August 29, 2023 4:48pm
As sector share pricing stays positive at close while digesting weak economic data; investors looked to the final days of what has been a difficult August for the cell and gene therapy sector
Pre-open Indications: 1 Hit and 0 Miss
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If I have learned one thing as a former research analyst in a venture and public fund, multiple operating roles, 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 UP +292.69 or +0.85%, the S&P closed UP +64.32 or +1.45% while the Nasdaq closed UP +238.63 points or+1.74%
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 …
Indexes floated up like a balloon as investors flocked back to tech and cell/gene therapy equities in the final days of what has been a difficult August for the market.
Tuesday’s moves come a day after the S&P 500 notched its first two-day advance of the month. The benchmark index rose 0.6% on Monday, while the Nasdaq advanced 0.8% while the Dow gained 200 points in the previous session.
The latest job openings and labor turnover survey showed a decline in open listings in July — a sign of stability in the jobs market. The Conference Board’s consumer confidence index fell more than expected in August. <CNBC>
Economic Data Docket: The Case-Shiller Home Price Index and the Federal Housing Finance Agency Price Index came out. The Case-Shiller index for June rose 0.9%, shy of estimates that called for a 1.1% rise. Year over year, the Case-Shiller index dropped 1.2%.
- The Conference Board’s Consumer Confidence Index came to 106.1 for August. Economists polled by Dow Jones forecasted a reading of 116. That also marks a pullback from July, which was revised to 114. Dana Peterson, chief economist at The Conference Board, noted that August’s data erased the back-to-back increases seen in June and July.
- The number of open job postings fell to 8.8 million in July from 9.5 million a month prior, the Bureau of Labor Statistics reported Tuesday. That is also the lowest level since March 2021.
Tuesday (8/29) … RegMed Investors’ (RMi) Opening Bell: “timing, the cell and gene therapy sector has enjoyed positive closing in 5 out of 6 recent sessions, can it last? … https://www.regmedinvestors.com/articles/13098
Pre-Open indications: 1 Hit < Ionis Pharmaceuticals (IONS +$0.20)>
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Tuesday’s advance/decline line opened positive at 18 up/ 15 down and 2 flats, strayed positive with 28 up/ 6 down and 1 flat at the mid-day, ending with a positive close of 20 incliners, 14 decliners and 1 flat
- Monday’s advance/decline line opened positive at 25 up/ 9 down and 1 flat, stayed positive with 21 up/ 11 down and 2 flats at the mid-day, ending with a positive close of 24 incliners, 11 decliners and 0 flat
Ebb and flow:
Q3: August – 9 positive and 12 negative closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB was up +1.07% and the XBI was up +0.48%
- Monday, the IBB was up +0.41% and the XBI was up +0.34%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was down -0.64 point or -4.24% at 14.44
- Monday was down -0.53 point or -3.38% at 15.15
Closing Down (14 of 14):
- Caribou BioSciences (CRBU -$0.17 after Monday’s -$0.01),
- Verve Therapeutics (VERV -$0.17 after Monday’s -$0.05),
- Blueprint Medicine (BPMC -$0.18 after Monday’s -$1.54),
- bluebird bio (BLUE -$0.14),
- Ultragenyx Pharmaceuticals (RARE -$0.11 after Monday’s -$1.23),
- Granite Bio (GRPH -$0.10),
- Sage Therapeutics (SAGE -$0.08),
- Mesoblast (MESO -$0.05),
- Homology Medicine (FIXX -$0.03),
- Regenxbio (RGNX +$0.02 after Monday’s +$0.26),
- Bellicum Pharmaceuticals (BLCM -$0.019 after Monday’s -$0.045)
- Agenus (AGEN -$0.01),
- Solid BioSciences (SLDB -$0.01 after Monday’s -$0.05),
- MiMedx (MDXG -$0.01 after Monday’s -$0.07
- Brainstorm Cell Therapeutics (BCLI)
Closing Up (10 of 20):
- Alnylam Pharmaceuticals (ALNY +$2.80 after Monday’s +$2.40),
- BioLife Solutions (BLFS +$1.54),
- CRISPR Therapeutics (+$0.61),
- Beam Therapeutics (BEAM +$0.29 after Monday’s +$0.22),
- Generation Bio (GBIO +$0.27 after Monday’s +$0.36),
- AxoGen (AXGN +$0.25),
- Vericel (VCEL +$0.22 after Monday’s -$0.42),
- Harvard Apparatus RM (HRGN +$0.21 after Monday’s +$0.27)
- Ionis Pharmaceuticals (IONS +$0.20 after Monday’s +$0.54),
- Prime Medicine (PRMC +$0.20 after Monday’s +$0.36),
Q3/23 – August
- Tuesday closed positive with 20 incliners, 14 decliners and 1 flat
- Monday closed positive with 24 incliners, 11 decliners and 0 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.”
At ANY time, this week, be ready to take partial profits and exit losers after the cell and gene therapy sector equity ascended Tuesday (today) but, with some slippage toward the close after Monday, last Friday’s positive closes following Thursday’s negative close and past positive closes of the previous Wednesday, Tuesday, Monday.
As I have stated, “What goes up with ceremony, goes down with disdain followed by the opposite effect.”
And I have also stated, attention remains laser-focused on weeks and end of month’s busy economic calendar; I believe there will be some hesitation side by side with inflation data to really see the reality of the markets and cell and gene therapy sector ability or capacity to continue moving upward.
Fate Therapeutics (FATE +$0.05 at $2.71) has a high short interest percentage –29.29 M shares with percentage of float <83.81 M> at 36.79%, although insiders have bought nearly $700,000 worth of shares over the past 12 months but have suffered from a 73.7% share price drop year to date.
Biogen (BIIB +$2.95 at $268.00) may be undervalued in its long-term sales potential, according to RBC Capital Markets, which is bullish on the company’s Alzheimer’s treatment Leqembi. Analyst Brian Abrahams raised his price target on Biogen by $3 to $357 on Tuesday. The firm’s new forecast suggests 34.7% upside.
· “Our analysis of prescription trends—which we believe may reasonably reflect unit demand—suggest Leqembi’s growth trajectory is remaining steep including in July following full approval/broad [Centers for Medicare and Medicaid] reimbursement,” Abrahams said. “We expect Leqembi will inflect further in the coming months with increased efficiencies in screening, formularies, and monitoring, and contribute meaningfully to BIIB’s top line over time.”
· The firm expects Leqembi to attract $1.4 billion worth of sales in 2026, reaching $10.4 billion end-user sales by 2032.
· Shares are up 0.6% on Tuesday. The stock has declined 3.7% so far this year.
It hasn’t been a good month to report earnings…
Cell and gene therapy sector performance continues to suggest the results of earning season.
30 of 35 companies have reported so far in August. The average post-report reaction to these stocks has been 100% LPS (loss-per-share) consensus with many also missing revenue forecasts.
Q2/23 net losses earnings, cash positions and runway outcomes. LPS (loss-per-share) releases will present challenges to share pricing with outcomes included … https://www.regmedinvestors.com/articles/13058
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!”
Being “greedy when others are fearful” is easier said than done
When a cell and gene therapy sector equity sells-off to or below a buy point, investors face a tough decision: hold tight, exit or trim the position. There's not necessarily a "right" answer. Sometimes the stock will bounce right back, others will keep falling — perhaps after briefly bouncing. A more-cautious approach may make more sense in the current volatile market.
The top three (3) performing in the session:
Tuesday: Alnylam Pharmaceuticals (ALNY) – yet again, BioLife Solutions (BLFS) and CRISPR Therapeutics (CRSP)
Monday: Alnylam Pharmaceuticals (ALNY) – again, Ionis Pharmaceuticals (IONS) and Generation Bio (GBIO)
While The worst three (3) in the session:
Tuesday: Blueprint Medicine (BPMC), Verve Therapeutics (VERV) and Caribou Biosciences (CRBU)
Monday: Ultragenyx Pharmaceuticals (RARE), Blueprint Medicine (BPMC) and Vericel (VCEL)
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 according to the 8-K and 10-K!
• Accumulated deficit: $88.5 M (newest 10-K)
Question: How many CEOs, presidents, VPs, CFOs, CMOs, board members and audit members have … left or been laid-off, accounting firm’s resignations and employees have resigned since 11/1/13 when it spun out of Harvard Biosciences (HBIO) – guess? Also, how many consultants and CROs were left UNPAID after months and years of facilitating IND filed?
· HRGN has incurred substantial operating losses since its inception, and as of June 30, 2023 had an accumulated deficit of approximately $88.5 million and will require additional financing to fund future operations.
· HRGN will NEED to raise additional funds to fund its operations. WHO and WHICH U.S. investors would INVEST with their history??
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.