November 1, 2022 8:00am
Liquidity and ensuing volatility are issues, I don't believe the cell and gene therapy sector has bottomed out … yet!
Busy next few days for earnings - 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.
Indications: 1 BUY, 3 Positive Indications, 2 Negative Indications and 1 Pump/Promote <Biostage (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 +0.59% or (+193 points), S&P futures are UP +0.93% or (+36 points) and NASDAQ futures are UP +1.17% or (+133 points) early in the pre-open – so far,
Stock futures rose Tuesday, the first day of November,
European markets were higher with global investors focusing on the U.S. Fed’s policy meeting,
Asia-Pacific markets were humming along; MCSI’s broadest index of Asia-Pacific shares outside Japan was 2.74% higher.
Indexes slipped Monday as the final trading day of October kicked off, but the major averages snapped a two-month losing streak.
- The Dow closed DOWN -128.85 points (-0.39%), the S&P closed DOWN -29.08 points (-0.75%) while the Nasdaq closed DOWN -114.31 points (-1.03 %)
Economic Data Docket: Federal Reserve meeting begins with an interest-rate decision set for Wednesday afternoon. A 75-basis point rate hike on Wednesday should be fully expected. Also, job openings data and construction spending for September, as well as the ISM manufacturing report for October.
Monday’s (10/31) … RegMed Investors’ (RMi) closing bell: “falling and feeling more than a pinch as October ends” … https://www.regmedinvestors.com/articles/12676
Ebb and flow:
Q4 – first session
· October -1 neutral, 11 positive and 90 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: I can’t let go, they’re undervalued …
Agenus (AGEN) closed down -$0.04 to $2.51 after Friday’s +$0.11 to $2.55, 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 +0.80% 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>
CRISP Therapeutics (CRSP) closed down -$1.95 to $52.34 after Friday’s +$1.93, Thursday’s -$2.84, Wednesday’s +$2.75, Tuesday’s +$2.05 and last Monday’s -$0.44 with a positive +$1.16 or +2.22% pre-open indication,
Intellia Therapeutics (NTLA) closed down -$1.25 to $ after Friday’s +$1.87, Thursday’s -$0.40, Wednesday’s +$1.34, Tuesday’s +$2.55 and last Monday’s -$1.55 with a positive +$0.22 or +0.42% pre-open indication,
Verve Therapeutics (VERV) closed down -$3.00 to $37.70 after Friday’s +$4.73, Thursday’s -$1.03, Wednesday’s +$2.16, Tuesday’s +$1.19 and last Monday’s +$1.65 with a positive +$1.00 or +2.65% pre-open indication,
Solid Biosciences (SLDB) closed up +$0.30 to $6.41 after Friday’s -$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 negative -$0.26 or -4.06% 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.
Prime Therapeutics (PRME) closed up +$0.17 to $18.82 after Friday’s +$1.35, Thursday’s +$0.89, Wednesday’s +$0.36, Tuesday’s +$0.85 and last Monday’s -$0.56 following an IPO of 10.29 M shares priced at $17.00 with a negative -$0.32 or -1.70% pre-open indication,
Puff/Pump and Promote: Maintaining SELL
Biostage (OTCQB: BSTG) closed down -$0.85 with 2,100 shares traded after Friday’s -$0.20 with 3,556 shares traded and Thursday’s +$0.50 to $7.00 with 3,147 shares traded <3-month average = 2,335 shares>
- A DRAFT prospectus is filed … SEC Form S-1/A …https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=117017206&type=HTML&formType=S-1%2FA&dateFiled=2022-10-27&cik=0001563665&CK=1563665&symbol=0001563665&companyName=Biostage
The BOTTOM LINE:
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:
· 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), Voyager Therapeutics (VYGR) and Sage Therapeutics (SAGE) on 11/8,
· Ionis Pharmaceuticals (IONS) and Vericel (VCEL) on Wednesday, 11/9
Investors are still struggling for sector share pricing direction and wanted clarity of guidance in earnings that are to begin in earnest
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.”
Investors are still struggling for sector share pricing direction and wanted clarity of guidance in earnings that are to begin in earnest. Bond yields have seen big swings as a lack of liquidity has widened the price gaps between investors buying and selling Treasuries. That means trades that didn't move the market before are now creating more volatility. Rate-sensitive growth stocks are especially vulnerable as borrowing costs are already rising on Fed rate hikes.
Legendary investor Jeremy Grantham warns the current market backdrop is among the worst he's ever seen - and says holding cash is a good idea. The veteran investor also confirmed he's betting against the Nasdaq index and high-yield or "junk" bonds, suggesting he expects tech stocks to continue dropping, and corporate defaults to spike. <had an office next door to him, many years ago – a god of markets>
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.