November 3, 2022 8:12am
After a volatile daily session, the cell and gene therapy sector will likely continue to seesaw until it is clear that earnings have cooled-off share pricing
Indications: 2 Positive Indications, 3 Negative Indications, 1 Sell into Strength and 1 Pump/Promote
Earnings: Intellia Therapeutics (NTLA), Fate Therapeutics (FATE), Cellectis SA (CLLS), Sangamo Therapeutics (SGMO) and Regenxbio (RGNX)
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
8:30 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 -0.62% or (-198 points), S&P futures are DOWN -0.84% or (-31 points) and NASDAQ futures are DOWN -1.07% or (-117points) early in the pre-open – so far,
Stock futures fell Thursday after the Federal Reserve delivered another interest rate hike,
European stocks pulled back,
Asia-Pacific stocks dropped.
Henry’omics:
We need to understand the macro to comprehend the micro re “our” universe of cell and gene therapy companies …
Indexes fell Wednesday, as the major averages bounced between gains and losses in volatile trading following the Fed’s afternoon decision.
The Dow closed DOWN -505.44 points (-1.55%), the S&P closed DOWN -96.41 points (-2.51%) while the Nasdaq closed DOWN -366.05 points (-3.36%)
In the Fed's accompanying statement, Powell hinted at a possible policy change concerning rate hikes in the future - alluding to the diminishing economy and rising chances of recession.
Powell also said that regardless of whether the Fed dials down its interest rate hike in December, it may still end up pulling its key short-term rate ultimately to a higher level than previously thought because of data show inflation is worse than expected.
Economic Data Docket: The next important report is October nonfarm payrolls, set to be released Friday.
Wednesday’s (11/2) … RegMed Investors’ (RMi) closing bell: “We waited for Jerome and got the expected .75 basis point rate increase followed by the small cap cell and gene therapy sector’s advance/decline line diving.” … https://www.regmedinvestors.com/articles/12681
Ebb and flow:
Q4 – November - 1 negative and 1 positive closes
· October -1 neutral, 11 positive and 9 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
Positive Indications:
AxoGen (AXGN) closed down -$0.52 to $10.65 after Tuesday’s -$0.25 with a positive +$0.22 or +2.07% pre-open indication,
Verve Therapeutics (VERV) closed down -$1.86 to $34.58 after Tuesday’s -$1.26 and Monday’s -$3.00 with a positive +$0.69 or +2% pre-open indication,
Sell into Strength:
uniQure NV (QURE) closed up +$1.37 to $20.21 with a positive +$1.01 or 5% pre-open indication after earnings miss on revenue. QURE shares have lost about 9.2% since the beginning of the year versus the S&P 500's decline of -19.1%. plus, the chart looks a little “peaky”.
Negative Indications:
Fate Therapeutics (FATE) closed down -$0.95 to $20.04 with a negative -$0.10 or -0.20% pre-earnings release
Regenxbio (RGNX) closed down -$0.49 to $24.24 after Tuesday’s +$1.06 with a negative -$0.84 or -3.47% pre-earnings release
Sage Therapeutics (SAGE) closed down -$0.98 to $36.90 with a negative -$0.90 or -2.44% pre-open indication
Puff/Pump and Promote: Maintaining SELL
Biostage (OTCQB: BSTG) closed down -$0.05 with 100 shares traded after Tuesday’s flat with 963 shares traded, Monday’s -$0.85 with 2,100 shares traded, 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 = 2,368 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 . Questions arise as to draft prospectus statement of non-reliance of past financials? Hey, CFO Joe some of us have copies of lost “payables”?
The BOTTOM LINE: The sector sold-off on Wednesday … it's possible that the whipsaw market action continues Thursday.
In determining the pace of future share pricing increases or decreases in the cell and gene therapy sector, one NEEDS to take into account … earnings season, economic activity and inflation, and electronic trading and algorithmic “rules” changes.
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
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:
· AxoGen (AXGN), Voyager Therapeutics (VYGR) and Sage Therapeutics (SAGE) on 11/8,
· Ionis Pharmaceuticals (IONS), Precigen (PGEN) and Vericel (VCEL) on Wednesday, 11/9
While the Fed meeting is like an earnings report for the market rally, don't forget actual earnings.
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. That means trades that didn't move the market before are now creating more volatility. Sentiment sensitive cell and gene therapy stocks are especially vulnerable.
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.
