RegMed Investors’ (RMi) closing bell: the sector just can’t keep the upside candle lit

August 3, 2021 5:40pm

Pre-open indications: 2 HITs and 4 MISS

My comments try to distinguish the temporary from real pricing digression or progress.

Who else is tracking a broad representative index of cell and gene therapy equities – the facts are supported by real numbers! 

The Dow closed UP +278.24 points (+0.80%); the S&P closed UP +35.39 points (+0.82%) while the Nasdaq closed UP +80.23 points (+0.55%)

Henry’omics:

Indexes moved higher on Tuesday and the S&P 500 set a new record high with broad market strength.

On the other hand, shares of cell and gene therapy sector companies were hit hard by earnings’ LPS (loss-per-share) limiting its upside.

Finally, a sign: Sanofi (SASY.PA) has offered to buy U.S. biotech company Translate Bio (TBIO.O), two sources familiar with the situation said on Monday, as the French drugmaker bets on next-generation mRNA technology after setbacks in the COVID-19 vaccine race.

• Shares in the NYSE biotech company soared more than 70% to above $50 in extended trading, building on the big gains in the stock as investors have piled in to the sector amid a rush to develop vaccines and treatments to tame the pandemic which has killed 4.3 million and roiled the global economy.

Data Docket: U.S. factory orders rose 1.5% in June after a 2.3% increase in the previous month. Economists had expected a rise of 1% in June.

RegMed Investors’ (RMi) pre-open: “pre-open: earnings, LPS or loss-per-share and the need to know” …  https://www.regmedinvestors.com/articles/12031

Key Metrics:

• Sector volume was LOW with 3 of the 10-upside having higher than the 3-month average volume with very LOW volume of 2 of 23-downside having higher than the 3-month average volume;
• Tuesday’s percentage (%) of the 10-upside were +0.28% (RGNX) to +4.22% (MESO) while the 23-downside ranges from -0.15% (CLLS) to -10.28% (VSTM);

Q2/21 Earnings releases … https://www.regmedinvestors.com/articles/11542

• Ultragenyx Pharmaceuticals (RARE)
• Verastem (VSTM)
• Alnylam Pharmaceuticals (ALNY);
• Sage Therapeutics (SAGE);
• Global Blood Therapeutics (GBT)

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

• Tuesday negative at 5/28, 1 flat and 1 acquired, stayed negative at the mid-day to 4/28 and 12 acquired, closing negative 10/23, 1 flat and 1 acquired;

The Biostage (BSTG) Chronicles: Tuesday closed flat with 616 shares traded after Monday closed down -$0.05 to $1.65 with 571 shares traded after Friday closed flat with 170 shares traded, Thursday closed flat with 1 share traded, Wednesday’s flat with 350 shares traded and last Tuesday closed down -$0.00 with 43 shares traded.

• Notice, how the share trades without any “push/promote”;
• They’re BROKE – so WHY are they “pumping” to buy a few days of a “runway”?

Pre-open Indications: 2 HITs <SELL: Biostage (BSTG -$0.00); BUY: Editas Medicine (EDIT +$0.57),)> and 4 MISS < CRISPR Therapeutics (CRSP -$0.92), bluebird bio (BLUE -$0.49), Sage Therapeutics (SAGE -$1.61), Fate Therapeutics (FATE -$1.83) >

There are clear winners and losers

Jumping with share pricing momentum:

• Ultragenyx (RARE), Intellia Therapeutics (NTLA), Alnylam Pharmaceuticals (ALNY), Editas Medicine (EDIT), uniQure NV (QURE) to name 10 of the 10 inclining of the 35

Hammered in today’s market:

• Fate Therapeutics (FATE), Sage Therapeutics (SAGE), Vericel (VCEL), ReNeuron (RENE.L), CRISPR Therapeutics (CRSP) to name 5 of the 23 declining of the 35 covered

Tuesday’s (10 of 10) incliners:

• Ultragenyx (RARE +$2.93 after Monday +$1.01);
• Intellia Therapeutics (NTLA +$2.22 after Monday -$5.28);
• Alnylam Pharmaceuticals (ALNY +$0.85 after Monday -$0.98);
• Editas Medicine (EDIT +$0.57 after Monday -$0.32);
• uniQure NV (QURE +$0.41 after Monday’s -$0.06);
• MiMedx (MDXG +$0.35 after Monday’s -$0.06);
• Mesoblast (MESO +$0.30);
• Ionis Pharmaceuticals (IONS +$0.18 after Monday’s +$0.49);
• Regenxbio (RGNX +$0.09 after Monday’s -$0.36);
• Solid Biosciences (SLDB +$0.02 after Monday’s -$0.02);

Tuesday’s (10 of 23) decliners:

• Fate Therapeutics (FATE -$1.83 after Monday’s +$2.28);
• Sage Therapeutics (SAGE -$1.61 after Monday’s -$0.36);
• Vericel (VCEL -$1,37 after Monday’s +$0.15);
• ReNeuron (RENE.L -$1.00);
• CRISPR Therapeutics (CRSP -$0.92 after Monday’s +$1.32);
• Global Blood Therapeutics (GBT -$0.86 after Monday’s +$0.42);
• AxoGen (AXGN -$0.53);
• bluebird bio (BLUE -$0.49 after Monday’s +0.19);
• Brainstorm Cell Therapeutics (BCLI -$0.33);
• Verastem VSTM -$0.33 after Monday’s -$0.02);

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

Stats:

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

• Tuesday, the IBB closed up +2.14% and XBI closed up +0.72%

The CBOE Volatility Index (VVIX: INDEX) tracked:

• Tuesday was down -1.42 points or -7.30% at 18.04

Upside volume:

• Tuesday: 3 out of the 10-upside had higher than the 3-month average volume;

Downside volume:

• Tuesday: 2 out of the 23-downside had higher than the 3-month average volume;

Percentage (%) movement/range statistics: price versus percentage …

• Tuesday’s percentage (%) of the 10-upside were +0.28% (RGNX) to +4.22% (MESO) while the 23-downside ranges from -0.15% (CLLS) to -10.28% (VSTM);

August, the second month of Q3/21:

Tuesday closed negative with 10 advancers, 23 decliners, 1 flat and 1 acquired

Monday (8/2) closed positive with 21 advancers, 13 decliners and 1 acquired

The BOTTOM LINE: the limbo dance was evident as the sector danced to as low as it could bend.

As I had stated, “the cell and gene therapy sector will be driven driven by two things: 1) earnings, 2) news and 3) multiples.”

There are still some not-so-distant jitters and negativity whispers about next week’s earnings releases’ and I think some underlying worries re sector share pricings.

A tool that hasn’t resonated … guidance is one factor of the sector. NO news has bake- in the decline of the sector.

Keep an eye on “runways” … as quarterly earnings come out

I’m STILL a “beware or the cautious man” whose focus has always been “warning analysis” … earnings’ season is NOT over … my advice, trim and skim any new highs 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.

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.