January 10, 2025 4:44pm

The cell and gene therapy sector took punches flat to the mat this week

As I had written Tuesday, “Investors should be cautious weighing economic data; the cell and gene therapy sector is under pressure as inflation … and risks waffle.” Couldn’t have been truer!

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

On point, short on words, long on facts and being judicious!

Never above you, never below you, always beside you!

 

RegMed Investors’ (RMi) pre-open: calibrate … snap, crackle or a pop? … https://www.regmedinvestors.com/articles/13761

 

Friday: The Dow closed down -696.75 points or -1.63%, the S&P closed down -91.21 points or -1.54% while the Nasdaq closed DOWN -317.25 points or -1.63%

  • Indexes tumbled Friday after 2 economic data reports dumped expectations for Fed interest rate cuts later this year as U.S. jobs report comes in much hotter than expected

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

  • Nonfarm payrolls growth of 256,000 in December, and respondents to a University of Michigan survey raised their long-term inflation outlook to the highest level since mid-2008.

Friday’s advance/decline line mid-day was negative with 3 incliners, 29 declined and 3 flats; ending with a negative close at the close of 29 incliner, 2 decliners and 4 flats

  • As I had asked, “Is heightened volatility a-comin’?” – it was and did again!
  • Small cap stocks, also sensitive to borrowing rates, dropped with the Russell 2000 index losing more than 2%.

Metrics:  Friday, the IBB was down -2.10%, the XBI was down -2.87% while the VIX was up +1.55 points or +8.56% at 19.62

 

Q1/25 – 1 holiday, 1 market close, 2 negative and 4 positive closes

  • Q4/24 – 1 holiday, 6 positive and 15 negative closes
  • November – 1 holiday, 10 negative and 10 positive closes              
  • October: 8 positive and 15 negative sessions

 

Friday’s Closing Down (10 of 29): Thursday markets were closed

  • Blueprint Medicine (BPMC -$3.20 after Wednesday’s -$3.74, Tuesday’s +$4.83 and Monday’s +$1.119),
  • Lenz Therapeutics (LENZ -$3.13 after Wednesday’s -$0.84),
  • Alnylam Pharmaceuticals (ALNY -$2.57 after Wednesday’s +$4.60, Tuesday’s +$2.80 and Monday’s -$1.13)
  • uniQure NV (QURE -$2.07 after Wednesday’s -$1.72 and Tuesday’s +$0.44),
  • Intellia Therapeutics (NTLA -$1.82 after Wednesday’s -$0.45, Tuesday’s -$0.33 and Monday’s +$0.67)
  • CRISPR Therapeutics (CRSP -$1.60 after Wednesday’s -$0.63, Tuesday’s -$0.51 and Monday’s +$1.41),
  • Ultragenyx Pharmaceuticals (RARE -$1.58 after Wednesday’s -$0.79, Tuesday’s +$1.78 and Monday’s +$1.16),
  • BioLife Solutions (BLFS -$1.08 after Wednesday’s +$0.58, Tuesday’s -$0.15 and Monday’s +$0.84),
  • Moderna (MRNA -$0.92 after Wednesday’s -$4.36, Tuesday’s +$4.96 and Monday’s +$0.39),
  • Regenxbio (RGNX -$0.78),

Flat (4)

  • bluebird bio (BLUE),
  • Harvard Apparatus RT (OTCQB: HRGN)
  • Homology Medicine (FIXX)
  • Mesoblast (MESO)

Friday’s Closing Up (2 of 2): Thursday markets were closed

  • AxoGen (AXGN +$2.78 after Wednesday’s +$0.57 after Tuesday’s +$0.14 after Monday’s -$1.55)
  • Generation bio (GBIO +$0.0154),

 

Thursday, markets were closed for former President Caters state funeral  

 

Wednesday: The Dow closed UP +106.84 points or +0.25%, the S&P closed UP +9.22 points or +0.16% while the Nasdaq closed DOWN -10.80 points or -0.06%

  • Indexes closed mixed amid persistent inflationary pressures
  • Bond yields have been climbing as inflation question lingers. The rate on the benchmark 10-year note at one point topped 4.7%, nearing levels last seen in late April

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

  • Initial filings for unemployment benefits fell last week, signaling that while the labor market may be softening, employers are not cutting staff. Claims totaled 201,000 for the period ending Jan. 4, down 10,000 from the prior period for the lowest total in nearly a year. Economists had been looking for 215,000. Continuing claims, which run a week behind, totaled 1.87 million, an increase of 33,000 from the week before.
  • ADP - private sector companies added fewer jobs than expected during the month of December, while wages grew at the slowest pace in nearly 3½ years, payment processing firm ADP reported. Companies added a seasonally adjusted 122,000 jobs for the month, down from 146,000 additions in November and less than the Dow Jones consensus forecast for 136,000. It marked the smallest increase since August.

Wednesday’s advance/decline line mid-day was negative with 6 incliners, 26 declined and 3 flats; ending with a negative close at the close of 27 incliner, 27 decliners and 1 flat

  • As I had asked, “Is heightened volatility a-comin’?” – it was and did …!

Metrics:  Wednesday, the IBB was down -0.64%, the XBI was down -0.56% while the VIX was down -0.15 points or -0.84% at 17.67

 

Tuesday: The Dow closed DOWN -178.20 points or -0.42%, the S&P closed DOWN -667.35 points or -1.11% while the Nasdaq closed DOWN -375.30 points or -1.89%

  • Indexes closed down pressured by high Treasury yields

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

  • The Institute for Supply Management reflected faster-than-expected growth in the U.S. services sector in December, adding to concerns about stickier inflation.
  • The ISM services sector PMI came in at 54.1. Economists expected a print of 53.4. A key driver of that beat was the PMI’s price index — which soared 6.2 points to 64.4 — signaling there may be more inflation on the horizon.

Tuesday’s advance/decline line at the open was positive with 21 incliners, 11 declined and 3 flats; ending with a barely positive close at the close of 17 incliner, 16 decliners and 2 flats

  • Is heightened volatility a-comin’?

Metrics:  Tuesday, the IBB was up +1.18%, the XBI was up +0.66% while the VIX was up +1.82 points or +11.33% at 17.86

 

Monday: The Dow closed DOWN -25.57 points or -0.06%, the S&P closed UP +32.91 points or +0.55% while the Nasdaq closed UP +243.30 points or +1.24%

  • Indexes closed mixed with the Nasdaq spurting

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

  • Market sentiment on Monday was also boosted by a Washington Post report saying President-elect Trump’s tariff plan would be narrower than anticipated, covering only critical imports.
  • investors awaited the release of key monthly jobs data later this week.   

Monday’s advance/decline line at the open was positive with 25 incliners, 8 declined and 2 flats; ending with a positive close at the close of 22 incliner, 12 decliners and 1 flat

  • Is heightened volatility a-comin’?

Metrics:  Monday, the IBB was up +0.14%, the XBI was down -0.20% while the VIX was down -0.08 points or -0.50% at 16.05

 

 

The BOTTOM LINE: closing the week on good news for the economy but not for the markets and the cell and gene therapy sector!

  • Stocks took their cue from the bond market, where yields rose to crank up the pressure after a report said U.S. employers hired many more workers last month than economists expected. The strong data could keep upward pressure on inflation and prevent the Federal Reserve from delivering cuts to interest rates.

Indexes also shook “their leg” on Friday after The University of Michigan’s consumer sentiment index signaled concern on the inflation front.

  • All 3 of the major averages are on track for weekly losses, with the S&P 500 off -1.8%, the Nasdaq down -2.4% and the Dow a -1.6% decline.

The market’s response to the strong nonfarm payrolls reading for December could signal bad news for more interest rate cuts from the Federal Reserve this year, according to Jeremy Siegel, prof at Wharton, Un of Penn.

 

I haven’t changed my tone reduce your winners … and I wasn’t wrong … all week long!

  • Economic data is a KEY to share pricing as hiring in the US labor market continues to effect share pricing.
  • I wrote Tuesday a.m.; a whole New Year group of expectations are coming and again … NOT happened!

 

2025 is here and it's time to talk about the January Barometer… think about this one …

  • The concept of the barometer is simple: If stocks are higher in January, they should be higher for the year. Likewise, if stocks are lower in January, they'll be lower for the year. <TheStreet>
  • It works most of the time. The Stock Trader's Almanac says it's been right 84% of the time since 1950.
  • It does suggest — based on history — the environments an investor might face in making a buy or sell decision.

 

As I have written “Many sector companies are engaged in cost realignment programs, which won’t be realized consequences over the next few Qs where the operating expense levels; spending on SG&A (selling, informational, and administrative) and R&D (research and development) facilitate the need to extend runways and enable expectation of clinical innovations.”

  • "I think the market's going to come back to earnings, the first couple of months of 2025, and 1st H will be a shifting cell and gene therapy sector due to earnings releases... I still believe stocks will swing upward pre and them more post releases
  • They had better, capital markets have been floundering on follow-on offerings.

 

Big Point to remember “Think about it; the biggest problem the cell and gene therapy sector has …  99% of them have no earnings! If rates are higher for longer, that means that sector companies will continue to struggle or be unable to raise capital and therefore be subject to debt servicing firms!” <Me>

2024 saw very little life IPOs (initial public offering) market and secondaries – I have seen private investments, mortgages, sell-offs, as companies deferred and struggle to gain further market access i.e., public.

What could 2025, and even 2026, have in store for the capital access space?

  • "You'll see a number of cell and gene therapy comandantes drive for secondaries – they’re desperate for cash, but I do think a lot of cell and gene therapy sector companies NEED to be focused on what is driving their own growth —they're focused on a lot of change BUT … that's happening in pipelines … capital expansion is second.

 

Why do I keep repeating, so investors can make the connection …

The top three (3) performing in the session:    

  • Friday: AxoGen (AXGN), Generation Bio (GBIO) and bluebird bio (BLUE)
  • Thursday: market closed
  • Wednesday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and BioLife Solutions (BLFS)
  • Tuesday: Moderna (MRNA), Blueprint Medicine (BPMC) and Alnylam Pharmaceuticals (ALNY)
  • Monday: Blueprint Medicine (BPMC), Beam Therapeutics (BEAM) and Ultragenyx Pharmaceuticals (RARE)

The worst three (3) in the session: 

  • Friday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Lenz Therapeutics (LENZ)
  • Thursday: market closed
  • Wednesday: Moderna (MRNA), Blueprint Medicine (BPMC) and uniQure NV (QURE)
  • Tuesday: Mesoblast (MESO), Lenz Therapeutics (LENZ) and bluebird bio (BLUE)
  • Monday: AxoGen (AXGN), Mesoblast (MESO) and Lenz Therapeutics (LENZ)

 

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.