What happened
Of their low during the depths of the COVID-19-induced stock market in March, shares of Sorrento Therapeutics (NASDAQ: SRNE) have increased in value more than 10 times.
Here’s why.
So what
In May, Sorrento made the shocking announcement that it believed it had found a cure for COVID-19. In an interview with Fox News, CEO Dr. Henry Ji:
We want to emphasize that there is a cure. There is a solution that works 100%. If we have the neutralizing antibody in your body, you do not need the social distance. You can open a society without fear.
Ji referred to Sorrento’s experimental antibody, STI-1499, which the biopharmaceutical company claims could neutralize SARS-CoV-2, the virus that causes COVD-19. His bold statements certainly caught the attention of investors, and Sorrento’s share ran on the news.
Sorrento Therapeutics’ share has delivered torrid gains to investors since the COVID-19 market crash. Image Source: Getty Images.
Shares declined after skeptics questioned the validity of Ji’s claims. But in June, Sorrento said it had designed another potential antidote for COVID-19: STI-4398, a protein that it said could inhibit the new coronavirus’ ability to infect certain cells in the airways. The news helped ignite another rally in Sorrento’s share price.
Sorrento’s profits accelerated in July after the company released promising pre-clinical results from its COVID-19 vaccine program. Sorrento said its vaccine candidate T-VIVA-19 produced neutralizing antibodies to SARS-CoV-2 in mice.
And on July 29, Sorrento said it had licensed a test from Columbia University that detects the SARS-CoV-2 virus in as little as 30 minutes using saliva samples, instead of uncomfortable nasal swabs. That has led to another massive rally in Sorrento’s share price in recent days, as investors have grown increasingly excited about the massive potential market potential for this new rapid diagnostic test.
Well what
Sorrento has given investors enough reasons to be optimistic about its future. But it is important to note that many more tests are needed to prove both the safety and effectiveness of their anticancer treatments and vaccine candidate. That uncertainty, combined with the incredible gains of the stock, makes Sorrento a relatively high-risk investment today.
