June 10, 2019 8:13am
What’s bothering, is not the movements but, low volume and percentage change of the up and downside direction (think, standing push-ups)
News: Roche Holding’s AG (RHHBY) $5 B acquisition of Spark Therapeutics (ONCE) delayed amid Hart-Scott-Rodino Act’s regulatory scrutiny from the U.S’s FTC and U.K’s CMA <read more>
Pre-open indications: 2 BUYs, 2 SELLs and 3 TRADES
It's likely to remain a volatile climate
RMi outlines preludes of a session defining the daily dose of factors, investment thesis and objectivity!
Dow futures are UP +0.52% (+134 points), S&P futures are UP +0.48% (+14 points) and NASDAQ futures are also UP +0.65% (+49 points)
U.S. stock index futures were slightly higher Monday morning as international trade continues to remain under focus.
European stocks open higher as trade tensions ease with the pan-European Stoxx 600 climbing 0.4% in early trade;
Asia Pacific markets traded higher; the pan-European Stoxx 600 climbed 0.4% in early trade;
Data docket: there will be a job openings report and consumer inflation expectations published.
Is the sector like Icarus flying close to the sun?
Beyond of trade war and tariff issues, investors continue to remain worried about share pricing sustainability!
Roche’s $4.8 billion proposed acquisition of Spark Therapeutics (ONCEO, may be delayed past Q2/19 beyond the first half amid greater scrutiny from regulators, raising questions as to when the deal will be completed.
Both companies received a request for more information from the U.S. Federal Trade Commission in connection with the FTC's review of the deal.
Roche also said that the UK Competition and Markets Authority (CMA) had opened an investigation. The British regulator's separate inquiry is aimed at determining whether the CMA considers it has jurisdiction over Roche's acquisition, and if so, whether it could hurt competition in Britain.
"Pending the outcome of its investigation, the CMA has issued an Interim Enforcement Order that would become effective upon closing of the transaction and would require Roche to hold separate the Spark business," Roche said. "The parties are working cooperatively with the CMA and will continue to do so."
Roche wants to buy Spark to, among other things, get ahold of U.S. firm's experimental gene therapy for hemophilia A as well as its platform to develop other treatments for genetic diseases. But Roche has been forced to push back completion repeatedly, this time giving itself to July 31, beyond its self-imposed first-half deadline, to wrap things up.
As a result of the Second Request, pursuant to the Agreement and Plan of Merger, dated as of February 22, 2019, by and among Roche Holdings, Inc., 022019 Merger Subsidiary, Inc., and Spark (the “Merger Agreement”), Roche has extended the offering period of its previously announced tender offer to purchase all of the outstanding shares of common stock (the “Shares”) of Spark for USD 114.50 per Share, net to the seller thereof in cash, without interest and subject to any withholding taxes required by applicable law and upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 7, 2019 (as it may be amended and supplemented from time to time, the “Offer”). The Offer, which was previously scheduled to expire at 5:00 p.m., New York City time, on Friday, June 14, 2019, has been extended until 5:00 p.m., New York City time, on July 31, 2019, unless it is extended further under the circumstances set forth in the Merger Agreement. All terms and conditions of the Offer shall remain unchanged during the extended period.
The Swiss pharmaceuticals group is in the midst of paying a premium to scoop up a promising biotechnology group.
From Friday night’s post, “oversold sensitivity enhances sector upside. Traders rode the weakness of past sessions (2 out of 5) within the week which heightens the likelihood of a continued volatile climate as upside volume remains weak.”
I also stated, “"Volume is STILL low while sentiment is sensitive to the oversold leading a few to an overbought condition!”
- The close was positive with an A/DL of 31/10 and 2 flats and 2 acquired;
- Friday’s range of the 31 upside was +0.19% (BMRN) to +15.11% (CRSP) while the 10 downside ranged from -0.27% (BLFS) to -5.48% (CUR);
- 6 out of the 31 upside had higher than the 3 month average volume;
- 2 out of the 10 downside had higher than the 3 month average volume;
- The iShares NASDAQ Biotechnology (IBB) indicator: closed up +1.62% after Thursday’s -0.17% after Wednesday’s +0.17% after Tuesday’s +1.93% after Monday’s+1.08% - that’s +4.63% for the week - some posssible sloppage;
Q2/19 so far:
- In June, there were 3 positive and 2 negative close, so far;
- In May, there were 14 negative, 1 holiday and 8 positive closes;
- In April, there has been 10 positive and 11 negative closes;
Companies in my headlights – It’s your decision; I provide an idea and context: post earnings release:
Applied Genetic Technologies (AGTC) closed up +$0.03 to $3.63 after Thursday’s-$0.08 to $3.60, Wednesday’s flat at $3.68, Tuesday’s -$0.20 to $3.68 following last Monday’s $3.88 and the previous Friday’s $3.65 - oversold on no news with 2nd half results due. A trading stock, BUY;
bluebird bio (BLUE) closed down again -$2.76 to $122.01 after Wednesday’s -$4.67 to $124.77 after Tuesday’s +$7.02 to $129.44, Monday’s $122.42, Friday’s $119.92, Thursday’s $120.53 and last Wednesday’s $122.25 - profit, Maintaining BUY;
CRISPR Therapeutics (CRSP) closed up +$5.63 to $42.88 after Thursday’s -$0.28 to $37.25, Wednesday’s +$0.27 to $37.53, Tuesday’s +$1.27 to $37.26 and last Monday’s +$0.42 to $35.99 as May 1st opened at $38.82, Overbought, – TRADE;
Editas Medicine (EDIT) closed up +$1.83 to $22.41 after Thursday’s +$0.10 to $20.58, Wednesday’s -$0.35 to $20.48, Tuesday’s +$0.07 to $20.83 and last Monday’s +$0.21 to $20.76 following the previous Friday’s -$0.68 to $20.55 – TRADE;
Intellia Therapeutics (NTLA) closed up +$0.80 to $15.06 after Thursday’s -$0.40 to $14.25, Wednesday’s-$0.03 to $14.66 after Tuesday’s +$0.44 to $14.69 and last Monday’s +$0.37 to $14.25 following the previous Friday’s -$0.62 to $13.88 - TRADE
uniQure NA (QURE) closed up +$3.55 to $75,55 after Thursday’s -$2.20 to $72,00, Wednesday’s +$3.46 to $74.20 after Tuesday’s +$6.10 to $70.74 and last Monday’s +$5.33 or +8.99% to $64.64 following the previous Friday’s $59.31, , Maintaining SELL;
ReNeuron (RENE.L) closed down another -$10.50 Friday and Thursday after Wednesday’s -$22.00, Tuesday’s -$5.00 to $295.00, Monday’s -$5.00 to $300.00 and last Friday’s at $305.00. RENE.L has a time differential trading with a market downside of -$10.00 – Maintaining SELL;
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.