October 12, 2023 4:46pm

The parable of the Scorpion and The Frog is an animal fable which could be satirized that inflation economics cannot resist hurting the cell and gene therapy sector’s sentiment even when it is not in its own interests <see Bottom Line>

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As I have written: What went DOWN has gone DOWN again!

Never leave an investor uninformed! 

The Dow closed DOWN -173.73 points or -0.51%, the S&P closed DOWN -27.34 points or -0.62% while the Nasdaq closed DOWN -85.46 points or -0.63%

 

What’s SAFE … “No one company is immune in the cell and gene therapy sector and this market of rolling downdrafts? Welcome to my world of defining the “grey’ in our universe!”

Investors are going to need to prepare for another reporting cycle to confirm whether or not a bottom is even close to happening.

 

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 closed negatively having reversed and fell sharply in afternoon trading on Thursday.

The ongoing Israel-Hamas war has raised questions of a potential oil supply crunch and a resulting rise in fuel prices if the geopolitical instability spreads to neighboring oil producers in the region.

Economic Data Docket: a mixed September inflation reading and solid employment data…

The Commerce Department said headline inflation for the month of September held at 3.7%, coming in just ahead of the Street's 3.6% forecast, but noted core price pressures eased to 4.1%, the lowest in two years.

Another set of data showed jobless claims rose 209,000 for the week ended Oct. 7, lower than an estimated 210,000 rise.

 

Thursday (10/12) … RegMed Investors’ (RMi): “No sigh of relief. The Strange Case of Dr. Jekyll and Mr. Hyde might make for a great read, but it’s far less fun when the sector act like it’s a blueprint.” … https://www.regmedinvestors.com/articles/13160

 

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 3 up/ 27 down and 5 flats, stayed negative with 0 up/ 35 down and 0 flat at the mid-day, ending with a negative close of 1 incliner, 32 decliners and 2 flats

 

52-week low:

  • Prime Medicine (PRME) at $7.19
  • Ultragenyx Pharmaceuticals (RARE) at $13.02
  • Sangamo Therapeutics (SGM) at $0.51
  • Cellectis SA (CLLS) at $1.36
  • Solid Biosciences (SLDB) at $2.25
  • bluebird bio (BLUE) at $2.75

 

Ebb and flow:

Q4:  October – 6 negative and 3 positive closes

·         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:

  • Thursday, the IBB was down -2.01% and the XBI was down -3.66%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Thursday was up +0.69 points or +4.29% at 16.78

 

Closing Down (10 of 32):

  • Ultragenyx Pharmaceuticals (RARE -$3.62 after Wednesday’s -$0.34, Tuesday’s +$0.92 after Monday’s +$0.45),
  • Vericel (VCEL -$2.68 after Wednesday’s -$1.21, Tuesday’s +$0.38 and Monday’s +$0.27),
  • Alnylam Pharmaceuticals (ALNY -$2.53 after Wednesday’s -$1.24, Tuesday’s +$0.74 and Monday’s -$8.60),
  • Blueprint Medicine (BPMC -$1.94 after Wednesday’s -$0.13, Tuesday’s -$0.13 after Monday’s +$0.98),
  • CRISPR Therapeutics (CRSP -$1.70 after Wednesday’s +$0.89, Tuesday’s +$1.33 after Monday’s -$0.55),
  • Intellia Therapeutics (NTLA -$1.34 after Wednesday’s +$0.12),
  • Beam Therapeutics (BEAM -$1.10 after Wednesday’s +$0.03, Tuesday’s +$0.36 and Monday’s +$0.49)
  • BioLife Solutions (BLFS -$1.05 after Wednesday’s -$0.54),
  • Regenxbio (RGNX -$0.90),
  • Ionis Pharmaceuticals (IONS -$0.81 after Wednesday’s -$0.26),

Flat (1):

  • Harvard Apparatus GN (HRGN $0.00 after Wednesday’s +$0.03, Tuesday’s $0.00 and Monday’s $0.00),

Closing Up (1 of 1):

  • Generation Bio (GBIO +$0.015)

 

Q4/23 – October

  • Thursday closed negative with 1 incliner, 32 decliners and 1 flat

 

The BOTTOM LINE: From the title … The parable of the Scorpion and The Frog is an animal fable which teaches that vicious people cannot resist hurting others even when it is not in their own interests. 

According 'A scorpion wants to cross a river but cannot swim, so it asks a frog to carry it across. 

'The frog hesitates, afraid that the scorpion might sting it, but the scorpion promises not to, pointing out that it would drown if it killed the frog in the middle of the river. 

'The frog considers this argument and agrees to transport the scorpion. Midway across the river, the scorpion stings the frog anyway, dooming them both. 

'The dying frog asks the scorpion why it stung despite knowing the consequence, to which the scorpion replies: "I am sorry, but I couldn't resist the urge. It's in my nature".'

 

Thursday follows Wednesday’s decline in cell and gene therapy sector …

  • Insight is about understanding perception and also putting into context what is relevant to expectation fulfillment
  • Spare the sell call, ruin the portfolio

Even with today's moves, the benchmark 10-year note yields have retreated more than 30 basis points over the past week, when the paper hit a 2007 high of 4.895%, with the dollar giving back gains on foreign exchange markets, amid a series of comments from Fed officials that suggested the central bank could use the elevated market rates as an extension of its base rate policy to slow the economy and fight inflation. <The Street.

 

The cell and gene therapy sector equities share pricing DIVED again on Thursday after Wednesday’s decline …

  • After popping on Tuesday following Monday and Friday declines following last Thursday “ascension”.

 

Quote from Tuesday, "Geopolitical risk doesn't tend to linger long in markets, but there are many second-order impacts that could come through in the weeks, months, and years ahead from this weekend's developments." <Deutsche Bank strategist Jim Reid>.

  • Welcome to my world of defining the “grey’ in our universe!

 

Consider:

Implied volatility shows how much movement the market is expecting in the future.

  • Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other.
  • It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

 

What’s behind the numbers:

indexes fell on Thursday as bond yields rose and data showed consumer prices rose more than anticipated in September, clouding the Fed's interest rate outlook.

  • Too many geopolitical risks and start of earnings season has investors buying cautiously and selling into uncertainty,
  • Consumer prices rise on gasoline and shelter costs,
  • The 10-year Treasury yield declined even after the hotter-than-expected inflation data, hitting its lowest level since Sept. 29. The 10-year recently lost more than 6 basis points to 4.59%. The 2-year yield, meanwhile, moved higher by less than 1 basis point to 4.993.
  • The consumer-price index data is set to be released Thursday and will provide more insight on the potential next steps for the Fed. Economists expect prices rose 0.3% in September,
  • Oil fell after an early-week surge.

 

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!”

Focus should be on the upcoming quarterly earnings season!

 

The top three (3) performing in the session:

  • Thursday: Generation Bio (GBIO)
  • Wednesday: CRISPR Therapeutics (CRSP), Ionis Pharmaceuticals (IONS) and Intellia Therapeutics (NTLA)
  • Tuesday: CRISPR Therapeutics (CRSP), Ultragenyx Pharmaceuticals RARE) -2x and Regenxbio (RGNX)
  • Monday: Vericel (VCEL), Beam Therapeutics (BEAM) and Ultragenyx Pharmaceuticals RARE) 

The worst three (3) in the session:

  • Thursday: Ultragenyx Pharmaceuticals RARE), Alnylam Pharmaceuticals (ALNY) – 2x and Vericel (VCEL) -2x
  • Wednesday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and Prime Medicine (PRME) -2x
  • Tuesday: MiMedx (MDXG), Prime Medicine (PRME) and Blueprint Medine (BPMC)
  • Monday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and uniQure NV (QURE)

 

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.