October 27, 2022 8:04am
Wednesday was a strange day for the market, the Nasdaq tumbled at the open erasing losses by late morning, but then indexes faded back toward session lows although the sector did close positive which underscores the need for caution today
News: Avrobio (AVRO +$0.06 pre-open) the FDA has granted Rare Pediatric Disease Designation to AVR-RD-02, an investigational gene therapy that modifies patients’ own hematopoietic stem cells (HSCs) to treat Gaucher disease, a rare lysosomal disorder that can lead to multiorgan pathology, clinical morbidity and early mortality. Can news oriented share pricing upside be sustained?
Indications: 2 BUY Dips, 4 Sell into Strength, and 1 Pump/Promote (BSTG – the usual suspect)
A daily report may say little or a lot and its final judgement may be inconclusive; yet it serves as insurance that all indications are being examined and evaluated.
Why do I keep writing this blog/newsletter to inform investors, what they need to hear that others won’t say or write! Insight is about understanding perception and also about putting into context what is relevant to expectation fulfillment
8:00 a.m. edition
Remember that overnight and pre-open actions in futures don't necessarily translate into actual trading in the coming day’s session.
Dow futures are UP +0.73% or (+234 points), S&P futures are UP +0.07% or (+2 points) and NASDAQ futures are DOWN -0.44% or (-50 points) early in the pre-open – so far,
U.S. futures rose are mixed and fluctuating on Thursday,
European markets are falling with the ECB meeting and Credit Suisse question direction,
Asia-Pacific markets were mixed
Indexes were mixed as the Dow closed barely positive S&P and Nasdaq fell on Wednesday … the Dow closed UP +2.37 points (+0.01%), the S&P closed Down -28.51 points (-0.74%) while the Nasdaq closed DOWN -228.12 points (-2.04%)
This week to date (Wednesday), indexes remain in positive territory; the Dow and S&P are up more than +2% while the Nasdaq is approximately +1% higher.
Economic Data Docket: Q3 GDP ... and durable goods orders, EIA report on natural gas and unemployment
Wednesday’s … RegMed Investors’ (RMi) closing bell: “sector slips and slides, yet with positive close. Not as bad as I supposed while I am also usually early on volatility prognostications” … https://www.regmedinvestors.com/articles/12669
Ebb and flow:
Q4 – 1 neutral, 10 positive and 7 negative closes
· September – 1 holiday, 10 positive and 11 negative closes
· August – 1 neutral, 11 positive and 11 negative closes
· July - 1 holiday, 10 negative and 10 positive closes
Companies in my headlights – It’s your decision; I provide ideas and context: INDICATIONS
BUY Dips, Undervalued and Range Bottoms:
Agenus (AGEN) closed down -$0.02 to $2.61 after Tuesday’s +$0.02, Monday’s -$0.03, Friday’s +$0.10, and last Thursday’s -$0.05, following the previous Wednesday’s -$0.13, Tuesday’s +$0.04 and the Monday’s +$0.24 with a negative -$0.02 or -0.77% pre-open indication. AGEN is projected to report earnings of -$0.18 per share, which would represent a year-over-year decline of -126.09% <Zacks>
Solid Biosciences (SLDB) closed down -$0.0080 to $0.46 after Tuesday’s +$0.0119, Monday’s +$0.0088, Friday’s down -$0.0027 and last Thursday’s $0.0026, following the previous Wednesday’s -$0.0226, Tuesday’s +$0.0073 and Monday’s +$0.0064 with a negative -$0.01 or -2.19% pre-open indication. Sharpen your pencil – new investment and management coming from Bain funds with an acquisition of AvantiBio and a $75 million private placement. Combined company is expected to have approximately $215 million in cash and investments, which is expected to fund the combined company into 2025 and support attainment of key milestones for lead gene therapy programs -
Sell Into Strength:
Avrobio (AVRO) closed up +$0.0041 to $0.68 after Tuesday’s down -$0.0011, Monday’s $0.0291 and Friday’s -$0.0066 with a positive +$0.06 or +8.48% pre-open indication. It’s now the 43nd session of being under Nasdaq’s $1.00 listing requirement. Question will news be sustained in relation to share pricing?
Verve Therapeutics (VERV) closed up +$2.16 to $37.00 after Tuesday’s +$1.19 and Monday’s +$1.65, Friday’s +$0.58 and last Thursday’s +$0.42 following the previous Wednesday’s -$2.05, Tuesday’s + 0.60 and Monday’s +$1.80 with a negative -$0.10 or -0.27% pre-open indication,
BioLife Solutions (BLFS) closed up +$1.38 to $21.96 after Tuesday’s +$1.98, Monday’s -$0.36, Friday’s +$0.58 and last Thursday’s +$0.42 following the previous Wednesday’s -$2.05, Tuesday’s +$ 0.60 and Monday’s +$1.80 with a negative -$0.95 or -4.33% pre-open indication,
CRISP Therapeutics (CRSP) closed up +$2.75 to $55.20 after Tuesday’s +$2.05 and Monday’s -$0.44, Friday’s -$0.45 and last Thursday’s -$2.78 following the previous Wednesday’s +$2.83, Tuesday’s +$0.57 and Monday’s +$2.26 with a positive +$0.01 or +0.02% pre-open indication,
Puff/Pump and Promote: Maintaining SELL
Biostage (OTCQB: BSTG) closed up +$0.50 to $7.00 with 3,147 shares traded after Tuesday’s +$0.01 with 1,007 shares traded, Monday’s -$0.75 with 3,035 shares traded, Friday’s +$0.23 with 1,082 shares traded and last Thursday’s -$0.08 with 2,031 shares traded <3-month average = 2,190 shares>
Questions need to be answered and they NEVER are for shareholders; as the First Amendment of the U.S. Constitution does guarantee the “freedom of speech, or of the press” … but I guess NOT to respond?
Who, WHAT and WHERE are pumping and promoting the “spikes” in volume and share price … coming from?
- What is DST Capital? Is DST Capital really managed by Mrs. bin Zhao of Weston, Mass and Hong Yu, president of BSTG? Is LIU Dong-hai chairman of D. Phone, one of the largest smartphone retailers in China and Dixintong Technology group; the ultimate funder of DST Capital?
- Consider the attrition rate of the past five (5) years: three (3) CEOs, one (1) CMO who became president, one (1) employee who became president, six (6) CFOs with one (1) interim CFO who walked-out over bringing irregularities to interim management in an audit review, three (3) controllers, a VP of Finance who left without notice and reappeared as a consultant twice, five (5) members of the board of directors of which four (4) were on the audit committee, three (3) other operating VPs and twenty (20) scientific employees. And, three (3) or is it four (4) accounting firms in five years.
- Would you TRUST this management team
The BOTTOM LINE: Investors are still struggling for sector share pricing direction and want continuation yet clarity eludes them as earnings are to begin.
What changes … “No one company is immune in the sector and this market … of rolling downdrafts?”
Reiterating, “I try to keep it simple … and short …
"Kenny Storch at BTIG, states there are 226 public biotech companies trading below cash currently; with 1 out of 5 in the Nasdaq Biotech Index trading below cash."
Is it a sign of the times for a few gene therapy companies to end-up like AGTC – running out of money with delisting hanging over their head like a sword of Damocles (?) and being forced to be acquired by a shell for a financing or closing down
Reiterating, “I believe the sector is showing mixed signals, some BUYs more SELLs – yet I also believe we should BUY Agenus (AGEN) and Solid Biosciences (SLDB).
We will be seeing what October brings – Q3 earnings LPS (loss-per-share) season and a whole lot of economic indicators.
Q4 is HERE and we are back into Q3 earnings season which could be a minefield:
· Alnylam Pharmaceuticals (ALNY) on Thursday, 10/27
· MiMedx (MDXG) and Editas Medicine (EDIT) on 11/2 at 5 p.m.
· Fate Therapeutics (FATE) and Regenxbio (RGNX) on Thursday, 11/3,
· AxoGen (AXGN) on 11/8,
· Ionis Pharmaceuticals (IONS) and Vericel (VCEL) on Wednesday, 11/9
If you have gains, you might want to lock-in profit (if any) … before earnings season begins!
Reiterating, “Set aside volatility and there still aren't good reasons to be invested now; companies are saving ANY news for the earnings season.”
DISPOSE ... of Avrobio (AVRO) who experiences news and the stock flip/flops after a de-listing notice while the management DID NOTHING to AVOID this dilemma while president, CEO and director Geoff Mackay carries home a HUGE salary of $754.39 K per year?
· AVRO STILL does NOT get close to the $1.00 to continue its Nasdaq listing after a delisting notice.
· Where is the upside coming from to “solve” the de-listing “position” on Nasdaq?
· Will AVRO have to “commission" a stock reverse to address its delisting?
· OR, will they “pull” an AGTC?
When it comes time to invest or even hold onto an investment; I’d say … focus on what percentage ownership of stock … NOT options CEOs and management teams own versus their salary and bonus.
Amid the ongoing cell and gene therapy sector volatility, “our” universe’s trend remains " in a constant correction." That means that investors are safer on the sidelines as again … earnings are coming.
My guide to 'good news seems to be bad news' and 'bad news is good news. 'In normal times, no one really questions whether good news in the economy is actually good.
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.
All investments are subject to risks. Investors should consider investment objectives.
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.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions securities referred to in this publication.