October 16, 2023 4:32pm

What separates mediocre from superior portfolio performance is vision. The remainder of the month’s trading sessions will be critical for the RegMed, cell and gene therapy sector which will establish whether market reaction to recent events is temporary and short-lived or be subject to earnings’ season release share pricing declines. 

Pre-open Indications: 6 Hits and 1 Miss

News: Editas Medicine (EDIT +$0.21) the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to EDIT-301, an investigational, gene editing medicine, for the treatment of severe sickle cell disease (SCD).

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The Dow closed UP +314.25 points or +0.93%, the S&P closed UP +45.85 points or +1.06% while the Nasdaq closed UP +160.75 points or +1.20%

 

What’s SAFE … “No one company is immune in the 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 jumped Monday as traders awaited a deluge of corporate earnings reports and shrugged off a rise in Treasury yields.

The 10-year U.S. Treasury yield rose nearly 8 basis points to 4.712% on Monday, while oil prices slipped as investors parsed the latest updates out of the war.

Economic Data Docket: the New York Fed's Empire State index posted a shallower than expected decline. Retail sales, industrial production, housing starts and existing home sales fill out the week's roster.

  • Retail sales results for September, due Tuesday at 8:30 a.m. ET; economists expect a mild 0.2% rise after gains of 0.6% in August and 0.5% in July.

 

Monday (10/13) … RegMed Investors’ Pre-open (RMi): “Friday’s investors’ gold is a trader’s disposable tin. Set aside volatility and mixed economic data; there still aren't good reasons to be investing, companies are saving ANY news for the LPS <loss-per-share> “earnings season” … https://www.regmedinvestors.com/articles/13164

 

Pre-open Indications: 6 Hits < Alnylam Pharmaceuticals (ALNY -$0.87), Beam Therapeutics (BEAM +$0.05), Prime Medicine (PRME -$0.11), Ultragenyx Pharmaceuticals (RARE +$0.16), Vericel (VCEL +$2.00), Sage Therapeutics (SAGE -$0.04)> and 1 Miss < Blueprint Medicine (BPMC -$0.52)>

 

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 9 up/ 25 down and 1 flat, flipped positive with 18 up/ 16 down and 1 flat at the mid-day, ending with a positive close of 21 incliners, 14 decliners and 0 flat
  • Friday’s advance/decline line opened negative at 3 up/ 27 down and 5 flats, flipped positive with 22 up/ 11 down and 2 flats at 10 a.m., staying positive with 28 incliners, 7 decliners and 0 flat at the mid-day, ending with a positive close of 28 incliner, 6 decliners and 1 flat

 

52-week low:

  • Solid Biosciences (SLDB) at $2.07

 

Ebb and flow:

Q4:  October – 6 negative and 5 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:

  • Monday, the IBB was up +0.55% and the XBI was up +0.83%
  • Friday, the IBB was up +0.40% and the XBI was up +1.38%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Monday was down -2.04 point or -10.56% at 17.28
  • Friday was up +2.70 points or +16.18% at 19.39

 

Closing Down (10 of 14):

  • Alnylam Pharmaceuticals (ALNY -$0.87 after Friday’s +$2.83),
  • Blueprint Medicine (BPMC +$0.52),
  • Harvard Apparatus GN (HRGN -$0.39 after Friday’s -$9.75),
  • Intellia Therapeutics (NTLA -$0.20 after Friday’s +$0.92),
  • uniQure NV (QURE -$0.15),
  • Verve Therapeutics (VERV -$0.13),
  • Prime Medicine (PRME -$0.11 after Friday’s +$0.46),
  • Adverum Biotechnologies (ADVM -$0.098 after Friday’s -$0.02),
  • Solid Biosciences (SLDB -$0.08),
  • Homology Medicine (FIXX -$0.06),

Closing Up (10 of 21):

  • Ultragenyx Pharmaceuticals (RARE +$3.45 after Friday’s +$0.93),
  • Vericel (VCEL +$2.00 after Friday’s +$0.71),
  • CRISPR Therapeutics (CRSP +$0.50 after Friday’s +$1.28),
  • BioLife Solutions (BLFS +$0.34),
  • Voyager therapeutics (VYGR +$0.21),
  • Editas Medicine (EDIT +$0.21),
  • AxoGen (AXGN +$0.21 after Friday’s -$0.13),
  • Regenxbio (RGNX +$0.16),
  • Ionis Pharmaceuticals (IONS +$0.16 after Friday’s +$1.88),
  • Bluebird bio (BLUE +$0.14)

 

Q4/23 – October

  • Monday (10/16) closed positive with 21 incliners, 14 decliners and 0 flat
  • Friday closed positive with 28 incliner, 6 decliners and 1 flat

 

The BOTTOM LINE: “Our” universe’s trend remains " in a constant correction." That means that investors are safer on the sidelines as again … earnings are coming.

  • I STILL believe the political aspect of the country’s polarization, and disparities of the debt ceilings and rate hike arguments are contributing to the roller coaster ride for share pricing actions.
  • Welcome to my world of defining the “grey’ in our universe!

 

A quote of interest, “As more economic data rolls in, investors will be paying attention to any clues that may hint to the Fed's next moves. While 92% of traders anticipate that the central bank will hike interest rates in November, 29.5% expect another 25-basis point rate increase in November.” <Barron’s>

 

The cell and gene therapy sector equities share pricing inclined on Monday

  • After ascended on Friday while Thursday DIVED after Wednesday’s decline
  • After popping on Tuesday following the previous Monday’s declines.

 

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:

  • Starting the week, a risk off-sentiment
  • The CBOE Volatility Index, or VIX, was down 9.7% to 17.45 on Monday. The VIX has fallen 44% in the past 12 months and 79% from its peak of 82.69 on March 16, 2020.

 

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:

  • Monday: Ultragenyx Pharmaceuticals (RARE), Vericel (VCEL) and BioLife Solutions (BLFS)
  • Friday: Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS) and CRISPR Therapeutics (CRSP)

The worst three (3) in the session:

  • Monday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Harvard Apparatus RN (HRGN) -2x,
  • Friday: Harvard Apparatus RN (HRGN), AxoGen (AXGN) and Fate Therapeutics (FATE)

 

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.