November 14, 2023 4:47pm
News: Intellia Therapeutics (NTLA +$2.64) the European Commission (EC) has granted orphan drug designation <see below>
Pre-Open Indications: 2 Hits and 2 Miss
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The RegMed sector suffers the tourist routine … look at today and past 4 sessions
The Dow closed up +489.83 points or +1.43%, the S&P closed up +84.15 points or +1.91% while the Nasdaq closed UP +326.64 points or +2.37%
After careful examination of the sector and breathe trends, I have come away more cautious. Having lived through the rise and multiple declines of “our” universe’s stock price, investors must be better informed on what fluctuating economics and markets can do to an equity, or what impact indications or expectations can have.
News: Intellia Therapeutics (NTLA +$2.64) the European Commission (EC) has granted orphan drug designation to NTLA-2002 for the treatment of hereditary angioedema (HAE). NTLA-2002 is an in vivo CRISPR-based investigational therapy designed to prevent potentially life-threatening swelling attacks in people with HAE.
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 rode higher …
As Tuesday’s gains added to an already stellar performance this month for stocks. The S&P 500 is up +7.4% and the Dow +5.6% while the Nasdaq is up +9.8% in November.
Softer-than-expected inflation data supported the view that the Fed may be done raising interest rates.
Economic Data Docket: core CPI growth fell short of estimates…
- Data showed U.S. consumer prices were unchanged in October as Americans paid less for gasoline, and the annual rise in underlying inflation was the smallest in two years. In the 12 months through October, the CPI climbed 3.2% - below economists' estimates - after rising 3.7% in September.
Pre-open indications: 2 Hits < Ionis Pharmaceuticals (IONS +$2.11), Sage Therapeutics (SAGE +$1.98)> 2 Miss < MiMedx (MDXG +$0.53), Alnylam Pharmaceuticals (ALNY +$4.98)>
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Tuesday’s advance/decline line was positive with 29 incliners, 4 decliners and 2 flats at the open, the mid-day continued positive with 29 declined, 2 incliners and 4 flats, ending with a positive close of 30 incliners, 5 decliners and 0 flat
Ebb and flow:
Q4: November – 5 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:
- Tuesday, the IBB was up +2.16% and the XBI was up +5.40%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was down -0.64 point or -4.34% at 14.12
Closing Down (5 of 5):
- Harvard Apparatus GN (HRGN -$0.17 after Monday’s $0.00)
- Mesoblast (MESO -$0.06 after Monday’s +$0.05),
- Adverum Biotechnologies (ADVM -$0.0437),
- Solid Biosciences (SLDB -$0.03),
- Homology Medicine (FIXX +$0.02)
Closing Up (10 of 30):
- Blueprint Medicine (BPMC +$5.87),
- Alnylam Pharmaceuticals (ALNY +$4.98 after Monday’s +$3.12
- CRISPR Therapeutics (CRSP +$3.29 after Monday’s -$1.15),
- Ultragenyx Pharmaceuticals (RARE +$2.99 after Monday’s +$0.42),
- Vericel (VCEL +$2.80 after Monday’s +$0.04),
- Intellia Therapeutics (NTLA -$2.64),
- Beam Therapeutics (BEAM +$2.61 after Monday’s -$0.22),
- Ionis Pharmaceuticals (IONS +$2.11 after Monday’s +$0.58)
- Sage Therapeutics (SAGE +$1.98 after Monday’s +$0.21),
- Verve Therapeutics (VERV +$1.48 after Monday’s -$6,41),
Q4/23 – November
- Tuesday closed positive with 30 incliners, 5 decliners and 0 flat
The BOTTOM LINE: the cell and gene therapy sector SURGED after very trying sessions from Monday and the past week.
- While Treasury yields tumbled to multi-month lows and the dollar retreated against its global peers, following a better-than-expected reading of October inflation that lifted bets on a near-term rate cut from the Fed
- The Commerce Department said headline inflation slowed to 3.2%, inside the Street's 3.3% forecast, while core pressures eased to a fresh two year low of 4%. <TheStreet>
- About time, the best consumer price index release day in a year; as October’s cooler than expected CPI report keeps the Fed on course for rate cuts in 2024,”
Investors also NEED to be focused on negotiations by U.S. lawmakers over a funding bill as they face an end-of-week deadline to fund the federal government.
A targeted quote, "The day's market rally overall "is in direct response to that CPI report suggesting that perhaps the Fed is finished (hiking rates), although there are questions as to whether or not the Fed can declare victory. Small caps have been extremely sensitive as the rates have climbed higher." <Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina>
- 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.
- U.S. Treasury yields dropped, with the two-year yield, which best reflects short-term interest rate expectations, sliding to two-week lows.
- 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.
- The small-cap Russell 2000 index jumped 5.2% to hit an over six-week high.
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:
- Market and sector 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 contractions.
- 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 also STILL 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:
- Tuesday:Blueprint Medicine (BPMC), Alnylam Pharmaceuticals (ALNY) -2x and CRISPR Therapeutics (CRSP)
- Monday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
The worst three (3) in the session:
- Tuesday:Harvard Apparatus GN (HRGN), Mesoblast (MESO) and Adverum Biotechnologies (ADVM)
- Monday: Verve Therapeutics (VERV), CRISPR Therapeutics (CRSP) and Intellia Therapeutics (BEAM)
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.
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.