October 2, 2023 4:44pm

Pre-open Indications: 2 Hits and 4 Miss

What a way to begin Q4, there are four (4) camps, institutional and hedge funds, electronic trading and algorithms, traders and investors who STILL wonder if the worst is behind us as these “entities” continue to elevate tailwinds and headwinds.

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The Dow closed DOWN -74.15 points or -0.22%, the S&P closed UP +0.34 points or +0.01% while the Nasdaq closed UP +88.45 points or +0.67%

 

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.

A couple of companies have become … black holes … of investor sentiment; as attention remains laser-focused on week’s busy economic calendar.

 

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 …

Indexes were lower Monday even after U.S. legislators were able to come to a short-term agreement that staved off a government shutdown.

“The small-cap focused Russell 2000 fell 1.8% on Monday, pulling it down 0.5% year to date. This marked the first time the index turned negative in 2023, underscoring trouble among small cap names. The Russell 2000 is often thought of as a better insight into the health of the broader economy due to its focus on smaller businesses.” <CNBC>

Economic Data Docket: Economic data showed U.S. construction spending increased in August

 

52-week low:

  • XBI at 70.87
  • Prime Medicine (PRME) at $8.74
  • Cellectis SA (CLLLS) at $1.50
  • Intellia Therapeutics NTLA) at $29.41
  • uniQure NV (QURE) at $6.18

 

Monday (10/2) … RegMed Investors’ (RMi) Opening Bell: “rock paper scissors … Is governed by three simple rules: rock beats scissors, scissors beats paper, paper beats rock. On the face of it, the chances of winning are just one in three as seasonal weakness may set up a stock-market rally in Q4.” … https://www.regmedinvestors.com/articles/13144  

 

Pre-Open indications: 2 Hit < Ultragenyx Pharmaceuticals (RARE -$0.85), Beam Therapeutics (BEAM -$2.55)> and 4 Miss < Homology Medicine (FIXX -$0.03), Ionis Pharmaceuticals (IONS -$1.93), CRISPR Therapeutics (CRSP -$2.98), Intellia Therapeutics (NTLA -$2.21)>

 

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

  • Monday’s advance/decline line opened negative at 5 up/ 28 down and 2 flats, stayed negative with 6 up/ 29 down and 0 flat at the mid-day, ending with a negative close of 4 incliners, 30 decliners and 1 flat
  • Friday’s advance/decline line opened positive with 18 up, 12 down and 2 flats, stayed positive at the mid-day with 17 up/ 14 down and 4 flats, ending with a barely negative close of 16 incliners, 17 decliners and 2 flats

 

Ebb and flow:

Q4:  October – 1st session, a negative close

·         Q3: September – 1 holiday, 8 positive and 12 negative closes

·         August – 9 positive and 14 negative closes

·          July - 1 holiday, 12 positive and 8 negative close

 

Key Metrics:

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

  • Monday, the IBB was down -1.35% and the XBI was down -3.19%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Monday was up +0.43 point or +2.45% at 17.94

 

Closing Down (10 of 30):

  • CRISPR Therapeutics (CRSP -$2.98 after Friday’s -$0.35),
  • Beam Therapeutics (BEAM -$2.55 after Friday’s +$0.03),
  • Intellia Therapeutics (NTLA -$2.21 after Friday’s -$0.14),
  • Ionis Pharmaceuticals (IONS -$1.93 after Friday’s -$0.90),
  • Verve Therapeutics (VERV -$1.48 after Friday’s +$0.30),
  • Blueprint Medicine (BPMC -$1.36 after Friday’s -$0.85),
  • Ultragenyx Pharmaceuticals (RARE -$0.85 after Friday’s +$0.48),
  • Sage Therapeutics (SAGE -$0.82 after Friday’s -$0.14),
  • Prime Medicine (PRME -$0.80 after Friday’s +$0.04),
  • Editas Medicine (EDIT -$0.66 after Friday’s +$0.88),

Closing Up (4 of 4):

  • Alnylam Pharmaceuticals (ALNY +$1.86 after Friday’s +$3.07),
  • MiMedx (MDXG +$0.21 after Friday’s -$0.29),
  • Harvard Apparatus GN (HRGN +$0.07 after Friday’s -$0.11)
  • Sangamo Therapeutics (SGMO +$0.0002)

 

Q4/23 – October

  • Monday closed negative with 4 incliners, 30 decliners and 1 flat

 

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

September ended with a market that was encased by uncertainty; while October will be a market that needs validation which will not be endorsed by cell and gene therapy sector earnings.

  • The Dow and S&P 500 were lower on Monday with the Nasdaq barely changed as investors weighed the likelihood the Fed will need to hold interest rates higher for longer.

 

The cell and gene therapy sector is defined by “When you’re on a roller coaster, the only thing you can be sure of is you’ll end up back where you started”

  • While sentiment is definitely slipping as exits continue.
  • Key word of the state of uncertainty in “our” universe of cell and gene therapy … “which makes It difficult to predict where sector is headed in the short run.”

 

Contributing to today’s (10/2) updraft: sector is still OVERSOLD …

  • Rising Treasury yields,
  • Concern over the impact of higher interest rates,
  • This week's key jobs data.

 

The cell and gene therapy sector equities share pricing dived yet again on Monday, Friday, Thursday, after last Wednesday’s flip to the upside (after diving mid-day) following last Tuesday’s positive close and the previous Monday’s negative dive.

  • 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.

 

It’s still about the economy … STUPID as investors congest a raft of economic reports pointing to … tamer core inflation data and a spending consumer.

  • 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!”

 

Coming events:

  • October, known as a “jinx month" for stocks, is days away and investors SHOULD be cautious!

 

The top three (3) performing in the session:

Monday: Alnylam Pharmaceuticals (ALNY), MiMedx (MDXG) and Harvard Apparatus GN (HRGN)

Friday: Alnylam Pharmaceuticals (ALNY), Editas Medicine (EDIT) and Ultragenyx Pharmaceuticals (RARE)

The worst three (3) in the session:

Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Intellia Therapeutics (NTLA)

Friday: Regenxbio (RGNX), Ionis Pharmaceuticals (IONS) and Blueprint Medicine (PBMC)

 

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