June 30, 2022 4:51pm
NO surprise as we adjust to reality which opens the door to a whole new paradigm for the cell and gene therapy sector which NOW depends on companies to defend and propagate their share pricing
Pre-open indications: 5 HITs and 2 MISS
More frequently right than consequentially wrong plus June’s closings’ recap
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?
No tunnel vision here, the velocity of decline obstructs the ebb and flow of the session
Investors should read as I DEVOTE a HUGE amount of time to “reckoning” the geography of my coverage group
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 DOWN -253.88 points (-0.82%); the S&P closed DOWN -33.44 points (-0.88%) while the Nasdaq closed DOWN -149.16 points (-1.33%)
Henry’omics:
Thursday marked the final day of June and Q2. The Dow and S&P 500 are on track for their worst three (3) month period since Q1/20 when Covid lockdowns sent stocks tumbling. The Nasdaq is down more than 20% over the last three months, its worst stretch since 2008.
All three major U.S. stock indexes were down but off session lows on the last day of the month and Q2 with the Nasdaq was on its way to its worst-ever 1H (first-half) performance,
Economic data released (today) did little to allay those fears. Disposable income inched lower, consumer spending decelerated, inflation remained hot and jobless claims inched higher.
Economic Data Docket: The core personal consumption expenditures price index, the Fed’s preferred inflation measure, rose 4.7% in May, the Commerce Department reported Thursday. That’s 0.2% points less than the month before, but still around levels last seen in the 1980s. The index was expected to show a year-over-year increase of 4.8% for May.
· The Chicago PMI, which tracks business activity in the region, came in at 56, slightly below a StreetAccount estimate of 58.3.
· The Fed has taken aggressive action to try and bring down rampant inflation, which has surged to a 40-year high.
· Jobless claims eased from a revised 233,000 to 231,000 in the latest week. Economists had forecast 226,000
RegMed Investor’s (RMi) Pre-Open: “final trading session, ending June and Q2 couldn’t have come sooner” … https://www.regmedinvestors.com/articles/12495
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …
- Thursday opened negative at 1 up/ 33 down and 1 flat, stayed negative at the mid-day to 7/27 and 1 flat, ending with a negative close of 5/27 and 3 flats.
Pre-open Indications: 5 HITs < bluebird bio (BLUE -$0.44), Chinook Therapeutics (KDNY -$0.52), Global Blood Therapeutics (GBT -$0.33), Intellia Therapeutics (NTLA -$0.67), Vericel (VCEL -$0.14), > 1 MISS < Beam Therapeutics (BEAM -$1.71)> 1 Puff/Pump/Promote < Biostage (BSTG $0.00 with 1 share traded)>
Key Metrics: review the volume disparities between daily sessions …
- Thursday - Sector volume was LOW with 0 of the 5-upside having higher than the 3-month average volume with LOW volume of 5 of 27-downside having higher than the 3-month average volume;
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Thursday, the IBB was down-0.31% and the XBI was down -0.71%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Thursday was up +0.55points or +1.95% at 28.71
Jumping with share pricing momentum (5 of 5):
- Regenxbio (RGNX +$0.44 after Wednesday’s -$0.12, Tuesday’s -$1.47 and Monday’s -$0.65),
- Alnylam Pharmaceutical (ALNY +$0.42 after Wednesday’s +$3.23, Tuesday’s -$4.29 and Monday’s -$1.01),
- uniQure NV (QURE +$0.17 after Wednesday’s -$0.10),
- Adverum Biotechnologies (ADVM- $0.02),
- Applied Genetic Technologies (AGTC +$0.009).
Closing down (10 of 27):
- CRISPR Therapeutics (CRSP -$2.23 after Wednesday’s -$0.28 and Tuesday’s -$3.62),
- Beam Therapeutics (BEAM -$1.71),
- BioLife Solutions (BLFS -$0.75 after Wednesday’s -$0.10),
- Intellia Therapeutics (NTLA -$0.67 after Wednesday’s +$0.40 and Tuesday’s -$1.37),
- Ultragenyx (RARE -$0.58 after Wednesday’s +$1.51, Tuesday’s -$2.45 and Monday’s +$0.61),
- Ionis Pharmaceuticals (IONS -$0.54 after Wednesday’s -$0.41, Tuesday’s -$1.37 after Monday’s +$0.09),
- Chinook Therapeutics (KDNY -$0.52),
- Sage Therapeutics (SAGE -$0.51 after Wednesday’s +$0.27, Tuesday’s -$2.39 and Monday’s +$1.28),
- bluebird bio (BLUE -$0.44 after Wednesday’s +$0.54),
- Editas Medicine (EDIT -$0.40 after Wednesday’s -$0.22),
FLAT:
- Biostage (BSTG), Homology Medicine (FIXX) and Sangamo Therapeutics (SGMO)
June, Q2/2022:
Thursday closed negative with 5 incliner, 27 decliners and 3 flats
Wednesday closed positive with 20 incliner, 14 decliners and 1 flat
Tuesday closed negative with 8 incliner and 27 decliners
Monday (6/27) closed negative with 11 incliner, 22 decliners and 2 flats
Friday closed negative with 13 incliner, 18 decliners and 4 flats
Thursday closed positive with 32 incliner and 3 decliners
Wednesday closed positive with 27 incliner, 7 decliners and 1 flat
Tuesday closed positive with 26 incliner, 7 decliners and 2 flats
Monday (6/20) was market holiday
Friday closed positive with 33 incliner and 2 decliners
Thursday closed negative with 7 incliner, 28 decliners and 0 flat
Wednesday closed positive with 26 incliner, 7 decliners and 2 flats
Tuesday closed negative with 11 incliner, 22 decliners and 2 flats
Monday (6/13) closed negative with 2 incliner and 33 decliners
Friday closed negative with 2 incliner, 32 decliners and 1 flat
Thursday closed negative with 5 incliner, 28 decliners and 2 flats
Wednesday closed positive with 22 incliner, 10 decliners and 3 flats
Tuesday closed positive with 30 incliner, 3 decliners and 2 flats
Monday (6/6) closed negative with 11 incliner, 23 decliners and 1 flat
Friday closed positive with 27 incliner and 8 decliners
Thursday closed positive with 28 incliner, 6 decliners and 1 flat
Wednesday (6/1) closed negative with 6 incliner, 29 decliners and 1 flat
The BOTTOM LINE: Back to that key word –expectation – who didn’t believe the sector would fall in the economic quagmire?
The cell and gene therapy sector fell on Thursday as the major averages logging steep declines for the month of June, Q2 and 1H (first half) of 2022 as concerns over heightened inflation and the prospects of a recession weighed heavily on risk assets.
From yesterday, good quote captures the essence of the sector and market, “We expect significant volatility this summer, with ‘face-ripping’ short-covering rallies followed by economically-inspired market slumps,” Wells Fargo senior equity analyst Christopher Harvey said in a note Wednesday. “While a much-anticipated market ‘washout’ could catalyze a more sustained move higher, we think the market will not sustain a rally until it believes the Fed will toggle from a 50-75bp tightening to a more mundane 25bp increase.”
Thursday added to Wednesday and Tuesday wipe-outs, after a drubbing from two (2) sessions of losses on Monday, that followed two (2) positive closes; the sector resume its downward trend Tuesday as the Nasdaq climbed as much as 1% but reversed lower to a loss of 0.6%.
At some point this aggressive selling is going to dissipate but it doesn't seem like it's going to be anytime soon.
Cell and gene therapy equity investors remain closely attuned to deceleration of share pricing with inflation continuing to run at multi-decade highs and monetary policymakers maintaining a firm stance that their priority remains bringing down prices even at the expense of some growth.
Question, BUY the dips or put gas in the car to overpay at the supermarket!
With quarterly corporate earnings season set to be released in the next few weeks, the focus will soon shift to how companies have been “dimed” (i.e., 10%) to a quarter (25%) or even more percentage wise while navigating persistent conviction issues alongside softening sentiment.
Runways” and trial status will be paramount factors in earnings reporting
I think we're going to have a 2H (second half) that's frustrating investors and frustrating the shorts - hedge funds and freaking-out long-term holders, bouncing around the economy slowing,
Share pricing is fluctuating as the sector and market rebalance with the month, 1H and quarter comes to a close.
Something I disdain and infrequently write about are … Price Targets … they have gotten so bad and inflated yet have NOT been reset.
Also, many i.e., most cell and gene therapy companies have NOT reset their internal stock award plans – so another disenfranchised investor (and employees) have their ire elevated as loyalty drains their capacity to be loyal and waiting for the next headhunter call.
We always need a villain and they are multiplying.
I try to keep it simple and short … because there’s so much worry that people use any piece of good news as a chance to sell – it has become a process of developing ROI (return of investment).”
Reiterating, I believe there will be opportunity in cell and gene therapy equities but, the summer doldrums are still a roadblock. This period of volatility will likely last into the second half of the year.
However, the continuing state of volatility confirms fears that I have been expressing these daily and weekly posts.
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.
