Sorrento Therapeutics (NASDAQ:SRNE) is popping higher today on news of trial approval from the U.S. Food and Drug Administration. A favorite of investors, SRNE stock is up by 22% in early trading.
So what exactly happened? Sorrento Therapeutics is a small biopharmaceutical company that entered the race to fight the novel coronavirus in a big way. It is evaluating a vaccine candidate, different tests and an antibody drug, among other products. Thursday saw the antibody drug — known as COVI-GUARD — come into the spotlight.
Investors are bidding up SRNE stock because the FDA gave Sorrento Therapeutics permission to move forward with Phase 1 human trials of its STI-1499 antibody drug. Now, with this permission in hand, Sorrento can begin enrolling trial participants.
But why does this matter? Just yesterday we reported on initial antibody drug results from Eli Lilly (NYSE:LLY). That company, along with other pharmaceutical leaders like Regeneron (NASDAQ:REGN), is already squarely in the antibody space. It seems that despite the competition and its smaller size, investors are passionate about SRNE stock. In fact, it is one of the most heavily traded names on the Robinhood platform.
Thursday then is seeing that passion manifest in a major rally.
SRNE Pops on Antibody Drug Trial
According to Sorrento Therapeutics, preclinical trials of the STI-1499 antibody successfully neutralized the novel coronavirus. This early success is critical and is the bulk of why the FDA is allowing the company to move forward with human trials.
Another thing that makes SRNE stand out is the specific dosing structure of its antibody drug. The company believes that, unlike some of its competitors, it can treat patients with a lower dose. Early results from animal studies suggest that even lower doses are highly potent. Sorrento says that if this trend holds up, it would be much easier to scale up manufacturing of a lower-dose drug.
Speaking of manufacturing, investors in SRNE stock are also likely pleased with its early supply deals. The company has announced plans to expand its program into international countries like Brazil to support the work it is doing in the United States. Investors have seen other companies follow that model, securing trial participants, manufacturing facilities and supply deals in countries around the world.
But the biggest piece of news supporting SRNE stock is likely the timeline for next steps. Sorrento indicated on Thursday that it is targeting moving into later-stage, larger-scale trials by the end of 2020. This timeline would also allow it to seek emergency-use authorizations for its STI-1499 drug before the end of the year. As the race heats up, investors want to see that companies can perform under pressure.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer at InvestorPlace.com.