Lower open expected; RegMed Investors’ (RMi) pre-open; I ain’t lyin’, risk is a four letter swear word

December 6, 2016 5:35am

… For the last two weeks, investors have been looking for the sector to provide us with some sustainability. The sector continually pushes against resistance so be prepared for a pullback!

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

Who is in today’s headlights – three (3) equities, are they a BUY or a SELL – subscribers know!

I write in every line that investors need to avoid risks as if I were the first to be hurt if I am wrong!

The sector is being driven by a missing theme - until we get some optimism, the path of least resistance is lower.

BUY: BLCM and SGMO

SELL: BSTG

Indexes and ETFs: The IWM (+0.21%), XLV (+0.26%) and XBI (+0.16%) are UP; the IBB is NOT indicating

Dow futures are UP +0.03 % and NASDAQ futures are UP +0.13%

U.S. stock index futures pointed to a lower open on Tuesday morning after notching record highs in the previous session while shrugging off any market uncertainty caused by Italy's rejection of constitutional reform and Prime Minister Matteo Renzi's subsequent resignation.

Europe markets were flat as concerns over political instability ease and investors focus on the upcoming meeting of the European Central Bank.

Asian markets bounced back with the central bank in Australia holding its benchmark rate steady and as market uncertainty faded following the failed referendum in Italy.

Data docket: U.S. trade deficit, productivity and unit labor costs released at 8.30 ET with factory orders due at 10 ET.

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

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

·         Monday closed POSITIVE with 11 decliners, 28 advancers and 4 flats;

·         Friday closed POSITIVE with 15 decliners, 25 advancers and 3 flat;

·         Thursday closed NEGATIVE with 30 decliners, 13 advancers and 0 flat;

·         Wednesday closed NEGATIVE with 36 decliners, 7 advancers and 0 flat;

·         Last Tuesday closed NEGATIVE with 22 decliners, 16 advancers and 5 flats;

Remembering last night’s newsletter, “let’s keep this upside moving further … The fickle traders of the stem, cell, gene and regenerative therapy sector will turn on investors if companies can’t sustain their pricing – news needed and some of Popeye’s spinach.”

What is on the agenda for the rest of the month?

• At the moment, I am of the belief that … ANY … SELL trade is appropriate to build the “pot” for next years – BUYS - if there is an upside worth taking!

Headed to the World Stem Cell Summit in Palm Beach, Florida where I am speaking and participating on multiple investment panels.

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  Monday up +0.54% and is NOT indicating in Tuesday’s pre-market;

·         The SPDR S&P Biotech ETF (XBI) closed Monday up +2.27% and is UP +0.16% in Tuesday pre-market;

·         The Health Care Select Sector SPDR ETF (XLV) closed down -0.18% Monday and is UP +0.26% in Tuesday’s pre-market;

·         The iShares Russell 2000 (IWM) closed down -0.07% on Monday and is UP +0.21% in Tuesday’s pre-market.

Companies in my headlights:

Bellicum (BLCM) closed DOWN -$0.45 to $18.27. The aftermarket indication is positive +$0.38 after BLCM presented a review of results to date from its multicenter BP-004 clinical trial of BPX-501 in the pediatric setting, and provided an update on the regulatory pathway for product registration in Europe at an investor and analyst event held today. Clinical results on BPX-501 in children with hematological malignancies were also presented in a poster presentation at the American Society of Hematology (ASH) annual meeting. Eighty-five patients have been treated with BPX-501 at multiple U.S. and European sites and followed for at least 100 days (out of a total of 105 patients treated to date). Only one case of transplant-related mortality has been reported, unrelated to BPX-501 cells, and none out of 51 patients with nonmalignant disorders. Compared to T-depleted haplo-transplants alone, results have also shown significantly faster immune recoveries, as well as reduced viral infections and reactivation, and reductions in time to hospital discharge and re-hospitalizations due to infection. In five cases where uncontrolled acute GvHD was attributable to BPX-501 cells, rimiducid was administered and symptoms resolved. Results have been consistent across a range of diseases and disorders where allogeneic HSCT is recognized as curative, including hemoglobinopathies such as Beta Thalassemia Major (β0β0), Sickle Cell Disease and Diamond-Blackfan Anemia; Primary Immune Deficiencies such as Severe Combined Immune Deficiency (“Bubble boy” disease) and Wiskott-Aldrich syndrome; leukemias and lymphomas; and bone marrow failure syndromes. BLCM also reported that of six refractory AML patients treated under compassionate use because of their active disease and not included in the BP-004 summary data, 4 remain alive and in remission, including two who are now 11 and 20 months post-transplant – BUY;

Biostage (BSTG) closed UP +$0.044 to $0.944 after closing DOWN on Friday $0.90 (-$0.18) following Thursday’s $1.08 (+$0.28) after Wednesday’s $0.80 (+$0.01). The news that the Esophageal Implant was granted Orphan Drug Designation by the U.S. FDA drove the recent appreciation. Helpful in the short-term but, the financing “Sword of Damocles” still hangs over its head with the NASDAQ listing issue put off for the usual 180 days – a tough slog for shareholders as tax selling season.  “A Bridge Too Far” or is this pricing too unsustainable for the pre-clinical status of the company; so, what’s next, more day trading take-downs (?)  – Maintaining SELL;

Sangamo (SGMO) closed FLAT at $3.10 following Friday’s $3.10 (+$0.05). November hasn’t been a good month for SGMO, ranging from $3.65 (11/1), hitting a high at $4.55 (11/14); last week was particularly “spent’ as the share price bottomed at $3.05 (12/1) having started the week at $3.25. SGMO presented Hemophilia A Program Data at the 2016 American Society Of Hematology Meeting. This program illustrates SGMO's drug development capabilities beyond its ZFP platform. In 2014, BIIB and SGMO entered a global licensing agreement to develop genome-editing drugs to treat two major blood disorders: sickle cell disease and beta-thalassemia. Impressive hedge and institutional names are staying with SGMO, which I believe is due for a “lift” - Oversold – Maintaining BUY;

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.