August 31, 2023 4:42pm
Algorithms, electronic trading and economic data fanned the flames of multiple downslides
Pre-open Indications: 1 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 DOWN -168.33 or -0.48%, the S&P closed DOWN -7.21 or -0.16% while the Nasdaq closed barely UP +15.66 points or +0.11%
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 wavered as the Dow and S&P crashed Thursday after four straight days of gains; set to wrap up a tough August.
The personal consumption expenditures index for July showed stubbornly high inflation, meeting expectations from economists.
Economic Data Docket: The core personal consumption expenditures index increased 0.2% month-over-month in July and 4.2% year over year, matching estimates from economists polled by Dow Jones. The core PCE is a closely watched inflation indicator by the Fed.
- Initial filings for unemployment benefits totaled a seasonally adjusted 228,000 for the week ended Aug. 26, a decrease of 4,000 from the previous week’s revised level, the Labor Department. The total was lower than the Dow Jones estimate for 235,000.
Thursday (8/31) … RegMed Investors’ (RMi) Opening Bell: “gains and losses. Our universe has oscillated between both while the aftermarket was weak before economic data.” … https://www.regmedinvestors.com/articles/13102
Pre-Open indications: 1 Miss < Sage Therapeutics (SAGE +$0.28)>
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Thursday’s advance/decline line opened negative at 16 up/ 17 down and 2 flats, stayed negative with 13 up/ 21 down and 1 flat at the mid-day, ending with a negative close of 13 incliners, 21 decliners and 1 flat
Ebb and flow:
- Q3: August – 9 positive and 14 negative closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Thursday, the IBB was down -0.88% and the XBI was down -0.64%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Thursday was down -0.40 point or -2.88% at 13.48
Closing Down (10 of 21):
- CRISPR Therapeutics (CRSP -$0.51),
- Regenxbio (RGNX -$0.72 after Wednesday’s -$0.03, Tuesday’s +$0.02 and Monday’s +$0.26),
- Intellia Therapeutics (NTLA -$0.48 after Wednesday’s -$0.23),
- Beam Therapeutics (BEAM -$0.33 after Wednesday’s -$0.21, Tuesday’s +$0.29 and Monday’s +$0.22),
- Ionis Pharmaceuticals (IONS -$0.30 after Wednesday’s -$0.49, Tuesday’s +$0.20 and Monday’s +$0.54),
- Generation Bio (GBIO -$0.25 after Wednesday’s -$0.33),
- Verve Therapeutics (VERV -$0.25 after Wednesday’s +$0.30, Tuesday’s -$0.17 and Monday’s -$0.05),
- Voyager Therapeutics (VYGR -$0.21 after Wednesday’s +$0.17),
- Editas Medicine (EDIT -$0.13),
- Fate Therapeutics (FATE -$0.13),
- AxoGen (AXGN -$0.13 after Wednesday’s -$0.25 and Tuesday’s +$0.25),
- Compass Therapeutics (CMPX -$0.11),
- Harvard Apparatus RM (HRGN after Wednesday’s -$0.10 after Tuesday’s +$0.21 and Monday’s +$0.27)
Closing Up (13 of 13):
- Vericel (VCEL +$0.27 after Wednesday’s +$0.28, Tuesday’s +$0.22 and Monday’s -$0.42),
- Sage Therapeutics (SAGE +$0.28 after Wednesday’s -$0.14 and Tuesday’s -$0.08),
- Blueprint Medicine (BPMC +$0.56 after Wednesday’s +$0.45, Tuesday’s -$0.18 after Monday’s -$1.54),
- Alnylam Pharmaceuticals (ALNY +$0.66 after Wednesday’s +$2.70, Tuesday’s +$2.80 and Monday’s +$2.40),
- Ultragenyx Pharmaceuticals (RARE +$0.23),
- BioLife Solutions (BLFS +$0.19 after Wednesday’s +$0.34 and Tuesday’s +$1.54),
- Mesoblast MESO +$0.18),
- MiMedx (MDXG +$0.06 after Wednesday’s +$0.04, Tuesday’s -$0.01 after Monday’s -$0.07)
- Prime Medicine (PRMC +$0.05 after Wednesday’s -$0.16, Tuesday’s +$0.20 and Monday’s +$0.36),
- Brainstorm Cell Therapeutics (BCLI +$0.03),
- bluebird bio (BLUE +$0.03),
- Sangamo Therapeutics (SGMO +$0.02 after Wednesday’s +$0.028),
- Homology Medicine (FIXX +$0.01)
Q3/23 – August - it's over ...
Thursday closed negative with 13 incliners, 21 decliners and 1 flat
Wednesday closed negative with 12 incliners, 22 decliners and 1 flat
Tuesday closed positive with 20 incliners, 14 decliners and 1 flat
Monday closed positive with 24 incliners, 11 decliners and 0 flat
Friday closed positive with 22 incliners, 12 decliners and 1 flat
Thursday closed negative with 11 incliners, 23 decliners and 1 flat
Wednesday closed positive with 26 incliners, 6 decliners and 3 flats
Tuesday closed positive with 19 incliners, 13 decliners and 3 flats
Monday closed positive with 20 incliners, 13 decliners and 2 flats
Friday closed positive with 17 incliners, 16 decliners and 2 flats
Thursday closed negative with 10 incliners, 25 decliners and 0 flat
Wednesday closed negative with 6 incliners, 28 decliners and 0 flat
Tuesday closed negative with 15 incliners, 18 decliners and 2 flats
Monday closed negative with 16 incliners, 18 decliners and 1 flat
Friday closed negative with 12 incliners, 18 decliners and 5 flats
Thursday closed negative with 16 incliners, 18 decliners and 1 flat
Wednesday closed positive with 18 incliners, 16 decliners and 1 flat
Tuesday closed positive with 20 incliners, 15 decliners and 0 flat
Monday closed negative with 2 incliners, 31 decliners and 2 flats
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.”
The stock market appeared to be tiring from its four-day sprint as indexes erased or thinned earlier gains.
Story of the day, “Sage Therapeutics (SAGE) said Thursday it will cut about 40% of its workforce following a setback for depression treatment Zurzuvae.
· Longtime Chief Scientific Officer Al Robichaud also is departing, though he will remain as a scientific consultant. Mike Quirk, current senior vice president of discovery research, succeeds him. Chief Development Officer Jim Doherty and Mark Pollack, senior vice president of medical affairs, are leaving to pursue new opportunities.
· Sage also will incur a $36 million to $38 million charge this quarter due to the reorganization, but could soon earn a $75 million milestone from partner Biogen (BIIB) for the first sale of Zurzuvae.
· Zurzuvae is a two-week pack of pills for postpartum depression. It aims to be more convenient than the company's first postpartum depression treatment, Zulresso.
· Zulresso, also developed in a partnership with BIIB, is a 60-hour infusion that causes extreme sleepiness. So, it must be given in a hospital.
· Sage and Biogen plan to launch Zurzuvae in the U.S. in the fourth quarter. First, the Drug Enforcement Administration will schedule it as a controlled substance, meaning prescriptions will be tightly regulated.
· But Sage stock didn't soar on the approval. Instead, shares plummeted almost 54% on Aug. 7 after the FDA said there wasn't sufficient evidence to support approving Zurzuvae in major depressive disorder. Sage and Biogen said they are evaluating their next steps.
· The FDA also noted a higher rate of suicidal thoughts in patients with major depressive disorder who took Zurzuvae. But that still needs additional testing.
· According to the briefing documents posted Thursday, one patient with major depressive disorder was unresponsive to stimuli for 50 minutes after receiving a high dose of Zurzuvae. That patient, given a dosage 30%-50% higher than what the FDA approved, also lost consciousness twice. Another patient lost consciousness for nearly five hours. <IBD>
At ANY time, this week, be ready to take partial profits and exit losers after the cell and gene therapy sector equity after Thursday and Wednesday’s negative closes loss post ascending Tuesday 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.
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:
Thursday: Alnylam Pharmaceuticals (ALNY) – 5x, Blueprint Medicine (BPMC) and Sage Therapeutics (SAGE)
Wednesday: Alnylam Pharmaceuticals (ALNY) – 3x again, Blueprint Medicine (BPMC) and BioLife Solutions (BLFS) - again
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:
Thursday: Regenxbio (RGNX), CRISPR Medicine (EDIT) and Intellia Therapeutics (NTLA)
Wednesday: Ionis Pharmaceuticals (IONS), Generation Bio (GBIO) and AxoGen (AXGN)
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 scientists 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?
· Answers coming … as those current (VPs and board members) marginalized the company are STILL in charge!!
· 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 in a BASICALLY Chinese company 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.