November 17, 2023 4:56pm
As cell and gene therapy sector flips to upside
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Week in review
After careful examination of the sector and breathe trends, I STILL 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.
The Dow closed UP +1.81 points or +0.01%, the S&P closed UP +5.78 points or +0.13% while the Nasdaq closed UP +11.81 points or +0.08%
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 closed up for another weekly gain amid a red-hot November rally.
The major averages are all on pace for their third straight positive week. The S&P 500 and the Nasdaq are up more than 2.3% through Thursday’s close, while the Dow is on pace for a 2% rise. This would be the first three-week win streak for the Dow and S&P 500 since July, and the first since June for the Nasdaq. <CNBC>
Economic Data Docket: New housing construction and building permits both were stronger than expected in October.
- Privately owned housing starts totaled a seasonally adjusted 1.372 million at an annual rate, a 1.9% increase from September and better than the 1.35 million Dow Jones estimate. The total was 4.2% below the year-ago level.
- Building permits totaled 1.487 million, 1.1% above the September level and better than the 1.45 million estimates.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Friday’s advance/decline line was positive with 25 incliners, 6 decliners and 4 flats at the open, the mid-day stayed positive with 27 inclined, 7 decliners and 1 flat, ending with a positive close of 28 incliners, 7 decliners and 1 flat
- Thursday’s advance/decline line was positive with 23 incliners, 11 decliners and 1 flat at the open, the mid-day flipped negative with 4 inclined, 28 decliners and 3 flats, ending with a negative close of 10 incliners, 25 decliners and 0 flat
- Wednesday’s advance/decline line was positive with 29 incliners, 4 decliners and 2 flats at the open, the mid-day continued positive with 30 declined, 5 incliners and 0 flat, ending with a positive close of 23 incliners, 11 decliners and 1 flat
- 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
- 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 – 7 positive and 6 negative closes
· October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Friday, the IBB was up +0.91% and the XBI was up +3.65%
- Thursday, the IBB was down -0.85% and the XBI was down -1.37%
- Wednesday, the IBB was up +0.10% and the XBI was up +0.27%
- Tuesday, the IBB was up +2.16% and the XBI was up +5.40%
- Monday, the IBB was down -0.10% and the XBI was up +0.43%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Friday was down -0.51 point or -3.56% at 13.81
- Thursday was down -0.01 point or -0.07% at 14.17
- Wednesday was down -0.06 point or -0.42% at 14.10
- Tuesday was down -0.64 point or -4.34% at 14.12
- Monday was up +0.59 point or +4.16% at 14.76
Closing Down (7 of 7):
- Alnylam Pharmaceuticals (ALNY -$5.24 after Thursday’s -$2.08, Wednesday’s +$1.06, Tuesday’s +$4.98 and Monday’s +$3.12
- Solid Biosciences (SLDB -$0.15),
- Mesoblast (MESO -$0.08),
- Harvard Apparatus GN (HRGN -$0.08 after Thursday’s +$0.13, Wednesday’s $0.00, Tuesday’s -$0.17 after Monday’s $0.00)
- Bellicum Pharmaceuticals (BLCM -$0.0337 after Thursday’s +$0.0124),
- Homology Medicine (FIXX -$0.0119),
- Agenus (AGEN -$0.01),
Closing Up (10 of 28):
- CRISPR Therapeutics (CRSP +$8.67 after Thursday’s +$2.99, Wednesday’s +$0.93, Tuesday’s +$3.29 and Monday’s -$1.15),
- Beam Therapeutics (BEAM +$2.68 after Thursday’s -$0.36, Wednesday’s +$0.60, Tuesday’s +$2.61 and Monday’s -$0.22),
- Intellia Therapeutics (NTLA +$2.10 after Thursday’s -$0.56),
- Blueprint Medicine (BPMC +$1.04 after Thursday’s -$1.05, Wednesday’s -$1.06, Tuesday’s +$5.87),
- Ultragenyx Pharmaceuticals (RARE +$1.02),
- Vericel (VCEL +$1.00 after Thursday’s -$0.47, Wednesday’s -$0.70, Tuesday’s +$2.80 after Monday’s +$0.04),
- Editas Medicine (EDIT +$1.00),
- BioLife Solutions (BLFS +$0.81 after Thursday’s -$0.38 after Wednesday’s +$0.45),
- Verve Therapeutics (VERV +$0.75 after Thursday’s -$0.51 after Wednesday’s +$0.72, Tuesday’s +$1.48 and Monday’s -$6,41),
- Regenxbio (RGNX +$0.63)
Q4/23 – November - this week
- Friday closed positive with 28 incliners, 7 decliners and 0 flat
- Thursday closed negative with 10 incliners, 25 decliners and 0 flat
- Wednesday closed positive with 23 incliners, 11 decliners and 1 flat
- Tuesday closed positive with 30 incliners, 5 decliners and 0 flat
- Monday closed negative with 16 incliners, 18 decliners and 1 flat
The BOTTOM LINE: CRISPR Therapeutics (CRSP) approval with Vertex (VRTX) set the stage for gene editing stocks to appreciate across the board. This authorization of Casgevy in Great Britain is the first regulatory authorization of a CRISPR-based therapy in the world."
- Specifically, the MHRA signed off on Casgevy for patients with sickle cell disease who experience severe episodes of pain called vaso-occlusive crises, and beta thalassemia patients who require frequent blood transfusions. These patients must also be unable to find a stem cell donor.
- The approval is conditional, meaning it's contingent upon continued testing and must be renewed every year. The FDA is due to make its decision on the use of exa-cel in treating sickle cell disease on Dec. 8. The FDA is also expected to make a decision on the drug's use for beta thalassemia on March 30.
- "While this approval comes in line with our expectations, the approval remains a historic milestone for gene-editing as a whole, as this technology enters the commercial market in earnest," Leerink Partners analyst Mani Foroohar said in a written statement.
- The drug formerly known as exa-cel will sell under the brand name Casgevy following the approval. The Medicines and Healthcare products Regulatory Agency approved Casgevy for people age 12 and older with sickle cell disease or beta thalassemia. <Allison Gatlin, IBD>
Barron’s wrote on Friday, “The beleaguered biotech sector has turned up this month, including a 5% jump on Tuesday, which was a strong day for risk assets. The gains are likely tied to a growing consensus that interest rates won’t climb any higher and a broader rally among small-cap stocks. In fact, much of the news from biotech companies over the past few weeks has been bad.
- As “uncle algo and his electronic dwarfs” bid the upside for the sector to become overbought in the next weeks … ripening for a profit binge
- The 10-year Treasury note yield was down slightly after touching a two-month low during the session.
- At the same time, 2-year notes have added around 10 basis points, and were last marked at 4.911%, following a series of hawkish messages from Fed officials and a better-than-expected reading for October housing starts. <TheStreet>
- 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.
- 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.
We've come a long way. We need to digest some of these moves and look for what the next catalyst is. Earnings is behind us. The Fed is on hold and is going to be in December. The equity market is looking for guidance." <Jack McIntyre, portfolio manager at Brandywine Global in Philadelphia>
What’s behind the numbers:
- The small-cap Russell 2000 index climbed 1.3%, outperforming broader markets, and was eyeing weekly gains of more than 5%.
- Global oil prices rebounded from their worst single-day decline in four months yesterday, as crude slumped into a bear market – defined as a 20% fall from a recent high – amid concerns over the fate of global demand heading into next year and the ongoing supply gut from a surge in U.S. production. <The Street>
- 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.
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:
- Friday: CRISPR Therapeutics (CRSP) -4x, Beam Therapeutics (BEAM) and Intellia Therapeutics (NTLA)
- Thursday: CRISPR Therapeutics (CRSP) -3x, Harvard Apparatus GN (HRGN) and MiMedx (MDXG)
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Ultragenyx Pharmaceuticals (RARE)
- Tuesday: Blueprint Medicine (BPMC), Alnylam Pharmaceuticals (ALNY) and CRISPR Therapeutics (CRSP)
- Monday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
The worst three (3) in the session:
- Friday: Alnylam Pharmaceuticals (ALNY), Solid Biosciences (SLDB) and Mesoblast (MESO)
- Thursday: Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS) and Blueprint Medicine (BPMC),
- Wednesday: Blueprint Medicine (BPMC), Prime Medicine (PRME) and Vericel (VCEL)
- Tuesday: Harvard Apparatus GN (HRGN), Mesoblast (MESO) and Adverum Biotechnologies (ADVM),
- 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!”
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.