Indication intelligence, analysis and sector perception

RegMed Investors’ (RMi) closing bell: after a flip, a flop and another drop

May 2, 2019 6:01pm

Earnings season is heightening risk, yet one of today’s earnings miss was rewarded with upside – go figure?

Q1/19 results: Intellia Therapeutics (NTLA +$0.36) Q1/19’s net loss was $21.9 M or -$0.49 per share, compared to $21.4 M or -$0.51 per share in Q1/18. A MISS yet, collaboration revenue increased by $3 M. Sage Therapeutics (SAGE -$1.24) Q1/19’s net loss was $163.4 M or -$3.37 per share compared to a net loss of $74.6 M or -$1.68 per share for Q1/18.

Pre-open indications: 5 HITs and 1 MISS (another VSTM drop)

Sentiment implies a glass half-full, half-empty or just plain empty?

Markets and indexes:

The Dow closed down -122.35 points or -0.46% to 26,307.79
The S&P closed down -6.21 points or -0.21% at 2,917.52
The NASDAQ was down -12.87 points or -0.16% to 8,036.77

Henry’omics:

Sector equities fell on Thursday as the Dow, S&P and NASDAQ “pooped-the-bed” and interest rates continued to rise following comments on Wednesday by Fed Chair Powell.

Today’s cell therapy sell-off is not about interest rates; it’s about souring sentiment heightened by political potential of drug price controls which also amplifies risk!

Many of my 45 covered companies could/should face a tougher road ahead as the earnings season winds up and down over the next four (4) weeks.

Pre-open post, “insight is about understanding perception.”

I also stated, “NOT much to say, a day and session of a wing and a prayer; sentiment has been in the tank and as “earnings” run out … declines will follow. Fundamentals are just into … too much flux while trust and conviction is AWOL!”

The advance/decline line scenario of 45 covered companies:

The open was positive with the A/DL at 29/12, 2 flats and 2 acquired (AST & OSIR);
The mid-day was positive with an A/DL of 23/20 and 0 flat and 2 acquired;
The close was negative with an A/DL of 12/30 and 0 flat and 2 acquired;

My pre-open indications: 5 HITs and 1 MISS

Athersys (ATHX) closed flat at $1.51 with 764.9 K shares traded – hit;
CRISPR Therapeutics (CRSP) closed up +$1.46 –hit;
Editas Medicine (EDIT) closed up +$0.78 – hit;
Intellia Therapeutics (NTLA) closed up +$0.36 – hit;
ReNeuron holdings (RENE.L) closed up +$15.00 – hit;
Verastem Oncology (VSTM) closed down again -$0.03 – miss;

Q1/19 results:

Intellia Therapeutics (NTLA +$0.40)

Q1/19’s net loss was $21.9 M or -$0.49 per share, compared to $21.4 M or -$0.51 per share in Q1/18.
SG&A increased by $3.1 M, R&D increased by $1.2 M. Cash and equivalents were $296.6 M (with $3.6 M in net equity proceeds from its "At the Market" (ATM) agreement) compared to $314.1 M as of end 2018.
A MISS yet, collaboration revenue increased by $3 M. Runway: early 2021.

Sage Therapeutics (SAGE -$1.24)

Q1/19’s net loss was $163.4 M or -$3.37 per share compared to a net loss of $74.6 M or -$1.68 per share for Q1/18.
R&D expenses were $86.4 M, including $20.7 M of non-cash stock-based compensation expense, compared to $49.3 M, including $8.9 million of non-cash stock-based compensation expense in Q1/18. G&A expenses were $83.9 M, including $23.4 M of non-cash stock-based compensation expense compared to $28.8 M, including $6.9 M of non-cash stock-based compensation expense, for Q1/18.
Cash, cash equivalents, and marketable securities as of Q1’s end were approximately $1.4 B, compared to $922.8 M atFY18’s end. The increase was primarily due to proceeds from SAGE's follow-on offering completed in 2/19.
Runway: 2021-22

Cell and gene therapy company’s worst-performers were:

IONS (-$1.36), SAGE (-$1.24), BMRN (-$0.83), ALNY (-$0.49) and BOLD (-$0.33)
Wednesday: RENE.L (-$30.00), ALNY (-$6.31), BLUE (-$2.21), GBT (-$1.96) and RARE (-$1.84)
RENE.L (-$15.00), SAGE (-$2.16), EDIT (-$1.52), RARE (-$1.47) and RGNX (-$1.09);
Monday: BLUE (-$2.00), BOLD (-$1.54), EDIT (-$1.49), GBT (-$1.17) and RGNX (-$1.15);

Sector equities posting gains were:

RENE.L (+$15.00), BLUE (+$2.36), CRSP (+$1.46), RGNX (+$1.26) and QURE (+$1.09);
Wednesday: QURE (-$0.91), AXGN (-$0.47), BLFS (+$0.44), SLDB (+$0.43), ADRO (+$0.12);
AXGN (+$1.73), BLUE (+$0.83), ALNY (+$0.81), BSTG (+$0.50) and ADRO (+$0.19);
Monday: RENE.L (+$15.00), SAGE (+$1.70), ALNY (+$1.47), BMRN (+$0.64) and BLFS (+$0.45);

Tonight’s percentage (%) indicators:

Range of the 17 upside was +0.29% (BLFS) to +5.36% (RENE.L) while the 23 downside ranged from -0.09% (PSTI) to -12% (BSTG)

Upside volume stats: review the numbers, there is a message …

Thursday: 2 out of the 17 upside had higher than the 3 month average volume;
Wednesday: 2 out of the 12 upside had higher than the 3 month average volume;
Tuesday: 5 out of the 8 upside had higher than the 3 month average volume;
Monday: 8 out of the 22 upside had higher than the 3 month average volume;

Downside volume stats: here is where the session landing is expressed …

Thursday: 5 out of the 23 downside had higher than the 3 month average volume;
Wednesday: 8 out of the 30 downside had higher than the 3 month average volume;
Tuesday: 5 out of the 8 downside had higher than the 3 month average volume;
Monday: 2 out of the 20 downside had higher than the 3 month average volume

3 flat – ATHX, BCLI and CLBS - with 2 acquired (AST & OSIR)

The iShares NASDAQ Biotechnology (IBB) indicator:

Thursday closed up +0.40 %
Wednesday closed down -0.81%
Tuesday closed down -0.83%
Monday closed down -0.08%
Friday closed up +0.65%
Last Thursday closed up +1.01%

May’s first week’s sessions:

Thursday closed NEGATIVE with 23 decliners, 17 advancers, 3 flat and 2 acquired (AST & OSIR);

Wednesday (5/1) closed NEGATIVE with 30 decliners, 12 advancers, 1 flat and 2 acquired (AST & OSIR);

Tuesday (4/30) closed NEGATIVE with 35 decliners, 8 advancers, 0 flat and 2 acquired (AST & OSIR);

Monday (4/29) closed POSITIVE with 20 decliners, 22 advancers, 1 flat and 2 acquired (AST & OSIR);

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors. All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.

35 companies, 1 interpreter!

Insight, foresight and recommendation

My motto … never leave an investor uninformed! I say today what others won’t, so you can do what others can’t.

My name is Henry McCusker; I endorse these opinions under my own name and with a subscription based membership.

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Editor and Publisher ... Henry McCusker enters his tenth (10th) year at RegMed Investors with past experience in sell-side analysis, buy-side management, corporate management and due diligence.

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Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.