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Why Sorrento Therapeutics Stock Is Up Today

By Prosper Junior Bakiny – Updated Jun 11, 2020 at 12:59PM

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The company could receive regulatory approval for its coronavirus antibody test.

What happened?

On Wednesday evening, Sorrento Therapeutics (SRNE -0.63%) announced that the Food and Drug Administration was reviewing the company's application for Emergency Use Authorization for its COVID-19 diagnostic test. As a result, Sorrento's shares jumped on Thursday morning and were up by 5.1% as of 12:24 p.m. EDT today.

So what

Testing has been crucial to the efforts to contain the spread of COVID-19, and several companies have managed to create test kits that are highly accurate and easy to use. Sorrento is looking to launch its own COVID-19 test. The biotech company claims that its COVI-TRACK in-vitro diagnostic kit can detect antibodies to the virus that causes COVID-19 in eight minutes or less.

Hand drawing upward pointing graph.

Image source: Getty Images.

Even if approved, though, this test will face stiff competition. Other companies such as Abbott Laboratories (ABT -1.56%) and Roche Holding (RHHBY -1.19%) have been providing the public with COVID-19 test kits for several weeks, and some of these tests (like Abbott's ID Now COVID-19 antibody test) can return positive results in as little as five minutes.

Now what

Sorrento has attracted a lot of attention of late. In particular, the company famously claimed that it had a potential cure for COVID-19, an antibody called STI-1499. Shares skyrocketed by more than 100% on this news, but have cooled down significantly since. It seems plausible that Sorrento overplayed its hand in claiming to have found a potential cure for COVID-19, but investors will want to keep an eye on this biotech.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Sorrento Therapeutics, Inc. Stock Quote
Sorrento Therapeutics, Inc.
$1.57 (-0.63%) $0.01
Abbott Laboratories Stock Quote
Abbott Laboratories
$96.76 (-1.56%) $-1.53
Roche Holding AG Stock Quote
Roche Holding AG
$40.62 (-1.19%) $0.49

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