Sorrento Therapeutics: Is the Company’s Stock Expected to Rise Massively?
Sorrento Therapeutics, Inc. is a clinical-stage and commercial biopharma company. The Company operates through two segments: Sorrento Therapeutics and Scilex. The Sorrento Therapeutics segment is organized around its Immune-Oncology therapeutic area, leveraging its G-MAB antibody library and targeted delivery modalities to generate the next generation of cancer therapeutics. These modalities include chimeric antigen receptor T-cell therapy (CAR-T), dimeric antigen receptor T-cell therapy (DAR-T), antibody-drug conjugates (ADC), as well as bispecific antibody approaches. Additionally, Sorrento Therapeutics segment also includes Sofusa, a drug delivery technology that delivers biologics directly into the lymphatic system to potentially achieve improved efficacy and fewer adverse effects than standard parenteral immunotherapy. The Scilex segment is organized around its non-opioid pain management operations. Sorrento Therapeutics stock has seen a surprising spike in recent days. Let’s find out more about it.
What is happening to the Sorrento Therapeutics stock?
Sorrento Therapeutics is an underappreciated coronavirus stock that is loaded with potential. If you are wondering “how loaded”, well, let’s just say that it might even double in value sometime soon.
B. Riley Securities’ Mayank Mamtani definitely believes so. Friday morning, B. Riley initiated coverage of the biotech company, tagging it with a buy rating at a price target of $26 per share.
Sorrento Therapeutics has been on the receiving end of a lot of attention from investors in the biotech industry, mainly because of the company’s efforts in fighting the COVID-19 epidemic. Many observers have kept an eye on the company’s COVI-MSC experimental stem cell therapy that targets COVID-19, the disease caused by the coronavirus. Encouragingly, on Wednesday Sorrento reported quite positive results from a phase 1b study of COVI-MSC.
While that’s a win for the company (albeit only from limited, early stage testing) Mamtani’s enthusiastic recommendation is based not only on its coronavirus efforts. Sorrento’s other products in development, which include therapies covering such disparate uses as non-opioid pain relief and immunotherapy, a very active and promising area of biotech at the moment, have also impressed him.
These latter development efforts mean that Sorrento is not a one-trick pony. Even if the ambitious coronavirus cure plans fail, the company has contingency measures in place. This, Mamtani wrote in his research note on the stock, makes it “well positioned for success.”
The analyst’s bullish take added to recent optimism on Sorrento following those COVI-MSC results. The company’s stock witnessed a 3.5% rise on Friday, in stark contrast to the overall 1.9% decline of the S&P 500 index.
What does the increase in stock price mean?
The fortunes of small biotech stocks like Sorrento depend on good results from clinical studies of their pipeline candidates. And the results announced last night for COVI-MSC, its experimental stem cell therapy, were very good.
Sorrento reported that the first three patients enrolled in its phase 1b study of COVI-MSC were discharged from the hospital within only one week of beginning infusions of the experimental therapy. These patients previously suffered from acute respiratory distress (ARD) or acute respiratory distress syndrome (ARDS) caused by COVID-19.
The company said that one of the patients had been in the hospital for three weeks before receiving COVI-MSC. Another of the patients had been previously discharged but had to be readmitted because of a recurrence of ARD. These patients and a third patient in Sorrento’s study improved rapidly after infusions of COVI-MSC.
It’s important to keep in mind, though, that these results are very early and only include a small number of patients. There’s no guarantee that COVI-MSC will deliver such great results in a larger group of patients.
What can be expected next from Sorrento Therapeutics?
Sorrento hopes to advance COVI-MSC to a controlled phase 2 study. In the meantime, the company is seeking Emergency Use Authorization for its COVI-STIX antibody test for COVID-19, and is evaluating several other potential coronavirus therapies in clinical studies.
How has Sorrento Therapeutics’ performance been in the last quarter?
The company’s earnings grew 32% last quarter, up from 0% in the prior report. Revenue also increased, from 39% to 103%.
Sorrento Therapeutics holds the No. 111 rank among its peers in the Medical-Biomed/Biotech industry group. Emergent Biosolutions (EBS), Genmab (GMAB) and Ligand Pharmaceuticals (LGND) are among the top 5 highly rated stocks within the group.
Can Sorrento Therapeutics stock actually quadruple in value?
After a 9.9% rise in value recently, Sorrento Therapeutics (NASDAQ:SRNE) went on to add another 8.9%, and an analyst from H.C. Wainwright estimates a price target of $30 for the stock, implying a 275.0% upside.
The analyst Ram Selvaraju projects $321M in total for Sorrento’s investments in Celularity, a clinical-stage cell therapeutics company, and NantKwest (NASDAQ:NK), which recently climbed in value in response to impressive mid-stage trial data in advanced pancreatic cancer.
Once merged with GX Acquisition Corp. (NASDAQ:GXGX) to go public, the stake at Celularity will be worth $200M Ram estimates, adding another $121M for the investment in NantKwest based on its current share price.
The analyst also highlights Sorrento’s “burgeoning portfolio of assets spanning three distinct therapeutic areas (non-opioid pain management, oncology, and COVID-19).”
Late December, Sorrento Therapeutics filed the Emergency Use Authorization (“EUA”) application for its COVI-STIX rapid diagnostic test for the detection of the SARS-CoV-2 virus. Sorrento Therapeutics’ CEO Henry Ji had this to say: “Now, the beauty of this one, we are kind of like finishing up the SP-102. That means that will lead to reduce the costs on the clinical trial side leading to short-term revenue generation with COVI-STIX diagnostic comes in. If COVI-DROPS and the COVI-AMG work, you will see a potential EUA application potentially meets the FDA requirement you get the EUA approved, we will see billions of dollars of revenue generated hopefully this year.”