RegMed Investors’ (RMi) pre-open indications; flack vest or a checkbook?

November 15, 2017 7:24am

In uncertain times - double down, wait or fold?

The oversold are beckoning as the sentiment sirens lure investors to rocky shoals

Pre-open trading indications: 4 SELLs and 3 BUYs

Out and about: Biostage (BSTG) files a late (NT 10-Q) filing. Opinion, what are they hiding? Is there a cover-up of the many issues and timelines of fiduciary mandated notifications related to the collapse of the company; where is the SEC? There’s more …

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Lower open expected

Dow futures are DOWN -0.51% (-119 points) and NASDAQ futures are DOWN -0.44% (-27.75 points)

U.S. stock index futures pointed to a sharply lower open Wednesday, following negative sentiment seen from markets overseas, as investors geared up for more earnings and data.

European equities fell deep into negative territory as market sentiment was hit by weaker oil prices.

Asia markets close lower; energy stocks tumble as oil extends losses. The cautious sentiment from the last session continued through Asia's Wednesday trading day, with major Asian indexes closing lower. Energy-related plays in the region, in particular, fell on weakening oil prices.

Issues that will affect the trading day: Commodities seemed to have some influence on trade, as oil prices declined after the IEA slashed its outlook for oil demand growth by 100,000 barrels per day for 2017 and 2018.

Data docket: At 8:30 a.m. ET, retail sales, consumer price index (CPI) data and the Empire State Manufacturing survey are all scheduled for release. Business inventories are set to be released at 10 a.m. ET, while Treasury International Capital (TIC) data is due out at 4 p.m. ET. Mortgage applications will also be released, as usual, at 7 a.m. ET.

On the political front: the future of a tax reform deal is expected to add uncertainty to markets throughout the trading day, as investors remain on edge over whether a reform will take place during 2017.

The cell therapy sector closed NEGATIVE on Tuesday and Monday, POSITIVE on Friday and Thursday and NEGATIVE last Wednesday.

The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):

·         Tuesday closed NEGATIVE with 30 decliners, 11 advancers and 2 flats;

·         Monday closed NEGATIVE with 25 decliners, 17 advancers and 1 flat;

·         Friday closed POSITIVE with 18 decliners, 24 advancers and 1 flat;

·         Thursday closed POSITIVE with 15 decliners, 25 advancers and 3 flats;

·         Last Wednesday closed NEGATIVE with 23 decliners, 16 advancers and 4 flats;

Henry’omics:

From Tuesday night’s closing bell post, “; in the tank with more loss-per-share quarterly results. The ETF is down -1.62% today and -11% off its 52-week highs, touched in early October, slipping below its 200-day moving average on an intraday basis for the first time since May. Again we’re seeing another journey of the oversold to being valued and then overbought.”

However, one of the nagging issues for the sector beyond its tanking; investors are nervous about the "crushing" declines of the past two sessions.

And when “our” universe falls again and again many traders get nervous yet some of us see an apparition of an upside as the desert sands engulf us.

In this kind of crazy market, as we head into 2018 - anything is possible as the sector sells-off and  it's usually exaggerated!

You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades?

Watch list:

• The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Wednesday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) is indicating a NEGATIVE -0.56% in Wednesday’s pre-market;
• The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Wednesday’s pre-open;
• The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.72% in Wednesday’s pre-open

Companies in my headlights:

AxoGen (AXGN) closed flat at $24.80 with 148.9 shares traded after Monday’s  -$0.25 to $24.80 with 106.8 K shares traded after Friday’s +$0.15 to $25.05 with 192 K shares traded, Thursday’s +$0.80 to $24.90 and last Wednesday’s +$0.20 to $24.10. My issue is the cash position ($22 M) and bank debt positions ($25 M). It’s still rich with a trader’s target on its back with $4.70 or +18.95% in twelve (12) sessions - Maintaining SELL;

BioLife Solutions (BLFS) closed down -$0.12 to $6.09 with 139.8 K shares traded after Monday’s +$0.30 to $6.21 with 173.6 K shares traded after Friday’s +$0.76 to $5.91 with 412.6 K shares traded <3 month average = 220.5 K shares>. Wednesday (11/9) saw $5.01. 11/1 saw $5.60 while 9/1 saw $4.86; I still have a problem with their cash and debt position and their dependence on facilitation for others, sooner or later companies are going to seek internal solutions – In six (6) sessions, there is $1.23 or +18.2% of premium in the share price - Maintaining SELL;

bluebird bio (BLUE) closed up +$3.80 to $158.35 with 703.5 K shares traded after Monday’s +$2.80 to $154.55 with 553.1 K shares traded <3 month average = 884.2 K shares>. Last week saw $151.75 (Friday), $150.35, $146.70 (Wednesday), $146.70 and $144.75 (Monday) – a nice trend and a target for traders.  The aftermarket indication is again a NEGATIVE -$0.90 or -0.57% - Maintaining SELL;

Biostage (OTCQB: BSTG) closed down -$0.0061 to $0.0769. It’s my opinion, they are hiding actions and answers to the reasons behind the company’s failure? BSTG filed a SEC late filing NT 10-Q; BSTG is unable to complete the necessary analysis and disclosures to timely file its Form 10-Q for the quarter ended 9/30/17. How can that be TRUE, there are two accountants and a CFO still on duty? Or, is it an issue of NOT disclosing the time lines, present conditions or their personal need to keep themselves on the payroll after spending $30 M with NO “findings” of regulatory initiatives in three (3) years. What are the real aspects of their former CMO role and history referencing circumstances of those who left or were terminated? Is there a cover-up of the many issues and timelines of fiduciary mandated notifications related to the collapse of the company, where is the SEC?  Maintaining SELL;

Cellectis SA (CLLS) closed down -$0.55 to $23.46 with 50 shares traded -$1.05 to $24.01 with 297.2 K shares traded <3 month average = 258.4 K shares>. CLLS quarterly results were not bad (a net loss attributable to shareholders of $14.1 million (or $0.40 per share on both a basic and a diluted basis) and 9 month net loss attributable to shareholders of Cellectis of $26.2 million (or $0.73 per share). As of 9/30/17, CLLS had $304.1 million in total cash, cash equivalents and current financial assets compared to $271.2 million as of 6/30/17. This increase of $32.9 million reflects an increase of $38.0 million attributable to Calyxt IPO, the net cash provided by investing activities of $6.1 million included $7.0 million of proceeds from Calyxt’s sale leaseback transaction and the unrealized positive translation effect of exchange rate fluctuations on U.S. dollar cash, cash equivalents and current financial assets of $3.1 million; partially offset by the net cash flows used by operating activities of $15.5 million – Maintaining  BUY;

Juno Therapeutics (JUNO) closed down -$2.19 to $53.86 with 2 M shares traded after Monday’s -$1.54 to $56.05 with 1.39 M shares traded <3 month average = 3 M shares>. JUNO always seems to retrace their declines – Maintaining BUY;

Sangamo Therapeutics (SGMO) closed flat at $12.90 with 1 M shares traded <3 month average = 1.66 M shares>. SGMO starts the session with news, announcing the treatment of the first patient in the P1/2 clinical trial ("the CHAMPIONS study") evaluating SB-913, an investigational in vivo genome editing therapy for people with mucopolysaccharidosis type II (MPS II), also known as Hunter syndrome. Sangamo aims to treat MPS II by using genome editing to insert a corrective gene into a precise location in the DNA of liver cells with the goal of enabling a patient's liver to produce a lifelong and stable supply of an enzyme he or she currently lacks. The pre-market indication is a POSITIVE +$0.75 or +5.81% - BUY;

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.