February 16, 2021 8:08am
What do analysts do, they separate actionable indications and news into a short-term investment thesis to tackle the “unknown unknowns”. What if I was to tell you the single biggest determinant of one’s success, is a skill at questioning?
Pre-open indication: 4 BUYs and 5 SELLs
News: Athersys (ATHX +$0.02 in pre-market) announcing that Dr. Gil Van Bokkelen has stepped down as Chairman and Chief Executive Officer, effective immediately. blue bird bio (BLUE -$13.24 in pre-market) has placed its P1/2 (HGB-206) and Phase 3 (HGB-210) studies of LentiGlobin gene therapy for sickle cell disease (SCD) (bb1111) on a temporary suspension due to a reported Suspected Unexpected Serious Adverse Reaction (SUSAR) of acute myeloid leukemia (AML). REGENXBIO (RGNX) reported at the Angiogenesis, Exudation, and Degeneration 2021 conference additional positive interim data from Cohorts 4 and 5 of its RGX-314 P1/2a trial for the treatment of wet age-related macular degeneration (wet AMD), and Cohort 3 of its Long-Term Follow-Up (LTFU) study. RGX-314 is a potential, one-time gene therapy for the treatment of wet AMD.
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Dow futures are up +0.56% (+177 points), S&P futures are UP +0.52% (+21 points) and NASDAQ futures are UP +0.54% (+75 points)
Futures contracts tied to the major U.S. stock indexes are rising early Tuesday indicating big gains,
European markets were muted as the pan-European Stoxx 600 hovered fractionally above the flatline by late morning trade,
Asia-Pacific markets rose especially in japan and in Australia while markets in mainland China remain closed for the Lunar New Year holiday with the MSCI’s index of Asia-Pacific shares outside Japan gained 0.38%.
It’s Tuesday after U.S. markets were closed Monday for a holiday …
Yesterday, European markets closed higher on Monday, with successful vaccine rollouts fueling hopes of a global economic recovery with the pan-European Stoxx 600 closing up 1.4%.
While, Asia-Pacific markets in Japan and South Korea rose on Monday, while multiple markets in North Asia were closed for Lunar New Year - in China, Hong Kong, Taiwan.
Indexes finished marginally higher on Friday with a record closes while finishing with modest gains for the week, as the strong rally to begin February has taken a slight breather.
Friday’s evening’s recap: “inclining market travels, declining sector moves, head, tail or no wind at all? Q4 and FY20 earnings are coming-in below expectations so far as optimism is stroked by coming, coming, almost near fiscal aid/stimulus” … https://www.regmedinvestors.com/articles/11769
- The Nasdaq closed UP +69.70 points (+0.50%);
- The IBB closed up +0.58% and XBI closed down -0.91%
- Sector volume was LOW with 5 of the 14-upside having higher than the 3-month average volume with the increased volume of 4 of 19-downside having higher than the 3-month average volume;
- The CBOE Volatility Index (VVIX: INDEX) was down -1.28 points or -6.02% at 19.97;
- Friday’s percentage (%) of the 14-upside were +0.13% (KDNY) to +11.78% (BLCM) while the 19-downside ranges from -0.02% (BLUE) to -14.65% (CLBS);
February: 7 positive and 3 negative closes and 1 holiday to date
January: 10 positive, 9 negative closes and 1 holiday
Companies in my headlights – It’s your decision; I provide an idea and context:
Maintaining Sell: Questions continue …
Biostage (BSTG) closed flat at $2.12 with 88 shares traded after Thursday’s +$0.30 to $2.12 with 8.09 shares traded, Wednesday’s flat at $1.82 with 4,292 shares traded after being up +$0.28 following Tuesday’s +$0.01 to $1.82 with 525 shares traded and last Monday -$0.19 to $1.81 with 1,725 shares traded.
Question#1: WILL RSM US LLP ensure compliance with established internal control procedures by examining records, reports, operating practices, and documentation, verify assets and even MISSING liabilities by FINDING AND QUESTIONING items to LOST documentation; reiterating, “that might have been conveniently lost or displaced”? DUE DILIGENCE is involved?
Question#2: Regarding RSM US LLP’s BSTG’s Q4 and FY20 audit findings, DO conflicts of interest and shareholders’ rights in corporate governance EXIST through – extent or limitation of disclosures, protection against board of directors’ allocation of corporate assets for their OWN corporate involvement entity <i.e., million-dollar gifts of which $429,500.00 still remains to be paid) and transparency of related-party <DST Capital> share purchase transactions?
Question #3: Is there an “aha” action in the cards in regard to minority investors who are watching and waiting?
Alnylam Pharmaceuticals (ALNY) closed Friday down -$7.46 to $157.92 after Thursday’s$165.38, Wednesday’s $164.16 and last Tuesday’s $167.65 with a positive +$2.08 or +1.32% aftermarket indication;
Athersys (ATHX) closed up +$0.07 to $2.69 with a positive +$0.02 or +0.74% pre-market indication on news that Dr. Gil Van Bokkelen has stepped down as Chairman and Chief Executive Officer, effective immediately. The Athersys Board has appointed William (B.J.) Lehmann, the Company’s President and Chief Operating Officer, as Interim Chief Executive Officer. Dr. Ismail Kola, Lead Director of the Athersys Board, has been appointed Chairman of the Board.
REGENXBIO (RGNX) closed down -$0.37 to $46.96 and has a positive +$1.25 or +2.66% pre-market indication on news of data out to three years, which demonstrates that one-time treatment with RGX-314 has the potential to result in long-term stability to improvement of visual acuity outcomes and retinal anatomy, while alleviating treatment burden," said Allen C. Ho, M.D., Director of Retina Research at Wills Eye Hospital and Mid Atlantic Retina and investigator surgeon in the RGX-314 clinical trials.
Ultragenyx (RARE) closed down -$12.52 to $150.26 after Thursday’s $162.78, Wednesday’s $167.22 and last Tuesday’s $167.73 after an earnings release and a positive +$0.24 or 0.16% bounce back potential. RARE came out with a quarterly loss of $1.34 per share versus the estimate of a loss of $1.06 compared to loss of $1.64 per share a year ago. However, in Q4, it reported $91.5 million in total revenues, up +157% from the year-ago quarter. Revenues surpassed the estimate of $71 million. RARE also reported a loss of $3.07 per share for 2020, narrower than a loss of $7.12 in 2019. However, the 2020 loss included a one-time gain $170.4-million fair value of investments in equity securities. Excluding this one-time gain, the loss came in at $5.88 per share in 2020 compared with a loss of $7.36 in 2019.
SELL into strength:
Bellicum Pharmaceuticals (BLCM) closed up +$0.70 to $6.64 after Thursday’s $5.94, Wednesday’s $5.28 and last Tuesday’s $4.97 with a positive +$0.97 or 14.61% aftermarket indication;
CRISPR Therapeutics (CRSP) closed up +$2.00 to $161.05 after Thursday’s $159.05, Wednesday’s $160.20 and last Tuesday’s $167.55 with a positive +$0.95 or +0.59% aftermarket indication;
Editas Medicine (EDIT) closed up +$0.77 to $57.94 after Thursday’s $57.17, Wednesday’s $59.11 and last Tuesday’s $66.73 with a positive +$0.21 or +0.36% aftermarket indication;
SELL on negative news:
bluebird bio (BLUE) closed down -$0.01 to $45.76 and has a negative -$13.24 or -28.93% pre-market indication over news of placing its P1/2 (HGB-206) and Phase 3 (HGB-210) studies of LentiGlobin gene therapy for sickle cell disease (SCD) (bb1111) on a temporary suspension due to a reported Suspected Unexpected Serious Adverse Reaction (SUSAR) of acute myeloid leukemia (AML). In line with the clinical study protocols for HGB-206 and HGB-210, bluebird bio placed the studies on temporary suspension following a report received last week that a patient who was treated more than five years ago in Group A of HGB-206 was diagnosed with AML.
The BOTTOM LINE: Welcome to my world of defining the “grey’ in our universe!
The short-term path to sector equities rolling higher is smaller ... to put it succinctly, earnings’ season seems to disengage buyers to wait for bigger dips pre- and post-releases to buy back into “our’ universe.
It’s STILL all about, the “bouncing ball” of market and sector momentum …
Reiterating, “There is STILL a short-term tone in the sector – “our’ universe of RegMed, stem, cell and gene therapy equities.”
As I have also stated, “MY warning became self-evident: as new highs evolve, so won’t the declines as electronic trading reap profits before earnings’ season appears – keep watching the advance/decline (A/D) lines.”
Many talk of horizons; “I said last week, my horizon is usually Friday’s close …”
Again, “forewarned … earnings LPS (los-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.