December 5, 2022 5:14pm

The Cell and gene therapy sector gives-up any gains

News: Verve Therapeutics (VERV -$2.58) shares fell the most in five months; the FDA has a bevy of safety concerns surrounding VERV's gene-editing approach to high cholesterol. US regulators requested additional information before allowing a test of its gene therapy to begin. Part of the FDA's concerns boil down to safety — worries of genetic edits becoming inheritable and unintended effects of changing the gene. In addition, the FDA asked for additional data from ongoing human studies in New Zealand and the U.K.

Pre-open Indications: 4 Hits and 1 Miss

Why do I keep writing this blog/newsletter; to inform investors, what others won’t say or write

Your portfolio should be profiting from RMi’s analysis; subscription is coming, it’s not conscription but, an offer to join our collective of like-minded investors!  

If I have learned one thing as a former research analyst in a venture and public fund now a journalist; it is that your life and your bank account are largely tied to your knowledge of price movements and questioning pricing targets.

 

The Dow closed DOWN -482.78 points (-1.40%), the S&P close DOWN -72.86 points (-1.79%) while the Nasdaq closed DOWN -221.56 points (-1.93%)

 

Henry’omics:

We need to understand the macro to comprehend the micro re “our” universe of cell and gene therapy companies …

Indexes fell Monday on fears that the Fed may continue tightening until it tips the economy into a recession.

Bond yields pushed higher as equities fell, with the yield on the benchmark 10-year Treasury as the last trade was up nearly 9 basis points at 3.588% late Monday.

A hotter-than-expected reading of November ISM Services further fueled concerns that the Fed will continue hiking after the index topped Dow Jones’ estimates and increased from October.

Economic Data Docket: the ISM Manufacturing Index expanded faster in November 56.5 compared to estimates of 53.5, which is above October’s reading of 54.4. In a separate report, the Purchasing Managers’ Index (PMI) is 46.2 in November, down from the October reading of 47.8. New business activity fell at the sharpest rate since May 2020.

 

Monday’s … RegMed Investor’s (RMi) Pre-Open: “looking for more as December begins. The problem, tax-selling will cripple the cell and gene therapy sector.” …  https://www.regmedinvestors.com/articles/12729

 

RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened

  • Monday’s advance/decline line opened negative at 2 up/ 30 down and 3 flats, stayed negative with 4 up/ 31 down and 0 flat at the mid-day, ending with a negative close of 3/32 and 0 flat.

 

Pre-open indication results: 4 Hit <Beam Therapeutics (BEAM -$2.45), Verve Therapeutics (VERV -$2.58), CRISPR Therapeutics (CRSP -$2.39), Ultragenyx (RARE -$0.34)> and 1 Miss <Solid BioSciences (SLDB -$0.31)>

 

Key Metrics:

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Monday, the IBB was down -2.12% and the XBI was down -3.25%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Monday was up +1.69 points or +8.87% at 22.75

 

Closing Down (10 of 32):

  • Alnylam Pharmaceuticals (ALNY -$8.20 after Friday’s +$14.15),
  • Intellia therapeutics (NTLA -$4.11),
  • BioLife Solutions (BLFS -$3.03),
  • Verve Therapeutics (VERV -$2.58 after Friday’s +$1.43),
  • Beam Therapeutics (BEAM -$2.45 after Friday’s +$0.99),
  • CRISPR Therapeutics (CRSP -$2.39),
  • Ionis Pharmaceuticals (IONS -$1.34),
  • Regenxbio (RGNX -$1.22 after Friday’s +$0.72),
  • Vericel (VCEL -$1.15 after Friday’s +$0.80,
  • Chinook Therapeutics (KDNY -$0.79 after Friday’s +$1.08),

Closing Up (3 of 3):

  • Prime Therapeutics (PRME +$0.86 after Friday’s +$0.88),
  • Cellectis SA (CLLS +$0.05),
  • Avrobio (AVRO +$0.0169 after Friday’s -$0.0228)

 

Q4 – December

  • Monday closed negative with 3 incliner, 32 decliners and 0 flat
  • Friday closed positive with 29 incliner, 5 decliners and 1 flat
  • Thursday (12/1/22) closed negative with 8 incliner, 24 decliners and 3 flats

 

The BOTTOM LINE: I try to keep it simple … and short!

“The stock market headed south Monday, as stronger-than-expected economic data sparked fears that the Federal Reserve will continue to aggressively raise interest rates into next year due to a strong labor market.”

“Early Monday, the ISM services report came in better than expected, with a 56.5 reading in November vs. a 54.4 in October. The ISM service is a barometer of U.S. business conditions in the service sector; a reading above 50 indicates expansion and a sub-50 reading is contraction.” <IBD>

Just 19 trading days remain in 2022.

What’s driving this market and conversely the cell and gene therapy sector – FEAR of more Fed rate hikes.

At any given time, not many stocks are flashing buy signals, while shakeouts and sector rotations can make holding onto positions difficult.

Avrobio (AVRO closed up +$0.0169 to $0.88 after Friday’s -$0.0228) filed a 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> Avrobio (AVRO) files S-3 (Registration Statement) for offering with draft prospectus by Cowen … https://investors.avrobio.com/node/9116/html

·         Also, RA Capital has sold its position in the company!

As I continually question, “The real question that should be asked is how many companies are at the end of sentiments …  leash?

 

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.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.

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.