What happened
Shares of Sorrento Therapeutics (NASDAQ: SRNE) dropped 16.2% from 11:02 am EDT on Monday. Two factors seem to be primarily behind the decline. On Sunday, the US Food and Drug Administration (FDA) granted Emergency Use Authorization (EUA) to convalescent plasma in the treatment of COVID-19. Also the Financial Times reported on Sunday that the Trump administration is considering following up soon AstraZeneca‘s (NYSE: AZN) COVID-19 vaccine candidate to make it available ahead of the US election in November.
So what
Why would the FDA influence EUA for plasma recovery and a potentially faster green light for AstraZeneca’s COVID-19 vaccine candidate Sorrento? The company is developing its own COVID-19 therapeutic and vaccine candidates. Any good news for rivals could be seen as bad news for Sorrento.
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However, the news may not be as bad for Sorrento as it first appears. Despite the FDA’s EUA, questions remain about just how effective convalescent plasma is in treating COVID-19. AstraZeneca also publicly stated that it has not discussed a rapid trajectory for COVID-19 vaccine candidate AZD1222, adding that “it would be too early to speculate on that possibility.”
Sorrento has multiple coronavirus related programs. The company is evaluating abivertinib in a Phase 2 clinical study for the treatment of cytokine storms associated with COVID-19. It recently filed for FDA approval to begin a Phase 1 study of experimental COVID-19 antibody therapy COVI-GUARD. Sorrento also hopes to receive FDA EUA for a COVID-19 antibody test and a COVID-19 diagnostic test.
Well what
Like other biotech files in the clinical stage, targeting COVID-19, Sorrento Therapeutics is likely to remain very volatile with the rapid pace of development in the fight against the new coronavirus. While what happens to potential rivals may be important, the most important thing for investors to see is the company’s progress with its own COVID-19 programs.
