July 19, 2024 4:44pm

The week and Friday’s momentum stocks got whacked, as the breadth under the surface these last two weeks was taken for granted

News: Agenus (AGEN) plunged (-$1.31 or -17.95% on 7/19 and 58.8% on 7/18) after announcing the outcome of its end-of-P2 (EOP2) meeting with the FDA regarding the accelerated development of its immunotherapy combination botensilimab (BOT) and balstilimab (BAL). The FDA discouraged the accelerated approval pathway …<continued below>

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 DOWN -377.62 points or -0.93%, the S&P closed DOWN -39.59 points or -0.71% while the Nasdaq closed DOWN -144.28 points or -0.81%

Friday’s advance/decline line at the open was negative with 16 incliner, 17 decliners and 2 flats; ending with a negative close of 10 incliners, 23 decliners and 2 flats

·         the IBB was down -0.07% and the XBI was down -0.03%

·         the VIX was up +0.65 point or +4.08% at 16.58

 

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 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 -% and the XBI was down -%

·         the VIX was up + point or +% at 14.

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.

 

Wednesday: The Dow closed UP +243.60 points or +0.59%, the S&P closed DOWN -78.93 points or -1.39% while the Nasdaq closed DOWN -512.41 points or -2.77%

Wednesday’s advance/decline line at the open was negative with 2 incliner, 29 decliners and 4 flats; ending with a negative close of 4 incliners, 29 decliners and 2 flats

·         the IBB was down -1.05% and the XBI was down -2.06%

·         the VIX was up +1.29 point or +9.78% at 14.49

Economic Data Docket: Housing data in June for new construction came in better than expected … Starts totaled 1.353 million for the month, better than the 1.3 million Dow Jones estimate and up 3% from May. Building permits were at 1.446 million, topping the outlook for 1.4 million and beating May by 3.4%. Totals for both permits and starts were revised higher in May.

 

Tuesday: The Dow closed UP +742.76 points or +1.85%, the S&P closed UP +35.98 points or +0.64% while the Nasdaq closed UP +36.77 points or +0.20%

Tuesday’s advance/decline line at the open was negative with 30 incliner, 1 decliners and 4 flats; ending with a positive close of 30 incliners, 2 decliners and 3 flats

·         the IBB was up +1.92% and the XBI was up +1.95%

·         the VIX was up +0.14 point or +1.07% at 13.25

Economic Data Docket: Retail sales data also came in better than anticipated, which could ease concerns that the consumer was buckling. June sales were unchanged, while economists predicted a decline of 0.4%. Excluding autos, sales rose 0.4%, a larger gain than the 0.1% consensus forecast.

 

Monday: The Dow closed UP +210.88 points or +0.53%, the S&P closed UP +15.87 points or +0.28% while the Nasdaq closed UP +74.12 points or +0.40%

Monday’s advance/decline line at the open was neutral with 16 incliner, 16 decliners and 3 flats; ending with a positive close of 20 incliners, 9 decliners and 6 flats

·         the IBB was up +0.08% and the XBI was up +0.95%

·         the VIX was up +0.67 point or +5.38% at 13.13

Economic Data Docket: comments from Fed Chair Powell said the central bank wouldn’t wait until inflation was at its goal of 2% before lowering interest rates. He also said a hard landing scenario is unlikely for the economy. <CNBC>

 

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 Friday, wrapping up the week defined by rotation …

Friday’s moves mark another day of declines across the board, with the Russell 2000 also down. But a shift toward names viewed as bigger beneficiaries of interest rate cuts from the Federal Reserve, like small caps, still appears to be theme of the week.

The S&P 500 has dropped more than -2%, on pace for its worst week since April. The Nasdaq has slipped more than 3%, putting a six-week winning streak at risk. On the other hand, the Dow is about 1% higher, while the small cap-focused Russell 2000 has climbed more than 1.5%. <CNBC>

For the week, the Dow is around 0.6% higher, the S&P 500 has dropped 2% and the Nasdaq has slipped more than 3%, while the small cap-focused Russell 2000 has climbed almost 2%.

 

From the title re Agenus (AGEN):

·         The FDA discouraged the accelerated approval pathway for the BOT/BAL combination in r/r MSS CRC. As per the regulatory body, the objective response rate (ORR) observed in the P2study might not convert to survival benefit.

·         Shares of Agenus have plunged 55.9% so far this year compared with the industry’s decline of 1.4%.

 

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

Q3/24

·         July: 1 market holiday. 1 day off, 5 negative, 1 neutral 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

 

Friday’s Closing Down (10 of 23):

  • CRISPR Therapeutics (CRSP -$1.65 after Thursday’s -$4.27 after Wednesday’s -$2.27, Tuesday’s +$5.29 and Monday’s -$0.44),
  • Agenus (AGEN -$1.31 after Thursday’s -$11.43 after Wednesday’s +$0.01 after Tuesday’s +$2.10),
  • Adverum Biotechnologies (ADVM -$1.31 after Thursday’s +$0.70),
  • Vericel (VCEL -$1.12),
  • Intellia Therapeutics (NTLA -$1.01 after Thursday’s -$1.27 after Wednesday’s +$0.01 and Tuesday’s +$1.34),
  • BioLife Solutions (BLFS -$0.43 after Thursday’s -$1.06),
  • Editas Medicine (EDIT -$0.30),
  • Regenxbio (RGNX -$0.27),
  • Prime Medicine (PRME -$0.27 after Thursday’s -$0.72 after Wednesday’s -$0.41 and Tuesday’s +$0.92),
  • Ultragenyx Pharmaceuticals (RARE -$0.23 after Thursday’s -$1.11 after Wednesday’s -$1.38),

Flat (2):

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

Friday’s Closing Up (10 of 10):

  • Blueprint Medicine (BPMC +$1.51 after Thursday’s -$0.90 after Wednesday’s -$6.14, Tuesday’s +$0.97 and Monday’s +$1.75),
  • Alnylam Pharmaceuticals (ALNY +$1.13 after Thursday’s -$3.32 after Wednesday’s -$9.81, Tuesday’s -$6.35 and Monday’s -$4.33),
  • Ionis Pharmaceuticals (IONS +$0.49),
  • Beam Therapeutics (BEAM +$0.48 after Thursday’s -$1.47 after Wednesday’s -$0.36, Tuesday’s +$1.67 and Monday’s -$1.28 as CFO departs),
  • Solid Biosciences (SLDB +$0.42 after Thursday’s -$1.11 after Wednesday’s -$0.73, Tuesday’s +$1.08 and Monday’s +$0.65),
  • AxoGen (AXGN +$0.15),
  • Mesoblast (MESO +$0.13),
  • Sage Therapeutics (SAGE +$0.12 after Thursday’s +$0.02)
  • Verve Therapeutics (VERV +$0.07),
  • Generation Bio (GBIO +$0.06),

 

The BOTTOM LINE:  Momentum stocks got whacked, hit, as the breadth under the surface these last two weeks was taken for granted.

The 3rd day wave ended at the shore line as the upside wiped-out … again; failing to make a comeback,

Sector continued to accumulate pessimism Friday, Thursday, Wednesday with 3 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 of previous downsizers in Friday’s session…  it works until it didn’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.”

 

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 cell and gene therapy sector equities, with markets at all-time highs.

 

Q3 and July to date:

·         Friday ended with a negative close of 10 incliners, 23 decliners and 2 flats

·         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 was 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:  

·         Friday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Ionis Pharmaceuticals (IONS)

·         Thursday: Adverum Biotechnologies (ADVM), Cellectis SA (CLLS) and Sage Therapeutics (SAGE)

·         Wednesday: AxoGen (AXGN), Agenus (AGEN) and Intellia Therapeutics (NTLA)

·         Tuesday: CRISPR Therapeutics (CRSP), Ionis Pharmaceuticals (IONS) and Vericel (VCEL)

·         Monday: Blueprint Medicine (BPMC), Vericel (VCEL) and Solid Biosciences (SLDB)

The worst three (3) in the session:  

·         Friday: CRISPR Therapeutics (CRSP), Adverum Biotechnologies (ADVM) and Agenus (AGEN)

·         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.