Sorrento Therapeutics Inc (NASDAQ:SRNE) continues to slide. SRNE stock has been on a downhill slope since peaking at a 2021 high of $16.51 on Feb. 8. At this point shares are worth about half of what they were then. Is it time to bail on SRNE, or is this a buying opportunity?
Much of the negativity around this stock is related to the company’s coronavirus vaccine candidate (T-VIVA-19). It remains in clinical trials even as more vaccines are approved for use. Investors are concerned that the demand for vaccines will have evaporated by the time it hits the market — If it hits the market.
The thing is, if you look past the coronavirus vaccine, Sorrento Therapeutics has other products in development that are very promising. This company is far from a one-trick pony, and fixation on the vaccine’s delay is dropping SRNE’s price to tempting levels.
Instead of Fixating on a Vaccine, Think About COVI-MSC
Sorrento Therapeutics is working on a wide range of products related to Covid-19, including various tests, antiviral treatments and its Covid-19 vaccine. This focus on coronavirus has led to the company frequently being lumped into the “Covid stocks” category over the past year.
We know from experience that these stocks can rise and fall dramatically in value based on clinical trials of their vaccine candidates. Every time a new vaccine is approved, the news hammers the stock of the companies still working on their own. However, Sorrento Therapeutics has another Covid-19 product under development that could turn out to be much more valuable than a vaccine at this point. COVI-MSC has been cleared by the U.S. Food and Drug Administration to enter phase one clinical trials. It is a stem cell treatment for Acute Respiratory Distress Syndrome (ARDS).
Once the vaccination rush is done and the pandemic is behind us, many scientists think that Covid-19 will become endemic. Like the common cold, or influenza, it won’t be eradicated, but will stick around and flare up.
Christopher Dye is an epidemiologist and a professor at Oxford University. In a discussion on the likelihood that Covid-19 will be with us for the long term, he told Nature:
“I guess COVID will be eliminated from some countries, but with a continuing (and maybe seasonal) risk of reintroduction from places where vaccine coverage and public-health measures have not been good enough.”
ARDS is one of the most severe symptoms of Covid-19. It often requires the patient to be intubated on a ventilator. For those who suffer from it, ARDS results in a mortality rate in the 30% to 40% range. Assuming that Covid-19 becomes endemic, a treatment like COVI-MSC would be a game-changer. Serious cases of Covid-19 would become far less deadly. It could become a product with ongoing, global demand.
A Diversified Product Pipeline
While its Covid-19 efforts have been getting much of the spotlight — and contributing greatly to the volatility of SRNE stock — Sorrento Therapeutics has a diverse range of products beyond Covid-19’s reach. This includes cellular therapy and immunotherapy programs for cancer treatment. RTX (resiniferatoxin) is showing promise as an alternative to opioid pain killers.
This diverse portfolio was cited by B. Riley Financial analyst Mayank Mamtani. He initiated coverage of MRNE stock in February with a “buy” rating and a $26 price target.
Bottom Line on SRNE Stock
There’s no arguing the fact that SRNE stock has been on a roller coaster over the past year. It hit spectacular high points last August, October, and again in February. In between, have been dramatic drops. We’re in one of those right now. However, these low points make for a great buying opportunity if you have the stomach.
Sorrento Therapeutics has products in the pipeline that have real commercial potential. This includes non-opioid pain therapies, and the company’s COVI-MSC treatment for Covid 19. Overlooking these to focus on a delayed Covid-19 vaccine has pushed SRNE down and I’m not the only one who thinks this is temporary.
The investment analysts tracked by CNN Money have SRNE stock rated as a buy. Their median 12-month price forecast of $28 offers over 200% upside. These analysts are convinced SRNE is going to bottom out and rally, then move into growth territory once again — blowing past 2020’s five-year high close.
On the date of publication, Louis Navellier had a long position in SRNE. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.
