March 15, 2016 5:41pm

 

The stem, cell and gene therapy regenerative medicine sector keeps seeking a bottom– there are just too many under-currents  

 

The iShares Nasdaq Biotechnology ETF (IBB) ended 3.8% lower, its worst day since 1/13/16.

 

Ranking Tuesday’s end-of-day pre-open trading indications – 3 hits and 2 misses.

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There is one thing that everyone needs, and that's interpretation and translation of intelligence, not just news or information - we get too much!

  • To that end, I report a matrix of variables designed for investor’s consideration concerning the stem, cell and gene therapy regenerative medicine portfolio to track and monitor its pricing metric;

The takeaway is that investor need to decide what actions to take, or not take, based on their specific situation.

 

 

U.S. stocks closed mostly lower Tuesday as a decline in health care stocks weighed and investors awaited the Wednesday afternoon conclusion of the Federal Reserve meeting.

The NASDAQ closed DOWN -21.61 or -0.45% to 4,728.67 and the DOW closed UP +22.40 or +0.13% to 17,251.53.

 

 

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.

  • Tuesday, the stem, cell and gene therapy RegMed sector opened negative with an A/DL of 12/25 and 6 flats – the opposite of yesterday;
  • The mid-day stayed negative with an A/DL of 10/32 and 1 flat;
  • The closing bell rang negative with A/DL of 9/32 and 2 flat

 

 

Earnings update:

 

 

Henry’omics:

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

  • What a start to a Tuesday open, the Dow traded about 30 points lower after briefly falling more than 100 points in opening trade, while the NASDAQ traded down 26 points.

Investors are caught between two competing desires for Fed action: On one hand, Wall Street wants rates to stay low given anemic economic growth and the risk of deflation globally. Yet other investors want the both U.S. economy and stock market to stand tall without the “drug” of constant stimulus and easy-money Fed policy.

  • The Bottom Line is that investors don’t want a rate hike and the economy has a long way to go before the Fed can responsibly move interest rates higher. Investors would go bananas if the Fed raised rates in an environment like this, further restricting credit and placing downward pressure on prices.

Keeping with  last night’s prose … “The recent “run-up” becomes suspect as news is slow and financial results/earnings continue with many afraid of reporting consequences of those who haven’t reported Q4/15 who could be caught with pre call and post reporting jitters.”

  • Reiterating, “We can never know if a whole series of events and/or a certain result is determined to follow one event or action in particular. But, fear in this sector and market seems to cause a domino effect.”

 

 

Out and about:

Caladrius Biosciences (CLBS), the former NeoStem (NBS) sold 19.9% of its subsidiary – Progenitor Cell Therapy (PCT) to Hitachi Chemical (HCHMY) for $19.4 M. I find it ludicrous that it further typifies the agreement as a licensing, development and equity components.

·         Q4 EPS of -$0.59 may not be comparable to consensus of -$0.28;

·         Revenue of $7.56M (+43.2% Y/Y) misses by $0.11M;

·         As I said yesterday … “Count those apples … rotting in the basket, CLBS dropped -$0.09 to $0.86 with any delisting upgrades diminishing;

Let me restate, when is this BOD going to “relive” this CEO who upon taking over his “throne” has depreciated CLBS’ share price from $3.75!

 

 

Capricor (CAPR) has entered into a RDO subscription agreement with current investors for the purchase and sale of 1,692,151 shares of common stock at a price of $2.40 per share and warrants to purchase up to 846,073 shares of common stock with an exercise price of $4.50 per share.

  • The Bottom Line: I told you … an offering was in the cards. CAPR had closed at $2.20 – so, why the $2.40 number? The gross proceeds of the offering are expected to be approximately $4.1 M, before deduction of placement agent fees and offering expenses.  A small deal with a big warrant “play”… to offset being out-of-cash by Q3/16;
  • Interesting caveat …  the warrants will be issued and are sold ... without registration ... under the Securities Act of 1933, as amended in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws;
  • Accordingly, the Investors may only ... sell the shares of stock issuable upon exercise of the Warrants pursuant to an effective registration statement under the Securities Act covering the resale of those shares, an exemption under Rule 144 under the Securities Act or another applicable exemption under the Securities Act.

NO more selling the share and clipping the warrant...?  CAPR is trading UP to $2.40 a +$0.15 or +7.01% to $2.35 - talk about reverse psychology!

 

 

Tuesday’s handicapping the sector pre-open indications – 3 hits and 2 miss: 

  • Bellicum Pharma (BLCM) closed DOWN -$1.96 – hit;
  • Capricor (CAPR) closed UP +$0.15 – miss;
  • Juno Therapeutics (JUNO) closed DOWN -$3.38 – hit;
  • Vericel (VCEL) closed UP +$0.41 – miss;
  • Spark Therapeutics (ONCE) closed DOWN -$1.69 – hit;

 

 

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

  • The market opened: NEGATIVE with 25 decliners, 12 advancers and 6 flats;
  • The mid-day (12:30 pm: NEGATIVE with 32 decliners, 10 advancers and 1 flat – another opposite of yesterday;
  • Closing bell: NEGATIVE with 32 decliners, 9 advancers and 2 flats

 

 

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

·         Tuesday traded above 17;

·         Monday traded below 17;

·         Friday traded below 17;

·         Thursday traded above 19;

·         Wednesday traded near 18.5;

·         Last, Tuesday traded near 18.5;

 

 

Riding the indexes and ETFs roller-coaster:

The iShares Biotechnology Stocks ETF (IBB) closed DOWN on Tuesday -9.97 or -3.81%

·         Monday -0.50 or -0.19%

·         Friday closed up +6.86 or +2.69%;

·         Thursday -1.62 or -0.63%

·         Wednesday -3.00 or -1.15%

·         Last, Tuesday -9.63 or -3.57%

The NASDAQ Biotechnology index (NBI) closed DOWN on Tuesday -105.31 or -3.85%

·         Monday -5.54 or -0.20%

·         Friday closed up +71.65 or +2.69%

·         Thursday -21.07 or -0.78%

·         Wednesday –31.50 or -1.16%

·         Last, Tuesday -100.90 or -3.58%

The Russell 2000 (IWM) closed DOWN on Tuesday -1.68 or -1.56%

·         Monday -0.28 or -0.26%

·         Friday closed UP +2.27 or +2.14%;

·         Thursday -0.87 or -0.81%

·         Wednesday +0.54 or +0.51%

·         Last, Tuesday -2.61 or -2.40%

The SPDR SD&P Biotech ETF (XBI) closed DOWN on Tuesday -3.00 or -5.78%

·         Monday +0.59 or +1.15%

·         Friday closed up +1.66 or +3.34%

·         Thursday -0.87 or -1.72%

·         Wednesday -0.47 or -0.92%

·         Tuesday -2.83 or -5.26%

·         Last, Monday +1.86 or +3.58%

 

 

 

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

  • Bluebird bio (BLUE) closed down -$4.43 to $43.87;
  • Kite Pharma (KITE) -$3.98 to $44.91;
  • Juno Therapeutics (JUNO) -$3.38 to $36.79;
  • Intrexon (XON) -$3.23 to $34.19;
  • Aduro Biotech (ADRO) closed down -$1.97 to $12.39

 

 

Who was UP – top 5:

  • Vericel (VCEL) closed up +$0.41 to $4.54;
  • Cellectis ADR (CLLS) +$0.23 to $25.50;
  • Mesoblast (MESO) +$0.18 to $9.10;
  • Capricor (CAPR) +$0.15 to $2.35;
  • International Stem cell (ISCO) closed up +$0.15 to $3.60

 

 

Who was FLAT?

  • Athersys (ATHX) at $2.33;
  • VistaGen (VSTA) at $8.00;

 

“Venimus, emimus, vendidit et resurrexit” – the new mantra, we came, we bought, we sold and we came back again!

 

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.