August 5, 2024 4:37pm

… As U.S. recession fear undermines confidence

The level of fear is out of whack with fundamentals as share pricing schizophrenia continues into another volatile week

News: Bristol Myers Squibb (BMY) has returned an experimental cancer immunotherapy (TGIT, AGEN1777) to Agenus (AGEN -$0.39), a licensing deal forged in 2021 terminated as part of a “strategic realignment” to BMY’s R&D efforts and will result in the deal’s termination on 1/26/25 ending an alliance that could’ve been worth more than $1 billion to AGEN,

 

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.”

 

(8/5) The Dow closed DOWN -1,033.20 points or -2.60%, the S&P closed DOWN -160.23 points or -3% while the Nasdaq closed DOWN -576.08 points or -3.43%

Monday’s advance/decline line at the open was negative with 0 incliners, 31 declined and 3 flats; ending with a negative close of 1 incliner, 31 decliners and 3 flats

  • the IBB was down -2.82% and the XBI was down -3.15%
  • the VIX was up +13.93 point or +59.23% at 37.32

Economic Data Docket: The ISM services index registered a 51.4% reading for the month; up from 48.8% in June and better than the Dow estimate for 50.9%.

 

(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%.

 

RegMed Investors’ (RMi) pre-open: “a falling knife scenario? A weakening sector in the middle of earnings season is not an ideal time to be ramping up exposure.” … https://www.regmedinvestors.com/articles/13568

 

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 got clobbered on Monday, with the Dow and S&P 500 were on track for their biggest daily losses since September 2022.

In Asia overnight, Japan stocks confirmed a bear market as Asia-Pacific investors had their first chance to react to the sour job’s figures in the U.S. from Friday.

  • The 12.4% loss on the Nikkei, which closed at 31,458.42, was the worst day for the index since the “Black Monday” of 1987 hit Wall Street.
  • The loss of 4,451.28 points on the index was also the largest in terms of points in its entire history.
  • The Dow lost more than 22% in a single day on Black Monday. <CNBC>

The Cboe Volatility Index, or VIX, rose 57% on Monday morning after trading near 25.7 on Friday; since the early days of the Covid-19 pandemic in 2020.

 

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

Q3/24

  • August: 3 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

 

Monday’s Closing Down (10 of 31):

  • Alnylam Pharmaceuticals (ALNY -$7.05 after Friday’s +$3.44),
  • Blueprint Medicine (BPMC -$3.75 after Friday’s -$3.57),
  • Ionis Pharmaceuticals (IONS -$2.13 after Friday’s -$2.19),
  • BEAM Therapeutics (BEAM -$1.82 after Friday’s -$2.88),
  • Vericel (VCEL -$1.76 after Friday’s +$0.10).
  • Lenz Therapeutics (LENZ -$1.74 after Friday’s -$0.59),
  • Intellia Therapeutics (NTLA -$1.52 after Friday’s $1.29),
  • CRISPR Therapeutics (CRSP -$1.45 after Friday’s -$3.74),
  • Ultragenyx Pharmaceuticals (RARE -$1.39 after Friday’s +$6.32),
  • Generation Bio (GBIO -$0.69)

Flat (3):

  • Bellicum Pharmaceuticals (BLCM)
  • Harvard Apparatus RT (OTCQB: HRGN)
  • Homology Medicine (FIXX)

Monday’s Closing Up (1 of 1):

  • uniQure NV (QURE +$0.27)

 

The BOTTOM LINE: I am NOT giving up … hope evaporated however it is not a fundamental metric with sector earnings downtrends as usual …!

Once earnings come-out, there will be an upside bounce but, we are exempted from moving by market forces motivated by FEAR and the devoid of confidence

The short and near-term are compromised for the periods of time as the LONG view gets clouded!

As Q2 earnings numbers sweep … hold tight more earnings numbers on the way, we can NOT battle the downslide!

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.

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 a new week’s Monday, last Friday and Thursday after inclining on the previous 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” hindered to the downside, the cell and gene therapy sector dives into the toilet!

 

Great quote from one of my favorites, Sam Stovall, chief investment strategist at CFRA Research …  

“The market was whistling past the graveyard. I think people were basically lulled into a sense of security, yet the market itself was very vulnerable to a correction — and the weaker than expected economic and employment data provided that catalyst for correction. The S&P 500 is currently around 8% off from its recent high.”

 

Earnings “whispers” (Zacks): Expectation …

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.

 

Reiterating, “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:

  • Monday ended with a negative close of 1 incliner, 31 decliners and 3 flats
  • 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:

  • CRISPR Therapeutics (CRSP) Monday, 8/5
  • 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:  just one of my covered/reporting group

  • Monday: uniQure NV (QURE)
  • Friday: Ultragenyx Pharmaceuticals (RARE), Alnylam Pharmaceuticals (ALNY) and Sangamo Therapeutics (SGMO)

The worst three (3) in the session: 

  • Monday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Ionis Pharmaceuticals (IONS)
  • Friday: CRISPR Therapeutics (CRSP), Blueprint Medicine (BPMC) 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.