October 10, 2016 7:44am

 

… As defined as a legitimate object of attack – a dramatic drop in an already depreciated share pricing?

It’s not so hard to fathom why a sector fluctuates so frequently …

… Or suffers the ravages of paying for management’s grandiosity and missteps – investors, need to Activist Up!

 

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

 

Where is “our” universe going today?  If you are not a subscriber, you won’t know the morning’s indications and who is in the headlights.

 

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

 

 

Ben Graham used to talk about the stock market being a cross between a voting machine and a weighing machine. On any given day, economic actors vote by buying and selling shares, and in the short run, the trades happen at the levels dictated by whether the buyers or sellers are more aggressive. That is the voting machine of the market. In the short run, values can be pretty senseless if one side or the other decides to be aggressive in their buying or selling.

 

Once we get through quarterly financial results <notice I didn’t say – earnings> season, it will be easier for investors to take a short -term view, but my fear is that the Q3 numbers aren't going to look much better than the Q2 numbers.

 

 

Indexes and ETFs: The IWM (+0.33%) and IBB (+1.04%) are UP while the XBI and XLV are NOT indicating

BUY: AGTC, CLLS and KITE

SELL: AXGN, BSTG, OSIR and VSTM

Dow futures are UP +0.34% and NASDAQ futures are UP +0.36%

 

U.S. stock index futures pointed to a higher open on Monday, as investors digest the latest from Sunday's second U.S. presidential debate, while keeping an eye on the oil price.

European markets tried for gains as investors kept an eye on the slight recovery in oil prices, yet remained cautious following a weak U.S. jobs report on Friday.

Asian stock markets were mixed, with falling crude oil prices weighing on Australian oil majors' shares.

 

Data docket: Columbus Day means it's set to be a quiet one on the data front, but investors are expected to continue digesting Friday's nonfarm payrolls report,

 

 

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

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

  • Friday closed NEGATIVE with 28 decliners, 15 advancers and 0 flat;
  • Thursday closed NEGATIVE with 32 decliners, 9 advancers and 2 flats;
  • Wednesday closed POSITIVE with 4 decliners, 35 advancers and 4 flats;
  • Tuesday closed NEGATIVE with 30 decliners, 12 advancers and 1 flat;
  • Last Monday closed NEGATIVE with 26 decliners, 14 advancers and 3 flats;

 

 

Remembering Friday’s closing post, “It’s the usual, that’s good, bad or … how ugly can it get but, reality is “material” and should be reported

  • Why … do we as investors TOLERATE those CEOs who destroy value  and then have the inability to communicate the true issues of the decline without being forthwith … IF … there was a story to tell?

Hasn’t the sector gotten hit hard enough?

  • Referencing the title, what is fair game … as defined as a legitimate object of attack?

Aggrieved shareholders should stand-up because some companies violate transparency, governance and fiduciary responsibilities as to the breakdown of releasing material information …

  • Investors are also held captive by management’s avoidance of shareholder approvals …

The real question is what NEW “promises” will be fulfilled … IF they can NOT get beyond past share pricing depreciated?

 

 

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 Friday down -0.02% and is UP +1.04% in Monday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Friday down -0.79% and is NOT indicating in Monday pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed down -0.07% Friday and is NOT indicating in Monday’s pre-market;
  • The iShares Russell 2000 (IWM) closed down -0.80% on Friday and is UP +0.33% in Monday’s pre-market.

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed DOWN -$0.62 to $9.45 following Thursday’s $10.07 ($0.11) after Wednesday’s $10.18, Tuesday’s $9.98 and last Monday’s $10.04. Cash of $172.7 M, revenue, no debt, and a named partner – Biogen (BIIB), multiple trials as well as pre-clinical programs and research in a hot universe, a book value per share of $9.87 and NO need for capital markets access . A float of 9.88 M shares with 18.05 M outstanding, with 52.30% held by institutions and a short percentage of float of 2.16%. For Q2/16, AGTC recorded net income of $2.7 M, compared to a net loss of $7.96 M in Q2/15. At June’16, the cash, cash equivalents and investments amounted to $172.7 M.  AGTC believes that these cash, cash equivalents and investments will be sufficient to enable it to advance planned preclinical studies and clinical trials for its lead product candidates for at least the next two years – Maintaining BUY;

AxoGen (AXGN) closed UP +$0.91 to $9.15 after Thursday’s $8.24 (-$0.21). AXGN executed an offering of 2.333 M shares at $7.50 to raise $17.5 M. The response was surprising – the dramatic upswing in pricing! However, new found gains pay down debt and could be sold into … in this market. A BIG difference 9.15 price and $7.50, I’d take the difference and run – Maintaining SELL;

Biostage (BSTG) closed DOWN -$0.16 to $0.94. The FDA spoke re their filing of an IND – not eligible until further studies are done and completed to their liking.  Is it a failure to understand the needed aspects of the filing or was it the protocol that changed by the day, week and month? Now, it is POTENTIALLY due to MAYBE be issued by Q2/17. Next, question – who will be paying the bills beyond Q1/17 when they run-out of cash? The answer must be another financing but, at what price, discount and dilution with a shelf filed for $20 M? Also, when are the warrants from the recent financing being registered? This decline “ain’t “over – SELL;

Cellectis SA (CLLS) closed UP +$0.07 to $22.72 following Thursday’s $22.65(-$0.45) after Wednesday’s $23.10, Tuesday’s $23.00 and last Monday’s $23.24. 9/1 was priced at $26.52 followed by 8/1’s $27.10 and 7/1’s $27.25. News has been very weak as of the last update other than a patent and winning EuropaBio’s 2016 Most Innovative European Biotech SME Award for the healthcare category. A  P1 study of UCART19 in pediatric acute B lymphoblastic leukemia (B-ALL) was initiated at the University College of London (UCL), with the first dose administered to a patient in 6/16. This UCART19 clinical trial was sponsored by Servier in close collaboration with Pfizer (PFE). Still oversold – Maintaining BUY;

Kite Pharma (KITE) closed UP +$0.06 to $55.72. KITE updated results from the P1 portion of its ZUMA-1 clinical trial of its KTE-C19 in patients with chemorefractory, aggressive non-Hodgkin lymphoma, at the ESMO 2016 (KITE) : "These data complement recently reported interim topline results from ZUMA-1 P2 and support the potential for KTE-C19 to be a breakthrough therapy for chemorefractory, aggressive NHL ... with the complete remission rate of 43%in the P1 portion of the study continues through month 12 and look forward to reporting additional data on the durability of response to KTE-C19 from the P2 portion of ZUMA-1 in 2017." – BUY;

Osiris (OSIR) closed UP +$0.03 to $4.75. On October 6, 2016, OSIR received a letter from NASDAQ's Office of General Counsel stating that a Hearings Panel had granted its request for a stay of the delisting of the stock until such time as a decision on the merits following a hearing, which had been scheduled for 11/10/16. Still NO K’s or Q’s – time is their enemy as to the share’s pricing, what more is to come out that has taken SO MUCH time to review – also the SEC is investigating – SELL;

Verastem (VSTM) closed DOWN -$0.02 to $1.47 UP $1.49 (+$0.10) after Wednesday’s $1.39 ($0.06), Tuesday’s $1.33 and last Monday’s $1.32. I used to depend on the cash per share number but, even that is down to $2.51 and quarterly financial results will show increases in spending and NO platform news.  Five (5) I-Bank analysts have downgraded VSTM in September and I am NOT deterred by a “flash” price target by Wainright, all they’re pitching is a financing with warrant coverage pricing discounts and dilution – Maintaining 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.

Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.