RegMed Investors’ closing bell analysis, some write about what happened

August 3, 2016 4:56pm

… I write about the present and the future

As I had stated this am, traders were “re-stocking”

… Investors need a tactical understanding of what comprises pricing of sector equities

I focus on a gradation set of possibilities

My pre-open indications – 3 hit (AGTC, PSTI and XON) and 1 miss (CLLS)

I answer one question; in which company should investors put, keep and commit their money!

Do you care what happened today, you should … because it has implications to Thursday'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 slightly higher on Wednesday, amid a sharp rebound in oil prices, while the Dow snapped a seven-day slide.

The NASDAQ closed UP +22.00 or +0.43% to 5,159.74 and the DOW closed UP +41.23 or +0.23% to 18,355.00.

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 negative with an A/DL of 15/21 and 7 flats;
• 10:30 am, the sector turned positive with an A/DL of 22/18 and 3 flats;
• 11:30 am, the sector stayed positive with an A/DL of 27/12 and 4 flats;
• The mid-day continued positive with an A/DL of 30/11 and 2 flats;
• The closing bell was negative with A/DL of 33/7 and 3 flats;

Henry’omics:

The stem, cell, gene and regenerative therapy (SCGT&RT) sector opened negative, bumped positive at the 10:30 am time, staying positive at the mid-day with the sector closing positive.

• The iShares Nasdaq Biotechnology NASDAQ GM (IBB) was UP +1.10% and the iShares Russell 2000 NYSE Arca (IWM) was also UP +0.81%.

Review the volume of the sector – it’s extremely LOW with volatility tremendously HIGH.

• The pricing compass is eschewed …

August can be a tough month for stocks with a market that seems lethargic by the day.

• Enjoy the peaks as they’re timed to expire but, incremental increases are being built-in. 

My issue is we’re getting closer to a large volume of financial results/earnings identifying spending and runways … the same old story!

• Risk-averse investors should LIGHTEN their LOADS in some equities pre earnings releases while keeping an eye on capital market ACCESS which seems to dissipate by the month …

Call me cantankerous, contrarian or even a curmudgeon but at last I get it right …

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

• Wednesday traded near 12.8;
• Tuesday traded near 13.5;
• Monday traded 12,63;
• Friday traded 12.4;
• Thursday traded near 12.6;
• Last Wednesday traded below 13;

Today’s Bottom Line:

Brush on <appreciation>, wait a day to brush off; more than a “Karate Kid” movie theme

My pre-open indications – 3 hit and 1 miss:

• Applied Genetic Technologies (AGTC) closed UP +$0.57 – hit;
• Cellectis SA (CLLS) closed UP +$0.30 – miss;
• Intrexon (XON) closed UP +$2.16 – hit;
• Pluristem (PSTI) closed DOWN -$0.01 – hit;

Out and about:

Investors Yank $255 M from Biotech ETF, once again, biotech is too hot to handle.

At least that’s the signal sent by whoever yanked $255 M from the SPDR S&P Biotech ETF at the end of last week, the biggest outflow in 16 months, according to data compiled by Bloomberg.

The withdrawal came with a gauge of S&P 500 drug makers sitting close to the highest level of 2016. Its 19% gain over the past five (5) weeks outpaced all the benchmark index’s 67 industry groups.

• Biotech companies have given investors reason to buy this earnings season, as reported results have spurred analysts to double their second-quarter growth forecasts for the industry.
• Still, it’s been a long road back for a group that dropped 35% to start 2016, and some restless investors are seizing the opportunity to collect gains.

The biotech ETF rose 1.2% at 12:43 p.m. in New York. It’s still down 10% on the year, while the S&P 500 has advanced 5.5%.

The withdrawal from the biotech tracker spurred an unusual phenomenon in the ETF: even as it rallied 1.2% on Friday, its market capitalization decreased by about $220 M.

Inflows and gains in its underlying stocks sent the security’s value to $2.4 billion last week, the highest since November.

• Normally, rallies in ETFs cause individual investors to plow more money into them, but biotechnology and oil have bucked that tendency, according to Balchunas.

The SPDR S&P Biotech fund saw a single-day inflow of $249 M on Jan. 13 even as it was embroiled in a skid that wiped out more than a third of its value by mid-February.

The group has also gotten expensive, relative to others in the S&P 500. The biotech group trades at 5.6 time’s sales, fourth highest out of 67 industries and twice the index’s average. <J Ciolli, Bloomberg>

UniQure (QURE) is DOWN -$0.04 to $7.96 < QURE shares have fallen 51% YTD> and Spark Therapeutics (ONCE) is UP +$2.30 to $59.90 …

• Shire (SHPGY) acquired Baxalta (BXLT) earlier this year; during yesterday’s quarterly finances conference call, Shire indicated it was killing its hemophilia B program, BAX 335.
• Shire isn’t abandoning hemophilia and gene therapy, it has decided instead to focus on a next-generation preclinical program for hemophilia B. It also will direct attention to its hemophilia a drug, BAX 888, that SHPGY expects will start trials by the end of this year or early in 2017.
• Shire dropping the program is positive for UniQure (QURE), since competition in hemophilia B has formed a major overhang on the stock.
• Spark Therapeutics’ (ONCE) has generated highly impressive clinical data to date, I as others believe that it is unlikely that one single gene therapy product will be used to treat all hemophilia B due to the product-specific limitations (e.g. neutralizing antibodies).

Applied Genetic Technologies (AGTC) closed UP +$0.57 to $15.51 …

AGTC and the Medical College of Wisconsin Announce Publication of Natural History Study Data Evaluating Residual Photoreceptor Cone Status in Patients with CNGB3-Associated Achromatopsia

• “Patients living with achromatopsia today have no effective treatment options, but a growing body of evidence suggests that emerging gene therapies may have significant potential,” said Joseph Carroll, PhD, Richard Schultz, MD/Ruth Works Professor in Ophthalmology, professor of ophthalmology & visual sciences, biophysics, and cell biology, neurobiology and anatomy, and co-director of the Advanced Ocular Imaging Program, MCW.
• “Current data show significant variation in the degree of residual cone photoreceptor structure among patients with CNGB3-associated ACHM. As such, imaging tools that can accurately quantify the remaining cone population may aid in selecting patients who are most likely to benefit from gene therapy clinical trials and expedite the development of new therapies.”
• AGTC's clinical program for achromatopsia caused by mutations in the CNGB3 gene continues enrollment, and AGTC is on track to release interim data in 2016.
• Results also show that these cones may occur contiguously or be sparsely arranged within the fovea. Cones were less evenly spaced and generally sparser in patients in the ACHM group compared with six normal subjects. The data also show that the ACHM patients had significantly thinner outer nuclear layers (ONL) compared with previously reported normal values (p <0.0001).

The authors noted that cellular resolution imaging will become an important tool for patient selection, monitoring and evaluation in future clinical trials.

Largest decliners:

• International Stem Cell (ISCO) -3.54%;
• Brainstorm (BCLI) -1.61%;
• Capricor (CAPR) -1.07% after Tuesday’s+3.07%; ;
• uniQure (QURE) -0.50% after Tuesday’s +8.55%;
• Neuralstem (CUR) -0.05%

Advancers:

• Adverum (ADVM) +22.32%;
• Cesca Therapeutics (KOOL) +21.80%;
• Intrexon (XON) +8.323%;
• Northwest Bio (NWBO) +6.64%;
• VistaGen (VTGN) +7.85%

Flat:                                                                                                                                      

• Athersys (ATHX) at $2.12;
• BioLife Solutions (BLFS) at $1.81;
• ReNeuron (RENE.L) at $3.00;

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.