Lower open expected; RegMed investors’ analysis, will Mesoblast’s (MESO) announcement stop the trading halt?

June 10, 2016 6:51am

… There are some BUYS in “our” universe but for stocks to surge, there needs to be milestone definitions and catalyst fulfillment while recent and current financings left been left in too many “fast” hands

Where do investors turn for insight and perspective - I say intelligently what others won't, so you can do what others can't!

I offer a handful of pertinent facts defining the who, when, where, which and what of it!

Where is today’s market going? 

Indexes and ETFs: the XLV is FLAT, DOWN are the IBB (-0.32%), XBI (-1.09%) and IWM (-0.69%) are DOWN

Investing actions: BLCM, BSTG, KITE and KOOL

Dow futures are DOWN -0.45% and NASDAQ futures are DOWN -0.72%

U.S. stock index futures indicated a lower open on Friday as traders eyed the release of consumer sentiment at 10:00 a.m. ET and the Federal Budget at 2:00 p.m.

European markets extended losses, as a renewed fall in the price of oil, upcoming risk events and economic growth concerns weighed on sentiment, sending investors in search of safe haven assets which sent European government bond yields towards record lows.

Asia markets stumbled on the final trading day of the week, as a stronger dollar weighed on commodity prices, while Japan's benchmark government bond yield hit a record low ahead of next week's closely watched Bank of Japan meeting.

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

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

• Thursday closed NEGATIVE with 38 decliners, 5 advancers and 0 flats;
• Wednesday closed barely NEGATIVE with 22 decliners, 20 advancers and 1 flat;
• Tuesday closed NEGATIVE with 32 decliners, 10 advancers and 1 flat;
• Monday closed POSITIVE with 12 decliners, 28 advancers and 3 flats;
• Last, Friday closed NEGATIVE with 16 decliners, 26 advancers and 1 flat;

Remembering Thursday’s post, “While profit taking can NOT be totally explained - there is low to moderate volume showed a lack of conviction.”

• Sentiment needs to improve if the SCGT&RM sector is to move up and beyond Q2.

In addition to volume increases and momentum, there will be better price action in “our” universe.

• Breadth, as measured by the advance/decline line, the number of weekly negative versus positive closes, and the percent of sector equities above their 5o day and 200-day moving average, is weak.

Reiterating, it's a "market of stocks," not a "stock market."

Thursday’s active sector stocks and Friday’s rotation candidates:

• VistaGen (VTGN) -11.81%;
• StemCells (STEM) -8.47%;
• Stemline (STML) -7.81%;
• Biostage (BSTG) -7.20%;
• Vericel (VCEL) -6.72%
• Cesca Therapeutics (KOOL) +20.72%;
• ReNeuron (RENE.L) +3.70%;
• Opexa (OPXA) +0.95;
• Spark Therapeutics (ONCE) +0.47%;
• AxoGen (AXGN) +0.34%

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 Thursday down -1.78% and is DOWN -0.32% in Friday’s pre-market;

• The SPDR S&P Biotech ETF (XBI) closed Thursday down -2.93%  and is DOWN -1.09% in Friday’s  pre-market;

• NASDAQ Biotechnology (NBI) closed down Thursday -1.81%;

• The Health Care Select Sector SPDR ETF (XLV) closed down Thursday -0.17% and is FLAT in Friday’s pre-market;

• The iShares Russell 2000 (IWM) closed Thursday down -0.64% and is DOWN -0.69% in Friday’s pre-market.

Companies in my spotlight:

Biostage (BSTG) closed DOWN -$0.09 to $1.16. BSTG came in fourth last night <Thursday> in the losers of the day. BSTG traded 247.3 K shares traded <3 month average = 209 K>. It has been a bad week for BSTG, another company with no support as unit’s shares are being sold however, the warrants were not registered but, granted and held.  The volume pressure is stronger and doesn’t seem to be abating.  The after-market indication is -$0.03 – SELL;

Cesca Therapeutics (KOOL) closed UP +$0.63 to $3.67. KOOL closed Wednesday UP again at +$0.20 to after yesterday’s +5.65% or +$0.16.  KOOL is “trying” to move the endpoints from AFS to TCPO2 in a CLI trial – I think the “bong” has been passed around too many times with 49.25 K shares trading <3 month average = 226.83 K shares>. The after-market is +$0.10. I am a sceptic – Maintaining SELL;

Bellicum Pharma (BLCM) closed DOWN -$0.07 to $12.95 after being flat on Thursday after being DOWN -$0.57 on Wednesday. Bellicum is probably going to be bought out by one of its adoptive T cell rivals or perhaps even a bigger biotech looking to jump into this red-hot space, the fact of the matter is that a buyout rumor is never a good enough reason to buy any stock. And Bellicum is certainly no exception. The good news, though, is that Bellicum's core value drivers are still firing on all cylinders -- despite the moody market taking a butcher knife to its share price earlier this year. If anything, I think Bellicum looks like an even stronger buy now since my original recommendation. Here's why.  Bellicum's platform revolves around its proprietary Chemical Induction of Dimerization (CID) technology that's designed to make adoptive T cell therapies both safer and more potent. The long and short of it is that the company has developed a potentially best-in-class molecular switching platform using its CID technology that can be safely triggered by a small molecule called rimiducid – Maintaining BUY;

Kite (PHARMA) closed DOWN -$2.76 to $53.42 after Wednesday’s +$0.12 after being DOWN Tuesday -$1.36 after Monday’s +$5.34 after Friday’s -$2.79. KITE is riding the “horse” of receiving initial regulatory approvals next year for a type of immunotherapy treatment known as chimeric antigen receptor T-cell (CAR-T) therapies. KITE aims to file this year for U.S. FDA approval of its therapy, KTE-C19, for patients with diffuse large B-cell lymphoma (DLBCL) – The after-market indication is -$0.64 - BUY to 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.