Clinical-stage, antibody-focused biotech firm Sorrento Therapeutics (NASDAQ:SRNE) has a clinical pipeline that’s packed with novel coronavirus treatment and vaccine candidates. The array of products in development just keeps expanding, and that could be good news for investors of SRNE stock.
Shareholders have been severely tested in 2020’s second half, however. SRNE stock is a typical biotech stock, meaning that it’s susceptible to roller-coaster moves that would shake out some inexperienced traders.
So, prepare yourself for volatility if you’re planning on buying and holding SRNE stock. Like any other “coronavirus stock,” Sorrento will be influenced by the ups and downs of the global battle against Covid-19.
Plus, Sorrento Therapeutics faces intense competition as it diligently develops its anti-Covid-19 solutions. In order to keep up with its peers, Sorrento will need to introduce new and innovative products. Can this ambitious biotech firm prove its mettle?
A Closer Look at SRNE Stock
As the coronavirus took hold of the U.S. population, Sorrento Therapeutics shifted its focus towards programs to address Covid-19. This resulted in a spike in the price of SRNE stock.
With astonishment, the trading community watched SRNE stock rocket from a 52-week low of $1.45 in March to a 52-week high of $19.39 in August. The thing is, parabolic moves like this usually aren’t sustainable.
Thus, the stock plunged towards the $6 level in September. The bulls then pushed the share price back up towards $12 in October.
The buyers would lose the tug-of-war once again, though, as SRNE stock slid towards $6 and is how holding at around $6.50. I’ll reiterate here that this type of price action is not unusual for biotech stocks, which are particularly prone to volatility.
Prospective investors should also be advised that SRNE stock has trailing 12-month earnings per share of -$1.50. Therefore, if you’re seeking a company that’s currently profitable on a per-share basis, Sorrento doesn’t fit the bill.
Reason for the Price Plunge
Since SRNE stock declined by an astonishing 37.8% in the month of October, one might surmise that the company hasn’t made much progress in its clinical pipeline lately.
Perhaps it’s possible that the trading community was disappointed with Sorrento’s progress in the battle against Covid-19. The expectations were sky-high as Sorrento had a vast array of programs to address the coronavirus:
- STI-1499 neutralizing antibody, also known as COVI-GUARD
- Neutralizing antibody cocktail COVI-SHIELD
- COVI-TRACE saliva-based diagnostic test
- COVI-TRACK blood-based antibody test
- COVI-AMG neutralizing antibody
- COVIDTRAP ACE2 receptor decoy
- T-VIVA-19 protein-based vaccine candidate
- Abivertinib targeted receptor inhibitor
With a battery of potential Covid-19 vaccine and/or treatment offerings, Sorrento’s chances of success with at least one product should be very high.
Nonetheless, the market didn’t necessarily see it that way. Traders want to see hard data and results, and patience isn’t an abundant asset on Wall Street unfortunately.
No Slowing Down
If the investing community’s lack of patience may have put negative pressure on the SRNE stock price, it certainly hasn’t slowed the company down in its clinical pipeline expansion efforts.
On Nov. 9, Sorrento Therapeutics announced a U.S. Food and Drug Administration (FDA) investigational new drug (IND) application for STI-2020, also known as COVI-AMG.
STI-2020 is a SARS-CoV-2 antibody that has already been validated in preclinical studies. And, the IND is for “the treatment of COVID-19 in patients with mild symptoms and a separate safety and pharmacokinetic study in healthy volunteers.”
But wait, there’s more. Just two days later, Sorrento announced an IND filing for STI-2099, also known as COVI-DROPS. This IND is “for a phase 1 safety and pharmacokinetic study in healthy volunteers and outpatients with mild COVID-19 disease with or without a simultaneous intravenous injection” of STI-2020.
COVI-DROPS are designed as an intra-nasal formulation of a neutralizing antibody against SARS-CoV-2. For patients presenting with mild cases of Covid-19, STI-2099 could prove to be relatively rapid and convenient treatment solution.
The Bottom Line
You’ve got to hand it to Sorrento Therapeutics. With a “more is better” approach, this ambitious biotech firm refuses to cut back on its array of potential anti-Covid-19 solutions.
If you’re on board with this approach, then a moderately sized position in SRNE stock could, sooner or later, offer strong upside.
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.
