Clinical-stage biopharmaceutical company Sorrento Therapeutics (NASDAQ:SRNE) is known as a lightning rod among traders. Risk-tolerant investors sometimes view SRNE stock as a strong competitor in the horse race to come up with a vaccine for the novel coronavirus.
Sorrento Therapeutics CEO Henry Ji only added fuel to the proverbial fire when he made a controversial statement about his company’s ability to develop not just a vaccine, but a “cure” for Covid-19.
So, SRNE stock is controversial but certainly worth watching. Maybe Sorrento Therapeutics’ proposed Covid-19 antibody, STI-1499, will be the world-changing solution to the pandemic. Or, maybe it won’t.
Are you ready to roll the dice and wager your hard-earned capital on one biopharma contender’s big claim? That’s the billion-dollar question, so let’s dig a little deeper and see what we can uncover with SRNE stock.
A Closer Look at SRNE Stock
Biopharmaceutical stocks are known to be volatile, and Sorrento is no exception to the rule. Prospective investors should brace for a roller coaster ride. The potential for both upside and downside movement is strong with this one.
It’s undoubtedly not a coincidence that after Sorrento Therapeutics became known among traders as a coronavirus stock, the SRNE share price made a huge move. Specifically, the stock rocketed its way up from less that $4 on June 4 to an incredible 52-week high of $19.39 on Aug. 10.
Perhaps there has been skepticism regarding the CEO’s big claim, though, as the stock price has declined recently. Indeed, it tumbled all the way down to $8.28 by Aug. 28.
In other words, the share price was literally cut in half within a few weeks after achieving its highest peak of the year. Some less forgiving traders would call this a pop-and-drop. Others would consider it an opportunity to own SRNE stock at a more favorable price. Could they both be right?
Low-key Ji? Far from It
In reference to STI-1499, the Sorrento Therapeutics CEO made a statement that turned heads and, at least temporarily, seemed to give SRNE stock a massive boost.
In case you haven’t read this one already, I’ll reprint it here and let it sink in:
“We want to emphasize there is a cure. There is a solution that works 100 percent. If we have the neutralizing antibody in your body, you don’t need the social distancing. You can open up a society without fear.”
As you might expect, the whole “you don’t need the social distancing” thing didn’t sit too well with some folks on social media. Still, it’s hard to resist the vision of a utopian “society without fear” along with the apparent promise of a Covid-19 vaccine that “works 100 percent.”
Clearly, Ji is far from low-key. With a few words, the CEO pushed Sorrento Therapeutics into the limelight, establishing the company as a contender seemingly on par with biotech giants Moderna (NASDAQ:MRNA) and Gilead Sciences (NASDAQ:GILD).
Now, They Must Deliver
The problem with big promises is that they must, sooner or later, be followed up with big results. Otherwise, you could have a “buy the rumor, sell the news” situation on your hands.
SRNE stock holders are still waiting for Ji and Sorrento Therapeutics to deliver the teased “solution that works 100 percent.” The aforementioned share-price drop suggests that perhaps the market will only remain so patient for so long.
The possibility of internal turmoil at the company isn’t exactly helping the situation, either. Not long ago, a filing from the U.S. Securities and Exchange Commission revealed that Sorrento Therapeutics fired Jiong Shao, the company’s executive vice president and CFO.
The Bottom Line
Could SRNE stock be a worthy investment? Sure, but only as a small position for a lottery-ticket type of trade. The CEO’s braggadocio hasn’t yet yielded verifiable results, and that should keep cautious investors on the sidelines for now.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
