September 14, 2016 7:12am

… The decline we saw on Tuesday’s was chilling while Monday’s incline was warming as compared to Friday’s decline being nerve-wracking and Thursday’s rebound reassuring …

What signal should we be looking for next?

 

… My expectation is to see some small upswings to incrementally take pricing higher but, slowly.

 

Indexes and ETFs: The IBB, XBI and XLV are NOT indicating and the IWM (+0.38%) is UP

Companies in my headlights:  BUY – AGTC and AST;  SELL - CAPR, CLLS and ONCE; HOLD - BSTG

 

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

 

Where is “our” universe going today?  If you don’t know, subscribe and find out! 

 

I say what others won't, so you can do what others can't!

 

 

How does the old saying go? It's easier to ask for forgiveness than ask for permission. Maybe it's the other way around. Whatever the case, to the extent I need to, I'm NOT going to ask for forgiveness for what I say – someone NEEDS to speak up and out!

 

 

The Dow futures are UP +0.07% and NASDAQ futures are UP +0.20%

 

U.S. stock index futures pointed to a slightly higher open on Wednesday, as investors remained cautious over choppiness in the oil market, while looking ahead to the Federal Reserve meeting next week           

European stocks were higher in morning trade, shrugging off market jitters over central bank uncertainty and a renewed drop in oil prices.

Asia markets mostly fell, tracking U.S. losses, as uncertainty over central banks' next moves spurred jitters and saw a spike in volatility.

 

Data docket: U.S. import and export price indexes are expected to keep investors on edge, as its latest data is released at 8.30 a.m. ET. Mortgage Applications are also due out at 7.00 a.m. ET.

 

 

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

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

  • Tuesday closed NEGATIVE with 34 decliners, 5 advancers and 4 flats;
  • Monday closed POSITIVE with 11 decliners, 30 advancers and 2 flats;
  • Friday closed NEGATIVE with 37 decliners, 5 advancers and 1 flat;
  • Thursday closed POSITIVE with 4 decliners, 35 advancers and 4 flats;
  • Last Wednesday closed POSITIVE with 15 decliners, 27 advancers and 1 flat

 

 

Remembering Tuesday’s closing post, “It’s … b a c k … Volatility, low volume and rootless sentiment. The real question is what’s next?  There are no easy answers … but, I know a few!

 

Review depressed pricing for those companies that have solid partners, substantial cash holdings  beyond 2017 and focused on immuno-oncloogy and gene therapy.

  • Stem and cell therapy companies are still questionable.
  • The worst “candidates” to invest are those who need to raise capital by or before Q1/17 – it’s getting closer day by week by month for road shows!  

 

The CBOE Volatility Index VIX, +17.74% often used as a measure of fear in the market, rose 18% on Tuesday at 17.85, implying that “our” universe’s traders will dial-up bets that SOME stocks could regain ground and altitude!

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

  • Tuesday traded at 17.74 – 18% higher – the sector tanked;
  • Monday traded 15.7 – 13% lower the sector appreciated;
  • Friday traded 16.4 – 30% higher – the sector tanked;
  • Thursday traded 12.2 – the sector appreciated;
  • Wednesday traded 11.94 – the sector appreciated;

 

Talk about being right on target …” Keep in mind the recent sector action and do NOT make any assumptions of what the market will do in relation to “our” universe!”

  • Markets have been choppy in recent sessions, with speculation over when the U.S. central bank could next raise interest rates keeping investors on edge.

Yet, when it comes to “our” universe – the stem, cell, gene and regenerative therapy sector; I rather be a flat than a splat.

  • What strikes a chord is there is an apptetite for trading action EVERYDAY …

 

 

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 Tuesday down -1.56% and is NPT indicating in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Tuesday down -1.61% and is … in Wednesday’s  pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed down Tuesday -1.38% and is NOT indicating  in Wednesday’s pre-market;
  • The iShares Russell 2000 (IWM) closed down -1.92% on Tuesday and is UP +0.38% in Wednesday’s pre-market.

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed DOWN -$4.19 to $9.00. The aftermarket indication is positive +$0.18 or +2% - think pick-up-sticks after the drop. I would be remiss if I didn’t state – there was an indication of issues as they usually report early in the grouping of quarterly reporting companies. The issue is management has LOST credibility with the retail sector IF they ever had it. Fidelity had it right – early in its exit? AGTC reported $172.7 M in cash with 18.04 M shares outstanding and a float of 9.87 M shares – approximately $9.57 in cash per share. Thus changing my tune – BUY to SELL to BUY again;

Asterias Biotheraapeutics (NYSEMKT: AST) closed DOWN-$0.25 to $3.68.  An experimental stem cell therapy developed by Asterias Biotherapeutics restored some movement to patients paralyzed by recent spinal cord injuries, according to interim data from a small study being presented on Wednesday. One of the five patients in the trial regained use of both arms and hands, and is now able to feed himself, send texts on a phone and operate a wheelchair. Three months after the cells were implanted, the study met its efficacy goal of two patients regaining return of two motor levels of functioning on at least one side of their body. All five people in the study have experienced some upper extremity improvement so far.Each motor level function measurement correlates with a reduction in the assistance and care a paralyzed patient might require. A two-level improvement can mean a patient is able to live more independently.The cells are injected by a neurosurgeon directly into the site of the spinal cord damage within two to four weeks of injury, before scar tissue forms. The hope is that they can help restore signals from the brain through the spinal cord to the outer extremities. AST had not expected to reach the efficacy goal before six to 12 months after implantation of the 10 million embryonic stem cells dubbed AST-OPC1 – News a is usually an aphrodiasiatic for share pricing – BUY;

Biostage (BSTG) closed DOWN -$0.11 to $0.98. Tough day for BSTG as with many other sector “participants” especially after presenting at the Rodman Renshaw’s Wainright conference who managed the last raise at $1.76 – where is the pricing support? The warrants from that “raise” are now coming due to be registered; historically, a share offering <burdened by warrants> will be sold and the warrants clipped with a short initiated. Can BSTG recover – HOLD;

Capricor (CAPR) closed DOWN -$0.19 to $3.73 having been UP Monday to $3.92. CAPR reported a Q2/16 loss of $4.7 M or -$0.23 per share. CAPR has two ongoing clinical trials of CAP-1002 (allogeneic cardiosphere-derived cells, or CDCs): the HOPE trial in boys with Duchenne heart disease and the ALLSTAR trial in adults with cardiac dysfunction following a large heart attack. They have milestones - top-line six-month data from HOPE due in Q1/17 and delivering six-month ALLSTAR data to Janssen at the same time. BUT, what if the data is inconclusive and/or Jansen<J&J> decide to negate or decline its option? TOO many IFs for me as well as CAPR, who I also believe DESPERATELY NEEDS cash i.e. access to capital markets for a raise that will effect a BIG discount in its pricing and increase dilution.  CAPR had $11.7 M in cash post Q2 reporting and spending $5.7 to $6 M a quarter.  MY read, a 50/50 bet with NO indicators – I wouldn’t be TOO deep into CAPR – Maintaining SELL;

Cellectis SA (CLLS) closed DOWN -$1.19 to $24.76. It’s a crap shoot, looks sketchy to me which means it could go either way.  The aftermarket indication is negative -$0.20 – SELL;

Spark therapeutics (ONCE) closed DOWN -$0.87 to $58.94. Gene therapy has taken a hit with AGTC creating question about them and potentially others – SELL;

                                                     

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.