May 20, 2020 7:59am

Doubts and conflicting data in trial results for Moderna’s (MRNA) potential coronavirus vaccine fueled volatility around a possible coronavirus vaccine after the “hope” rally

News: Applied Genetic Technologies (AGTC) published positive preclinical data that provide the foundation for the vector and starting dose used in its ongoing P1/2 clinical trial in patients with XLRP due to mutations in the RPGR gene. The data, which demonstrate that its proprietary AAV vector and engineered RPGR constructs were well tolerated and had beneficial effects on markers of disease in a canine model of XLRP, were published online in Human Gene Therapy

Pre-open indications:  3 BUYs and 3 SELLs     

What I provide is an “intelligence daily” to inform the RegMed/cell and gene therapy sector and its investors utilizing indication and warning analysis. Check the BOTTOM LINE <read more>

Dow future are UP +1.14% (+276 points), S&P futures are UP +1.10% (+32 points) and NASDAQ futures are up +1.01% (+94 points)

 

U.S. stock futures pointed to solid gains, following a weak session that snapped a three-day winning streak for markets;

European stocks re-visited negative territory as positive global market sentiment faltered forcing the pan-European Stoxx 600 to slip -0.5% in early trading;

Asia Pacific stocks were mixed as China’s benchmark lending rate was left unchanged; Mainland china was lower, Japan rose, South Korea ended higher while Australia climbed with MSCI Asia ex-Japan index slightly higher.

 

Data Docket: Mortgage applications rose 6% last week from the previous week, according to the Mortgage Bankers Association. Purchase volume was just 1.5% lower than a year ago, a rather stunning recovery from just over a month ago, when purchase volume was down 35% year over year.

  • If mortgage demand is an indicator, buyers are coming back to the housing market far faster than anticipated, despite coronavirus shutdowns and job losses.

 

Henry’omics:

Looks like a good day to “play” in the opening market “sandbox” on Wednesday’s!

Yesterday, the “hope” rally and ultimate downslide were fueled by uncertainty around a possible coronavirus treatment and vaccine, and how state and local economies will fare as they prepare to re-open.

On Tuesday, stocks traded most of the day around the flatline until a report raised concerns about previously publicized trial results for Moderna’s (MRNA) potential coronavirus vaccine. The Dow lost 390 points, while the S&P 500 also registered a loss, dropping 1.05% and the Nasdaq was the relative outperformer, registering a loss of 0.5%.

Yesterday’s performance was odd …

It took 33 days for stocks to drop 34%, and three weeks to gain half of it back. Whiplashed investors have been thankful for a dose of calm, but signs are emerging the lull may not last.

The clues are evident across options markets, in surging share volume and in widening daily price swings, among other places. Frantic positioning and extreme readings in market internals show that while the S&P 500 has been nestled in a trading range for four weeks, investors remain anything but settled.

 

Tuesday night’s newsletter’s title:” the sector suffers a descent as Icarus could only fly so high before index wings melt.”

  • The NASDAQ closed DOWN -49.72 points (-0.54%);
  • The IBB closed down -1.92% and XBI also closed down -2.85%
  • Tuesday closed negative with an Advance/decline line of 9/23 and 3 flats following Monday’s positive close at 29/6 and last Friday’s positive close at 24/10 and 1 flat;
  • Volume was still LOW with 4 out of the 9-upside having higher than the 3-month average volume and 2 out of the 23-downside having higher than the 3-month average volume;
  • The percentage (%) of the 9-upside were +0.04% (EDIT) to +5.17% (ADVM) while the 23-downside ranged from -0.22% (FIXX) to -6.54% (SAGE). 

Q2:

  • May registered 6 negative, 7 positive closes – so far
  • April registered 10 negative, 11 positive closes and 1 holiday.

Q1:

  • March registered 11 negative, 10 positive closes and 1 neutral close.
  • February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
  • January registered 9 negative, 10 positive closes and 2 holidays.

 

Companies in my headlights – It’s your decision; I provide an idea and context

Maintaining Sell into strength:

  • Athersys (ATHX) closed down -$0.085 after Monday’s +$0.035 after Friday’s +$0.04, Thursday’s -$0.11 and last Wednesday’s +$0.045. SELL into trials which will take time plus a lingering negative includes taking PPP funds from the government while simultaneously raising $57.6 M.
  • BioLife Solutions (BLFS) closed up again +$0.59 to 16.47 after Monday’s +$0.53 after Friday’s $15.35, Thursday’s $14.57, Wednesday’s $14.90 and last Tuesday’s +$15.23 after reporting earnings with solid revenue and a $20 M investment by Casdin Capital. The chart looks “peaky” and at $15.88, a $20 million infusion adds the share count of the existing 20.45 million and if these new shares are registered – a calamity;

SELL, switching sides:

  • Intellia Therapeutics (NTLA) closed up another +$0.74 to $19.44 after Monday’s +$1.31 after hitting a 52-week high which threatens me as to ownership. I bit last night on the IBD article but, anything hitting a 52-week high in a session is suspect;

Maintaining BUY:

  • Applied Genetic Technologies (AGTC) today’s news might help share pricing, AGTC closed up +$0.02 after many sessions of value lost yet, AGTC has been increasing its cash burn investing in the future with a positive +$0.04 or +0.95% aftermarket indication. AGTC treats inherited orphan diseases of the eye, caused by mutations in single genes that significantly affect visual function and currently lack effective medical treatments;
  • Pluristem (PSTI) closed down again -$0.51 after Monday’s -$0.57 and has a negative -$0.01 or -0.11% aftermarket indication. Traders are “scoring” on taking down PSTI however recent news (which was sold into) highlights an … 87.5% survival rate of patients on invasive mechanical ventilation injected with PLX cells, 75% of patients no longer in need of any mechanical ventilation, 62.5% of the patients discharged alive from the hospital after a 28-day study in PSTI’s recently announced FDA P2 study. A compassionate use program should NOT be underestimated. I’m also a sucker for the oversold;

BUY:

  • CRISPR Therapeutics (CRSP) closed down -$0.42 and has a positive +$0.74 or +1.16 aftermarket indication;

 

The BOTTOM LINE: It’s a sector of musical chairs regarding the rise and fall of share pricing.

The newest model for assessing stocks will be defining when and where and on which chair share pricing bottoms will rest.

From the title, investors seeking to protect their portfolios in a weakened sector amid periods of high volatility should position their exposure to defensive stocks.

However, new vaccine developments and clinical data uncertainty with regulatory concerns means they aren't as defensive as they once were.

While some may choose to take the high road of optimism in this somewhat volatile market, there appear to be more headwinds than tailwinds.

Some sector stocks look fatigued and, in some cases, injured, however, it’s back to fundamentals, cash positions, runways and platforms.

 

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.