Indication intelligence, analysis and sector perception

RegMed Investors’ (RMi): the sector was surrounded by strong winds in the eye of the storm

March 12, 2020 4:42pm

Q4 and FY19 “numbers” are being “masked” by the motion and impact of coronavirus pricing disruption – thank electronic trading and algorithms pursuing their capacity of emotionless profit taking

The sector is impossible to forecast although timely insights have line extensions within or to a volatile pricing universe

As the cell and gene therapy sector runs out of buyers, it runs into trouble (just like a fire that runs out of wood)

The Dow closed DOWN – 2352.27 points (-9.99%), the S&P closed DOWN -260.66 points (-9.51%) while the NASDAQ closed DOWN – 750.25 points (-9.43%)

Henry’omics:

U.S. stocks suffered a -10% historic drop on Thursday!

It got so bad, that trading was halted briefly after the open for 15 minutes as markets hit the mandated “circuit-breaker” threshold used by U.S. exchanges;
Small-cap benchmark the Russell 2000 index cratered by -10.19%;
The Cboe Volatility Index (VIX), widely considered the best fear gauge jumped +22.14 or +41.08% and hit its highest level since 2008;
Yesterday, the Dow ended its historic 11-year bull market run by closing 20% decline from all-time highs;
Mid-day, indexes dramatically cut losses after Fed announces new funding actions starting Fridays to buy long-tern treasuries;
The Fed move only suppressed a decline with a temporary respite before selling resumed;

One winner today in the share pricing sweepstakes, was Pluristem (PSTI +0.19 or +6.57% to $3.08) on news of a signed collaborative agreement with the BIH Center for Regenerative Therapy (BCRT) and the Berlin Center for Advanced Therapies (BeCAT) at Charite’ University of Medicine Berlin to expand its existing framework and research agreement and conduct a joint project evaluating the therapeutic effects of PSTI’s patented PLX cell product candidates for potential treatment of the respiratory and inflammatory complications associated with the COVID-19 coronavirus.

The second was Aduro Biotech (ADRO +$0.08 or +2.39% TO $2.44) after Tuesday’s spiral of -16.3% following its earnings release on Monday. In fact, the stock has plunged 37.1% in the past year compared to the industry’s decrease of 12.5%.

Revenues of $3.6 M were up 31.7% year over year, primarily owing to recognition of an upfront payment received in 2019 under the collaboration with Eli Lilly LLY. Notably, in December 2018, ADRO entered into an exclusive collaboration and license agreement with pharma giant Eli Lilly to develop novel immunotherapies for autoimmune and other inflammatory diseases by leveraging its cGAS-STING inhibitor platform.

Also, in January 2020, ADRO announced a corporate restructuring to extend its operating capital and align personnel with the execution of clinical development strategy. As part of this, the company trimmed its current workforce by 51 employees across the organization and expects to shut down its Europe headquarters in Oss, The Netherlands by the end of third-quarter 2020.
For 2019, ADRO’s revenues of $17.3 M were up 14.4% year over year and the loss per share was $1.03 in 2019 compared with the loss of $1.21 in 2018.
ADRO had $213.6 M worth of cash, cash equivalents and marketable securities as of Dec 31, 2019.

The sector has shown it is unprepared for continuous periods of uncertainty i.e. selling.

A question, where is buying from management teams at these bottom begging share prices?

Leaving investors stuck in punishing weeks of volatility which should/could continue.

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

Thursday, the IBB closed down -8.85% and XBI closed down -10.89%
Wednesday, the IBB closed down -5.34% and XBI closed down -5.79%
Tuesday, the IBB closed up +2.31% and XBI closed up +2.26%
Monday, the IBB closed down -6.80% and XBI closed down -8.06%

The advance/decline line scenario of 35 covered companies:

Thursday, the close was negative with an A/D line of 2/33, 0 flat of 35 covered;
Wednesday, the close was negative with an A/D line of 2/32, 1 flat of 35 covered;
Tuesday, the close was positive with an A/D line of 24/10, 1 flat of 35 covered;
Monday, the close was negative with an A/D line of 3/32, 0 flat of 35 covered;

Thursday’s (only 2) incliners:

Aduro Biotech (ADRO +$0.08);
Pluristem (PSTI+$0.19);

Thursday’s (lowest 5) decliners:

bluebird bio (BLUE -$12.11 after Wednesday’s -$4.66);
ReNeuron (RENE.L -$10.00);
Global Blood Therapeutics (GBT -$8.97 after Wednesday’s -$6.89);
Alnylam Pharmaceuticals (ALNY -$8.77 after Wednesday’s -$7.50 and Tuesday’s -$0.57);
Sage Therapeutics (SAGE -$7.61 after Wednesday’s -$3.99);

The percentage (%) indicators:

Thursday’s range of the 2-upside was +3.39% (ADRO) to +6.57% (PSTI) while the 33-downside ranged from -3.14% (BSTG) to -29.47% (BLFS);
Wednesday’s range of the 2-upside was +1.25% (BLCM) to +2.94% (BSTG +$0.10) while the 32-downside ranged from -2.65% (CLBS) to -19.13% (MESO);
Tuesday’s the range of the 24-upside was +0.27% (FIXX) to +21.04% (MESO) while the 10-downside ranged from -0.20% (STML) to -16.29% (ADRO);
Monday’s the range of the 3-upside was +0.53% (BSTG) to +16.53% (BSTG +$0.02) while the 30-downside ranged from -3.02% (ALNY) to -22.31% (PGEN);

Upside volume stats: to compare

Thursday: 1 out of the 2-upside had higher than the 3-month average volume;
Wednesday: 0 out of the 2-upside had higher than the 3-month average volume;
Tuesday: 11 out of the 24-upside had higher than the 3-month average volume;
Monday: 2 out of the 3-upside had higher than the 3-month average volume;

Downside volume stats:

Thursday: 26 out of the 33-downside had higher than the 3-month average volume;
Wednesday: 20 out of the 32-downside had higher than the 3-month average volume;
Tuesday: 5 out of the 10-downside had higher than the 3-month average volume;
Monday: 24 out of the 32-downside had higher than the 3-month average volume;

0 flat

March

Thursday closed negative with 33 decliners, 2 advancers and 0 flat

Wednesday closed negative with 32 decliners, 2 advancers and 1 flat

Tuesday closed positive with 10 decliners, 24 advancers and 1 flat

Monday closed negative with 32 decliners, 3 advancers and 0 flats

Friday closed negative with 29 decliners, 4 advancers and 2 flats

Thursday closed negative with 24 decliners, 11 advancers and 2 flats

Wednesday closed positive with 3 decliners, 30 advancers and 2 flats

Tuesday closed negative with 26 decliners, 7 advancers and 2 flats

Monday closed positive with 11 decliners, 24 advancers and 0 flats

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.

Do you have an opinion you would like to share with us? We would like to hear from you.

Please e-mail us at hwm@regmedinvestors.com.

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.

RegMed Investors (RMi) or Regmedinvestors.com content is the intellectual property of Henry McCusker. Any copying, republication or redistribution of RMI’s content, including by framing or similar means, is expressly prohibited without the prior written consent of Scimitar; who also shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. For additional information on other Scimitar media services or reposting please email hwm@regmedinvestors.com.

The information included above as well as individual companies and/or securities mentioned should be construed as guidance in RMi reviews.

The facts stated and the opinions given in this publication are based on data and information considered to be reliable and have been carefully worked into my qualitative analyses and prognoses. However, no guarantee can be given as to their fairness, accuracy or completeness.

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