June 6, 2016 5:27pm
… With the IWM jumping +1.08% and IBB rising +1.53%
Pre-market indications – 5 hit and 2 miss
Earnings: MESO, one piece of the trading halt puzzle
Financing: CYTX
Do you care what happened today, you should … because it has implications to Tuesday's sector activity?
There are two things that investors need - interpretation of news and translation of related market metrics concerning the stem, cell and gene therapy and regenerative medicine sector to substantiate share pricing.
The Dow closed about higher, off session highs. The S&P 500 closed at its highest since Nov. 3 and 1.1% below its 52-week intraday high set last July while the NASDAQ closed up.
The NASDAQ closed UP +26.20 or +0.53% to 4,968.71 and the DOW closed UP +113.27 or +0.64% to 17,920.33.
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.
- The mid-day stayed positive with an A/DL of 30/12 with 1 flat;
- The closing bell stayed positive with A/DL of 28/12 with 3 flats
Henry’omics:
The SCGT&RM sector was positive at the mid-day and closed positive.
- Wow.
The SCGT&RM sector changed from Friday’s negative close as I had expected as Thursday and Wednesday closed positive after a Memorial Monday.
- The bottom line in this changing position of the stem, cell, gene and regenerative therapy universe is that each day, pricing reflects a tired sector economy.
There is NO pricing recession looming; it has been here for months!
- Keep in mind that the rotating cycle of share pricing is reflective of sentiment and as I have stated … many a time - a thorough lack of conviction other than the immuno-oncologists and the alternating rotation of the gene therapy companies.
Investors are NOT confident enough to start tightening their portfolios, they must also be fairly confident about the current state of our economy.
- The only stories have been in ASCO!
This is not good news, as I had stated the sector feeds off the stock market which then feeds off of a struggling economy.
Pre-market indications – 5 hit and 2 miss
- Aduro Biotech (ADRO) closed UP +$0.76 – hit;
- Applied Genetic Technologies (AGTC) closed UP +$0.10 – miss;
- Biostage (BSTG) closed DOWN -$0.01 –hit;
- Cesca Therapeutics (KOOL) closed DOWN -$0.03 – hit;
- Juno Therapeutics (JUNO) closed UP +$4.60 – hit;
- Kite (PHARMA) closed UP +$5.34 – hit;
- Stemline (STML) closed DOWN -$0.33 – miss;
Earnings:
Mesoblast (MESO) still has a halt in force but, put out earnings …
MESO had a net loss of $16.9 M or -$4.49 per share as compared to $22.24 M or -$7.00 per share in Q3/15
Revenue was $15.7 M for the nine months of 2016 compared with $15.6 M for the nine months of 2015, an increase of $100 K.
This increase was primarily due to higher milestone revenue received during the nine months of 2016 compared with the nine months of 2015 and royalty income earned on sales of TEMCELL. This is offset by a decrease in interest income as we increased the proportion of cash reserves held in U.S. dollars to reduce currency risk
For the nine months ended 31 March 2016, MESO’s loss before income tax improved by 14% (US$9 million) as compared to the comparative period in FY2015.
The main items within this overall loss reduction, which impacted cash reserves, were a 19% reduction in R&D expenses and a 21% reduction in management and administration costs.
Operating cash outflow for Q3/16 was US$22 M. The total cash outflows of both Q2 and Q3 was US$42 M, a reduction of 25% in comparison to the total outflows of both the first quarter of 2016 and the fourth quarter of 2015 of US$55 M.
At 31 March 2016, MESO had cash reserves of US$100 M.
Financing:
Cytori (CYTX) closed DOWN -$0.13 to $2.39 …
CYTX has extended the subscription period and adjusted the subscription price for its previously announced rights offering until 5:00 PM ET on Friday, June 10, 2016.
Rights holders will need to exercise their subscription rights prior to that date and time. The adjusted unit pricing is now $2.55 per unit. Furthermore, Cytori invites stockholders to call in for a corporate presentation on Monday, June 6, 2016, at 2:00 PM ET.
Each right entitles the holder to purchase one unit at the subscription price of $2.55 per unit, composed of one share of common stock and 0.5 of a warrant, with each whole warrant exercisable to purchase one share of common stock at an exercise price of $3.06 per share for 30 months from the date of issuance.
Cytori has applied to list the warrants on NASDAQ, although there is no assurance that a sufficient number of subscription rights will be exercised so that the warrants will meet the minimum listing criteria to be accepted for listing on NASDAQ under the symbol “CTYXW.”
The warrants may be redeemed by Cytori prior to their expiration if Cytori’s common stock closes above $7.65 per share for 10 consecutive trading days.
Today’s Bottom Line:
Share prices moving higher and that's been helpful satisfying … today’s need.
Review my fear gauge or the CBOE Volatility Index (VIX):
- Monday traded near 13.5;
- Friday traded at 13.4;
- Thursday traded 14.1;
- Wednesday traded near 14.4;
- Tuesday traded above 14;
- Last, Monday was a holiday;
Most active sector stocks + and -:
- StemCells (STEM) -8.07%;
- Cytori (CYTX) -5.16%;
- Athersys (ATHX) -4.21%;
- Stemline (STML) -3.70%;
- Fibrocell (FCSC) -1.44%
Versus …
- Juno Therapeutics (JUNO) +10.48%;
- Kite Pharma (KITE) +10.25%;
- Aduro Biotech (ADRO) +6.48%;
- Bluebird bio (BLUE) +6.16%;
- Sangamo (SGMO) +6.08%
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.
