January 29, 2021 5:53pm

It’s re-inventing the impact of retail investor “rebellion” as short sellers’ targets scatter

The week in review …

Pre-open indication results: 6 HITs and 1 MISS – it’s good to be right, so often!

Subscription is coming, it’s not conscription but, an offer to join our collective of like-minded investor profiting! Numbers based facts speak better then opinion as I see answers in numbers

Sector earnings LPS (loss-per-share) season begins as Mesoblast (MESO) reports?

 

The Dow closed DOWN - 620.74 points (-2.03%); the S&P closed DOWN -73.14 points (-1.93%) while the Nasdaq closed DOWN - 266.46 points (-2%)

 

Henry’omics:

Indexes fell sharply on Friday as heightened speculative trading by retail investors continued to unnerve the institutional fed markets.

The Dow fell -2%, and S&P got slugged -1.1%, their biggest weekly fall since the end of October; while the Nasdaq eked out a 1.4% gain on the month.

  • The stock of the week, GameStop (GME) continues to rise in such a volatile fashion, it may ripple through the financial markets, causing losses at hedge funds who bet against the stock to sell other securities to raise cash.

Adding color, let’s get back to “our’ business:

  • Lilly (LLY) reported strong sales, boosted by COVID-19 antibodies. December’s sales were as good as expected and profits came in about 9% better than the forecasts of analysts polled. “Counting the $870 million order for its COVID-19 treatment bamlanivimab, Lilly’s sales jumped 22% in the quarter to $7.4 billion. Backing out, sales were up 7%. Profits in the quarter increased 58%, excluding some noncash charges, to $2.5 billion, or $2.75 a share. For the year, revenue was up 10%, to $24.5 billion, while earnings rose 30% to $7.2 billion, or $7.93 a share, not counting certain charges.” <Barron’s>
  • Biogen (BIIB) shares rose 5.50%, after the FDA extended the review period for its investigational Alzheimer's disease treatment aducanumab by three (3) months. As part of the review, BIIB submitted a response to an information request from the regulator and provided it with additional data and analyses, "which the FDA considered a Major Amendment to the application that will require additional time for review,"

 

Pre-open indication results: 6 HITs <Maintaining SELL: Biostage (BSTG -$0.06 with 7,338 shares traded - market manipulation?); BUY: Bellicum Pharmaceuticals (BLCM +$0.81), Precigen (PGEN +$0.07), Global Blood Therapeutics (GBT +$1.78): SELL: Alnylam Pharmaceuticals (ALNY -$4.26), Mesoblast (MESO -$0.22)> and 1 MISS <BUY: Homology Medicine (FIXX -$0.29) >

 

Data Docket: U.S. labor costs increased more than expected in Q4/20 amid a jump in wages, supporting views that inflation could accelerate this year, while a report showed U.S. consumer spending fell for a second straight month in December. Pending home sales end 2020 slightly down.

 

Sentiment and COVID-19 infections:

The World Health Organization has warned that new and more contagious COVID-19 variants are fueling a spike in infections and death across Africa.

New trial results from Johnson & Johnson’s (JNJ) coronavirus vaccine disappointed some investors, weighing on the broader market.

  • JNJ said its one-dose vaccine demonstrated 66% effectiveness overall in protecting against Covid-19. The vaccine was 72% effective in the United States, 66% in Latin America and 57% in South Africa after four (4) weeks. The vaccine did offer complete protection against COVID-19-related hospitalizations.

Infection cases <Million>: never to forget …

  • Friday 25.76 M cases,
  • Friday’s death rate totaled 433,223 <Johns Hopkins University>

 

RegMed Investors’ (RMi) pre-open: “speculation mania and market rebellion. WHAT is driving the sector - volatility, indigestion, weakness followed by altitude mixed in by the start of earnings releases” …  https://www.regmedinvestors.com/articles/11745

 

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

  • Friday opened positive at 26/8 and 1 flat, strayed negative at the mid-day to 9/24 and 2 flats, closing negative at 12/22 and 1 acquired;
  • Thursday opened positive at 24/8 and 3 flats, stayed positive at the mid-day to18/16 and 1 flat, closing positive at 18/15, 1 flat and 1 acquired;
  • Wednesday at the mid-day was negative at  7/25 and 3 flats, closing negative at 4/26, 1 flat and 1 acquired;
  • Tuesday opened negative at 13/21 and 1 flat, stayed negative at the mid-day to 7/26 and 2 flats, closing negative at 3/31 and 1 acquired;
  • Monday opened positive at 22/10 and 3 flats, flipped neutral at 16/16 and 3 flats, stayed negative at the mid-day to 14/20 and 1 flat, flipped again positive at 22/12 and 1 flat closing positive at 21/13 and 1 acquired;

 

Key metrics:

  • Sector volume was LOW with 2 of the 12-upside having higher than the 3-month average volume with the increased volume of 3 of 22-downside having higher than the 3-month average volume;
  • Friday’s percentage (%) of the 12-upside were +0.36% (EDIT) to +21.09% (BLCM) while the 22-downside ranges from -0.25% (AGTC) to-4.20% (BCLI);

 

There are clear winners — and losers — heading into the first month of 2021.

Jumping with share pricing momentum:

  • Global Blood Therapeutics (GBT), Sage Therapeutics (SAGE), Bellicum Pharmaceuticals (BLCM), MiMedx (MDXG), Vericel (VCEL) to name 5 of the 12 inclining of the 35 covered

Hammered in today’s market:

  • ReNeuron (RENE.L), Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP), Ultragenyx (RARE), Intellia Therapeutics (NTLA) to name 5 of the 22 declining of the 35 covered

 

Friday’s (10 of 12) incliners:

  • Global Blood Therapeutics (GBT +$1.78 after Thursday’s -$2.46 and Wednesday’s +$3.31);
  • Sage Therapeutics (SAGE +$1.38 after Thursday’s -$1,26, Wednesday’s -$2.95, Tuesday’s -$3.50 and and Monday’s +$1.91);
  • Bellicum Pharmaceuticals (BLCM +$0.81);
  • MiMedx (MDXG +$0.57);
  • Editas Medicine (EDIT +$0.22 after Thursday’s +$0.63);
  • Vericel (VCEL +$0.17 after Thursday’s +$0.95);
  • Solid Biosciences (SLDB +$0.15);
  • Caladrius BioSciences (CLBS +$0.08);
  • Precigen (PGEN +$0.07 after Thursday’s -$0.85 and Wednesday’s +$1.14);
  • Adverum Biotechnologies (ADVM +$0.06);
  • Verastem (VSTM +$0.05);
  • Athersys (ATHX +$0.035 after Thursday’s -$0.10);

Friday’s (10 of 22) decliners:

  • Alnylam Pharmaceuticals (ALNY -$4.26 after Thursday’s -$0.65, Wednesday’s -$14.63, Tuesday’s -$5.67 and Monday’s +$3.31);
  • ReNeuron (RENE.L -$4.00 after Thursday’s -$4.00, Wednesday’s -$4.50, Tuesday’s -$5.00 and Monday’s -$2.00);
  • Ultragenyx (RARE -$2.01 after Thursday’s +$4.44 and Wednesday’s -$6.79);
  • CRISPR Therapeutics (CRSP -$1.72 after Thursday’s +$3.47, Wednesday’s -$5.58, Tuesday’s -$11.71 and Monday’s -$7.25);
  • Intellia Therapeutics (NTLA -$1.35 after Thursday’s +$5.86, Wednesday’s -$6.14, Tuesday’s -$7.15 and Monday’s -$2.96);
  • Cellectis SA (CLLS -$0.91 after Thursday’s +$0.46 and Wednesday’s -$2.32);
  • Ionis Pharmaceuticals (IONS -$0.62 after Thursday’s +$1.50 and Wednesday’s -$3.33);
  • AxoGen (AXGN -$0.54 after Thursday’s +$0.71);
  • Sangamo Therapeutics (SGMO -$0.53);
  • uniQure NV (QURE -$0.47 after Thursday’s -$0.42 and Wednesday’s -$1.95);

Closing 1 -Stemline Therapeutics (STML – acquired)

 

Stats:

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

  • Friday, the IBB closed up +0.14% and XBI closed up +0.82%
  • Thursday, the IBB closed up +0.35% and XBI closed down -0.43%
  • Wednesday, the IBB closed down -3.02% and XBI closed down -1.35%
  • Tuesday, the IBB closed down -1.74% and XBI closed down -1.76%
  • Monday, the IBB closed up +1.86% and XBI closed up +3%

The CBOE Volatility Index (VVIX: INDEX) tracked: retation ...

  • Friday was up +2.88 points or +9.53% at 30.09
  • Thursday was down -7.00 points or – 18.81% at 30.21
  • Wednesday was up +14.19 points or +61.64% at 37.21
  • Tuesday was down -0.17 points or -0.73% at 23.02
  • Monday was up +1.28 points or +5.84% at 23.19

Upside volume:

  • Friday: 2 out of the 12-upside had higher than the 3-month average volume;
  • Thursday: 4 out of the 18-upside had higher than the 3-month average volume;
  • Wednesday: 4 out of the 4-upside had higher than the 3-month average volume;
  • Tuesday: 9 out of the 31-upside had higher than the 3-month average volume;
  • Monday: 6 out of the 21-upside had higher than the 3-month average volume;

Downside volume:

  • Friday: 3 out of the 22-downside had higher than the 3-month average volume;
  • Thursday: 6 out of the 15-downside had higher than the 3-month average volume;
  • Wednesday: 15 out of the 26-downside had higher than the 3-month average volume;
  • Tuesday: 1 out of the 3-downside had higher than the 3-month average volume;
  • Monday: 7 out of the 13-downside had higher than the 3-month average volume;

Percentage (%) movement/range statistics: a 360 degrees comparison of % and pricing

  • Friday’s percentage (%) of the 12-upside were +0.36% (EDIT) to +21.09% (BLCM) while the 22-downside ranges from -0.25% (AGTC) to-4.20% (BCLI);
  • Thursday’s percentage (%) of the 18-upside were +0.42% (PSTI) to +10.98% (NTLA) while the 15-downside ranges from -0.24% (FIXX) to-11.24% (AGTC);
  • Wednesday’s percentage (%) of the 4-upside were +1.52% (BLUE) to +14.07% (PGEN) while the 26-downside ranges from -2.55% (VSTM) to-14.63% (ALNY);
  • Tuesday’s percentage (%) of the 3-upside were +1.37% (BLCM) to +18.42% (BSTG) while the 31-downside ranges from -0.11% (MESO) to-10.01% (NTLA);
  • Monday’s percentage (%) of the 21-upside were +0.10% (CLLS) to +10.82% (ATHX) while the 13-downside ranges from -0.44% (EDIT) to -4.18% (CLBS);

 

January, the 1st month of Q1 … a visual review identifies the range of sector volatility

Friday closed negative with 12 advancers, 22 decliners and 1 acquired

Thursday closed positive with 18 advancers, 15 decliners, 1 flat and 1 acquired

Wednesday closed negative with 4 advancers, 26 decliners, 1 flat and 1 acquired

Tuesday closed negative with 3 advancers, 31 decliners and 1 acquired

Monday (1/25) closed positive with 21 advancers, 13 decliners and 1 acquired

Friday closed negative with 21 advancers, 13 decliners and 1 acquired

Wednesday closed negative with 18 advancers, 16 decliners and 1 acquired

Tuesday closed positive with 18 advancers, 14 decliners, 2 flats and 1 acquired

Monday (1/18) was a holiday

Friday closed negative with 10 advancers, 24 decliners and 1 acquired

Thursday closed positive with 27 advancers, 7 decliners and 1 acquired

Wednesday closed positive with 10 advancers, 21 decliners and 4 flats

Tuesday closed positive with 21 advancers, 13 decliners and 1 flat

Monday (1/11) closed negative with 13 advancers, 20 decliners and 2 flats

Friday closed negative with 16 advancers, 18 decliners and 1 flat

Thursday closed positive with 31 advancers, 2 decliners and 2 flats

Wednesday closed positive with 22 advancers, 12 decliners and 1 flat

Tuesday closed positive with 19 advancers, 14 decliners and 2 flats

Monday (1/4) closed positive with 26 advancers, 7 decliners and 2 flats

 

The Bottom Line: Concerns over stretched valuations, new coronavirus variants and rising COVID-19 cases are keeping all of us on edge about the market and sector pullbacks in addition to the dramatic increase in volatility in the near-term.

There is STILL a short-term tone in the sector – “our’ universe of RegMed, stem, cell and gene therapy equities.

A good quote, “There’s way too much leverage in the system, and we’re starting to see signs that this excess leverage is going to be unwound in a way that will create headwinds for the stock market and other risk assets for more than just a few days,” said Matt Maley, chief market strategist at Miller Tabak.

Let’s NOT forget, it is a new tax year thus, a cut back of some (I say many) gains in the sector before the release of Q4 and FY20 “earnings” i.e., LPS (loss-per-share)!

Forewarned … earnings LPS (loss-per-share) season is coming quickly – my advice, trim and skim!!

 

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.