January 14, 2025 4:34pm

Over worries about inflation data, I’m waiting for bottom BUYs following earnings releases

Cell and gene therapy sector traded lower on Tuesday after wholesale (PPI) price inflation cooled in December

If Wednesday’s CPI comes in hotter than expected, it would certainly be bad news for equity markets focusing on the Fed’s ability to lower interest rates

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: get it up, futures are higher … https://www.regmedinvestors.com/articles/13766

 

Tuesday: The Dow closed UP +221.16 points or +0.52%, the S&P closed UP +6.69 points or +0.11% while the Nasdaq closed DOWN -43.71 points or -0.23%

  • Indexes closed mixed, awaiting more inflation data

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 producer price index for December rose at a 0.2% monthly rate, which was below expectations at 0.3% and down from 0.4% in November
  • The iShares U.S. Home Construction ETF (ITB)
  •  climbed 1.8% Tuesday, on track for back-to-back gains and its best day since Nov. 25, 2024, when it advanced 5.1%
  • CPI looms as to whether we get new highs of yields

Tuesday’s advance/decline line at the open was negative with 13 incliners, 19 declined and 3 flats; ending with a negative close at the close of 6 incliner, 26 decliners and 3 flats

  • Heightened volatility continues

Metrics:  Tuesday, the IBB was down - 2.45%, the XBI was down -2.47% while the VIX was down -0.48 points or -2.50% at 18.71

 

Q1/25 – 1 holiday, 1 market close, 4 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

 

Tuesday’s Closing Down (10 of 26):

  • Alnylam Pharmaceuticals (ALNY -$17.76 after Monday’s +$2.29)
  • Ultragenyx Pharmaceuticals (RARE -$3.14 after Monday’s +$1.09),
  • Ionis Pharmaceuticals IONS -$2.25 after Monday’s +$1.48),
  • Beam Therapeutics (BEAM -$2.24 after Monday’s -$0.85),
  • Vericel (VCEL -$0.95 after Monday’s +$0.12),
  • Lenz Therapeutics (LENZ -$0.84),
  • Blueprint Medicine (BPMC +$0.80 after Monday’s +$15.93),
  • BioLife Solutions (BLFS -$0.70 after Monday’s +$0.36),
  • Moderna (MRNA -$0.69 after Monday’s -$7.10),
  • uniQure NV (QURE -$0.56),

Flat (3)

  • Cellectis SA (CLLS)
  • Brainstorm Cell therapeutics (BCLI)
  • Homology Medicine (FIXX)

Tuesday’s Closing Up (6 of 6):

  • Regenxbio (RGNX +$0.10 after Monday’s -$0.56),
  • Adverum Biotechnologies (ADVM +$0.05)
  • Compass Therapeutics (CMPX +$0.05 after Monday’s +$0.18),
  • MiMedx (MDXG -$0.05),
  • Precigen (PGEN -$0.015),
  • Caribou Biosciences (CRBH +$0.01),

 

The BOTTOM LINE: 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. <Josh Nathan-Kazis, Barron’s>

 

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

Vericel (VCEL) … Full-Year 2024 Total Revenue Growth of 20% and Adjusted EBITDA Growth of Approximately 55%. MACI Full-Year 2024 Revenue Growth of 20%, with Q4 Revenue of $68.2 to $68.7 M. Highest Quarterly MACI Implants, Surgeons, and Biopsies Since Launch and Strong Early MACI Arthro Launch Indicators. Record Q4/24 Gross Margin of Approximately 77% and Adjusted EBITDA Margin of 39%. 2025 Total Revenue Guidance of 20% to 23% Growth. Mid-Term Profitability Targets Increased to Gross Margin in the High-70% Range and Adjusted EBITDA Margin in the High-30% Range

 

Biotech stocks put up a downdraft showing at the J.P. Morgan Healthcare Conference in San Francisco

  • Health care stocks underperformed Tuesday, with the S&P 500 sector barely up +0.11%. Eli Lilly (LLY) was the worst performer dropping -6.59% or -$52.57 to $744.91. Charles River Laboratories (CRL) declined -12.05 or -6.34% to $178.08%, while Biogen (BIIB) lost at least -4.74 or -$7.12% to $143.06.

 

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:    

  • Tuesday: Regenxbio (RGNX), Adverum Biotechnologies (ADVM) and Compass Therapeutics (CMPX)
  • Monday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Sage Therapeutics (SAGE)

The worst three (3) in the session: 

  • Tuesday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
  • Monday: Moderna (MRNA), CRISPR Therapeutics (CRSP) 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.