June 14, 2016 6:42am

 

Risk appetites will always mean different things to different categories of investors

... Not so different from investing but related, the risks associated with clinical trials are defined by trial design, population and procedures

Lately the missing of endpoints is the result of risky protocols

… The question is,  have companies truly defined how risks can be mitigated?

 

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 set of pertinent facts defining the who, when, where, which and what of it!

 

 

Where is today’s market going? 

Indexes and ETFs: the IBB, IWM, XBI and XLV are DOWN

Investing actions: AGTC, BSTG, MESO, ONCE and QURE

Dow futures are DOWN-0.24% and NASDAQ futures are DOWN -0.34%

 

U.S. stock index futures indicated a lower open Tuesday, amid a wider "risk-off" move in global markets that saw the yield on benchmark German government paper fall into negative territory for the first time.

European stocks traded lower as investors waver ahead of a two-day meeting of the U.S. Federal Reserve and global concerns over a Brexit weigh on sentiment.

Asia markets were mixed while Australia and Japan shares stumbled , as investors remained cautious before central bank meetings in the U.S. and Japan and on uncertainty over whether the U.K. will vote to remain in the European Union.

Data docket: The NFIB (National Federation of Independent Business) survey is released at 6 a.m. ET. Retail sales and import prices are due at 8:30 a.m. ET and business inventories data are due at 10 a.m. ET.

 

 

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector closed NEGATIVE on Monday, Friday, Thursday, 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 closed NEGATIVE with 31 decliners, 10 advancers, 1 flat and 1 trading halt;
  • Friday closed NEGATIVE with 35 decliners, 7 advancers and 1 flat;
  • Thursday closed NEGATIVE with 38 decliners, 5 advancers and 0 flats;
  • Wednesday closed barely NEGATIVE with 22 decliners, 20 advancers and 1 flat;
  • Last, Tuesday closed NEGATIVE with 32 decliners, 10 advancers and 1 flat;

 

 

Remembering Monday’s post, “Stem, cell, gene and regenerative therapy stocks are logging a fifth (5th) straight losing session as investors become increasingly jittery while … news has not been forthcoming.”

  • To get down to the basics, a focus on risk management should start from the beginning of a development process encouraging a company to examine the trial plan and identify potential challenges. With that information, management can improve the study design to reduce risk and be better prepared to deal with issues when they occur.

For “we” the investors, risk tolerance and risk capacity are two concepts that need to be understood clearly before making investment decisions. Together, the two help to determine the amount of risk that should be taken in a portfolio of investments.

  • The problem many investors face is that their risk tolerance and risk capacity are not the same.

Risk tolerance is the amount of risk that an investor is comfortable taking, or the degree of uncertainty that an investor is able to handle. Risk tolerance often varies with age, income and financial goals.

  • Risk capacity, unlike tolerance, is the amount of risk that the investor "must" take in order to reach financial goals. The rate of return necessary to reach these goals can be estimated by examining time frames and income requirements.

In the end, it's all about probability!

 

 

Monday’s active sector stocks and Tuesday’s possible rotation candidates?

  • uniQure (QURE) -16.09%;
  • Cesca Therapeutics (KOOL) -11.43%;
  • ReNeuron (RENE.L) -10.71%;
  • Fibrocell (FCSC) -7.69%;
  • Organovo (ONVO) -6.77%;
  • Opexa (OPXA) +8.90%;
  • Fate Therapeutics (FATE) +7.88%;
  • Capricor (CAPR) +5.92%;
  • ImmunoCellular (NYSEMKT: IMUC) +5.97%;
  • Biostage (BSTG) +5.58%

 

 

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 Monday down -1.18% and is DOWN -0.12% in Tuesday’s pre-market;

 

  • The SPDR S&P Biotech ETF (XBI) closed Monday down -1.67%  and is DOWN -0.42% in Tuesday’s  pre-market;

 

  • NASDAQ Biotechnology (NBI) closed down Monday -1.25%;

 

  • The Health Care Select Sector SPDR ETF (XLV) closed down Monday -0.79% and is DOWN -0.17% in Tuesday’s pre-market;

 

  • The iShares Russell 2000 (IWM) closed Monday down -1.09% and is DOWN -0.55% in Tuesday’s pre-market.

 

 

Companies in my spotlight:

Applied Genetic Technologies (AGTC) closed DOWN -$0.02 to $15.47 after Friday’s -$0.51. Last week was truly a “bummer”, as the stock closed at $17.05 <Monday>, $16.61, $16.08 <Wednesday>, $16.00 and <Friday’s> $15.49. I still like the platform and expect it will prevail in the long run; June 21st is coming up, will there be any fresh news at the Research Day, they are hosting in NYC. However, the see-saw of competing technologies and speculation has kept the share pricing floating down. It’s time for an updraft from being oversold – Maintaining BUY;

Biostage (BSTG) closed UP +$0.06 at $1.22 after 22 days of a downward spiral based post a unit financing at $1.76. Volume at the open was 21,251 shares with the share price down -$0.06. About 3 pm, there were 292,115 shares traded but, some big share moves came pre the close with the stock finishing +$0.06 with 410,307 shares traded.  A new “shot” at a bottom which I HAD felt at $1.30; let’s see if it holds – BUY;

 

Mesoblast (MESO) had experienced at trading halt at $7.07 since May 31. MESO has now regained worldwide rights to cardiovascular field for its cell therapy platform. Lead product candidate in cardiovascular portfolio is MPC-150-IM for heart failure, with multibillion dollar blockbuster potential and no financial consideration to Teva Pharmaceutical Industries Ltd. Independent Data Monitoring Committee recommended continuation of the 600-patient heart failure trial without modification after clinical data review of first 175 patients. MESO aims to complete the P3 heart failure trial, almost 40% recruited, within eighteen months. To meet the program’s remaining funding requirements, Mesoblast has been offered an equity finance facility. FDA approval has been obtained to incorporate into the heart failure program a widely-used second catheter delivery system which is likely to result in accelerated recruitment and provide a commercial distribution channel. Japan’s conditional approval pathway provides potential early revenue opportunity.  Mesoblast now has unencumbered rights to partner with a leading cardiovascular company with a commitment to heart failure product commercialization – HOLD;

 

Spark Therapeutics (ONCE) closed DOWN -$1.03 to $52.55. ONCE launched an offering of 3.5 M shares ONCE will not receive any proceeds from the sale of shares by Children’s Hospital of Philadelphia Foundation (CHOP). The offering consists of 2.5 M shares being offered by Spark and 1 M shares being offered by CHOP.  In addition, Spark is expected to grant the underwriters of the offering an option for a period of 30 days to purchase up to an additional 525 K shares at the public offering price, less the underwriting discount – SELL;

uniQure (QURE) closed DOWN -$1.90 to $9.91. Clinical data from ongoing P1/2 Study in Hemophilia B demonstrated 6 months of sustained increases in Factor IX Activity. The increases in FIX activity and the overall stability of the activity observed over a 6-month period are cause for optimism, as they are associated with meaningful clinical benefits as well as reduced need for ongoing infusions of recombinant FIX therapy. Oversold on news and strength – Maintaining 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.