January 17, 2025 5:15pm

Yet the cell and gene therapy sector stumbled as the JP Morgan Healthcare Conference didn’t light-up the stories

Investors are looking ahead to next week, as Donald Trump is set to be inaugurated as president for the 2nd time.

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

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!

 

Friday: The Dow closed UP +334.70 points or +0.78%, the S&P closed UP +59.32 points or +1% while the Nasdaq closed UP +291.91 points or +1.51%

  • Indexes popped higher to complete its first weekly gain of 2025

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

  • Housing starts rose at a much faster than expected pace in December even as mortgage rates climbed
  • The better-than-expected economic data earlier this week has helped “revive the goldilocks narrative for equities, and likely prompted some re-risking,” <Barclays strategist Emmanuel Cau>  

Friday’s advance/decline line at the open was positive with 19 incliners, 12 declined and 4 flats; ending with a positive close at the close of 21 incliner, 12 decliners and 2 flats

  • Ending the week on a positive close

Metrics:  Friday, the IBB was down -0.31%, the XBI was up +0.08% while the VIX was down -0.63 points or -3.80% at 15.97

 

Thursday: The Dow closed DOWN -68.42 points or -0.16%, the S&P closed DOWN -12.58 points or -0.21% while the Nasdaq closed DOWN -172.94 points or -0.89%

  • Indexes drifted lower following a mixed set of earnings reports ending a 3-day winning streak

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 Labor Department said initial jobless claims for the week ending Jan. 11 totaled 217,000, an increase of 14,000 from the previous week and higher than the forecast for 210,000. Continuing claims, which run a week behind, declined slightly to 1.86 million.
  • The 10-year U.S. Treasury yield pulled back sharply from a 14-month high reached earlier in the week. It last hovered around 4.623%.

Thursday’s advance/decline line at the open was negative with 9 incliners, 24 declined and 2 flats; ending with a negative close at the close of 10 incliner, 22 decliners and 3 flats

  • Heightened volatility continues, after the upside; yet another downslide

Metrics:  Thursday, the IBB was down -0.46%, the XBI was down -0.66% while the VIX was up +0.22 points or +1.36% at 16.34

 

Wednesday: The Dow closed UP +703.27 points or +1.65%, the S&P closed UP +1.07 points or +1.83% while the Nasdaq closed UP +466.84 points or +2.45%

  • Indexes surged on Wednesday after the latest consumer price index report showed core inflation unexpectedly slowed in December

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

  • December’s consumer price index showed that core inflation, which excludes food and energy, rose 3.2%, the Bureau of Labor Statistics reported Wednesday. This was a notch down from the previous month and lower than the 3.3% estimated by economists surveyed by Dow Jones. Headline inflation increased 2.9% on a 12-month basis, in line with forecasts.
  • The 10-year Treasury yield sharply dropped on the back of the CPI report and was last down 14 basis points at 4.651%.

Wednesday’s advance/decline line at the open was positive with 30 incliners, 3 declined and 2 flats; ending with a positive close at the close of 29 incliner, 3 decliners and 3 flats

  • Heightened volatility continues, now to the upside

Metrics:  Wednesday, the IBB was up +1.85%, the XBI was up +1.89% while the VIX was down -2.47 points or -13.21% at 16.24

 

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

 

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

 

Q1/25 – 1 holiday, 1 market close, 5 negative and 6 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 (12 of 12):

  • Alnylam Pharmaceuticals (ALNY -$2.89 after Thursday’s -$1.85 after Wednesday’s +$10.50, Tuesday’s -$17.76 and Monday’s +$2.29)
  • Ultragenyx Pharmaceuticals (RARE -$0.85),
  • Ionis Pharmaceuticals IONS -$0.85 after Thursday’s -$0.93 after Wednesday’s +$0.52, Tuesday’s -$2.25 and Monday’s +$1.48),
  • AxoGen (AXGN -$0.34 after Thursday’s -$0.30 after Wednesday’s +$0.49),
  • BioLife Solutions (BLFS -$0.31),
  • uniQure NV (QURE -$0.16 after Thursday’s +$0.22 after Wednesday’s +$0.76 and Tuesday’s -$0.56),
  • Brainstorm Cell Therapeutics (BCLI -$0.10),
  • Cellectis SA (CLLS -$0.03),
  • Editas Medicine (EDIT -$0.02 after Thursday’s +$0.02),
  • Harvard Apparatus (OTCQB: HRGN -$0.02 after Thursday’s $0.00, Wednesday's $0.00,Tuesday -$0.05 and Monday's $0.00)
  • Sangamo Therapeutics (SGMO -$0.01),
  • Caribou Biosciences (CRBU -$0.01),

Flat (2)

  • Homology Medicine (FIXX)
  • Precigen (PGEN)

Friday’s Closing Up (10 of 21):

  • Blueprint Medicine (BPMC +$6.10 after Thursday’s -$0.94 after Wednesday’s +$2.33, Tuesday’s +$0.80 and Monday’s +$15.93),
  • Vericel (VCEL +$2.72 after Thursday’s -$1.20 after Wednesday’s -$1.12, Tuesday’s -$0.95 and Monday’s +$0.12),
  • Mesoblast (MESO +$0.63 after Thursday’s -$0.43),
  • Agenus (AGEN +$0.33),
  • Moderna (MRNA +$0.30 after Thursday’s -$1.01),
  • CRISPR Therapeutics (CRSP +$0.23 after Thursday’s +$1.26 after Wednesday’s +$0.68),
  • Regenxbio (RGNX +$0.22)
  • Sage Therapeutics (SAGE +$0.11 after Thursday’s -$0.29 and Wednesday’s -$0.18),
  • Lenz Therapeutics (LENZ +$0.10 after Thursday’s -$0.51 after Wednesday’s +$0.55 and Tuesday’s -$0.84),
  • Compass Therapeutics (CMPX +$0.10 after Thursday’s +$0.03 after Wednesday’s +$0.47, Tuesday’s +$0.05 and Monday’s +$0.18),

 

The BOTTOM LINE:  Glad this week is over … U.S. stock indexes rallied to close out their best week in 2 months.

Also, the session capped off the best trading week for the S&P 500 and Nasdaq since the 2024 election.

For the week:

  • The S&P 500 is up 169.62 points, or 2.9%.
  • The Dow is up 1,549.38 points, or 3.7%.
  • The Nasdaq is up 468.57 points, or 2.4%.
  • The Russell 2000 is up 86.65 points, or 4%.

January ‘25 recap:

  • 1/17 - Friday’s advance/decline line ended with a positive close at the close of 21 incliner, 12 decliners and 2 flats
  • 1/16 - Thursday’s advance/decline line ended with a negative close at the close of 10 incliner, 22 decliners and 3 flats
  • 1/15 - Wednesday’s advance/decline line ended with a positive close at the close of 29 incliner, 3 decliners and 3 flats
  • 1/14 - Tuesday’s advance/decline line ended with a negative close at the close of 6 incliner, 26 decliners and 3 flats
  • 1/13 - Monday’s advance/decline line ended with a negative close at the close of 11 incliner, 20 decliners and 4 flats
  • 1/10 - Friday’s advance/decline line mid-day ended with a negative close at the close of 29 incliner, 2 decliners and 4 flats
  • 1/9 - Thursday, markets were closed
  • 1/8 - Wednesday’s advance/decline line ended with a negative close at the close of 27 incliner, 27 decliners and 1 flat
  • 1/7 - Tuesday’s advance/decline line ended with a barely positive close at the close of 17 incliner, 16 decliners and 2 flats
  • 1/6 - Monday’s advance/decline line ended with a positive close at the close of 22 incliner, 12 decliners and 1 flat
  • 1/3 - Friday’s advance/decline line ended with a positive close at the close of 30 incliner, 8 decliners and 2 flats
  • 1 /2 - Thursday’s advance/decline line ended with a positive close at the close of 21 incliner, 12 decliners and 2 flats
  • 1/1 - Wednesday was a holiday, markets closed

 

Biotech stocks have slumped 15% since Donald Trump clinched victory over Kamala Harris to win his second presidency. That's because Trump comes with a lot of unknowns.

I am NOT worried … the new appointees will clean-out the flotsam of the previous administration and its spending; I am believing leaving “our” universe to GROW!

  • Licensing transactions are a key business component for biotech companies. Smaller players will often strike deals with big pharmaceutical companies that have the cash to further develop, manufacture and commercialize their products. In return, biotechs usually get an up-front payment and are eligible for future milestone payments and/or royalties on sales.
  • Beyond his nominations, investors in biotech stocks will undoubtedly be watching how Trump handles drug prices. Under the Inflation Reduction Act, 10 of the costliest drugs will face lower prices in 2026. Medicare recently released the list of negotiated drugs. <IBD>
  • The appointments of Oz and Musk could also prove to be a boon for biotech stocks working on obesity medications. Robert Kennedy is something more of a wild card, however – he will be slapped down if he wavers from his lane!

 

Sector companies had also been issuing prelim (un-audited) revenue, guidance, pipeline for JP Morgan Healthcare conference - it will sort-out earnings releases!

 

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:    

  • Friday: Blueprint Medicine (BPMC), Vericel (VCEL) and Mesoblast (MESO)
  • Thursday: CRISPR Therapeutics (CRSP), Verve Therapeutics (VERV) and MiMedx (MDXG)
  • Wednesday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Ultragenyx Pharmaceuticals (RARE)  
  • 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: 

  • Friday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
  • Thursday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and Moderna (MRNA)
  • Wednesday: Vericel (VCEL), Sage Therapeutics (SAGE) and Cellectis SA (CLLS)
  • 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.