Narrowly higher open expected; RMi’s analysis, ending the month as unmet needs correspond to most stock pricings

May 31, 2016 6:47am

Who is considering stakeholders?

Will new treatments make it to market and when, to alleviate the share pricing downfalls?

What will spark investor’s interest – another P2, an IND?

Where do investors turn for insight and perspective - I say intelligently 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!

Where are today’s markets going? 

Indexes and ETFs: the IWM, XLV, IBB and the XBI are all UP

Investing actions: NYSEMKT: AST, BLUE, ONCE and OSIR

Dow futures are UP +0.13 % and NASDAQ futures are UP +0.17%

U.S. stock-index futures pointed to a narrowly higher open on Tuesday, as traders wait to scour a data pile for hints as to whether the U.S. Fed will hike interest rates this month.

European markets traded lower as investors digested the prospect of a June U.S. interest rate hike and key risk events this week including a European Central Bank meeting.

Asian markets were mostly higher, with Chinese mainland markets up more than 2% and Japan shares rising after better-than-expected economic data.

Data docket: include personal income and spending for last month, the core personal consumption expenditure (PCE) measure of inflation, the Chicago purchasing managers' index (PMI) for May and consumer confidence for May.

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector closed POSITIVE on Friday, NEGATIVE on Thursday, POSITIVE on Wednesday and last Tuesday.

The stem, cell and gene therapy regenerative medicine sector’s record after the last 5 days (of 43 covered companies):

• Monday was Memorial Day;
• Friday closed POSITIVE with 13 decliners, 27 advancers and 3 flat;
• Thursday closed NEGATIVE with 26 decliners, 13 advancers and  flats;
• Wednesday closed POSITIVE with 15 decliners, 27 advancers and 1 flat;
• Tuesday closed POSITIVE with 10 decliners, 29 advancers and 4 flats;

Remembering Friday’s post, “The biggest problem investor’s face is the uncertainty of share pricing. So, which decisions are investors paying for – the ones that assist managements!”

The markets were closed on Monday;

• European markets closed higher on Monday after hints from the U.S. Federal Reserve's Janet Yellen and James Bullard about when the Fed might next raise interest rates;
• Asian markets were mixed on Monday, as the dollar strengthened against Asian currencies.

Investors continually seek the clues to performance in the SCGT&RM sector – there are a few:

• The first being financing – who needs it or who got it and how long will it last? Pricing “energy: as related to expectation of clinical in initiatives and the ultimate – unexpected and expected <to most> consequences of choices and decision making by managements;

• Earnings – kiss that thought goodbye, the LPS <loss per share> rate is growing by the quarter. The key to good quarters are past deals which are credited to following quarters;

• Partnering, the chances are slim to none except among the immuno-oncology plays;

•  Gene therapy, the deals are done – now companies have to deliver as partners leverage their bets with multiple players;

• What’s to be believed in stem and cell therapy companies, most are rotating, shrinking or barely advancing by the week? All we see are gyrations’ based on reverse splits and toxic financings with warrant attachments and the ultimate gift that keeps on giving – short positions!

The table is set for the summer months; let’s see who comes for breakfast, lunch or dinner?

You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades?  Watch list:

• The iShares Nasdaq Biotechnology (IBB) closed Friday up +0.91% and is UP +0.11% in Tuesday’s pre-market;

• The SPDR S&P Biotech ETF (XBI) closed Friday up +1.10%  and is UP +0.39% in Tuesday’s  pre-market;

• NASDAQ Biotechnology (NBI) closed up Friday +0.96%;

• The Health Care Select Sector SPDR ETF (XLV) closed up Friday +0.45% and is UP +0.28% in Tuesday’s pre-market;

• The iShares Russell 2000 (IWM) closed Friday up +1% and is UP +0.07% in Tuesday’s pre-market.

Companies in my spotlight:

Asterias Biotherapeutics Inc. (NYSEMKT: AST) closed UP +$0.08 to $3.42. AST was recently rated a Buy rating at Chardan Capital. The firm also assigned a $5.50 price target. This was given attention, because on Monday the stock was up 8% at $3.34, after a $3.13 prior close. Asterias also saw its stock rise another 5% $3.52 on Tuesday but, settled down on Wednesday at $3.47. By Thursday’s close the stock was still at $3.34, implying upside 65%. Friday’s upside just strengthens the SELL on strength mantra of the market.  AST’s day range was a 52-week range of $3.26 to $3.44 closing at the high end. Don’t forget 3/13’s $3.02 or 1/21’s $2.70 – SELL;

bluebird bio (BLUE) closed UP +$0.49 to $44.15.  Can’t seem to find a reason for Friday’s after-market indication was -$2.15 – SELL;

Osiris (OSIR) closed UP +$0.08 to $5.67. OSIR has been advised by the United States Attorney's Office for the Southern District of New York that a criminal investigation has been opened by that office into what OSIR understands to be matters also under investigation, as previously disclosed, by the SEC. As with the SEC investigation, OSIR intends to cooperate fully with the investigation being conducted by the U.S. Attorney's Office. OSIR is unable to predict the duration, scope or outcome of either investigation or their potential impact on the Company's financial condition and results of operations. NASDAQ extending the deadline until September 12, 2016 for OSIR  to file all delinquent periodic reports with the SEC, including its Annual Report on Form 10-K for the year ended 12/31/15 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2016. The exception was granted by NASDAQ based on a compliance plan submitted by Osiris in response to a previously announced request. Friday’s after-market indication is -$0.82 or -14.46% - SELL

Spark Therapeutics (ONCE) closed UP +$1.70 to $56.28. After a week of highs, TV channel endorsements – “will the frosting be tasted”? Last week started out at $54.51 <Monday> but the previous Monday registered a share price of $36.76. What trader would forego “the taste” when the cake is so expensive? - SELL

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.