RegMed Investors’ closing bell analysis, volatility puts a hex on upside pricing

September 15, 2016 5:21pm

… Volume is still low and vulnerable to be traded into as “our” universe is long on risk

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

Pre-open indication’s tally:  1 hit and 3 miss

Out and about: bluebird bio (BLUE) take-out rumors?? Capricor (CAPR) initiates an offering

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

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

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 sharply higher on Thursday as investors parsed through a series of economic data as the FED's next meeting draws near.

The NASDAQ closed UP +75.92 or +1.47% to 5,249.69 and the DOW closed UP +177.71or +0.99% to 18,212.48.

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 16/25 and 2 flats;
• The mid-day was positive with an A/DL of 26/13 and 4 flats;
• The closing bell continued positive with A/DL of 29/10 and 4 flats;

Henry’omics:

The stem, cell, gene and regenerative therapy (SCGT&RT) sector was negative at the opening bell, jumped positive at the mid-day with the sector closing positive.

I keep telling investors in the a.m. to check the indexes:  

• The iShares Russell 2000 (IWM) indicated +0.25% and rose +1.19% while the iShares Nasdaq Biotechnology (IBB) indicated +0.37% and rose +1.48%

Volume spikes that stand out:

• Northwest Bio (NWBO) – 7th day <5.35 M shares versus Wednesday’s 7.52 M shares compared with Tuesday’s 22.346 M shares versus 3 month average = 1.3 M>,
• ReNeuron (RENE.L) 3.515 M shares traded;
• bluebird bio (BLUE) 2.773 M shares traded;

I think the stem, cell, gene and regenerative therapy sector is in a … lose-lose situation!

If we have good news, it’s sold into after a day or two; if we have no news – speculation abounds again to be sold into and if there is bad news – it is sold into!

• The real issue risk is we are solidly stuck in a trading market with investors left on the sidelines! 

Review the last eleven (11) closing session’s status of 43 SCG&RT sector’s covered companies

• Tonight (Thursday) closed POSITIVE;
• Wednesday closed POSITIVE;
• Tuesday closed NEGATIVE;
• Monday closed POSITIVE;
• Friday closed NEGATIVE;
• Last Thursday closed POSITIVE;
• Wednesday closed POSITIVE ;
• Tuesday closed POSITIVE;
• The previous Monday was a holiday;
• Friday closed NEUTRAL;
• Last Thursday closed NEGATIVE;

Note that pattern is more alternating as positive closes (6) top negative closes (3) versus one (1) neutral and a holiday … while advance/decline lines, the basis of this review  are parsed through a filter of blinking sentiment and poor conviction but, not consistency.

I further think the sector is interpreting pricing as news straddles the sidelines and volatility should increase in the short-term.

Call me cantankerous, contrarian or even a curmudgeon but at the least I get it right and investors make money!

Pre-open indication’s tally:  1 hit and 3 miss:

• Asterias Biotherapeutics (NYSEMKT: AST) closed DOWN -$0.07 – miss;
• Biostage (BSTG) closed barely UP +$0.01 – miss – don’t be dependent on one day;
• Cellectis SA (CLLS) closed DOWN -$0.12 – hit;
• Stemline (STML) closed UP +$0.20 – miss;

Today’s Bottom Line:

Beware of short interest percentage of float based risks …!

Out and about:

bluebird bio (BLUE)  is UP +$7.09 or +11.27% to $69.98 …

• As rumors say it is a possible take-out candidate as 3.229 shares traded;
• After Citigroup said the cell therapy company could be a new acquisition target for Japanese drug maker Takeda Pharmaceutical(TKPYY), the Fly reports;
• Citi noted that Synergy Pharma (SGYP) is the likeliest target for a takeover, but Cambridge, MA-based Bluebird's oncology candidates also make it an attractive buy for Takeda;
• Takeda has set aside $10 to $15 B to make deals with U.S. looking for acquisitions in the oncological, gastrointestinal and central nervous system research industries. Takeda could stretch spending to $20 billion for multiple deals or one large one, according to the FT;
• BLUE has 12 buys, 3 holds with average price target of  $85.00;
• Goldman Sachs also put the company on its "Americas Conviction List."
• Short interest is 39.13% of float or 8.52 M shares versus 8.33 M shares in the prior month

Capricor Therapeutics (CAPR) closed DOWN -$0.07 to $3.83 – another “I-Told-You-So”

• CAPR intends to offer shares of its common stock in an underwritten public offering.
• The offering is subject to market and other conditions.
• Roth Capital Partners and National Securities Corporation, a wholly-owned subsidiary of National Holdings, Inc., are acting as joint book-running managers for the offering;

Review the book runner names – TALK ABOUT DESPERATE!!

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

• Thursday traded near 15.79 – 13% lower;
• Wednesday traded 18.14 – 1.18% lower
• Tuesday traded at 18.74 – 24% higher;
• Monday traded 15.7 – 13% lower;
• Friday traded 16.4 – 30% higher;
• Last Thursday traded 12.2;

Decliners:

• Northwest Bio (NWBO) -18.81% after Wednesday’s +8.23% after Tuesday’s +42.61% after Monday’s +17.56% or +$0.0597;
• Capricor (CAPR)-1.79% after Wednesday’s +4.86%;
• StemCells (STEM) -2.72% after Wednesday’s +12.21%;
• Applied Genetic Technologies (AGTC) -2.49%;
• Cesca Therapeutics (KOOL) -2.15%

Advancers:

• Caladrius (CLBS) 15.44% after Wednesday’s -2.54%;
• bluebird bio (BLUE) +11.37% after Wednesday’s 7.91%;
• BioTime (NYSEMKT: BTX) +7.12%;
• Mesoblast (MESO) +4.44%;
• Histogenics (HSGX) -1.21%

Flat:                                                            

• International Stem Cell (ISCO) at 1.85;
• uniQure (QURE) at $7.90;
• Vericel (VCEL ) at $2.39;
• ReNeuron (RENE.L) at $2.625;

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.