May 7, 2019 6:16pm
Q1/19 results: Applied Genetic Technologies (AGTC -$0.09) and Vericel (VCEL -$1.10); - beat or evened “street” expectations; Audentes Therapeutics (BOLD -$1.78); Editas Medicine (EDIT -$1.18); Aduro Biotech (ADRO -$0.19); Cellectis (CLLS); Fate Therapeutics (FATE -$0.93), Voyager Therapeutics (VYGR -$0.52) and Regenxbio (RGNX -$2.44) missed “street” expectations
RMi outlines aftermaths defining the daily dose of earnings, investment thesis and objectivity!
An UGLY session but, it does set-up for the oversold to be recognized in the coming future of the next days into next week!
Markets and indexes:
- The Dow closed down -473.39 points or -1.79% to 25,965.09
- The S&P closed down -48.52 points or -1.65% at 2,884.05
- The NASDAQ was down -159.53 points or -1.96% to 7,963.75
Pre-open post, “tensions weigh on this market and it’s not all about trade; don’t get comfortable with yesterday’s upside, Tuesday’s seven (7) earnings’ releases.”
Sector equities and markets fell sharply on Tuesday after a top U.S. trade official indicated that higher tariffs on Chinese goods are coming later this week, disappointing traders who hoped President Trump’s weekend tweet threat was just a negotiation tactic.
Shares of BLUE (-$10.29), RENE.L (-$7.50) fell the deepest while ADRO (+$0.15) and ADVM (+$0.08) were 2 of the 6 ups!
Sector equities flipped to the downside after yesterday’s incline of the Advance/Decline (A/D) line of a positive 32/8 and 3 flat and 2 acquired;
Tuesday’s advance/decline line scenario of 45 covered companies:
- The open was negative with the A/DL at 10/32, 1 flat and 2 acquired (AST & OSIR);
- The mid-day was negative with an A/DL of 7/35 and 1 flat and 2 acquired;
- The close was negative with an A/DL of 6/36 and 1 flat and 2 acquired;
The Cboe Volatility Index, a measure of the 30-day implied volatility of the S&P 500 known as the “VIX” or the “fear gauge,” hit a fresh high of 21.09 on Tuesday, its highest level since January 22 <CNBC>.
Some investors see the higher volatility as a buying opportunity.
Cell and gene therapy company’s worst-performers were:
- Tuesday: BLUE (-$10.29), RENE.L (-$7.50), IONS (-$5.12), RARE (-$4.68) and SAGE (-$3.53);
- Monday: ALNY (-$3.21), RARE (-$0.74), IONS (-$0.72), BMRN (-$0.63) and AXGN (-$0.50);
Sector equities posting gains were:
- Tuesday: ADRO (+$0.15), ADVM (+$0.08), BCLI (+$0.05), ONCE (+$0.05) and KOOL (+$0.013);
- Monday: RENE.L (+$20.00), BLUE (+$3.99), SAGE (+$3.69), NTLA (+$1.66) and VYGR (+$1.53);
Tonight’s percentage (%) indicators:
- Tuesday’s range of the 6 upside was +0.05% (ONCE) to +4.92% (KOOL) while the 36 downside ranged from -0.61% (SLDB) to -8.65% (XON);
- Monday’s range of the 32 upside was +0.47% (AGTC) to +17.65% (MDXG) while the 8 downside ranged from -0.75% (BMRN) to -4.15% (ALNY)
Upside volume stats: review the numbers, there is a message …
- Tuesday: 2 out of the 6 upside had higher than the 3 month average volume;
- Monday: 7 out of the 32 upside had higher than the 3 month average volume;
- Last Friday: 3 out of the 37 upside had higher than the 3 month average volume;
Downside volume stats: here is where the session landing is expressed …
- Tuesday: 10 out of the 36 downside had higher than the 3 month average volume;
- Monday: 2 out of the 8 downside had higher than the 3 month average volume;
- Last Friday: 2 out of the 4 downside had higher than the 3 month average; volume
1 flat – BSTG - with 2 acquired (AST & OSIR)
Aduro Biotech (ADRO +$0.15) Q1/19 net loss was $23.4 M or -$0.29 per share compared to net loss of $21.5 M or $0.28 per share for Q1/18.
Revenue – Revenue was $3.9 million for the first quarter of 2019 compared to $6.6 million for the same period in 2018. The decrease in revenue for the period was primarily due to a $3.0 million milestone payment received from Merck in 2018 for initiation of the Phase 1 trial for the anti-CD27 antibody. The decrease was partially offset by $1.4 million in revenue recognized under the Lilly agreement
R&D expenses were $19.5 M compared to $20.1 M for Q1/18. G&A expenses were $9.2 M for Q1/19 compared to $9 M for Q1/18.
Cash, cash equivalents and marketable securities totaled $266.9 M, compared to $277.9 M at the end of FY18. Cash spend for Q1/19 included $2.2 M in one-time charges resulting from ADRO’s strategic reset and was offset by receipt of a $12 M upfront payment from the 2018 license agreement with Eli Lilly.
Audentes Therapeutics (BOLD -$1.78) reported a Q1/19 loss of $49.4 M or a loss of $1.13.
The results missed “street” expectations for a loss of -$0.90 per share.
BOLD shares have risen 74% since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $37.12, a rise of 2% in the last 12 months.
Cellectis (CLLS -$0.70) the Q1/19 net loss was $15 M or $0.36 per share of which $10 million was attributed to Cellectis, compared to $25 M or $0.71 per share for Q1/18, of which $20 M was attributed to Cellectis. This $10 M decrease in net loss between 2019 and 2018 was primarily driven by a significant increase in net financial gains of $8 M and by a decrease in operating losses of $2 M which was attributed to Cellectis.
Consolidated R&D expenses were $14 M for the year ended March 31, 2019 compared to $18 million for the year ended March 31, 2018. 86% of consolidated R&D expenses were attributed to Cellectis in the first quarter of 2019. R&D expenses were attributed to Cellectis in Q1/19. The $4 M decrease between 2019 and 2018 was primarily attributed to the reductions of non-cash stock-based compensation expenses by $4 M and purchases and external and other expenses by $1 M. This decrease was partially offset by higher employee expenses and other by $1 M. Consolidated SG&A expenses were $12 M compared to $14 M for Q1/18. 47% of consolidated SG&A expenses were attributed to Cellectis in the first quarter 2019.
Cash position of $425 million as of March 31, 2019
Editas Medicine Inc. (EDIT -$1.18) reported a Q1 loss of $29.2 M or a loss of -$0.60 per share.
The results missed “street” expectations for a loss of -$0.57 per share.
EDIT posted revenue of $2.1 M
Editas shares have climbed 8.5% since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $24.68, a decline of 26% in the last 12 months.
Fate Therapeutics (FATE -$0.93) reported a loss of $19.8 M or a loss of $0.30 per share.
The results missed “street” expectations of $0.23 per share. FATE posted revenue of $2.6 M which also did not meet “street” forecast of the expected $2.9 M.
FATE shares have increased 32% since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $16.98, an increase of 61% in the last 12 months.
Applied Genetic Technologies Corp. (AGTC -$0.09) Q3/19 net income of $11.5 M or +$0.63 per share, after reporting a net loss of $8.1 M or -$0.45 in Q3/18.The results topped “street” expectations of -$0.54 per share.
AGTC posted revenue for the three and nine months ended 3/31/19 were $21.3 M and $41.3 M, respectively, compared to $3.6 M and $18.8 M in the comparable periods in 2018. The increase of $22.5 M for the nine-month period was primarily due to recognizing revenue of $20.4 M as a result of the termination of the Collaboration Agreement with Biogen, and recognizing revenue of $8.3 M associated with the receipt of a $10 M milestone payment from Biogen during Q1/19, partially offset by decreased license and related service revenue due to the revised pattern of revenue recognition under ASC 606, Revenue from Contracts with Customers.
Cash position of $89.2 M and a runway until early 2021
AGTC's shares closed at $4.32. A year ago, they were trading at $4.85.
Bellicum Pharmaceuticals (BLCM -$0.12) reported a Q1/19 net loss of $24.5 M or -$0.55 per share compared to a net loss of $22.8 M or -$0.68 per share for Q1/18. The results included non-cash, share-based compensation charges of $2.1 M for Q1/19 of $2.1 M and $3.6 M for Q1/18.
Cash, restricted cash and investments totaling $78.1 M compared to $98 M at Q4/18; during Q1 , Bellicum utilized it’s ATM (at the market financing facility) selling 1.4 M shares for net cash proceeds of $4.6 M.
BLCM beat “street” consensus of $0.56, an earnings surprise of 1.79% which was adjusted for non-recurring items.
Runway: through the end of 2019.
Regenxbio (RGNX -$2.44) reported a Q1/19 loss of $32.2 M or -$0.89 per share, compared to net (profit) income of $104.2 M, or $3.30 basic and $3.04 diluted net income per share in Q1/18.
The results fell short of “street” expectations for a loss of -$0.85 per share.
Revenues were $864 K, compared to $132.4 M for Q1/18. The decrease was primarily attributable to $132.1 M of non-recurring revenue recognized during Q1/18 under its amended license agreement with AveXis for the development and commercialization of treatments for SMA.
R&D expenses were $25.2 M compared to $19.6 M forQ1/18. The increase was primarily attributable to personnel costs as a result of increased headcount, laboratory and facilities costs and external expenses associated with conducting clinical trials and manufacturing-related services.
G&A expenses were $11.6 M, compared to $8.4 M for Q1/18. The increase was primarily attributable to personnel costs as a result of increased headcount and professional fees for advisory and other services.
A cash position of $444 M and a runway until 2021
Regenxbio shares have risen 19% since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $49.97, a climb of 26% in the last 12 months.
Voyager Therapeutics (VYGR -$0.52) reported a net loss of $27.2M or -$0.81 per share missing “street” expectation of a loss of -$0.79 versus Q1/18’s loss of -$0.63 per share. These figures are adjusted for non-recurring items.
VYGR posted revenue of $5.2 M in the period, exceeding “street” forecasts expecting $3 M.
R&D increased to $24.8 M (from Q1/18’s $14.9 M) to support the advancement of the VY-AADC program into the RESTORE-1 P2 clinical trial, and gene therapy platform initiatives for new capsid development while G&A expense of $9.7 M (versus Q1’18’s $7.2 M) also increased primarily due to an increase in consulting and professional fees, and personnel and facility costs to support the advancement of its pipeline programs, platform and manufacturing capabilities
Cash, cash equivalents, and marketable debt securities were $358.5 M. Based on the current operating plan; Voyager expects to end 2019 with cash, cash equivalents and marketable debt securities of approximately $280 M to $290 M, with full-year 2019 operating expenses expected to range from $130 M to $140 M that includes amounts reimbursable under the Neurocrine collaboration.
Runway: early to mid-2022
VYGR shares have more than doubled since the beginning of the year. The stock has risen 28% in the last 12 months.
Vericel (VCEL -$1.10) net loss of $2.8 million, or -$0.07 per share, compared to $7.7 M, or $0.21 per share, in Q1/2018; with a Non-GAAP adjusted EBITDA loss of $400 K compared to a loss of $2.6 M in Q1/18;
$84.1 M in cash and short-term investments compared to $82.9 million as of FY18’s end;
Full year 2019 revenue guidance for MACI® and Epicel® was raised to $110 M to $114 M compared to previous full year revenue guidance of $108 M to $112 M.
The consensus EPS Estimate was -$0.07 and the consensus revenue estimate is $22.51M (+24.8% Y/Y).
The iShares NASDAQ Biotechnology (IBB) indicator:
- Tuesday closed down -2.94%
- Monday closed up +0.85%
- Friday closed up +1.82%
- Thursday closed up +0.40 %
- Wednesday closed down -0.81%
- Last Tuesday closed down -0.83%
Tuesday closed NEGATIVE with 36 decliners, 6 advancers, 1 flat and 2 acquired (AST & OSIR);
Monday closed POSITIVE with 8 decliners, 32 advancers, 3 flat and 2 acquired (AST & OSIR);
Friday closed POSITIVE with 4 decliners, 37 advancers, 2 flat and 2 acquired (AST & OSIR);
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);
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.