November 1, 2017 7:56am

And it’s killing the sector?

 

Skepticism which has stimulated volatility with the lack of share pricing sustainability

Compounded by the lack of communication to shareholders

 

Out and about: HC Wainwright announced 10/31/17 a $14 M at-the-market financing of 28.3 M shares priced at $2.45 for CAPR with a prospectus filed on 10/26/17.  What no notice to shareholders or the market from the company other than a transaction release from HCW?

Quarterly results: AXGN, BLUE, FATE and JUNO

 

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Pre-open trading indications: 7 SELLs and 2 BUY

 

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What’s the gauge of pricing expectation – monetization of information!  How right does one have to be? You could and should be reading this review of the day’s share pricing activity.

 

Higher open expected

Dow futures are UP +0.57% (132 points) and NASDAQ futures are UP 0.48% (29.75 points)

 

U.S. stock index futures pointed to a sharply higher open Wednesday, as investors prepared themselves for the latest cluster of corporate earnings ahead of a decision by the U.S. central bank.

European stocks edged higher, despite a terrorist attack in New York, as investors focused on earnings reports.

Asian markets closed higher, with markets in Japan and South Korea leading gains in the region. Investors also digested the extended gains in oil prices and the release of China's Caixin manufacturing Purchasing Managers' Index, which met expectation

 

Issues that will affect the trading day: Futures took their cue from overseas equity markets, which also traded higher. The U.S. Federal Open Market Committee is due to kick-start the second and final day of its regular monetary policy meeting. Investors will be looking out for the FOMC's announcement at 2 p.m. ET, which will include an interest rate decision and commentary on the state of the U.S. economy.

Data docket: the ADP national employment report, due out at 8:15 a.m. ET; US manufacturing PMI expected at 9:45 a.m. ET; and, at 10 a.m. ET, the manufacturing ISM report on business and construction spending data are due. The routine mortgage applications data will also be released set to come out at 7 a.m. ET.

 

 

The cell therapy sector closed NEGATIVE on Tuesday and Monday, POSITIVE on Friday, NEGATIVE on Thursday and last Wednesday.

The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):

·         Tuesday closed NEGATIVE with 23 decliners, 17 advancers and 3 flat;

·         Monday closed NEGATIVE with 28 decliners, 13 advancers and 2 flats;

·         Friday closed POSITIVE with 12 decliners, 29 advancers and 2 flats;

·         Thursday closed NEGATIVE with 27 decliners, 10 advancers and 6 flat;

·         Last Wednesday closed NEGATIVE with 30 decliners, 11 advancers and 2 flats;

 

 

Henry’omics:

From Tuesday night’s closing bell post, “opens up, treads down and closes to the downside, again as the sector ended the dreaded month of October as … quarterly results keep share pricing volatile affecting sentiment with expectation remaining low.”

As I had stated, “A BIG quarterly results week as many of the sector’s “usual suspects” lined-up to announce their depreciated past quarter and then … for a few to propose offerings to extend their runways for FY18.

Traders are grinding their teeth about JUNO, results later in the day to continue that loss-per-share earnings trend, as November gets underway.

The sector is also buoyed by a downbeat aftermarket and pre-market indications.

The downbeat mood comes after sector stocks closed lower on Tuesday, even though all three major benchmarks posting their biggest monthly percentage rises since February.

 

Out and about:

Capricor (CAPR) – HC Wainwright announced 10/31/17 a $14 M at-the-market financing of 28.3 M shares priced at $2.45 for CAPR with a prospectus filed on 10/26/17.

  • The number of shares of common stock to be outstanding after this offering is based on 22,595,310 shares of common stock outstanding as of June 30, 2017, and gives effect to the sale and issuance of up to 5,714,285 shares of common stock, assuming a sales price of $2.45 per share, which was the closing price of our common stock on The NASDAQ Capital Market on October 18, 2017.

 

 

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) had a NEGATIVE aftermarket indication of -0.04% but is NOT indicating in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +0.07% in Wednesday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) had a NEGATIVE aftermarket indication of -0.09% but is NOT indicating in Wednesday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.74% in Wednesday’s pre-open

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed down -$0.30 to $3.40 with 301.4 K shares traded <3 month average = 162.6 K shares>. It has been a BAD month for AGTC as October started at $4.10 and it continues as quarterly results are due 11/7. The aftermarket indication is a negative -$0.25 or -7.35% - Maintaining SELL;

Athersys (ATHX) closed down -$0.02 to $1.84 with 463 K shares traded after Monday’s -$0.05 to $1.86 with 361.3 K shares traded. October started at $2.19, saw a low of $1.84 and a high of $2.45.  I expect they will announce on 11/ a bigger loss due to the patent infringement settlement i.e. $500 K and stock payments and a need to finance – Maintaining SELL;

AxoGen (AXGN) closed up +$0.40 to $20.55 with 340.1 K shares traded after Monday’s +$0.05 to $20.15 with 209.3 K shares traded after Friday’s flat at $20.10 with 302.8 K shares traded <3 month average = 214.4 K shares>. It’s getting rich just before their quarterly result’s announcement as October started at $19.10 with a low of $18.50. AXGN also announces today, its Q3 “earnings” – Maintaining SELL;

bluebird bio (BLUE) closed down -$2.50 to $139.10 with 549.3 K shares traded after Monday’s up again +$0.80 to $141.60 with 434 K shares traded after Friday’s +$4.20 to $140.80 with 898.7 K shares traded <3 month average = 826.8 K shares>. Last week started out at $140.35 which was down -$2.20 from the previous Friday, while October started out at $125.45 which was down -$1.19 from September’s month end with the month’s high of $143.30. Net loss was $78.8 million for Q3/17 compared to $77 million for Q3/16. Cash, cash equivalents and marketable securities as of 9/30/17 were $1.1 billion, compared to $884.8 million as of 12/31/16, an increase of $257.8 million. The aftermarket indication is a negative -$1.10 or -0.79% – Maintaining SELL;

Capricor (CAPR) closed up +$0.10 to $2.48 with 1.08 M shares traded <3 month average = 1.96 M shares> after Monday’s -$0.02 to $2.38 with 238.4 K shares traded. October started at $3.45 and has seen a continuous decline with a low of $2.20; HC Wainwright announced 10/31/17 a $14 M at-the-market financing for CAPR. NO pricing or advance notice to shareholders – Maintaining SELL;

Cellectis SA (CLLS) closed up +$1.00 to $35.01 with 213 K shares traded after Monday’s +$0.76 to $23.01 with 219.5 K shares traded after Friday’s +$1.17 to $33.25,Thursday’s -$0.22 to $32.08 and last Wednesday’s +$0.56 to $32.50 with 447.1 K shares traded <3 month average = 216.7 K shares>. The aftermarket indication is a positive +$0.39 or +1.111% – Maintaining SELL;

Juno Therapeutics (JUNO) closed down -$1.38 to $44.91 with 1.98 M shares traded <3 moth average = 2.64 M shares>. Quarterly Q3 results are due today as last quarter, JUNO delivered a negative earnings surprise of 1.37%. JUNO’s poor track record so far, shows negative surprises in three of the last four quarters with a positive surprise in one. With no approved products in its portfolio, Juno is yet to generate any product revenue. Thus, investors’ focus will primarily be on the company’s cash burn and its pipeline updates. At the time of releasing second-quarter results, Juno maintained its expectations of cash burn in the $270-$300 million range for 2017. The aftermarket indication is -$0.33 or -0.73% – SELL;

Stemline (STML) closed up +$3.10 to $13.65 with 3.06 M shares traded after Monday’s -$0.25 to $10.55 with 164.4 K shares traded <3 month average = 191.7 K shares>. STML announced today that its pivotal P2 trial of SL-401 in blastic plasmacytoid dendritic cell neoplasm (BPDCN) has met its primary endpoint. Based on feedback from the U.S. FDA, STML remains on track to begin submission of its Biologics License Application (BLA) in the 4Q17-1Q18 timeframe. SL-401 has been granted Breakthrough Therapy Designation (BTD) by the FDA for the treatment of BPDCN, and Orphan Drug Designation (ODD) by the FDA and EU for the treatment of patients with BPDCN and acute myeloid leukemia (AML). The aftermarket indication is a positive -$0. or +0.10 or.+0.73%, shooting stars seem to burn out fast as traders seek the quick profit– BUY ;

Verastem (VSTM) closed up +$0.16 to $3.82 with 430.7 K shares traded after Monday’s -$0.10 to $3.66 with 190.3 K shares traded <3 month average = 1.2 M shares> after Friday’s $3.76 and Thursday’s $3.55. News is always a stimulator as VSTM announced that a meeting was held with the U.S. FDA regarding the regulatory path for duvelisib which is being developed for the treatment of patients with lymphoid malignancies. Based on the meeting with, and written feedback from the FDA, Verastem intends to submit a New Drug Application (NDA) requesting the full approval of duvelisib for the treatment of patients with relapsed or refractory chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL), and accelerated approval for the treatment of patients with relapsed or refractory follicular lymphoma (FL). The Company expects to submit the duvelisib NDA during the first quarter of 2018. The pre-market indication is a positive +$0.34 or +9.29% – Maintaining 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.