August 17, 2022 4:44pm

The play begins and ends with similar words. Its final lines are: "Well, shall we go. / Yes, let's go. / (They do not move)." Typical …

News: bluebird bio (BLUE +$0.20) scored its first approval from the U.S. FDA following its business split late last year; when it announced U.S. commercial Infrastructure to enable patient access to ZYNTEGLO®, with Beta-Thalassemia who require regular red blood cell transfusions. A one-time therapy with the potential to free patients from chronic transfusions; Homology Medicine (FIXX -$0.11) paused clinical development of a gene therapy trial while also disclosing a workforce reduction or layoff of 10% of the workforce

Pre-open indications: 0 HIT, 1 MISS and 1 Puff/Pump/Promote < Biostage (BSTG), the usual suspect, back “pumping” the volume and pricing again>

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 171.62- points (-0.50%); the S&P closed DOWN -31.17 points (-0.72 %) while the Nasdaq closed DOWN -164.43 points (-1.25%)

 

Henry’omics:

Indexes sharply pared losses in afternoon trading on Wednesday after minutes from the Federal Reserve's July meeting showed officials said the pace of future interest rates hikes would depend on incoming data.

indexes fell on Wednesday as cell and gene therapy stocks came under pressure after bond yields climbed. At 12:03 p.m. ET, the Dow was down 273.08 points, or 0.80%, at 33,878.93, the S&P 500 was down 45.89 points, or 1.07%, at 4,259.31, and the Nasdaq was down 217.65 points, or 1.66%, at 12,884.90.

Weak results from Target dragged the retail sector lower. Retail earnings have been mixed so far this week. The S&P 500 retail sector declined 1.7%, after jumping 1.9% in the previous session.

Economic Data Docket: showed U.S. retail sales were unchanged in July as declining gasoline prices weighed on receipts at service stations. However, consumer spending appeared to be holding up, which could further ease fears the economy was in recession.

News from title re bluebird bio (BLUE): https://finance.yahoo.com/news/bluebird-bio-announces-u-commercial-183200132.html

  • BLUE has devised an innovative strategy to enable timely and quality access to ZYNTEGLO, informed by payer insights and is committed to flexibility to meet payer needs. This includes one upfront payment that can be paired with an outcomes-based agreement. As part of this agreement, bluebird will reimburse contracted commercial and government payers up to 80% of the cost of the therapy if a patient fails to achieve and maintain transfusion independence up to two years following infusion. All patients in ZYNTEGLO P3 studies who achieved transfusion independence (TI) have remained transfusion free. This outcomes measure is recognized by payers and providers as clinically meaningful and straightforward to track through claims data.

 

RegMed Investor’s (RMi) Pre-Open: “volatility + weak LPS (loss-per-share) = declining conviction and confidence. In many cases, it’s just buy until fat and sell to profit, it’s not predictable investing for the short or near term until clinical data is able to be partnered.” … https://www.regmedinvestors.com/articles/12566

 

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

  • Wednesday’s advance/decline line opened negative at 1 up/ 30 down and 4 flats, stayed negative with 5 up/30 and 0 flat at the mid-day, ending with a negative close of 6/29 and 1 flat.

 

Pre-open Indications: 0 HITs, 1 MISS < BioLife Solutions (BLFS -$2.62), 1 Puff/Pump/Promote <Biostage (BSTG +$0.15 with1,028 shares traded again

 

Key Metrics:

  • Wednesday - Sector volume was HIGH with 3 of the 6-upside having higher than the 3-month average volume with LOW volume of 9 of 28-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 -1.95% and the XBI was down -3.01%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +0.42. points or +1.63% at 20.01

 

Jumping with share pricing momentum (x of x):

  • Brainstorm Cell Therapeutics (BCLI +$0.41),
  • Sage Therapeutics (SAGE +$0.25),
  • bluebird bio (BLUE +$0.20),
  • Biostage (BSTG +$0.15),
  • Bellicum Pharmaceuticals (BLCM +$0.06),
  • Avrobio (AVRO +$0.02),

Flat:

  • Global Blood therapeutics (GBT)

Closing down (10 of 28):

  • Alnylam Pharmaceuticals (ALNY -$5.02 after Tuesday’s -$2.86 and Monday’s -$2.84),
  • Intellia Therapeutics (NTLA -$4.61 after Tuesday’s -$4.25 and Monday’s +$0.68),
  • CRISPR Therapeutics (CRSP -$4.11 after Tuesday’s -$4.29 and Monday’s +$1.48),
  • Beam Therapeutics (BEAM -$4.00),
  • Fate Therapeutics (FATE -$2.69 after Tuesday’s -$3.16 and Monday’s +$2.24),
  • BioLife Solutions (BLFS -$2.62 after Tuesday’s -$0.66 and Monday’s +$1.42),
  • Ultragenyx (RARE -$2.06 after Tuesday’s -$1.89 and Monday’s -$0.37),
  • Verve Therapeutics (VERV -$1.05 after Tuesday’s -$0.69 and Monday’s +$2.27),
  • Editas Medicine (EDIT -$1.02 after Tuesday’s -$1.12 and Monday’s -$0.31),
  • Chinook Therapeutics (KDNY -$0.83 after Tuesday’s +$1.49),

 

August, Q3/2022:

  • Wednesday closed negative with 6 incliner, 28 decliners and 1 flat
  • Tuesday closed negative with 7 incliner, 25 decliners and 3 flats
  • Monday closed positive with 26 incliner, 8 decliners and 1 flat

 

The BOTTOM LINE: I try to keep it simple … and short!

The good, bluebird bio’s (BLUE) approval - Zynteglo treats patients who rely on regular blood transfusions because of a genetic disease that interferes with the production of hemoglobin; a bad – Homology Medicine (FIXX) having to pause a trial and cut its workforce and the ugly – 28 of 35 down drops.

It was expected to see the magnitude of the lack of EPS strength in Q2 and after the prior quarter (Q1) in the face of the difficulty that investors are facing in the inflation continuum of soon to be experiencing rising rate environment which is about to get worse!

I am still hobbling with walking stick for use and have trouble sitting on a chair for a period of time (with a pillow on hard chair (versus my usual business chair) - back injury; not 35 anymore as strapping on the 50 lb. leaf blower and heavy yard work times are now - OVER <a favorite> having been saved by a chiropractor. Thanks Rich, Dr. Richard B. Waller, D.C. (Bolton, Mass) who was able to get me walking (barely without a walking stick) again!!!

The cell and gene therapy sector is STILL experiencing the “flight of Icarus” …  since “our” universe have oscillated between gains and losses since the first of the year!

There are ONLY net and per share losses in Q2. SG&A’s are, I believe “OUT-OF-CONTROL”, CEOs are skimming shareholders with HIGH salaries and perks as share pricing gets hammered on alternate sessions.

The real question is how recently have CEOs bought-into their depreciated share pricing such as two: AVRO and AGTC.

As I have “noticed” yet again from to date reporting, “Most reporting sector companies … to date have reported net losses, lagging revenue estimates … although AXGN, FATE, RGNX, FIXX and NTLA beat on revenues generating forward motion while ATM use is up.”

 I was proven RIGHT after having written … “I am STILL … skeptical that Tuesday through Friday’s rally can be sustain! I am also NOT convinced that the lows are in the cell and gene therapy sector are behind us.”

The coming weeks will reveal more about the cell and gene therapy sector's state of health.

I find it very interesting to evaluate share price over earnings and a shortage of revenue reporting as a proxy for performance.

We always need a villain and they are multiplying – We are stuck in “Earnings’ season, 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.