November 1, 2023 4:42pm
CRISPR Therapeutics’ (CRSP) gene-editing approach to sickle cell disease sentiment follows a "relatively benign" FDA advisory committee likely to approve “share pricing rally” pre-December meeting, Cellectis SA (CLLS) collaboration and investment agreements with AstraZeneca (AZN) while Beam (BEAM)and Verve Therapeutics (VERV) expanded “relationships” with Eli Lilly (LLY) initiating “some” sentiment uplifts anticipating expectation for “others”
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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 +221.71 points or +0.67%, the S&P closed UP +44.06 points or +1.05% while the Nasdaq closed UP +210.23 points or +1.64%
Q3 earnings’ reporting cycle is here to confirm whether or not any bottoms are even close to happening?
News: The Fed kept interest rates unchanged for a second consecutive time — leading investors to think the central bank would stay put for the rest of the year.
- However, Fed Chair Powell at the post-decision press conference would not rule out a hike next month, saying that the idea that it would be difficult to raise rates after pausing for two meetings was wrong.
- Next week, the Treasury will auction $112 billion in debt, largely matching what Wall Street was expecting.
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 gained Wednesday after the Fed held rates steady for a second time after…
- a dismal October. The Dow and the S&P 500 ended the month lower by 1.4% and 2.2%, respectively, marking the first three-month losing streak for both indexes since March 2020.
Economic Data Docket: the ADP National Employment Report for October showed 113,000 jobs were added to the US economy, below the Street's estimates for 150,000.
- The ISM manufacturing index showed manufacturing activity contracted more than expected in October.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Wednesday’s advance/decline line opened negative at 8 up/ 25 down and 2 flats, stayed negative with 13 incliners, 20 decliners and 2 flats at the mid-day, ending with a positive close of 18 incliners, 16 decliners and 1 flat
Ebb and flow:
Q4: November – 1st session, positive close
· October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Wednesday, the IBB was up +1.35% and the XBI was up +2.13%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Wednesday was down -1.2 points or -7.11% at 16.85
Closing Down (10 of 16):
- Verve Therapeutics (VERV -$0.29 after Tuesday’s +$2.63),
- Vericel (VCEL -$0.18 after Tuesday’s +$0.80),
- AxoGen (AXGN -$0.15 after Tuesday’s -$0.02),
- MiMedx (MDXG -$0.11),
- Beam Therapeutics (BEAM -$0.10),
- Prime Medicine (PRME -$0.07 after Tuesday’s +$0.67),
- Precigen PGEN -$0.06),
- Caribou Biosciences (CRBU -$0.05),
- Homology Medicine (FIX -$0.04),
- Sangamo Therapeutics (SGMO -$0.0394),
- Harvard Apparatus GN (HRGN $0.00 after Tuesday’s -$0.06),
Closing Up (10 of 18):
- CRISPR Therapeutics CRSP +$4.82),
- Cellectis SA (CLLS +$1.67 after Tuesday’s -$0.0452),
- Regenxbio (RGNX +$1.30 after Tuesday’s -$1.48),
- Blueprint Medicine (BPMC +$1.04 after Tuesday’s +$4.52),
- Ionis Pharmaceuticals IONS +$0.99 after Tuesday’s +$0.27),
- Sage Therapeutics SAGE +$0.97),
- Ultragenyx Pharmaceuticals (RARE +$0.64 after Tuesday’s +$2.32),
- Intellia Therapeutics (NTLA +$0.45 after Tuesday’s +$1.22),
- Editas Medicine (EDIT +$0.22 after Tuesday’s +$0.35),
Q4/23 – November
- Wednesday closed positive with 18 incliners, 16 decliners and 1 flat
The BOTTOM LINE: sector suffers deterioration and then flips to the upside …
Think abut quote, "I consider that a man’s brain originally is like a little empty attic, and you have to stock it with such furniture as you choose. A fool takes in all the lumber of every sort that he comes across so that the knowledge that might be useful to him gets crowded out, or at best is jumbled up with a lot of other things so that he has difficulty in laying his hands." — Sherlock Holmes, A Study in Scarlett
Roiling markets: If you're buying on weakness, you might be jumping onto a sinking ship even as …
- More earnings are coming around the bend
- The ADP (private payrolls) number is indicative of an economy that isn't collapsing, but still not overly strong
- The yield on the benchmark 10-year note dropped below 4.8% for the first time in two weeks after the announcement.
- 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.
Macro and Pharma News:
- GSK reported Q3 adjusted earnings of 50.4 pence, exceeding analyst consensus. Sales grew 10% year over year to 8.2 billion pounds, also topping consensus. The company raised guidance for the remainder of the year.
- While, venture funds, which dole out money in cycles as long as 10 years, tend to be leading indicators of market conditions.
- The sudden spate of fundraising would suggest that limited partners, the deep-pocketed organizations that invest in VCs, believe biotech’s current downturn will eventually turn around, creating a long-term return on all the capital they’re putting to work in the present. <STAT>
What’s behind the numbers:
- A trip, we didn’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:
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics CRSP) and Cellectis SA (CLLS)
- Tuesday: Blueprint Medicine (BPMC), Verve Therapeutics (VERV) and Ultragenyx Pharmaceuticals (RARE)
- Monday: not recorded
The worst three (3) in the session:
- Wednesday: Verve Therapeutics (VERV), Vericel (VCEL) and AxoGen (AXGN)
- 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.
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