Please ensure Javascript is enabled for purposes of website accessibility

Why Sorrento Therapeutics Stock Jumped Today

By Joe Tenebruso – Jul 31, 2020 at 5:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The biotech has a new coronavirus test that could see broad-scale usage.

What happened

Shares of Sorrento Therapeutics (SRNE 0.96%) rose on Friday, furthering the biopharmaceutical company's gains since it disclosed a licensing deal for an innovative new COVID-19 test. By the close of trading, Sorrento's stock was up 4.3% after rising as much as 23.3% earlier in the day.

So what 

Sorrento announced on Wednesday that it signed a licensing agreement with Columbia University for the rights to a rapid diagnostic test that detects the SARS-CoV-2 virus in as little as 30 minutes. Unlike other tests that require uncomfortable nasal swabs, the new test uses easier to obtain saliva samples. 

A person is holding a COVID-19 test tube.

Sorrento Therapeutics' new COVID-19 test helped to drive its stock higher in recent days. Image source: Getty Images.

Moreover, Sorrento and Columbia's test requires no specialized laboratory equipment, which could make it easier to deploy in a wide range of settings. Potential examples include airports, hotels, and sporting events, as well as at-home testing. 

Now what

Sorrento CEO Dr. Henry Ji said the company will "move rapidly" to submit an emergency use authorization request to the FDA. Sorrento will also take steps to boost its production capabilities. 

Sorrento believes the new test, called COVI-TRACE, could help to boost the availability of COVID-19 diagnostic tests in the U.S. and reduce turnaround times. 

"Testing for SARS-CoV-2 needs to be fast, frequent, and far-reaching," said Dr. Zev Williams, associate professor at Columbia University. "We are delighted to work with Sorrento Therapeutics in the hope that COVI-TRACE may be scaled and deployed in the U.S. and around the world to combat the spread of COVID-19."

Joe Tenebruso 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.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.