May 19, 2025 4:44pm

Equity markets have seemingly shrugged off Moody’s downgrade to the US credit rating

Many cell and gene therapy sector equities were lying in the weeds at the open, then flying; let’s NOT be too optimistic to buying dips and hanging on to highs

News: Prime Medicine (PRME -$0.25 or -16.04%) Strategic Restructuring Focuses on Large Genetic Liver Diseases, Cystic Fibrosis, in partnership with Bristol Myers Squibb (BMY), new CEO Named with cost cutting measures to significantly reduce cash needs. BrainStorm Cell Therapeutics (BCLI +$0.04 or +3.03%) the FDA has cleared the initiation of its P3b clinical trial of NurOwn® (autologous MSC-NTF cells) for the treatment of amyotrophic lateral sclerosis (ALS). Ionis Pharmaceuticals (IONS +$0.47 or +1.40%) today announced positive topline results from the Essence study of olezarsen in people with moderate hypertriglyceridemia with or at risk for atherosclerotic cardiovascular disease (ASCVD).

Never leave an investor uninformed! 

 

On point, short on words, long on facts and being judicious!

My mission is to provide clear, actionable guidance on a regular basis to help investors and traders navigate the uncertain and often irrational financial markets.

I put hours of effort to create reporting, while leveraging my 40 years of operating. investigative and research experiences to analyze the key market-moving events and distill that into a cogent outlook.

 

Monday’s RegMed Investors’ (RMi) pre-open: volatility seems to determine sentiment… https://www.regmedinvestors.com/articles/13924

Friday night’s RegMed Investors (RMi) Closing Bell: Cover, cover … https://www.regmedinvestors.com/articles/13923

 

RegMed Investors (RMi) Research Note: Harvard Apparatus GT (OTCQB: HRGN) Chronicles: Yet another "screw job" for/on investors ... "wanting to effect a reverse split of its outstanding common stock" in its recent proxy statement filing!! … https://www.regmedinvestors.com/articles/13812

 

Monday: The Dow closed UP +137.33 points or +0.32%, the S&P closed UP +5.22 points or -0.09% while the Nasdaq closed UP +4.36 points or +0.02%

  • Indexes flipped back-and-forth eventually closing positive on Monday after Moody’s downgraded the U.S. credit rating late Friday, causing Treasury yields to spike.

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

  • The debt downgrade pressured bond prices, sending yields higher, at a time when the economy is already awaiting the full impact of President Trump’s unfolding tariff policy. The 30-year U.S. bond yield traded above 5% on Monday and the 10-year yield topped 4.5%, levels that hurt equity markets last month and helped lead Trump to back off his stiffest tariff measures.

Monday’s advance/decline line opened with a negative 12 incliner, 20 decline and 3 flats ending with a positive close of 22 incliners, 12 decliners and 1 flat        

Metrics:  Monday, the IBB was up +1.35%, the XBI was up +0.70% while the VIX was up +0.85 points or +4.93% at 18.10

 

Q2/25 – May – 6 negative and 7 positive closes

  • April – 11 positive and 10 negative closes

Q1/25

  • March, 10 positive and 12 negative closes
  • February – 12 holiday, 11 negative and 7 positive closes
  • January - 2 holidays, 1 market close, 10 negative and 10 positive closes

 

Mondays Closing UP (10 of 22) +$ after Friday’s

  • Alnylam Pharmaceuticals (ALNY +$6.67 after Friday’s +$1.91),
  • Lenz Therapeutics (LENZ +$1.64 after Friday’s -$0.53),
  • Moderna (MRNA +$1.53 after Friday’s +$1.21),
  • uniQure NV (QURE +$1.01 after Friday’s +$0.45),
  • Regenxbio (RGNX +$0.90),
  • Ultragenyx Pharmaceuticals (RARE +$0.58 after Friday’s +$0.77),
  • Intellia Therapeutics (NTLA +$0.56),
  • Ionis Pharmaceuticals (IONS +$0.47 after Friday’s +$0.57),
  • Agenus (AGEN +$0.31),
  • Sage Therapeutics (SAGE +$0.18),

Flat (1)

  • Homology Medicine (FIXX)

Monday’s Closing DOWN (12 of 12): 

  • BioLife Solutions (BLFS -$0.65 after Friday’s +$1.60
  • Blueprint Medicine (BPMC -$0.48 after Friday’s +$2.20
  • Verve Therapeutics (VERV -$0.26),
  • Prime Medicine (PRME -$0.25),
  • Beam Therapeutics (BEAM -$0.23 after Friday’s +$0.64),
  • Mesoblast (MESO -$0.17 after Friday’s -$0.23),
  • Harvard Apparatus RT (OTCQB: HRGN -$0.14 after Friday’s $0.00
  • CRISPR Therapeutics (CRSP -$0.09 after Friday’s +$2.46
  • Precigen (PGEN -$0.09),
  • AxoGen (AXGN -$0.07),
  • Cellectis SA (CLLS -$0.02),
  • Editas Medicine (EDIT -$0.02),

 

The BOTTOM LINE: Moody’s credit downgrade, spooked futures and markets this a.m.

But if history is any indication, prior US credit downgrades haven't led to structurally higher interest rates, recessions, or sustained equity market declines.

  • So, given that, how much weight should investors really place on this latest downgrade? Does it carry any meaningful signal for future market or economic direction?
  • So, we had an S&P downgrade, then we had Fitch, and now we have Moody's. All three of them have downgraded. <Yahoo Finance>
  • But if you look at both the equity market and the fixed income market, they've hardly responded.

Some … “Investors should lean into equities in a 'glass half full' market”

What more can be written, another surprise upside …

 

May ‘25: understand the “flow” …

  • 5/19 – Monday closed positive with 23 positive, 12 negative and 1 flat
  • 5/16 - Friday closed positive with 29 positive, 3 negative and 3 flats
  • 5/15 – Thursday closed positive with 24 positive, 10 negative and 1 flat
  • 5/14 – Wednesday closed negative with 8 positive, 25 negative and 2 flats
  • 5/13 – Tuesday closed negative with 6 positive, 28 negative and 1 flat
  • 5/12 - Monday positive with 39 positive, 3 negative and 2 flats
  • 5/9 - Friday closed negative with 10 positive, 23 negative and 2 flats
  • 5/8 – Thursday closed positive with 25 positive, 8 negative and 2 flats
  • 5/7 - Wednesday closed positive with 16 positive, 15 negative and 4 flats
  • 5/6 – Tuesday closed negative with 2 positive, 31 negative and 2 flats
  • 5/5 - Monday closed negative with 9 positive, 23 negative and 3 flats
  • 5/2 – Friday closed positive with 24 positive, 8 negative and 3 flats
  • 5/1 - Thursday closed negative with 14 positive, 19 negative and 2 flats

 

Some good news:

BioMarin Pharmaceutical (BMRN) has agreed to acquire Boston-based Inozyme (INZY) for about $270 million. The deal will close in the third quarter of 2025.

  • The deal comes just about 2 months after INZY announced a strategic prioritization to extend its cash runway. The company said it would concentrate its remaining capital — about $113.1 million as of the end of 2024 — on advancing INZ-701 toward a potential approval in ENPP1 Deficiency. This is a rare disease that affects blood vessels, soft tissues, and bones.
  • INZY said data from the first P3 study of INZ-701 in children is expected in early 2026, which means a regulatory approval could come in 2027.
  • BioMarin CEO Alexander Hardy said in the announcement that the Inozyme acquisition builds on the company’s 25 years of work in enzyme therapies for children and adults. “This acquisition brings to BioMarin an important medicine that has the potential to be the first treatment for children and adults with ENPP1 Deficiency, improving care for people living with this serious condition. As BioMarin continues our transformation and delivers on our corporate strategy, we will continue to evaluate external innovation alongside internal innovation,” Hardy said.
  • Inozyme was founded in 2017 with technology developed by Demetrios Braddock and licensed from Yale University. The company’s other co-founders are Joseph Schlessinger and Axel Bolte. INZY in Q1 reduced its workforce by about 25% in connection with its strategic review. Inozyme went public in the heyday of biotech IPOs in 2020, raising $112 million.  <Boston Business Journal>

 

I usually write/say “electronic trading and uncle algo” slips in and out, back doors reaping sector disharmony and then pops right back for some profiteering.

  • What can I say, love ‘em, leave ‘em and welcome back to save the sector’s honor – “uncle algo and his electronic dwarfs.” <me>

My perspective is retail investors should NOT be dipping their toes back into the cell and gene therapy sector until after LPS (loss-per-share) earnings report.

  • NO all ins – just add those with solid partners, lengthened runways and solid cash positions leveraged by solid management teams – there I see losses going forward!

Market news i.e., tariff drive upside yet estimate and consensus misses with continued earnings LPS (loss-per-share) will shake the sector down – the vig must be paid!

“I 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!”

  • If I have learned one thing as a former research analyst in a venture and public fund, operating executive, x-FBI, x-military officer and an adjunct (MBA) business school professor now a journalist; my life and your portfolio are largely tied to knowledge of price movements and questioning pricing targets and more.

 

What could 2025 have in store for the capital access space – DESPERATE  

  • "You'll see a number of cell and gene therapy companies DESPARITE drive for financings – they’re desperate for cash, but I do think a lot of cell and gene therapy sector companies NEED to be focused on what is driving their own growth —they're focused on a lot of change BUT … that's happening in pipelines … capital expansion is second.

Why do I keep repeating, so investors can make the connection …

The top three (3) performing in the session:   

  • Monday: Alnylam Pharmaceuticals (ALNY), Lenz Therapeutics (LENZ) and Moderna (MRNA)
  • Friday: CRISPR Therapeutics (CRSP), Blueprint Medicine (BPMC) and Alnylam Pharmaceuticals (ALNY)

The worst three (3) in the session: 

  • Monday: BioLife Solutions (BLFS), Blueprint Medicine (BPMC) and Verve therapeutics (VERV)
  • Friday: Lenz Therapeutics (LENZ), Mesoblast (MESO) and MiMedx (MDXG)

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 it’s 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.