October 31, 2023 5:12pm
As investors face threats from too many issues: a potential government shutdown - the biggest threat to the economy, volatility, seasonal patterns, bond market issuance, inflation, debt, geopolitics, Israel-Hamas war blow-back, immigration/border, coming budget battles, antipathy by current administration, interest rates, crude oil pricing and the list goes on!
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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 UP +123.91 points or +0.38%, the S&P closed UP +26.98 points or +0.65% while the Nasdaq closed UP +61.76 points or +0.48%
Q3 earnings’ reporting cycle is here to confirm whether or not any bottoms are even close to happening?
News: Beam Therapeutics (BEAM +$2.61) Eli Lilly and Company (Lilly) has agreed to acquire certain rights under BEAM’s amended collaboration and license agreement with Verve Therapeutics (Verve), including Beam’s opt-in rights to co-develop and co-commercialize VERV’s base editing programs for cardiovascular disease, which includes programs targeting PCSK9, ANGPTL3 and an undisclosed liver-mediated, cardiovascular target.
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 traded higher Tuesday, trying to close out a dismal month of trading — that saw Treasury yields surge to levels not seen in more than 16 years — on a high note.
The fundamental problems; the huge fiscal impulse over the past year has concealed that the US economy has lost its organic engine of growth; a productive private sector, while Yellen’s efforts to juice liquidity in the system have concealed the growing problem with the underlying liquidity drain from QT and deteriorating bank lending, which will reappear, likely at the worst moment, when reverse repo bottoms out.
The Cboe Volatility Index (VIX) dropped to an 18 handle, below the long-term average of roughly 20. A higher VIX level can point to greater uncertainty in markets.
News: BEAM <continued from title>: Under the terms of the agreement, Beam will receive a $200 million upfront payment and $50 million equity investment. Beam is also eligible to receive up to $350 million in potential future development-stage payments upon the completion of certain clinical, regulatory and alliance events for a total of up to $600 million in potential total deal consideration.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Tuesday’s advance/decline line opened positive at 16 up/ 14 down and 5 flats, stayed positive with 9 incliners, 23 decliners and 3 flats at the mid-day, ending with a positive close of 26 incliners, 6 decliners and 3 flats
- Monday – sick call with hospital stay - stones
- Caribou Biosciences (CRBU) at $3.52
- Regenxbio (RGNX) at $13.49
- Alnylam Pharmaceuticals (ALNY) at $149.18
- uniQure NV (QURE) at $5.53
Ebb and flow:
- Q4: October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB was up +0.58% and the XBI was up +1.60%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was down -1.61 points or -8.15% at 18.14
Closing Down (6 of 6):
- Regenxbio (RGNX -$1.48),
- Harvard Apparatus GN (HRGN -$0.06),
- Cellectis SA (CLLS -$0.0452),
- AxoGen (AXGN -$0.02),
- Mesoblast (MESO -$0.02),
- Generation Bio (GBIO -$0.0195),
- Bellicum Pharmaceuticals (BLCM),
- Homology Medicine (FIXX),
- CRISPR Therapeutics (CRSP)
Closing Up (10 of 26):
- Blueprint Medicine (BPMC) +$4.52),
- Verve Therapeutics (VERV) closed +$2.63),
- Ultragenyx Pharmaceuticals (RARE +$2.32),
- Intellia Therapeutics (NTLA +$1.22),
- BioLife Solutions (BLFS +$1.11),
- Vericel (VCEL +$0.80),
- Prime Medicine (PRME +$0.67),
- Alnylam Pharmaceuticals AY +$0.39),
- Editas Medicine (EDIT +$0.35),
- Ionis Pharmaceuticals IONS +$0.27),
Q4/23 – October
Tuesday closed positive with 26 incliners, 6 decliners and 3 flats
Monday closed positive with 25 incliners, 9 decliners and 1 flat
Friday closed negative with 4 incliners, 30 decliners and 1 flat
Thursday closed positive with 20 incliners, 15 decliners and 0 flat
Wednesday closed negative with 8 incliners, 26 decliners and 1 flat
Tuesday closed positive with 26 incliners, 8 decliners and 1 flat
Monday (10/23) closed negative with 9 incliners, 26 decliners and 0 flat
Friday closed negative with 9 incliners, 25 decliners and 1 flat
Thursday closed negative with 5 incliner, 26 decliners and 4 flats
Wednesday closed negative with 5 incliners, 30 decliners and 0 flat
Tuesday closed positive with 17 incliners, 16 decliners and 2 flats
Monday (10/16) closed positive with 21 incliners, 14 decliners and 0 flat
Friday closed positive with 28 incliner, 6 decliners and 1 flat
Thursday closed negative with 1 incliner, 32 decliners and 2 flats
Wednesday closed negative with 10 incliners, 21 decliners and 4 flats
Tuesday closed positive with 28 incliners, 6 decliners and 1 flat
Monday (10/9) closed negative with 10 incliners, 23 decliners and 2 flats
Friday closed positive with 16 incliners, 19 decliners and 0 flat
Thursday closed positive with 24 incliners, 9 decliners and 2 flats
Wednesday closed negative with 8 incliners, 27 decliners and 0 flat
Tuesday closed positive with 19 incliners, 14 decliners and 2 flats
Monday (10/2) closed negative with 4 incliners, 30 decliners and 1 flat
The BOTTOM LINE: Cell and gene therapy equities are up yet, still on pace for their worst month of the year this October, with higher Treasury yields, mounting geopolitical risks and muted earnings.
- And … more earnings are coming around the bend
- The Fed begins its two-day policy meeting today, with its interest rate decision slated for 2 p.m. ET on Wednesday. Markets are still betting that rates will remain steady at between 5.25% and 5.5%, and see no better than a 30% chance of a rate hike over the next seven months.
- Up and down market and past cell and gene therapy activity is reflective of investors sentiment – how can we be happy?
- 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:
- A trip, we don’t hope to take-- Sarepta Therapeutics (SRPT -$40.35 or -37.37%) slumps on muscle disorder therapy failure.
- The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contraction.
- Data showing a solid increase in U.S. labor costs in the third quarter prompted some concerns that the Fed could keep interest rates higher for longer. <Reuters>
- 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:
- The worst three (3) in the session:
- Monday: not recoded
- Tuesday: Blueprint Medicine (BPMC), Verve therapeutics (VERV) and Ultragenyx Pharmaceuticals (RARE)
- Tuesday: Regenxbio (RGNX), Harvard Apparatus GN (HRGN) and Cellectis SA (CLLS)
- Monday: not recorded
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.