December 9, 2022 6:36pm

The cell and gene therapy sector needs to achieve an equilibrium in sentiment whether positive or negative to process actual investor “participation” - New Year post tax selling!

The Biostage (OTCQB: BSTG) Chronicles: notice when the pump/promote “program” is NOT being utilized the share pricing DROPS -$0.19 with much lower volume of 982 shares traded <3-month average volume = 2,153 shares? Funny how that happens, is the SEC watching – is the new CFO involved, should he be questioned?

News: Are troubling inflation figures “spooking” cell and gene therapy equities - to be sure?

Pre-open Indications: 1 Hit and 4 Miss

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

TGIF

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 -305.02 points (-0.90%), the S&P close DOWN -29.13 points (-0.73%) while the Nasdaq closed DOWN -77.39 points (-0.70%)

 

Henry’omics:

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

Shortly after the opening bell on Wall Street, all three averages opened lower by about 0.3% following the November read on producer prices.

As indexes finished lower Friday, with losses for the week as worries persisted over continued rate hikes.

This week, Dow is off by -2.77%, the S&P 500 has fallen 3.37% and the Nasdaq has lost -3.99%.

Economic Data Docket: The November read on producer prices showed prices rising 0.3% over the prior month on a headline basis and 0.4% on a "core" basis, which excludes food and energy. Economists had expected increases of 0.2% for each reading, respectively. Compared to the prior year, producer prices rose 7.4%.

·         The University of Michigan Index of Consumer Sentiment rose to 59.1 for the month, up from 56.8 in November and ahead of the Dow Jones estimate for 56.5, according to a preliminary reading Friday. The index remains well below its year-ago level of 70.6, which was 16.3% higher than the current reading.

·         On inflation, one-year expectations fell to 4.6% from 4.9% for the lowest reading in more than a year. Five-year inflation expectations were unchanged at 3%.

·         The current conditions index also rose to 60.2, a 2.4% gain from November.

 

Friday’s … RegMed Investor’s (RMi) Pre-Open: “December ain’t turning-out, so far to be a good month for the cell and gene therapy sector –up against resistance. Investors should still be cautious amid choppy market action after another weak aftermarket; is it almost time for bottom fishing – we’re coming closer!” … https://www.regmedinvestors.com/articles/12737

 

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

  • Friday’s advance/decline line opened negative at 13 up/ 21 down and 1 flat, stayed negative with 6 up/ 28 down and 1 flat at the mid-day, ending with a negative close of 2/31 and 2 flat.
  • Thursday’s advance/decline line opened positive at 31 up/ 2 down and 2 flats, stayed positive with 22 up/ 13 down and 0 flat at the mid-day, ending with a positive close of 23/11 and 1 flat.
  • Wednesday’s advance/decline line opened negative at 13 up/ 23 down and 0 flats, flipped positive with 18 up/ 16 down and 1 flat at the mid-day, ending with a negative close of 16/19 and 0 flat.
  • Tuesday’s advance/decline line opened negative at 10 up/ 23 down and 2 flats, stayed negative with 8 up/ 27 down and 0 flat at the mid-day, ending with a negative close of 5/30 and 0 flat.
  • 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: 0 Hit and 5 Miss < Sage Therapeutics (SAGE +$0.35), BioLife Solutions (BLFS -$0.39), CRISPR Therapeutics (CRSP -$1.51), Intellia Therapeutics (NTLA -$0.41), Beam Therapeutics (BEAM -$2.57)>   

 

Key Metrics:

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

  • Friday, the IBB was down -2.12% and the XBI was down -2.51%
  • Thursday, the IBB was up +1.31% and the XBI was up +0.60%
  • Wednesday, the IBB was up +0.66% and the XBI was up +0.63%
  • Tuesday, the IBB was down -1.65% and the XBI was down -2.76%
  • Monday, the IBB was down -2.12% and the XBI was down -3.25%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday was up +0.54 points or +2.42% at 22.83
  • Thursday was down -0.39 points or -1.72% at 22.29
  • Wednesday was up +0.42 points or +1.89% at 22.59
  • Tuesday was up +1.40 points or +6.75% at 22.15
  • Monday was up +1.69 points or +8.87% at 22.75

 

Closing Down (10 of 31):

  • Alnylam Pharmaceuticals (ALNY -$6.68 after Thursday’s +$6.68, Wednesday’s +$11.69, Tuesday’s -$6.56 and Monday’s -$8.20),
  • Beam Therapeutics (BEAM -$2.57 after Thursday’s +$0.59, Wednesday’s +$0.92, Tuesday’s -$1.19 and Monday’s -$2.45),
  • CRISPR Therapeutics (CRSP -$1.51 after Thursday’s -$0.11, Wednesday’s -$0.17, Tuesday’s -$1.33 and Monday’s -$2.39),
  • Regenxbio (RGNX -$0.80),
  • uniQure NV (QURE -$0.78 after Thursday’s -$0.65, Wednesday’s -$0.51 and Tuesday’s -$1.41),
  • Ultragenyx (RARE -$0.56 after Thursday’s +$1.70, Wednesday’s +$0.29 and Tuesday’s -$0.61),
  • Editas Medicine (EDIT -$0.53),
  • Ionis Pharmaceuticals (IONS -$0.50 after Thursday’s -$0.20),
  • Vericel (VCEL -$0.48),

Verve Therapeutics (VERV -$0.46 after Thursday’s +$0.69),

Closing Up (2 of 2):

  • Verastem (VSTM +$0.04),
  • Avrobio (AVRO +$0.0049 - barely)

Flat (2):

  • Adverum Biotechnologies (ADVM,
  • MiMedx (MDXG),

 

Q4 – December

  • Friday closed negative with 2 incliner, 31 decliners and 2 flats
  • Thursday closed positive with 23 incliner, 11 decliners and 1 flat
  • Wednesday closed negative with 16 incliner, 19 decliners and 0 flat
  • Tuesday closed negative with 5 incliner, 30 decliners and 0 flat
  • Monday closed negative with 3 incliner, 32 decliners and 0 flat

 

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

The cell and gene therapy sector extended its losses on Tuesday, again.

As the glow comes off the sector of the past years rapidly fades, I believe the sector will become even more focused on the status of clinicals, patient recruitment, interim results, share pricing and guidance from management teams who have FORGOTTEN individual investors while focused on lining their own pockets with OUTSIZED G&A “obligations”. Communication MUST will be driven by a constant out-reach to individual investors.

Just 15 trading days remain in 2022.

Interesting stats from multiple sources: what others have to write …

·         CRISPR Therapeutics AG (CRSP) shareholders might be concerned after seeing the share price drop 25% in the last quarter. Despite shrinking by US$301m in the past week, shareholders are still up 165% over 5 years. CRSP wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS).

·         An Intrinsic Calculation for Sage Therapeutics (SAGE) suggests It's 31% Undervalued.

·         It has been about a month since the last earnings report for Bluebird Bio (BLUE). Shares have added about 6.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is BLUE due for a pullback? An offering is EXPECTED!

·         Caribou Biosciences (CRBU) is held by institutions with 60% ownership. Institutional investors would appreciate the 12% increase in share prices last week, given their one-year returns have been disappointing at 50%.

·         Editas Medicine (EDIT) is down by 61% this year, a terrible performance it partly owes to market-wide troubles. However, the biotech has had problems of its own. EDIT's leading candidate, EDIT-101, has disappointed investors in clinical trials. EDIT-101 targets a rare eye-related disorder called Leber congenital amaurosis 10 (LCA10) that causes blindness -- or at least severely impaired vision -- from birth. There are no effective treatments for LCA10, but it only affects 1,500 patients in the U.S., making EDIT's target market in this area pretty tiny.

·         Sangamo Therapeutics (SGMO) investors are sitting on a loss of 78% if they invested five years ago. Shareholders have had an even rougher run lately, with the share price down 34% in the last 90 days.

·         Verve Therapeutics (VERV) shares fell the most in five months, as US regulators requested additional information before allowing a test of its gene therapy to begin.

·         Ionis Pharmaceuticals (IONS) shares have lost about 16.4% in a month. Ionis maintained its previously issued financial guidance for the year; expecting total revenues to be more than $575 million in 2022 with commercial and R&D revenue roughly split 50-50. Its adjusted net loss is expected to be less than $275 million. IONS has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

 

Another aspect driving this market and conversely the cell and gene therapy sector – FEAR of more Fed rate hikes; the probability the Fed will raise rates by 0.5% in its meeting next week is pegged at 77%, while odds for a 75-basis-point hike are 23%.

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 on Friday +$0.0049 after Thursday’s +$0.0035, Wednesday’s -$0.0585, Tuesday’s -$0.0489 to $0.83, Monday’s +$0.0169 and last Friday’s -$0.0228) having 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 – a sign of dissatisfaction!

·         President, CEO and director Geoff Mackay carries home a HUGE salary of $754.39 K per year?

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.