August 29, 2017 7:08am
The day after and as the Labor Day weekend approaches
… The IBB (-1.225), XBI (-0.91%), XLV (-0.45%) and the IWM (-0.71%) are down in the aftermarket and pre-market
Also, ever wonder, why the number of companies closing flat is increasing – even with solid volume?
Answer, perception as a subset of sentiment – traders, ETFs and algorithms just can’t decide to jilt or engage a position. When some companies have recently destroyed shareholder value, it’s hard to resurrect the dead!
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Pre-open indications: 1 BUY and 4 SELLs
Critical pre-market indications ahead of “our” universe’s open!
Lower open expected
Dow futures are DOWN -0.53% and NASDAQ futures are DOWN -0.86%
U.S. stock index futures pointed to a sharply lower open on Tuesday, as geopolitical concerns surrounding North Korea and the West were amplified, following news that a missile had passed over Japan.
European markets were trading sharply lower as geopolitical concerns surrounding North Korea raised fresh jitters across global markets.
Asian shares fell as investors turned to safe-haven assets and U.S. futures traded lower after a North Korean missile launch, although major indexes were off session lows by the end of the day.
Data docket: the S&P CoreLogic Case-Shiller Home Price Index is due out at 9.00 a.m. ET, followed by consumer confidence and the Dallas Fed's Texas Service Sector Outlook Survey, set to come out at 10.00 a.m. ET and 10.30 a.m. ET respectively.
Political issues that affect the trading day: Geopolitical tensions returned to the fore after North Korea launched a ballistic missile that flew over Japan on Tuesday. The missile headed in the direction of the Tohoku region before falling in the sea, Japan's NHK said. The last time a projectile from the hermit state flew over Japan was 2009, according to Reuters. "North Korea's firing of more missiles, this time over Japan, could be the trigger for another round of global risk off," warned ING Asia Head of Research Rob Carnell in a note.
The cell therapy sector closed POSITIVE on Monday, NEGATIVE on Friday, POSITIVE on Thursday, Wednesday and last Tuesday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Monday closed POSITIVE with 14 decliners, 21 advancers and 8 flats;
· Friday closed NEGATIVE with 21 decliners, 17 advancers and 5 flats;
· Thursday closed POSITIVE with 18 decliners, 21 advancers and 4 flat
· Wednesday closed POSITIVE with 18 decliners, 21 advancers and 4 flats;
· Last Tuesday closed POSITIVE with 11 decliners, 28 advancers and 4 flats;
Henry ’omics:
As I had stated in Monday evening’s post, “…Gilead (GILD) makes a timely, expensive and plucky deal to diversify … As KITE expects approval for potential treatment of refractory aggressive non-Hodgkin lymphoma around November in the US and next year in EU.
- Some cell therapy stocks were up on KITE +$38.95 (+28%) news - BLUE +$8.45 (+8.64%), BLCM +$1.14 (13.77%), CLLS +$4.29 (+17.03%), JUNO +$5.75 (+18.71%) and SGMO +$0.80 (+7.48%) while the NASDAQ is up +17.37 or +0.28% … Keep an eye on the velocity of these stocks, a trail-off can be expected.
The indexes and ETFs were smokin’ so expect the shell or casing to be ejected …
- The SPDR S&P Biotech ETF (XBI) rose 3.15%, making it one of the best performers among the exchange-traded products universe. KITE is the fifth-largest holding in XBI, a $3.6 billion equally-weighted fund that tracks a broad index of biotech stocks. Gilead, meanwhile, is also in XBI’s top 10, accounting for 2.3% of the portfolio.
Speaking of comparable: KITE, JUNO, and BLUE are all developing chimeric antigen receptor (CAR) and the related engineered T-cell receptor (TCR) technologies, which make genetic changes to patient's immune T cells, training them to attack cancer cells.
- KITE is substantially further ahead of BLUE and JJUNO…
Kite's lead drug axicabtagene ciloleucel, which treats blood cancers such as diffuse large B-cell lymphoma, transformed follicular lymphoma, and primary mediastinal B-cell lymphoma, is under FDA review with a decision expected on or before Nov. 29. In March, Juno took a step back after announcing that it was discontinuing development of its lead CAR-T treatment, JCAR015, which was in P2 development. Bluebird's CAR-T program bb2121 is still in phase 1, although it's had pretty good data to date.
- Yesterday's buyout announcement values Kite at $11.9 billion, while Juno's market cap is just $3.8 billion and bluebird's is $4.9 billion. BLUE's market capitalization reflects the fact that the company has an additional gene therapy program, to treat beta thalassemia and sickle cell disease.
Overall, it's pretty clear JUNO and BLUE have upside if they can get their drugs approved. But whether the two companies are worth more today than they were yesterday, because KITE is being acquired, is debatable.
- Juno has a large partnership with Celgene (CELG), limiting the number of suitors that might be interested in buying the company. Bluebird also has a partnership Celgene, but only for bb2121, making the company potentially more attractive as a buyout candidate. However it's not optimal to count on that as part of an investment thesis.
It was a big day for many cell therapy equities and as we get closer to the holiday weekend, many will exit as … shooting stars burn-out after an announcement about other comparable,
I also said, “While the not- unusual suspects or losers continue to decline, BSTG, CAPR, FCSC, IMUC, NWBO and PSTI.”
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 up +1.88% on Monday and the aftermarket is a NEGATIVE -1.22 while Tuesday’s pre-market is NOT indicating;
- The SPDR S&P Biotech ETF (XBI) closed Monday up +3.51% and is indicating a NEGATIVE -0.91% in Tuesday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) closed up +0.41% Monday and the aftermarket is a NEGATIVE -0.45% and is NOT indicating in Tuesday’s pre-open;
- The iShares Russell 2000 (IWM) closed up +0.44% on Monday and the aftermarket is indicating a NEGATIVE -0.63% while the pew-market is indicating a negative -0.71% in Tuesday pre-open
Q2/17 reporting for … to date:
Regenerative Medicine Earnings Scorecard - Q2/2017 - to date … http://www.regmedinvestors.com/articles/9841
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed down -$0.05 again to $4.50 with 83 K shares traded after Friday’s $4.55 with 119.5 K shares traded <3 month average =196.4 K shares>. The week started at $4.60, August at $4.60, July at $5.05 and June at $5.20. Volume has been volatile with no pattern or reason as the shares tripped to the downside. The 50 day moving average is $4.85; the 52 week low was $4.50 while August’s low was $4.80 with a high of $5.25 – Time for an upside – Maintaining BUY;
Bellicum Pharmaceuticals (BLCM) closed up +$1.14 to $9.42 after Friday’s $8.28 (-$0.34) with 453.8 K shares traded <3 month average = 757.9 K shares after Thursday’s up $8.62 (+$0.66) with 1 M shares traded. The aftermarket indication is a negative -$0.07 or -0.74%. OVERBOUGHT on KITE’s news – BUY to SELL;
bluebird bio (BLUE) closed up +$8.45 to $106.30. The aftermarket indication is a negative -$1.25 or -1.18% - OVERBOUGHT as to KITE’s news – SELL;
Cellectis SA (CLLS) closed up +$4.29 to $29.49 with 534.2 K shares traded <3 month average = 91.9 K shares> after Friday’s $25.19 (+$0.43) with 79.5 K shares traded. Last week started at $23.20 while the month experienced a high of $25.19 and a low of $21.65. CLLS can be a trading vehicle as its share pricing rides the waves of sentiment; OVERBOUGHT in regard to KITE’s news – Maintaining SELL;
Juno Therapeutics (JUNO) closed up +$5.75 to $36.48. The aftermarket indication is a negative -$0.43 or -1.18% - OVERBOUGHT on KITE’s news – SELL;
Sangamo Therapeutics (SGMO) closed up +$0.80 to $11.50. Last week started at $9.90 and ended at 10.70. August started at $8.45, with a high of $11.50 and a low of $8.40. The aftermarket indication is a negative -$0.10 or -0.87% - SELL;
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.
