May 6, 2020 8:31am
Maintaining my sell-into-strength recommendation, better to be early than be late in a session
Pre-open indications: 4 BUYs and 4 SELLs
News: Mesoblast (MESO; ASX: MSB) the first patients have been dosed in the 300-patient randomized placebo-controlled P2/3 trial in the US of Mesoblast’s allogeneic cellular medicine remestemcel-L in COVID-19 infected patients with moderate to severe acute respiratory distress syndrome (ARDS) on ventilator support.
Quarterly results expected today: AxoGen (AXGN), Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS), Precigen (PGEN), Global Blood Therapeutics (GBT), Voyager therapeutics (VWGR) and Ultragenyx Pharmaceuticals (RARE)
What I provide is an “intelligence daily” to inform the RegMed/cell and gene therapy sector and its investors utilizing my focus on indication and warning analysis. Check the BOTTOM LINE <read more>
Dow future are UP +0.58% (+139 points), S&P futures are UP +0.62% (+18 points) and NASDAQ futures are UP +0.68% (+63 points)
U.S. stock futures project another positive open were higher in early morning trading on Wednesday, following two positive sessions in the equity markets as investors weighed the consequences of a growing number of states beginning to reopen their economies in the first two weeks of May;
European stocks traded mixed as investors kept an eye on tensions between the U.S. and China, efforts to lift lockdown measures and fresh economic data although the pan-European Stoxx 600 gained +0.5%;
Asia Pacific stocks rose as oil prices retraced some of their overnight gains, Mainland China South Korea advanced while Australia dipped while the MSCI Asia ex-Japan index rose 0.76%.
Data docket: Private payrolls fell by more than 20.2 million in April, the worst drop in the ADP survey history, though not as bad as estimates of 22 million job losses. The biggest losses came in services and hospitality along with trade, transportation and utilities as well as construction. Big business suffered the worst losses at more than 9 million jobs.
Data released showed that euro zone business activity collapsed to record lows last month, almost grinding to a halt on the back of government-enforced lockdowns to stem the spread of the coronavirus.
- IHS Markit’s final composite PMI (purchasing managers’ index) reading plummeted to 13.6 in April from March’s already dismal 29.7, with anything over 50 representing a contraction in economic activity.
U.S. stock-index futures on Wednesday rose as investors prepared for an update on private-sector employment from ADP for April and parsed corporate quarterly updates from some of the nation’s largest companies, which are mostly swooning from the effects of the COVID-19 pandemic.
A session focused on earnings and a question of how they will be reconciled and absorbed by the sector?
I’m getting nervous as the “numbers’ start slipping:
- The IBB is up +4.97% and the XBI is up +7.20% as the advance/Decline (A/D) line also slipped in two (2) sessions from Monday’s 28/7 to Tuesday’s 25/10 and I noticed Tuesday’s highs were slipping just before the session closed;
- Volume was also slipping from Monday’s 1 out of the 7-downside had higher than the 3-month average volume versus Tuesday’s 4 out of the 10-downside had higher than the 3-month average volume;
- While Monday’s 9 out of the 28-upside had higher than the 3-month average volume as compared to Tuesday’s 6 out of the 25-upside had higher than the 3-month average volume;
Tuesday night’s title: “still focusing on caution having recommended selling into strength. Don’t chase this rally as earning’s LPS (loss-per-share) “confessions” don’t meet expectation and sector share pricing starts slipping pre close.”
- The NASDAQ closed UP +98.41 points (+1.13%);
- The NASDAQ closed UP +98.41 points (+1.13%);
- The percentage (%) of the 25-upside were +0.14% (IONS) to +38.35% (ADVM) on acquisition news while the 10-downside ranged from -0.06% (RARE) to -3.38% (MDXG);
- May registered 1 negative, 2 positive closes
- April registered 10 negative, 11 positive closes and 1 holiday.
- March registered 11 negative, 10 positive closes and 1 neutral close.
- February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
- January registered 9 negative, 10 positive closes and 2 holidays.
Companies in my headlights – It’s your decision; I provide an idea and context:
SELL into STRENGTH:
- Adverum (ADVM) closed up +$5.27 after Monday’s +$1.73 and has a positive +$0.23 or +1.19% aftermarket indication,
- Alnylam Pharmaceuticals (ALNY) closed up +$5.27 after Monday’s +$7.66, Friday’s -$2.73, Thursday’s -$4.11 and last Wednesday’s -$1.69 and has a negative -$0.52 or -0.37% aftermarket indication;
- Regenxbio (RGNX) closed up +$0.88 after Monday’s +$5.51, Friday’s -$3.36, Thursday’s -$1.25 and last Wednesday’s +$0.37, I’d trim the position and come backs after May 7’s earning’s “confession”;
- BioLife Solutions (BLFS) closed up +$0.95 after putting out a preliminary Q1 projection of total revenue was $12.1 million, a 110% increase over Q1/2019 and a 46% sequential increase over the Q4/2019. Biopreservation media accounted for approximately 72% of total revenue. Sales of ThawSTAR®, evo® and Custom Biogenic Systems® freezer products accounted for the balance of revenue and were in line with management's expectations. BLFS kas a negative -$0.01 aftermarket indication, conference call is May 14 – I’d trim position;
- Editas Medicine (EDIT) closed up +$0.66 after Monday’s +$2.74 and has a positive +$0.52 or +$2.03% aftermarket indication;
- CRISPR Therapeutics (CRSP) closed up +$2.00 after Monday’s +$1.54 and has a positive +$0.29 or +0.56% aftermarket indication;
- Mesoblast (MESO; ASX:MSB +$0.27) is up in the pre-market +$1.50 or +13.66% on news of the first patients have been dosed in the 300-patient randomized placebo-controlled P2/3 trial in the US of Mesoblast’s allogeneic cellular medicine remestemcel-L in COVID-19 infected patients with moderate to severe acute respiratory distress syndrome (ARDS) on ventilator support.
- ReNeuron (RENE.L) closed up on Tuesday after being down on Monday, Friday, Thursday, Wednesday and has a positive US pre-market pricing of +$3.20;
The BOTTOM LINE: Appetite for equities has overcome concerns about the deadly pandemic’s pace of infection across the country, but still leaves uncertainty about the path forward for investors.
Expectations will deliver a lot of LPS (loss-per-share) earnings.
The wild swings in volatility has been a blessing for some of the investing population so far this year; but for others, it's been a curse.
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.