RegMed Investors’ closing bell analysis, how some company’s make-up their own rules until they get caught-up in the regulatory maze!

October 7, 2016 5:23pm

… Biostage (BSTG) – Thursday’s pre-open - SELL - fit Friday’s expectation as BSTG’s press release, issued after the market close <on Thursday> warned of filing setbacks for the IND until Q2/17, not Q4/16. As well as animal studies needing to be extended and/or re-done – another I told you so!

The real issue will be financing to an IND and then a clinical trial initiation in late FY17 - if then – BIG bucks needed with resulting pricing destruction, warrant coverage and dilution especially if they're BROKE mid Q1/17?

Pre-open indication’s tally:  2 hit (CLLS and VSTM) and 2 miss (AGTC and AXGN)

Out and about: The story unfolds as Biostage’s (BSTG) share pricing droops -$0.14 or -12.55% to $0.96 on HUGE volume – 363 K shares traded <3 month average = 116.5 K shares>

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 Monday's sector activity?   Subscribe or lose!

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. equities closed lower in choppy trade on Friday with a weaker-than-expected employment report and kept an eye on falling oil prices.

The NASDAQ closed DOWN -14.45 or -0.27% to 5,292.40 and the DOW closed DOWN -28.01 or -0.15% to 18,240.49.

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 15/25 and 3 flats;
• The mid-day stayed negative with an A/DL of 14/29 and 0 flat;
• The closing bell  was negative with A/DL of 15/28 and 0 flat;

Out and about:

Biostage (BSTG) closed DOWN -$0.16 or -14.55% to $0.94 …

Thursday I stated in the pre-open … “BSTG is supported unfortunately by day trading and any upside is usually sold into - maybe not today but it’s usually in the cards.

• “A lot of questions abound; I might have an inner ear infection but, I can still hear.
• The silence is deafening - Have the warrants from the $1.76 offering been registered? 
• The MAYO peer reviewed article is where? 
• Will there be a big increase in the quarterly loss, especially as a fund raising is needed as BSTG spends itself into a Q1/17 zero balance?
• Still NO IND or any trials on-going; a number of questions need to be answered – SELL”;

Then a press release appeared and an 8-K filed that stated … “announcing a regulatory update following its planned pre-Investigational New Drug, or IND, meeting with the U.S. FDA.

• The regulatory update included that … BSTG … now expects to file its IND application with the FDA by the end of Q2/17 based on its election to extend the duration of its ongoing GLP animal studies following the feedback provided by the FDA.

The wording … “election” shouldn’t it be … rejection of the initial studies and findings as complete with a protocol that … evolved as it … WENT ALONG versus was written to be followed and adhered to ...

• A Q4/16 IND filing is well OFF the table but, what of the needed financing as BSTG has enough cash to last until mid Q1/17?

I felt something was forthcoming as the MAYO peer reviewed article was NOT forthcoming as follow-up and through has been a … weak point for BSTG.

This isn’t a recent event but, one that started as far back as the spin-off from Harvard BIO (HBIO) – more to come on that matter …

Henry’omics:

The stem, cell, gene and regenerative therapy (SCGT&RT) sector opened negative, stayed negative at the mid-day and closed negative.

• As I stated this a.m.: “I have been writing about slowing share pricing growth for the past year. Many CEOs consider me a gloom and doom “pundit”, there was a lack of belief in my thesis. “

“Yet, over the past few year, months, week and day, MANY members of the corporate “elite” have agreed with me about the peripatetic or nomadic nature of fluctuating pricing growth – the emails and calls make the point.”

• It’s the usual, that’s good, bad or ugly but, reality is material.”

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

• The iShares Russell 2000 (IWM) indicated DOWN -0.23%, a positive in the pre-open and was DOWN -0.86% at the close while the iShares Nasdaq Biotechnology (IBB) indicate a positive +0.08% and closed DOWN -0.02% at the close.

U.S. stocks were pressured in choppy trade Friday following a report on U.S. employment that came in below expectations, but was viewed as strong enough for the Fed to consider raising interest rates by the end of the year.

• The U.S. economy added 156,000 jobs last months, while the unemployment rate ticked up to 5% as more workers entered the labor market. Hourly wages grew 0.2% as employers struggled to attract workers in a tight labor market.

The relatively subdued reaction to the jobs report is due to a December rate increase being largely priced in …

Look close at today and the past days – think crossword or puzzle – I see patterns evolving as technicals and fundamentals matter … yet they seem over-ridden as:

The downside trend reflects a pricing trend range of

• Friday’s -0.06%  to -14.55% in 28 equities;
• Thursday’s -0.11% to -9.48% in 9 equities;
• Wednesday’s -0.68% to -3.71% in 4 equities;
• Tuesday’s-0.34% to -15.92% on Tuesday of 12 equities;
• Monday’s  -0.25% to -6.84% of 26 equities; 
• Friday’s -0.21% to -$2.94% of 12 equities ;

The upside shows a pricing trend range of

• Friday’s +0.11% to 12.63% in 15 equities;
• Thursday’s  +0.26% to 7.19% in 32 equities;
• Wednesday’s +0.43% to +12.22% in 35 equities;
• Tuesday’s of +0.76% to +2.82% of 30 advancing equities following …
• Monday’s +0.21% to +5% in 14 equities following
• Friday’s +0.04% to +6.27% in 29 equities ;

Abnormal volume …

Highs and lows

• AxoGen (AXGN +$0.91) with 1.236 M shares traded <3 month average = 196.5 K shares>;
• Juno Therapeutics (JUNO +$0.23) with 985.5 K shares traded <3 moth average = 2.259 M shares>;
• Stemline (STML +$0.23) with 521.7 K shares traded <3 month average =145.1 M shares>;
• Biostage (BSTG -$0.16) with 375.7 K shares traded <3 month average =116.5 K shares>;
• Opexa (OPXA +$0.38) with 424.4 K shares traded <3 month average =58.7 K shares>;
• Capricor (CAPR -$0.02) with 69.9 K shares traded <3 month average =29.6 K shares> after Thursday’s -$0.08 with 51.3 K shares traded following Wednesday’s +0.25 with 98.9 K shares traded after Tuesday’s -$0.14 and 46.1 K shares traded <3 month average =28.4 K shares>;
• Mesoblast (MESO –$0.10) with 3562 shares traded after Thursday’s  +$0.35 52.1 K shares traded <3 month = 22,7 K shares>

Pre-market indication review; 2 hit and 2 miss:

• Applied Genetic Technologies (AGTC) closed DOWN -$0.62 – miss;
• AxoGen (AXGN) closed UP +$0.91 on offering news – miss and a surprise;
• Cellectis SA (CLLS) closed UP +$0.07 – hit;
• Verastem (VSTM) closed DOWN -$0.02 – hit;

Percentage decliners:

• Biostage (BSTG) -14.55%;
• International Stem Cell  (ISCO) -9.84% after Thursday’s FLAT at $1.83;
• ReNeuron (RENE.L) -9.52% after Thursday’s at 2.625;
• Adverum (ADVM) -6.70%;
• Applied Genetic Technologies (AGTC) -6.16%

Percentage advancers:

• Stemline (STML) +12.62%;
• AxoGen (AXGN) +11.04%;
• Opexa (OPXA) +10.74%;
• Regenxbio (RGNX) +5.40%;
• Intrexon (XON) +4.07%;

Flat: 0                                                                                                   

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

• Friday traded near 13.4;
• Thursday traded near 12.84;
• Wednesday traded near 13.06;
• Tuesday closed near 13.63;
• Monday traded near 13.57;
• Friday traded near 13.3, -5.2% lower;

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.