August 2, 2024 4:51pm

Earnings season LPS (loss-per-share) gravity strikes

Harvard Apparatus RT (OTCQB: HRGN) 1 share sale brings down share pricing -$0.32 or -12.80%, after Thursday’s +$0.26 with 175 shares bought – its own DST Capital). These fact states the obvious – a Ponzi Scheme?

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!  

Week in review as vacation of manual yard labor continues … keeps one’s perspective

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

 

(8/2) Friday: The Dow closed DOWN -610.71 points or -1.51%, the S&P closed DOWN -100.12 points or -1.84% while the Nasdaq closed DOWN -417.98 points or -2.43%

Friday’s advance/decline line at the open was negative with 3 incliners, 29 declined and 3 flats; ending with a negative close of 6 incliners, 27 decliners and 2 flats

  • the IBB was down -1.99% and the XBI was down -2.23%
  • the VIX was up +4.86 point or +25.76% at 42.43

Economic Data Docket: July job growth in the U.S. slowed more than expected, while the employment rate rose to the highest since October 2021. Nonfarm payrolls grew by just 114,000 last month, a slowing from 179,000 jobs added in June and below the 185,000 expected. The unemployment rate increased to 4.3%.

 

(8/1) Thursday: The Dow closed DOWN -494.82 points or -1.21%, the S&P closed DOWN -75.62 points or -1.37% while the Nasdaq closed DOWN -405.26 points or -2.30%

Thursday’s advance/decline line at the open was negative with 13 incliners, 19 declined and 3 flats; ending with a negative close of 4 incliners, 29 decliners and 2 flats

  • the IBB was down -0.59% and the XBI was down -0.39%
  • the VIX was up +2.23 point or +13.70% at 18.60

Economic Data Docket: Some fresh data stoked fears over a possible recession and the notion that the Fed could be too late to start cutting interest rates. Initial jobless claims rose the most since August 2023. And the ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and a signal of economic contraction. After these releases, the 10-year Treasury yield dropped below 4% for the first time since February.

  • First-time filings for unemployment insurance totaled 249,000 for the week ending July 27, an increase of 14,000, the Labor Department reported. That was the highest level since August 2023 and above the 235,000 Dow Jones estimate. Continuing claims, which run a week behind, increased to 1.877 million, the highest level since Nov. 27, 2021.

 

(7/31) Wednesday: The Dow closed UP +99.46 points or +0.24%, the S&P closed UP +85.86 points or +1.58% while the Nasdaq closed UP +451.98 points or +2.64%

Wednesday’s advance/decline line at the open was negative with 11 incliners, 21 declined and 3 flats; ending with a positive close of 16 incliners, 13 decliners and 6 flats

  • the IBB was up +0.06% and the XBI was up +0.07%
  • the VIX was down -1.33 point or -7.52% at 16.36.

Economic Data Docket: During Fed Chair Powell’s press conference said that if data continues to give the central bank confidence that inflation is slowing, it could be ready to move.

  • Jobs data - The payrolls processing firm said nongovernment job growth was just 122,000, down from 155,000 in June and below the Dow Jones estimate for 150,000. 
  • The iShares U.S. Home Construction ETF (ITB) tracked for its best month in more than four years. The fund has climbed more than 19.5% so far in July’s trading month.
  • The employment cost index, a closely watched inflation variable for the Federal Reserve, increased less than expected in the second quarter, the Labor Department reported Wednesday. Total compensation costs including salaries and benefits rose 0.9% for the April-through-June period, less than the 1.2% in the first quarter and below the Dow Jones estimate for a 1% increase.

 

(7/30) Tuesday: The Dow closed UP +203.40 points or +0.50%, the S&P closed DOWN -27.10 points or -0.50% while the Nasdaq closed DOWN -222.78 points or -1.28%

Tuesday’s advance/decline line at the open was negative with 11 incliners, 21 declined and 3 flats; ending with a negative close of 6 incliners, 26 decliners and 3 flats

  • the IBB was down -0.03% and the XBI was down -1.28%
  • the VIX was down -0.94 point or 5.31% at 16.75.

 

(7/29) Monday: The Dow closed DOWN -49.41 points or -0.12%, the S&P closed UP +4.44 points or +0.08% while the Nasdaq closed UP +12.32 points or +0.07%

Monday’s advance/decline line at the open was negative with 10 incliners, 22 declined and 3 flats; ending with a negative close of 10 incliners, 22 decliners and 3 flats

  • the IBB was down -0.26% and the XBI was down -1.25%
  • the VIX was up +0.21 point or +1.28% at 16.60.

 

RegMed Investors’ (RMi) pre-open: “weakness pervades and selling pressures increase”;  weed whacking and garden loam spreading (320 lbs) instead! NOT published.

 

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 slid Friday as a much weaker-than-anticipated jobs report for July ignited worries that the economy could be falling into a recession; kicking the dog down the street again.

It’s been a volatile week with the stock market rallying Wednesday when the Fed gave a strong hint that a rate cut was coming at its next meeting in September, while keeping rates at current levels.

The Cboe Volatility Index, known as the VIX, surged about 3 points to 21.51, hitting the highest level.

The 10-year Treasury yield fell to its lowest since December as investors flooded into bonds for safety on the fear the Fed made a mistake this week by keeping interest rates at current levels.

 

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

Q3/24

  • August: 2 negative close
  • July: 1 market holiday. 1 day off, 6 negative, 1 neutral and 12 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 27):

  • CRISPR Therapeutics (CRSP -$3.74 after Thursday’s -$2.44, Wednesday’s +$0.88, Tuesday’s -$2.09 and Monday’s +$0.58),
  • Blueprint Medicine (BPMC -$3.57 after Thursday’s -$8.01, Wednesday’s +$1.27, Tuesday’s -$3.31 and Monday’s -$1.85),
  • BEAM Therapeutics (BEAM -$2.88 and Thursday’s -$1.33),
  • Ionis Pharmaceuticals (IONS -$2.19 after Thursday’s +$1.86, Wednesday’s -$0.32. Tuesday’s -$0.46 and Monday’s -$1.21),
  • Intellia Therapeutics (NTLA -$1.29 after Thursday’s -$1.07, Wednesday’s -$0.06, Tuesday’s -$0.67 and Monday’s +$0.44),
  • BioLife Solutions (BLFS -$0.79 after Thursday’s -$0.66, Wednesday’s -$0.02 and Tuesday’s +$0.24),
  • Solid Biosciences (SLDB -$0.71),
  • Lenz Therapeutics (LENZ -$0.59),
  • Verve therapeutics (VERV -$0.42),
  • Vericel (VCEL -$0.42 after Thursday’s -$3.00 and Wednesday’s -$0.76),

Flat (2):

  • Bellicum Pharmaceuticals (BLCM))
  • Homology Medicine (FIXX)

Friday’s Closing Up (6 of 6):

  • Ultragenyx Pharmaceuticals (RARE +$6.32 after Thursday’s -$0.87, Wednesday’s +$0.31, Tuesday’s -$0.53 and Monday’s +$0.38),
  • Alnylam Pharmaceuticals (ALNY +$3.44 after Thursday’s +$31.15, Wednesday’s +$3.65, Tuesday’s -$2.47 and Monday’s +$1.44),
  • Sangamo Therapeutics (SGMO +$0.166),
  • Vericel (VCEL +$0.10).
  • Mesoblast (MESO +$0.03),
  • bluebird bio (BLUE +$0.03),

 

The BOTTOM LINE:  Give it up … hope evaporates with sector finance … the short and near view gets complicated!

As Q2 earnings numbers sweep … clean the sector … hold tight more numbers on the way!

A slew of weaker-than-expected economic data, highlighted by July's jobs report triggering a closely watched recession indicator, has sent the stock market tumbling.

"Markets seem to be treating bad news as bad news again, not a positive catalyst given an easy Fed outlook." <Citi's head of US equity strategy, Scott Chronert>

  • Investors are even starting to ask recession-related questions and have started to review their economic slowdown playbooks.

 

The small-cap Russell 2000 (^RUT), which had rallied over the past month as markets grew more optimistic about interest rate cuts, has fared even worse, falling more than 7% across the last two trading sessions. <Yahoo Finance>

 

Cell and gene therapy sector share pricing declined on Friday and Thursday after inclining on Wednesday following Tuesday’s decline and Monday after Friday’s positive close following Thursday’s upswing after diving on Wednesday following Tuesday and Monday’s bubble-up positive closes …

  • Without “uncle algo and his electronic dwarfs” help to the upside, the cell and gene therapy sector rises to the occasion following slipping into the toilet!

 

Earnings “whispers” (Zacks): Expectation …

Blueprint Medicines (BPMC) could deliver a year-over-year increase in earnings on higher revenues when it reports results for Q2/24.

  • BPMC is expected to post quarterly loss of $1.27 per share in its upcoming report, which represents a year-over-year change of +42%. Revenues are expected to be $104.55 million, up 81.6% from the year-ago quarter.

Ionis Pharmaceuticals (IONS) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for Q2/24.

  • IONS is expected to post quarterly loss of $0.99 per share in its upcoming report, which represents a year-over-year change of -65%.
  • Revenues are expected to be $144.64 million, down 23.1% from the year-ago quarter.

Prime Medicines (PRME) Consensus Estimate for loss per share in Q2 is pinned at -$0.40.

  • R&D expenses have likely seen an increase inQ2, driven by expenses related to the advancement of its pipeline and platform. G&A expenses will increase due to expansion of clinical activities.

AxoGen (AXGN) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for Q2/2024.

  • is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of -66.7%.

Precigen, Inc. (PGEN), another stock in the same industry, has yet to report results for the quarter ended June 2024.

  • expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of -12.5%. The consensus EPS estimate for the quarter has been revised 12.5% lower over the last 30 days to the current level.
  • revenues are expected to be $1.28 million, down 27.7% from the year-ago quarter.

 

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.

 

Q3 and August to date:

  • Friday ended with a negative close of 5 incliners, 28 decliners and 2 flats
  • Thursday ended with a negative close of 4 incliners, 29 decliners and 2 flats

 

Electronic trading pops and flops the cell and gene therapy sector

  • 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 into Q2 earnings season

 

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

  • Voyager Therapeutics (VYGR) Tuesday, 8/6
  • Sangamo Therapeutics (SGMO) Tuesday, 8/6
  • Editas Medicine (EDIT) Wednesday, 8/7
  • AxoGen (AXGN) on Thursday, 8/8
  • BioLife Solutions (BLFS) on Thursday, 8/8
  • Intellia therapeutics (NTLA) on Thursday, 8/8

 

The top three (3) performing in the session: 

  • Friday: Ultragenyx Pharmaceuticals (RARE), Alnylam Pharmaceuticals (ALNY) and Sangamo Therapeutics (SGMO)
  • Thursday: Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS) and Harvard Apparatus RT (OTCQB: HRGN) with 175 shares traded
  • Wednesday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and CRISPR Therapeutics (CRSP)
  • Tuesday: Editas Medicine (EDIT), Compass Therapeutics (CMPX) and Generation Bio (GBIO)
  • Monday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Intellia Therapeutics (NTLA)

The worst three (3) in the session: 

  • Friday: CRISPR Therapeutics (CRSP), Blueprint Medicine (BPMC) and Beam therapeutics (BEAM)
  • Thursday:  Blueprint Medicine (BPMC), Vericel (VCEL) and CRISPR Therapeutics (CRSP)
  • Wednesday: Vericel (VCEL), Ionis Pharmaceuticals (IONS) and Lenz Therapeutics (LENZ)
  • Tuesday: Blueprint Medicine (BPMC), Alnylam Pharmaceuticals (ALNY) and CRISPR Therapeutics (CRSP)
  • Monday: Blueprint Medicine (BPMC), Ionis Pharmaceuticals (IONS) and Beam Therapeutics (BEAM),

 

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.