April 16, 2020 6:23pm

The real question is how long will risks compared to future driven rewards go unrecognized

Breaking news: Gilead Sciences (GILD) shares surged by more than 15% in after-hours trading Thursday after details leaked of a closely watched clinical trial of the company’s antiviral drug Remdesivir appeared to show promising results in treating Covid-19. The University of Chicago’s P3 drug trial found that most of its patients had “rapid recoveries in fever and respiratory symptoms”.

Pre-open indications: 2 HITs (ATHX -$0.82 on proposed offering & PSTI -$0.75) and 0 MISSes

An “intelligence newspaper” that many worldwide investors call the “bible” for smart investing in the RegMed, gene and cell therapy sector. Readers are growing exponentially.  Check the BOTTOM LINE on one investment criteria… <read more>

The Dow closed UP +33.33 points (+0.14%), the S&P closed UP +16.19 points (+0.58%) while the NASDAQ closed UP +139.19 points (+1.66%)

 

Henry’omics:

Stocks were putting in a mixed performance on Thursday as ...

The first conundrum is how (and when) are government officials weigh plans for getting daily life back as investors digest share pricing data showing the effect of economic damage done by widespread lockdowns imposed to contain the coronavirus pandemic.

The second question is when state governments will reopen scientific development businesses because there’s death involved in keeping some of these companies in shut-down as isolation is also making people crazier than usual … and holding-up the cures for disease and traumas.

Uncertainty about the outlook for the business climate in the aftermath of the coronavirus is still swirling around.

Negative economic reports won’t stop but is slowing investors from picking up healthcare-related stocks however, the violent impact of trading velocity of the downs and ups of share pricing of our universe of RegMed/cell and gene therapy companies is showing its impact.

I am a personal Art Hogan friend <chief market strategist at National Securities> who states, "This week we seem to have narrowed the focus back to the what works in this work-from-home world,” said Art noting <last week> investors are buying into the recent sell-off’s laggards.  However, I also agree about that “we’re going to get a horrendous pile of data dumped on our heads” – that I say ... does NOT affect our capacity to see clearly WHAT to own - it's just more to reflect upon!

 

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

Thursday, the IBB closed up +2.93% and XBI also closed up +2.70%

  • Wednesday, the IBB closed down -2.49% and XBI also closed down -2.47%
  • Tuesday, the IBB closed up +3.63% and XBI also closed up +4%
  • Monday, the IBB closed up +0.46% and XBI also closed down -0.16%

 

The CBOE Volatility Index (VVIX: INDEX) tracked:

Thursday was down -0.73 points or -1.79% at 40.11,

  • Wednesday was up +3.08 points or +8.18% at 40.82,
  • Tuesday was down -3.41 points or -8.28% at 37.76,
  • Monday was down -0.50 points or -1.20% at 41.17,
  • Two weeks ago, 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 …

Thursday opened positive at 19/16, flipped negative at the mid-day at 10/24 and 1 flat (BSTG) closing negative at 14/20 and 1 flat;

  • Wednesday opened negative at 3/32, stayed negative at the mid-day at 5/30 and 1 flat closing negative at 6/29;
  • Tuesday opened positive at 31/4 and 1 flat, stayed positive at the mid-day at 28/6 and 1 flat closing positive at 31/4;
  • Monday opened negative at 16/17 and 2 flats, stayed negative at the mid-day at 11/24 and closed negative at 16/19;

 

Thursday’s (top 10 of 14) incliners:

  • Alnylam Pharmaceuticals (ALNY +$6.22 after Wednesday’s +$1.06, Tuesday’s +$1.71 and Monday’s +$2.630;
  • bluebird bio (BLUE +$5.19 after Wednesday’s -$1.04, Tuesday’s +$2.76, Monday’s -$0.59 following last Thursday’s +$3.46);
  • Ionis Pharmaceuticals (IONS +$2.47 after Wednesday’s -$1.90, Tuesday’s +$1.52 and Monday’s -$1.75);
  • uniQure NV (QURE +$1.61 after Wednesday’s -$2.61, Tuesday’s +$2.61, Monday’s +$1.23 following last Thursday’s -$2.50);
  • CRISPR Therapeutics (CRSP +$1.38);
  • Regenxbio (RGNX +$1.31 after Wednesday’s -$2.29);
  • Global Blood Therapeutics (GBT +$1.03 after Wednesday’s -$2.45 and Tuesday’s +$4.07);
  • Editas Medicine (EDIT +$0.72 after Wednesday’s -$0.78);
  • Cellectis SA (CLLS +$0.61 after Wednesday’s -$0.86, Tuesday’s +$1.36 and Monday’s +$0.78);
  • Ultragenyx Pharmaceuticals (RARE +$0.55 after Wednesday’s -$1.28, Tuesday’s +$4.36, Monday’s +$0.73 and last Thursday’s -$0.52);

Thursday’s (bottom 10) decliners:

  • ReNeuron (RENE.L -$2.50 after Wednesday’s -$15.00 and Tuesday’s -$13.00;
  • Athersys (ATHX -$0.82 after Wednesday’s +$0.0068 with news of offering after Tuesday’s -$0.36, Monday’s +$0.55 following last Thursday’s -$0.06);
  • Pluristem (PSTI -$0.75 after Wednesday’s +$1.36);
  • AxoGen (AXGN -$0.49);
  • Mesoblast (MESO -$0.38);
  • MiMedx (MDXG -$0.22);
  • Applied Genetic Technologies (AGTC -$0.18 after Wednesday’s +$0.23);
  • Caladrius Biosciences (CLBS -$0.14 after Wednesday’s +$0.03);
  • Solid Biosciences (SLDB -$0.10);
  • Stemline Therapeutics (STML -$0.09);

 

Today’s stand-outs: a wipe-out

  • 7-session repeater –Alnylam Pharmaceuticals (ALNY);
  • A lot of new additions to the upside having been down yesterday (see incliners) – BLUE, QURE, GBT, CLLS, EDIT, RARE and CRSP;
  • Crashing after offering announcement -$0.82 - Athersys (ATHX);
  • 4 down session after 6-sessions of upside – ReNeuron (RENE.L);
  • Hop-scotching – Biostage (BSTG closed twice (2x) flat after being up 3 times versus 7 down in the last twelve (11) sessions since April 1st;
  • 2 hammered sessions after 8-sessions– Pluristem (PSTI);

 

Volumes versus 3-month averages: low volume is moving the needle

Thursday’s volume was LEANER as 2 out of the 14-upside had higher than the 3-month average volume and only 1 out of the 20-downside had higher than the 3-month average volume.

  • Wednesday’s volume was LOW as 3 out of the 6-upside had higher than the 3-month average volume and only 6 out of the 29-downside had higher than the 3-month average volume.
  • Tuesday’s volume was LACKLUSTER as 10 out of the 31-upside had higher than the 3-month average volume and only 3 out of the 4-downside had higher than the 3-month average volume.
  • Monday’s volume was even LOWER as 5 out of the 16-upside had higher than the 3-month average volume and only 3 out of the 19-downside had higher than the 3-month average volume.

 

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

Thursday’s % of the 14-upside were +0.11% (RARE) to +6.88% (BLUE) while the 20-downside ranged from -0.59% (SAGE) to -26.29% (ATHX)). 

  • Wednesday’s % of the 6-upside were +0.22% (ATHX) to +16.17% (PSTI) while the 29-downside ranged from -0.88% (BCLI) to -27.66% (FIXX) were a lot higher than usual. 
  • Tuesday’s % of the 31-upside were +1.44% (ALNY) to +12.98% (CLLS) while the 4-downside ranged from -2.28% (SAGE) to -12% (BSTG) were a lot higher than usual. 
  • Monday’s % of the 16-upside were +0.33% (FATE) to +19% (BLCM) while the 19-downside ranged from -0.35% (GBT) to -9.70% (VYGR) were a lot higher than usual. 

 

Sentiment and its indicators:

The Labor Department said 5.245 million Americans filed for unemployment benefits in the week of April 11. Last week’s claims total brought the number of job losses to 22 million during the coronavirus outbreak, so far …

The Philadelphia Federal Reserve’s business conditions index also hit its lowest level since July 1980 as activity in the region slumped this month. U.S. housing starts plunged 22.3% in March.

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

  • Thursday’s 641,000
  • Wednesday’s 610,700,
  • Tuesday’s 584,000,
  • Monday’s 560,800,

Thursday’s death rate escalated to 31,590 after Wednesday’s 26,119, Tuesday’s 24,485 and Monday’s 22,861 <John Hopkins University>

 

Upside volume stats: 

  • Thursday: 1 out of the 14-upside had higher than the 3-month average volume;
  • Wednesday: 3 out of the 6-upside had higher than the 3-month average volume;
  • Tuesday: 10 out of the 31-upside had higher than the 3-month average volume;
  • Monday: 5 out of the 16-upside had higher than the 3-month average volume;

Downside volume stats:

  • Thursday: 1 out of the 20-downside had higher than the 3-month average volume;
  • Wednesday: 6 out of the 29-downside had higher than the 3-month average volume;
  • Tuesday: 3 out of the 4-downside had higher than the 3-month average volume;
  • Monday: 3 out of the 19-downside had higher than the 3-month average volume;

 

April

Thursday closed negative with 20 decliners, 14 advancer and 1 flat

Wednesday closed negative with 29 decliners, 6 advancer and 0 flats

Tuesday closed positive with 4 decliners, 31 advancer and 0 flats

Monday closed negative with 19 decliners, 16 advancer and 0 flats

Friday was a market holiday

Thursday closed positive with 7 decliners, 28 advancer and 0 flat

Wednesday closed positive with 4 decliners, 30 advancer and 1 flat

Tuesday closed negative with 18 decliners, 17 advancer and 0 flats

Monday closed positive with 2 decliners, 33 advancer and 0 flats

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:  there is a lot of push-back to shelter-in-place but we do need to continue safeguards.

There are NO right answers without testing!

Where is the balance of deploying capital as the sector investing is managed by unknowns, back-and forth trading, momentum, moving averages and hyper volatility which are topics of phone calls versus past lunches and meetings – very limiting?  

The opening of the U.S. economy from its current dormancy could be one of the biggest factors in determining how “our’ universe of RegMed/cell and gene therapy sector recovers from COVID-19, which has also forced millions of Americans to stay sequestered to stem the spread of the contagion.

One theme has come-out lately is the POPULARITY CONTEST of CEOs and companies; who do investors like and, not joking, who they would have a drink or a coffee with and leave satisfied.

Times are a changing, past relevancy … Ben Graham used to talk about the “stock market being a cross between a voting machine and a weighing machine”.

Relationships are one if not, a MAJOR judgement for if a trade from one side or the other depends an investor’s buying or selling.

IF I haven’t “liked” a CEO or a management team, I would NOT invest or recommend an investment in a certain company for a multitude of historical interactions!

I won't be deterred from ... speaking TRUTH from FACTS!

 

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.