RegMed’s close: any news or positives were sold into

March 10, 2016 5:26pm

Restraint should be the word when it comes to investing, but in this case, the stem, cell and gene therapy regenerative medicine sector itself is the one signaling.

Investors are confused!  Ranking Thursday’s end-of-day pre-open trading indications – 4 hits and 1 misses.

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Investors suffer from the paradox of information overload. If you have a smartphone in your pocket, you can access more information about the financial markets than the world's top hedge funds did 20 years ago. Yet, I bet your investment returns have not improved one iota as a result.

·         But, who is interpreting that information … get it here!

U.S. stocks closed mostly lower Thursday, under pressure from low oil prices and concerns about the effectiveness of monetary policy following the morning's announcements from the European Central Bank.  The S&P 500 recovered from an intraday decline of 1% to eke out a gain of less than one point, while the Dow closed about 5 points lower after earlier falling as much as 178 points. The NASDAQ underperformed with a loss of about a ¼%, but still closed down but, well above session lows.

The NASDAQ closed DOWN -12.22 or -0.26% to 4,662.16 and the DOW closed DOWN -5.23 or -0.03% to 16,995.13.

A day in the life of the stem, cell and gene therapy RegMed (SCGT & RM) sector – the advance/decline line scenario of our 43 covered companies.

• Thursday, the stem, cell and gene therapy RegMed sector opened positive with an A/DL of 32/6 and 5 flats;

• The mid-day slipped negative with an A/DL of 23/17 and 3 flats;

• The closing bell rang negative with A/DL of 15/27 and 1 flat

Henry’omics:

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector opened positive , slipped negative at the mid-day  and closed negative (of 43 covered companies).

• The CBOE Volatility Index (VIX) is advancing back to the upper-teens. But the so-called “Fear Index” just made its own version of a “death cross”. 

That doesn’t bode well for the market.  In technical analysis, a “death cross” usually occurs when the 50-day moving average falls below the 200-day moving average. Technicians see this at as sign that things will get worse. 

• We’re going to see increased volatility over the next three to six months or farther out in the 2016 calendar.

My indicators combine fundaments <which have been dubious>, earnings or LPS <loss per share> trends, relative valuations and debt <ATM usage> levels while technicals include price momentum, advance/decline trends, new highs minus new lows, and money flows.

• And, the SCGT&RM sector still struggle – again with share price killing headwinds.

You know, the usual suspects — financial results that are slowly coming to an end, cash positions, access to capital markets and slow advancement beyond P2 trials.

• There are NO clear candidates for hooking your portfolio to!

One company’s accomplishments can't lift the sector any more as many struggle with growth-killing headwinds. With a sector “picture” like the one we find ourselves in today, how do investors decide what to do?

• There is one thing that everyone needs, and that's information.

To that end, I developed a news portal that addresses the needs of investors and my readers assess the current health of “our” universe and get to a reasonable conclusion about what they should do with their portfolio.

Out and about:

Athersys (ATHX) for all those Doubting -Thomas”, including me – “Overall, we have made substantial progress over the past twelve months,” said Gil Van Bokkelen, Chairman and Chief Executive Officer of Athersys.  “We have seen that MultiStem® treatment has the potential to help ischemic stroke victims, especially those who can be treated within 36 hours following the stroke. We have identified a promising path forward for continued development through a new partnership in Japan that is well positioned to take advantage of Japan’s progressive regulations for the development and approval of regenerative medicine products.  Furthermore, we have continued to make progress in our other programs, strengthening the underlying science and our core capabilities, including manufacturing.”

ATHX recognized net income for Q4/15 of $3.6 M, compared to net loss of $6.6 M for Q4/14.  The $10.2 M net variance includes the impact of the $10 M Chugai license fee, the $400 K increase in grant revenues, the $300 K decrease in research and development expenses, the $200 K increase in general and administrative costs, and an increase in net other expenses.

Thursday’s handicapping the sector pre-open indications – 4 hits and 1 miss: 

• Athersys (ATHX) closed DOWN – hit;
• Harvard Apparatus RT (HART) closed UP – hit;
• Intrexon (XON) close DOWN – miss;
• StemCells (STEM) closed DOWN – hit;
• Vericel (VCEL) closed UP – hit;

Dosing the sector – what a day for the 43 Patients:

• The market opened: POSITIVE with 6 decliners, 32 advancers and 5 flats;

• The mid-day (12:30 pm: NEGATIVE with 23 decliners, 17 advancers and 3 flats;

• Closing bell: NEGATIVE with 27 decliners, 15 advancers and 1 flat

Review my fear gauge or the CBOE Volatility Index (VIX) which is scary:

·         Thursday traded above 19;

·         Wednesday traded near 18.5;

·         Tuesday traded near 18.5;

·         Monday traded near 17.5;

·         Friday traded at 16.5;

·         Last, Thursday traded below 17;

Riding the indexes and ETFs roller-coaster:

The iShares Biotechnology Stocks ETF (IBB) closed DOWN on Thursday -1.62 or -0.63%

·         Wednesday -3.00 or -1.15%

·         Tuesday -9.63 or -3.57%

·         Monday +6.63 or +2.52%

·         Friday -1.11 or -0.42%

·         Last, Thursday -3.88 or -1.45%

The NASDAQ Biotechnology index (NBI) closed DOWN on Thursday -21.07 or -0.78%

·         Wednesday –31.50 or -1.16%

·         Tuesday -100.90 or -3.58%

·         Monday +66.97 or +2.43%

·         Friday -9.39 or -0.34

·         Last, Thursday -39.41 or -1.41%

The Russell 2000 (IWM) closed DOWN on Thursday -0.87 or -0.81%

·         Wednesday +0.54 or +0.51%

·         Tuesday -2.61 or -2.40%

·         Monday +1.17 or +1.09%

·         Friday +0.59 or +0.55%

·         Thursday +1.11 or +1.05%

·         Last, Wednesday +1.08 or +1.03%

The SPDR SD&P Biotech ETF (XBI) closed DOWN on Thursday -0.87 or -1.72%

·         Wednesday -0.47 or -0.92%

·         Tuesday -2.83 or -5.26%

·         Monday +1.86 or +3.58%

·         Friday +0.24 or +0.46%

·         Last, Thursday -0.58 or -1.11%

Who was leading the declines – to of the bottom 5?

• Intrexon (XON) closed down -$2.56 to $34.99;
• Aduro Biotech (ADRO) -$1.93 to $14.34;
• Juno (JUNO) -$1.64 to $39.09;
• Kite Pharma (KITE) -$1.02 to $48.28;
• bluebird bio (BLUE) closed down -$1.02 to $48.28;

Who was UP – top 5:

• Vericel (VCEL) closed up +$1.83 to $3.95;
• Caladrius Biosciences (CLBS) +$0.07 to $0.68;
• Immunocellular (NYSEMKT: IMUC) +$0.0.022 to $0.365;
• Histogenics (HSGX) +$0.129 to 42.60;
• Pluristem (PSTI) closed up +$0.08 to $1.63
• Juno Therapeutics (JUNO) +$0.70 to $40.73;

Who was FLAT?

• ReNeuron (RENE.L) at $3.00;

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.