May 4, 2020 5:59pm

Worries, doubt, risk, volatility, wait times and their weighting

Pre-open indications follow-up: 4 HITs <Alnylam Pharmaceutics (ALNY +$7.66), CRISPR Therapeutics (CRSP +$1.54), Stemline Pharmaceuticals (STML +$7.35), ReNeuron (RENE.L $9.90), and 1 MISS < bluebird bio (BLUE +$4.93)>

Quarterly results: Aduro Biotech (ADRO)

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

The Dow closed UP +26.07 points (+0.11%), the S&P closed UP +12.03 points (+0.43%) while the NASDAQ closed UP +105.77 points (+1.23%)

 

Henry’omics:

Indexes rose slightly lifting markets into the green from losses earlier in the session.

Sector equities jived on Monday after diving on Friday as shares of Stemline Pharmaceuticals (STML) rose on news of being acquired and led the incliners as ReNeuron (RENE.L) led the decliners.

Trading volumes seem lighter due to holidays in China and Japan.

A quote worth consider for thought, “While it is unlikely that we will retest the March lows, at least there is some chance that we head back toward the bottom of the April trading range -– which would be a further 7-10% downside from here, for most risk assets” said Ciaran Mulhall, managing director at Solus Capital Partners Ltd.

So, what … and if when …

Shares of Verastem (VSTM) were up by +$0.19 or 10.87% to $1.94. VSTM has not reported any news, though, so the reason behind that stock market rise is a bit of a mystery; the gain essentially recouped the stock's Friday decline considering that the stock was oversold.

  • Whether VSTM is worth buying right now depends on your risk tolerance;
  • VSTM has just one approved product on the market: Copiktra, a treatment for leukemia;
  • During Q4/19, Copiktra recorded a measly $3.6 million in revenue. Given that, VSTM's future largely hinges on its pipeline. A lot could go wrong for its investigational drugs, however, including regulatory roadblocks or more negative results from clinical trials;
  • In the seven (7) years since it peaked above $17 a share, the stock now down almost 90%. With that backdrop in mind, only investors willing to take on some risk should consider investing in this biotech stock. <The Motley Fool>
  • My view, roll it and stroll to the next low to see if it plays trough …

Volume was LOW with 9 out of the 28-upside had higher than the 3-month average volume and 1 out of the 7-downside had higher than the 3-month average volume. The percentage (%) 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); 

Hammered in today’s market: the only

  • Biostage (BSTG), Applied Genetic Technologies (AGTC), Homology Medicine (FIXX), ReNeuron (RENE.L), MiMedx (MDXG), AxoGen (AXGN), Aduro Biotech (ADRO),

Jumping in today's sector:

  • Stemline Pharmaceuticals (STML), Cellectis SA (CLLS), Verastem (VSTM), Regenxbio (RGNX), bluebird bio (BLUE) and Ultragenyx (RARE)

 

Q1/2020 results: Aduro Biotech (ADRO):

  • Net loss for Q1 was $7.6 million or $0.09 per share compared to net loss of $23.4 million or $0.29 per share for Q1/19; revenue was $14 million, cash position of $205.9 million with corporate restructuring to reduce operating expenses and extend cash runway into 2023.

 

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

  • 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:

  • 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 …

  • 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;

 

Monday’s (top 10) incliners:

  • Alnylam Pharmaceuticals (ALNY +$7.66 on news after Friday’s -$2.73, Thursday’s -$4.11, Wednesday’s -$1.69, Tuesday’s -$5.20 and last Monday’s -$2.93;
  • Stemline Therapeutics (STML +$7.35);
  • Ultragenyx (RARE +$6.07 after Friday’s -$1.78, Thursday’s -$3.21, Wednesday’s -$0.06, Tuesday’s -$5.27 and last Monday’s +$2.74);
  • Regenxbio (RGNX +$5.51 after Friday’s -$3.36, Thursday’s -$1.25, Wednesday’s +$0.37, Tuesday’s -$2.40 and last Monday’s +$1.68;
  • bluebird bio (BLUE +$4.93 after Friday’s -$3.11, Thursday’s -$2.63, Wednesday’s -$0.84, Tuesday’s -$4.17 and last Monday’s +$2.94);
  • Global Blood Therapeutics (GBT +$3.41 after Friday’s -$2.23 and Thursday’s -$2.22);
  • Editas Medicine (EDIT +$2.74 after Friday’s -$0.92;
  • Sage Therapeutics (SAGE +$2.58 after Friday’s -$1.85, Thursday’s -$1.54 and Wednesday’s +$0.65);
  • Fate Therapeutics (FATE +$1.86);
  • Cellectis SA (+$1.75 after Friday’s -$0.99);

Monday’s (only 7) decliners:

  • ReNeuron (RENE.L -$9.90);
  • Biostage (BSTG -$0.25);
  • MiMedx (MDXG -$0.20);
  • Homology Medicine (FIXX -$0.18 after Friday’s +$0.83);
  • AxoGen (AXGN -$0.13 after Friday’s +$0.09);
  • Aduro Biotech (ADRO -$0.07 after Friday’s +$0.015);
  • Applied Genetic Technologies (AGTC -$0.01 after Friday’s +$0.22);

 

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

  • 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:

Increasing hopes of a possible treatment from Gilead Sciences also lifted sentiment last month.

  • Gilead Sciences’ (GILD) remdesivir antiviral drug will be available to coronavirus patients this week.

Stocks notched their best monthly performance in over 30 years in April in part because of hopes of an economic reopening. Last month, the S&P 500 rallied 12.7%.

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

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

Monday’s death rate escalated to a total of 67,686 after Friday’s 63,019 from Thursday’s 60,999 from Wednesday’s 58,968, Tuesday’s 56,253 and last Monday’s 55,118 <John Hopkins University>

 

Upside volume stats: 

  • 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:

  • 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

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 market and the sector will remain volatile as local and state governments struggle to time the lifting of lockdowns while waiting for potential treatments and vaccines, getting relief from the losses due to the pandemic and the usual and ever evolving political undercurrents (that’s an understatement).

Reiterating, the biggest risk to the stock market is a pre-mature reopening of the U.S. economy.

  • The damage to sentiment will be a melodrama.

Investors are disinclined to understand the dimension of 30 + million unemployed and its weight on any economic recovery even after restrictions lift.

Investors should be worried over another war of words between China and the U.S. This might it lead to an opening of confrontations on the economic front and possible skirmishes in the south China sea.

 

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.