July 22, 2022 4:37pm
An example of the volatility that investors should expect as earnings are reported
Pre-open indications: 0 MISS, 4 HITs and 1 Puff/Pump/Promote <The usual suspect – Biostage (BSTG)>
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 daily share pricing and causes
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 – 136.29 points (-0.43%); the S&P closed DOWN -37.05 points (-0.93%) while the Nasdaq closed DOWN -225.50 points (-1.87%)
The Nasdaq traded lower, the Dow lost, while the S&P 500 declined.
All three major averages were on pace for a weekly gain – the Dow +1.7%, the S&P +2.2% and the Nasdaq halted its rise.
RegMed Investor’s (RMi) Pre-Open: “are risk parameters crashing the cell and gene therapy sector? Earnings are a ‘Comin’, LPS (loss-per-share) will squeeze valuations” … https://www.regmedinvestors.com/articles/12529
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …
- Friday advance/decline line opened negative at 1 up/ 33 down and 1 flat, stayed negative with 2/33 at the mid-day, ending with a negative close of 1/34.
- Thursday advance/decline line opened negative at 13 up/ 19 down and 3 flats, stayed negative with 15 /18 and 2 flats at the mid-day, ending with a negative close of 14/18 and 3 flats.
- Wednesday advance/decline line opened positive at 31 up/ 2 down and 1 flat, stayed positive with 27 /7 and 1 flat at the mid-day, ending with a positive close of 28/6 and 1 flat.
- Tuesday advance/decline line opened positive at 32 up/ 1 down and 2 flats, stayed positive with 34 up/1 at the mid-day, ending with a positive close of 34/1 and 0 flat.
- Monday advance/decline line opened positive at 29 up/ 4 down and 2 flats, turning negative with 15 up/19 and 1 flat at the mid-day, ending with a negative close of 10/21 and 4 flats.
Pre-open Indications: 4 HITs < Sage Therapeutics (SAGE -$0.81), CRISPR Therapeutics (CRSP -$4.13), Beam Therapeutics (BEAM -$5.60), Verve Therapeutics (VERV -$2.20)> 0 MISS and 1 Puff/Pump/Promote < Biostage (BSTG +$0.30 with 998 shares traded)>
Key Metrics: low volumes
- Friday - Sector volume was LOW with 1 of the 1-upside having higher than the 3-month average volume with LOW volume of 5 of 34-downside having higher than the 3-month average volume;
- Thursday - Sector volume was LOW with 2 of the 14-upside having higher than the 3-month average volume with LOW volume of 2 of 18-downside having higher than the 3-month average volume;
- Wednesday - Sector volume was LOW with 10 of the 28-upside having higher than the 3-month average volume with LOW volume of 3 of 6-downside having higher than the 3-month average volume;
- Tuesday - Sector volume was LOW with 7 of the 34-upside having higher than the 3-month average volume with LOW volume of 0 of 1-downside having higher than the 3-month average volume;
- Monday - Sector volume was LOW with 4 of the 10-upside having higher than the 3-month average volume with LOW volume of 1 of 21-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 down -1.98% and the XBI was down -4.19%
- Thursday, the IBB was up +0.94% and the XBI was down -0.38%
- Wednesday, the IBB was up +0.26% and the XBI was up +1.42%
- Tuesday, the IBB was up +2.57% and the XBI was up +4.45%
- Monday, the IBB was down -2.22% and the XBI was down -3.19%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Friday was down -0.10 points or -0.43% at 23.01
- Thursday was down -0.85 points or -3.56% at 23.03
- Wednesday was down -0.69 points or -2.82% at 23.81
- Tuesday was down -0.62 points or -2.45% at 24.68
- Monday was up +1.15 points or +4.75% at 25.38
Jumping with share pricing momentum (1 of 1):
- Biostage (BSTG +$0.30 after Thursday’s +$0.09),
Closing down (10 of 34):
- Beam Therapeutics (BEAM -$5.60 after Thursday’s +$0.57, Wednesday’s +$3.30, Tuesday’s +$6.60 and Monday’s +$0.39),
- CRISPR Therapeutics (CRSP -$4.13 after Thursday’s -$2.39, Wednesday’s -$1.44, Tuesday’s +$4.42 and Monday’s -$4.03),
- Alnylam Pharmaceuticals (ALNY -$3.99 after Thursday’s +$0.64, Wednesday’s +$0.84, Tuesday’s +$5.08 and Monday’s -$4.75),
- Intellia Therapeutics (NTLA -$3.05),
- Ultragenyx (RARE -$2.73 after Thursday’s -$0.51, Wednesday’s +$1.84, Tuesday’s -$8.28 and Monday’s -$3.73),
- Fate Therapeutics (FATE -$2.30 after Thursday’s +$0.70),
- Verve Therapeutics (VERV -$2.20 after Thursday’s -$3.10, Wednesday’s +$3.62, Tuesday’s +$5.98 and Monday’s +$2.60),
- BioLife Solutions (BLFS -$1.75 after Thursday’s +$1.06 and Wednesday’s +$1.49),
- Global Blood Therapeutics (GBT -$1.16 after Thursday’s -$0.47),
- Editas Medicine (EDIT -$1.10 after Thursday’s -$0.36),
July, Q3/2022: the week
- Friday closed negative with 1 incliner and 34 decliners
- Thursday closed negative with 14 incliner, 18 decliners and 2 flats
- Wednesday closed positive with 28 incliner, 6 decliners and 1 flat
- Tuesday closed positive with 34 incliner and 1 decliner
- Monday closed negative with 10 incliner, 21 decliners and 4 flats
The BOTTOM LINE: I try to keep it simple … and short!
Sector expectations are really low as earnings season begins next week; remember, a little bit of good news can go a long way when you have low expectations.
As I wrote yesterday a.m., the algos are coming like the Redcoats in Paul Revere’s warning.
The cell and gene therapy sector slimmed the leads from Tuesday’s, Wednesday’s rally following Thursday and Friday’s decline although percentage (%) movements were lower.
Friday’s Percentage (%) of the decliners (34) ebbed from -0.97% to -8.98% while the advancer (1) got "pumped and promoted" at +5.88%.
After Thursday’s percentage (%) of the decliners (18) ebbed from -8.63% to -0.03% while the advancers (14) receded +6.84% to $0.44%.
Volume is still low …
The coming next two (2) weeks will reveal more about the cell and gene therapy sector's state of health.
However, what will the cell and gene therapy sector start to sniff out – Q2 earnings as Alnylam Pharmaceuticals (ALNY) on Thursday 7/28, Sage Therapeutics (SAGE) on 8/2; and AxoGen (AXGN), MiMedx (MDXG) and Vericel (VCEL) on Wednesday, 8/3.
investors should be bracing for a milder-than-usual earnings season and downwardly LPS (loss-per-share) predictions,
I find it very interesting to evaluate share price over earnings as a proxy for performance.
We always need a villain and they are multiplying – “Earnings’ season is coming, investors NEED to focus on LPS (loss-per-share), collaboration revenues and cash positions i.e., runways”.
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.