November 10, 2021 7:39am

Skittish sector Investors are not holding their breath for the end of earnings season

Pre-open indications: 3 SELLs, 3 BUYs and 1 Pump (or No Promote)

News: REGENXBIO (RGNX) closed its Collaboration and License Agreement with AbbVie (ABBV) to develop and commercialize RGX-314, a potential one-time gene therapy for the treatment of wet age-related macular degeneration (wet AMD), diabetic retinopathy (DR) and other chronic retinal diseases.

What I provide is an intelligence daily. RMi outlines a daily bell weather of “indications” about what you need to know; it’s what could happen or materialize after the opening and what might happen during the session.

Remember that overnight and pre-open actions in futures doesn't necessarily translate into actual trading in the coming day’s session.

Dow futures are DOWN -0.17% (-63 points), S&P futures are DOWN -0.25% (-12 points) and NASDAQ futures are DOWN -0.42% (-68 points)

 

U.S. equity futures were lower early Wednesday as investors await consumer pricing I.e., inflation data,

European stocks were mixed with the pan-European Stoxx 600 hovered fractionally below the flatline by late morning,

Asia-Pacific stocks were mixed as investors reacted to the release of Chinese inflation data for October.

 

Economic data Docket: consumer price index reading as economists expect a 0.6% increase, or a year-over-year gain of nearly 6%, which would be the most in 30 years. They expect core CPI, which excludes food and energy and is the Fed’s preferred measure of inflation, to have risen 0.4%, or 4.3% year-over-year.

 

Henry’omics:

After rising nearly 2,000 points from the early October low, the Nasdaq dipped 95.82 points on Tuesday, ending an 11-day win streak.

  • The action on the stock market rally was perfectly normal and healthy.
  • The Nasdaq is now 5.3% above its 50-day line while the Nasdaq 100 is 5.6% above that level. Both had been above the 6% mark, signaling they are extended.
  • Ideally, the stock market rally would pause or pull back modestly for a few days or even weeks, letting the moving averages catch up and giving leaders a chance to offer new buying opportunities. <IBD>

 

News (continued): As previously announced on September 13, 2021, under the terms of the agreement, RGNX will receive an upfront payment from ABBV of $370 million with the potential for RGNX to receive up to $1.38 billion in additional development, regulatory and commercial milestones.

  • Under the collaboration, RGNX will be responsible for completion of the ongoing trials of RGX-314. ABBV and RGNX will collaborate and share costs on additional trials of RGX-314, including the planned second pivotal trial evaluating subretinal delivery for the treatment of wet AMD and future trials. ABBV will lead the clinical development and commercialization of RGX-314 globally. RGNX will participate in U.S. commercialization efforts as provided under a mutually agreed upon commercialization plan.
  • RGNX and ABBV will share equally in profits from net sales of RGX-314 in the U.S. and ABBV will pay RGNX tiered royalties on net sales of RGX-314 outside the U.S. In addition, RGNX will lead the manufacturing of RGX-314 for clinical development and U.S. commercial supply, and AbbVie will lead manufacturing of RGX-314 for commercial supply outside the U.S.

 

If you didn’t remember what happen at Tuesday night’s close and the quarter’s “number’s” impact, you won’t be prepared for today’s session:

Tuesday’s evening’s recap: “sector takes yet another dive. Sector earnings season is half way over, so I don’t see a reason to add exposure just quite yet” … https://www.regmedinvestors.com/articles/12176

Q4: November, 3 positive and 4 negative close to date

  • October, 8 positive and 13 negative closes

 

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

SELL with a Pump or No Promote:

Biostage (BSTG) closed down -$0.03 with 3,304 shares traded after Monday’s +$0.07 with 7,082 shares traded after being down -$0.60 after Friday’s flat again at $2.60 with 9,003 shares traded after Thursday’s flat with 82 shares traded, Wednesday’s -$0.40 to $2.60 with 1,208 shares traded, Tuesday’s -$0.10 to $3.00 with 200 shares traded following Monday’s flat again with 80 shares traded and the previous Friday’s flat with 95 shares traded.

  • What’s there to invest in – the “Sword of Damocles” hanging over its recent insurance company rejection of legal expense/costs of a terminal death suit against the company?
  • For a company with NO clinical trial, an a one (1) and a half year approved IND, four (4) employees and NO CRO <clinical research organization> initiation.

 

Probabilities versus aftermarket/pre-open share pricing indication moves:

SELL into Strength:

Chinook Therapeutics (KDNY) closed up +$0.32 to $14.51 after Monday’s -$1.77 with a pre-market indication of -$0.01 or -0.07% after proposing a 6 m share. A lot of shares hitting the outstanding, as it’s priced at $14.00.

Pluristem (PSTI) closed up +$0.26 to $3.10 after Monday’s +$0.07 and has a negative -$0.10 or -3.23% pre-open indication.

 

Maintaining SELL:

BioLife Solutions (BLFS) closed up +$0.28 to $53.51 after Monday’s -$0.59, Friday’s -$4.73, Thursday’s +$0.14 and last Wednesday’s +$3.29 following the previous Tuesday’s +$1.06) with a negative -$2.51 or -4.69%. Thursday is earnings release.

 

BUY:

REGENXBIO (RGNX) closed down -$0.28 to $38.14 after Monday’s $38.42 and Friday’s $39.06 with a positive +$0.41 or +1.07% pre-open indication.

 

Buy into Weakness:

Editas Medicine (EDIT) closed down -$0.01 to $40.56 after Monday’s +$3.07 to $40.57, Friday’s down again -$0.34 and last Thursday’s -$0.85 with a negative aftermarket of -$0.86 or -2.12%. Even as it floats down, look for a mid-day inflexion and buy the oversold or as I say a fish in a barrel.

Intellia Therapeutics (NTLA) closed up again +$2.29 to $138.36 after Monday’s +$0.59 to $136.07, Friday’s+$1.54 and Thursday’s -$1.97 with a negative -$0.36 or -0.26% pre-open indication.

 

The BOTTOM LINE: Most of these sector stocks have had been lately losers.

But many haven’t been losers overnight, not a great sign for this market. LPS (loss-per-share) earnings and revenues were all over the map, but they still have good runway’s i.e., cash positions for minimum two (2) years.

Reiterating, “It's highly risky to buy a stock just before earnings, and investors may want to take whole or partial profits on holdings with tiny gains”.

We are seeing to date, one (1) net income – Bellicum Pharmaceuticals (BLCM),

  • Twenty-one (21) net losses to date <uniQure (QURE), Alnylam Pharmaceuticals (ALNY), Regenxbio (RGNX), Sage Therapeutics SAGE), Ultragenyx Pharmaceuticals (RARE), Voyager Therapeutics (VYGR), Solid Biosciences (SLDB), Ionis Pharmaceuticals (IONS), CRISPR Therapeutics (CRSP), Intellia Therapeutics (NTLA), Caladrius Biosciences (CLBS), AxoGen (AXGN), Adverum Biotechnologies (ADVM), Verastem (VSTM), Global Blood Therapeutics (GBT), Fate Therapeutics (FATE), Sangamo Therapeutics (SGMO),  Cellectis SA (CLLS), Editas Medicine (EDIT) and today’s … Applied Genetic Technologies (AGTC) and Vericel (VCEL)>

… Earning’s releases that initiated Q3 earnings reporting season and beginning the tug-of-war between share pricing that is softer than usual and the usual LPS (loss-per-share) to be less than estimates and expectations.

The stem, cell and gene therapy earnings continue with BioLife Solutions (BLFS) on 11/11 followed by Athersys (ATHX) and Brainstorm Cell Therapeutics (BCLI) coming 11/15 (to date).

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!”

RMi’s daily report is a primer that may say little or a lot; yet it serves as insurance that all indications are being examined and evaluated.

WHY do I keep analyzing Biostage (BSTG): When one sees an inextricable wrong and morally repulsive scenario; it takes courage, resolve and patience to stay the course of asking the questions without response!

 

 

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.

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.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.