Markets, Sentiment, etc. Turned For The Worse This Week

Amazing how a few days can really make you feel that all is better or as it was this week, a turn for the worse. Indeed this week seemed to bring a tidal wave of pressure from all directions bringing forth a web of negative sentiment. Setting a strange and dark tone throughout the week, at least hear in San Francisco, was the crazy orange, smokey grey, and ash filled sky caused by out of control wildfires that are occurring up and down the west coast. We also had the ongoing threat of the COVID-19 pandemic and shutdown continue to rear its ugly head as news that AstraZeneca (AZN) “temporarily stopped” its COVID-19 vaccine trial as a serious adverse reaction in a patient surfaced and giving us a gut check. The fear of a “twindemic” crisis (flu season & COVID) surfaced as well as the risk of a growing population getting both is increasing with many of our kids going back to school and restrictions being lifted otherwise as we fly through fall and towards winter. President Trump also added his own negative tone to the mix as he increased his rhetoric around implementing disincentives for US companies to outsource jobs to China reminding us of the US-China trade war. The risks that he may blacklist China’s largest semiconductor foundry also alarmed most with regard to the worldwide economic order. The House and the Senate also failed again to agree on additional economic stimulus measures as they proceeded to play their games with the impending presential election around the corner where we saw evidence of slowing progress in the job market all contributed to the somber outlook. We also kicked off the NFL season on Thursday night, but there was an unspoken cloud of doubt a little booing that made you feel a little sad and the event at least missed the mark. Lastly, on Friday it was 9/11 and the 19th anniversary of the terrorist attack in the US that added at least gloom in the air. The markets also pulled back significantly as all indices dropped with the Nasdaq leading the way and volatility came into full swing throughout the week not permitting any form of settled ground. 

However, the macroeconomic schedule did produce the following reports this week showed some promise with a couple of exceptions. On Tuesday, we received the Consumer credit report which confirmed a rise of $12.3B in July also confirming a contraction in lending as banks tighten their purse strings. The NFIB Small Business Optimism Index report for August moved up to 100.2. On Wednesday, we received the July job openings report which confirmed a rise to 6.618M & the weekly MBA Mortgage Applications Index report confirmed and a rise of 2.9% so not earth-shattering news. On Thursday, we received the initial claims report for the week ending September 5 which remained at 884k while continuing claims for the week ending August 29 rose by 93k to 13.385M. The Producer Price Index report for final demand rose by .3% month/month in August. The index for final demand, excluding food and energy, rose .4% month/month. The Wholesale inventories report confirmed a drop by .3% in July. On Friday, the Total CPI report confirmed a rise of .4% month/month in August as the core CPI, which excludes food and energy, also increased by .4% The Treasury Budget reported confirmed a $200.1B deficit in August.

MARKET RESULTS & MARKET LEADERS

All indices finished in the red as 10 of 11 sectors dropped. Only the materials sector rose (.+8%) week over week. The energy sector was the big loser as it dropped 6.4% in concert with oil prices dropping 5.9%. The information technology sector came in a close second dropping -4.4%.

The Dow ended the week at 27,665.64 down 1.7% for the week and is now down 3.1% YTD. Around the Dow 30, Deere (DE) continued its recent run and closed at $215.96/share up over 3 points or $211.34/share after recently beating earnings expectations. The Walt Disney Company (DIS) closed at $131.75/share ticking down from last Friday’s close of  $131.99/share. Pharmaceutical giant Merck (MRK) closed at $84.48/share down again from last Friday’s close of $85.24/share, Johnson & Johnson (JNJ) closed at $147.78/share down from last week’s close of $148.59, energy giant Chevron (CVX) closed at $77.69 down from last Friday’s close of $81.93/share, Caterpillar (CAT) closed at $153.83/share up from last Friday’s close of $148.18/share while Walmart (WMT) closed at $136.70/share down from last Friday’s close of $142.83/share. Shares of Microsoft (MSFT) closes at $204.03/share down ~10 points from last Friday’s close of $214.25/share. Shares of Nike (NKE) closed at $118/share up from $112.40/share last Friday. NIKE (NIKE) has stepped into the maternity clothing market under Nike (M). The new launch aims to bring in sports science to maternity apparel, emphasizing style and performance. Nike began research on the needs of expecting mothers three years ago reviving data from more than 150,000 body scans of women worldwide to understand how the body grows during pregnancy. The sports giant worked closely with 30 female athletes, including elite and everyday athletes, who were either pregnant or undergoing post-partum.

The S&P 500 closed at 3340.97 losing 2.4% and remains up 3.4% YTD. The tech-heavy Nasdaq Composite closed 10,853.55 moving down by 4.1% and remains up 21% YTD and has now pulled back ~10% from the recent all-time high. The Russell 2000 dropped 2.5% to close a 1,497.27 and is down 10.1% YTD. 

The highly weighted FAANG’s ended down week over week as follows:  Facebook (FB) closed at $266.61/share, -.55% Friday ($282.73/share a week ago), Apple (AAPL) Friday at $112/share down 1.31% ($120.96/share a week ago.). Amazon (AMZN) closed at $3,116.22/share, -1.85% Friday ($3,294.62/share a week ago), Netflix (NFLX) closed at $482.03/share, +.28% Friday, ($516.05/share a week ago), & Alphabet (GOOG) closed at $1,520.72/share, -.74% Friday, ($1,591.04/share a week ago.) Elon Musk’s Tesla (TSLA) recently reached an all-time high post the split of $502.49/share prior to closing at $372.72/share this Friday. 

The financial sector pulled back 2.4% this week, as shares of Goldman Sachs (GS) close trading at $200.92/share down from last Friday’s close of $210.94/share, American Express (AXP) closed at $103.36/share down from the $105.67/share last Friday, Visa (V) closed trading at $200.68/share down from the $204.66/share last Friday & shares of Morgan Stanley (MS) closed at $50.35/share down from last Friday’s close of $52.71/share.

COMMODITY MOVES

Gold prices closed at $1,940/oz. rising from $1,934/0z. last Friday & silver prices closed at $26.84/oz. down from $27/oz. last Friday. North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.45/share down a little from last Friday’s close of $5.58/share after recently establishing a new 52-week high of $6.79. Recently, Hecla reported 24% higher revenues on higher production and prices in Q2 2020. On, September 30th at 11:30 am eastern, President and CEO of Hecla, Phillips S. Baker, Jr. will present at Tribe Public’s Free Webinar Event and be available for Q&A at 11  am eastern. His presentation is titled “A Uniquely Scare Investment.” You can join by registering at Hecla.TribePublic.com. North American silver producer First Majestic Silver (AG) closed at $11.65/share up from last Friday’s close of $11.50/share after recently establishing a new 52-week high of $14.57. This week, First Majestic announced that it has entered into an agreement with Cormark Securities Inc., as underwriter (the “Underwriter”) pursuant to which the Underwriter has agreed to purchase, on a bought deal basis, 5,000,000 common shares of First Majestic (the “Common Shares”) at a price of CDN$15.60 per Common Share for gross proceeds of CDN$78,000,000 (the “Offering”). The sole investor under the Offering will be Canadian billionaire businessman, Eric Sprott, through 2176423 Ontario Ltd., a corporation beneficially controlled by him. This investment will result in Mr. Sprott holding approximately 2.3% of First Majestic’s issued and outstanding common shares, post-closing.

Oil prices ended at $37.34/bbl down 5.9%. Midstream player, Enterprise Products Partners (EPD), closed trading at $17.06/share down from $17.69/share last Friday and currently sports at an attractive $1.78/share dividend or 10.40%. USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $10.82/share down from $11.27/share last Friday and currently sports a juicy $2.10/share (19.74%) dividend.

MONEY UPDATE

The U.S. Dollar Index strengthened a little to end the week at 93.28 up .6% from 92.79 last week.

The 2-yr Treasury yield closed down 3 basis points w/w closing at .13%, the 10-yr yield closed down 5 basis points ending at .67 while the 30-yr yield ended at 1.416% down from 1.472% last Friday.    

NEXT WEEK

We will be back with another full week of trading and we will receive The Federal Reserve interest rate decision on Wednesday.

I will be hosting a Tribe Public Network Webinar Q&A Event on Thursday, September 17th at 8 am PT / 11 am ET with Nobel Prize Winner Dr. Lou Ignarro, Ph. D. who will deliver a presentation (15-20 minutes) titled “Nitric Oxide From Viagra To COVID-19” & then be available for a Q&A session. Please join me by registering at Lou.TribePublic.com. 

NEXT WEEK’S KEY MACROECONOMIC DATA

• The industrial production report on Tuesday
• The retail sales report on Wednesday
• The consumer sentiment report 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 $1.98 on Friday.

• • Recently, Atossa announced a positive interim safety assessment from the first cohort of healthy participants in their Phase 1 clinical study using Atossa’s proprietary drug candidate AT-301 administered by nasal spray. This first group of 8 participants received a single dose of either AT-301A (placebo) or AT-301B (active drug). This blinded, positive assessment by the safety committee allows the study to now enroll in the next cohort. Learn more.

  • On Aug. 13th, Atossa announced its Q2 2020 financial results and gave a corporate update highlighting the following: 

    • Received approval from the Australian Human Research Ethics Committee (HREC) to open a Phase 1 clinical study in Australia using Atossa’s proprietary drug candidate AT-301 administered by nasal spray. As of August 3, 2020, all necessary approvals were obtained and enrollment is expected to begin in the coming weeks.
    • Contracted with Avance Clinical Pty. Ltd. to conduct a clinical study of Atossa’s AT-301. Avance is a leading Australian clinical research organization and has successfully completed multiple clinical studies of Atossa’s proprietary Endoxifen.
    • Announced successful in vitro testing of both of Atossa’s COVID-19 therapies under development: AT-301 and AT-H201. The preliminary study results show that AT-301 and the components of AT-H201 inhibit SARS-CoV-2 infectivity of VERO cells in a laboratory culture, which is the standard disease model used for initial screening of COVID-19 drug candidates.
    • Announced interim findings following 18 months of an Expanded Access (or “compassionate use”) single-patient study of Endoxifen. The patient in the study had no cancer recurrence and suffered no side effects. Endoxifen did not cause other safety and tolerability concerns in this patient.
    • Advanced product development programs with multiple key hires in clinical, regulatory, and chemistry manufacturing and controls. The hiring of these talented and highly accomplished individuals will help accelerate the advancement of Atossa’s development pipeline, which includes programs in breast cancer and COVID-19.
    • Completed sales of all available shares under Atossa’s at-the-market financing program with total gross proceeds to Atossa of $5 million through July 2020. As of June 30, 2020, the Company had approximately $7.5 million in cash and cash equivalents and with this program, they received an additional $4.3 million in July 2020.

• • 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 Price Target to $8 from $4. 

  • 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 $3.90/share down from $4.25/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

• •  On August 13th, INVO announced financial results for the quarter ended June 30, 2020. Steve Shum, Chief Executive Officer of INVO Bioscience stated, “Despite the impact that COVID-19 has had in delaying fertility treatment for many around the world, we continue to make strong progress on our key goals to create commercialization agreements for our INVOcell solution. As we have been advancing our commercialization efforts outside the United States, industry leaders, as well as our internal team, have begun to recognize the expanded opportunity that exists through the creation of these joint ventures for developing dedicated, INVO-only centers in the U.S. and select markets around the world. The INVO center model also allows INVO Bioscience to participate in a greater share of the economics. Over the past year, we have had a number of conversations that started as standard distribution agreements that have evolved into potential joint venture agreements. We believe such partnerships, such as the one signed in India, will ultimately be mutually beneficial to achieving our goal to increase access to care and lower the cost of fertility treatment across the globe. Similar to the first quarter of 2020, the second quarter 2020 results were impacted by the COVID-19 virus outbreak which resulted in reduced product sales to Ferring. A majority of clinics curtailed their fertility services in connection with the lockdowns that occurred. Many of the clinics have since resumed operations, albeit at a measured pace. As a result, and along with Ferring’s required annual minimums, we expect to experience stronger sales in the second half of 2020. We also believe that new guidelines that requiring limiting interactions and social distancing at most clinics could favor accelerated adoption of our technology, which allows for a more streamlined cycle approach with fewer patient visits and reduced lab requirements and resources.”ng the same lines in the other 5 countries signed during that period. I am also expecting the company to give us some updates on other countries that could be added to their growing distribution network. 

• • Recently, a spotlight report was published by Birmingham, Alabama-based America Institute of Reproductive Medicine (AIRM) highlighting the success achieved in their practice utilizing INVOcell. INVO’s INVOcell® is the world’s only in vivo Intravaginal Culture System. “The AIRM clinic became an early adopter and advocate for the use of INVOcell shortly after we received FDA-clearance. We appreciate their willingness to share their story of that successful implementation of INVOcell within their clinical practice, which highlights important aspects of our INVOcell technology solution,” stated Steve Shum, CEO of INVO Bioscience. You can review the report here.

• • I am expecting to see the company push forward with new market supportive initiatives in the back half of 2020 that may result in further adoption in the US clinics and establishing new joint ventures, partners, and distributors throughout the world.

• • Tiny Float – INVO has  ~7.89 million shares outstanding and with ~+15% insider ownership the share float is tight and recently confirmed that the company raised ~$3.5M.

• North American silver and gold producer Hecla Mining Company (HL) ended the week at $5.45 down from $5.58/share last Friday.

• • Recently, Hecla announced that its Board of Directors is increasing the expected minimum quarterly dividend 50% to an annualized one and one-half cents per share and lowering the silver-linked dividend threshold price. If Hecla’s average realized silver price for a quarter is $25.00 per ounce, the new silver-linked quarterly dividend policy provides an annualized two cents per share, while at $30 and above, the realized silver-linked dividend per quarter is unchanged. Recently, Hecla reported 24% higher revenues on higher production and prices in Q2 2020.

• • Next Wednesday, September 9th at 11 am eastern, President and CEO of Hecla, Phillips S. Baker, Jr. will present at Tribe Public’s Free Webinar Event and be available for Q&A at 11  am eastern. His presentation is titled ” A Uniquely Scare Investment.” You can join by visiting Tribe Public’s website www.tribepublic.com.

• • Recently, Hecla reported 24% higher revenues on higher production and prices in Q2 2020.

• • 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.

• • If silver continues to drive higher as it has been this year, not to mention if Gold continues to move higher as it has, then it would seem that Hecla could continue to become a break out stock this year.

• Shares of Fate Therapeutics (FATE) closed at $33.56/share up from $31.11 last  Friday. Its all-time & 52-week high is $38.52 and its 52-week low of $12.59.

• • 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 $8.43/share up from $7.91/share last Friday.  

• • NeuBase is making progress with its development of a modular antisense peptide nucleic acid (PNA) platform with the capability to address rare genetic diseases caused by mutant proteins with a single, cohesive approach.

• • 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 Aduro (ADRO) closed at $2.36/share down from $2.60/share last Friday.

• • Aug. 18th, Chinook Therapeutics, Inc., a privately-held clinical-stage biotechnology company focused on the discovery, development, and commercialization of precision medicines for kidney diseases,  announced a $106 million private placement financing, with participation from new widely respected healthcare investors including EcoR1 Capital, OrbiMed, funds managed by Rock Springs Capital, 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, will purchase $25 million in Chinook common stock on the same terms as the new investors in lieu of their prior commitment to purchase convertible notes. The private placement closing is expected to occur immediately prior to the closing of the previously announced proposed merger between Chinook and Aduro Biotech, Inc. (NASDAQ: ADRO). Following the proposed merger closing, which is expected to occur in the second half of 2020, Aduro will be renamed Chinook Therapeutics, Inc., and is expected to trade on the Nasdaq Global Select Market under the ticker symbol “KDNY”. Closing of the private placement is subject to the satisfaction or waiver of all closing conditions for the proposed merger. Following the private placement financing, and upon closing of the merger, Chinook is expected to have at least $275 million in operating capital.

• • Recently, ADRO announced that the first patient with IgA nephropathy has been dosed in a Phase 1 clinical trial of BION-1301, an investigational humanized IgG4 monoclonal antibody that blocks APRIL binding to both the BCMA and TACI receptors. “We are thrilled to have dosed the first patient with IgA nephropathy in the Phase 1 clinical study of our investigational anti-APRIL antibody, BION-1301,” said Dimitry S.A. Nuyten, M.D., Ph.D., chief medical officer of Aduro.

• • “The data Aduro recently presented from Parts 1 and 2 of this study in healthy volunteers at the 57th ERA-EDTA Virtual Congress indicated BION-1301 was well-tolerated, had a half-life of approximately 33 days, achieved over 90% target engagement with a single 450 mg dose of BION-1301 and demonstrated dose-dependent and durable reductions in IgA and IgM levels, and to a lesser extent, IgG levels. We look forward to hopefully replicating this effect in addition to exploring BION-1301’s disease-modifying potential in patients with IgA nephropathy in Part 3 of the ongoing Phase 1 clinical study.”

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. My thoughts and prayers also go out to all of those that are having to deal and fight the California wildfires. I hope the rain comes and the wind slows down so that all can get back to normal. 

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

“Never test the depth of the river with both of your feet.” – Warren Buffet