January 25, 2018 7:46am

After a big run, even the less jaded realized that in a no news cycle other than a larger cap acquisition – the appreciation would evaporate  

 

… Which also suggests that there is a risk when the sector turns down; the decline will be exaggerated

 

Headwinds include Q4 results that highlight cash positions versus development milestones and those companies who need to raise capital through dilutive and depreciating offerings

In many cases, the higher the volatility, the riskier the equity

 

Pre-open indications: 4 SELLs and 2 BUY

 

Higher open expected

Dow futures are UP +0.33% (+88) and NASDAQ futures are UP +0.56% (+38.5 points)

 

U.S. stock index futures posted minor gains ahead of Wall Street's open Thursday.

European markets were mostly higher, as investors awaited the latest monetary policy decision from the European Central Bank.

Asia closed lower as the dollar continued to struggle after tumbling in the last session.

 

Issues that will affect the trading day: Investors will be looking overseas as the European Central Bank is set to deliver its latest monetary policy decisions Thursday.

Data docket:  jobless claims and advance economic indicators are expected to be published at 8:30 a.m. ET.

Issues on the political front: the impact of President Trump at Davos and what rhetoric will emanate from the visit?

 

 

Correlate the closings, patterns appear:

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

·         Wednesday closed NEGATIVE with 22 decliners, 16 advancers and 2 flats;

·         Tuesday closed POSITIVE with 9 decliners, 28 advancers and 3 flats;

·         Monday closed POSITIVE with 9 decliners, 26 advancers and 5 flats;

·         Friday closed closely POSITIVE with 18 decliners, 21 advancers and 1 flat;           

·         Last Thursday closed NEGATIVE with 20 decliners, 15 advancers and 5 flats;

 

 

Henry’omics:

From Wednesday night’s closing bell post, “…right again… 11:30 am marked the dramatic downdraft in sector pricing as 24 of 40 sector “participants” cratered. As I had stated, “a sector who’s pricing rocketed … is now deemed to be problematic after dramatic upsides with a here today and gone tomorrow appreciation …”

As I stated, “a reasonable question to ask … if the KITE and JUNO deals did not happen – where would the sector be trading?”

Q4 financial results are starting to “pour” out setting the tone for Q1/18 and share pricing.

I foresee further meltdowns in the sector … speculation should NOT be depended on, we need news!

 

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Thursday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is NOT indicating in Thursday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Thursday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.43% in Thursday’s pre-open

 

 

Companies in my headlights:

Applied Genetic Technologies (AGTC) closed up +$0.05 to $4.30 with 170 K shares traded <3 month average = 102.3 k shares> after Tuesday’s +$0.10 to $4.25, Monday’s +$0.05 to $4.15 with 31.6 K shares traded, Friday’s +$0.10 to $4.10 with 57.8 K shares traded and last Thursday’s +$0.05 to $4.00. AGTC has clinical trial timing issues and spending woes – Maintaining SELL;

bluebird bio (BLUE) closed up again +$7.25 to $207.45 with 1.35 M shares traded <3 month average = 967.3 K shares> after Tuesday’s +$5.55 to $200.20 with 1.5 M shares traded after Monday’s +$18.70 to $194.65 with 2.48 M shares traded after Friday’s -$6.15 to $175.95 with 739.6 K shares traded up +$6.85 to $182.10 with 1 M shares traded after last Thursday’s $182.10. During the last week, the stock ran from $163.35 to $182.10 and then there was last Friday’s close at $175.95. The pre-market indication is a negative -$0.45 or -0.22% yet, after all the “ups’ of $24.25 or +15.18% in four (4) sessions – greed will set in – Maintaining SELL;

Capricor (CAPR) closed down again -$0.03 to $1.60 with 143.9 K shares traded <3 month average = 721.6 K shares> after Tuesday’s $1.63 with 166.1 k shares traded after Monday’s +$0.03 to $1.66 with 143.2 K shares traded.  CAPR over the weekend “scraped” their website promoting its director of finance to CFO, while he changed his Linked-In profile to reflect his new CFO status there was NO public release to shareholders/investors and NO 8-K to reflect a corporate officer change – TYPICAL for CAPR’s habit of NOT reporting the facts. Is this an SEC reporting issue? Monday’s calls to CAPR’s new CFO were NOT returned; even their CEO was “in” our website (RMi) on Tuesday night to browse with no response! Also since they desperately need to finance, a golden axiom is to NOT change CFOs – they have “real” knowledge of their MANY short-comings – Maintaining SELL;

Regenxbio (RGNX) closed down -$1.15 to $28.60 with 190.7 K shares traded <3 month average =393.5 K shares>after Tuesday’s +$2.35 to $29.75 with 478.2 K shares traded. RGNX announced an agreement with FUJIFILM Diosynth Biotechnologies (FUJIFILM) for the manufacture of REGENXBIO’s lead product candidates, including RGX-314 and RGX-501, which will support late-stage clinical development and early commercialization. -  Maintaining BUY;

Spark Therapeutics (ONCE) closed down -$5.19 to $55.36 with 643.4 K shares traded <3 month average = 1.04 M shares>. Novartis (NVS) enter into a Licensing/Supply Agreement with upfront fee of $105 M for ONCE; NVS will commercialize investigational voretigene neparvovec when and if approved in the EU and all other markets outside the U.S. ONCE will also be eligible to receive up to $65 million in milestone payments, as well as receive a royalty on net sales outside the U.S. ONCE is up +$1.39 or + 2.51% in the aftermarket – BUY;

Stemline Therapeutics (STML) closed up +$1.10 to $15.25 after Tuesday’s -$0.20 to $14.15 after Monday’s +$0.70 to $14.25 with 309.8 K shares traded <3 month average = 278.6 K shares>. STML executed an offering of 3.7 M shares which appreciated - Maintaining 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.