October 12, 2017 7:09pm

As the sector repeats and trades in another narrow band

Out and about:  Biostage (BSTG) files 8-K; BSTG has conducted a reduction in headcount of 17 of its employees, which represented 71% of its employee. The reduction and other cost cutting measures were made to slow the cash burn rate while they explore strategic alternatives with its advisors.  BSTG estimates that it will incur charges for one-time termination benefits in connection with the headcount reduction of approximately $153,000 for employee severance, benefits and related costs, all of which are expected to be paid during the fourth quarter of 2017. Pecos, its proposed investor has demanded that BSTG pay a $500 K termination fee pursuant to the terms of “their” agreement. The biggest issue is WHY the CEO and CFO are maintaining their HIGH salary and bennies having been the root and cause of BSTG’s demise – their egos, lack of vision and tactical execution. As I said last night in my opinion, where is the SEC when shareholders need them?

Spark Therapeutics (ONCE): FDA Advisory committee unanimously recommends approval of Investigational LUXTURNA™ (voretigene neparvovec) for patients with Biallelic RPE65-mediated Inherited Retinal Disease

 

Pre-open indications: 5 hit and 2 miss (by pennies)

 

If you had been right as many times as I have been in these many months of 2017 as a SUBSCRIBER you would know when to get in or out and even get back in again!  

 

Thursday’s results have implications to Friday’s sector activity as a daily report may say little or a lot and it serves as insurance that all indications are being examined and evaluated!

The way forward cannot be found in the practices and spending of the past as the sector is operating and defined by its own contradictions.

 

 

Henry’omics:

From the pre-open’s newsletter, “the turning of the herd - what goes down, comes up as I’m sticking with the equities I’ve been touting.”

Reiterating, “When companies mistakenly assume new science creation hinges on breakthrough technologies, their organizations tend to push for products or services that are either too “out there” — ahead of their time, too esoteric or too complicated for investors to understand ultimately to be ditched as the regulatory roadblocks take their toll.”

  • Basically, fundamentals haven’t moved while volume is still low and momentum continues to the downside!

The RegMed and cell therapy sector will be weak as it begins the season of financial results  (notice I didn’t say earnings) and I don’t see any huge spikes up between now and the end of the month or even the year because cash positions are depreciating as development and operating expenses are increasing.

 

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

·         The open was negative with an A/DL of 15/22 and 5 flats;

·         The mid-day was negative with an A/DL of 15/23 and 5 flats;

·         The close was negative with an A/DL of 16/23 and 4 flat;

 

Pre-open indications: 5 hit and 2 miss

  • Athersys (ATHX) closed down -$0.14 – miss;
  • bluebird bio (BLUE) closed up +$4.75 – hit;
  • Capricor (CAPR) closed up +$0.02 – miss;
  • MiMedx (MDXG) closed up +$0.83 – hit;
  • Pluristem (PSTI) closed down -$0.09 – hit;
  • Spark Therapeutics (ONCE) closed flat at $86.20 after an FDA approval - hit;
  • Vericel (VCEL) closed flat at $4.95 – hit;

 

 

Out and about:

Spark Therapeutics (ONCE), announced today that the FDA’s Cellular, Tissue and Gene Therapies Advisory Committee has unanimously recommended (16-0) approval of LUXTURNA™ (voretigene neparvovec), an investigational, potential one-time gene therapy, for the treatment of patients with vision loss due to confirmed biallelic RPE65-mediated inherited retinal disease (IRD).

The clinical program for LUXTURNA included patient data that show efficacy for up to four years on endpoints including bilateral multi-luminance mobility test (MLMT) score change and full-field light sensitivity threshold (FST) testing, with observation ongoing.

The advisory committee’s recommendation is based on LUXTURNA’s clinical development program, which includes the first completed randomized, controlled Phase 3 gene therapy clinical trial ever conducted for a genetic disease. In the original Phase 3 intervention group, participants aged four to 44 years on average maintained the functional vision and visual function improvements demonstrated 30 days after LUXTURNA administration through their last annual follow-up visit, as measured by bilateral multi-luminance mobility test (MLMT) score change and full-field light sensitivity threshold (FST) testing. Data from a cohort of the P1 clinical trial, in which investigational LUXTURNA was administered to the contralateral, or second previously uninjected eye, showed similarly maintained mean improvements. As part of the Biologics License Application (BLA) to FDA, Spark also submitted the results of two Phase 1 clinical trials, a natural history study and a MLMT validation study. Today’s advisory committee vote is non-binding, but FDA will take its recommendation into consideration when reviewing the BLA for LUXTURNA.

 

Biostage (BSTG) the saga continues …

… Also as previously disclosed, on October 5, 2017, BSTG delivered a notice (the “Notice”) to Pecos and its manager, Leon “Chip” Greenblatt III, stating that Pecos was in breach of the Purchase Agreement as a result of its failure to deliver the Purchase Price to the Company following satisfaction of all closing conditions in the Purchase Agreement. None of the shares of common stock, shares of Preferred Stock or Warrants was issued to Pecos.

On October 10, 2017, Pecos delivered a notice to the Company stating that, as a result of alleged breaches by the Company of its obligations pursuant to the Agreement, Pecos has terminated the Agreement and demanded that the Company pay a $500,000 termination fee pursuant to the terms of the Agreement.

BSTG believes that it was not in breach of the Purchase Agreement at any time, and that Pecos’ notice was unjustified and without any legal merit or factual basis. Accordingly, the Company believes that Pecos is not entitled to terminate the Agreement, and is not entitled to any termination fee thereunder, as the failure to consummate the Private Placement resulted from Pecos’ breach of the Agreement.

BSTG is reviewing all of its rights and remedies against Pecos that may be available to the Company.

Who is left, a CEO, a CFO and 2 accountants and a systems guy – tell me about the science and regulatory initiative as even LM (a class act), the VP Regulatory quit 2 weeks ago with NO 8-K filed.

Do you really think – this gang that didn’t and couldn’t shoot straight will be able to return – ANYTHING to shareholders – SHAME should be your middle name!

 

 

Some of MY working trend lines or indications:

… The greatest volume to the downside:  IMUC, ONVO, CYTX, ATHX and PTSI

… Upside volume was weighted to:  MDXG, ADVM, JUNO, XON and BLUE

… Biggest $ downside: CLLS (-$0.85), BLCM (-$0.50), RGNX (-$0.25), ADRO (-$0.25) and SGMO (-$0.25)

… Largest $ upside:  BLUE (+$4.75), MDXG (+$0.83), QURE (+$0.41), AXGN (+$0.35) and ADVM (+$0.35)

… Flat: ISCO, KITE, VCEL, ONCE and IMUC

 

 

Daily analytics:

The U.S. stock market heralded the beginning of Q3 earnings season by finishing slightly lower on Thursday.

·         The Dow fell 31.88 points, or 0.1%, to close at 22,841.01.

·         The S&P 500 shed 4.31 points, or 0.2%, to end at 2,550.93.

·         The NASDAQ dropped 12.04 points, or 0.2%, to finish at 6,591.51.

 

The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market; Thursday at 9.91, up +0.61% …

  • Wednesday traded at 9.83, down -2.48%  after Tuesday traded at 10.08, down -2.42% after Monday traded at 10.33, up +7.05% after Friday traded 9.65, up +5.01% after last Thursday traded at 9.19, down -4.57% …

 

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

… The iShares Russell 2000 (IWM) indicated:

·         Thursday was down -0.07%

·         Wednesday -0.09%

·         Tuesday+0.27%

·         Monday -0.41%

·         Friday -0.11%

·         Last Thursday +0.27%

 

… The Russell 2000 (RUT)

·         Thursday lost -1.76 or -0.12%

·         Wednesday lost -1.08 or -0.07%

·         Tuesday was gained +4.44 or +0.30%

·         Monday lost -6.66 or -0.44%

·         Friday lost -1.87 points or -0.12%

·         Last Thursday gained 4.32 points, or 0.3%

 

… The iShares NASDAQ Biotechnology (IBB) indicated:

·         Thursday was down -0.52%

·         Wednesday -0.21%

·         Tuesday +0.03%

·         Monday -0.29%

·         Friday -0.11%

·         Last Thursday +0.11%

 

 

The count - decliners versus gainers:

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

·         Thursday’s decliners ranged from -0.54% <BLFS -$0.03> to -15.13% <CYTX -$0.084> in 23 equities;

·         Wednesday’s decliners ranged from -0.44% <JUNO -$0.19> to -9.84% <BSTG -$0.01> in 26 equities;

·         Tuesday’s decliners ranged from -0.42% <XON -$0.08> to -12.82% <ONVO -$0.25)> in 19 equities;

·         Monday’s decliners ranged from -0.22% <VSTM -$0.01> to -14.95% <CYTX -$0.0949> in 26 equities;

·         Friday’s decliners ranged from -0.05% <ONCE -$0.04> to -52.40% <BSTG -$0.119> in 28 equities;

·         Last Thursday’s decliners ranged from -0.05% <ONCE -$0.04> to -24.99% <BSTG -$0.08> in 21 equities;

Versus

… Look at the percentage’s (%) and spreads …

·         Thursday’s gainers ranged from +0.19% <JUNO +$0.08> to +10.43% <HSGX +$0.22> in 16 equities;

·         Wednesday’s gainers ranged from +0.24% <MDXG +$0.03> to +15.24% <PSTI +$0.25> in 14 equities;

·         Tuesday’s gainers ranged from +0.11% <BLUE +$0.15> to +10.02% <MESO +$0.61> in 23 equities;

·         Monday’s gainers ranged from +0.16% <JUNO +$0.07> to +12.12% <RENE.L +$0.20> in 13 equities;

·         Friday’s gainers ranged from +0.36% <BTX +$0.01> to +29.55% <CYTX +$0.14> in 12 equities;

·         Last Thursday’s gainers ranged from +0.22% <OSIR -$0.01> to +24.49% <CYTX +$0.10> in 20 equities;

 

 

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.