June 27, 2017 5:38pm

 

As I had stated, “the slippage begins as the old battle of the overbought heated up as the oversold simmered”

Sector stocks plunge as market rolls over while some of past week’s appreciator’s BLUE, JUNO, KITE, RGNX and SGMO are slipping

 

Pre-open indications re-cap: 4 hit and 4 miss,

As the IBB -2.88%, XBI -3.53%, XLV -0.91% and IWM dumped -0.88% as the VIX was up +12.12%,  

 

Out and about:  Biostage (BSTG) how low and dilutionary can they go in financing their operations? After 4 years, there is still NO IND after multiple “pig” surgeries with NO proof of concept while …

Retail shareholders have already been WIPED-OUT!

·Now, an agreement to “conduct“ < first time I heard that one> a $3.1 M Private Placement priced at $0.315 with 100% warrant coverage … that doesn’t close until August 15.2017

Don’t be enticed by the “words” or ensnared by the PR; it’s pure “financial engineering” and total horse manure!

·A bargain as First Pecos had more than considered a $0.875 per share investment last November

NASDAQ listing still in question and IND is a moving target and further away than previously expected

·Every investors, retail and even warrant-clipping fund haven taken a huge haircut as the CEO, President/CMO, CFO and management enjoy full salaries, grants and payments to their savings/retirement accounts

What is this “early” release of “Agreement” terms … a distraction from the current status of the company as Q2 results are due … diversion at its best?

· Remember, the terminal death lawyers are the first in line to get payed and there won’t be anything left for investors of any group

 

I answer one question, in which company should investors commit and keep their money.

Tuesday’s results have implications to Wednesday’s sector activity

 

A daily report may say little or a lot and its final judgement may be inconclusive; yet it serves as insurance that all indications are being examined and evaluated.

 

 

The advance/decline line scenario of 43 SCGT & RT covered companies:   

·         The open was negative with an A/DL of 17/24 and 2 flats;

·         The mid-day was barely negative with an A/DL of 20/21 and 2 flats;

·         The close was negative with an A/DL of 10/32 and 1 flat;

 

 

Pre-open indications re-cap:  4 hit and 4 miss

  • Athersys (ATHX) closed down -$0.03- hit;
  • Biostage (BSTG) closed up +$0.04 – miss;
  • bluebird bio (BLUE) closed down -$4.20 – hit;
  • Juno Therapeutics (JUNO) closed down -$0.36 – miss;
  • Kite Pharma (KITE) closed down -$2.38 – miss;
  • Neuralstem (CUR) closed down -$0.63 – hit;
  • Osiris (OSIR) closed up +$0.13 – miss;
  • Regenxbio (RGNX) closed down -$1.85 – hit;

 

 

Henry’omics:

From the pre-open’s investor’s newsletter … “, the slippage begins as the IBB and XLV aren’t indicating while the XBI is barely up and the IWM indicates a negative index.”

  • Reiterating, “A great time to escape on the back of new highs as a holiday and a slower market evolves.”

 

Short-term volatility as momentum ebbs and flows over the past few days, but the impact to the cell therapy sector has been minimal until … today.

 

 

Out and about:

Biostage (BSTG) hitting bottom, how dilutionary can they become in financing their future – if there is ANY?

Continued … Does this agreement REALLY” lay the foundation for funding through the end of 2018, that is a question that could be disputed and at what price?

•             It has been stated that a … “Strategic investor provides opportunity through future rights offering for additional gross proceeds up to $14 M – which pea is under the pod in this shell game;

•             Total proceeds will enable the company to advance first-in-human clinical study for Cellspan™ Esophageal Implants program especially since there is NO “proof of concept” other than few and fewer reports from the company and still NO IND or response from its collaborator,  Mayo Clinic;

•             I might say liar, liar, your pants are on fire and stock is all but burned to the ground …!

BSTG announced (6/27) the entry into a binding Memorandum of Understanding (“MOU") with First Pecos, LLC (Pecos) for the private placement of 9,700,000 shares of BSTG's common stock at a purchase price of $0.315 per share, being the closing price of the company's common stock on the trading day prior to the execution of the MOU, and warrants to purchase 9,700,000 shares of its common stock, for gross proceeds of approximately $3.1 million.

·The private placement is conditioned on satisfaction of customary closing conditions and on … the company terminating its Shareholder Rights Plan, and must be consummated on or prior to August 15, 2017 – BIG ISSUE!

WHAT is MORE than wrong …?

To the extent the transaction would result in Pecos and its affiliates owning more than 19.9% of BSTG's common stock at the time of closing, they will instead receive shares of a new class of convertible preferred stock, which will automatically convert into shares of common stock upon approval of the Company's stockholders.

·         Such approval will be sought at BSTG's next annual meeting of stockholders.

·         Until conversion, the convertible preferred stock will have a cumulative annual dividend of 15%.

·         Similarly, to the extent exercise of the warrants would result in Pecos and its affiliates owning more than 19.9% of BSTG's common stock at the time of exercise, the warrants will instead be exercisable into shares of the new class of preferred stock.

MORE to come on this ANALYSIS … and it’s UGLY!

 

 

Daily analytics:

U.S. equities closed on Tuesday … with the DOW closing DOWN -0.46% (-98.20) as the NASDAQ closed DOWN -1.61% (-100.53) …

… The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, above 11.07 … up +11.72%

· Monday traded near 9.7, breaking below 10 for the first time since June 9, after Friday’s near 10.02 … down -4.39%,  Thursday’s near 10.5,  Wednesday near 10.75 – DOWN -1.01% and last Tuesday’s  near 10.86% - UP +4.73%

 

Welcome to another day of the sector’s roller coaster …

… The iShares Russell 2000 (IWM) indicated a close of:

·         Tuesday traded DOWN -0.88%

·         Monday+0.12%

·         Friday+0.66%

·         Thursday +0.38%

·         Wednesday -0.25%

·         Last Tuesday -1.01%

… The iShares NASDAQ Biotechnology (IBB) indicated a close of:

·         Tuesday traded DOWN -2.88%

·         Monday -0.32%

·         Friday+0.20%

·         Thursday +1.27%

·         Wednesday +4.12%

·         Last Tuesday +1.27%

 

 

The count - decliners versus gainers:

……. look at the differences in the spreads as decliners jump and %’s migrate……….

·         Tuesday’s decliners ranged from -0.32% <BTX> to -9.95% <CUR> in  32  equities;

·         Monday’s decliners ranged from -0.23% <KITE> to -3.93% <NWBO> in  15  equities;

·         Friday’s decliners ranged from -0.31% <FATE> to -11.36% <BSTG> in  14  equities;

·         Thursday’s decliners ranged from -0.38% <MDXG> to -5.95% <ATHX> in  12  equities;

·         Wednesday’s decliners ranged from -0.13% <OSIR> to -4.23% <VTGN> in  13 equities;

·         Last Tuesday’s decliners ranged from -0.16% <BLCM> to -7.32% <BSTG> in  21 equities;

Versus

………… look at the percentage’s (%) and their decreases …….

·         Tuesday’s gainers ranged from +0.55%  <VTGN> to +14.49% <FCSC> in 10 equities;

·         Monday’s gainers ranged from +0.08%  <XON> to +10.41% <CAPR> in 26 equities;

·         Friday’s gainers ranged from +0.28%  <XON> to +7.49% <JUNO> in 24 equities;

·         Thursday’s gainers ranged from +0.31%  <FATE> to +14.74% <NWBO> in 27 equities;

·         Wednesday’s gainers ranged from +0.38%  <ONVO> to +12% <ATHX> in 27 equities;

·         Last Tuesday’s gainers ranged from +0.31%  <BLUE> to +8.61% <NWBO> in 20 equities;

 

 

Some of MY working trend lines or indications for Tuesday:

… The greatest volume to the downside:  JUNO, KITE, NWBO, BLUE and SGMO

… Upside volume was weighted to:  CYTX, BSTG, VCEL, FCSC and CAPR

… Biggest $ downside:  BLUE, KITE, RGNX, XON and ONCE

… Largest $ upside: FCSC, OSIR, CAPR, CYTX and VCEL                  

… Flat: RENE.L

 

 

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.