October 31, 2022 7:56am

A week of earnings LPS (loss-per=share) starts the month

Indications: 2 BUYs, 1 Positive Indication and 3 negative indications

Earnings: Mesoblast (MESO)

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 DOWN -0.27% or (-90 points), S&P futures are DOWN -0.33% or (-12 points) and NASDAQ futures are DOWN -0.50% or (-57 points) early in the pre-open – so far,

 

Stock futures were lower early on Monday,

European markets were flat,

Asia-Pacific were mostly higher while Chinese indexes were down as China’s National Bureau of Statistics released its Purchasing Managers’ Index data, with the official manufacturing print coming in at 49.2, missing expectations.

 

Henry’omics:

Friday ended with indexes jumping on Friday, with investors hoping that some signs of economic weakness would lead to the Fed slowing down the pace of its interest rate hikes soon.

·         The Dow closed UP +828.06 points (+2.59%), the S&P closed UP +93.73 points (+2.46%) while the Nasdaq closed UP +309.78 points (+2.87%)

Economic Data Docket: Traders will be preparing for the latest Federal Reserve meeting, which begins Tuesday.

 

Thursday’s … RegMed Investors’ (RMi) closing bell: “grabbing onto the upside. Don’t hold-on too tight, you’ll drown in the downside; a contrarian view that make money.” …  https://www.regmedinvestors.com/articles/12674

 

Ebb and flow:

Q4 – 1 neutral, 11 positive and 8 negative closes

Q3/22 –

·         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 up +$0.11 to $2.55 after Thursday’s -$0.17, Wednesday’s -$0.02, Tuesday’s +$0.02 and last Monday’s -$0.03 following the previous Friday’s +$0.10, with a positive +$0.02 or +0.78% 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 -$0.70 to $6.11 after a reverse split following Thursday’s -$0.0061 to $0.45, Wednesday’s -$0.0080, Tuesday’s +$0.0119 and last Monday’s +$0.0088 with a positive +$0.09 or +1.47% pre-open indication. The 1-for-15 reverse split went into effect. A 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 - Sharpen your pencil.

 

Positive Indications:

Intellia therapeutics (NTLA) closed up +$1.87 to $54.03 after Thursday’s -$0.40, Wednesday’s +$1.34, Tuesday’s +$2.55 and Monday’s -$1.55 with a positive +$0.83 or +1.54% pre-open indication

 

Negative Indications:

Sage Therapeutics (SAGE) closed up +$0,90 to $38.22 after Thursday’s -$0.29, Wednesday’s +$1.28, Tuesday’s -$0.20 and last Monday’s +$0.36 with a negative -$0.22 or -0.58% pre-open indication. SAGE is expected to post quarterly loss of $2.16 per share in its upcoming report, which represents a year-over-year change of +2.3%. Revenues are expected to be $1.68 million, up 16.7% from the year-ago quarter. <Zacks Consensus Estimates>

Beam Therapeutics (BEAM) closed up +$2.43 to $48.74 after Thursday’s -$1.24 to $46.31 after Wednesday’s +$0.81, Tuesday’s +$3.19 and Monday’s -$1.41 with a negative +$0.32 or -0.66% pre-open indication.

 

Puff/Pump and Promote: Maintaining SELL

Biostage (OTCQB: BSTG) closed down -$0.20 with 3,556 shares traded after Thursday’s +$0.50 to $7.00 with 3,147 shares traded <3-month average = 2,335 shares>

 

The BOTTOM LINE: Investors are still struggling for sector share pricing direction and wanted clarity of guidance in earnings that are to begin in earnest.

Reiterating, “I try to keep it simple … and short …

What changes … “No one company is immune in the sector and this market … of rolling downdrafts?”

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:

·         Mesoblast MESO) on 11/2,

·         MiMedx (MDXG), Ultragenyx (RARE) and Editas Medicine (EDIT) on 11/2,

·         Fate Therapeutics (FATE), Cellectis SA (CLLS), Sangamo Therapeutics (SGMO) and Regenxbio (RGNX) on Thursday, 11/3,

·         AxoGen (AXGN) and Sage Therapeutics (SAGE) 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 drops 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 is NOT 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.