July 6, 2022 6:00pm
As the cell and gene therapy sector ascends, it’s just a tug-of-war matter of time for a stronger pull downward
Pre-open indications: 6 HITs, 2 MISS and 1 Puff/Pump/Promote <Biostage (BSTG +$1.22 with 14,121 shares traded – 3 mo. average = 1,408 shares)>
More frequently right than consequentially wrong
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, I get into the weeds of share pricing
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 +69.86 points (+0.23%); the S&P closed UP +13.69 points (+0.36%) while the Nasdaq closed UP +39.61 points (+0.35%)
Indexes closed positive after falling slightly on Wednesday as the market struggled to hold onto its gains. Wednesday’s moves also followed an intraday reversal in the previous session.
Indexes moved higher after the Fed released the minutes from its June meeting, showing that the central bank was committed to bringing down inflation. Fed members said the July meeting likely also would see another 50- or 75-basis point move, the minutes showed. A basis point is one one-hundredth of 1% (percentage) point.
Investors continued to worry about whether the economy is falling into a recession after the benchmark 10-year U.S. Treasury yield fell below the 2-year yield. The so-called yield curve inversion historically has been a warning sign that the economy may be falling or has already fallen into recession. <CNBC>
Economic Data Docket: Mortgage demand fell week over week even as rates declined, according to the Mortgage Bankers Association. The Institute for Supply Management services PMI data came in better than expected, but did show a slight slowdown in growth. Job openings also came in higher than expected, at more than 11 million.
RegMed Investor’s (RMi) Pre-Open: “RegMed Investors’ (RMi) pre-open: I am a runner from some of these sector highs” … https://www.regmedinvestors.com/articles/12502
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …
- Wednesday opened positive at 28 up/ 6 down and 1 flat, stayed positive at the mid-day to 19/14 and 1 flat, ending with a negative close of 16/19.
Pre-open Indications: 6 HITs <SELL into Strength: Verve Therapeutics (VERV +$1.56), Caribou Biosciences (CRBU +$0.14), Intellia Therapeutics (NTLA -$2.67), CRISPR Therapeutics (CRSP +$2.10), Beam Therapeutics (BEAM -$0.93), Editas Medicine (EDIT -$0.21)> 2 MISS < Negative Indications: Chinook Therapeutics (KDNY +$0.34), Global Blood Therapeutics (GBT +$0.21)> 1 Puff/Pump/Promote <Biostage (BSTG +$1.22 with 14,121 shares traded – 3 mo. average = 1,408 shares)>
- Wednesday - Sector volume was LOW with 5 of the 16-upside having higher than the 3-month average volume with LOW volume of 8 of 19-downside having higher than the 3-month average volume;
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Wednesday, the IBB was down -0.02% and the XBI was up +0.02%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Wednesday was down -0.80 points or -2.90% at 26.74
Jumping with share pricing momentum (10 of 16):
- CRISPR Therapeutics (CRSP +$2.10 after Tuesday’s +$6.81)
- Verve Therapeutics (VERV +$1.56),
- Biostage (BSTG +$1.22 with 14, 121 shares traded <3 mo. average =1,408 shares> after Tuesday’s +$0.32 with 496 shares traded),
- Sage Therapeutics (SAGE +$0.81 after Tuesday’s +$1.48),
- Regenxbio (RGNX +$0.51),
- Chinook Therapeutics (KDNY +$0.34),
- Mesoblast (MESO +$0.28),
- Global Blood Therapeutics (GBT +$0.21),
- AxoGen (AXGN +$0.17),
Closing down (10 of 19):
- Intellia Therapeutics (NTLA -$2.67 after Tuesday’s +$9.17),
- Ionis Pharmaceuticals (IONS -$1.04 after Tuesday’s -$0.21),
- Beam Therapeutics (BEAM -$0.93 after Tuesday’s +$6.70),
- Alnylam Pharmaceuticals (ALNY-$0.73 after Tuesday’s +$2.48,
- uniQure NV (QURE -$0.65 after Tuesday’s +$1.66),
- Fate Therapeutics (FATE -$0.47 after Tuesday’s +$3.96),
- Ultragenyx (RARE -$0.42),
- Voyager Therapeutics (VYGR -$0.24),
- bluebird bio (BLUE -$0.23),
- Editas Medicine (EDIT -$0.21 after Tuesday’s +$1.96),
- Wednesday closed negative with 16 incliners and 19 decliners
- Tuesday closed positive with 32 incliner and 3 decliners
- Monday was a holiday
The BOTTOM LINE: Again, I took a contrarian view of this (Wednesday) upside … that’s three (3) positive closes.
Volume was lower on the Nasdaq compared to the same time Tuesday.
As I stated this a.m., BUILD CASH POSITIONS, the upward spiral will be STRIPPED, maybe NOT all today but, it’s coming.
Monday was a holiday, Tuesday and Wednesday closed positive after Friday’s positive close.
Are we seeing a game of chicken right now, with the sector appreciating for the third (3rd) session? Ultimately, the algorithms and electronic alongside traders are going to reap the profit on the back of the upside.
For investors; can you TRUST sessions that dramatically appreciate - it was proven today, Wednesday!
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” (today’s, a high of +10.77% although BSTG climbed +25.42% with pumped volume and pricing and a low of -11.59%).
As we proceed 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
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.
Again, from this morning’s post,” There is VALUE out there however, it’s about playing or betting the timing of the sector. We are left with choosing to hang on to “our” portfolio position as it is a given that the sector shifts from fierce, sudden sell-offs to gaining altitude or ascending not to its value but, better than it was.
We always need a villain and they are multiplying.
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.