May 26, 2020 7:54am

Are we afraid or are we not afraid of new highs? My issue is volatility has snookered volume to remain low – a sign of trouble?

News: Merck (MRK) in collaboration to develop a coronavirus vaccine, with clinical trials to start later this year alongside IAVI, a non-profit scientific research organization, to develop a potential vaccine against the coronavirus. Alnylam Pharmaceuticals (ALNY) the U.S. FDA has accepted its NDA for lumasiran for the treatment of primary hyperoxaluria type 1 (PH1).

Pre-open indications:  3 BUYs and 7 SELLs     

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Dow future are UP +1.96% (+478 points), S&P futures are UP +1.77% (+52 points) and NASDAQ futures are UP +1.60% (+151 points)

 

Stock futures traded sharply higher Tuesday to begin a short week with business re-opening optimism and another press released coronavirus vaccine collaboration;

European stocks advanced over optimism that a coronavirus vaccine can be found as the pan-European Stoxx 600 jumped 1.2% in early trade;

Asia Pacific stocks were higher as Japan led gains, the here (3) mainland China exchanges saw gains while South Korea and Australia jumped as well with the MSCI Asia ex-Japan index rose 1.86%.

 

Sector news: Alnylam Pharmaceuticals (ALNY) the U.S. FDA has accepted its NDA for lumasiran, an investigational RNAi therapeutic targeting hydroxyacid oxidase 1 (HAO1) – the gene encoding glycolate oxidase (GO) – in development for the treatment of primary hyperoxaluria type 1 (PH1).

  • The FDA also granted Priority Review for the NDA, a designation for medicines that have the potential to provide significant improvements in the treatment, prevention or diagnosis of a serious disease, with the goal of FDA taking action within six months compared to 10 months under standard review.

 

Henry’omics:

Stock futures traded sharply higher (Tuesday) to begin a holiday-shortened week and a month ender…

Dow gained 3.3% to post its best weekly performance since April 9. The S&P 500 and Nasdaq also rose more than 3% this week. The Russell 2000, which tracks small-cap stocks, trounced the large-cap indexes this week with a more than 7% jump.

Monday’s markets were closed for Memorial Day although it was business as usual for the rest-of-the world which traded sharply higher (the EU and Asia Pacific) on gradual economic re-opening,

Novavax (NVAX) started the first human study of its experimental coronavirus vaccine. The company said it expects initial results on safety and immune responses in July. Last week, Moderna (MRNA) reported positive developments on its vaccine trial where all 45 participants had developed coronavirus antibodies.

I’d bet on solid P1/2 data (beyond safety, efficacy and side effects data) from advancing trials with populated (volunteers/patients) trial and a “rock-hard” protocol.

Most experts agree that it could take between 12 to 18 months for a safe-to-use vaccine to be rolled out to the market.

I invest on hope but, streaks and peaks scare the “be ‘Jesus” out of me that’s why I sell the peaks and come back ‘for more” if I profited from the “ride” or if the news drives me!

Sometimes I’m early to respond to an invite and occasionally late to the party but, I always depart safely with my wallet intact – an axiom that should be a proverb!

There are 223 treatments in consideration and 141 vaccines in development (Milken Institute) - https://milkeninstitute.org/covid-19-tracker; many are pre-clinicals and clinicals (in trials). it could be months/a year (fast-tract compassionate usage) or years before treatments are available that are known to work against COVID-19. It could be … even longer for a vaccine.

 

Friday night’s newsletter’s title:” buying support overcame selling resistance levels as the sector’s share pricing is still subjected to low volume.”

  • The NASDAQ closed UP +39.71 points (+0.43%);
  • Friday closed positive at with an Advance/Decline line of 29/6;
  • The IBB closed up +0.66% and XBI also closed up +1.20%;
  • Friday’s percentage (%) of the 26-upside were +0.25% (STML) to +13.32% (BLCM) while the 9-downside ranged from -0.52% (MDXG) to -4.12% (VSTM)
  • The CBOE Volatility Index (VVIX: INDEX) down -4.64 % at 28.16;
  • Friday; 3 out of the 26-upside had higher than the 3-month average volume;
  • Friday: 3 out of the 9-downside had higher than the 3-month average volume;

Last week’s closes – Four (4) positive closes out of five (5) sessions while ETF “indicators” alternated patterns…

  • The IBB closed up +0.87% after Thursday’s -1.08% after Wednesday’s +2.06%, Tuesday’s down -1.92% and Monday’s +1.16%;
  • The XBI also closed up +1.20% after Thursday’s -0.83%, Wednesday’s +2.89% last Tuesday’s down -2.85% and the previous Monday’s +2.91%;

Q2:

  • May registered 6 negative, 10 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

Selling into strength:

  • Athersys (ATHX) closed down again -$0.06 on Friday after Thursday’s -$0.06, Wednesday’s +$0.20, Tuesday’s -$0.085 and Monday’s +$0.035. SELL into trials which will take time plus a lingering negative includes taking PPP funds from the government while simultaneously raising $57.6 M. For the past four (4) years, what has ATHX done but, DRIFT up and down; now it’s in the beginning of a trial that will last, last and last;
  • Brainstorm Cell Therapeutics (BCLI) jumped again +$0.39 after Thursday’s +$0.30 on what, and spikes and declines followed by inclines and crevasses;
  • Cellectis SA (CLLS) closed up $0.14 after Thursday’s +$1.33, Wednesday’s +$0.36 to $19.55 and has a negative -$0.33 or -1.58% aftermarket indication. I’s weakening and I’d ride the upside and the SELL as 5/13 saw $13.70 and started the month of May at $12.06. Check the 1-year chart, a steep incline, another “early” call;
  • Adverum Biotechnologies (ADVM) closed up again +$0.18 after Thursday’s +$0.46, Wednesday’s +$1.00 or +5.29% to $19.92 and has NO aftermarket indication however, the month of May started at $12.00 and a 52-weeh high of +122.99%. Earnings release this week, Thursday;
  • CRISPR Therapeutics (CRSP) closed up again +$2.16 to $69.94 after Thursday’s +$0.99, Wednesday’s +$3.23 after last Tuesday’s down -$0.42. A 52-week change of +90.47%, a chart that also looks very “peaky” as the month of May opened at $48.46. a target of trading;
  • Intellia Therapeutics (NTLA) closed up again +$0.42 to $20.99 after Thursday’s +$0.77, Wednesday’s +$0.36 and last Tuesday’s +$0.74 and the previous Monday’s +$1.31 after hitting a 52-week change of +42.21% and yet another “peaky” chart which threatens me;
  • Editas Medicine (EDIT) has also been on a “roll” with the other gene editors rising Friday +$0.82 to $30.10. It also has a “peaking” chart and a 52-week change of +40.46%. EDIT opened May at $22.20 and has been slipping and sliding in May in small increments, the question is what say you as we approach month’s end and June?

Maintaining BUY:

  • Alnylam Pharmaceuticals (ALNY) closed down of Friday -$1.34 to $140.52 and today had news of an NDA approval from the FDA, a should be mover of a share price;
  • Applied Genetic Technologies (AGTC) closed up another +$0.12 to $4.60 after Thursday’s +$0.13, Wednesday’s +$0.15 and last Tuesday’s +$0.02 news. AGTC’s spikes usually get taken down by trading, however, I just might stay the course based on their CBO who couldn’t be any better;
  • Pluristem (PSTI) closed down again -$0.17, a slow drip but, staying the course after Thursday’s -$0.26, Wednesday’s +$0.01, last Tuesday’s -$0.51 and the previous Monday’s -$0.57. Reiterating, 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, the problem with PSTI is they have to overcome past issues and define the veracity of their messaging;

 

The BOTTOM LINE:  What’s to worry?  I am always worried about the impact of news to the sector.

Good news causes spikes in share pricing, the net is bad news as many upside timely pricings are drained from the pricing spike.

Believe it or not, I am not someone who focuses on a negative!

However, I MUST view all sides to size the sector against the market forces to come to a determination of speeding through the directionals at the crossroads or being cautious as I anticipate whether the traffic (m0mentum) light will turn yellow for caution.

A good day to SELL into strength of early optimism!

 

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.