April 1, 2020 9:02am

Two (2) purposes remain unchanged - collecting and analyzing data in order to dissect the possibilities of this market and “our’ universe

Pre-open indications: 8 BUY possibilities (3 with news) and 1 SELL into strength

News: Ultragenyx Pharmaceuticals (RARE closed up +$0.11 to $44.43) announced a strategic partnership and non-exclusive license and technology access agreement with Daiichi Sankyo. Regenxbio (RGNX) extended its existing gene therapy partnership; under the terms of the agreement, REGENXBIO has granted Ultragenyx (RARE) an exclusive, worldwide license. FDA accepts Mesoblast’s (MESO closed up +$0.04 to $4.38 and has a +$0.24 or +5.48% pre-open indication) BLA for RYONCIL™ and agrees to priority review.

My interpretation of the morning’s numbers is written to be informative; it’s built on what happened or will happen behind the headline today, not tomorrow or yesterday.

Dow future are DOWN -3.68% (- 801 points), S&P futures are DOWN -3.63% (-93 points) and NASDAQ futures are DOWN -2.86% (-223 points)

 

U.S. stock futures dropped Wednesday pointing to a lower open, following the end of the worst Q1 on record for the Dow and S&P 500 spurred by the coronavirus sell-off;

European markets traded lower as global market sentiment continues to take a pummeling amid the coronavirus outbreak with the pan-European Stoxx 600 falling 3.4% in early deals;

Asia Pacific markets were lower as a private survey showed Chinese manufacturing activity expanding only slightly in March with the MSCI Asia ex-Japan index dropping -1.16% lower;

 

Data docket:  Data from ADP and Moody’s Analytics showed U.S. companies cut 27,000 jobs through March 12. Actual losses for the month were far worse, as shown by the record number of jobless claims in the week or March 20. Markit Manufacturing PMI and ISM manufacturing index for March will also be released today …

 

Henry’omics:

President Trump said Tuesday evening the U.S. should prepare for a “very, very painful two weeks” because of the rampant coronavirus.  White House officials are projecting between 100,000 and 240,000 virus deaths in the U.S. while DoubleLine Capital CEO Jeffrey Gundlach said that the coronavirus driven market rout will worsen again in April, taking out the March low.

I am truly concerned; the trillions of dollars Washington is spending to combat the COVID-19 epidemic are likely to push annual fiscal deficits relative to the size of the U.S. economy close to levels last seen during World War II.

“Just as firefighters don’t care how much water they use in putting out a fire, governments don’t fret about how much they spend to fight a once-in-a-lifetime crisis like a deadly global pandemic. Democrats and Republicans in Washington are virtually united in the belief that they should spend whatever they need to and worry about how to pay for the coronavirus bailout later.” <MarketWatch>

 

The BOTTOM LINE: the sector is what it is until it isn't. One can take a good or bad feeling, re-frame it, and suddenly that feeling is the solution. Not me, I don’t run from any feeling but, take that sensation itself as a sharpened stick to “poke’ mainstream thinking

 

Tuesday night’s title: “the cell/gene sector swings neutral as Q1 ends and markets collapse. The real question is how much end-of-quarter rebalancing is actually happening or whether we are back to outright machine-oriented selling.”

  • The NASDAQ closed DOWN -74.05 points (-0.95%);
  • The CBOE Volatility Index (VIX) tracked down -3.54 points or -6.20% at 53.54;
  • The range of the 17-upside was +0.02% (ALNY) to +15.83% (ATHX) while the 17-downside ranged from -0.76% (VCEL) to -11.35% (PSTI); 
  • Volume was LOW as 3 out of the 17-upside had higher than the 3-month average volume with even LOWER volume as only 2 out of the 17-downside had higher than the 3-month average volume;

 

Q2:

today starts the queue

Q1:

  • March registered 11 negative, 1 neutral and 10 positive closes
  • 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:

My targets to SELL into strength and volume:

Athersys (ATHX) - Before stem cells can be used in the U.S. to fight the virus, there would have to be clinical trials in this country and approval from the U.S. FDA.

My targets to BUY:

  • blue bird bio (BLUE), Adverum (ADVM), Regenxbio (RGNX), Ionis Pharmaceuticals (IONS), Sage Therapeutics (SAGE), Ultragenyx Pharmaceuticals (RARE)

BUY on News:

Ultragenyx Pharmaceuticals (RARE) announced a strategic partnership and non-exclusive license and technology access agreement with Daiichi Sankyo Company, Limited for RARE’s proprietary AAV-based gene therapy manufacturing technologies. RARE’s HeLa producer cell line (PCL) platform enables large commercial-scale AAV-based gene therapy product manufacturing that is intended to be highly reproducible, more consistent, and less expensive than other gene therapy manufacturing platforms.

  • In addition, RARE has developed a proprietary HEK293 transient transfection system for AAV manufacture which is also a subject of the collaboration. Under the license and technology access agreement, RARE granted Daiichi Sankyo a non-exclusive license to intellectual property, including know-how and patent applications, with respect to its HeLa PCL and HEK293 transient transfection manufacturing technology platforms for AAV-based gene therapy products.
  • Under the terms of the agreements, Daiichi Sankyo will make an upfront payment of $125 million and will purchase $75 million of Ultragenyx common stock at a price of approximately $60 per share. Daiichi Sankyo will pay an additional $25 million upon completion of the technology transfer of the HeLa PCL and HEK293 platforms as well as single-digit royalties on net sales of products manufactured in either system. Daiichi Sankyo will reimburse Ultragenyx for all costs associated with the transfer of the manufacturing technology.
  • Mesoblast (MESO) the US has accepted for priority review the Company’s Biologics License Application (BLA) filing for RYONCILTM (remestemcel-L), its allogeneic cell therapy for the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD). The FDA has set a Prescription Drug User Fee Act (PDUFA) action date of September 30, 2020, and if approved, Mesoblast will make RYONCIL immediately available in the United States.

Regenxbio (RGNX) extended its existing gene therapy partnership. Under the terms of the agreement, REGENXBIO has granted Ultragenyx (RARE) an exclusive, worldwide license, with rights to sublicense, to RGNX’s NAV AAV8 and AAV9 Vectors for the development and commercialization of gene therapy treatments for a rare metabolic disorder. In return for these rights, REGNX will receive an upfront payment of $7 million, ongoing fees, milestone payments, and royalties on net sales of products incorporating the licensed intellectual property.

 

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.