May 27, 2022 6:09pm

As valuation had fallen to ginormous levels

After a four (4) day break to take “the babe – she who must be obeyed” away for the major birthday, I return from her spa retreat to fill bridge the gaps of “our” universe’s ebb and flow

WHY and HOW is this market affecting the cell and gene therapy sector … “The Bottom Line” underlines the framework of share pricing actions.  Who else is tracking a broad grouping of cell and gene therapy equities – can you afford to not read facts supported by real numbers?

It’s a quick read to understand the ebb and flow of the session in one site

The week in review …

If I have learned one thing as a former research analyst, venture and public fund investor now a journalist; it is that your life and your bank account are largely tied to your knowledge of price movements and questioning pricing targets.

 

The Dow closed UP +575.77 points (+1.76%); the S&P closed UP +100.40 points (+2.47%) while the Nasdaq closed UP +390.48 points (+3.33%)

 

Henry’omics:

Indexes were higher Friday as the Dow snapped an eight-week losing streak, the Nasdaq was an outperformer, up +3.1%, also breaking a seven-week losing streak. helped by a fall in the 10-year Treasury yield.

The Nasdaq is now sits about 23% from its record, while the S&P 500 is off by -13% and Dow is down -9%.

Still, the indexes are well off their highs, with the Nasdaq is solidly in negative territory and the S&P 500 having briefly dipped more than 20% below its record last week.

One views, nearly a third of publicly-traded biotechs are trading for less than the cash on their balance sheets, says Dr. Rod Wong, managing partner and CIO of RTW Investments.

My view, fulfilled catalysts are needed to motivate investors to mitigate their portfolio fears.

A report showing inflation slowing a bit helped give stocks a boost on Friday. The core personal consumption expenditures price index rose 4.9% in April, down from the 5.2% pace seen the previous month. This particular report is watched closely by the Fed when setting policy.

 

RegMed Investors’ (RMi) pre-open: last Tuesday’s “the cell and gene therapy staged a retreat yesterday and marching to the rear today with the sector being whipsawed again – very few ups or and more than many downs … https://www.regmedinvestors.com/articles/12449    

 

RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …

  • Friday opened positive at 32 up/2 downs and 1 flat, stayed positive at the mid-day to 29/3 and 3 flats, ending with a positive close of 33/1 and 1 flat.
  • Thursday opened positive at 31 up/2 downs and 2 flats, stayed positive at the mid-day to 31/2 and 2 flats, ending with a positive close of 27/6 and 2 flats.
  • Wednesday opened negative at 6 up/28 downs and 1 flat, stayed negative at the mid-day to 8/24 and 3 flats, ending with a positive close of 20/14 and 1 flat.
  • Tuesday opened positive at 25 up/8 downs and 2 flats, dived negative at the mid-day to 5/29 and 1 flat, ending with a negative close of 6/26 and 3 flats.
  • Monday opened negative at 1 up/33 downs and 1 flat, stayed negative at the mid-day at 3/31 and 1 flat, ending with a negative close of 7/25 and 3 flats.

 

Key Metrics: review the disparities between daily sessions …

  • Friday - Sector volume was LOW with 6 of the 33-upside having higher than the 3-month average volume with LOW volume of 1 of 1-downside having higher than the 3-month average volume;
  • Thursday - Sector volume was LOW with 6 of the 27-upside having higher than the 3-month average volume with LOW volume of 2 of 6-downside having higher than the 3-month average volume;
  • Wednesday - Sector volume was LOW with 1 of the 20-upside having higher than the 3-month average volume with LOW volume of 6 of 14-downside having higher than the 3-month average volume;
  • Tuesday - Sector volume was LOW with 3 of the 6-upside having higher than the 3-month average volume with LOW volume of 8 of 26-downside having higher than the 3-month average volume;
  • Monday - Sector volume was LOW with 2 of the 7-upside having higher than the 3-month average volume with LOW volume of 3 of 25-downside having higher than the 3-month average volume;

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

  • Friday, the IBB was up +3.20% and the XBI was up +3.83%
  • Thursday, the IBB was up +0.90% and the XBI was up +1.09%
  • Wednesday, the IBB was up +0.17% and the XBI was up +0.49%
  • Tuesday, the IBB was down -1.60% and the XBI was down-3.91%
  • Monday, the IBB was up +0.72% and the XBI was down -0.27%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday was down-1.78 points or -6.47% at 25.72
  • Thursday was down-0.87 points or -3.07% at 29.50
  • Wednesday was down-1.08 points or -3.67% at 28.37
  • Tuesday was up +1.68 points or +5.90% at 30.16
  • Monday was down -0.99 points or -3.36 % at 28.44

 

Jumping with share pricing momentum – Friday (10 of 26):

  • Intellia Therapeutics (NTLA +$3.42),
  • Beam Therapeutics (BEAM +$3.51),
  • CRISPR Therapeutics (CRSP +$3.11),
  • Ultragenyx (RARE +$2.80),
  • Alnylam Pharmaceuticals (ALNY +$2.17),
  • Verve Therapeutics (VERV +$1.64),
  • Regenxbio (RGNX +$1.60),
  • BioLife Solutions (BLFS +$1.60),
  • Chinook Therapeutics (KDNY -$0.24 after Friday’s +$1.16),
  • BioLife Solutions (BLFS +$1.54),

Closing down:

  • Applied Genetic Technologies (AGTC -$0.0236),

Flat:

  • Biostage (BSTG) and Verastem (VSTM)

 

May, Q2/2022:

  • Friday closed positive with 33 incliner, 1 decliner and 1 flat
  • Thursday closed positive with 27 incliner, 6 decliners and 2 flats
  • Wednesday closed positive with 20 incliner, 14 decliners and 1 flat
  • Tuesday closed negative with 6 incliner, 26 decliners and 3 flats
  • Monday closed negative with 7 incliner, 25 decliners and 3 flats

 

The BOTTOM LINE: I had a feeling, it was a “good’ time to escape the market (a short interlude) as altitude driven sessions were positive Wednesday through Friday momentum although I did NOT “spa”; I still watched the laptop and, did visit the Pequot Museum (CT) and various revolutionary War burial grounds.

 The continuing state of volatility confirms fears that I have been expressing these daily and weekly posts.

As I have written, change is an epidemic as the cell and gene therapy sector is so volatile – we are LUCKY these last few days; while investors have become accustomed to significant downside and upside moves in sector equities, which are so common during times of tremendous uncertainty.

Again, as have I written (repeatedly), “There's a battle in the cell and gene therapy sector between which or what breaks first: share pricing resilience or tumbling into yet another downturn as fear remains beneath the strength of any positive close” …

Investors NEED a blossoming of catalysts to strengthen their capacity to get beyond the “rules” of algorithms as these CONTROL the sector’s movement.

I try to keep it simple … I don't think we've seen the bottom yet. We haven't had that big sell off yet where we have huge volumes.

I maintain MY concerns of a contrarian view and a right-on actuality of “our” universe” as represented by an outlook of anxiety, striking a more cautious tone on cell and gene therapy stocks for the short and near-term.

I stick to my view of anticipating the risks – as my careers focus has been “warning analysis”.

 

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.