January 13, 2025 4:41pm

Not many attendees are feelin’ the <share pricing> love after 2 years of unique underperformance for the healthcare sector

Bad news is unhealthy news, good news seems limited, and no news is usually bad news

I say today what others won't, so you can do what others can't!

Never leave an investor uninformed!  

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: Rollover Breathe, gotta see something today … https://www.regmedinvestors.com/articles/13764

 

Monday: The Dow closed UP +358.67 points or +0.86%, the S&P closed UP +9.18 points or +0.16% while the Nasdaq closed DOWN -73.53 points or -0.38%

  • Indexes closed as a continued selloff in tech stocks extended losses sparked by past stronger-than-expected job reports

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

  • Surging bond yields have been one of the catalysts for the sell-off in growth-oriented shares. The 10-year Treasury yield touching the highest level since November 2023.
  • On the macroeconomic front, investors will keep an eye on the key inflation indicators, the consumer price index (CPI) and producer price index (PPI), this week.

Monday’s advance/decline line at the open was negative with 10 incliners, 22 declined and 3 flats; ending with a negative close at the close of 11 incliner, 20 decliners and 4 flats

  • Heightened volatility continues

Metrics:  Monday, the IBB was up +1.29%, the XBI was down -0.0.31% while the VIX was down -0.31 points or -1.59% at 19.23

 

As compared to:

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 2 incliner, 29 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, 3 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

 

Monday’s Closing Down (10 of 21):

  • Moderna (MRNA -$7.10 after Friday’s -$0.92),
  • Beam Therapeutics (BEAM -$0.85),
  • CRISPR Therapeutics (CRSP -$0.84 after Friday’s -$1.60),
  • Regenxbio (RGNX -$0.56 after Friday’s -$0.78),
  • Solid Biosciences (SLDB -$0.37),
  • Fate Therapeutics (FATE -$0.175),
  • Cellectis SA (CLLS -$0.17),
  • Prime Medicine (PRME -$0.17),
  • Voyager Therapeutics (VYGR -$0.17),
  • Intellia Therapeutics (NTLA -$0.15 after Friday’s -$1.82)

Flat (4)

  • Brainstorm Cell Therapeutic (BCLI)
  • Harvard Apparatus RT (OTCQB: HRGN)
  • Homology Medicine (FIXX)
  • Mesoblast (MESO)

Monday’s Closing Up (11 of 11):

  • Alnylam Pharmaceuticals (ALNY +$2.29 after Friday’s -$2.57)
  • Blueprint Medicine (BPMC +$15.93 after Friday’s -$3.20),
  • Sage Therapeutics (SAGE +$1.95),
  • Ionis Pharmaceuticals IONS +$1.48),
  • Ultragenyx Pharmaceuticals (RARE +$1.09 after Friday’s -$1.58),
  • BioLife Solutions (BLFS +$0.36 after Friday’s -$1.08),
  • AxoGen (AXGN +$0.20 after Friday’s +$2.78)
  • Compass therapeutics (CMPX +$0.18),
  • Vericel (VCEL +$0.12),
  • Agenus (AGEN +$0.04),
  • bluebird bio (BLUE +$0.03 after Friday’s $0.00),

 

The BOTTOM LINE: From the title … J.P. Morgan’s healthcare investment conference runs from Monday through Thursday after 2 years of unprecedented underperformance for the healthcare sector.

  • At the J.P. Morgan conference, the usual barrage of deal announcements, company updates, and comments from top executives set the tone for the sector for the year to come.

Is the conference a turning point for investors, when big news draws generalist interest and rescues the sector from the doldrums?

  • This year, however, investors don’t see much hope for a turnaround. The incoming Trump administration brings dramatic policy uncertainty, which, layered on top of shaky fundamentals, is making the industry too unpredictable for investors.
  • Although, some experts are hoping a spate of M&A might draw some generalist cash back into the sector.
  • Healthcare stocks in the S&P 500, as tracked by the Health Care Select Sector SPDR Fund, have climbed just 3% since the start of 2023. The S&P 500 is up more than 50% over the same period. <Josh Nathan-Kazis, Barron’s>

 

Biotech stocks put up a split showing at the J.P. Morgan Healthcare Conference in San Francisco: <in my universe>

  • Beam Therapeutics (BEAM) stock tumbled -3.22% to 25.54. Investors are closely focused on BEAM's treatment for alpha-1 antitrypsin deficiency, or AATD. The disease is a genetic disorder that can cause problems in the liver or lungs. The company expects to provide an update on at least 7 patients who've received its gene-editing treatment in the 1st H of 2025.
  • Moderna (MRNA) stock crashed Monday after the Covid vaccine maker slashed its outlook for 2024 and 2025 sales and announced an expanded cost-cutting initiative. MRNA projects $3 billion to $3.1 billion in sales of its 2 products, below its previous call for $3 billion to $3.5 billion. Moderna sells Spikevax, a Covid vaccine, and a vaccine to prevent RSV, or respiratory syncytial virus, in older adults. That shot is called mResvia. Moderna also cut its 2025 outlook and now projects just $1.5 billion to $2.5 billion, well below its prior view for $2.5 billion to $3.5 billion. MRNA closed down -16.8% to 35.15. Monday’s decline put the stock on track for its worst day on record.

 

Sector companies are issuing prelim revenue, guidance, pipeline for JP Morgan Healthcare conference:

Editas Medicine (EDIT) … Achieved in vivo preclinical proof of concept of editing hematopoietic stem cells in non-human primates as a key step toward developing a novel in vivo treatment for sickle cell disease and beta thalassemia. Achieved in vivo editing of liver cells in non-human primates and in vivo delivery to two additional cell types in humanized mice. Anticipated 2025 milestones include: declare two in vivo development candidates, one in HSCs and one in liver; present further in vivo HSC data; present in vivo data in one liver indication; establish one additional target cell type/tissue; and continue to derive revenue through sublicensing foundational IP. Strategic priorities through 2027 include: submit at least one IND/CTA; achieve human in vivo proof of concept in HSC editing for the treatment of sickle cell disease and beta thalassemia; and commence late-stage trial of at least one asset. Strong financial position with operational runway into Q2/27

BioLife Solutions (BLFS) … Preliminary and unaudited revenue for continuing operations for the fourth quarter of 2024 was $22.7 million, an increase of 31% from $17.4 million for the fourth quarter of 2023. Cell processing platform revenue was $20.3 million, up $5.5 million, or 37%, over the same period in 2023, and up 7% sequentially over the third quarter of 2024. Evo and Thaw platform revenue was $2.4 million, a decrease of $0.2 million, or 8%, from the same period in 2023. Preliminary and unaudited revenue from continuing operations for the full year 2024 was $82.3 million, an increase of 8% from $75.9 million for 2023. Cell processing platform revenue was $73.5 million, up $7.8 million, or 12%, from 2023. Evo and Thaw platform revenue was $8.7 million, down $1.4 million, or 14%, from 2023.

 

Some positive news: Johnson & Johnson (JNJ) will acquire Intra-Cellular Therapies (ITCI) for $132 per share in cash, valuing the neurological disorder treatment company at $14.6 billion. Shares of Intra-Cellular soared 34.07% to $127.19 on the news. J&J’s stock was up +$2.41 to $144.47with an aftermarket of -$0.33.

 

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 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:    

  • Monday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Sage Therapeutics (SAGE)
  • Friday: AxoGen (AXGN), Generation Bio (GBIO) and bluebird bio (BLUE)

The worst three (3) in the session: 

  • Monday: Moderna (MRNA), CRISPR Therapeutics (CRSP) and Beam Therapeutics (BEAM)
  • Friday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) 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.