June 8, 2020 8:06am

As last week’s sector’s sell-off was disconcerted by more share pricing weakness

News: Alnylam Pharmaceuticals (ALNY) announced positive P3 results from the ILLUMINATE-A study of lumasiran, an investigational RNAi therapeutic targeting hydroxyacid oxidase 1 (HAO1) – the gene encoding glycolate oxidase (GO) – in development for the treatment of primary hyperoxaluria type 1 (PH1).

Pre-open indications: I’m temporarily unsettled about the week ahead …

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Dow future are UP +0.82% (+223 points), S&P futures are UP +0.54% (+17 points) and NASDAQ futures are DOWN -0.03% (-3 points)

 

U.S. stock futures were higher early Monday, building on last week’s optimism over the economy reopening but, the NASDAQ is slipping;

European stocks traded lower as markets weigh an economic recovery from the coronavirus and ongoing global protests against racism with the pan-European Stoxx 600 sliding -0.4% in early trade;

Asia Pacific stocks were higher based on hopes of an economic recovery from the coronavirus; Japan indexes rose, Mainland Chinese stocks ended higher, South Korea, the Kospi closed higher while markets in Australia were closed on Monday for a holiday with the MSCI Asia ex-Japan index rising +0.3%.

 

Henry’omics:

More green on the screen ... is welcomed ...

However, optimism and hope are NOT fundamental factors which worries me, are we sprinting to a cliff drop driven by electronic trading?

The Dow was up 6.8% for the week, while the S&P 500 gained 4.9% and the Nasdaq was up 3.4%.

Friday’s non-farm payroll report came joyfully as states continued their reopening processes. However, the question remains, assuming eased quarantine restrictions will allow businesses, to resume operations with relative ease and IF employees feel safe with the trepidation of going back to how operations were?

 

News (continued from title): Alnylam Pharmaceuticals (ALNY) clinical data presented at a late-breaking session at the European Renal Association-European Dialysis and Transplant Association (ERA-EDTA) International Congress being held as a virtual event on June 6-9.

  • PH1 is an ultra-rare orphan disease caused by excessive oxalate production, and elevated urinary oxalate levels are associated with progression to end-stage kidney disease and other systemic complications;
  • Based on the ILLUMINATE-A results, Alnylam filed a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA). The FDA has granted a Priority Review for the NDA and has set an action date of December 3, 2020 under the Prescription Drug User Fee Act (PDUFA). In addition, the Marketing Authorization Application (MAA) for lumasiran has been submitted to and validated by the European Medicines Agency (EMA), and has received Accelerated Assessment designation.

However;

  • However, RBC analyst Luca reiterated his Hold rating on the stock with a $150 price target, arguing that ALNY’s trailblazing phase 1 may actually end up providing a clearer path for rival Dicerna Pharma (DRNA)- which has a Strong Buy Street consensus;
  • “We think DRNA is better positioned for PH given: 1) better dosing (fixed vs. weight-based dosing); 2) potential for broader label (can tackle all PH subtypes vs. only PH1); and 3) DRNA may capitalize on ALNY’s heavy lifting on building disease awareness”.

 

Interesting tidbit (rumor):  AstraZeneca had approached U.S. rival Gilead Sciences (GILD) last month regarding a potential merger, which could have been the largest pharmaceutical hook-up in history. The British drug maker’s shares slid 2% in early trade. <Bloomberg News>

 

Friday post’s title: “sold-out by strength. A stunning blowout and reversal in non-farm payroll numbers – they decreased however; sector underperformance continues with sentiment spoilage”   

  • The NASDAQ closed UP +198.27 points (+2.06%);
  • The IBB closed down -0.07% and XBI also closed up +0.81%
  • The Dow was up 6.8% for the week, while the S&P 500 gained 4.9% and the Nasdaq Composite was up 3.4%;
  • Volume was WEAK with 5 out of the 16-upside having higher than the 3-month average volume and 5 out of the 19-downside having higher than the 3-month average volume;
  • Friday’s percentage (%) of the 16-upside were +0.02% (RARE) to +11.82% (ADVM) while the 19-downside ranged from -0.32% (FIXX) to -6.47% (CLBS);
  • The CBOE Volatility Index (VVIX: INDEX) was down -1.29 points or -5% at 24.52;

Q2:

  • June registered 2 positive and 3 negative close
  • May registered 9 negative, 11 positive closes and 1 holiday
  • 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

… HOLD … let’s see or watch market forces play their role …

 

The BOTTOM LINE: What news is keeping the sector up? The ebb and flow of algorithmic electronic trading is MY CONCERN as the market reaches new highs.

The Dow Jones Industrial Average jumped 829.16 points, or 3.1%, to 27,110.98. The S&P 500 rose 2.6%, or 81.58 points, to 3,193.93.

Friday’s rally put the S&P 500 down just 1.1% for 2020. At one point this year, the broader market index was down 30.3%. The Dow was only down 5.0% year to date after dropping as much as 34.6% in 2020. Friday’s gains also put the S&P 500 up more than 45% from a March 23’s intraday low and less than 6% from its Feb. 19 record.

Storm or sunshine, I’m in a cautiously waiting period …

 

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.