May 5, 2020 5:09pm

Don’t chase this rally as earning’s LPS (loss-per-share) “confessions” don’t meet expectation and sector share pricing starts slipping pre close

Pre-open indications follow-up: 10 HITs <Adverum (ADVM +$5.27), Athersys (ATHX -$0.01); Editas Medicine (EDIT +$0.66), Fate Therapeutics (FATE -$0.56), Ionis Pharmaceuticals (IONS +$0.08), Ultragenyx (RARE -$0.08), Regenxbio (RGNX +$0.88), CRISPR Therapeutics (CRSP +$2.00); bluebird bio (BLUE +$0.52), ReNeuron (RENE.L +$1.00) > and 0 MISS

Quarterly results: Vericel (VCEL +$0.40)

An “intelligence newspaper” for smart investing in the RegMed, gene and cell therapy sector.  Check the BOTTOM LINE <read more>

The Dow closed UP +133.33 points (+0.56%), the S&P closed UP + 25.70points (+0.90%) while the NASDAQ closed UP +98.41 points (+1.13%)

 

Henry’omics:

Stocks rose sharply on Tuesday as investors bet that the U.S. economy could start to reopen again as oil pricing increased for a fifth (5th) straight day.

While sector equities rose as the advance/decline (A/D) line inclined to an all-time i.e. recent high as Pfizer (PFE) led the Dow higher with a 3% gain. Health care was one of the best-performing sectors in the S&P 500 jumping +2.7%.

  • PFE shares rose after it began coronavirus vaccine trials in humans.

Volume was LOW with 6 out of the 25-upside having higher than the 3-month average volume and 4 out of the 10-downside having higher than the 3-month average volume. The percentage (%) of the 25-upside were +0.14% (IONS) to +38.35% (ADVM) while the 10-downside ranged from -0.06% (RARE) to -3.38% (MDXG).

Some also are looking for the S&P 500 (SPX 1.08%) to start dropping towards its 200-day moving average at 2,650 - a key technical support level.

As mentioned in the a.m. post, Adverum Biotechnologies’ (ADVM +$5.27) shares are blasting higher this morning in response to a positive clinical update for the company's experimental gene therapy candidate ADVM-022. Yesterday the company announced that the therapy was showing signs of robust efficacy and an acceptable safety profile in an early-stage dosing study in patients with wet age-related macular degeneration (wet AMD).

ADVM reached a 52-week high of $19.00 rising today +$5.27 or +38.35% with an aftermarket indication of +$0.51 or +7.21%.

 

Hammered in today’s market:

  • MiMedx (MDXG), Athersys (ATHX), Verastem (VSTM), Precision (PGEN), Fate Therapeutics (FATE) to name a few of the 10

Jumping in today’s sector: just a few

  • Adverum Biotechnologies (ADVM), Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP), Global Blood Therapeutics (GBT) to name a few of the 25

 

Q1/2020 results: Vericel (VCEL +$0.45): Q1/2020 net loss was $4.7 million, or $0.10 per share, compared to $2.8 million, or $0.07 per share, for Q1/2019 with $83.3 million in cash …

  • Earnings per share fell 42.86% year over year to (-$0.10 per share), which missed the estimate of (-$0.08 per share). Revenue of $26,678,000 higher by 22.32% from the same period last year, which beat the estimate of $26,280,000. NO earnings guidance for the time being.

 

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

  • Tuesday, the IBB closed up +1.95% and XBI also closed up +2.14%
  • Monday, the IBB closed up +3.02% and XBI also closed up +5.06 %
  • Friday, the IBB closed down -2.50% and XBI also closed down -2.74%

 

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Tuesday was down -2.66 points or -7.40% at 33.36,
  • Monday was down -1.22 points or -3.28% at 35.97,
  • Friday was up +3.04 points or +8.90% at 37.19,

 

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

  • Tuesday opened positive at 30/5, stayed positive at the mid-day at 32/2 and 1 flat and closed positive at 25/10;
  • Monday opened positive at 28/7, stayed positive at the mid-day at 24/11 and closed positive at 28/7;
  • Friday opened negative at 5/29 and 1 flat, stayed further negative at the mid-day at 2/31 and 2 flats and closed negative at 8/25 and 2 flats;

 

Tuesday’s (top 10) incliners:

  • Alnylam Pharmaceuticals (ALNY +$5.27 after Monday’s +$7.66, Friday’s -$2.73, Thursday’s -$4.11, Wednesday’s -$1.69 and last Tuesday’s -$5.20;
  • Adverum Biotechnologies (ADVM +$4.60);
  • CRISPR Therapeutics (CRSP +$2.60);
  • Global Blood Therapeutics (GBT +$1.62 after Monday’s +$3.41, Friday’s -$2.23 and Thursday’s -$2.22);
  • uniQure NV (QURE +$1.33);
  • ReNeuron (RENE.L +$1.00 after Monday’s -$9.90);
  • BioLife Solutions (BLFS +$0.95);
  • Regenxbio (RGNX +$0.88 after Monday’s +$5.51, Friday’s -$3.36, Thursday’s -$1.25, Wednesday’s +$0.37 and last Tuesday’s -$2.40;
  • Editas Medicine (EDIT +$0.66 after Monday’s +$2.74 after Friday’s -$0.92;
  • Brainstorm Cell Therapeutics (BCLI +$0.64);

Tuesday’s (only 10) decliners:

  • Fate Therapeutics (FATE -$0.56 after Monday’s +$1.86);
  • MiMedx (MDXG -$0.12 after Monday’s -$0.20);
  • Precision (PGEN -$0.075);
  • Intellia therapeutics (NTLA -$0.07);
  • Homology Medicine (FIXX -$0.06 after Monday’s-$0.18 and Friday’s +$0.83);
  • Verastem (VSTM -$0.05);
  • Ultragenyx (RARE -$0.04 after Monday’s +$6.07, Friday’s -$1.78, Thursday’s -$3.21, Wednesday’s -$0.06 and last Tuesday’s -$5.27);
  • Solid Biosciences (SLDB -$0.02);
  • Stemline Therapeutics (STML -$0.01 after Monday’s +$7.35);
  • Athersys (ATHX -$0.01);

 

Percentage (%) movement/range statistics: look closely …

  • Tuesday’s % of the 25-upside were +0.14% (IONS) to +38.35% (ADVM) on acquisition news while the 10-downside ranged from -0.06% (RARE) to -3.38% (MDXG); 
  • Monday’s % of the 28-upside were +0.07% (VCEL) to +154.84% (STML) on acquisition news while the 7-downside ranged from -0.25% (AGTC) to -7.46% (BSTG); 
  • Friday’s % of the 8-upside were +0.43% (SLDB +$0.01) to +6.88% (FIXX) while the 25-downside ranged from -0.38% (IONS) to -16.36% (CLBS -$0.35); 

 

Sentiment and a few daily indicators:

Optimism as markets are increasingly looking toward this reopening and the gradual relaxation to some of the rules surrounding social distancing to stimulate economic activity …

The number of confirmed U.S. coronavirus cases: every day I get sadder as I post these numbers …

  • Tuesday 1.1 million
  • Monday’s 1.1 million,
  • Friday’s 1 million

Tuesday’s death rate escalated to a total of 70,115 after Monday’s 67,686, Friday’s 63,019 from Thursday’s 60,999 from Wednesday’s 58,968 and last Tuesday’s 56,253 <John Hopkins University>

 

Upside volume stats: 

  • Tuesday: 6 out of the 25-upside had higher than the 3-month average volume;
  • Monday: 9 out of the 28-upside had higher than the 3-month average volume;
  • Friday: 2 out of the 8-upside had higher than the 3-month average volume;

Downside volume stats:

  • Tuesday: 4 out of the 10-downside had higher than the 3-month average volume;
  • Monday: 1 out of the 7-downside had higher than the 3-month average volume;
  • Friday: 8 out of the 25-downside had higher than the 3-month average volume;

Closing flat: 0

 

May

Tuesday (5/5) closed positive with 10 decliners, 25 advancer and 0 flats

Monday (5/4) closed positive with 7 decliners, 28 advancer and 0 flats

Friday (5/1) closed negative with 25 decliners, 8 advancer and 2 flats

 

The BOTTOM LINE: the sector’s volume was lower as buyers “pushed” new peaks - it signals sentiment rewarding the oversold versus electronic trading.

Quarterly earning’s LPS (loss-per-share) “confessions” will be a catalyst in defining share pricing and runway risks versus return over the next two (2) quarters.

Maybe not tomorrow but – I wouldn’t hold my breath as the algorithms seek to “nip” the upside of today’s moves as investors weigh fears of a second (2nd) wave of coronavirus cases against efforts to reopen businesses and loosen restrictions.

Post the negatives is a positive reminder – Pluristem (PSTI just executed a register direct offering with $15 million in proceeds.

Reading the tea leaves of other business pages, “Summer could bring “hard economic data collapsing like we’ve never seen before, terrible corporate guidance, stories of pending bankruptcies,” and a second wave of layoffs that will hit the white-collar sector.”

 

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.