May 19, 2020 8:11am

The sector’s road is where? Headwinds are not being acknowledged as spikes are not trends, and hope is not a fundamental factor. Where is the news of catalysts that are sustainable?

News: bluebird bio (BLUE) prices 9.09 million share’s offering at $55.00

Pre-open indications:   2 BUYs and 6 SELLs     

What I provide is an “intelligence daily” to inform the RegMed/cell and gene therapy sector and its investors utilizing indication and warning analysis. Check the BOTTOM LINE <read more>

 

 

Dow future are DOWN -0.16% (-39 points), S&P futures are DOWN -0.25% (-8 points) and NASDAQ futures are UP +0.02% (+3 points)

 

Stock futures are lower and fluctuating after the market scored its best session in six weeks a day earlier on rising optimism about a coronavirus vaccine < after a promising development from a Moderna (MRNA pre-open -$4.46 or -5.25% on news of proposed offering) trial>;

European stocks whipsawed, halting the positive trend set at the start of the week as hopes rise for a coronavirus vaccine with the pan-European Stoxx 600 reversed earlier progress to slide -0.4%

Asia Pacific stocks jumped as hopes rise on a potential coronavirus vaccine as Mainland China, South Korea, Japan and Australia popped with Stocks in Asia jumped on Tuesday as hopes rise on a potential coronavirus vaccine with the MSCI Asia ex-Japan index rising +1.84%.

 

Henry’omics:

Futures on the Dow implied an opening loss of about 100 points, as overnight action followed a strong rally that saw the Dow and S&P 500 both enjoying their biggest one-day gains since April 6. Investor’s optimism was also optimized by news of antibody response for a vaccine in development from Moderna (MNRA) which showed promising early efficacy.

The myth of Icarus was the son of the famous craftsman Daedalus in Greek mythology. His father was the creator of the Labyrinth, a huge maze located under the court of King Minos of Crete, where the Minotaur, a half-man half-bull creature lived.

  • In order for the secret of the Labyrinth to be kept, Minos had then imprisoned Daedalus and Icarus in a tower above his palace. Daedalus managed to create two sets of wings for himself and his son, that were made of feathers glued together with wax.
  • He taught Icarus how to fly and warned him not to fly too high, which would cause the wax to melt, nor too low, which would cause the feathers to get wet with sea water.
  • Together, they flew out of the tower towards freedom.
  • However, Icarus soon forgot his father's warnings, and started flying higher and higher, until the wax started melting under the scorching sun. His wings dissolved and he fell into the sea and drowned.

 

Monday night’s newsletter’s title:” the upside direction sets-up the algorithms and machine trading to strip share pricing. Valuations say, thank you for momentum moves; I smell, feel and fear a possible hi-jacking of value.”

  • the NASDAQ closed UP +220.27 points (+2.44%);
  • Monday closed positive at 29/6. Volume was still LOW with 12 out of the 29-upside having higher than the 3-month average volume and 1 out of the 6-downside having higher than the 3-month average volume;
  • The percentage (%) of the 29-upside were +0.52% (CLLS) to +12.02% (CLBS) while the 6-downside ranged from -0.06% (FIXX) to -6.56% (BSTG); 

Q2:

  • May registered 5 negative, 7 positive closes – so far
  • April registered 10 negative, 11 positive closes and 1 holiday.

Q1:

  • 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:

Maintaining Sell into strength:

  • bluebird bio (BLUE) closed up +$0.48 to $57.04 after Friday’s +$2.60, Thursday’s -$1.76, Wednesday’s -$1.04 and last Tuesday’s -$3.37 even as the FDA initially declining to move forward on the application for their experimental multiple myeloma treatment. Now BLUE proposes an offering with an overallotment of 1.363 million shares priced at $55.00. However, adding another 9.09 million shares to the existing float of 55.31 million and outstanding shares of 55.65 million is a bit hard to absorb in my mind’s eye;
  • Athersys (ATHX) closed up +$0.035 after Friday’s +$0.04, Thursday’s -$0.11, Wednesday’s +$0.045, last Tuesday’s down -$0.21 and the previous Monday’s +$0.43 with a lot of volume being “bandied” about. SELL into trials which will take time plus a lingering negative includes taking PPP funds from government will simultaneously raising $57.6 M.

Trading targets based on share pricing strength and volume:

  • BioLife Solutions (BLFS) closed up +$0.53 after Friday’s +$0.78, Thursday’s -$0.33, Wednesday’s -0.33 and last Tuesday’s +$0.34 after reporting earnings with solid revenue and a $20 M investment by Casdin Capital. The chart looks “peaky” and at $15.88, a $20 million infusion adds the share count of the existing 20.45 million and if these new shares are registered – a calamity;
  • Caladrius Biosciences (CLBS) popped +$0.22, I don’t feel the promise of May 14’s CLBS16 durably improves heart function and symptoms in patients with coronary microvascular dysfunction. There was a negative -$0.10 or -4.88% aftermarket indication;
  • Cellectis SA (CLLS) closed up another +$0.10 after Friday’s +$1.91, Thursday’s +$3.71, Wednesday’s -$1.29 and could be an Icarus candidate – a decline in the making as traders take profits;
  • Ultragenyx Pharmaceuticals (RARE) closed at $72.59 (up +$1.30 or +1.82%) and hit a 52-week high of $73.34 that was backed-off at the close. Charts “peaky” and volume spiked (920.4 K versus a 3-month average of 580.8 K and a 10-day of 527.5 K). I see three (3) up (+$1.30, +$6.56 and +$0.65) sessions and two (2) down (-$2.22 and -$1.07) following last Monday’s up session (+$3.52).

BUY:

  • Intellia Therapeutics (NTLA) closed up +$1.31 after Thursday’s +$0.60, another “peaky” chart” although Investor’s Business daily (IBD) considers NTLA as an extended and out of buy range after clearing a 16.86 buy point in a first-stage cup with handle. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week moving average. I’ll bite but, anything hitting a 52-week high in a session is suspect;
  • Pluristem (PSTI) closed down -$0.57 and has a positive +$0.04 or +0.43% aftermarket indication. Traders are “scoring” on taking down PSTI however recent news (which was sold into) highlights an … 87.5% survival rate of patients on invasive mechanical ventilation injected with PLX cells, 75% of patients no longer in need of any mechanical ventilation, 62.5% of the patients discharged alive from the hospital after a 28-day study in PSTI’s recently announced FDA P2 study. A compassionate use program should NOT be underestimated.

 

The BOTTOM LINE: I’m all for taking money off the table!

Over the past week (Monday through Monday) the IBB has advanced +4.35% while the XBI has only advanced +6.19%.

  • Volume continues LOW while percentage of share pricing mobility fluctuates with Monday’s range of declines at -0.06% to 6.56% following Friday’s -0.55% to -4.86% versus Thursday’s (-0.16% to -21.3%;
  • The percentage (%) inclines on Monday (+0.52% to +12.02%) were comparable to Friday’s (+0.08% to 10.97%) which also followed Thursday’s +0.55% to +27.08%, a spike that came from nowhere.

What I’m trying to forecast is as markets move, there are still headwinds lurking!

Momentum is fragmented, volatility exceeds volume and we shouldn’t base our buying positions in this climate on hope!

 

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.