August 31, 2017 7:03am
… About upsized share pricing as sector comparables appreciate post KITE and NVS news
Everyone gets hot and bothered re M&A but, why buy a partnered program at these prices?
The bigger issue, what about the rest of the sector, the non-immune-oncology companies?
I am maintaining my weakness prognosis, having been right so far re many!
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Pre-open indications: 2 BUY and 2 SELLs
Critical pre-market indications ahead of “our” universe’s open!
Higher open expected
Dow futures are UP +0.25% and NASDAQ futures are UP +0.21%
U.S. stock index futures pointed to a higher open on Thursday, as investors geared up for a slew of economic data, while keeping a close eye on oil and the political space.
European markets moved higher as investors digested fresh data and geopolitical fears eased.
Asian indexes closed mixed as the dollar extended gains and investors digested China manufacturing and services PMIs, as well as solid U.S. economic data.
Data docket: At 8.30 a.m. ET, jobless claims, personal income and outlays are all due out, which will then be followed by Chicago PMI at 9.45 a.m. ET and pending home sales at 10.00 a.m. ET.
Issues that affect the trading day: Hurricane Harvey continues to weave uncertainty into markets, as investors continue to debate how much of an impact the natural disaster will have on the economy and certain sectors including energy and insurance.
The cell therapy sector closed POSITIVE on Wednesday, Tuesday and Monday, NEGATIVE on Friday and POSITIVE last Thursday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Wednesday closed POSITIVE with 14 decliners, 26 advancers and 3 flats;
· Tuesday closed POSITIVE with 16 decliners, 24 advancers and 3 flats;
· Monday closed POSITIVE with 14 decliners, 21 advancers and 8 flats;
· Friday closed NEGATIVE with 21 decliners, 17 advancers and 5 flats;
· Last Thursday closed POSITIVE with 18 decliners, 21 advancers and 4 flat
Henry ’omics:
As I had stated in Wednesday evening’s post, “…Novartis (NVS) moved yesterday’s sector … The FDA approved Novartis’ (NVS) cellular therapy CAR-T treatment. The accelerated approval ahead of the PDUFA date is for all young people under 25 with a form of acute lymphoblastic leukemia but at a cost of a onetime $475 K treatment.”
Trading volume is still low and the sector is due for a pullback without potential catalysts to ramp up volume as September trading volume could be lower than that of a low August.
U.S. financial markets will be closed on Monday, Sept. 4 in observance of Labor Day.
And I am READY ... today!
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 +2.05% on Wednesday while the pre-market is indicating a POSITIVE +0.26%;
- The SPDR S&P Biotech ETF (XBI) closed Wednesday up +1.20% and is indicating a POSITIVE +0.12% in Thursday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) closed up +0.57% Wednesday and is NOT indicating in Thursday’s pre-open;
- The iShares Russell 2000 (IWM) closed up +0.64% on Wednesday and pre-market is indicating a POSITIVE +0.46% in Thursday pre-open
Companies in my headlights:
Verastem (VSTM) closed up +$0.42 to $3.85 with the aftermarket indication is a positive +$0.13 or +3.38%. August started at $3.68 with a high of $3.91 and a low of $3.01 as July started at $2.19 with a high of $4.12 and a low of $2.19 while June started at $2.18 with a high of $2/38 and a low of $2.01. Investors need to pay close attention to the stock based on moves in the options market lately. That is because the September 15th, 2017 $2.50 Put had some of the highest implied volatility of all equity options. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a rally or … A BIG sell off - I have gone with momentum so far … now but, I am nervous - SELL
Applied Genetic Technologies (AGTC) closed flat at $4.55 with 54.9 K shares traded after Tuesday’s $4.55 (+$0.05) with 112.2 K shares traded following Monday’s -$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 =193.4 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;
Biostage (BSTG) closed at $0.30. What do they have, some new money? $3 M for 9.7 M shares, NO IND forthcoming, a new development target which already has an FDA approved device, NO partner and finally who can believe anything they say – they don’t communicate to shareholders. It’s more than shocking - $30 M + down the drain over the last 3 years and this BOD has NOT dismissed a single executive as after all the failures and down financings; their still collecting their over-the-top compensation packages. But, we shall see, their response to the dismissal of the terminal death suit is STILL waiting - Maintaining SELL;
Vericel (VCEL) closed up +$0.05 to $4.15. Some mention in the news re the FDA on the heart stem cell product but … it would have to be partnered and many have tried and failed in successive trials. The pre-market indication is a positive +$0.15 or +3.66% - for now a momentum – BUY:
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.
