August 2, 2022 4:45pm

Pre-open indications: 3 HITs and 1 MISS

Biostage (BSTG) Chronicles: indexes fall a second day on U.S.-China tensions; question, are we in favor of having them fund and continue to control BSTG in our own country? Another question, how now, Newbridge Securities?

Earnings’ Update: Sage Therapeutics (SAGE +$0.80) reports Q2 loss, negative earnings while missing estimates

WHY and HOW is this market affecting the cell and gene therapy sector … “The Bottom Line” underlines the framework of share pricing actions.  Who else is tracking a broad grouping of cell and gene therapy equities – can you afford to not read facts supported by real numbers?

No tunnel vision here, I get into the weeds of daily share pricing and causes 

If I have learned one thing as a former research analyst, venture and public fund investor now a journalist; it is that your life and your bank account are largely tied to your knowledge of price movements and questioning pricing targets.

 

The Dow closed DOWN -401.64 points (-1.22%); the S&P closed DOWN -27.32 points (-0.66%) while the Nasdaq closed DOWN 20.22 points (-0.16%)

 

Henry’omics:

Indexes were mixed on Tuesday as investors weigh tensions between the U.S. and China with House Speaker Nancy Pelosi beginning a visit to Taiwan, while continuing to watch earnings and economic data.

Economic Data Docket: the June Job Openings and Labor Turnover Survey, released Tuesday morning by the Bureau of Labor Statistics, showed that job openings fell to 10.7 million. That was much lower than economist expectations of an 11.14 million print. The largest decreases in job openings were in retail trade, wholesale trade and state and local government education.

Earnings’ Update: Sage Therapeutics (SAGE) reported a Q2 loss of -$126.3 M or -$2.13 per share versus the Zacks Consensus Estimate of a loss of $2.16. This compares to loss of $1.83 per share a year ago. This quarterly report represents an earnings surprise of 1.39%. A quarter ago, it was expected that this company would post a loss of $2.09 per share when it actually produced a loss of $2.07, delivering a surprise of 0.96%. SAGE posted revenues of $1.5 million in Q2 missing the Zacks Consensus Estimate by 14.62%. This compares to year-ago revenues of $1.64 million. The company has not been able to beat consensus revenue estimates over the last four quarters. SAGE shares have lost about 19% since the beginning of 2022

RegMed Investor’s (RMi) Pre-Open: “earnings’ week expectation, can’t take them all to the bank. A very weak after-market does not bode well as earnings set the stage for share pricing erosion” … https://www.regmedinvestors.com/articles/12544

 

RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …

  • Tuesday’s advance/decline line opened positive at 28 up/ 5 down and 2 flats, stayed positive with 29 up/5 down and 1 flat at the mid-day, ending with a positive close of 29/4 and 2 flats.
  • Monday’s advance/decline line opened positive at 19 up/ 15 down and 1 flat, flipped negative with 10 up/23 and 1 flat at the mid-day, ending with a negative close of 8/26 and 1 flat.

 

Pre-open Indications: 3 HITs < Biostage (OTCQB: BSTG $0.00 with 0 shares traded), Verve Therapeutics (VERV +$0.67), CRISPR Therapeutics (CRSP +$2.30)> 1 MISS <Caribou Biosciences (CRBU -$0.02)

 

Key Metrics:

  • Tuesday - Sector volume was LOW with 2 of the 29-upside having higher than the 3-month average volume with LOW volume of 0 of 4-downside having higher than the 3-month average volume;
  • Monday - Sector volume was LOW with 1 of the 8-upside having higher than the 3-month average volume with LOW volume of 4 of 26-downside having higher than the 3-month average volume;

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

  • Tuesday, the IBB was up +0.29% and the XBI was up +0.90%
  • Monday, the IBB was down -1.46% and the XBI was down -2.05%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Tuesday was up +0.99 points or +4.33% at 23.83
  • Monday was up +1.51 points or +7.08% at 22.84

 

Jumping with share pricing momentum (10 of 29):

  • CRISPR Therapeutics (CRSP -$2.33 after Monday’s -$0.99),
  • Alnylam Pharmaceuticals (ALNY +$2.02 after Monday’s -$2.09),
  • Intellia Therapeutics (NTLA +$1.32 after Monday’s -$2.02),
  • Verve Therapeutics (VERV +$1.04 after Monday’s -$2.02),
  • Sage Therapeutics (SAGE +$0.80 after Monday’s +$0.04),
  • Regenxbio (RGNX +$0.77 after Monday’s -$0.33),
  • Ultragenyx (RGNX +$0.65 after Monday’s -$2.65),
  • Editas Medicine (EDIT +$0.64),
  • Fate Therapeutics (FATE +$0.59 after Monday’s -$0.49),
  • Global Blood Therapeutics (GBT +$0.53),

Closing down (4 of 4):

  • Ionis Pharmaceuticals (IONS closed down -$0.31),
  • Adverum Technologies (ADVM -$0.07),
  • BioLife Solutions (BLFS -$0.02),
  • Caribou Biosciences (CRBU -$0.01),

Flat:

  • Biostage (BSTG $0.00 after Monday’s $0.00) and Verastem (VSTM)

 

August, Q3/2022:

  • Tuesday closed positive with 29 incliner, 4 decliners and 2 flats
  • Monday (8/1) closed negative with 8 incliner, 26 decliners and 1 flat

 

The BOTTOM LINE: I try to keep it simple … and short!

As I have been writing … “I am STILL … NOT convinced the lows are in the cell and gene therapy sector.”

Last week post two (2) earnings were a split decision as ALNY reported a net loss as did RARE; yet ALNY dropped Friday -$1.48 or -1.03% and another -$2.09 or -1.47% on Monday after reporting and RARE jumped +$1.40 or +2.70% and crashed Monday -$2.65 or -4.97% following the earnings release.

Today, Sage therapeutics (SAGE) reported a net loss of -$126.3 M or -$2.13 per share as the equity’s share price popped +$0.80 or +2.32% closing the session.

Volume is still low …

Although, I’m STILL a firm believer in the flight of Icarus …  since the cell and gene therapy equities have oscillated between gains and losses since the first of the year... a bigger “slip” is on the way – maybe NOT today but, it’s coming!

Hold-on (to the railing) as our portfolios weather these volatile sessions as an ordinary practice.

The coming next two (2) weeks will reveal more about the cell and gene therapy sector's state of health.

This week, the cell and gene therapy sector Q2 earnings continue full-force: AxoGen (AXGN), Editas Medicine (EDIT), Fate Therapeutics (FATE), MiMedx (MDXG) and Vericel (VCEL) on Wednesday, 8/3, Agenus (AGEN) and Intellia therapeutics (NTLA) and Sangamo Therapeutics (SGMO) on 8/4 followed by Precigen (PGEN) and Global Blood Therapeutics (GBT) on 8/8 before Ionis Pharmaceuticals (IONS) on 8/9.

investors should be bracing for a milder-than-usual earnings season and downwardly LPS (loss-per-share) predictions,

I find it very interesting to evaluate share price over earnings as a proxy for performance.

We always need a villain and they are multiplying – “Earnings’ season is coming, investors NEED to focus on LPS (loss-per-share), collaboration revenues and cash positions i.e., runways”.

I stick to my view of anticipating the risks – as my careers focus has been “warning analysis”.

 

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.

Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.