RegMed Investors’ (RMi) pre-open: a coming year of outcome definition

January 4, 2021 7:55am

We need to consider the backend of last year, the volatility and pricing determination of Q4 to focus the dimensions of Q1/Q2 of 2021

Pre-open indication: 1 SELL and moderate upside sector moves

What I provide is a trusted source of share pricing intelligence that ensures that investors are kept apprised of “our” universe, the RegMed/cell and gene therapy sector and its surrounding markets

A pre-open briefing on what you need to know in the session ahead!

Dow futures are UP +0.51% (+156points), S&P futures are UP +0.48% (+18 points) and NASDAQ futures are UP +0.43% (+55 points)

U.S. stock futures pointed to a positive open, the first session of trading in 2021;

European stocks advanced on Monday with the pan-European Stoxx 600 climbed 1.6% by late morning;

• The coronavirus pandemic is focus on the start of the roll-out of the AstraZeneca and the University of Oxford vaccine, following the U.K.’s separation from the EU was completed 12/31.

Asia-Pacific stocks were mostly higher with the MSCI’s index (Asia-Pacific shares outside Japan) advanced 1.29%.

• A private survey released Monday showed Chinese manufacturing activity expanding in December, with the Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) for the month coming in at 53.0. That compared against November’s reading of 54.9. The 50-level in PMI readings separates expansion from contraction.

Data Docket: U.S. manufacturing PMI for December is at 9:45 a.m., with construction spending for November at 10:00 a.m. Chicago Fed President Charles Evans, Atlanta Fed President Raphael Bostic and Cleveland Fed President Loretta Mester kick off the year for monetary policy speeches.

Henry’omics:

Investors are starting 2021 with a risk appetite that remains elevated.

Overnight the MSCI Asia Pacific Index added 0.9%, with Japan's Topix index closing 0.5% lower as the yen rose against the dollar. In Europe, the Stoxx 600 Index had gained 1.5% by 5:50 a.m., boosted by strong manufacturing data from the euro area. S&P 500 futures pointed to another record high at the open, the 10-year Treasury yield was at 0.931% and gold rallied. <Bloomberg>

Thursday’s (12/31/20) evening’s recap: RegMed Investors’ (RMi) closing bell: “that’s it for 2020. No fond goodbyes, just a riotous scramble to the exit”

• The Nasdaq closed UP +18.28 points (+0.14%);
• The IBB closed down -0.65% and XBI closed down -2.29%
• Sector volume was LOW with 2 of the 4-upside having higher than the 3-month average volume with the increased volume of 6 of 29-downside having higher than the 3-month average volume;
• The CBOE Volatility Index (VVIX: INDEX) was down -0.02 points or -0.09% at 22.75;
• Thursday’s percentage (%) of the 4-upside were +0.86% (BLCM) to +3.31% (BSTG) while the 29-downside ranges from -0.47% (MESO) to -8.35% (EDIT);
• As 2020 ends, the S&P 500 posted 17 new 52-week highs and no new lows; the Nasdaq recorded 105 new highs and 19 new lows.

Companies in my headlights – It’s your decision; I provide an idea and context:

Maintaining Sell:

Biostage (BSTG) closed up +$0.04 to $1.15 with 5,491 shares traded after Wednesday’s -$0.01 to $1.21 with 6,82 shares traded, Tuesday’s +$0.01 to $1.22 with 552 shares traded and last Monday’s -$0.20 to $1.21 with 1,700 shares traded.  Continuing the questions …

• Question#1: “As previously disclosed (12/30/2020), Biostage issued warrants to acquire shares of common stock with an exercise price of $3.70 per share that were exercisable until December 31, 2020. On December 30, 2020, the Company agreed to extend the expiration date to June 30, 2021 with respect to warrants exercisable for an aggregate of 122,554 shares of common stock.” WHY the extension, can’t they “move” the warrants?
• Question#2: Does it have anything to do with the 2020’s share price depreciation with a 52-week low of $0.80 and a 52-week high of $4.88, a current share price of $1.25 (up from $1.21 on 12/30 and 12/28) following the last price placement priced at $4.00?
• Question#3:  A precarious capital formation platform - they’re running-out of warrant conversions?
• Question#4: Reiterating, WHAT is “with” the $75 million raised and all but spent on getting to an IND with … NO clinical trial initiation?

I see moderate sector moves as the Nasdaq moves higher coming-off a past shirt-week of the Christmas (Friday) holiday, 3 negative and 1 positive closes.

Last Thursday, week, month and year – many lows were fractured or consummated by profit taking; I foretell some upward mobility of the oversold – let’s wait and see how the first trading session “shakes out”?

But, a rush to the upside will bring-on the “Pac-man” profit eating algorithms

The BOTTOM LINE: The stock market ended 2020 in an excruciating yet remarkable year; as investors hope for a vaccination timeline to the pandemic in 2021 and many, not all of the unemployed return to work. 2020 also featured one of the biggest sector (stem, cell and gene therapy) share pricing disparity based on volatility driven sentiment ever.

 Vaccinator, Moderna (MRNA)shares added 4.4% in premarket trading Monday.

The question remains, what is considered normality and when might this new of newest form of “regularity” evolve? 

With the Georgia runoff elections on Tuesday and the electoral college drama on Wednesday, expect increased volatility this week.

To reiterate, my soapbox is still in place as I re-emphasize volatility will remain elevated into the New Year.

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.