July 13, 2020 5:50pm

Another I told you so; the sector got afternoon hammered (after ignoring the virus issues drinking the Kool-Aid of misplaced optimism) as investors chased pricing with volatility jumped +17.96%

Pre-open indications: 1 HIT <Biostage (BSTG -$0.02)>

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The Dow closed UP +10.50 points (+0.04%), the S&P closed DOWN -29.82 points (-0.94%) while the NASDAQ closed -226.60 points (-2.13%)

 

Pre-open indication results: 1 HIT < Toxic Sell Biostage (BSTG -$0.00)> and 0 MISS

 

Henry’omics:

indexes reversed on Monday closing lower with the Nasdaq pulling back as the infection rate are rose through the roof and a vaccine is still to the future as clinical trials are still “evolving”. Science is the answer but, timing is still in flux as words are the only hope we have for a vaccine or treatment

  • Shares of German biotech firm BioNTech <BNTX.O> jumped 10.9% and Pfizer (PFE) climbed 4.3% as two of their experimental coronavirus vaccines received the U.S. FDA's "fast track" designation. There are renewed expectations that the Pfizer vaccine will be ready for approval by the end of October, which is sooner than expected.

 

RegMed/Cell and Gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

  • Monday opened positive at 21/11 and 3 flats, stayed positive at the mid-day at 22/9 and 4 flats, closing negative at 4/29 and 2 flats;
  • Friday opened positive at 16/15 and 4 flats, dropped precipitously negative at the mid-day to 9/27 and 4 flats, closing negative at 9/22 and 4 flats;

 

Key metrics:

  • Sector volume was LOW with 1 of the 4-upside having higher than the 3-month average volume and 10 out of the 29-downside having higher than the 3-month average volume;
  • Monday’s percentage (%) of the 4-upside were +0.60% (AXGN) to +6.40% (CLBS) while the 29-downside ranged from -0.10% (BLFS) to -9.91% (NTLA); 

 

Hammered in today’s market:

  • Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE), bluebird bio (BLUE), CRISPR Therapeutics (CRSP) and Intellia therapeutics (NTLA) to name 5 of the 29 declining of the 35 covered

Jumping with share pricing momentum:

  • Vericel (VCEL), Caladrius Biosciences (CLBS), AxoGen (AXGN) and Aduro Biotech (ADRO) to name 4 of the 4 trading up of 35 covered

 

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

  • Monday, the IBB closed down -1.34% and XBI also closed down -2.58%
  • Friday, the IBB closed down -0.97% and XBI also closed down -1.02%

 

Monday’s (4 of 4) incliners:

  • Vericel (VCEL closed up +$0.14 after Friday’s +$0.52, Thursday’s +$0.38 and announcing preliminary financial results for the quarter ended 6/30/20, and provided business updates);
  • Caladrius Biosciences (CLBS +$0.13 after Friday’s +$0.03);
  • AxoGen (AXGN +$0.07);
  • Aduro Biotech (ADRO +$0.05 after Friday’s +$0.01);

Monday’s (bottom 10 of 29) decliners:

  • Alnylam Pharmaceuticals (ALNY -$9.51 after Friday’s +$3.22 and Wednesday’s -$1.39);
  • Ultragenyx Pharmaceuticals (RARE -$4.31 after Friday’s -$1.69, Thursday’s -$2.05, Wednesday’s +$2.12, Tuesday’s +$1.13 and last Monday’s +$0.71);
  • bluebird bio (BLUE -$3.28 after Friday’s -$2.17);
  • CRISPR Therapeutics (CRSP -$3.24 after Friday’s -$4.55);
  • Intellia Therapeutics (NTLA -$2.36 after Friday’s -$0.76 and Thursday’s -$0.36);
  • uniQure NV (QURE -$2.34 after Friday’s -$1.25, Thursday’s +$1.06, Wednesday’s +$1.08, Tuesday’s +$0.93 and last Monday’s -$0.73);
  • Fate Therapeutics (FATE -$2.05 after Friday’s -$1.09 and Thursday’s -$1.36 post announcing that the U.S. (FDA has cleared their Investigational New Drug (IND) application for FT819, an off-the-shelf allogeneic chimeric antigen receptor (CAR) T-cell therapy targeting CD19+ malignancies.
  • Sage Therapeutics (SAGE -$1.79 after Friday’s -$1.19 and Thursday’s -$0.29);
  • Adverum Biotechnologies (ADVM -$1.60 after Friday’s -$1.25, Thursday’s -$0.51 and last Wednesday’s +$1.16);
  • Editas Medicine (EDIT -$1.40 after Friday’s -$1.62);

Closing flat: 2 – ReNeuron (RENE.L) and Stemline Therapeutics (STML – being acquired)

 

Percentage (%) movement/range statistics: look closely … notice percentage (%) movements are declining

  • Monday’s percentage (%) of the 4-upside were +0.60% (AXGN) to +6.40% (CLBS) while the 29-downside ranged from -0.10% (BLFS) to -9.91% (NTLA); 
  • Friday’s percentage (%) of the 9-upside were +0.38% (ADRO) to +8.43% (BLFS) while the 22-downside ranged from -0.61% (MESO) to -5.92% (ADVM); 

 

Sentiment and a few daily indicators - cases:

Pfizer (PFE) and BioNTech said they expect to start the next phase of the vaccine trial later this month with 30,000 subjects.

  • The companies expect to have 100 million doses of a vaccine by the end of 2020 and more than 1.2 billion doses by the end of 2021 … according to a release.  Unless one has been there, manufacturing has many and more problems to comprehend in a massive scale-up!

The news on BioNTech and PFE’s vaccine candidates came after Florida reported 15,299 new coronavirus cases on Sunday, the highest single day total for any U.S. state since the pandemic began. Meanwhile, the U.S. has reported more than 60,000 new cases daily for three days in a row. <CNBC>

  • Monday 3.30 million cases
  • Friday 3.11 million cases
  • Last Monday 2.89 million cases

Monday’s death rate totaled 135,205 after Friday’s 133,291 and last Monday’s 130,007 <Johns Hopkins University>

 

Upside volume stats: 

  • Monday: 1 out of the 4-upside had higher than the 3-month average volume;
  • Friday: 1 out of the 9-upside had higher than the 3-month average volume;

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Monday was up +4.90 points or +17.96% at 32.19
  • Friday was down -1.97 points or -6.73% at 27.29;

Downside volume stats:

  • Monday: 10 out of the 29-downside had higher than the 3-month average volume;
  • Friday: 1 out of the 22-downside had higher than the 3-month average volume;

 

July

Monday (7/13) closed negative with 4 advancers, 29 decliners and 2 flats

Friday closed negative with 9 advancers, 22 decliners and 4 flats

Thursday closed negative with 10 advancers, 24 decliners and 1 flat

Wednesday closed positive with 28 advancers, 5 decliners and 2 flats

Tuesday closed positive with 18 advancers, 12 decliners and 5 flats

Monday 97/6) closed positive with 19 advancers, 15 decliners and 1 flat

Friday was a market holiday;

Thursday closed positive with 18 advancers, 14 decliners and 3 flats

Wednesday (7/1) closed positive with 24 advancers, 7 decliners and 4 flats

 

The Bottom line:  I believe we are at a scary time in the sector and the market – the upside is like “rolling thunder” however, I expected a reversal!

How can the stock market be so strong in the face of such bad (infection) news? Investors are valuing companies over the SHORT term and chasing pricing - these present “assumptions” have led to a big overbought dip.

Q2 results are coming, so will momentum last? I tend to be a contrarian – safety is NOT a virtue! Speculation is a VICE. I started writing this at 1 p.m. – and the feeling ran TRUE!

 

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.