May 9, 2017 5:53pm
Come out; come out, where ever you are
… I know what a company is supposed to look like, be like, and smell like to succeed!
Investors need to consider time horizons; I say forget the long-term
… As shares are “disconnected from fundamentals
Pre-open indications: 4 hits and 1 miss,
Financial results breakdowns (below) and endings: Adverum (ADVM +$0.00), Athersys (ATHX -$0.04), Spark Therapeutics (ONCE +$2.20), Pluristem (PSTI -$0.03), uniQure (QURE -$0.01)
The truth is harsh, but reality is what it is! Instead of trying to guess at what sector will do, I continue to do what I always do, and that means watching what the patterns and markets are telling me.
I answer one question, in which company should investors commit and keep their money
RMi’s daily and continual “reads” of the goings-on of the SCG&RT sector can improve investor’s and trader’s odds - just because a stock underperforms the market doesn’t mean you have to lose money.
Henry’omics:
From the pre-open’s investor’s newsletter “There is no easy money … the story, the sector will continue to struggle as Q1 reporting continues to grind investors to the bone.”
- Reiterating, “Consensus laggards are “feeling the pain” as Q1 metrics are worse than expected … I believe, post reporting - some bounces are anticipated.”
On Tuesday, the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded below 10, near levels not seen since December 2006.
- I've been very surprised that the Vix is this low because, “our” universe has been - I believe double or triple that number!
The Vix has fallen more than 10% in the past month and dropped 25% on April 24.
- That best ‘gauges of fear’ are volatility as I measure advance/decline lines and negative/positive close and volume for us … investors!
I still believe the issues surrounding the declines relate to Q1 financial results – spending is up with minimal results over Q4/16.
The pain versus the gain will decrease as financial results get completed and the sector bounces back …
Daily analytics:
U.S. equities closed UP on Monday … with the DOW closing down -0.17% as the NASDAQ also closed up +0.29% …
The cell therapy sector had a number of up moves after reporting Q1/17 results as there has been a betterment of the oversold.
… The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, traded below 10 … not seen since December 2006.
· Monday traded near 10 after Friday’s near 10.7 following Thursday’s 10.48, Wednesday ‘s near 10.7 and last Tuesday trading near 9.90;
Welcome to another day of the sector’s roller coaster …
… The iShares Russell 2000 (IWM) indicated a positive +0.04% at the pre-open was and closed DOWN -0.03% versus Monday’s -0.24%;
… The iShares NASDAQ Biotechnology (IBB) did NOT indicate at the pre-open and closed UP +1.21% versus Monday’s -2.17%
The advance/decline line scenario of 43 SCGT & RT covered companies:
· The open was negative with an A/DL of 16/24 and 3 flats – the opposite of Monday;
· The mid-day stayed negative with an A/DL of 17/22 and 4 flats;
· The close was negative with an A/DL of 18/22 and 3 flats;
The count - decliners versus gainers: look at the differences in the spreads and advance/decline lines:
Tuesday’s decliners ranged from -0.07% <MDXG> to -27.70% <CUR> in 22 equities;
· Monday’s decliners ranged from -0.65% <CAPR> to -13.56% <CUR> in 28 equities;
· Friday’s decliners ranged from -0.41% <ONCE> to -12.83% <IMUC> in 24 equities;
Versus
Tuesday’s gainers ranged from +0.04% <CLLS> to +6.41% <JUNO> in 18 equities;
· Monday’s gainers ranged from +0.37% <ONVO> to +11.84% <OSIR> in 12 equities;
· Friday’s gainers ranged from +0.37% <ONVO> to +8.09% <AXGN> in 15 equities;
Pre-open indications: 4 hit and 1 miss
- Histogenics (HSGX) closed down -$0.02 – miss;
- Osiris (OSIR) closed down -$0.15 – hit;
- Bellicum Pharma (BLCM) closed down -$0.49 – hit;
- Juno therapeutics (JUNO) closed up +$1.06 – hit;
- Kite Pharma (KITE) closed up +$1.11 – hit;
Financial results a.k.a. earnings:
Adverum (ADVM)
Net loss attributable to common stockholders was $16.1 million or $0.38 per basic and diluted share, for the three months ended March 31, 2017, compared to $15.4 million, or $0.57 per basic and diluted share, for the same period in 2016.
· Revenues, consisting of revenue from collaborative research, were $500 K for Q1, compared to $300 K for Q1 2016.
· R&D expenses were $9.1 million for Q1 2017, compared to $7.5 million for Q1 2016. This increase was primarily due to an increase in material production costs and lab expenses, partially offset by a decrease in stock-based compensation expense.
· G&A expenses were $8 million for Q1, compared to $8.3 million for Q1/16. This reduction was primarily due to a decrease in acquisition-related expenses and stock-based compensation expense, partially offset by accrued estimated expenses associated with the termination of ADVM’s master services agreement with Cornell and litigation settlement expense.
Cash, cash equivalents, and marketable securities of $209.5 million as of March 31, 2017 are expected to fund the three lead gene therapy programs through the end of 2019 and through the achievement of meaningful clinical data in patients for at least one of ADVM’s lead programs.
ADVM closed flat at $2.80
Athersys (ATHX)
Net loss of $5.6 million or $0.06 loss per share compared to net income of $4.8 million in 2016. The difference of $10.4 million reflects the above variances, as well as a $2.9 million non-cash increase in the gain related to the fair value of our warrant liabilities. All outstanding warrants had either been exercised or expired as of March 31, 2017;
· Commercial milestone payment of $1.0 million received from collaboration with RTI Surgical, Inc. (RTI);
· Net proceeds of $20.9 million received in February 2017 from common stock offering in support of ongoing and planned clinical and process development activities;
· Proceeds from warrant exercises of $1.9 million received in Q1 2017, resulting in the issuance of approximately 1.8 million shares of common stock;
· No warrants remain outstanding;
· Revenues of $1.5 million was recognized;
Cash and cash equivalents were of $31.9 million at Q1’s end.
102 M shares are outstanding versus 83.8 M in Q1/16;
ATHX closed down -$0.04
Pluristem (PSTI)
As usual, PSTI filed an 8-K versus a press release …
· The net loss was $7.86 M or -$0.09 per share versus $7.203 or -$0.09 in Q1/16
· There were 91.75 M shares outstanding versus 79.9 M in Q1/16
Q1/17 ended with $5.3 M in cash;
PSTI closed down -$0.03
Regenxbio RGNX)
Net loss was $22.0 million, or $0.82 net loss per basic and diluted common share, for the three months ended March 31, 2017, compared to $10.8 million, or $0.41 net loss per basic and diluted share, for the three months ended March 31, 2016.
· Revenues were $0.5 million for the three months ended March 31, 2017, compared to $0.4 million for the three months ended March 31, 2016.
· Total operating expenses were $23.4 million for the three months ended March 31, 2017, compared to $11.6 million for the three months ended March 31, 2016.
· REGENXBIO reiterates that it expects full-year 2017 cash burn to be between $75 million and $85 million, which will support the continued development of its lead product candidate programs. Full-year 2017 cash burn guidance excludes the effect of REGENXBIO’s previously announced underwritten public offering of common stock in March 2017 and the underwriters’ exercise of their option to purchase additional shares in April 2017, which resulted in aggregate net proceeds to REGENXBIO of approximately $81.5 million, after deducting underwriting discounts and commissions and estimated offering expenses.
Cash, cash equivalents and marketable securities were $209.6 million as of March 31, 2017, compared to $159.0 million as of December 31, 2016.
RGNX closed up +$0.60 …
Spark Therapeutics (ONCE)
· Net loss applicable to common stockholders for Q1/17 was $52.3 million, or $1.70 basic and diluted net loss per common share, as compared with a net loss applicable to common stockholders of $25.6 million, or $0.95 basic and diluted net loss per common share for Q1/16.
· ONCE ended Q1/17 with $285.4 million in cash and cash equivalents and marketable securities at March 31, 2017
· Weighted average basic and diluted common shares outstanding were 26,807,380 compared with the 30,771,867 in Q1/16.
ONCE closed up +$2.79
uniQure (QURE) …
The net loss for Q1 2017 was $20.3 million, or $0.80 per share, compared with $22.3 million, or $0.90 per share, for Q1 2016.
· Revenue for Q1 was $3.3 million compared with $4.3 million in 2016. The reduction in the current year period was driven by a decrease in collaboration revenue compared to the prior year period.
· R&D expenses for the first quarter of 2017 were $17.0 million compared with $16.7 million in the first quarter of 2016. The increase was primarily related to higher operating expenses and depreciation related to our Amsterdam facilities.
· SG&A expenses for the first quarter of 2017 were $6.4 million compared with $7.3 million in the first quarter of 2016. The decrease was primarily related to one-time costs related to our CEO transition incurred in the prior year period.
· As of 3/31/17, QURE held cash and cash equivalents of $120.3 million, compared with $132.5 million as of 12/31/16. The decrease in cash was primarily related to the advancement of its clinical and preclinical gene therapy targets, general corporate activities and capital expenditures related to its facilities in Lexington, MA and Amsterdam.
QURE intends to significantly reduce capital expenditures in 2017 and 2018 and realize operational cost savings from the strategic restructuring initiated in November 2016 and the withdrawal of Glybera in October 2017. As a result of these initiatives, QURE expects its cash on hand will be sufficient to fund operations into 2019.
QURE closed down -$0.01
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.
