February 16, 2023 7:46am
Risks seem to be priced in as the sector limps with share pricing barely budging
Pre-Open Indications: 2 Positive Indications and 2 Negative Indication
Remember, there are four (4) phases of the stock cycle: accumulation; markup; distribution; and markdown
I write this blog/newsletter to inform investors with facts and supporting numbers focused on what they need to hear that others won’t say or write about - truth! Subscription is coming, it’s not conscription but, an offer to join our collective of like-minded investors! Join me … in the NO spin zone.
The 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. My interpretation of the morning’s numbers is written to be informative; it’s built on will happen behind the headlines today, not tomorrow or yesterday
Dow futures are DOWN -0.05 or (-18 points), S&P futures are DOWN -0.11% or (-4 point) and NASDAQ futures are DOWN -0.08% or (-10 points) early in the pre-open – so far
Stock futures are floating negative on Thursday,
European markets higher,
Asia Pacific markets mostly rise.
Henry’omics:
We need to understand the macro to comprehend the micro re “our” universe of cell and gene therapy companies …
Indexes closed slightly higher Wednesday even after a stronger-than-expected January retail sales report suggested the Fed may have further to go in its efforts to tame inflation; the Dow rose 38.78 points, or 0.11%, and the S&P 500 climbed 0.28% as the Nasdaq notched its third straight day of gains, rising 0.92%
Economic Data Docket: January’s producer price index (PPI). Headline PPI is expected to show a monthly increase of 0.4%, against December’s decline of 0.5%. Weekly jobless claims and housing data
Wednesday’s (2/15) … RegMed Investors’ (RMi) closing bell: “inflation data drags on sector as an end of session closes positive. Who says inflation is NOT affecting share pricing? Not me …! … https://www.regmedinvestors.com/articles/12836
Ebb and flow:
Q1/23 – February – 6 negative and 5 positive closes
· January – 2 holidays, 11 positive and 9 negative closes
Companies in my headlights – It’s your decision; I provide ideas and context: INDICATIONS
Positive Indications:
Verve Therapeutics (VERV) closed down -$0.04 to $21.72 after Tuesday’s +$0.62 after Monday’s +$0.69 with a positive +$0.65 or +2.99% pre-open indication on news.
Vericel (VCEL) closed down -$0.02 to $29.53 with a positive +$1.39 or +4.71% aftermarket indication.
Negative indications:
Sage Therapeutics (SAGE) closed up +$0.19 to $45.11 after Tuesday’s -$0.36, Monday’s +$0.27, Friday’s +$0.21 and last Thursday’s -$0.01 with a negative -$1.11 or -2.46% aftermarket indication.
Intellia Therapeutics (NTLA) closed up +$1.00 to $41.78 with a negative -$0.68 or -1.63% pre-open indication.
The BOTTOM LINE: I try to keep it simple and short!
Maintaining my investing thesis, “Until the sector as well shows some strength, investors should be careful about adding exposure. The recent pullbacks highlight the importance of adding exposure gradually, and not buying extended.”
From Insider Monkey: a few excerpts …
· The rising interest rate environment hammered the biotech industry in 2022. Small biotech companies need a lot of cash for their clinical trials and ambitious R&D budgets.
· And easy cash becomes elusive when consumers, investors and central banks begin to cut back on spending. The Federal Reserve’s rate-hike spree didn’t bode well for biotech companies in 2022.
· Healthcare investors funneled most of their cash into large-cap pharmaceutical stocks that are deemed defensive by experts.
· Bloomberg in a January 2023 report said that biotech executives are facing a lot of scrutiny on cash from investors amid a tough environment. Investors are asking biotech companies about their cash reserves and for how long they are expected to last.
· The report added that private investments in the sector fell 19% last year on a YoY basis to $29.5 billion. <Fahad Saleem>
The sector “gyrate” as algorithms and electronic trading satisfy the lust for returns in quant and hedge funds.
I do NOT believe there aren't a lot of cell/gene therapy companies in position yet – UNTIL earnings (Q4) are reported – any breakout is a false hope with the inevitable downside re-occurring.
I also hate to be so negative or contrarian but, this is a NO spin zone and truth is its product.
And I can always be WRONG but, mostly EARLY!
Upcoming Q4 earnings reporting will present challenges to share pricing.
· Sage Therapeutics (SAGE) 2/16 – Thursday
· Ionis Pharmaceuticals (IONS) 2/22 – Wednesday
· Ultragenyx Pharmaceuticals (RARE) 2/22- Wednesday
· Ionis Pharmaceuticals (IONS) 2/22 – Wednesday
· Editas Medicine 2/22 - Wednesday
· Alnylam Pharmaceuticals (ALNY) 2/23 – Thursday
· Vericel (VCEL) 2/23 – Thursday’s
· Fate Therapeutics (FATE) 2/28 -Tuesday
So be cautious about adding exposure and stick to loss-cutting rules.
A couple of companies have become … black holes … of investor sentiment; yet, some get financing to continue the chain around investors’ necks until they recognize it could be forever with “some” of these equities.
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.
