There are plenty of companies that research and develop potentially lifesaving therapies. Yet, Sorrento Therapeutics (NASDAQ:SRNE) is a clinical-stage biopharmaceutical company with an edge. By learning about this company, you might be inspired to take a position in SRNE stock.
Sorrento focuses on antibody-centered therapies to treat cancers. The company also has three preclinical Covid-19 programs. Perhaps the most intriguing one is “COVI-SHIELD,” which utilizes a “Neutralizing Antibody Cocktail.”
The good news is that you don’t need a degree in medicine to appreciate the merits of Sorrento or to invest in SRNE stock. Besides, a recent acquisition should encourage you to look further into Sorrento’s expanding pipeline of vital therapeutic solutions.
A Closer Look at SRNE Stock
You won’t want to touch SRNE stock if you’re afraid of outsized share-price moves. For instance, SRNE dropped 6.54% on July 24 and that’s just business as usual for this volatile biotech stock.
Furthermore, it might amaze you to learn that SRNE’s 52-week range is $1.39 to $10.00. Many stocks have made big moves during the novel-coronavirus pandemic, but SRNE is a real wild card. For this reason, I do not recommend allocating a large portion of your account towards this stock.
SRNE stock might be fine for a small position, however. The bulls have certainly taken control of the price action lately as SRNE was trading at $5 per share in early June but reached $7.29 by July 24.
Visualizing a Vaccine Alternative
In an important but underappreciated announcement, Sorrento recently announced that it signed of a letter of intent to acquire SmartPharm, a therapeutics company that develops gene-delivery platforms for Covid-19 and rare diseases.
This transaction is scheduled to close in August, and the financial terms have not been revealed to the public. What’s exciting about this acquisition is that it might yield a single-injecting, longer-acting means of protection against Covid-19.
As Sorrento explains, the targeted therapy “could allow the recipient’s own muscle cells to produce the antibody for a prolonged period of time after a single injection, potentially providing extended protection against COVID-19 for periods of time that might provide an alternative to vaccines.”
The mission here isn’t anti-vaccine. Rather, it’s a vision of a treatment that might not even require a traditional vaccine.
Sorrento Therapeutics CEO Henry Ji notes that the collaboration with SmartPharm will target cancer as well. Through this partnership, Ji looks forward to the prospect of producing “next-generation gene-encoded antibody candidates against a host of pathogens and cancer cell types.”
The Big Unknown for SRNE Stock
One would usually imagine that an announcement of this magnitude would elicit cheers from the stock-trading community. However, this was not the case, at least on the day of the announcement.
As we mentioned, the SRNE stock price fell by 6.54% on July 24, which was the day when the SmartPharm acquisition was announced. It’s possible that investors reacted negatively to the lack of disclosure as to the financial terms of the arrangement.
In other words, traders wanted to know how much money Sorrento will be shelling out to acquire SmartPharm. And indeed, this is a key piece of information that investors should want to know. After all, any acquisition can be detrimental if it’s overpriced.
If there’s one thing that the market doesn’t like, it’s uncertainty. The financial terms of the transaction remain a big unknown for the time being, and that’s a problem. Hopefully, Sorrento will soon disclose the financial details and quell investors’ concerns so the company can focus on the business of potentially saving people’s lives.
The Bottom Line
It’s amazing to consider that Sorrento’s pipeline might someday include a product that would make Covid-19 vaccines unnecessary for some people. If this idea appeals to you, and if Sorrento hopefully comes forward with the aforementioned financial-transaction details, then SRNE stock deserves a place in your biotech-sector holdings.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
