“Karuna 2.0 & Another Nasdaq Record” Vista Partners Daily Market Recap 11/19/19

By John Heerdink LinkedIn

Got to love biotech! Shares of Karuna Therapeutics, Inc. (Nasdaq: KRTX) closed at $96/share up +$78.32 +442.99% after hitting $100 intraday trading yesterday. This move came after Karuna, a clinical-stage biopharmaceutical company committed to developing novel therapies with the potential to transform the lives of people with disabling and potentially fatal neuropsychiatric disorders and pain, announced results from its Phase 2 clinical trial of KarXT for the treatment of acute psychosis in patients with schizophrenia. In the clinical trial, KarXT demonstrated a statistically significant and clinically meaningful 11.6 point mean reduction in total Positive and Negative Syndrome Scale (PANSS) score compared to placebo (p<0.0001) and also demonstrated good overall tolerability. A statistically significant reduction in the secondary endpoints of PANSS-Positive and PANSS-Negative scores were also observed (p<0.001). KarXT was well tolerated in the Phase 2 trial, with similar discontinuation rates between KarXT (20%) and placebo (21%). The number of discontinuations due to treatment-emergent adverse events (AEs) were equal in the KarXT and placebo arms (N=2 in each group).

Today, the stock amazingly legged forward again up to $149.89/share and closed at $123.99/share up a more than solid +29.16%. After the market yesterday, Karuna announced that it had commenced an underwritten public offering of 2,600,000 shares of its common stock. Karuna intends to grant the underwriters a 30-day option to purchase an additional 390,000 shares of its common stock, at the public offering price, less the underwriting discounts and commissions. The offering is subject to market and other conditions, and there can be no assurances as to whether or when the offering may be completed, or as to the actual size and terms of the offering. All the shares to be sold in the proposed offering will be sold by Karuna. Goldman Sachs & Co. LLC and Citigroup are acting as joint book-running managers for the offering. Stifel, Nicolaus & Company, Incorporated is also acting as a book-running manager. JMP Securities LLC is acting as a lead manager. No updates on this process have been published.

As for the broad markets, results were a bit mixed. The Dow closed down -102.18 points -.36% closing at 27,934.02. The S&P 500 ended today’s session -1.85 points or -.06% as it closed at 3,120.18. The S&P 500 health care (+.7%) & the information technology (+.2%) sectors led the way while the energy (-1.5%) & the consumer discretionary (-1%) sectors dragged the index down.  The Nasdaq closed at 8,570.66 +20.72 points +.24% at yet another record high. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index was also ending up on the day +.37% +5.95 points at 1,598.294.

The U.S. Dollar Index strengthened +1%  ending at 97.85. The 2-yr Treasury yield closed at 1.59% & the 10-yr yield finished at 1.79% today respectively flat and up 2 basis points.

Oil prices closed at $55.21/bbl, -3.2%. Chevron (CVX) closed at $116.45/share -1.77%, Exxon (XOM) closed at $67.82/share -1.02%. Chevron reported earnings recently of $.75, beating estimates of $.681 per share. Exxon Mobil (XOM) reported earnings recently of $1.36, missing estimates of $1.564 per share. Occidental Petroleum (OXY) closed at $38.14/share down -2.95%.

Gold prices closed up at $1,473.20/oz. Silver closed at $17.11/oz -$.01/oz. Hecla Mining Company (HL) closed at $2.45/share +0% after reporting its Q3 2019 earnings Thursday Nov. 7th, which highlighted their Adjusted EBITDA of $69.8 million, approximately 40% lower cash cost per silver ounce and all-in sustaining cost (“AISC”) per silver ounce, in each case net of by-product credits compared to the third quarter of 2018, free cash flow of $28.8 million generated and a tentative agreement for their Lucky Friday Mine. (See complete story). Post the quarter BMO upgraded HL to a market perform. First Majestic Silver (AG) closed higher at $10.83/share -.09% after reporting their Q3 2019 earnings last week where their CEO Keith Neumeyer highlighted that they added $21.4M to their treasury during the quarter as a result of strong production from San Dimas and Santa Elana mines.

Volatility bets results were up today.  The CBOE Volatility Index (VIX) closed at $12.86/share +3.21% or +$.40/share. The 2x leveraged ETF (TVIX) closed at $7.24/share +2.26% or -$.04/share and traded tightly between $6.98 and $7.30 today.

Economic Reports

  • On Monday, the NAHB Housing Market Index report for November showed that it had lowered to 70 from the 71 levels it had achieved in October.
  • On Tuesday, the total housing starts report confirmed an increase of +3.8% month/month to a seasonally adjusted annual rate of 1.314M. The total building permits report also rose 5% month/month to a seasonally adjusted annual rate of 1.461M.

Big Movers

Progyny, Inc. (Nasdaq: PGNY), a leading benefits management company specializing in fertility and family building benefits solutions in the United States, closed trading today at $26.82/share up +7.62% after reaching another new all-time high of $29.21. PGNY closed its IPO on October 29th, 2019 that was priced at $13/share and now enjoys a $2.05B market cap. They will report their financial results for the quarterly period ended September 30, 2019, on Wednesday, December 4, 2019, after the close of the market. The company will host a conference call at 5:00 P.M. Eastern Time (or 2:00 P.M. Pacific Time) and issue a press release regarding its financial results prior to the start of the call. You may access the conference call in the US by dialing 1.877.883.0383 and using the passcode 8909894. International participants may access the call by dialing 1.412.902.6506 and using the same passcode. An audio replay of the call will be available through Monday, December 9, 2019, and maybe accessed by dialing 1.877.344.7529 (US participants) or 1.412.317.0088 (international participants) with the passcode 10136987.

INVO Bioscience, Inc. (IVOB), a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcell®, the world’s only in vivo Intravaginal Culture System (pictured above), closed trading at $.26/share up +15.02%. Recently, IVOB announced that it has entered into commercialization agreements in the continent of Africa, covering Nigeria, Uganda, Sudan, and Ethiopia, to distribute the revolutionary INVOcell system. The agreements represent INVO Bioscience’s initial entry into the highly populated infertility markets in Africa. According to research, approximately 31% of Nigerian couples fail to conceive a child after 12 months of unprotected sex—a rate at least as high as in the West. Across the continent, infertility is on the rise. Infertility comes with devastating social, cultural, emotional and economic consequences for young couples in Africa. However, access to assisted reproductive services remains a big challenge as traditional IVF treatment is limited in many areas of Africa. (READ complete story)

The Company will hold a live investor webcast at 11:00 am ET (8:00 am PT) on Thursday, November 21, 2019, to discuss the results and provide investors an overview of the Company and its strategy. Interested parties can access the conference call via a live Internet webcast, which is available in the Investor Relations section of the Company’s website at https://invobioscience.com/investors/. To submit a question in advance of the webcast, please email it to IVOB@lythampartners.com. A webcast replay will be available for 90 days in the Investor Relations section of the Company’s website at https://invobioscience.com/investors/.

Healthcare

The S&P 500 healthcare sector closed at 1122.50 -4.25%. UnitedHealth Group (UNH) closed at $272.93/share +1.31% after a recent Q3 earnings beat on 10/15/19 & Walgreens Boots Alliance (WBA) closed at $61.94/share -.32%. Walgreens reported earnings on 10/28/2019 of $1.43/share, missing estimates calling for $1.451 per share. Recently reports surfaced that publicly traded private equity firm KKR (KKR $29.46 +-1.27%) is preparing a buyout plan. Cigna (CI) closed +1.21% closing at $198.38/share.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved +1.99% closing at $113.45 & the NYSE Arca Biotech Index (^BTK) closed at 4,716.8935 +1.45%.

Johnson & Johnson (JNJ) closed at $134.82/share -.01%, Merck & Co (MRK) closed at $84.65/share +.62%, Pfizer (PFE) closed at $37.66/share +1.18%. Merck (MRK) reported earnings on 10/29/2019 of $1.51, beating estimates of $1.28 per share. Pfizer (PFE) reported earnings on 10/29/2019 of $.75, beating estimates of $.644 per share.

Atossa Genetics (ATOS) closed trading at $1.25/share. Recently, Atossa and The Dr. Susan Love Research Foundation announced that the Institutional Review Board (IRB) has approved a Phase 2 clinical study of Atossa’s intraductal microcatheter technology for the administration of fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS). Susan Love, M.D., inventor of the technology, will advise Atossa as it conducts the trial. Atossa also entered into a clinical trial agreement with a major research university named in the 8k filing that Atossa filed on 10-14-2019 to conduct their Phase 2 clinical study of Atossa’s intraductal microcatheter technology for the administration of fulvestrant in patients with early-stage breast cancer or ductal carcinoma in situ (DCIS). Atossa Genetics is the owner of issued patents, pending patent applications, and medical device FDA 510(k) premarket notifications related to the treatment of breast conditions, including breast cancer and DCIS.

“We have contracted with a world-class teaching, research, and healthcare organization based in the United States to conduct this study,” commented Steven C. Quay, Ph.D., M.D., CEO and President of Atossa. “Atossa’s intraductal technology was invented by Dr. Love and subsequently acquired by Atossa. We are honored that Dr. Love has agreed to work with us on this important new study. This work begins as Atossa increases its corporate focus on its proprietary Endoxifen for the reduction of mammographic breast density.” READ the complete story here.

This week, Atossa announced financial results for the third quarter ended September 30, 2019, and provided an update on recent company developments. Steven C. Quay, M.D., Ph.D., Atossa Genetics’ President, and CEO commented, “In the third quarter we made substantial headway in advancing the development of our lead drug candidate – Endoxifen – as we turn our concentration towards treating mammographic breast density (MBD). We recently announced meeting all objectives in our Phase 1 study of the modified-release tablet form of oral Endoxifen, which paves the way toward advancing our modified-release tablet into Phase 2 studies. The final analysis of the results demonstrated that the modified-release tablet had no treatment-related side effects that were rated as moderate or severe in intensity, strongly supporting the continued development of this proprietary formulation. We also initiated our Phase 2 clinical study of Atossa’s intraductal technology for the administration of fulvestrant in patients with early-stage breast cancer with a major institution and supported by the Dr. Susan Love Research Foundation. Many of the approximately 64,000 women with ductal carcinoma in situ (DCIS) who opt for ‘watchful waiting’ rather than extensive surgery could benefit from a gentler, intermediate treatment of DCIS with intraductal ablation with fulverstrant. Before the end of the year, we look forward to reporting several significant milestones: contracting with a clinical research organization for our Phase 2 study of oral Endoxifen to treat MBD, completing additional pre-clinical work of our cell-based therapy candidate and our intraductal technology, as well as reporting additional results from our recently completed clinical study of our modified-release form of Endoxifen tablets.” Read Complete Story.

Tech, Entertainment & Beyond

Apple (AAPL) closed at $266.29/share -.30% as optimism continues to grow with regard to the new iPhone models and new streaming entertainment offering, Alphabet (GOOG) closed at $1315.46/share -.40%, Facebook (FB) closed at $199.32/share +.97%, Microsoft (MSFT) closed at $150.39/share +.03%, NVIDIA (NVDA) closed at $207.99/share -2.02% and recently reported Q3 results beating Wall Street’s Q3 expectations however they did not meet on their forward-looking outlook views. IBM closed at $134.52/share +.16% as it recently missed wall street Q3 expectations. Cisco Systems (CSCO) was +.71% finishing at $45.47/share after reporting results this week that missed expectations & lowered guidance. Goldman Sachs (GS) ($220.04/share +.14%) recently downgraded CSCO as it views that corporate spending on technology has weakened.

Disney (DIS) closed at $148.38/share +.49% after beating quarterly expectations this week & announcing that they already have more than 10 million Disney+ subscribers which also beat analysts’ expectations of 8 million subscribers by the end of 2019.

Verizon (VZ) ($59.50/share, +.10%) recently announced that it will be giving the streaming service Disney+ to all new customers of Verizon for a year, and Netflix (NFLX) closed at $302.60/share +.01%. Rumors surfaced that either/or both Carl Icahn & Bill Ackman have accumulated a large position in NFLX. Amazon (AMZN) closed at $1,752.79/share +.26%.

Streaming device maker Roku (ROKU) closed at $153.91/share -3.88% after they recently reported earnings beating both top and bottom Wall Street expectations, but also reducing its profitability outlook for 2019 as a whole, adjusting it from $30M from $35M reflecting continued investing in the business and Q4 dataxu operations and acquisition expenses. The dataxu acquisition was announced to have been completed recently.

Boeing (BA) closed at $367/share -.67% after their CEO’s recent testimony to the Senate and today’s new reported understanding that the 737 Max return is closer than thought.



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