After the market closed on Tuesday, Sorrento Therapeutics (NASDAQ: SRNE) revealed in an SEC filing that dismissed Executive Vice President and Chief Financial Officer Jiong Shao, immediately effective. Shares of the stock fell 11.7% on Wednesday at 1:29 p.m.
Najjam Asghar, former chief accountant of Sorrento Therapeutics, was counted on to fill the void left by Shao’s sister. Asghar was effectively appointed CFO on Tuesday, just 14 months after joining the company.
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In the five-month period between March 10 and August 10, investors were furious about Sorrento’s attempt to tackle the COVID-19 pandemic, the share 818% higher. The stock has tumbled about 42% since Aug. 11, when a short-seller report accused the company of misleading the public about a spoke-based, fast-paced COVID-19 diagnostic it had licensed from Columbia University for just $ 5 million upfront and potential royalties if the FDA gives it a thumbs up.
The abrupt dismissal of a CFO is not the only reason to be nervous about Sorrento’s future. The company ended March with just $ 21.9 million in cash, after losing its ever-changing operations in the previous 12 months to $ 270 million. Revenue from contract production and ZTildo, a lidocaine lotion for post-herpetic neuralgia reached $ 7.7 million in the second quarter.
Sorrento was able to begin conducting clinical trials with STI-1499, its treatment candidate COVID-19. On August 19, the company submitted an exploratory new medication application for STI-1499, the approval of which is a condition to begin giving the treatment to trial volunteers.
