“Q3 Positively Ends” Vista Partners Daily Market Recap 9/30/19

By John Heerdink LinkedIn

Today, the markets ended Q3 on a positive swing after a US Treasury representative on Saturday followed up by White House trade advisor Peter Navarro essentially refuted Friday’s Bloomberg story that stated that the Trump administration is considering limits to US investors’ flows into China & is weighing several options, including delisting Chinese companies from US stock exchanges and restricting Americans’ vulnerability to Chinese firms through pension funds, thus lifting the previously negative mood around the US-China trade wars and the markets.  I would also suggest that we saw a lightening up of the moves or shifting that portfolio managers generally make going into the end of quarters as that is typically completed prior to the last day which could have been driving down the values of certain growth stocks, especially biotech, that had hit 52-wk highs.

As a result, it was a “green” day across the board.  The S&P 500 ended today’s session up by 14.85 points or .50% as it closed at 2,976.74 but short of the 3k level. The information technology sector up 1% and the health care sector was up .9% to lead the move higher. The Dow added 96.58 points closing at 26,916.83 up by .36% but shy of the 27k level. The tech-heavy Nasdaq Composite closed at 7,999.34 up .75% or 59.71 points just shy of the 8k level. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index gained 2.9 points up .19% and ended trading at 1,523.37.

Treasury yields were flat today. The 2-yr Treasury yield closed at 1.62% & the 10-yr yield finished lower at 1.68%.

The U.S. Dollar Index strenthened again today and closed at 99.39 moving higher by .28%.

The energy esector was off .8% as oil prices dropped to $54.12/bbl down down a sizable 3.2% as the understanding that Saudia Arabia had brought inventories back to pre-attack levels pushed through the world. Chevron (CVX) closed at $118.60/share even on the day, Exxon (XOM) closed at $70.61/share down by 1.22%. Occidental Petroleum (OXY) closed at $44.47/share down by .46%.

Gold prices closed dropped considerable today at $1,471.95/oz once again below the $1500/oz level. Silver closed at $17.52/oz down .10. Hecla Mining Company (HL) closed at $1.76/share down 9.28% on the day. First Majestic Silver (AG) closed lower at $9.09/share down 5.61%.

Volatility bets lost ground today.   The CBOE Volatility Index (VIX) closed at $16.24/share down 5.69% or $.98/share. The 2x leveraged ETF TVIX  closed at $13.60/share down 4.96% or $.71/share and traded relatively tightly between $13.35 and $14.15 today.

Economic Reports

On Monday, we received the Chicago PMI report for September and it went down to 47.1.

Healthcare

The S&P 500 healthcare sector closed at 1043.37 up .90% reversing its recent downward trend. UnitedHealth (UNH) closed up .96% at $217.32/share, Walgreens Boots Alliance (WBA) closed at $55.31/share up 1.65% & Cigna (CI) jumped 1.55% closing at $151.49/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.3010/share down 2.9%. Daily trading volume continues to rise in concert with their announcing progress after their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry was announced in Q1-2019. Ferring has committed to providing the necessary sales and marketing resources to more fully develop the market in the United States. There are countless couples not able to receive reproductive treatments today, and Ferring can be instrumental in addressing the unmet needs of this cohort. Ferring has the industry experience, relationships and the marketing capabilities to successfully embed the INVOcell in clinics throughout the country.  IVOB is a medical device company, headquartered in Sarasota, FL focused on creating simplified, lower-cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that is FDA cleared and that enables egg fertilization and early embryo development in the woman’s vaginal cavity.

Recently, INVO Bioscience (IVOB) announced that revenues for the quarter totaled $658,638 compared to $110,210 in the second quarter of 2018, an increase of 498%. Revenue growth was driven primarily by increased product sales in the U.S. as shipments to Ferring were above expectations outlined in May 2019 as they began to increase their marketing activities. On January 14, 2019, the Company closed an exclusive U.S. licensing agreement with Ferring International Center S.A. the parent Company of Ferring Pharmaceuticals U.S. to commercialize the INVOcell™ system for use in the treatment of infertility. As part of the U.S. licensing agreement, the Company received a $5 million one-time milestone payment, with the ability to receive an additional $3 million upon obtaining a label enhancement from the U.S. Food and Drug Administration. Read Complete Story.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved higher by .20% to close at $99.50 the NYSE Arca Biotech Index closed at 4,215.65 up .30% reversing the recent downward trend

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $1.96/sharedown 3.45% on 235,233 shares of trading volume after hitting a high of $2.09/share. Atossa announced today that it had reported preliminary results from its Phase 1 study of its proprietary modified-release tablet form of oral Endoxifen. The Phase 1 study was conducted in Australia. The objectives of the study were to assess safety and tolerability and to ascertain the pharmacokinetics of the tablet. The study was randomized, double-blinded and placebo-controlled with both single and multiple-doses (daily for 14-days) in two groups with a total of 24 healthy female volunteers. Atossa’s oral Endoxifen capsule served as the comparator. Based on the number of women with MBD and the number of patients who have survived breast cancer but are not fully benefiting from taking tamoxifen, Atossa estimates that the potential markets for its proprietary formulations of Endoxifen could potentially exceed $1 billion in annual sales.

The company published the following:

  All objectives were successfully met:

– Safety: There were no unexpected and serious adverse events; no clinically significant adverse safety signals; and no clinically significant adverse events in participants receiving the tablet form of oral Endoxifen. No participants withdrew or were removed from the study due to skin rashes and irritation or other adverse events (side effects).

– Tolerability: The tablet form of oral Endoxifen was well tolerated by each participant throughout the study.

Atossa also stated the following: These results demonstrate the suitability of the tablet form of oral Endoxifen for further clinical development.

“This was an important study because the results support advancing our modified-release tablet into a Phase 2 study to reduce mammographic breast density (MBD), which we plan to begin in the fourth quarter by contracting with a CRO,” commented Dr. Steven C. Quay, Ph.D., M.D., CEO and President of Atossa. “We will continue our analysis of the Phase 1 data and plan to announce additional results in the coming weeks. We also recently completed a successful Phase 2 study of our topical form of Endoxifen in which a significant reduction of MBD was achieved among study participants who applied the stronger dose of topical Endoxifen. Our success with the topical Phase 2 study and now the successful Phase 1 study of the tablet, supports our plan to advance our proprietary tablet into a Phase 2 study to reduce MBD.”

Legislation has been recently enacted in approximately 35 states requiring that women be notified if they have mammographic breast density (MBD) and those notifications typically state that women with MBD have a higher risk of developing breast cancer, and that mammography may not be as effective in detecting breast cancer because the MBD can “mask” the detection of cancers. In February 2019, Federal legislation was enacted that requires that the FDA adopt rules requiring that mammography reports include information about breast density and inform women about their breast density. It is estimated that approximately ten million women in the Unites States have MBD, for which there is no FDA-approved treatment. Although oral tamoxifen is approved to prevent breast cancer in “high-risk” women, it is used by less than 5 percent of women with an increased risk of developing breast cancer because of the actual or perceived side effects and risks of tamoxifen. Atossa Genetics believes its Endoxifen may provide an option for women to proactively reduce the density of their breasts. Moreover, the company’s Endoxifen may improve mammography accuracy and patient care by unmasking cancerous tumors that are otherwise obscured by high breast density.

Dova Pharmaceuticals, Inc. (DOVA) announced today it had entered into an agreement and plan of merger with Swedish Orphan Biovitrum AB (Sobi) (SOBI.ST). Under the terms of the agreement, an indirect subsidiary of Sobi will commence a tender offer for all outstanding shares of Dova, whereby Dova stockholders will be offered an upfront payment for $27.50 per share in cash, along with one non-tradeable Contingent Value Right (CVR) that entitles them to an additional $1.50 per share in cash upon regulatory approval of DOPTELET for the treatment of chemotherapy-induced thrombocytopenia (CIT), representing a total potential consideration of $29.00 per share, or a total potential consideration of up to $915 million on a fully diluted basis. The upfront consideration of $27.50 per share represents a premium of 36% to Dova’s closing price on September 27, 2019, and a premium of 59% to the 30-day volume weighted average price. The transaction was unanimously approved by the Boards of Directors of both companies and is expected to close in the fourth quarter of 2019.

Tech & Entertainment

Apple (AAPL) closed at $223.97/share up 2.35%, Alphabet (GOOG) closed at $1219/share down .5%, Facebook (FB) closed at $178.08/share up .55%, Microsoft (MSFT) closed at $139.03/share up .94%, NVIDIA (NVDA) closed at $174.07/share up 1.34% & IBM closed at $145.42/share up 1.52% while Cisco Systems (CSCO) rose 1.17% finishing at $49.41/share. Disney (DIS) closed at $130.32/share up .28% and Netflix (NFLX) closed at $267.62 and Amazon (AMZN) closed at $1,735.91/share up .61%.

IPO

Peloton Interactive, Inc. (PTON) which went pubic last week and dropped significantly below the issue price ($29) closing at $25.10/share today. This should be a lesson that pushing the price to the top of the range is not necessarily good, at least intially for the company’s stock and the IPO market in general when you have such a visible company.



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