Is Sorrento Therapeutics (NASDAQ:SRNE) the little Covid-19 stock that could? This is the question Sorrento stock investors have to reckon with as they evaluate the biotech company that is developing several medications to treat patients infected with Covid-19, to both prevent infection with a vaccine and detect the virus with various diagnostic tests.
While the company has been working overtime on its various Covid-19 treatments, SRNE stock has been punished in recent weeks after a research and development presentation underwhelmed investors. Sorrento stock has fallen 50% since Oct. 13 and now trades at $6.65 a share — not far above penny stock levels.
The question is: Can Sorrento Therapeutics recover and become a viable player in resolving the global pandemic?
Falling Behind In The Vaccine Race
In the global race to develop a vaccine against Covid-19, Sorrento Therapeutics is at the back of the pack. While leading vaccine contenders such as Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) are now in late-stage clinical trials with their vaccine candidates, Sorrento has not started any vaccine trials.
The company has so far received approval from the Brazilian government to begin a 400-patient, mid-stage clinical trial of its medication “Abivertinib,” which is a potential treatment for patients hospitalized with Covid-19. An Abivertinib trial has recently started enrolling patients, according to the U.S. government’s clinical trial database. But results from that trial won’t be coming until well into 2021.
Another issue facing Sorrento Therapeutics concerns statements made by the company’s chief executive officer, Henry Ji, who said on Fox News that Sorrento has already developed a Covid-19 cure, saying “We want to emphasize there is a cure. There is a solution that works 100 percent.”
Lawsuits have since been launched against Sorrento alleging the company has exaggerated its scientific findings and the abilities of its medications. The situation has cast further doubts on Sorrento Therapeutic’s ability to deliver on an effective Covid-19 treatment.
Other Products?
Apart from its Covid-19 products, Sorrento Therapeutics is focused on a pain relief medication called “Resiniferatoxin.” The pharmaceutical is currently being tested in clinical trials for two diseases, osteoarthritis pain and terminal cancer pain.
Sorrento executives have said that their goal with the Resiniferatoxin study is to investigate whether it can deliver the same pain relief as opioid drugs without the addictive properties. A phase-1 clinical trial of Resiniferatoxin has been completed and the drug is planned for a phase-2 clinical trial by the end of this year or in early 2021.
However, the clinical trial of Resiniferatoxin was not encouraging. Only three out of 14 patients who took Resiniferatoxin in the clinical trial reported significant improvements in their pain symptoms. Whether Sorrento Therapeutics can eventually bring Resiniferatoxin to market remains to be seen, but indications are that the medication has a long road ahead of it. It is worth noting that Sorrento has been tested in clinical trials as a treatment for terminal cancer pain since 2009 with no definitive results.
Sell Sorrento Stock
There are many biotech and pharmaceutical companies that are now close to having a viable Covid-19 vaccine, as well as therapeutics to treat the disease in infected patients. Unfortunately, Sorrento Therapeutics is not one of them. The small biotech company is unlikely, at this point, to get its Covid-19 treatments to market and its other primary product, the pain reliever Resiniferatoxin is also not likely to reach consumers anytime soon.
SRNE stock was trading at $1.45 earlier this year and indications are that it is heading back down to that level. While Sorrento stock peaked at $19.39 this past summer on optimism of its Covid-19 treatments, that optimism has since faded and the company’s share price has been trending downward lately. Given its weak pipeline and lack of medication prospects, investors should sell Sorrento stock or avoid it altogether.
On the date of publication, Joel Baglole was long MRNA stock.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
