October 26, 2023 4:51pm
I am not lazy in defining any upside or downside; everyone needs to re-think the potential of advancers/decliners in a capricious market
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I also won’t apologize for being a “Devil’s Advocate” challenging views or consensus by building a better or possible case for an explanation of today’s actions
The Dow closed DOWN -251.63 points or -0.76%, the S&P closed DOWN -49.54 points or -1.18% while the Nasdaq closed DOWN -225.62 points or -1.76%
Q3 earnings’ reporting cycle is here 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 all dropped into correction territory on Thursday; the Nasdaq is now officially in correction territory, down more than 10% from its high close for the year in July.
Economic Data Docket: Q3 GDP (gross domestic product) came in much stronger than expected; growing at a 4.9% annualized clip from July through September, while economists forecasted 4.7%.
- The Labor Department's read of weekly jobless claims was also modestly bullish for bond markets, with the number of Americans filing for new unemployment benefits rising by 10,000 to 210,000 over the week ending on October 21.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Thursday’s advance/decline line opened positive at 18 up/ 13 down and 4 flats, stayed positive with 20 incliners, 12 decliners and 3 flats at the mid-day, flipped neutral a 2 p.m. with 17 incliners, 17 decliners and 1 flat, ending with a positive close of 20 incliners, 15 decliners and 0 flat
- Alnylam Pharmaceuticals (ALNY) at $157.23
- Sangamo Therapeutics (SGMO) at $0.47
Ebb and flow:
Q4: October – 11 negative and 8 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Thursday, the IBB was down -0.05% and the XBI was up +1.04%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Thursday was up +0.49 points or +2.43% at 20.68
Closing Down (10 of 15):
- Alnylam Pharmaceuticals (ALNY -$3.83 after Wednesday’s -$4.47, Tuesday’s +$1.96 and Monday’s +$0.21),
- Regenxbio (RGNX -$0.22 after Wednesday’s -$0.34, Tuesday’s +$0.34 and Monday’s -$0.59),
- Voyager Therapeutics (VYGR -$0.16),
- Prime Medicine (PRME -$0.14 after Wednesday’s -$0.72 and Tuesday’s -$0.14),
- Editas Medicine (EDIT -$0.11 after Wednesday’s +$0.05),
- BioLife Solutions (BLFS -$0.07),
- CRISPR Therapeutics (CRSP -$0.07 after Wednesday’s -$2.33, Tuesday’s +$1.41 and Monday’s +$1.48),
- Mesoblast MESO -$0.06 after Wednesday’s +$0.02 after Tuesday’s -$0.03 and Monday’s +$0.09),
- AxoGen (AXGN -$0.05),
- Fate Therapeutics (FATE -$0.05),
Closing Up (10 of 20):
- Blueprint Medicine (BPMC +$1.26 after Wednesday’s -$2.27 after Tuesday’s +$2.08 and Monday’s -$2.07),
- Ultragenyx Pharmaceuticals (RARE +$1.68 after Wednesday’s +$0.65),
- Ions Pharmaceuticals (IONS +$1.26 after Wednesday’s -$1.91 after Tuesday’s +$0.49 and Monday’s $0.37),
- Harvard Apparatus GN (HRGN +$0.81 after Wednesday’s +$0.11, Tuesday’s +$0.38 and Monday’s -$0.59),
- Intellia Therapeutics (NTLA +$0.62 after Wednesday’s -$2.26),
- Sage Therapeutics (SAGE +$0.29 after Wednesday’s -$0.81 after Tuesday’s +$0.74),
- Beam Therapeutics (BEAM +$0.25),
- bluebird bio (BLUE +$0.15)
- Verve Therapeutics (VERV +$015),
- Graphite Bio (GRPH +$0.11),
Q4/23 – October
- Thursday closed positive with 20 incliners, 15 decliners and 0 flat
The BOTTOM LINE: I passed on a daily forecast this a.m.; thinking if GDP (gross domestic product) elevated, sector equites would “thrive” as negativity has spawned mixed closes
- Thursday’s advance/decline line ended with a positive close of x incliners, xx decliners and x flats
- Wednesday closed negative as the cell and gene therapy sector equities declined (8 incliners/26 decliners and 1 flat)
- Tuesday, cell and gene therapy sector equities advanced (26 incliners/8 decliners and 1 flat)
- Monday’s advance/decline line ended with a positive close of 9 incliners, 26 decliners and 0 flat
- Friday’s advance/decline line ended with a negative close of 9 incliners, 25 decliners and 1 flat
- Last, Thursday’s advance/decline line ended with a negative close of 5 incliners, 26 decliners and 4 flats
“It’s hard to square such sequentially good economic growth with such lack luster stock market performance,” said Jamie Cox, Managing Partner at Harris Financial Group. “There is only one clear explanation: investors think ZIRP (Zero Interest Rate Policy) is the only condition which permits the economy to grow, and that is clearly an incorrect assumption.”
Sign of the time:
Bristol-Myers Squibb (BMY -$2.91 or -5.13% to $53.70) stock slips more than 4% after third quarter results
- Shares of pharmaceutical firm Bristol-Myers Squibb (BMY) slipped nearly 5% in premarket trading following third-quarter results.
- BMY reported earnings beat and revenue that matched Wall Street’s forecast, but lowered its full-year adjusted earnings forecast.
- Revenue was 2% lower in Q3/22 due to lower sales of Revlimid, the company said, as well as increased competition generic alternatives. <Brian Evans>
Merck (MRK) earnings beat expectations, reporting Q3 earnings and revenue that exceeded expectations, boosted by sales of two key drugs and a vaccine.
- MRK earned an adjusted $2.13 per share on revenue of $15.96 billion. Analysts polled by LSEG expected a profit of $1.95 per share on revenue of $15.32 billion.
- Sales from cancer treatment Keytruda grew by 17% year over year to $6.34 billion. Revenue from Lagevrio, a Covid-19 antiviral treatment, shot up 47% to $640 million. Gardasil, a vaccine used to prevent cancer from HPV, hauled in $2.59 billion in sales, up 13% from the year-earlier period.
- The benchmark 10-year treasury note yield (^TNX) fell 6 basis points to trade near 4.89%,
- “The XBI is now down 18% for the year and more than 25% since June, when biotech’s fortunes appeared to be reversing. The slumping sentiment has made it that much more difficult for the industry’s many cash-strapped companies to raise money while worsening the effects of bad news on the ones that already have it.” <STAT>
- “The unexpected strength of the U.S. economy has been a factor in the selloff in the U.S. Treasury market, and the benchmark 10-year yield last stood at 4.913%, down slightly on the day, having earlier reached 4.989%, just below 5.021%, the highest since 2007 hit earlier in the week.” <Reuters>
- 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.
What’s behind the numbers:
- The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contraction.
- 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.
Welcome to my world of defining the “grey’ in our universe!
The top three (3) performing in the session:
- Thursday: Blueprint Medicine (BLMC) – 2x, Ultragenyx Pharmaceuticals (RARE) – 2x and Ionis Pharmaceuticals (IONS)
- Wednesday: Ultragenyx Pharmaceuticals (RARE), Harvard Apparatus RN (HRGN) and Editas Medicine (EDIT)
- Tuesday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and Blueprint Medicine (BLMC)
- Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Vericel (VCEL)
The worst three (3) in the session:
- Thursday: Alnylam Pharmaceuticals (ALNY) -2x, Regenxbio (RGNX) and Voyager Therapeutics (VYGR)
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Blueprint Medicine (BLMC)
- Tuesday: Prime Medicine (PRME), Cellectis SA (CLLS) and Agenus (AGEN)
- Monday: Blueprint Medicine (BPMC), Ultragenyx Pharmaceuticals (RARE) and Harvard Apparatus RN (HRGN)
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.
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