July 1, 2022 4:43pm
Sentiment and conviction have not evolved, algorithms and electronic trading recognized oversold conditions as June ended. I believe it is a BID’EM up session to take share pricings down in next week’s follow-on!
Pre-open indications: 4 HITs and 4 MISS
Happy 4th of July weekend - be safe
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
Week in review - what happened and to whom, the root metrics
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 +321.83 points (+1.05%); the S&P closed UP +39.95 points (+1.06%) while the Nasdaq closed UP +99.11 points (+0.90%)
Indexes fell on Friday as disappointing economic data continued to dampen market sentiment. Several profit warnings also pressured stocks.
Thursday HAD marked the end of the month of June, Q2 and the 1H of the year.
The steep first-half and quarterly losses came as investors grapple with sky-high inflation and tighter monetary policy. The Fed, in turn, has stepped up its efforts against the surge in prices, hiking by 0.75 percentage point in June. That was its biggest rate increase since 1994. <CNBC>
Economic Data Docket: The Institute for Supply Management said manufacturing activity in June was weaker than expected. Its index of national factory activity dropped to 53 for the month, the lowest reading since June 2020. ISM’s new orders index also fell to 49.2 from 55.1 — showing contraction for the first time since May 2020.
RegMed Investor’s (RMi) Pre-Open: “diving futures before long 3-day weekend ahead. First day of the new quarter as July begins with more weakness” … https://www.regmedinvestors.com/articles/12498
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …
- Friday opened positive at 28 up/ 5 down and 2 flats, stayed positive at the mid-day to 22/12 and 1 flat, ending with a positive close of 26/8 and 1 flat.
- 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.
- Wednesday opened negative at 5 up/ 29 downs and 1 flat, stayed negative at the mid-day to 14/20 and 1 flat, ending with a positive close of 20/14 and 1 flat.
- Tuesday opened negative at 11 up/ 24 downs and 1 flat, stayed negative at the mid-day to 6/28 and 1 flat, ending with a negative close of 8/27.
- Monday opened negative at 7 up/ 27 downs and 1 flat, stayed negative at the mid-day to 15/18 and 2 flats, ending with a negative close of 11/22 and 2 flats.
Pre-open Indications: 4 HITs < Biostage (BSTG $0.17 with 568 shares traded), Avrobio (AVRO +$0.0001), bluebird bio (BLUE +$0.14), Beam Therapeutics (BEAM +$1.08)> 4 MISS < Verve Therapeutics (VERV +$0.29), Global Blood Therapeutics (GBT +$0.63), Intellia Therapeutics (NTLA +$0.35), Caribou Biosciences (CRBU -$0.09)>
Key Metrics: review the volume disparities between daily sessions …
- Friday - Sector volume was LOW with 2 of the 26-upside having higher than the 3-month average volume with LOW volume of 2 of 8-downside having higher than the 3-month average volume;
- 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;
- Wednesday - Sector volume was LOW with 5 of the 20-upside having higher than the 3-month average volume with LOW volume of 2 of 14-downside having higher than the 3-month average volume;
- Tuesday - Sector volume was LOW with 2 of the 8-upside having higher than the 3-month average volume with LOW volume of 7 of 27-downside having higher than the 3-month average volume;
- Monday - Sector volume was LOW with 1 of the 11-upside having higher than the 3-month average volume with HIGHER volume of 11 of 22-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 +2.16% and the XBI was up +3.06%
- Thursday, the IBB was down-0.31% and the XBI was down -0.71%
- Wednesday, the IBB was up+0.54% and the XBI was up+1%
- Tuesday, the IBB was down -2.30% and the XBI was down -3.57%
- Monday, the IBB was up +0.08% and the XBI was down -0.34%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Friday was down -2.02 points or -7.04% at 26.69
- Thursday was up. points or +1.88% at 28.69
- Wednesday was down -0.24 points or -0.85% at 28.12
- Tuesday was up +1.44 points or +5.34% at 28.36
- Monday was down -0.26 points or -1.03% at 26.95
Jumping with share pricing momentum (10 of 26):
- CRISPR Therapeutics (CRSP +$2.87 after Thursday’s -$2.23, Wednesday’s -$0.28 and Tuesday’s -$3.62),
- Ultragenyx (RARE +$2.85 after Thursday’s -$0.58, Wednesday’s +$1.51, Tuesday’s -$2.45 and Monday’s +$0.61),
- Intellia Therapeutics (NTLA +$2.02 after Thursday’s -$0.67, Wednesday’s +$0.40 and Tuesday’s -$1.37),
- Alnylam Pharmaceutical (ALNY +$1.91 after Thursday’s +$0.42, Wednesday’s +$3.23, Tuesday’s -$4.29 and Monday’s -$1.01),
- Ionis Pharmaceuticals (IONS +$1.00 after Thursday’s -$0.54, Wednesday’s -$0.41, Tuesday’s -$1.37 after Monday’s +$0.09),
- BioLife Solutions (BLFS =$0.92 after Thursday’s -$0.75 and Wednesday’s -$0.10),
- Beam Therapeutics (BEAM +$0.91 after Thursday’s -$1.71),
- Regenxbio (RGNX +$0.90 after Thursday’s +$0.44, Wednesday’s -$0.12, Tuesday’s -$1.47 and Monday’s -$0.65),
- Global Blood Therapeutics (GBT +$0.79),
- Editas Medicine (EDIT +$0.74 after Thursday’s -$0.40 and Wednesday’s -$0.22),
Closing down (8 of 8):
- Cellectis SA (CLLS -$0.14),
- Homology Medicine (FIXX -$0.12),
- Caribou Biosciences (CRBU -$0.10),
- Sage Therapeutics (SAGE -$0.05),
- Solid Biosciences (SLDB -$0.05),
- AxoGen (AXGN -$0.03),
- Adverum Biosciences (ADVM-$0.025),
- Verastem (VSTM-$0.02),
- Friday closed positive with 26 incliner, 8 decliners and 1 flat
The BOTTOM LINE: Cell and gene therapy equity investors remain closely attuned to a SURGE in PRICING with ALGORITHMIC and ELECTRONIC SUPPORT after a deceleration of share pricing with inflation continuing to run at multi-decade highs.
For investors can you TRUST sessions that dramatically appear, I am STILL concerned with the thesis of BUYING the dips or putting 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%) or more percentage wise while navigating persistent conviction issues alongside softening sentiment.
As we proceed in Q3 to Q2 reporting in weeks, will consensus estimate for 2022 remain unchanged, even though stock prices have declined considerably?
Cash positions and “runways” along with 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.