Windows of Opportunity Are Tightening for Sorrento Therapeutics

You’ve got to hand it to Dr. Henry Ji of Sorrento Therapeutics (NASDAQ:SRNE). No matter what you think about him or his biotechnology firm, Sorrento made the most out of an otherwise rotten situation. Before the novel coronavirus, SRNE stock was one of many oncology-related investments. Following the global disruption, it became one of the hottest plays in the battle against Covid-19.

a scientist with protective equipment and microscope in a lab
Source: luchschenF /

In my last feature article of Sorrento Therapeutics, I mentioned that I would never play poker against Ji. I’ve had a few occasions to speak with him and you can tell that he has that “thing.” From what I hear about Tesla’s (NASDAQ:TSLA) Elon Musk, the two share one of the rarest combinations of scientific brilliance and engaging personality.

Plus, Ji has courage. How else can you explain the all-out pivot toward the Covid-19 crisis? Watching the developments from afar, Sorrento is the biotech version of Casino Royale. Naturally, the excitement that Ji effortlessly generates carried over into SRNE stock. Year-to-date, shares more than doubled despite an incredibly wild ride.

But one of the critical differences between Casino Royale and Sorrento is that with SRNE stock, you don’t risk funding terrorism. Instead, if the situation goes awry, you ended up capitalizing an ultimately pointless endeavor.

Before you send me a nastygram, that’s not my description. Rather, it came from Ji himself.

Key Takeaways for SRNE Stock From an Intriguing Interview

Sitting down with The Motley Fool contributor Brian Orelli, Ji offered critical insights into Sorrento’s development of its SARS-CoV-2 vaccine. Rarely do I recommend readers watch videos. But if you’re considering buying SRNE stock, it’s truly must-watch material.

Let’s get right into it. In my opinion, the biggest takeaways from the interview are:

  • Ji asserts that late-stage coronavirus vaccines address the wild-type virus (the naturally occurring, non-mutated strain of the target virus).
  • Sorrento is taking its time researching and developing its protein-based vaccine (subunit) that will produce the right antigens for SARS-CoV-2.
  • If the other rival vaccines are effective, Ji stated that pursuing its own vaccine candidate any further would be “a total waste of time.”

I want to give credit where it’s due. Ji’s no-nonsense assessment of Sorrento’s vaccine solution – and by logical deduction, SRNE stock – is refreshing. Frankly, I wish more corporate executives (as well as politicians) would be as straight with their answers.

However, the problem is that refreshing dialogue doesn’t necessarily equate to profitability. Moreover, I was struck with how many variables have to tilt in Sorrento’s favor before SRNE stock becomes a comfortable buy. Here are some of my thoughts:

  • The coronavirus must mutate to the point where current late-stage vaccines are rendered pointless.
  • Both the RNA vaccines underlining Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) must fail.
  • AstraZeneca (NASDAQ:AZN) must also trip up with its viral-vector vaccine, which may offer the crucial logistical advantage of a one-dose regimen.
  • Then, Novavax (NASDAQ:NVAX), which utilizes a similar subunit approach with Sorrento, must stumble before crossing the finish line.
  • Sorrento has to move beyond the preclinical stage before putting its name in the ring.
  • All this assumes none of the other late-stage rivals built in contingency plans in case SARS-CoV-2 mutates.

Like President Donald Trump, you never want to count out Henry Ji. Unfortunately, when it comes to the vaccine race, there appears to be too many variables. And that’s a problem even Ji has acknowledged.

Can the Treatment Race Save Sorrento?

Of course, Sorrento made an all-out pivot, as I mentioned earlier. Therefore, if the vaccine avenue closes, the company has other potential revenue channels, particularly in treatments. Further, this approach is incredibly relevant, given that new daily coronavirus cases have spiraled out of control.

But is that enough to justify SRNE stock? While the narrative logically favors Sorrento, prospective investors should exercise skepticism. Because even here, the biotech firm is behind the ball. When Trump got sick with the virus, Gilead Sciences (NASDAQ:GILD) and Regeneron Pharmaceuticals (NASDAQ:REGN) came to the rescue, not Sorrento.

Nevertheless, the presidential marketing spotlight hasn’t panned out so well for GILD and REGN. Don’t get me wrong – these two companies should dominate the treatment space if Covid-19 cases continue to soar. I’m just pointing out that having an approved treatment doesn’t necessarily guarantee upside.

Ultimately, you should consider SRNE stock as a high-risk, high-reward venture. On paper, the underlying science is compelling. But practically, too many events must fall favorably for Sorrento to have a shot offering either its vaccine or treatment products. It could happen but it’s not a risk I’m comfortable taking.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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