February 25, 2021 5:09pm

Yesterday’s sector gave, today took it away as volatility raged and fundamentals were frisked and cuffed

News: Even as the sector declines, Merck (MRK) pays-up ($60.00 per share in cash or $1.85 billion) to buy Pandion Therapeutics (PAND) which is developing drugs to target autoimmune diseases

Pre-open indication results: 7 HITs and 0 MISS

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The Dow closed DOWN -559.85 points (-1.75%); the S&P closed DOWN -96.09 points (-2.45%) while the Nasdaq closed DOWN -476.53 points (-3.52%)

 

Henry’omics:

Indexes along with cell and gene therapy sector stocks fell sharply Thursday as an outsized surge in bond yields spooked investors, who rushed to dump risk-oriented equities.

Higher rates hit the RegMed, cell and gene therapy sector hard as “our” universe relies on access to capital markets for financing as the Nasdaq has dropped -5.4% this week, on pace for its second weekly loss in a row.

 

Data Docket: Investors shrugged off better-than-expected economic data out Thursday. First-time jobless claims totaled 730,000 for the week ended Feb. 20, versus a print of 845,000 expected by economists. Meanwhile, durable goods orders increased by 3.4% in January, compared to a consensus of 1% growth.

 

RegMed Investors’ (RMi) pre-open: “what are the terms of fear – inflation, intervention, expectations and rising interest rates buttressed by jobless claims. The Fed will intervene to make sure rising rates don’t become too restrictive and disrupt” https://www.regmedinvestors.com/articles/11786

 

Pre-open indication results:  7 HITs < SELL: Biostage (BSTG -$0.00 with 3,310 shares traded); SELL into Strength: CRISPR Therapeutics (CRSP -$6.24), Caladrius Biosciences (CLBS -$0.21), Editas Medicine (EDIT -$4.94), Intellia Therapeutics (NTLA -$6.25), Global Blood Therapeutics (GBT -$5.69), Pluristem (PSTI -$0.43)> and 0 MISS

 

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

  • Thursday opened negative at 13/19, 2 flat and 1 acquired, stayed negative at the mid-day to 4/29,13 flat and 1 acquired, closing negative at 3/30, 1 flat and 1 acquired;

 

There are clear winners — and losers — almost to the end of the second month and Q1 of 2021.

Jumping with share pricing momentum:

  • bluebird bio (BLUE), ReNeuron (RENE.L), Mesoblast (MESO) to name 3 of the 3 inclining of the 35 covered

Hammered in today’s market:

  • Fate Therapeutics (FATE), Ultragenyx (RARE), Intellia Therapeutics (NTLA), CRISPR Therapeutics (CRSP), Global Blood Therapeutics (GBT), to name 5 of the 30 declining of the 35 covered

 

Key metrics:

  • Sector volume was LOW with 1 of the 3-upside having higher than the 3-month average volume with the increased volume of 9 of 30-downside having higher than the 3-month average volume;
  • Thursday’s percentage (%) of the 3-upside were +0.44% (RENE.L) to +8.49% (BLUE) while the 30-downside ranges from -1.25% (QURE) to -13.03% (SLDB);

 

Thursday’s (3 of 3) incline

  • bluebird bio (BLUE +$1.30);
  • ReNeuron (RENE.L +$0.50);
  • Mesoblast (MESO +$0.13 after Wednesday’s -$0.58);

Thursday’s (10 of 30) decliners:

  • Fate Therapeutics (FATE -$9.00 after Wednesday’s -$0.21, Tuesday’s -$5.48 and Monday’s -$9.22);
  • Ultragenyx (RARE -$6.48 after Wednesday’s +$2.51, Tuesday’s -$4.47 and Monday’s -$3.45);
  • Intellia Therapeutics (NTLA -$6.25);
  • CRISPR Therapeutics (CRSP -$6.24 after Wednesday’s -$1.78, Tuesday’s -$2.59 and Monday’s -$10.42);
  • Global Blood Therapeutics (GBT -$5.69 after Wednesday’s +$1.16);
  • Alnylam Pharmaceuticals (ALNY -$5.00 after Wednesday’s -$1.62, Tuesday’s +$5.14 and Monday’s -$4.73);
  • Editas Medicine (EDIT -$4.94 after Wednesday’s +$0.56, Tuesday’s -$3.26 and Monday’s -$4.07);
  • Ionis Pharmaceuticals (IONS -$2.80);
  • Vericel (VCEL -$1.88 after Wednesday’s +$2.08, Tuesday’s -$1.07 and Monday’s -$2.96);

Closing 1 – Biostage (BSTG), and 1 - Stemline Therapeutics (STML – acquired)

 

Sentiment and COVID-19 infections:

  • Investors are rotating into areas of the market that would benefit from an economic reopening; let’s continue ramping-up vaccination shots!

Infection cases <Million>: never to forget …

  • Thursday 28.34 M cases,
  • Thursday’s death rate totaled 506,500 <Johns Hopkins University>

 

Stats:

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

  • Thursday, the IBB closed down -2.65% and XBI closed down -4.06%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Thursday was up +7.55 points or +35.38% at 28.89

Upside volume: low

  • Thursday: 1 out of the 3-upside had higher than the 3-month average volume;

Downside volume: low

  • Thursday: 9 out of the 30-downside had higher than the 3-month average volume;

Percentage (%) movement/range statistics: % and pricing drop

  • Thursday’s percentage (%) of the 3-upside were +0.44% (RENE.L) to +8.49% (BLUE) while the 30-downside ranges from -1.25% (QURE) to -13.03% (SLDB);

 

February, the 2nd month of Q1 … the final week:

Thursday closed negative with 3 advancers, 30 decliners, 1 flat and 1 acquired

 

The BOTTOM LINE: Sector stocks slide as treasury yields keep rising; it’s STILL all about, the “bouncing ball” of sector momentum …

Today it’s to the downside after a Wednesday spurt post Tuesday and Monday’s sector declines.

Even as the sector declines, Merck (MRK) pays-up ($60.00 per share in cash or $1.85 billion) to buy Pandion Therapeutics (PAND) which is developing drugs to target autoimmune diseases. PAND is advancing a pipeline of precision immune modulators targeting critical immune control nodes. The company’s lead candidate, PT101, is an engineered IL-2 mutein fused to a protein backbone designed to selectively activate and expand regulatory T cells (Tregs) for the potential treatment of ulcerative colitis and other autoimmune diseases. Earlier this year, PAND announced that PT101 had completed a P1a clinical trial, which achieved its primary objective of safety and tolerability as the pipeline also includes PD-1 agonists in development for numerous autoimmune diseases.

As to earnings’ season: “Again, “forewarned … earnings LPS (loss-per-share) season is upon us – my advice, trim and skim … if one can!”

 

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.