July 14, 2024 10:14am

More than appreciate the upside yet, still nervous about the sector’s pricing continuum

I say today what others won't, so you can do what others can't by sticking to the FACTS!

Never leave an investor uninformed!

The week in review

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

 

Friday: The Dow closed UP +247.15 points or +0.62%, the S&P closed UP +30.81 points or +0.55% while the Nasdaq closed UP +115.04 points or +0.63%

 

Friday’s advance/decline line at the open was positive with 27 incliner, 4 decliners and 4 flats; ending with a positive close of 22 incliners, 11 decliners and 2 flats

  • the IBB was up +0.82% and the XBI was up +1.02%
  • the VIX was down -0.46 point or -3.56% at 12.46

Economic Data Docket: The reading of inflation came in slightly hotter than expected yet, indexes largely ignored those figures after Thursday’s more important consumer prices report showed slowing inflation.

 

Thursday: The Dow closed UP +32.39 points or +0.08%, the S&P closed DOWN -49.37 points or -0.88% while the Nasdaq closed DOWN -364.04 points or -1.95%

Thursday’s advance/decline line at the open was positive with 30 incliner, 2 decliners and 3 flats; ending with a positive close of 31 incliners, 2 decliners and 2 flats

  • the IBB was up +2.36% and the XBI was up +2.61%
  • the VIX was up +0.06 point or +0.47% at 12.91

Economic Data Docket: The consumer price index fell 0.1% last month from May, bringing the annual inflation rate down to 3%. Economists had expected a 0.1% monthly increase and a 3.1% annual rate. Core CPI, which excludes food and energy, came in at a 3.3% annual rate, also lower than economists expected.

 

Wednesday: The Dow closed UP +429.39 points or +1.09%, the S&P closed UP +56.93 points or +1.02% while the Nasdaq closed UP +218.16 points or +1.18%

Wednesday’s advance/decline line at the open was positive with 20 incliner, 12 decliners and 3 flats; ending with a positive close of 23 incliners, 10 decliners and 2 flats

  • the IBB was up +1.20% and the XBI was up +1.18%
  • the VIX was up +0.35 point or +2.80% at 12.86

Economic Data Docket: Economists expect a 0.1% month-over-month advance and a 3.1% year-on-year gain. Core CPI, which excludes energy and food prices, is forecast to have expanded 0.2% month over month and 3.4% year on year.

 

Tuesday: The Dow closed DOWN -52.82 points or -0.13%, the S&P closed UP +4.13 points or +0.07% while the Nasdaq closed UP +25.55 points or +0.14%

Tuesday’s advance/decline line at the open was negative with 10 incliner,21 decliners and 4 flats; ending with a positive close of 19 incliners, 12 decliners and 4 flats

  • the IBB was up +0.82% and the XBI was up +1.22%
  • the VIX was up +0.13 point or +1.05% at 12.50

Economic Data Docket: Fed chair Powell said in prepared remarks that keeping interest rates elevated for too long could risk further economic growth, seemingly hinting that the central bank is considering taking a less restrictive stance.

 

Monday:

Monday: The Dow closed DOWN -31.08 points or -0.08%, the S&P closed UP +5.66 points or +0.10% while the Nasdaq closed UP +50.98 points or +0.28%

Monday’s advance/decline line at the open was positive with 26 incliner, 6 decliners and 3 flats; ending with a positive close of 24 incliners, 8 decliners and 3 flats

  • the IBB was up +1.12% and the XBI was up +1.66%
  • the VIX was down -0.11 point or -0.88% at 12.37

Economic Data Docket: June consumer price index (CPI) will be released Thursday, and producer price index (PPI) data will be released Friday.

 

Henry’omics:

We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …

Indexes closed positive on Friday, after an up week.

 

Ebb and flow of MY covered sector cell and gene therapy session daily “endings”:

Q3/24

  • July: 1 market holiday. 1 day off, 2 negative, 1 neutral (l;ast Friday) and 5 positive closes (this week)

Q2/24 -June: 1 market holiday, 7 positive and 12 negative closes

  • May – 1 holiday, 11 positive and 12 negative closes
  • April - 16 negative and 6 positive closes

 

Friday’s Closing Down (11 of 11):

  • Vericel (VCEL -$0.91 after Thursday +$4.18 after Wednesday’s -$0.60 and Tuesday’s -$0.89),
  • Alnylam Pharmaceuticals (ALNY -$0.51 after Thursday +$2.92, Wednesday’s +$3.02, Tuesday’s -$0.37 and Monday’s +$4.08)
  • Prime Medicine (PRME -$0.29),
  • Solid Biosciences (SLDB -$0.28 after Thursday +$1.17, Wednesday’s +$0.35, Tuesday’s -$0.09 and Monday’s +$0.88),
  • BioLife Solutions (BLFS -$0.25 after Thursday +$1.67),
  • uniQure NV (QURE -$0.19 after Thursday -$0.85 after Wednesday’s +$3.45, Tuesday’s +$2.89 and Monday’s -$0.06),
  • Voyager Therapeutics (VYGR -$0.17),
  • Generation BIO (GBIO -$0.07),
  • AxoGen (AXGN -$0.07),
  • Precigen (PGEN -$0.03),
  • Blueprint Medicine (BPMC -$0.01 after Thursday +$2.09, Wednesday’s +$0.70, Tuesday’s -$1.07 and Monday’s +$4.62),

Flat (2):

  • Bellicum Pharmaceuticals (BLCM) – dropped)
  • Homology Medicine (FIXX) – under $1.00

Friday’s Closing Up (10 of 22):

  • Lenz Therapeutics (LENZ +1.42),
  • Ultragenyx Pharmaceuticals (RARE +$1.25, Thursday’s +$1.48, Wednesday’s +$0.21, Tuesday’s +$0.76 and Monday’s +$0.61),
  • Intellia Therapeutics (NTLA +$1.16 after Thursday’s +$1.72, Wednesday’s +$0.89 and Tuesday’s -$0.68),
  • CRISPR Therapeutics (CRSP +$1.09 after Thursday +$2.14, Wednesday’s +$0.53 and Tuesday’s +$1.80),
  • Beam Therapeutics (BEAM +$1.00 after Thursday’s +$1.88),
  • Ionis Pharmaceuticals (IONS +$0.69 after Thursday’s -$0.46, Wednesday’s +$0.81, Tuesday’s -$0.20 and Monday’s +$1.15),
  • Mesoblast (MESO +$0.59 after Thursday’s -$0.03, Wednesday’s -$0.16, Tuesday’s -$0.14 and Monday’s -$0.01)
  • Verve Therapeutics (VERV +$0.36),
  • Agenus (AGEN +$0.21)
  • Fate Therapeutics (FATE +$0.21)

 

The BOTTOM LINE: Welcome to my world of defining the “grey’ in our universe!

  • Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and facts are its product; I can always be WRONG but … I am mostly EARLY!”

Sector optimism closed high for the week with 5 positive closes while the Nasdaq stretched; I still reiterate that the risks of a pullback are elevated as earnings release dates become evident.

Indexes rallied last week as investors raised rate-cut expectations following tame CPI inflation and Fed chief Powell's testimony.

 

 I still believe that moneys coming off the table …

  • Even after a good start into the 2nd week of July with 5 positive closes; it may NOT ensure a gain for the rest of week and month.
  • The cell and gene therapy sector STILL looks frothy, but there’s no indication yet that sector earnings can’t support these valuations.
  •  When, there’s slippage it’s going to have an amplified effect.

 

Q3 and July to date:

  • Friday ended with a positive close of 22 incliners, 11 decliners and 2 flats
  • Thursday ended with a positive close of 30 incliners, 3 decliners and 2 flats
  • Wednesday ended with a positive close of 23 incliners, 10 decliners and 2 flats
  • Tuesday ended with a positive close of 19 incliners, 12 decliners and 4 flats
  • Monday ended with a positive close of 24 incliners, 8 decliners and 3 flats
  • Friday ended with a neutral close of 16 incliners, 16 decliners and 3 flats
  • Thursday was a market holiday
  • Wednesday was a day off
  • Tuesday ended with a negative close of 6 incliners, 19 decliners and 3 flats
  • (7/1) Monday ended with a negative close of 13 incliners, 19 decliners and 3 flats

 

So, I am still NOT bullish because the cell and gene therapy sector always … kind of moves along however (versus but), there is evidence of a slowdown coming and it's going to become, I think, even more thin as we go forward.

 

“Stuff” happens:

  • The Russell 2000 Index is up more than 6% for the week after a 1.5% gain on Friday as investors see a so-called soft landing for the broader economy giving a boost to smaller companies.
  • The Nasdaq is extended while earnings season could be a debilitating factor over the next weeks and month.

 

The top three (3) performing in the session:   

  • Friday: Lenz Therapeutics (LENZ), Ultragenyx Pharmaceuticals (RARE) and Intellia Therapeutics (NTLA)
  • Thursday: Vericel (VCEL), Alnylam Pharmaceuticals (ALNY) and Blueprint Medicine (BPMC)
  • Wednesday: uniQure NV (QURE), Alnylam Pharmaceuticals (ALNY) and Intellia Therapeutics (NTLA)
  • Tuesday: uniQure NV (QURE), CRISPR Therapeutics (CRSP) and Ultragenyx Pharmaceuticals (RARE)
  • Monday: Blueprint Medicine (BPMC), Alnylam Pharmaceuticals ALNY) and Ionis pharmaceuticals (IONS)

The worst three (3) in the session:   

  • Friday: Vericel (VCEL), Alnylam Pharmaceuticals (ALNY) and Prime Medicine (PRME)
  • Thursday: uniQure NV (QURE) and Ionis pharmaceuticals (IONS)
  • Wednesday: Vericel VCEL), Sage Therapeutics (SAGE) and Agenus (AGEN)
  • Tuesday: BioLife Solutions (BLFS), Blueprint Medicine (BPMC) and Vericel VCEL)
  • Monday: Regenxbio (RGNX), uniQure NV (QURE) and Fate Therapeutics (FATE)

 

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. Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and it’s or their securities.

I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.