November 13, 2023 4:45pm
When they are good, it’s accepted when it’s bad - awful
News: Verve Therapeutics (VERV) crashes, losing 1/3 of its value <read more below>
Pre-Open Indications: 4 hits and 1 Miss
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The Dow closed UP +54.77points or +0.16%, the S&P closed DOWN -3.69 points or -0.08% while the Nasdaq closed DOWN -30.36 points or -0.22%
Q3 earnings’ reporting cycle continues to confirm whether or not any bottoms are even close to happening?
News: Verve Therapeutics (VERV -$6.41 or -40.83% to $9.31) stock crashed as safety concerns plagued its gene-editing approach to genetically high cholesterol. VERV stock lost more than a third of its value. VERV tested its drug in patients with heterozygous familial hypercholesterolemia, an inherited disease that causes lifelong high LDL cholesterol. This increases the risk of cardiovascular disease. A single dose of VERV's drug reduced LDL cholesterol by up to 55%. But two patients experienced severe side effects. One died of cardiac arrest five weeks following treatment. Another had a heart attack the day following treatment. Investigators said the latter is possibly related to Verve's treatment. But Verve noted the patient experienced chest pain prior to treatment, and hadn't told the study investigators.
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 …
The Dow rose slightly as the S&P and Nasdaq dived as traders tried to move past Moody’s Investors Service lowering its U.S. credit rating outlook to negative from stable.
Moody’s on Friday underscored the U.S. “very large” fiscal deficit.
Pre-open indications: 4 Hits < Alnylam Pharmaceuticals (ALNY +$3.51), Sage Therapeutics (SAGE +$0.21), Verve Therapeutics (VERV -$6.41), CRISPR Therapeutics (CRSP -$1.15)> 1 Miss < MiMedx (MDXG +$0.22)>
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Monday’s advance/decline line was negative with 4 incliners, 29 decliners and 2 flats at the open, the mid-day was negative with 12 declined, 21 incliners and 2 flats, ending with a negative close of 16 incliners, 18 decliners and 1 flat
Ebb and flow:
Q4: November – 4 positive and 5 negative closes
· October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Monday, the IBB was down -0.10% and the XBI was up +0.43%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Monday was up +0.59 point or +4.16% at 14.76
Closing Down (10 of 18):
- Verve Therapeutics (VERV -$6,41 after Friday’s -$0.34),
- CRISPR Therapeutics (CRSP -$1.15 after Friday’s +$1.90),
- Intellia Therapeutics (NTLA -$ after Friday’s -$0.83),
- Beam Therapeutics (BEAM -$0.22),
- Precigen (PGEN -$0.19 after Friday’s -$0.17),
- BioLife Solutions (BLFS -$0.17 after Friday’s -$0.44),
- Compass Therapeutics (CMPX -$0.15),
- Prime Medicine (PRME -$0.14),
- Regenxbio (RGNX -$0.10 after Friday’s +$1.03),
- Fate Therapeutics (FATE -$0.07),
- Harvard Apparatus GN (HRGN)
Closing Up (10 of 16):
- Alnylam Pharmaceuticals (ALNY +$3.12 after Friday’s -$2.63
- Ionis Pharmaceuticals (IONS +$0.58 after Friday’s -$0.95
- Ultragenyx Pharmaceuticals (RARE +$0.42),
- MiMedx (MDXG +$0.22 after Friday’s +$0.24),
- Sage Therapeutics (SAGE +$0.21 after Friday’s -$0.14),
- AxoGen (AXGN +$0.13),
- Mesoblast (MESO +$0.05),
- Vericel (VCEL +$0.04)
- bluebird bio (BLUE +$0.04),
- Homology Medicine (FIXX +$0.02)
Q4/23 – November
- Monday closed negative with 16 incliners, 18 decliners and 1 flat
The BOTTOM LINE: NO downside surprises here … the hits keep coming
- The cell and gene therapy sector is STILL shell-shocked by sentiments … leaving.
- While sector stocks fluctuated for the week, they’ll face bigger challenges in the week ahead… unless – algorithms and electronic trading claim “the field”!
The Consumer Price Index (CPI) data is due out Tuesday morning. Economists expect a headline increase of 3.3% for October, easing from 3.7% in September. But core prices are expected to be unchanged from the previous month. The CPI reading, along with labor market, "are clearly in the driver's seat for what matters to financial markets, because it dictates where Fed policy goes from here." <Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management Company in Milwaukee, Wisconsin>
- Treasury yields were flat despite the negative outlook, helping traders also look past the downgrade in the equity market. Stocks fell on the news earlier Monday morning before recovering.
- Moody’s on Friday underscored the U.S.′ “very large” fiscal deficits and partisan gridlock in Washington as contributing factors for the cut. The ratings agency reaffirmed America’s credit rating at AAA, the highest level. This comes three months after Fitch lowered the U.S. long-term foreign currency issuer default rating to AA+ from AAA, also citing expected fiscal deterioration, an increasing debt burden and political standoffs on fiscal and debt issues. <CNBC>
- Oil prices rose on Monday after OPEC said demand for crude is strong, blaming speculators for a recent selloff. Brent crude contracts for January rose $1.05, or 1.29%, to $82.48 a barrel, while West Texas Intermediate contracts for December rose $1.04, or 1.35%, to $78.21 a barrel.
- Verve Therapeutics (VERV) share pricing crash after trial results
- Short positioning and leveraged trading in hedge funds percentage (%) is the highest since November 2018 … Regulators are particularly concerned about one strategy called the basis trade, which involves using leverage to profit from the price gap between Treasury futures and the underlying cash market. It has garnered particular attention from federal watchdogs over concerns about a lack of visibility into the amount of risk in the market.
- Reiterating, more earnings are coming around the bend as LPS (loss-per-share) cascaded.
- Up and down market and past cell and gene therapy activity is reflective of investors sentiment – we be happy as November starts but, does it continue this and next week?
- 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: this week is kind of a dead zone for coming economic news.
- Market expectations have become more questionable …
- 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!
I believe … there will be deceleration in sector pricing gains and economic activity for the remaining weeks of 2023.
The top three (3) performing in the session:
- Monday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
The worst three (3) in the session:
Monday: Verve Therapeutics (VERV), CRISPR Therapeutics (CRSP) and Intellia Therapeutics (NTLA)
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 continues to be on the 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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