March 13, 2023 7:47am
Regulators announced a plan to backstop all the depositors in failed Silicon Valley Bank (SVB) and make additional funding available for other banks. The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. jointly announced the efforts Sunday aimed at strengthening confidence in the banking system after SVB’s failure on Friday spurred concern about spillover effects. All SVB depositors will have access to their money starting Monday, according to a joint statement from the Treasury Department, Federal Reserve and the FDIC. <Bloomberg>
Pre-open Indications: 5 Positive and 2 Negative Indication
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, evaluated and reported.
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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 -0.83% or (-260 points), S&P futures are DOWN -0.71% or (-27 point) and NASDAQ futures are UP +0.34% or (+40 points) early in the pre-open – so far
Stock futures jumped after regulators announced a plan to backstop all the depositors in failed SVB and make additional funding available for some other banks,
European markets were trading 2.5% lower,
Asia-Pacific markets traded mixed.
Henry’omics:
We need to understand the macro to comprehend the micro re “our” universe of cell and gene therapy companies …
Indexes tumbled on Friday as Silicon Valley Bank – a banker of liquid assets, and lender to tech and cell/gene therapy companies was shut down after losses in its bond portfolio, a huge bank failure sent shockwaves through the banking sector.
The Dow closed DOWN -345.22 points (-1.07%); the S&P closed DOWN -56.73 points (-1.45%) while the Nasdaq closed DOWN -199.47 points (-1.76%)
Economic Data Docket: Tuesday’s consumer price index report is the last major inflation data release ahead of the Fed’s next meeting, ending March 22. February retail sales and the producer price index are also on deck.
From the Title: The Fed in a separate statement said it’s creating a new “Bank Term Funding Program” that offers loans to banks under easier terms than are typically provided by the central bank.
· The Treasury will “make available up to $25 billion from the Exchange Stabilization Fund as a backstop” for the bank funding program but the Fed doesn’t expect to draw on the funds, it said.
· Under the new program, which provides loans of up to one year, collateral will be valued at par, or 100 cents on the dollar. That means banks can get bigger loans than usual for securities that are worth less than that — such as Treasuries that have declined in value as the Fed raised interest rates. <Bloomberg>
Friday’s (3/10) … RegMed Investors’ (RMi) closing bell: “bad goes to worse and fear for cell and gene therapy sector cash positions. As damage plays out as Silicon Valley Bank’s (SVB) eco financial support banking and investment for sector companies and VCs dissolves into FDIC.” … https://www.regmedinvestors.com/articles/12864
RegMed Investors (RMi) Research Note: Upcoming Q4 earnings reporting dates … https://www.regmedinvestors.com/articles/12830
RegMed Investors (RMi) Research Note: Q4 and FY22 earnings reporting … “The cell and gene therapy sector fluctuates in revenues, collaboration, regulatory submissions and expenses, but the changes may alarm investors who prefer to see expectation and consensus stability and share pricing growth” … https://www.regmedinvestors.com/articles/12843 --- 21 of 35 (my coverage group)
Ebb and flow:
Q1/23 –
March – 1 positive and 7 negative close
· February – 1 holiday, 2 vacation, 7 negative and 8 positive closes
· January – 2 holidays, 11 positive and 9 negative closes
Companies in my headlights – It’s your decision; I provide ideas and context: INDICATIONS
Positive indications:
Friday’s closing price, aftermarket dollar ($) and cent ($0.00) value and percentage (%)
· Sage Therapeutics (SAGE) closed down -$3.31 with a positive +$0.74 or +1.87% pre-open indication
· Ultragenyx Pharmaceuticals (RARE) closed down -$1.16 with a positive +$1.11 or +2.86% positive indication
· uniQure NV (QURE) closed down -$1.20 with a positive +$0.68 or +3.55% aftermarket indication.
· Solid Biosciences (SLDBN) closed down -$0.26 with a positive +$0.18 or +3.67% aftermarket indication
· Ionis Pharmaceuticals (IONS) closed down -$0.80 with a positive +$1.69 or +4.98% aftermarket indication.
Negative Indications:
Friday’s closing price, aftermarket dollar ($) and cent ($0.00) value and percentage (%)
· Caribou Biosciences (CRBU) closed down -$0.33 with a negative -$0.17 or -3.28% pre-open indication,
· Compass Therapeutics ((CMPX) closed down -$0.25, with a negative -$0.22 or -6.63% pre-open indication
The BOTTOM LINE: I try to keep it simple and short!
If economic data releases were hard enough to hurdle i.e.; share pricing deep dives in the new month’s eight (8) sessions contributes, following the collapse of Silicon Valley Bank (SVB) that effected not just investors and companies but, employee’s payrolls contributing to the last week’s conflagration
Cell and gene therapy sector weakness should stimulate BUYING after selling had become extreme enough to possibly … generate the oversold to bounce skyward.
The rush of Q4 and FY22 earnings to release is STILL on … I do NOT believe there are not a lot of cell/gene therapy companies in position yet – UNTIL earnings (Q4 and FY22) are reported – any breakout is a false hope with the inevitable downside re-occurring.
21 of my 35 covered have reported.
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.
· Agenus (AGEN) 3/14 – Tuesday
· AxoGen (AXGN) 3/14 – also on Tuesday
· BioLife Solutions (BLFS) 3/16 - Thursday
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.
