RegMed investors’ closing bell analysis: sector’s UP, markets mixed – another inverse relationship

July 15, 2016 5:10pm

… Sector momentum exhibits volatility, low volume and pricing dynamics – a warning is sounded …

JUNO finally confronted the number of deaths – 4; while Ziopharm Oncology (ZIOP.OB) “circles the wagons” after a 3 deaths scuttling a $50 M offering and Brainstorm (BCLI) depreciates <-$0.57> on their “hype stunt”

… Transparency is the cornerstone of investor confidence

My pre-open indications – 3 hit (BLUE, BCLI and CLLS) and 0 miss

Do you care what happened today, you should … because it has implications to Monday's sector activity?  

Where has today’s market gone – subscribe and find out. 

There are two things that investors need - interpretation of news and translation of market metrics concerning the stem, cell, gene and regenerative therapy sector to substantiate share pricing.

U.S. stocks closed mostly lower Friday as a massive rally eased. The S&P 500 closed 0.1% lower, as consumer discretionary lagged. The NASDAQ also fell about 0.1%. A key measure of consumers' attitudes, Index of Consumer Sentiment, was reported lower so far this month. Sentiment came in at 89.5 for July's preliminary reading, the University of Michigan said. Economists expected the preliminary sentiment index to hit 93.

The NASDAQ closed DOWN -4.47 or -0.09% to 5,029.59 and the DOW closed UP +10.14 or +0.05% to 18,516.55.

A day in the life of the stem, cell, gene and regenerative therapy (SCGT & RT) sector – the advance/decline line scenario of our 43 covered companies:    

• The open was positive with an A/DL of 26/13 and 2 flats;
• The mid-day stayed positive with an A/DL of 23/15 and 5 flat;
• The closing bell was positive with A/DL of 29/13 and 1 flat the opposite of Thursday;

Henry’omics:

The SCGT&RT sector opened positive, stayed positive at the mid-day and closed positive.

• The iShares Nasdaq Biotechnology (IBB) closed UP +1.51% along with the iShares Russell 2000 ETF (IWM) also being UP +0.28%

Reiterating, regardless of whether you are a short-term trader, long-term investor or somewhere in between, investing is choosing equities to invest in, allocating among them, making ongoing decisions about those assets individually, all with constant awareness of how those decisions impact.

• The question is what an acceptable range of outcomes in percentage term.  My range would be 10% on the downside and 20% on the upside.

Out and about:

BrainStorm (BCLI) closed DOWN -$0.47 to $2.99 …

To announce top line results from the U.S. P2 Study of NurOwn in patients with Amyotrophic Lateral Sclerosis (ALS) on Monday, July 18

• A typical HYPE move which begets  whip-saw moves up and DOWN …
• SELL, run don’t walk …
• And, investors and traders – RAN ,

Juno Therapeutics (JUNO) closed UP +$0.41 to $29.21 …

Juno Therapeutics (JUNO) amidst concerns about its recent trial hold has bought Redox Therapies, a Boston-based startup to gain a small molecule that it can use in combination with its engineered T cell platform.

• The startup has bought a Boston-based startup to gain a small molecule that it can use in combination with its engineered T cell platform.
• JUNO paid – UPFRONT $10 M in cash plus committed to undisclosed clinical, regulatory and commercial milestone payments for the startup.
• Redox has a license to vipadenant, an adenosine A2a (A2a) receptor antagonist that Juno expects could work to disrupt key immunosuppressive pathways in the tumor microenvironment in some cancers.
• Redox licensed vipadenant from Vernalis a couple of years ago under a deal with undisclosed terms.
• Vipadenant is an oral small molecule; it’s been dosed in about 250 Parkinson’s disease patients in Phase I and Phase II testing. Serum levels of the drug have been found to predict saturation of the A2a receptor and blockade of signaling via this pathway. Redox founder Michail Sitkovsky will become a scientific consultant to Juno.

JUNO, yesterday, July 14, made a correction, indicating that instead of three patient fatalities out of 129 cases, there were actually four.

• In a filing with the SEC, Juno said, “Dr. Gilbert mistakenly said ‘three’ cases out of 129 rather than ‘four’ cases. The fourth case was a patient treated in the JCAR014 trial.”
• Mark Gilbert, Juno’s chief medical officer, had made the comments during an investor’s conference call on July 12. As pointed out in Investor’s Business Daily News, “The transcript, however, noted that a fourth patient had died last year in a trial of a different CAR-T therapy, JCAR014. This was ‘included in the data presented in an oral presentation at the American Society of Hematology meeting in December 2015, and included in Juno’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.”

Ziopharm (ZIOP) closed DOWN -$1.76 to $4.91 …

• The FDA hasn't been told yet: three (3) brain tumor patients died after Ziopharm gene therapy injection during its P1 trial;
• "Ziopharm was trying to raise as much as $50 M in a stock offering this week, but the deal was abandoned last night [...] concerns about the patient death and the way ZIOP disclosed it scuttled it. In Ziopharm’s case, a patient diagnosed with a recurrent brain tumor was treated with Ad-RTS-hIL-12, a gene therapy. Ad-RTS-hIL-12 utilizes a virus modified to express interleukin-12 (IL-12), a protein that stimulates T-cells to attack cancer cells. The modified virus is injected directly into a patient’s tumor. Once injected, the gene and the manufacturing of IL-12 are controlled with an oral drug, veledimex.
•  Ziopharm disclosed this death, which was part of a clinical trial, at a closed-door scientific workshop in Washington, DC yesterday. Results were also included in an 8-K form filed with the U.S. SEC.
• At this point, ZIOP has … NOT been able to confirm if the injection of Ad-RTS-hIL-12 into the patient’s brain was the cause of the intracranial hemorrhage.
• ZIOP says it is following protocol in collecting and analyzing information in order to properly report it to the FDA.”
• At the same time as the reporting of the first death, ZIOP disclosed that two other patients had died who were enrolled in the clinical trial.
• One patient died 3.9 months after treatment for a reason that was undisclosed, but apparently unrelated to Ad-RTS-hIL-12;
• The other died about 6.7 months after a 20mg dose, but Ziopharm indicates those deaths are not related to the clinical trial.

Ziopharm picked up its gene therapy technology from Intrexon (XON). It initially investigated Ad-RTS-HIL-12 in skin cancer patients, but didn’t find it to be an effective treatment, particularly in comparison to competitive therapeutic strategies, and has since shifted to breast cancer and brain cancer.

Review my fear gauge or the CBOE Volatility Index (VIX):

• Friday closed near 13;
• Thursday closed below 13;
• Wednesday traded near 13.4;
• Tuesday closed near 13.6;
• Monday traded near 13.5;
• Last, Friday traded below 13.3;

Today’s Bottom Line:

Oversold and overbought while still undervalued – WHY is the stem, cell, gene and regenerative therapy sector so restless and fractious?

• Their dependence on and associated fallibility of some managements …

My pre-open indications – 3 hits and 0 miss:

• bluebird bio (BLUE) closed UP +$0.28 – hit;
• Brainstorm (BCLI) closed DOWN - 0.57 – hit;
• Cellectis SA (CLLS) closed UP +$0.35 – hit;

Largest decliners:

• Brainstorm (BCLI) -15.01% after Thursday’s +32.84% or +$0.88;
• AxoGen (AXGN) -9.31%;
• Histogenics (HSGX) -7%;
• International Stem Cell (ISCO) -6.38% after Thursday’s -4.45% after Wednesday’s ’s +10%;
• BioLife Solutions (BLFS) -6.22% after Thursday’s -6.22% after Wednesday’s +8.70%;

Advancers:

• Regenxbio (RGNX) +6.18%;
• Aduro (ADRO) +5.35%;
• Adverum (ADVM) +4.93%;
• Applied Genetic Technologies (AGTC) +3.50%;
• Cytori (CYTX) +3.32%

Flat:                                                                                                                                      

• ReNeuron (RENE.L) at $2.875

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.