August 2, 2023 4:54pm

Monday, I wrote “Cash out July in its last session of month” sector crashed followed by Tuesday’s downside and Wednesday's dump

Proven right again ...

Pre-Open Indications: 2 Hits and 2 Miss

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If I have learned one thing as a former research analyst in a venture and public fund, operating executive, x-military officer and x-FBI, an adjunct (MBA) business school professor now a journalist; my life and your portfolio are largely tied to our knowledge of price movements and questioning pricing targets.

 

The Dow closed DOWN -348.16 points (+0.98%), the S&P closed DOWN -63.34 points (-1.34%) while the Nasdaq closed DOWN -310.47 points (-2.17%)

 

Henry’omics:

We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …

Wednesday, markets and indexes were sold off as the Nasdaq headed for its worst day since February, after Fitch downgraded the long-term rating for the U.S. and risk-off sentiment resurfaced.

Telling quote, “The Fitch downgrade of U.S.′ long-term rating Tuesday night mostly amounts to “noise” as far as the market is concerned — though it could help it digest its recent gains. Fitch Ratings cut its long-term foreign currency issuer default rating for the U.S. to AA+ from AAA, saying it expects “fiscal deterioration over the next three years.” The downgrade was immediately criticized by Treasury Secretary Janet Yellen and others in Washington, who said the rating is based on outdated information.” <CNBC>

Economic Data Docket: U.S. private payrolls rose more than expected in July as small businesses boosted hiring, pointing to continued labor market resilience that could shield the economy from a recession.

·         Private payrolls increased by 324,000 jobs last month after surging by 455,000 in June, according to ADP. Economists polled by Reuters had forecast private employment would increase by 189,000.

·         Wages for workers remaining in their jobs increased 6.2% in the 12 months through July after advancing 6.4% in June. For those changing jobs, wages rose 10.2% on a year-on-year basis after increasing 11.3% in June. This aligns with government data on Tuesday that showed a sharp decline in workers quitting their jobs for greener pastures in June.

 

Wednesday (8/2) … RegMed Investors’ (RMi) pre-open: “Impact of rating actions and earnings. Fitch Ratings downgrades America’s rating lowering the U.S.’s long-term foreign currency issuer default rating to AA+ from AAA Tuesday night, citing “expected fiscal deterioration over the next three years.” … https://www.regmedinvestors.com/articles/13060   

 

Pre-Open Indications: 2 Hit < CRISPR Therapeutics (CRSP -$3.40), Intellia Therapeutics (NTLA -$1.25)> and 2 Miss < Agenus (AGEN -$0.01), Generation Bio (GBIO -$0.26)>

 

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

  • Wednesday’s advance/decline line opened negative at 2 up/ 29 down and 4 flats, stayed negative with 5 up/ 26 down and 4 flats at the mid-day, ending with a negative close of 6 incliners, 27 decliners and 2 flats

 

Key Metrics:

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

Wednesday, the IBB was down -0.54% and the XBI was down -1.46%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +2.09 point or +15.36% at 16.11

 

Closing Down (10 of 27):

  • Blueprint Medicine (BPMC -$9.54 after Tuesday’s -$1.86 and Monday’s +$2.88),
  • CRISPR Therapeutics (CRSP -$3.40 after Tuesday’s -$0.92 and Monday’s +$0.44),
  • Alnylam Pharmaceuticals (ALNY -$2.04 after Tuesday’s -$6.35 and Monday’s -$3.89)
  • Intellia Therapeutics (NTLA -$1.25 after Tuesday’s -$1.37 and Monday’s -$0.03),
  • Prime Medicine (PRME -$0.81 after Tuesday’s -$0.23)
  • Ionis Pharmaceuticals (IONS -$0.80),
  • Ultragenyx (RARE -$0.57),
  • uniQure NV (QURE -$0.56 after Tuesday’s +$0.25 and Monday’s +$0.51),
  • Vericel (VCEL -$0.49 after Tuesday’s -$0.80 and Monday’s -$1.86),
  • Verve Therapeutics (VERV -$0.30 after Tuesday’s -$1.07 and Monday’s +$0.59),

Flat (2):

  • Harvard Apparatus RM (HNGN) – formerly BIostage (BSTG)
  • Mesoblast (MESO)

Closing Up (6 of 6):

  • Sage Therapeutics (SAGE +$0.74 after Tuesday’s +$1.32 and Monday’s -$0.28),
  • Editas Medicine (EDIT +$0.49),
  • bluebird bio (BLUE +$0.10),
  • BioLife Solutions (BLFS +$0.06 after Tuesday’s -$0.54 and Monday’s +$0.14),
  • Graphite Bio (GRPH +$0.045),
  • Bellicum Pharmaceuticals (BLCM +$0.02),

 

Q3/23 – August

  • Wednesday closed negative with 6 incliners, 27 decliners and 2 flats
  • Tuesday closed negative with 7 incliners, 27 decliners and 1 flat

 

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

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

While shares lost ground, investors showed little sign of panic after Fitch on Tuesday evening cut the U.S. by one notch to AA+ from AAA, citing fiscal deterioration.

An indicator, “Economic data over the last month has painted a more positive picture of the US economy than many thought more than halfway through 2023. Inflation is cooling while Americans continue to gain jobs at a healthy clip, and consumers have remained resilient.” <Yahoo Finance>

 

Questionable re fighting inflation, “The U.S. Treasury said on Monday it expected to borrow $1.007 trillion in the third quarter, the largest amount yet for that period. It also said it plans to "incrementally" increase the size of its auctions across the board in the third quarter and continue increases in future quarters.” <Reuters>

 

August tends to frighten many stock market investors and historians.

·         The stock market is riding high after a strong performance in July, but August could be a difficult month for investors.

·         Data compiled by the Stock Trader’s Almanac shows the S&P 500 averages just a 0.1% gain in August. That makes it the third-worst month on average for the benchmark index. The Dow, meanwhile, averages a loss of 0.04% in August. <CNBC>

 

Cell and gene therapy sector performance continues to suggest the results of earning season although uniQure NV (QURE) – the first to release net share consensus and revenue misses where this equity (QURE) actually rose after earnings release – Tuesday (+$0.25) and possibly WHERE “this” market wants to go despite fears of recession, inflation, aggressive monetary policy, and problems earlier this year.

 

Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and truth is its product; I can always be WRONG but, I am mostly EARLY!”

 

The top three (3) performing in the session:

Wednesday: Editas Medicine (EDIT), Sage Therapeutics (SAGE) – again and Vericel (VCEL)

Tuesday: Sage Therapeutics (SAGE), uniQure NV (QURE), and Caribou Biosciences (CRBU)

Monday: Blueprint Medicine (BPMC), Ionis Pharmaceuticals (IONS) and Verve Therapeutics (VERV)

 

While The worst three (3) in the session:

Wednesday: Blueprint Medicine (BPMC) – again, Alnylam Pharmaceuticals (ALNY) – again and CRISPR Therapeutics (CRSP)

Tuesday: Alnylam Pharmaceuticals (ALNY), Beam Therapeutics (BEAM) and Blueprint Medicine (BPMC),

Monday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and Beam Therapeutics (BEAM)

 

RegMed Investors (RMi) Research Note: Q2/2023 earnings reporting date announcements …

https://www.regmedinvestors.com/articles/13044

 

Earnings:  8/2/23 - today’s releases

Vericel (VCEL) had a Q2/23 net loss of -$5 M or -$0.11 per share with a $147 m cash position and a runway until 2026

·         Surpassed EPS and revenue estimates

·         Closed down -$0.49

Blueprint Medicine (BPMC) had a Q2/23 net loss of $32.8 m or -$2.19 per share with a cash position of $1,0785.7 M and a runway until 2025

·         EPS surprise and tops revenue estimate

·         Closed down -$9.84

Editas Medicine (EDIT) had a Q2/23 net loss of -$40.29 M or -$0.50 with $480 M cash position and a runway until 2025

·         EPS surprise and revenue miss

·         Closed up +$0.49

REGENXBIO (RGNX) had a Q2/23 net loss of -$72.1 m or -$1.66 per share with a $415 M cash position and a runway until 2025

·         EPS miss and lower revenue numbers

·         Closed down -$0.25

 

I am definitely considered a contrarian depending on the session – one has to be a watcher of the ups and downs as well as measurer of sentiment. I am also a NO trust investor but, a validate and verify journalist/analyst.

 

The NO spin zone! U.S. public shareholders deserve accountability …

 

Harvard Apparatus Regenerative Technology (HRGN)  formerly Biostage (OTCQB: BSTG) … as of 7/20/23 -- so many issues!

·         Question: is HRGN just another Ponzi scheme (with their pump/promote buy and sell agenda) as shares are bought to replace those sold?

·         Accumulated deficit:  $85,901 M

·         Will HRGN ESCAPE the scandals when its “former” corporate name was used by a former chairman and CEO Green initiating scandal plagued utilization of an Italian surgeon and the $5 M it took to settle out the executive responsibility as it was SHIFTED to the company shareholders and Harvard Bio (HBIO)???

·         Can this management team be TRUSTED by ANY shareholder other then major holders’ Chinese off-shore investors.

My question that resounds, 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.