October 19, 2023 4:34pm
I’m occasionally retellings of “Romeo and Juliet” about our sector, the question is; who are the sellers or when should buyers purchase downtrodden equities. “Deny thy pricing and refuse thy orders or if thou wilt not be but sworn”
Pre-open Indications: 2 Hits and 2 Miss
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The Dow closed DOWN -250.91 points or -0.75%, the S&P closed DOWN -36.60 points or -0.85% while the Nasdaq closed DOWN -128.13 points or -0.96%
I continue to ask “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 any bottoms are even close to happening.
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 turned higher to slide as the close approached as traders seem to be encouraged after Fed Chair Powell said the Federal Open Market Committee is “proceeding carefully.”
Powell said inflation was still too high and would likely require lower economic growth, while also noting recent data showed progress toward slowing prices. He also said that monetary policy was not yet too tight.” <CNBC>
“The Fed will “make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks,” Powell said.
Economic Data Docket: “Weekly first-time claims for unemployment assistance surprisingly fell to 198,000. Claims were expected to have climbed modestly in the week ended Oct. 14, to 211,000 vs. 209,000 in the previous week. Further, the Philadelphia Fed's Manufacturing Index improved to -9.0 in October after some wild swings in August and September.” <IBD>
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 5 up/ 25 down and 5 flats, staying negative with 10 incliners, 24 decliners and 1 flat at the mid-day, ending with a negative close of 5 incliners, 26 decliners and 4 flats
Pre-open Indications: 2 Hits < Alnylam Pharmaceuticals (ALNY -$4.58), Ionis Pharmaceuticals (IONS +$0.58), > and 2 Miss < Prime Medicine (PRME -$0.15), Verve Therapeutics (VERV -$1.30)>
Ebb and flow:
Q4: October – 8 negative and 6 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
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Thursday, the IBB was down -1.64% and the XBI was down -2.07%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Thursday was up +1.40 points or +7.28% at 20.62
Closing Down (10 of 26):
- Alnylam Pharmaceuticals (ALNY -$4.58 after Wednesday’s -$0.90, Tuesday’s -$1.27 and Monday’s -$0.87),
- Blueprint Medicine (BPMC -$2.56 after Wednesday’s -$2.05, Tuesday’s +$2.26 and Monday’s +$0.52),
- Beam Therapeutics (BEAM -$2.44 after Wednesday’s -$1.47),
- Verve Therapeutics (VERV -$1.30),
- Generation bio (GBIO -$1.21),
- Sage Therapeutics (SAGE -$0.98),
- Intellia Therapeutics (NTLA -$0.86 after Wednesday’s -$1.09, Tuesday’s -$0.58 and Monday’s -$0.20),
- CRISPR Therapeutics (CRSP -$0.65 after Wednesday’s -$3.23, Tuesday’s -$1.15 and Monday’s +$0.50),
- BioLife Solutions (BLFS -$0.43 after Wednesday’s -$0.77, Tuesday’s $0.00 and Monday’s +$0.34),
- Vericel (VCEL -$0.40 after Wednesday’s -$1.18, Tuesday’s +$2.11 and Monday’s +$2.00),
- Compass Therapeutics (CMPX)
- Prime Medicine (PRME +$),
- Harvard Apparatus GN (HRGN $0.00 after Wednesday’s -$0.98, Tuesday’s +$0.47 and Monday’s -$0.39),
- uniQure NV (QURE)
Closing Up (5 of 5):
- Ultragenyx Pharmaceuticals (RARE +$1.72 after Wednesday’s -$5.10, Tuesday’s -$0.19 and Monday’s +$3.45),
- Ionis Pharmaceuticals (IONS +$0.58 after Wednesday’s -$2.53, Tuesday’s +$0.37 and Monday’s +$0.16),
- Fate Therapeutics (FATE +$0.04),
- Mesoblast (MESO +$0.02),
- Brainstorm Cell Therapeutics (BCLI +$0.0127 after Wednesday’s +$0.0036),
Q4/23 – October
- Thursday closed negative with 5 incliner, 26 decliners and 4 flats
The BOTTOM LINE: The lack of clarity re the Fed and policy decisions as well as the middle Est conflagration are causing a reduction in confidence
Insight is about understanding perception and also about putting into context what is relevant to expectation fulfillment.
- It’s not hard to be right so often, it’s about refining expectation, defining insight and NOT being indentured to ANY financial institution! That’s why the term “quantamental,” a blend of the two styles, may soon become common parlance among ordinary investors.
- All three major U.S. stock indexes closed lower pulling the Nasdaq down.
- Middle East conflict still weighed on the market as investors assessed the chances of it breaking out into a wider war. The rising geopolitical tensions in the Middle East could drive a global recession, leading investors have warned.
- I STILL believe the political aspect of the U.S.’s polarization, and disparities of the debt ceilings and rate hike arguments are contributing to the roller coaster ride for share pricing actions.
- The number of Americans filing new claims for unemployment benefits fell to a nine-month low last week, indicating that strong job growth persisted in October as the labor market remains tight.
A quote of interest, “This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months. He added that while recent data points to economic strength, contact with individual businesses indicates “things seem to be slowing down.” < Patrick Harker, Philadelphia Fed President>
The cell and gene therapy sector equities share pricing declined on Thursday and Wednesday following inclines on Tuesday and Monday and last Friday’s positive close post Thursday’s the previous DIVE.
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.
Some bad news: This year has seen a record high 28 biotech bankruptcies so far, SEC filings show. And more will come by year’s end.” < James Cassel, chairman and co -founder of Miami -based investment banking firm Cassel Salpeter & Co - https://twitter.com/xDILAUDEADx/status/1714604739805982990>
What’s behind the numbers:
- The Nasdaq was faring worst out of the major indexes. It briefly rallied out of negative territory but was down almost 1% as it headed to the close.
- Small caps got bitten by the bears after trying to rally back, with the Russell 2000 falling over 1%. The index has seen its 50-day line undercut the 200-day moving average, a negative sign.
- I remain EXTREMELY cautious as upcoming earnings may have a more significant negative impact on share price due to missed consensus as estimates will lessen valuations.
- Valuation suggests the cell and gene therapy sector is skating on very thin ice while the charts and data have YET to generate signals of a correction low. Thus, I believe risk is EVEN high as we enter earnings season.
- Welcome to my world of defining the “grey’ in our universe!
The top three (3) performing in the session:
- Thursday: Ultragenyx Pharmaceuticals (RARE), Ionis Pharmaceuticals (IONS) and Fate Therapeutics (FATE)
- Wednesday: Adverum Biotechnologies (ADVM), Homology Medicine (FIXX) and AxoGen (AXGN)
- Tuesday: Blueprint Medicine (BPMC), Vericel (VCEL) and Prime Medicine (PRME)
- Monday: Ultragenyx Pharmaceuticals (RARE), Vericel (VCEL) and BioLife Solutions (BLFS)
The worst three (3) in the session:
- Thursday: Alnylam Pharmaceuticals (ALNY), Beam Therapeutics (BEAM) and Blueprint Medicine (BPMC)
- Wednesday: Ultragenyx Pharmaceuticals (RARE), CRISPR Therapeutics (CRSP) -2x and Ionis Pharmaceuticals (IONS)
- Tuesday: Alnylam Pharmaceuticals (ALNY) – 2x, CRISPR Therapeutics (CRSP) and Intellia therapeutics (NTLA)
- Monday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Harvard Apparatus RN (HRGN) -2x,
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!
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.