July 18, 2024 4:33pm

In the cell and gene therapy sector …

It’s more than profit taking, showing the magnitude of what we’ve seeing as rotation

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! 

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

 

Thursday: The Dow closed DOWN -533.19 points or -1.29%, the S&P closed DOWN -43.70 points or -0.78% while the Nasdaq closed DOWN -125.70 points or -0.70%

Thursday’s sector (of my covered group) advance/decline line at the open was negative with 17 incliner, 13 decliners and 5 flats; ending with a negative close of 3 incliners, 30 decliners and 2 flats

  • the IBB was down -1.54% and the XBI was down -2.26%
  • the VIX was up +1.45 point or +10.01% at 15.93

Economic Data Docket: The Labor Department's weekly jobless claims rose more than expected, jumping to 243,000; while expected to rise to 230,000 versus 222,000.

  • Continuing claims, which run a week behind, also rose by 20,000, hitting 1.867 million, the highest since Nov. 27, 2021 and slightly above the FactSet estimate for 1.863 million.
  • The Philadelphia Fed Manufacturing Index climbed to 13.9 in July, up from June's 1.3 reading. It was expected to tick higher to 3.0.

 

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 fell Thursday as investors continued to pare positions in tech and cell and gene therapy sector names.

This trend came to a head on Wednesday, when the Nasdaq tumbled 2.8% in its worst day since December 2022. Wednesday also marked the first session since 2001 where the Nasdaq posted a loss exceeding 2.5%, while the blue-chip Dow registered a gain. <CNBC

The Russell is down -2% … after jumping 7% in the last five trading days.

As the growing likelihood of a September interest rate cut from the Fed bolstered optimism in the broader market.  

Thursday’s sell-off appeared broader than tech alone, with 7 of the 11 sectors that comprise the S&P 500 lower and more than half of Dow members also headed for losses.

 

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

Q3/24

  • July: 1 market holiday. 1 day off, 4 negative, 1 neutral (last Friday) and 7 positive closes

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

 

Thursday’s Closing Down (10 of 30):

  • Agenus (AGEN -$11.43 after Wednesday’s +$0.01 after Tuesday’s +$2.10),
  • CRISPR Therapeutics (CRSP -$4.27 after Wednesday’s -$2.27, Tuesday’s +$5.29 and Monday’s -$0.44),
  • Alnylam Pharmaceuticals (ALNY -$3.32 after Wednesday’s -$9.81, Tuesday’s -$6.35 and Monday’s -$4.33),
  • Beam Therapeutics (BEAM -$1.47 after Wednesday’s -$0.36, Tuesday’s +$1.67 and Monday’s -$1.28 as CFO departs),
  • Intellia Therapeutics (NTLA -$1.27 after Wednesday’s +$0.01 and Tuesday’s +$1.34),
  • Ultragenyx Pharmaceuticals (RARE -$1.11 after Wednesday’s -$1.38),
  • Solid Biosciences (SLDB -$1.11 after Wednesday’s -$0.73, Tuesday’s +$1.08 and Monday’s +$0.65),
  • BioLife Solutions (BLFS -$1.06),
  • Blueprint Medicine (BPMC -$0.90 after Wednesday’s -$6.14, Tuesday’s +$0.97 and Monday’s +$1.75),
  • Prime Medicine (PRME -$0.72 after Wednesday’s -$0.41 and Tuesday’s +$0.92),

Flat (2):

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

Thursday’s Closing Up (3 of 3):

  • Adverum Biotechnologies (ADVM +$0.70),
  • Cellectis SA (CLLS +$0.05),
  • Sage Therapeutics (SAGE +$0.02)

 

The BOTTOM LINE:  the second day wave ended at the shore line as the upside wiped-out … again; failing to make a comeback on Thursday following the Nasdaq's worst day since 2022,

Sector pessimism flooded Thursday, Wednesday with 2 negative closes after Tuesday and Monday’s optimism with 2 positive close this week after last week closed with 5 session positive closes.

  • My thoughts of “making book” on some upside slid by the 10:30 a.m. time line of the day’s session…  it works until it doesn’t!

 

I had written, the downside was due, as uncle algo and electronic trading dwarfs thirsted for profit - they fulfilled their “rules” to investor’s detriment

 

At the same time, political matters, the push on Biden by the democratic forces to leave the coming election continued to preoccupy a market while…

  • The RNC continues with former President Trump a clearer frontrunner for the White House after he survived an assassination attempt over the weekend.

 

The cell and gene therapy sector STILL looks frothy, there’s NO indication yet that sector earnings can’t support these valuations.

  • As I had written, “when, there’s slippage it’s going to have an amplified effect – it was.”

 

I believe that investors are LEFT on the sideline as trading take profits, I would expect to see this continue until sector earnings begin on 7/31

Stocks may be due for a rough time in the near term, according to Evercore ISI:

  • In a Thursday note, Evercore ISI head of technical analysis Rich Ross said that he’s grown more concerned tactically as stocks enter their worst stretch shortly.
  • There’s more room for “tactical downside in the weeks to come as we enter the gauntlet of the weakest two months and only consecutive losing months for equities, with markets at all-time highs,” he elaborated.

 

Q3 and July to date:

  • Thursday ended with a negative close of 3 incliners, 30 decliners and 2 flats
  • Wednesday ended with a negative close of 4 incliners, 29 decliners and 2 flats
  • Tuesday ended with a positive close of 30 incliners, 2 decliners and 3 flats
  • Monday ended with a positive close of 20 incliners, 9 decliners and 6 flats
  • 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

 

The sector crash was coming having written so while appreciating the upside of the cell and gene therapy sector but was aware of when electronic trading will strike

There is past evidence of a slowdown coming (it’s the contrarian in me) and it's going to become even more thin as we go forward.

 

Due “dates” for Q2 LPS (loss per-share) earnings releases:

  • Sage Therapeutics (SAGE) on Wednesday, 7/31
  • MiMedx (MDXG) on Wednesday, 7/31
  • Vericel (VCEL) on Thursday, 8/1
  • Alnylam Pharmaceuticals (ALNY) on Thursday, 8/1
  • Blueprint Medicine (BPMC) on Thursday, 8/1

 

The top three (3) performing in the session:  

  • Thursday: Adverum Biotechnologies (ADVM), Cellectis SA (CLLS) and Sage Therapeutics (SAGE)
  • Wednesday: AxoGen (AXGN), Agenus (AGEN) and Intellia Therapeutics (NTLA)
  • Tuesday: CRISPR Therapeutics (CRSP), Ionia Pharmaceuticals (IONS) and Vericel (VCEL)
  • Monday: Blueprint Medicine (BPMC), Vericel (VCEL) and Solid Biosciences (SLDB)

The worst three (3) in the session:  

  • Thursday: Agenus (AGEN), CRISPR Therapeutics (CRSP) and Alnylam Pharmaceuticals (ALNY)
  • Wednesday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and CRISPR Therapeutics (CRSP)
  • Tuesday: Alnylam Pharmaceuticals (ALNY), Brainstorm Cell Therapeutics (BCLI)
  • Monday: Alnylam Pharmaceuticals (ALNY), Beam Therapeutics (BEAM) and Ultragenyx Pharmaceuticals (RARE)

 

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!”

 

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.