July 9, 2019 6:36pm
While the NASDAQ rose +0.54% (+43.35 points) and the IBB rebounded +1.02% from a negative -1.36% on Monday
Like I stated, “fundamentals remain challenged”; points of concern, expectations for this earnings (Q2) season are downbeat
News: Roche (RHHBY) and Spark Therapeutics (ONCE) agreed to extend the deadline for the $4.3 billion takeover bid for ONCE by end of year 2019
Pre-open indications: 3 HITs and 0 MISS
I know what a company is supposed to look like, be like and act like to succeed!
As the leading voice of cell and gene therapy investors; I am not always a doom and gloom analyst/journalist but a man who has been “there” (BUY, SELL, VC and operating roles) with the gray hair and a readership following with real numbers to prove it!
Markets and indexes:
- The Dow closed down -22.65 points or -0.08% to 26,783.49
- The S&P closed up +3.68 points or +0.12% at 2,979.63
- The NASDAQ was up +43.35 points or +0.54% to 8,141.73
The sector dived again Tuesday after Monday and Friday’s decline as losses in Ultragenyx (RARE -$2.75 after Monday’s -$3.25) again shares led “our” universe to the downside.
From the a.m. post, “fundamentals remain challenged. We … were due for an upside fling, a game of “pick-up stocks” … was needed; some of the oversold are tempting to acquire for the very short-term.”
Key thematic, “Yesterday’s tin could be today’s gold or gold plated until scraped, revealed and sold!” The sector open up as the oversold where recognized; unfortunately, many equities did NOT have the SUPPORT to new upside moves!
As I had also stated, “Sector “watchers” are focused on the start of the Q2 earnings season that will start August 7 with Athersys’ (ATHX) reporting.”
Tuesday’s advance/decline line scenario of 45 covered companies:
- The open was positive with an A/DL of 22/20 with 3 flats and 2 acquired;
- The mid-day was positive with an A/DL of 30/13 with 0 flats and 2 acquired;
- The close was negative with an A/DL of 13/29 and 1 flat and 2 acquired
- Adverum Biotechnologies (ADVM) closed down -$0.01 – hit;
- BioLife Solutions (BLFS) closed down -$0.06 – hit;
- ReNeuron (RENE.L) closed up +$15.00 – hit;
Be on the look-out:
- Fed Chair Jerome Powell is scheduled to testify in front of the House Financial Services Committee on Wednesday. This comes just after a stronger-than-expected jobs report raised questions about the central bank’s rate policy.
- Investors will be looking for clues on whether the Fed will cut rates later this month, as it is widely expected, or if the central bank thinks the economy is strong enough to maintain current monetary policy <CNBC>.
The new deadline for both companies to extend the merger agreement is now April 30, 2020, rather than Jan. 31, 2020, Roche said in a U.S. regulatory filing on Monday, saying the change provides "additional time to clear the transaction".
Roche's March 5 bid to add ONCE's gene therapy technology is dragging on, with completion pushed back several times as the Swiss company blames time-consuming U.S. Federal Trade Commission scrutiny of any competition issues. Moreover, three U.S. lawsuits challenging the deal are pending, alleging disclosure violations associated with the offer.
RHHBY is buying Spark to get its one approved medicine, the $850 K per patient hereditary blindness therapy - Luxturna; another investigational gene therapy for hemophilia A, as well as the company's development platform that RHHBY hopes to leverage into additional disease areas.
Leading incliner stand-outs were:
- ReNeuron (RENE.L +$10.00 after Monday’s +$10.00)
- Sage Therapeutics (SAGE (+$1.76 after Monday’s +$1.69) and Friday’s -$3.39;
- Adverum (ADVM +$1.35 after Monday’s +$2.74) and Friday’s +$0.54;
- Sangamo Therapeutics (SGMO +$0.95)
- BioLife Solutions (BLFS +$0.94 after Monday’s +$2.50);
- Homology Medicine (FIXX +$0.13 after Monday’s +$0.27)
While the downside stragglers –
- Ultragenyx (RARE -$2.75 after Monday’s -$3.15) and Friday’s -$3.09;
- BioMarin Pharmaceuticals (BMRN -$2.00 after Monday’s -$1.61) and Friday’s -$2.15;
- Spark Therapeutics (ONCE -$1.96 after Monday’s -$1.89) and Friday’s +$0.59;
- Regenxbio (RGNX (-$1,84 after Monday’s -$2.34);
- uniQure (QURE -$1.77 after Monday’s -$1.73) and Friday’s +$0.27;
Upside volume stats: to compare
- Tuesday: 7 out of the 13 upside had higher than the 3 month average volume;
- Monday: 8 out of the 18 upside had higher than the 3 month average volume;
- Friday: 8 out of the 19 upside had higher than the 3 month average volume;
Downside volume stats: NOTICE
- Tuesday: 0 out of the 29 downside had higher than the 3 month average volume;
- Monday: 7 out of the 24 downside had higher than the 3 month average volume;
- Friday: 2 out of the 22 downside had higher than the 3 month average volume;
The percentage (%) indicators:
- Tuesday’s range of the 13 upside was +0.28% (BLCM) to +11.10% (ADVM) while the 29 downside ranged from -0.17% (BLUE) to -5.71% (VSTM);
- Monday’s range of the 18 upside was +0.06% (BLUE) to +22.53% (ADVM) while the 24 downside ranged from -0.10% (AXGN) to -5.29% (RARE);
- Friday’s range of the 19 upside was +0.06% (BLFS +$0.01) to +13.17% (KJOOL +$0.39) while the 23 downside ranged from -0.62% (ALNY) to -6.65% (BOLD);
1 flat – ATHX with 2 acquired (AST & OSIR) and the Spark Therapeutics’ (ONCE) acquisition by Roche still being delayed
The iShares NASDAQ Biotechnology (IBB) indicator:
- Tuesday: closed up +1.02%;
- Monday: closed down -1.36%;
- Friday: closed down -1.54%;
July’s sessions and the beginning of Q3:
Tuesday closed NEGATIVE with 29 decliners, 13 advancers, 1 flat and 2 acquired (AST & OSIR);
Monday closed NEGATIVE with 24 decliners, 18 advancers, 1 flat and 2 acquired (AST & OSIR);
Friday closed NEGATIVE with 23 decliners, 19 advancers, 1 flat and 2 acquired (AST & OSIR);
Thursday was a holiday;
Wednesday closed POSITIVE with 10 decliners, 31 advancers, 2 flat and 2 acquired (AST & OSIR);
Tuesday closed NEGATIVE with 30 decliners, 11 advancers, 2 flat and 2 acquired (AST & OSIR);
Monday closed NEGATIVE with 23 decliners, 19 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.