December 13, 2023 5:13pm

After loading up on a bag of dramatic upside for a later take down, take the upside and punt; one doesn’t realize appreciation until a sale

News: Blueprint Medicine (BPMC +$0.17) the European Commission (EC) has approved the label expansion of Ayvakit (avapritinib) to include the treatment of adult patients with indolent systemic mastocytosis (ISM) with moderate to severe symptoms inadequately controlled on symptomatic treatment.

Pre-open Indications: 3 Hits and 4 Miss

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Welcome to my world of defining the “grey’ in our universe!

The sector is … still what it is, until it isn’t and even then, it doesn’t seem to be … that is after taking a deep breath and holding it

 

The Dow closed UP +512.30 points or +1.40%, the S&P closed UP +63.39 points or +1.37% while the Nasdaq closed UP +200.57 points or +1.38%

 

Henry’omics:

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 …

Another index high for 2023 … as the Fed signaled it would cut rates several times next year,

Economic Data Docket: Summary of Economic Projections, which includes central bankers’ projections for interest rates next year. The Fed now sees 75 basis points of rate cuts coming in 2024, which accounts for one more rate cut than had been projected in September.

 

RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …

  • Wednesday’s advance/decline line was positive at the open with 21 incliners, 13 decliners and 1 flat, stayed positive at the mid-day with 18 declined, 15 incliners and 2 flats, ending with a positive close of 32 incliners, 2 decliners and 1 flat

 

Pre-open Indications: 3 Hits < Blueprint Medicine (BPMC +$0.17), CRISPR Therapeutics (CRSP +$3.31), Intellia Therapeutics (NTLA +$2.24)> 4 Miss < Alnylam Pharmaceuticals (ALNY +$6.64), Prime Medicine (PRME +$1.23), BioLife Solutions (BLFS +$1.19), Ultragenyx Pharmaceuticals (RARE +$1.32)>

 

Ebb and flow of MY covered sector cell and gene therapy session daily “endings”:

Q4:  December – 4 negative and 5 positive closes

  • November – 11 positives, 1 holiday and 10 negative closes
  • October – 12 negative and 10 positive closes

 

Key Metrics:

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Wednesday, the IBB was up +4.18% and the XBI was up +4.83%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +0.14 point or +1.16% at 12.21

 

Wednesday’s Closing Down (2 of 2):

  • Ionis Pharmaceuticals (IONS -$0.33 after Tuesday’s +$0.28 after Monday’s +$0.49),
  • Harvard Apparatus GN (HRGN -$0.006 after Tuesday’s -$0.07 and Monday’s -$0.18)? Who would buy this pig?

Flat (1):

  • Mesoblast (MESO $0.00 after Tuesday’s +$0.04)

Wednesday’s Closing Up (10 of 32):

  • Alnylam Pharmaceuticals (ALNY +$4.64 after Tuesday’s +$2.96 and Monday’s +$0.88),
  • CRISPR Therapeutics (CRSP +$3.31 after Tuesday’s -$2.16 and Monday’s -$4.26
  • Intellia Therapeutics (NTLA +$2.24 after Tuesday’s -$0.20 and Monday’s -$0.67),
  • Beam Therapeutics (BEAM +$2.24 after Tuesday’s -$0.61 and Monday’s +$0.25
  • Sage Therapeutics (SAGE +$1.55 after Tuesday’s -$0.22),
  • Vericel (VCEL +$1.43),
  • Ultragenyx Pharmaceuticals (RARE +$1.32 after Tuesday’s +$2.81 and Monday’s +$0.16),
  • Prime Medicine (PRME +$1.23 after Tuesday’s -$0.58 and Monday’s -$0.35),
  • BioLife Solutions (BLFS +$1.19 after Tuesday’s -$0.17 and Monday’s -$0.39),
  • Verve Therapeutics (VERV +$1.19 after Tuesday’s -$0.29 after Monday’s -$0.38),

 

Q4/23 – December

Wednesday closed positive with 32 incliners, 2 decliners and 1 flat

Tuesday closed negative with 10 incliners, 25 decliners and 0 flat

Monday (12/11) closed negative with 13 incliners, 21 decliners and 1 flat

 

The BOTTOM LINE: again, and again – I say what changes … as I reiterate … “I remain a skeptic, as electronic trading remains the impetus to, I believe a cell and gene therapy sector’s artificial high” … as proven today yet again!

  • I warned that sector portfolios containing cell and gene therapy sector equities should consider getting defensive” … “Investors NEED to start formulating their portfolio outlook into next year.”

Wednesday’s backdrop:

  • The Fed held its benchmark interest rate in a range of 5.25%-5.50%, the highest in 22 years.
  • The 10-year Treasury yield, a benchmark for mortgage rates and other loans, dropped to 4.03% following the Fed’s rate forecast release, the lowest levels since August
  • Small-cap stocks rallied after the Fed lowered its inflation outlook for next year.
  • The Russell 2000 gained 2.8%, putting the small-cap index on pace for its fourth positive session in five sessions.

 

I think the magnitude of the market’s upside and cell and gene therapy sector’s response is exaggerated. <Me>

 

Pharma news:

Pfizer (PFE) stock careened lower Wednesday after its acquisition of Seagen, now expected to close Thursday.

PFE recognized $58.5 billion to $61.5 billion in sales. At the midpoint, that would be roughly flat compared with expectations for this year

  • <according to FactSet. But the guidance is far below analysts' call for $62.66 billion in 2024 sales>

PFE's outlook includes about $3.1 billion in sales from Seagen, which it's buying for $43 billion, and $8 billion from Covid products Comirnaty and Paxlovid. Both missed projections, though. Analysts projected a stronger $3.25 billion and $12.4 billion. <Leerink Partners analyst David Risinger said in a report>. PFE also guided to $2.05 to $2.25 in adjusted earnings per share, well below the Street's view for $3.13. That largely excludes the impact of Seagen's acquisition. Pfizer is far from the only Covid products maker to be struggling heading into the new year.

As demand slips for Covid booster shots, so have shares of PFE, its partner BioNTech (BNTX), Moderna (MRNA) and Novavax (NVAX). Wednesday was no exception as BioNTech stock fell 4.5%, Moderna lost 3.7% and Novavax slipped 2.7%.

PFE is pushing deeper into the cancer space with its takeover of Seagen. The deadline passed this week for the Federal Trade Commission to oppose PFE's takeover. Seagen makes antibody drug conjugates, or ADCs. These drugs target toxic chemicals directly at tumors. This limits their damage to healthy tissue. In the third quarter, PFE put up $2.89 billion in sales of cancer drugs, though that fell 6% year over year and missed projections for $3.06 billion.

PFE stock easily led the declines among the S&P 500 stocks early Wednesday. The stock has been locked in a steep, 12-month decline. Shares hit their lowest level since the Covid crash in March 2020. <Allison Gatlin on X>

It's time to think ahead to December. It's usually an important month for the Nasdaq.

  • Don’t FORGET portfolio December tax selling and a bit of rebalancing … “Investors NEED to start formulating their portfolio outlook into next year.”
  • It might be prudent to harvest and cash in some chips following the past month’s dramatic rally.
  • And then comes January and with worries that the U.S. economy will be slowing down, the potential for continued Middle East violence and, of course, the real prospect of bitterly contested elections across all of the United States. <The Street>

The top three (3) performing in the session:

  • Wednesday: Alnylam Pharmaceuticals (ALNY) -3x, CRISPR Therapeutics (CRSP) and Intellia therapeutics (NTLA)
  • Tuesday: Blueprint Medicine (BPMC) -2x, Alnylam Pharmaceuticals (ALNY) -2x and Ultragenyx Pharmaceuticals (RARE)
  • Monday: Blueprint Medicine (BPMC), Alnylam Pharmaceuticals (ALNY) and Ionis Pharmaceuticals (IONS)

The worst three (3) in the session:

  • Wednesday: Harvard Apparatus GN (HRGN) and Ionis Pharmaceuticals (IONS)
  • Tuesday: CRISPR Therapeutics (CRSP) -2x, Beam therapeutics (BEAM) and Prime Medicine (PRME)
  • Monday: CRISPR Therapeutics (CRSP), Solid Biosciences (SLDB) and Intellia therapeutics (NTLA)

Welcome to my world of defining the “grey’ in our universe!

  • Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and facts are 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.