Russell 2000 & Acquisitions Rise During Overall Positive Week In Markets

It was an overall fantastic week for the broad markets as all indices & sectors ended significantly in the green. Indeed, we even saw the little guys of the Russell 2000 race like a mustang once again realizing an amazing 6.4% gain week-over-week.

A few headlines fed the general markets’ enthusiasm including the report that President Trump had recovered from COVID-19. We also received the report that a $1.8T stimulus bill package may actually be in play after earlier in the week political pull back from the table that the White House pushed forward on Tuesday.  Encouraging news on the coronavirus front also surfaced as Eli Lilly (LLY) & Regeneron (REGN) both requested emergency use authorization for coronavirus antibody treatments. Of course, all of this is set on the foundation of a river of money continuing to be pumped into the US economy at unprecedented low and attractive interest rates fueling a number of moves including an ongoing acquisition spree being realized across all sectors. To mention a couple of deals of note this week, we saw the financial giant Morgan Stanley (MS) announced the acquisition of Eaton Vance Corporation (EV) for $7B or $56.50/share in cash and stock on Thursday & then news hit on Friday that Xilinx (XLNX) would be acquired by AMD (AMD) for a cool $30B.

On the macroeconomic side of the coin, the schedule produced a mix of reports as follows: On Monday, the ISM Non-Manufacturing Index report for September was reported to have jumped to 57.8% and the Markit Services PMI report for September rose to 54.6. On Tuesday, the schedule brought forth the report that the trade deficit widened to $67.1B in August, while y-o-y, average exports dropped $44.8B from the three months ending August 2019 & average imports dropped $34.7B. The August job openings report confirmed a decline to 6.493M. On Wednesday, we received the Consumer credit report which pulled back by $7.2B in August. The weekly MBA Mortgage Applications Index report also confirmed a rise by 4.6%.
On Thursday, the Initial claims report for the week ending October 3 which showed a drop by 9k to 840k while continuing claims for the week ending September 26 dropped by 1.003M to 10.976M. On Friday, we received the wholesale inventories report for August that confirmed an rise by .4%.

MARKET RESULTS & MARKET LEADERS

All eleven sectors ended in the green this week with the materials sector rising 5.1%, the energy sector up 5.0%, the information technology sector up 4.6%, & the utilities sector up 4.6% to lead the way.

The Russell 2000 again led all indices as it closed at 1,637.55 moving up sharply by 6.4% week over week, and now is only  down 1.8% YTD. The Russell has now rallied 10.8%over the last two weeks.

The tech-heavy Nasdaq Composite rose 4.6% week-over-week to close at 11,579.94 and is now back up an eye popping 29.1% YTD. The highly weighted FAANG’s helped the Nasdaq’s cause as usual and ended as follows:  Facebook (FB) closed at $264.45/share, +.26% Friday ($259.94/share a week ago), Apple (AAPL) closed up 1.74% on Friday at $116.97/share and up from $113.02/share a week ago. Amazon (AMZN) closed at $3,286.65/share, +3.01% Friday ($3,125/share a week ago), Netflix (NFLX) closed at $539.44/share, +1.44% Friday, ($503.06/share a week ago), & Alphabet (GOOG) closed at $1,4515.22/share, +1.97% Friday, ($1,458.42/share a week ago.)

The Dow ended the week at 28,586.90 up 3.3% and is now up .2% YTD. Around the Dow 30, Johnson & Johnson (JNJ) closed at $150.97/share up from last week’s close of $146.24. Shares of Coca-Cola (KO) closed at $50.81/share up from last Friday’s close of $49.36/share. Shares of Disney (DIS) closed at $124,98/share up from last Friday’s close of $122.55/share. Shares of Nike (NKE) closed at $130.98/share up from $126.64/share last Friday. Sportwear giant NIKE, Inc. (NIKE) recently released its Q1 earnings performing above market estimates as digital sales surged and lockdown measures eased, allowing the brand to open stores worldwide.

Shares of Deere (DE) charged forward closing at $234.81/share up from last week’s close of $224.79/share. Pharmaceutical giant Merck (MRK) closed at $80.36/share down slightly from last Friday’s close of $80.80/share, energy giant Chevron (CVX) closed at $74 up from last Friday’s close of $71.90/share after recently receiving shareholder approval for its $4.B acquisition of Noble Energy, Caterpillar (CAT) closed at $158.94/share up from last Friday’s close of $149.94/share while Walmart (WMT) closed at $142.78/share up from last Friday’s close of $140.50/share. Shares of Microsoft (MSFT) closed at $215.81/share down from last Friday’s close of $206.19/share, Salesforce (CRM) closed at $265.98 & Boeing (BA) closed $167.33/share.

Around the financials sector,  we saw the shares of Goldman Sachs (GS) close trading at $207.54/share up from last Friday’s close of $199.90/share, American Express (AXP) closed at $106.34/share up from the $101.61/share close last Friday, Visa (V) closed trading at $206.64/share up from the $201.46/share last Friday & shares of Morgan Stanley (MS) closed at $48.83/share up from last Friday’s close of $47.97/share

The S&P 500 closed at 3,477.14 gaining 3.8% wk/wk and is back up 7.6% YTD. 

Elon Musk’s Tesla (TSLA) closed at $433.95/share up 1.89% on Friday & up from $415.09/share last Friday. 

COMMODITY MOVES

Gold prices closed at $1,930/oz. up from $1,899/0z. last Friday & silver prices closed at $25.29/oz. up from $23.83/oz. last Friday. North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.53/share up from last Friday’s close of $5.08/share after recently establishing a new 52-week high of $6.79. This week, Hecla announced their production results and cash position at the end of Q3. Phillips S. Baker, Jr., President and CEO go Hecla stated, “Hecla’s strong operating performance was from increasing silver production at Greens Creek and Lucky Friday and managing COVID-19 at all the mines. This operating performance combined with higher silver prices allowed us to close the quarter with $97 million of cash and cash equivalents while fully repaying our revolving credit facility. Given our free cash flow generation, we expect to spend about $5 million more in exploration, and based on our realized silver price for the quarter being above $25, we expect the silver-linked dividend to be triggered.” President and CEO Phillips S. Baker, Jr.also recently delivered a presentation titled“Hecla – A Uniquely Scarce Investment”at the Tribe Youtube Channel.

The energy sector rose 5% as oil prices ended at $40.64/bbl up 9.9% this week. Midstream player, Enterprise Products Partners (EPD), closed trading at $17.01/share up from $16.04/share last Friday and currently sports at an attractive $1.78/share dividend or 10.29%. USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $10.73/share up from $10.44/share last Friday and currently sports a juicy $2.10/share (20%) dividend.

MONEY UPDATE

The U.S. Dollar Index weakened to end the week at 93.06 down .9% again from 93.84 last week.

The 2-yr Treasury yield closed up 3 basis points w/w closing at .16%, the 10-yr yield rose 8 basis points ending at .78 while the 30-yr yield ended at 1.576% up from 1.488% last Friday.

NEXT WEEK

We will be back with another full week of trading even though Monday is Columbus Day. Banks will be closed on Monday.

NEXT WEEK’S KEY MACROECONOMIC DATA

• The inflation report on Tuesday
• The retail sales and consumer sentiment reports on Friday

We will also have the following “stocks in view” throughout the week:

STOCKS IN VIEW NEXT WEEK

• Shares of Atossa Therapeutics (ATOS) closed at $2.33/share slightly down from $2.40 last Friday. 

• • Atossa Therapeutic’s CEO & CFO will be presenting on October 13th at a Tribe Public Webinar Event titled “Atossa Therapeutics: Tackling Our Greatest Health Challenges: COVID-19 and Breast Cancer.” Learn ore and register for FREE today at Atossa.TribePublic.com.

• • Recently, Atossa announced a positive interim safety assessment from the second cohort of healthy participants in their Phase 1 clinical study using Atossa’s proprietary drug candidate AT-301 administered by nasal spray. This second group of eight participants received a single escalated dose of either AT-301A (placebo) or AT-301B (active drug). The blinded, positive assessment by the safety committee allows the study to now enroll the next cohort, which will be the third of a total of four cohorts and the first of two multi-dose, placebo-controlled cohorts. The ongoing Phase 1 study is a double-blinded, randomized, and placebo-controlled safety study of AT-301 nasal spray in 32 healthy adult subjects divided into two study groups. Part A consists of two single-dose cohorts receiving either active therapy, AT-301B, or the placebo comparator AT-301A at two different doses. Part B is a multiple-dose arm with cohorts receiving either AT-301A or AT-301B for 14 days at two different doses. The primary objective of the study is to evaluate the safety and tolerability of single and multiple doses of AT-301 administered via nasal instillation to healthy volunteers. Secondary objectives are to assess the incidence and severity of local irritation and bronchospasm following administration of AT-301 via nasal instillation. The study is being conducted in Australia. READ THE COMPLETE STORY!

• • The Maxim Group’s Analyst Jason McCarthy, Ph.D. updated his research on Atossa Therapeutics stating “Factoring in COVID-19 Candidates, awaiting HOPE Study Initiation as Pandemic Continues – Raising His Price Target to $8 from $4. 

• • Ascendiant Capital Markets’ Analyst Edward Woo, CFA initiated coverage recently with a BUY Rating and a $7.00 Target.

• • Dr. Steven Quay MD, Ph.D., Atossa’s founder, and CEO, recently published the following book “Stay Safe: A Physician’s Guide to Keep You and Your Family Healthy During the Pandemic and Beyond,” in paperback and eBook format on his website, www.DrQuay.com. Proceeds from the book will go to military veterans performing COVID-19 relief work in their communities. You may order it here.

• Shares of INVO Bioscience (INVO) closed at $3.891/share slightly up from $3.80/share last week.

• • INVO’s mission is to increase access to care and expand infertility treatment across the globe with a goal of improving patient affordability and industry capacity. Industry forecasts suggest that only 1% to 2% of the estimated 150 million infertile couples worldwide are currently being treated which presents and interesting opportunity. 

• • INVO recently announced a new joint venture as it has teamed up with Dr. Francisco Arredondo, MD, a respected and experienced board certified reproductive endocrinologist, and Dr. Ramiro Ramirez, MD, a physician and owner of several successful enterprises in Mexico, to establish a joint venture through its wholly-owned subsidiary INVO Centers, LLC, a Delaware limited liability company (“INVO Centers”), focusing on developing the Mexico market for INVOcell. The new jointly-owned operation, named Positib Fertility, S.A. de C.V. (“Positib Fertility”), is a Mexico registered company that will focus on establishing fertility centers dedicated to offering INVOcell, with the initial center to be located in the city of Monterrey, Mexico.

• • Recently, INVO Bioscience, Inc. (INVO), the developers of INVOcell®, the world’s only in vivo Intravaginal Culture System, announced the appointment of two seasoned executives, Barbara Ryan and Matthew Szot, to its board of directors, effective immediately. To make way for their appointments, Kathleen Karloff and Michael Campbell have both agreed to voluntarily step down from their board positions to assist the company in achieving an independent board majority. Mr. Campbell will remain as Chief Operating Officer and Vice President of Business Development, while Ms. Karloff intends to continue to advise the board and assist the operating team on a go-forward basis. Ms. Ryan founded Barbara Ryan Advisors, a capital markets and communications firm, in 2012 following a more than 30-year career on Wall Street as a sell-side research analyst covering the US Large Cap Pharmaceutical Industry. Previously, Ms. Ryan was a Managing Director at Deutsche Bank/Alex Brown and Head of the company’s Pharmaceutical Research Team for 19 years and began her research career covering the Pharmaceutical industry at Bear Stearns in 1982. Ms. Ryan has deep experience in equity and debt financings, valuation, SEC reporting, financial analysis, and corporate strategy across a broad range of life sciences companies. During Ms. Ryan’s career as an analyst, in addition to covering the large-cap pharmaceutical companies, Barbara also covered the drug wholesalers and PBMs and was the lead analyst on many high-profile IPO’s including Express Scripts, PSSI, Henry Schein, and Flamel Technologies. Ms. Ryan has extensive global buy-side, sell-side and financial media relationships, and has provided support and counsel on several of the highest-profile deals in the biopharma industry, including Shire/Abbvie, Shire/Baxalta, and Allergan/Valeant. Barbara led the IR/PR programs for Radius Health, the best performing IPO of 2014, for 4 years, Eloxx Pharmaceuticals for the past two years, and served on the Executive Team at both companies. Ms. Ryan has provided strategic communications counsel for Cardinal Health, Purdue, Zoetis, Radius Health, Eloxx Pharmaceuticals, Agenus, Centrexion, Esperion, ContraFect, Relypsa, Shire, Allergan, and Perrigo. Ms. Ryan’s opinions and expertise are widely sought; she is frequently quoted in the press and appears on CNBC. Ms. Ryan currently serves on Pharmaceutical Executive’s Editorial Advisory Board, the Executive Advisory Board for the Prix Galien Foundation is a member of the Life Sciences Council of Springboard Enterprises and is a member of the Board of Directors of Gilda’s Club NYC, and a Faculty member at the GLG Institute. Ms. Ryan Chaired the Board of Villa Maria School, a school for children with learning disabilities, for 8 years. Ms. Ryan is the Founder of Fabulous Pharma Females, a non-profit dedicated to the advancement of women in the biopharmaceutical industry.

• • Tiny Float – INVO has  ~7.89 million shares outstanding and with ~+15% insider ownership the share float is tight.

• North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.53 up from $5.08/share last Friday.

• • This week, Hecla announced their production results and cash position at the end of Q3 this week. Phillips S. Baker, Jr., President and CEO go Hecla stated, “Hecla’s strong operating performance was from increasing silver production at Greens Creek and Lucky Friday and managing COVID-19 at all the mines. This operating performance combined with higher silver prices allowed us to close the quarter with $97 million of cash and cash equivalents while fully repaying our revolving credit facility. Given our free cash flow generation, we expect to spend about $5 million more in exploration, and based on our realized silver price for the quarter being above $25, we expect the silver-linked dividend to be triggered.”

• • Cantor Fitzgerald Analyst Mike Kozak also updated his coverage moving his Speculative Buy rating to a Buy rating and moving his target price to $7.25/share.
  • A Presentation & Q&A event video with North American Silver & Gold Producer Hecla Mining Company’s (NYSE: HL) President and CEO Phillips S. Baker, Jr. titled “Hecla – A Uniquely Scarce Investment”  is available to view at the Tribe Youtube Channel.

• Shares of Fate Therapeutics (FATE) closed at $48.01/share up significantly from $38.90 last Friday after establishing a new all-time 52-wk high of $48.10 on Friday.

• • Fate is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders.

• • Aug. 19, Fate announced that Edward Dulac has been appointed Chief Financial Officer. Mr. Dulac comes to the Company from Celgene Corporation, where he most recently served as Vice President, Business Development & Strategy, and brings an extensive array of biopharmaceutical experience having served for over 20 years in positions in finance, business development, and product portfolio strategy.

• • On Aug. 5, Fate Reported Second Quarter 2020 Financial Results and Highlights Operational Progress ending the quarter with $533 Million in Cash & Short-term Investments. Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics stated, “Early clinical data from our FT596 program are very encouraging, as we observed a partial response in a heavily-pretreated patient with refractory diffuse large B-cell lymphoma at the first dose level without any reported events of cytokine release syndrome, neurotoxicity or graft-versus-host disease. Additionally, the safety, tolerability, and immunogenicity data across our off-the-shelf NK cell programs continue to suggest that multiple doses of iPSC-derived NK cells can be administered to a patient without matching. We continue to be pleased with our pace of innovation, where the recent clearances of our IND applications by the FDA for FT538, the first-ever CRISPR-edited iPSC-derived cell therapy, and for FT819, the first-ever iPSC-derived CAR T-cell therapy, continue to demonstrate our unique ability to rapidly bring multiplexed engineered, off-the-shelf NK cell and T-cell cancer immunotherapies to patients. In addition, we successfully launched our Janssen collaboration with strong momentum, bringing together Janssen’s proprietary tumor-targeting antigen binders and our industry-leading iPSC product platform to develop novel off-the-shelf CAR NK and CAR T-cell immunotherapies for hematologic malignancies and solid tumors.”

• • July 14th, FATE announced that the Company entered into an exclusive license agreement with Baylor College of Medicine covering alloimmune defense receptors, a first-in-class approach that renders off-the-shelf allogeneic cell products resistant to host immune rejection. Preclinical studies published in the journal Nature Biotechnology (https://www.nature.com/articles/s41587-020-0601-5) demonstrate that allogeneic cells engineered with a novel alloimmune defense receptor (ADR) are protected from both T- and NK-cell mediated rejection, and provide proof-of-concept that ADR-expressing allogeneic cell therapies can durably persist in immunocompetent recipients.

• • On July 9 Fate announced that the U.S. Food and Drug Administration (FDA) cleared the Company’s Investigational New Drug (IND) application for FT819, an off-the-shelf allogeneic chimeric antigen receptor (CAR) T-cell therapy targeting CD19+ malignancies. FT819 is the first-ever CAR T-cell therapy derived from a clonal master induced pluripotent stem cell (iPSC) line and is engineered with several first-of-kind features designed to improve the safety and efficacy of CAR T-cell therapy. The Company plans to initiate a clinical investigation of FT819 for the treatment of patients with relapsed / refractory B-cell malignancies, including chronic lymphocytic leukemia (CLL), acute lymphoblastic leukemia (ALL), and non-Hodgkin lymphoma (NHL).

• • On June 11th, FATE announced that it had closed an underwritten public offering of 7,108,796 shares of its common stock, which included 927,324 shares that were issued pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $28.31 per share. Aggregate gross proceeds from this offering, including the exercise of the option, were approximately $201.3 million, prior to deducting underwriting discounts and commissions and estimated offering expenses. 

• Shares of NeuBase Therapeutics (NBSE) closed trading at $8.40/share up from $7.32/share last Friday.  

• • NeuBase, a biotechnology company accelerating the genetic revolution using a new class of synthetic medicines,  announced that Dietrich A. Stephan, Ph.D., chief executive officer, is scheduled to present at the Myotonic Dystrophy Foundation 2020 Virtual Conference on September 25 between 4:00 p.m. and 4:45 p.m. ET. The conference will be held virtually on September 25-26, 2020 and is designed as an educational event for individuals and families living with myotonic dystrophy. The presentation will provide an overview of NeuBase’s PATrOL™ platform and the potential of its therapeutic approach for myotonic dystrophy type 1 (DM1).

  • NeuBase’s CEO Dietrich A. Stephan, Ph.D. will be presenting an an upcoming Tribe Public Webinar Event titled “Manufacturing Heat Seeking Missiles Against Misbehaving Genes.” You may register for FREE at NeuBase.TribePublic.com.

• • RBC Capital Markets recently initiated coverage of NBSE today with an Outperform, Speculative Risk rating & a $16 price target.

• • On Aug. 13th, NBSE reported its financial results for the three and nine-month periods ended June 30, 2020. Dietrich A. Stephan, Ph.D., chief executive officer of NeuBase stated, “We are pleased with the continued execution of our development programs during 2020. This includes the announcement in late-March of compelling data that firmly validates our platform as a viable fully synthetic approach to genetic medicine. Notably, these data confirm that our therapies penetrate into the brain when administered systemically – overcoming one of the grand challenges of drug delivery. PATrOL-enabled compounds can also access tissues throughout the entire body, opening our platform up to unexplored indications that have not previously been accessible by genetic medicine technologies. These positive pharmacokinetic and pharmacodynamic data-position our unique technology to output a vast pipeline of therapeutics to resolve innumerable human diseases. We anticipate presenting additional new data with respect to our ongoing progress in the fourth calendar quarter of this year. A key objective for our company shortly after the March data announcement was to strengthen our balance sheet in order to fully advance our strategies in HD and DM1, and build out our pipeline. This was accomplished in April with the closing of our oversubscribed capital raise of approximately $33.3 million in net proceeds that was led by fundamental healthcare investors and significantly increased our institutional shareholder base. We expect this to support our R&D and general corporate expenses into the second calendar quarter of 2022.”.

• Shares of Chinook Therapeutics, Inc. (NASDAQ: KDNY) closed at $16.33/share up from $14.01/share last Friday after rising to a new 52-week high of $16.98/share.

• • Recently Chinook Therapeutics, Inc. (NASDAQ: KDNY), a clinical-stage biotechnology company focused on the discovery, development and commercialization of precision medicines for kidney diseases, announced the closing of its merger with Aduro Biotech, Inc. and $115 million private placement financing. The combined company, now known as Chinook Therapeutics, commenced trading October 6, 2020 on the Nasdaq Global Select Market under the trading symbol “KDNY.” As previously announced, the $115 million private placement financing includes participation from new investors EcoR1 Capital, OrbiMed Advisors, funds managed by Rock Springs Capital, Fidelity Management and Research Company LLC, Avidity Partners, Surveyor Capital (a Citadel company), Ally Bridge Group, Monashee Investment Management LLC, Northleaf Capital Partners, Janus Henderson Investors, Sphera Biotech and other top-tier healthcare investors. As part of the financing, Chinook’s existing investors, Versant Ventures, Apple Tree Partners and Samsara BioCapital, purchased $25 million in Chinook common stock on the same terms as the new investors. Effective as of the closing of the merger, Chinook has over $275 million in operating capital to advance its kidney disease programs.

• We continue to like clean hydrogen solution provider Plug Power (PLUG) which closed at $18.43/share on Friday. Shares of PLUG are up significantly since we brought PLUG to your attention after they closed the $300M equity offering at $10.25 over the last couple of months. We even have CNBC’s Jim Kramer touting PLUG as we saw again on Thursday this week. 

Thanks again for your attention this week. Please continue to share your thoughts, questions, & ideas as we move forward. 

In the meantime, please enjoy the balance of the weekly newsletter’s videos, quotes, updates. 

I will leave you with an insightful quote to help form your investment thesis this week:

“Investing puts money to work. The only reason to save money is to invest it.” – Grant Cardone