November 9, 2022 7:46am
Be aware of LPS (loss-per-share) earnings, which focus share pricing revealing negativity and depleting “runways”
News: Avrobio (AVRO) files S-3 for $250 million common stock, preferred stock, debt securities, warrants and unit offering within draft prospectus by Cowen as stock sinks while delisting continues? Just another “screw-job” of investors! < Read, SELL and Weep - see hyperlink below>
Earnings today: Ionis Pharmaceuticals (IONS), Precigen (PGEN) and Vericel (VCEL)
Indications: 1 SELL, 2 Positive Indications, 5 Negative Indication, and 1 Pump/Promote
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 -0.39% or (-129 points), S&P futures are DOWM -0.32% or (-12 points) and NASDAQ futures are DOWN -0.30% or (-33 points) early in the pre-open – so far,
Stock futures were down retreating slightly in early premarket trading as results of the midterm elections providing no clear answers about who would control Congress,
European markets were down,
Asia Pacific markets were mixed while China’s producer prices drop
Henry’omics:
We need to understand the macro to comprehend the micro re “our” universe of cell and gene therapy companies …
Tuesday, indexes rallied, fueled by lower Treasury yields and a declining dollar although the S&P 500 Nasdaq briefly turned negative before recovering.
The Dow closed UP +335.28 points (+1.02%), the S&P closed UP +21.51 points (+0.57%) while the Nasdaq closed UP +51.68 points (+0.49%)
Avrobio (AVRO) files S-3 (Registration Statement) for offering with draft prospectus by Cowen … https://investors.avrobio.com/node/9116/html
- A SCREW-JOB for investors ...
Economic Data Docket: Mortgage demand flattened last week but was significantly lower than it was one year ago. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 7.14% from 7.06% for loans with a 20% down payment.
- investors are anticipating Thursday’s CPI report will give further insight into the Federal Reserve’s efforts to squash inflation. A hot inflation report could signal to investors that a pivot from higher interest rates, for longer, could be further away than expected. <CNBC>
Tuesday’s (11/) … RegMed Investors’ (RMi) closing bell: “after five (5) down sessions, it was inevitable that the algorithms would “rule” … https://www.regmedinvestors.com/articles/12690
Ebb and flow:
Q4 – November - 5 negative and 2 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
SELL:
Avrobio (AVRO) closed up +$0.0061 to $0.66 after Monday’s +$0.0079 to $0.65 with a negative -$0.01 or -1.20% pre-open indication with earnings release with a net loss of -$23 million or -$0.52 per share and a cash position of $116 million with a runway until Q4/23.
Negative Indications:
Prime Therapeutics (PRME) closed up +$1.41 after Monday’s -$2.07, Friday’s +$1.58 and Thursday’s -$1.67 with a negative +$1.06 or -5.42% pre-open indication.
Beam Therapeutics (BEAM) closed up +$0.48 to $38.39 after Monday’s -$4.89, Friday’s -$1.21, Thursday’s +$0.41 and last Wednesday’s -0.76 following the previous Tuesday’s +$0.30 and Monday’s -$4.68 with a negative -$0.01 or -0.03 pre-open indication.
bluebird bio (BLUE) closed up again +$0.56 to $7.37 after Monday’s +$0.68 to $6.81 with a negative -$0.07 or -0.95% pre-open indication. My question, “WHEN the offering”? bluebird bio (BLUE) had a Q3 net loss of -$76.52 million or -$0.94 per share with a cash position of $141 million (with $45 million restricted cash and $54 ATM utilization) and a Q2/23 runway.
Ionis Pharmaceuticals (IONS) closed up +$0.64 to $42.25 after Monday’s +$0.06, Friday’s -$2.94 and Thursday’s -$0.19 with a negative -$1.15 or -2.72% pre-open indication.
Vericel (VCEL) closed down -$1.01 to $23.05 with a negative -$0.77 or -3.34% pre-open indication with earnings being released.
Positive Indications:
uniQure NV (QURE) closed up +$0.37 to $19.23 after Monday’s -$0.38 with a positive +$0.23 or +1.20% pre-open indication.
Intellia Therapeutics (NTLA) closed up +$1.00 to $49.53 after Monday’s -$2.41 post Friday’s -$0.67, Thursday’s +$0.51, last Wednesday’s -$2.11 following the previous Tuesday’s +$0.43 and Monday’s -$1.25 with a positive +0.40 or +0.81% pre-open indication.
Sage Therapeutics (SAGE) closed up +$0.03 to $33.91 with a positive +$1.09 or +3.21% pre-open indication after earnings
Puff/Pump and Promote: Maintaining SELL
Biostage (OTCQB: BSTG) closed up +$0.76 with 1,880 shares traded after Friday’s +$0.01 with 2,953 shares traded, Thursday’s -$0.09 with 800 shares traded, Wednesday’s -$0.05 with 100 shares traded, and last Tuesday’s flat with 963 shares traded following the previous Monday’s -$0.85 with 2,100 shares traded <3-month average = 2,446 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 suffered significant damage this past week and on Monday although Tuesday had a positive upside, after share pricings tumblings.
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 RUBY (Rubius Therapeutics – seeking “strategic alternatives”, AGTC – running out of money – getting acquired by shell, AVRO and VSTM with delisting hanging over their head like a sword of Damocles (?) or BEAM (Beam Therapeutics (dropping trial) or even Verve Therapeutics (VERV) getting IND halted by FDA.
WHO or WHICH are NEXT …?
CEO salaries, spending within G&A are totally OUT-OF-WHACK; these are companies in early development stages and will be for years without products in most cases not like the tech companies, whose CEOs and management teams think sector management teams should be compared to for bi-weekly cash and “beanies”!
We will be seeing what November 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:
· Still more on way to be announced.
Investors are still struggling … to HOLD-on for sector share pricing direction and wanted clarity of guidance in earnings … and TRIALS that are to begin in earnest
If you have gains, you might want to lock-in profit (if any) … before earnings season begins!
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?
· AVRO has filed a DRAFT S-3 prospectus to “commission" an OFFERING by Cowen to address its delisting?
· Let’s NOT forget … AVRO’s 51st session under $1.00 i.e., delisted
Isn’t this Verastem Oncology’s (VSTM is up again +$0.0107 to $0.409 after Monday’s +$0.0010 to $0.39 after Friday’s -$0.0088); its 33th session of being UNDER $1.00 heading for de-listing under Nasdaq.
· 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.
