April 3, 2020 6:09pm

We still haven’t seen the last of lows to initiate a bottom as no chart can determine a signal

Pre-open indications: 5 HITs < CRSP (-$0.09), FATE (+$2.20), RARE (-$1.72), VSTM (-$0.12), sold into strength ALNY (+$1.61)> and 4 MISS <BLUE (-$0.73), VCEL (-$0.12), BCLI (-$0.10), SAGE ($0.80)>

The week’s numbers” in review; also check out the BOTTOM-LINE homily on reviving share pricing in these devilish times

Volatility sketches a contradictory picture of the short, near and long-term

The Dow closed DOWN – 360.91 points (-1.69%), the S&P closed DOWN -38.25 points (-1.51%) while the NASDAQ closed DOWN – 114.23 points (-1.53%)

 

Henry’omics:

Indexes declined in volatile trading on Friday to end another volatile week of trading, pressured by the jobs reporting and the spike in coronavirus-related deaths.

  • Poised for its third weekly decline in four; the Dow was down -3.5%, the S&P 500 had lost -3.1% and the Nasdaq lost -2.8% this week.

 

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Friday, the IBB closed down -1.35% and XBI also closed down -1.341%
  • Thursday, the IBB closed up +3.77% and XBI also closed up +3.64%
  • Wednesday, the IBB closed down -3.67% and XBI also closed down -5.40%
  • Tuesday, the IBB closed down -1.01% and XBI also closed down -0.76%
  • Monday, the IBB closed up +3.57% and XBI also closed up +2.05%

 

Volatility in the market is usually inversely correlated in the short-term. The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday volatility was down -4.11 points or -8.07% at 46.80,
  • Thursday volatility was down -6.15 points or -10.78% at 50.91,
  • Wednesday was up +3.53 points or +6.59% at 57.07,
  • Tuesday was down -3.54 points or -6.20% at 53.54,
  • Monday was down -8.46 points or -12.91% at 57.08,
  • The last week in March, the VIX eclipsed its financial crisis high, closing at 82.69.

 

RegMed/Cell and gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

  • Friday opened positive territory at 19/25 and 1 flat (SAGE) continuing to the mid-day positive at 13/21 and 1 flat (CRSP) and closed negative at 12/23;
  • Thursday opened negative territory at 11/23 and 1 flat continuing to the mid-day positive at 25/8 and closed positive at 23/10 and 2 flats;
  • Wednesday’s opened negative at 6/28 and 1 flat and closed negative at 4/31 of the 35 covered companies;
  • Tuesday Cell and gene therapy equities closed neutral;
  • Monday opened negative at 8/24 and 3 flats and closed positive at 20/15 of the 35 covered companies.

 

Friday’s (top 10) incliners:

  • ReNeuron (RENE.L +$10.00);
  • Global Blood Therapeutics (GBT +$2.10 after Thursday’s +$1.83 and Wednesday’s -$2.36);
  • Fate Therapeutics (FATE +$1.87 after Thursday’s +$0.86, Wednesday’s -$2.00, Tuesday’s -$0.95 and Monday’s +$0.98);
  • Alnylam Pharmaceuticals (ALNY +$1.61 after Thursday’s -$0.33 and Wednesday’s -$4.31);
  • Adverum (ADVM +$0.42 after Thursday’s -$0.21);
  • Homology Medicine (FIXX +$0.41 after Thursday’s +$1.53);
  • BioLife Solutions (BLFS +$0.38);
  • Athersys (ATHX +$0.14 after Thursday’s -$1.24, Wednesday’s +$1.22 and Tuesday’s +$0.98);
  • Cellectis SA (CLLS +$0.12 after Thursday’s -$0.40);
  • Intellia Therapeutics (NTLA +$0.09);
  • Caladrius Biosciences (CLBS +$0.05);

 

Friday’s (bottom 10) decliners:

  • Ultragenyx Pharmaceuticals (RARE -$1.72 after Thursday’s +$3.11 and Wednesday’s +$2.48);
  • Regenxbio (RGNX -$1.68);
  • uniQure NV (QURE -$1.41 after Thursday’s +$1.33 and Wednesday’s -$1.82);
  • Sage Therapeutics (SAGE -$0.80);
  • bluebird bio (BLUE -$0.73);
  • AxoGen (AXGN -$0.59 after Thursday’s -$0.41, Wednesday’s -$1.72, Tuesday’s +$0.15 and Monday’s +$0.92);
  • Voyager Therapeutics (VYGR -$0.57 after Thursday’s +$0.65);
  • Biostage (BSTG -$0.54 after Thursday’s -$0.06 and Wednesday’s +$0.20);
  • Ionis Pharmaceuticals (IONS -$0.50 after Thursday’s +$2.16);
  • Editas Medicine (EDIT -$0.42 after Thursday’s +$1.48);

 

Today’s stand-outs:

  • 2-day repeat upsiders: ReNeuron (RENE.L), Fate Therapeutics (FATE), Homology Medicine (FIXX) and Global Blood Therapeutics (GBT);
  • 2-day repeat downslides’: AxoGen (AXGN), Biostage (BSTG), Pluristem (PSTI), Bellicum Pharmaceuticals (BLCM), Solid Biosciences (SLDB), Mesoblast (MESO);

 

Volumes versus 3-month averages:

  • Friday’s volume was LOW as 2 out of the 12-upside had higher than the 3-month average volume with even LOWER volume as only 2 out of the 23-downside had higher than the 3-month average volume.
  • Thursday’s volume was LOW as 4 out of the 10-upside with low volume as only 2 out of the 23-downside;
  • Wednesday’s volume was LOW as 3 out of the 4-upside versus 6 out of the 31-downside;
  • Tuesday’s volume was low as 3 out of the 17-upside versus even lower volume as only 2 out of the 17-downside;
  • Monday’s volume was minimal as 5 out of the 20-upside with nominal volume versus only 4 out of the 15-downside.

 

Percentage (%) movement/range statistics: thinning …

Friday’s range of the xx-upside was +0.76% (NTLA) to +10.53% (RENE.L) while the -downside ranged from -0.33% (CRSP) to -13.04% (BSTG -$0.54); 

  • Thursday’s range of the 23-upside was +0.24% (BLUE) to +10.41% (FIXX) while the 10-downside ranged from -0.32% (ALNY) to -31.16% (ATHX); 
  • Wednesday’s % of the 4-upside ranged +3.88% to +32.67% while the 31-downside ranged from -0.91% to -19.12% and highlighted disparity of volume: 
  • Tuesday’s % of the 17-upside while the 17-downside were lower: 
  • Monday’s % of the 20-upside were +1.45% (EDIT) to +37.54% (PSTI) while the 15-downside ranged from -0.38% (RGNX) to -9.52% (RENE.L) were a lot higher than usual. 

 

Sentiment and its indicators: the world of grey and disruption

Job losses will continue to surge as the national shutdown strengthens its hold on the U.S. economy.

  • U.S. payrolls fell by 701,000 in March, marking the worst jobs report since 2009, while the unemployment rate jumped to 4.4%. However, the report failed to capture the full extent of the ongoing economic blow from the coronavirus outbreak. On Thursday, the Labor Department said jobless claims jumped by a record of 6.6 million for the week of March 27.

Defining pandemic disruption: The number of confirmed U.S. coronavirus cases:

  • Jumped on Friday to 258,214,
  • Thursday’s 234,400,
  • Wednesday’s 200,000,
  • Tuesday’s 177,452,
  • Monday’s 153,200,
  • Last Friday’s 97,028,

Friday’s death rate escalated to 6,605 after Thursday’s 5,607 after Wednesday’s 4,400, Tuesday’s 3,440, Monday’s 2,828 and last Friday’s 1475. <John Hopkins University>

 

Upside volume stats:  key numbers

  • Friday:  4 out of the 12-upside had higher than the 3-month average volume;
  • Thursday:  2 out of the 23-upside had higher than the 3-month average volume;
  • Wednesday: 3 out of the 4-upside had higher than the 3-month average volume;
  • Tuesday: 3 out of the 17-upside had higher than the 3-month average volume;
  • Monday: 5 out of the 20-upside had higher than the 3-month average volume;

Downside volume stats:

  • Friday: 2 out of the 23-downside had higher than the 3-month average volume;
  • Thursday: 4 out of the 10-downside had higher than the 3-month average volume;
  • Wednesday: 6 out of the 31-downside had higher than the 3-month average volume;
  • Tuesday: 2 out of the 17-downside had higher than the 3-month average volume;
  • Monday: 4 out of the 15-downside had higher than the 3-month average volume;

0 flats –

 

April

Friday closed negative with 23 decliners, 12 advancer and 0 flats

Thursday closed positive with 10 decliners, 23 advancer and 2 flats

Wednesday (4/1) closed negative with 31 decliners, 4 advancer and 0 flat

 

The BOTTOM LINE:

To cap off the week, literally and figuratively, I see volatility continuing (no s**t Wolfgang) however, the linkage of the RegMed/cell and gene therapy sector … NEEDS a stress test as of small biotech companies.

It also needs to define its probabilities to BRING BACK confidence in regard to its proximity to treatments and cures for diseases categories.

It’s back to basics which many CEOs or management teams have FORGOTTEN …

Quoting from an article – of which I totally agree, “A different kind of playbook is required in this unique environment to assess individual stocks and to evaluate portfolio positioning;

So, I propose a homily, a tutorial or a primer … that again NEEDS to be articulated!

  • What and how big is the disease market defined in regard to incidence and treatability;
  • Remember, “Incidence proportion is a measure of the risk of disease or the probability of developing the disease during the specified period. As a measure of incidence, it includes only new cases of disease in the numerator. The denominator is the number of persons in the population at the start of the observation period”;

Define for the retail investor, that … “Prevalence is a statistical concept referring to the number of cases of a disease that are present in a particular population at a given time, whereas incidence refers to the number of new cases that develop in a given period of time”;

  • And after that focus on “The morbidity rate is the frequency or proportion with which a disease appears in a population. Morbidity rates are used in actuarial professions, such as health insurance, life insurance, and long-term care insurance to determine the premiums to charge to customers;
  • And only then is it about the population that can or not be treated as one estimates the market sizing in relation again to incidence, prevalence and occurrences;

Revenue and partners create the stand-on balance bar of muscularity and elasticity of share pricing;

  • Articulate spending in relation to “runways” and less reliance on capital market access. Operating expense needs further definition i.e. the split of R&D (research versus development), G&A (general and admin costs), clinical trial costs versus impending results need to be made more aware;
  • My BIG issue is the costs of management teams and who versus what and when compromises their related costs – salaries have risen to ridiculous heights, many with weakening results – pay MORE for results not EXCUSES;

Companies should evaluate and measure themself against any comparable in real words and in some cases forgetting share pricing as perceptions can be created and not always reinforced;

  • You want to send a message to investors – start here as the first steps in ARTICULATING your message that HAS to also evolve awe and the shock of these pandemic times

Much of today’s and tomorrow’s Investing is short-term and partially fulfilled by optimist’s dreamscape.

  • Despite volatility, development continues but, how will it increase its resiliency?

You want investors … COMMUNICATE … the negatives to be offset by the positives!!!

 

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.