RegMed Investors’ closing bell analysis, thank you and watch your back

August 5, 2016 4:54pm

… More financial results/earnings due next week (ATHX, BLFS, BSTG, BTX, CLBS, HSGX, FATE, ONCE, VCEL and XON)

Post financial results/earnings, most of those reporting companies trading UP (ADRO, AXGN, BLUE, JUNO, ONVO and STML) versus Cytori (CYTX), Fibrocell (FCSC) and Sangamo (SGMO) that traded DOWN

… A GOOD sign, cash positions and runways are on display.

Pre-open indication‘s tally: 5 hits and 1 miss:

I answer one question; in which company should investors put, keep and commit their money!

Do you care what happened today, you should … because it has implications to Monday's sector activity?   Where has today’s market gone – subscribe and find out. 

There are two things that investors need - interpretation of news and translation of market metrics concerning the stem, cell, gene and regenerative therapy sector to substantiate share pricing.

U.S. stocks closed sharply higher Friday, with the S&P and the NASDAQ posting their strongest close ever, after a stronger-than-expected jobs report.

The NASDAQ closed UP +54.57 or +1.06% to 5,221.12 and the DOW closed UP +191.48 or +1.04% to 18,543.53.

A day in the life of the stem, cell, gene and regenerative therapy (SCGT & RT) sector – the advance/decline line scenario of our 43 covered companies:    

• The open was positive with an A/DL of 29/12 and 2 flats;
• 10:30 am, the sector stayed positive with an A/DL of 33/9 and 1 flat;
• 11:30 am, the sector was positive with an A/DL of 31/11 and 1 flat;
• The mid-day continued positive with an A/DL of 32/9 and 2 flats;
• The closing bell was positive with A/DL of 29/11 and 3 flats;

Henry’omics:

The stem, cell, gene and regenerative therapy (SCGT&RT) sector opened positive, stayed positive at the mid-day with the sector closing positive.

• The iShares Nasdaq Biotechnology NASDAQ GM (IBB) was UP +0.38% and the iShares Russell 2000 NYSE Arca (IWM) was also UP +1.44%, the SPDR S&P Biotech ETF (XBI) was UP +1.09% and the Health Care Select Sector SPDR ETF (XLV) was UP +0.18%.

The iShares NASDAQ biotechnology index (IBB) has been hitting its highest levels … incrementally!

• We might be in a loss per share cycle yet, the sector is appreciating as most losses were expected.

Regardless of losses, investors face the same problem each quarter — the obsession among analysts and the media with “beating” quarterly estimates for earnings or revenues.

• Beating an estimate is part of the traditional “game”, but it might not tell you anything about how a development company is doing or what it needs to do.

Next week will be the clincher of the smaller-cap sector companies who NEED to raise capital …

• I am feeling the “burn” next week …

It's all about expectation and not all hoorays for sector stocks - Bristol-Myers (BMY) shares tanked today on news of a failed clinical trial for a key cancer drug.

Call me cantankerous, contrarian or even a curmudgeon but at last I get it right …

Pre-open indication’s tally:  5 hits and 1 miss:

• Adverum (ADVM) closed DOWN -$0.45 – hit;
• AxoGen (AXGN) closed UP +$0.16 – miss;
• Biostage (BSTG) closed DOWN -$0.01 – hit;
• Cesca Therapeutics (KOOL) closed DOWN -$0.24 – hit;
• Juno Therapeutics (JUNO) closed UP +$0.54 – hit;
• Intrexon (XON) closed UP +$1.03 – hit;

Review my fear gauge or the CBOE Volatility Index (VIX):

• Friday traded near 11.3;
• Thursday traded near 12.5;
• Wednesday traded near 12.8;
• Tuesday traded near 13.5;
• Monday traded 12,63;
• Last Friday traded 12.4;

Today’s Bottom Line:

Most sector “participants” are “in line” with historical spending and LPS (loss-per-share) averages …

Out and about:

Adverum Biotechnologies (ADVM) closed DOWN -9.57% after rising 12%.

• The shares declined -$0.45 to $4.25 from a previous close of $4.70 in the previous session. Trading volume was quadruple the average for this time of day. Adverum Bio's move compares with little change in the Nasdaq Biotechnology Index, which was down 0.1%, and almost no move in the Standard & Poor's 500 Index.
• ADVM’s stock's relative strength index was above 70 indicating that it may be overbought.
• The stock is 46%below the Bloomberg consensus one- year target price. It returned a negative 49% so far this year and a loss of 68% in the past 52 weeks.
• Short interest was 5.1 times ADVM's average daily trading and represented 2.6% of the shares.

Bellicum Pharmaceuticals (BLCM) rose 7.36%. The shares climbed to $17.36 from $16.17 in the previous session. Trading volume was almost the same as the average for this time of day. Bellicum's move compares with the 0.8% rise in the Nasdaq Biotechnology Index and the 0.8% gain in the Standard & Poor's 500 Index.

• In addition to the rising stock price, Fidelity Select Biotechnology Portfolio added Bellicum to its portfolio, buying 293,500 shares as of June 30.
• The stock is 12% below the Bloomberg consensus one- year target price. It returned a negative 13% so far this year and a loss of 13% in the past 52 weeks.
• Short interest was 7.6 times BLCM's average daily trading and represented 13% of the shares available as of the latest quarterly filing.

BioTime (NYSEMKT: BTX) rose 3.46%, the biggest move since May 20, and more than five times its industry group.  The shares climbed to $3.29 from $3.18 in the previous session. Trading volume was almost triple the average for this time of day. BioTime's move compares with the 0.8% rise in the Nasdaq Biotechnology Index and the 0.8% gain in the Standard & Poor's 500 Index.

• BTX’s stock up 33.1% since raising $20.1M in an equity offering on 6/16/16 with the equity lockup expiring in 40 days on 9/14/16.
• The stock is 56% below the Bloomberg consensus one- year target price. It returned a negative 12% so far this year and a gain of 18 percent in the past 52 weeks.
• Short interest was 30 times BTX's average daily trading and represented 8.1% of the shares available as of the latest quarterly filing.

Kite Pharma (KITE) rose 0.34.

• The shares climbed to $58.59 from $58.39 in the previous session. Trading volume was almost the same as the average for this time of day. KITE's move compares with the 1.1% rise in the Nasdaq Biotechnology Index and the 0.2% gain in the Standard & Poor's 500 Index.
• Cash balance of $577.4M is 24.8% of enterprise value, based on 3/31/16.
• KITE’s stock down 18.9% since raising $287.6M in an equity offering on 12/10/15.
• The stock is 20% below the Bloomberg consensus one- year target price. It returned a negative 4.2% so far this year and a loss of 18% in the past 52 weeks.
• Short interest was 5.3 times KITE's average daily trading and represented 19% of the shares available.    

Earnings:

Aduro Biotech (ADRO) reported net income of $2.3 M, or $0.03 per share. Revenue was $39 M; the increase was primarily due to the receipt of a $35 M milestone payment from Novartis in connection with the initiation of the P1 ADU-S100 trial in Q2.  Cash, cash equivalents and marketable securities totaled $396.9 M. ADRO shares have fallen 46% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $15.09, a fall of 40% in the last 12 months; Thursday the shares traded at $15.17 and closed Friday UP +$0.33 at $15.56

AxoGen (AXGN) reported a loss of $2.8 M or -$0.09 per share. AXGN posted revenue of $10.4 M. Gross margin of 85.2%. This is the first time that revenue has exceeded $10 M in a quarter and marks the twenty second consecutive quarter of year over year double digit revenue growth. Management is increasing its full year 2016 revenue guidance to over $40 M and increasing its full year 2016 gross margin guidance to exceed 80%. Cash was $18.2 M and accounts receivables were 6 M. AxoGen shares have climbed 44% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $7.18, more than doubling in the last 12 months and is UP +$0.16 on Friday post release.

Cytori Therapeutics (CYTX) on Thursday reported a loss of $6.4 M or -$0.43 in Q2. Revenue was $1.1 M. CYTX shares had closed at $2.18 and was DOWN -$0.14. A year ago, they were trading at $6.31.

Organovo Holdings (ONVO) on reported a loss of $8.8 M or -$0.09 in its Q1. ONVO posted revenue of $891 K.ONVO’s shares closed at $4.33 and is UP +$0.20 on Friday. A year ago, they were trading at $3.19

Sangamo Biosciences (SGMO) reported a consolidated net loss of $26.6 M, or $0.38 per share. SGMO had cash, cash equivalents, marketable securities and interest receivable of $172.6 M. Revenues for the second quarter of 2016 were $3.7 M. Second quarter 2016 revenues were generated from the SGMO's collaboration agreements with Biogen (BIIB) and Shire International GmbH (Shire), enabling technology agreements and research grants. The revenues recognized for the second quarter of 2016 consisted of $3.6 million from collaboration agreements and $100 K from research grants. The decrease in collaboration agreement revenues was primarily a result of an amendment to SGMO's collaboration and license agreement with Shire in Q3/15, which returned the rights to the hemophilia programs to Sangamo.

Juno Therapeutics (JUNO) reported a loss of $64.7 M or $0.64 per share (including stock-based compensation expense). JUNO recorded revenue of $27.6 M in the reported quarter, up 120.8% from the year-ago period. Reported quarter revenues include revenue recognized under the Celgene Corporation (CELG) collaboration and CD19 opt-in as well as milestone revenue from Novartis AG NVS. JUNO continues to expect cash burn of $220 M - $250 M in 2016. Cash position was $1.1 B.

Fibrocell Science (FCSC) on Thursday reported a loss of $8.1 M or -$0.18 per share in Q2. Losses, adjusted for one-time gains and costs, came to $0.14 per share. FCSC posted revenue of $87 K. FCSC’s shares had closed at $1.07 on Thursday and is UP +0.01 on Friday. A year ago, FCSC was trading at $6.89.

Decliners:

• Adverum (ADVM) -9.57% after Thursday’s +8.55%;
• Cytori (CYTX) -6.42%;
• Cesca Therapeutics (KOOL) -5.36% after Thursday’s -17.34%;
• ReNeuron (RENE.L) -4.17%;
• Fibrocell (FCSC) -2.91%;
• Northwest Bio (NWBO) -2.17%;
• Sangamo (SGMO) -1.03%;
• Caladrius Biosciences (CLBS) -0.79%;
• Biostage (BSTG) -0.88%;
• Mesoblast (MESO) -0.46%;
• MiMedx (MDXG) -0.13%

Advancers:

• bluebird bio (BLUE) +7.41% after Thursday’s -9.43%;
• Bellicum Pharma (BLCM) +7.36%;
• uniQure (QURE) +7.74%;
• Capricor (CAPR) +3.65%;
• Neuralstem (CUR) +5.61%

Flat:                                                                                                                                      

• International Stem Cell (ISCO) at $2.00;
• Pluristem (PSTI) at $1.51;
• Verastem (VSTM) at $1.36;

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.