May 18, 2017 5:40pm
As fundamentals come back into perspective
Sector started strong, dumped at the mid-day and counter-reacted with gains
Pre-open indications: 9 hits and 3 miss
Out and about: Caladrius Biosciences (CLBS) closed sale of PCT to Hitachi Chemical for $75 M
As the leading voice of cell therapy investors; I am not always a doom and gloom reporter but a man who has been “there” with the gray hair and a readership following with real numbers to prove it!
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.
From the pre-open’s investor’s newsletter … “Time to put the wounded on a stretcher and get the <buying> plasma into their system. Hopefully this stimulates share price healing - especially with injuries after market free-falls.”
- Reiterating, “Markets punish, reward and we get to come back another day!”
On Wednesday, the U.S. stock market suffered its worst day in eight months.
- However, something else was also at work – Capricor’s (CAPR) trial failures offset today by Caladrius BioSciences’ (CLBS) sale of PCT and let’s NOT forget Q1 quarterly results.
Q1/17 was WEAK and estimates for all of 2017 are so – SOFT, share prices are still hugging the bottom of the pool , making stocks, particularly certain sector stocks, MORE than vulnerable.
- Luckily, sector stocks closed higher on Thursday, recovering from one of their worst day of 2017.
Yet again, a sell-off on no sector headlines! Remember … a surge is usually followed by a purge!
Pre-open indications: 9 hit and 3 miss
- Athersys (ATHX) closed down -$0.02 – hit;
- AxoGen (AXGN) closed down -$0.15 – miss;
- Bellicum Pharmaceuticals (BLCM) closed down -$0.07 – hit;
- Biostage (BSTG) closed flat $0.00 – hit;
- bluebird bio (BLUE) closed up +$2.35 – miss;
- Capricor (CAPR) closed up + $0.01 – hit;
- Juno Therapeutics (JUNO) closed up $0.48 – hit;
- Kite Pharma (KITE) closed up +$2.90 – miss;
- Neuralstem (CUR) closed up +$0.66 – hit;
- Sangamo (SGMO) closed up +$0.50 – hit;
- Spark Therapeutics (ONCE) closed up +$1.86 – hit;
- Verastem (VSTM) closed up +$0.05 – hit;
U.S. equities closed UP on Thursday … with the DOW closing UP +0.27% (+56.09) as the NASDAQ also closed UP +0.73% (+43.89) …
… The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, traded at 14.6 – down -5.97%.
· Wednesday traded at 15.59 – a 44% increase after Tuesday’s 10.56, Monday’s near 10.4, Friday’s traded below 10 and last Thursday’s near 10.6;
Welcome to another day of the sector’s roller coaster …
… The iShares Russell 2000 (IWM) indicated a negative -0.24% at the pre-open and closed UP +0.36 following Wednesday’s -2.70%, Tuesday’s +0.04% and Monday’s +0.78%
… The iShares NASDAQ Biotechnology (IBB) indicate a positive +0.26% in the pre-open and closed UP +1.28 following Wednesday -2.27%, Tuesday’s +0.40% and Monday’s +0.43%
The advance/decline line scenario of 43 SCGT & RT covered companies:
· The open was positive with an A/DL of 31/9 and 3 flats;
· The mid-day stammered barely negative with an A/DL of 20/21 and 2 flat;
· The close jumped positive with an A/DL of 25/13 and 5 flat;
The count - decliners versus gainers: look at the differences in the spreads and advance/decline lines - review the number divergence:
· Thursday’s decliners ranged from -0.32% <KOOL> to -6.42% <AGTC> in 13 equities;
· Wednesday’s decliners ranged from -0.47% <BLFS> to -9.23% <OSIR> in 39 equities;
· Tuesday’s decliners ranged from -0.19% <ONCE> to -23.27% <IMUC> in 19 equities;
· Monday’s decliners ranged from -0.04% <KITE> to -4.41% <MESO> in 12 equities;
· Friday’s decliners ranged from -0.13% <MDXG> to -61.97% <CAPR> in 12 equities;
· Last Thursday’s decliners ranged from -0.20% <CLBS> to -5.04% <AGTC> in 21 equities;
· Thursday’s gainers ranged from +0.35% <MDXG> to +16.46% <CUR> in 25 equities;
· Wednesday’s gainers ranged from +0.72% <AXGN> to +6.83% <ISCO> in 4 equities;
· Tuesday’s gainers ranged from +0.06% <BLUE> to +10.33% <OPXA> in 23 equities;
· Monday’s gainers ranged from +0.19% <BSTG> to +9.50% <FCSC> in 27 equities;
· Friday’s gainers ranged from +0.40% <BLUE> to +17.14% <SGMO> in 30 equities;
· Thursday’s gainers ranged from +0.09% <KITE> to +60.92% <SGMO> in 19 equities;
Out and about:
Caladrius Biosciences (CLBS) closed sale of PCT …
CLBS closed on the sale of its remaining 80.1% ownership interest in its PCT subsidiary to Hitachi Chemical Co. America, Ltd. for $75 million in cash, subject to certain adjustments, including based on PCT’s cash and outstanding indebtedness as of the closing date and a potential future milestone payment …
CLBS received $5 million of the purchase price upon the signing of the Interest Purchase Agreement <3/16/17>. The remainder of the Purchase Price was paid as follows:
· $60.1 million was paid, taking into account the Purchase Price adjustments based on PCT’s cash and outstanding indebtedness as of the closing date;
· $5 million was deposited into an escrow account to cover potential indemnification claims against the Company pursuant to the terms of the Purchase Agreement;
· $4.9 million was used to pay off the remaining balance owed pursuant to the loan and security agreement, dated as of September 19, 2014, among Oxford Finance LLC, as collateral agent and lender, CLBS and certain subsidiaries of CLBS.
In addition, Hitachi will pay $5 million if PCT achieves $125 million in Cumulative Revenue (excluding clinical service reimbursable) for the period from January 1, 2017 through December 31, 2018 (the “Milestone Period”). For purposes of the Milestone, “Cumulative Revenue” will be calculated based on PCT’s revenue from all customers (including the Company and its subsidiaries) in accordance with the financial accounting and reporting standards set forth in the statements and pronouncements of the Financial Accounting Standards Board, consistently applied. There can be no assurance that such Milestone Payment will be earned or received.
· The Escrow Amount is expected to be released on June 17, 2018
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.