February 23, 2018 7:56am

Sector intelligence and perspective

 

A spit sector, overbought with an oversold bias?

… With volume on low side as the NASDAQ and IBB weakened

 

The sector suffers a heavy weight of expectation

 

Out and about:The California Institute for Regenerative Medicine (CIRM) has awarded Fate Therapeutics (FATE) $4 M grant to advance FT516 into a first-in-human clinical trial. FT516 is being developed by FATE as an off-the-shelf engineered NK cell cancer immunotherapy. The NK cell product candidate is derived from a clonal master induced pluripotent stem cell (iPSC) line engineered to uniformly express a novel CD16 Fc receptor.(BUY)

Pre-open indications: 5 BUYs and 5 SELLs

 

Higher open expected


 

Dow futures are UP +0.48% (+119 points) and NASDAQ futures are 0.46% (+31 points)

 

U.S. stock index futures pointed to sharp gains ahead of Friday's open, with investors awaiting more comments from Federal Reserve officials on the state of the economy.

Europe markets mixed

Markets in Asia advance

 

Issues to be faced at the open: Investor anxiety

Data docket: data scheduled to be published Friday; investors will be awaiting key remarks from leading members of the U.S. Federal Reserve.

The economy:  A U.S. monetary policy forum will be taking place in New York, where four major Fed officials are due to speak on economic policy, in front of other policymakers, academics and market economists.

 

 

Been where, done what …

RegMed, stem and cell therapy sector’s record over 5 sessions (of 40 covered companies):

·         Thursday closed POSITIVE with 10 decliners, 28 advancers and 2 flats;

·         Wednesday closed POSITIVE with 13 decliners, 24 advancers and 3 flats;

·         Tuesday closed NEGATIVE with 26 decliners, 12 advancers and 2 flats;

·         Monday the market was closed for President’s Day

·         Last Friday closed POSITIVE with 17 decliners, 18 decliners and 5 flats;

 

 

Henry’omics:

From last night’s newsletter, “…the trading “tourists” stuck to the schedule … As sector stocks stay up overshadowed by NASDAQ (-0.11%), the IBB (-0.61%) and XLV’s (-0.15%) decline defines the balance between pricing, value and risk as … volatility is here to stay subsidized by algorithms.”

Traders are expected to look for more hints on the economic outlook from a parade of expected Federal Reserve speakers, notably the prepared remarks from newly appointed central bank boss Jerome Powell, who succeeds outgoing Chairwoman Janet Yellen.

As of Thursday’s close, the Dow and S&P 500 were each facing a loss of 1% for the week, while the NASDAQ was set to slip 0.4%.

The Fed will release a report on monetary policy at 11 a.m. Eastern, which comes ahead of Jerome Powell’s inaugural testimony before congress as Federal Reserve chairman.

His testimony comes ahead of the Fed’s key march meeting but after a release of minutes on Wednesday rattled markets, signaling that the central bank is eager to hike borrowing costs on the back of signs of rising inflation.

 

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Friday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +0.47% upside in Friday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Friday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.84% upside in Friday’s pre-open

 

 

Companies in my headlights:

Adverum (ADVM) closed up +$0.40 to $6.80 with 1.75 M shares traded <3 month average =1.154 M shares>. A premium of +$0.60 in three (3) sessions with big volume in a jittery sector, traders sell into strength – SELL;

AxoGen (AXGN) closed up +$0.15 to $28.65 after Wednesday’s +$0.75 to $28.50 with 227.2 K shares traded after Tuesday’s +$0.35 to $27.75 with 267.2 K shares traded <3 month average = 300 K shares>. A little too “toppy” for me in ten (10) sessions the shares have jumped from $24.40, that’s a $4.25 or a +14.8% premium - Maintaining SELL;

Bellicum Pharmaceuticals (BLCM) closed up +$0.07 to $6.67 with 836.9 K shares traded <3 month average = 776.7 K shares>. BLCM received notification from the FDA outlining the criteria required for lifting the clinical hold on U.S. studies of BPX-501. To address the FDA requirements, BLCM plans to implement revisions to the U.S. study protocols, including the addition of more comprehensive monitoring and management of neurotoxicity. In addition, BLCM will revise the Investigator Brochure and Informed Consent Documents to inform healthcare providers, patients and caregivers of the changes. The Company expects to provide a full response to the FDA within a few weeks – BUY;

bluebird bio (BLUE) closed down -$6.20 to $201.20 with 1 M shares traded <3 month average = 964.3 K shares>after Wednesday’s  +$1.95 to $207.40 in a day’s range that went as high as $213.20 before it sold-off with 303.4 K shares traded after Tuesday’s  -$7.90 to $205.45 with low volume of 593.1 K shares traded. Quarterly results missed expectations, BLUE’s shares have risen 16% since the beginning of the year.  BLUE released Q4/17 earnings on Wednesday without warning or holding a conference call. Nevertheless, is there an arrogance factor as BLUE had to issue and update on Thursday evening. The aftermarket indication is a lean upside +$0.80 or +0.40% compared to the usual upside; as CEO Leschly laid out the BLUE's plans for filing three (3) marketing applications over the next two years: with regulatory authorities in the next two years: LentiGlobin in TDT in 2018, Lenti-D in [cerebral adrenoleukodystrophy] in 2019 and, with its partners at Celgene, bb2121 in multiple myeloma, also in 2019.  What about 2018 (?), they’ll still be spending -Maintaining SELL;

Caladrius Bioscience (CLBS) closed up +$0.24 to $4.28 with 45.5 K shares traded <3 month average =50.1 K shares>. Five (5) sessions ago, CLBS was trading at $3.78, maybe time to profit and maybe come back after quarterly results – SELL;

MiMedx (MDXG) closed down -$0.17 to $8.88 with 5.57 M share traded <3 month average = 2.29 M shares> with an aftermarket indication of +$9.10 or +1.13%. MDXG has been shaken by short seller drama and a current issue of accounting – what’s new. There is always a bounce back as 21/1 opened at $17.13, thus there is a wide upside margin - BUY;

UniQure (QURE) closed up +$0.44 to $25.89 with 388.3 K shares traded <3 month average = 434.9 K shares>. The aftermarket indication is a positive +$0.29 or +1.10% - BUY;

Sangamo Therapeutics (SGMO) closed up +$3.20 to $25.40 with 13.4 M shares traded <3 month average =1.57 M shares> after Wednesday’s  -$0.05 to $22.20 and is up in the pre-market a positive +$0.19 or +0.77% on yesterday’s news of Gilead Sciences (GILD) unit Kite entering an agreement to collaborate in developing engineered cell therapies to treat cancer. Under the terms of the deal, Kite will use SGMO's zine finger nuclease technology platform to develop the next-generation therapies for autologous and allogeneic use in treating different cancers. SGMO will receive $150 million in upfront payments and be entitled to up to $3.01 billion in potential payments – Maintaining BUY;

Spark Therapeutics (ONCE) closed up +$2.85 to $54.19 with 1 M shares traded<3 month average = 1 M shares> after Wednesday’s +$1.11 to $51.34 with 954.1 K shares traded after Tuesday’s -$4.27 to $50.23 with 1.44 M shares traded. Four (4) sessions ago, I saw $54.99 and $56.30 on 2/1 and $59.38 on 1/29 - Maintaining BUY;

Stemline Therapeutics (STML) closed up +$1.05 to $17.60 with 515.4 K shares traded <3 month average = 276.1 K shares>. The aftermarket indication is AA positive +$0.05 or +0.28%; however, STML’s chart is just too “peaky” and the shares in eight (8) sessions have jumped from $15.35 having started the month at $15.85. Only 13% but is a Friday in a “jittery” sector as the NASDAQ weakened – SELL;

 

 

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.