March 1, 2016 6:27am
“Our’ universe is in a holding pattern at the moment flitting from risk on and risk off on a daily basis with no real direction…
Wait a day or two to see all the other sector comparables announce Q4/15 cash positions – to feel better about “runways” and buying …
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I say today what others won't, so you can do what others can't; whether information or intelligence is good, bad or somewhere in between – it defines the who, when, where, which and what of it …
Dow futures are UP +0.7% and NASDAQ futures are UP +0.8%
Tuesday is also "Super Tuesday," when 12 states hold primary elections, and it could be a major turning point for presidential candidates in both parties.
Stocks set to march higher, in step with gains out of Europe and Asia, and higher oil prices, with a smattering of data ahead … with Dow futures over 100 points higher in pre-market trading on the first day of March, which is historically a strong month for stocks.
European markets traded higher after starting the day in negative territory, shrugging off a survey showing another slump in China's manufacturing sector.
Asia markets were mostly higher as investors digested the surprise move by China's central bank to cut banks' reserve requirement ratio (RRR) to free up liquidity, shrugging off fresh negative economic data from the mainland.
Data docket: ISM manufacturing data is expected at 10 a.m. ET, ISM is expected at 48.8, from 48.2 in January. A number under 50 shows contraction. Monthly vehicle sales should remain strong — estimated at as high as a 17.7 million annual selling rate in February.
The stem, cell and gene therapy RegMed sector closed NEGATIVE on Monday, POSITIVE on Friday, NEGATIVE on Thursday, POSITIVE on Wednesday and NEGATIVE on last Tuesday.
Past five (5) days (of 43 covered companies):
· Monday closed NEGATIVE with 24 decliners, 16 advancers and 2 flats;
· Friday closed POSITIVE with 9 decliners, 32 advancers and 2 flats;
· Thursday closed NEGATIVE with 23 decliners, 19 advancers and 1 flat;
· Wednesday closed POSITIVE with 17 decliners, 23 advancers and 3 flats;
· Last, Tuesday closed NEGATIVE with 33 decliners, 8 advancers and 2 flats;
The stem, cell and gene therapy regenerative medicine (SCGT&RM) closed negative after a neutral mid-day and a positive open.
- Hedge fund managers may have to face some upheaval in their industry this year. After years of sub-par returns, industry members are girding for a rough go of it in 2016, with the possible exodus of investor cash. As an industry, hedge funds lost about 1% in 2015, just the fourth (4th) losing calendar year since 1990, though the industry has a less favorable record when compared to broad stock market averages;
- As with the investors in most of the financings in the SCGT&RM sector – it is a changed world as Northwest Bio (NWBO) initiated a Registered Direct Offering - i.e. Financing of 5.88 M share at $1.70 for a $10 M “pot” but, review discount post the drop, the dilution and the obscene warrant <2.94 M with an exercise price of $2.25> coverage – tell me again who is having a bad year!
The financing window is open for the … desperate … to access severe depreciation, dilation and warrant coverage!
You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what could be Tuesday’s trades?
- Athersys (ATHX) closed UP +$0.04 to $1.78 after being down -$0.22 on Friday. ATHX shares had a mixed week <Thursday’s $1.96, Wednesday’s $1.83 and last Tuesday’s $1.73 – all coming with solid volume, Friday = 1.3 M shares, Thursday = 1.477 M shares and Wednesday = 941.8 K shares <3 month average = 698.8 K share volume>. My problem is that I DON’T believe the “spin” of the data from the Athersys’ stem-cell therapy MultiStem, however, the after-market indication is +$0.05 – Maintaining HOLD;
- AxoGen (AXGN) closed DOWN -$0.09 to $5.20. AXGN on Monday reported a loss of $3.6 M with a loss of $0.12 cents per share in Q4/15. The results did not meet Street expectations. The average estimate was for a loss of $0.11 cents per share. AXGN posted revenue of $7.8 M, which topped Street forecasts. Three analysts surveyed expected $7.1 M. For the year, AXGN reported that its loss narrowed to $13.4 M, or -$0.51 cents per share. Revenue was reported as $27.3 M. AxoGen shares have risen 4% since the beginning of the year. In the final minutes of trading on Monday, shares hit $5.20, a climb of 64% in the last 12 months. As of 12/31/15, cash and cash equivalents totaled $25.9 M. The weighted common average shares for Q4/14 were 29.9 M, an increase from 18.6 M shares from Q4/14 due to a common stock offering in the Q1 and Q3 of 2015. AXGN is forecasting full year 2016 revenue to approach $39 M and gross margin for the year in the high 70% range – BUY;
- Juno therapeutics (JUNO) closed DOWN -$1.50 to $35.17. JUNO Q4/14 call showed an $85.8 M net loss missed by $0.09 and reported Q4 (Dec) loss of $0.89 per share, excluding non-recurring items, $0.09 worse than the Capital IQ Consensus of ($0.44); rev $4.2 M versus a $6.3 M consensus. JUNO expects 2016 cash burn, excluding cash inflows or outflows from business development activities and including the assumption that Celgene exercises its CD19 opt-in rights, to be between $220 M and $250 M. Operating burn estimated to be between $170 M to $195 M with $1.22 B in cash. Capital expenditures estimated to be between $40 M and $55 M, the vast majority of which are related to one-time infrastructure build-outs. JCAR015 is on-track for approval as soon as 2017 in relapsed/refractory adult ALL; first clinical milestone was met for CD22 CAR T cell product candidate; multiple trials are enrolling using CAR/TCR product candidates to treat solid organ tumors and Celgene (CELG) collaboration is off to a strong start. However, the after-market indication is -$0.17 – Maintaining SELL;
- Kite Pharma (KITE) closed DOWN -$2.65 to $44.72. KITE on Monday reported a loss of $38.2 M in Q4/15. KITE had a loss of $0.85 per share. Losses, adjusted for stock option expense, were $0.54 cents per share. The results exceeded expectations. The average estimate was for a loss of $0.82 cents per share. KITE posted revenue of $4.9 M which also beat Street forecasts. For 2015, KITE reported profit of $101.7 M, or $2.33 per share. Revenue was reported as $17.3 M. KITE’s shares have decreased 27% since the beginning of the year. In the final minutes of trading on Monday, shares hit $44.72, a drop of 32% in the last 12 months. KITE had a Monday after-market of -$0.72 - Maintaining SELL;
- Intrexon (XON) closed DOWN -$2.81 to $30.95. Intrexon Corp. (XON) on Monday reported a Q4/15 loss of $32.7 M, after reporting a profit in the same period a year earlier. On a per-share basis, XON said it had a loss of $0.28 cents. Losses, adjusted for non-recurring costs, came to $0.17 cents per share. The results topped Street expectations. The average estimate was for a loss of $0.18 cents per share. XON posted revenue of $41.5 M in the period, also topping Street forecasts. Four analysts expected $41 M. For the year, XON reported that its loss widened to $84.5 M, or -$0.76 cents per share. Revenue was reported as $173.6 M. Intrexon shares have risen roughly 3% since the beginning of the year. In the final minutes of trading on Monday, shares hit $30.95, a decline of 25% in the last 12 months. XON has an after-market indication post Monday’s close of +$1.45 – SELL to BUY;
Opinions expressed are those of the author and are subject to change, and are 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.
Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.
