March 18, 2016 6:48am
Unusually low expectations for the stem, cell and gene therapy regenerative medicine sector suggests only one course of action – watch for what happens to the oversold
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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 +0.2% and NASDAQ futures are UP 0.14%
U.S. stock index futures indicated a higher open on Friday as traders watched to see whether oil and stocks are able to hold their gains of the week so far.
European equities turned positive after a shaky start to the trading session.
Asian markets traded mostly traded higher, after U.S. indexes ended higher and oil prices hit their highest levels for this year. But a stronger yen continued to weigh on Japan's shares
Data docket: consumer sentiment is to be released at 10:00 a.m. ET.
The stem, cell and gene therapy RegMed sector closed POSITIVE on Thursday, NEGATIVE on Wednesday and Tuesday, POSITIVE on Monday and last Friday.
Last five (5) days (of 43 covered companies):
· Thursday closed POSITIVE with 18 decliners, 21 advancers and 4 flats;
· Wednesday closed NEGATIVE with 23 decliners, 19 advancers and 1 flat;
· Tuesday closed NEGATIVE with 32 decliners, 9 advancers and 2 flats;
· Monday closed POSITIVE with 18 decliners, 23 advancers and 2 flats;
· Last, Friday closed POSITIVE with 7 decliners, 34 advancers and 2 flats;
The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector opened down, stayed negative at the mid-day and closed to the upside on Thursday!
- Keeping Thursday’s end-of-day hat on … “When watching the SCGT&RM sector react to the daily, weekly and monthly activity or history, one comes to the conclusion that it's foolish to assume that because the sector has not done well in the recent past due to volatility, that it will not do well in the future.”
“Just the opposite, the SCGT&RM sector should be generating greater optimism as Q4/15 financial results are completed – a hang-up for many investors as to cash utilization and end-of-year positions.”
- Was there a message at the end of the day’s positive close having started the day with a negative A/DL <advance/decline line> of 11/27, struggling to the mid-day with a negative A/DL of 13/29 and closing with a positive A/DL of 21/18?
Be aware …
Today is a quadruple witching Friday … the expiration date of various stock index futures, stock index options, stock options and single stock futures.
- All stock options contracts expire on the third Friday of each month and once every quarter - on the third Friday of March, June, September and December - all four asset classes expire on the same day;
- Because futures and options investors must close out their positions on “witching” Fridays, it usually entails increased trading volume.
However, the iShares Nasdaq Biotechnology (IBB) closed down -1.24% but it is UP +0.17% in the after-market against the iShares Russell 2000 (IWM) which closed UP +1.53% and is UP in the after-market +0.02%.
You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what could be Friday’s trades?
· Due to increased volatility and frenzied market activity, many investors approach the markets differently on witching days.
- Applied Genetic Technologies (AGTC) closed UP +$0.08 to $13.38 after being down Wednesday -$0.12 after Tuesday’s -$1.01 and Monday’s +$0.13. To me the closing numbers speak of being oversold – Maintaining BUY;
- Capricor (CAPR) closed UP +$0.19 to $2.69. Q4/15 financial results/earnings reflected an increased net loss of approximately $3.3 M, or $0.21 per share compared to a Q4/14 net loss of approximately $1.9 M, or $0.16 per share. For FY15, CAPR reported a net loss of $12.9 M, or $0.81 per share, compared to FY14’s $6.2 M, or $0.53 per share. Cash totaled $13.6 M at years end with a recent RDO of $4.1 M and a $3.38 grant/loan of $3.38 M lengthens its runway but, I believe there are still issues around the relationship with their research collaborator and the CEO; it is a question of oversight. Based on the past weeks appreciation, traders could be emptying some of the “ups” <Monday’s $2.20 to Thursday’s $2.69 following last Friday’s $2.10> from the plate – Maintaining SELL;
- Harvard Apparatus RT (HART) closed DOWN -$0.02 to $1.88. The week has been good for the stock especially as financial results/earnings were disclosed on Thursday. HART has made significant progress over the past twelve months as it advances its development platform in collaborative large-animal studies with Mayo Clinic. Based on its existing preclinical data, HART has selected life-threatening conditions of the esophagus as the initial clinical application for advancing its Cellframe technology through the IND process. Cash used in operating activities decreased in Q4/15 from Q4/14. Despite a Q4 2015 increase in spending related to its large-animal studies, HART's Q4/15 R&D expenses decreased in Q4 2014. G&A expenses also decreased in Q4/15 compared to Q4/14. Cash used in operating activities was $7.2 M in FY15 versus $8 M in FY14. At year-end 2015, HART had $7.5 M in cash. Yet another decrease, HART's net loss for Q4/15 was $2.3 M, or $0.17 per basic share, compared to $2.8 M, or $0.36 per basic share in Q4/14. The anticipated read-out of pre-clinical date in conjunction with the oversight of the Mayo Clinic’s, Dr. Dennis Wigle should validate the assembly of an IND – Strong 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.
