After the market closed on Tuesday, Sorrento Therapeutics (NASDAQ:SRNE) disclosed in an SEC filing that it fired Executive Vice President and Chief Financial Officer Jiong Shao, effective immediately. Shares of the stock down around 11.7% at 1:29 pm on Wednesday.
Najjam Asghar, formerly Sorrento Therapeutics' chief accounting officer, was tapped to fill the void left by Shao's ouster. Asghar was appointed CFO effective Tuesday, just 14 months after he joined the company.
During the five-month period between March 10 and Aug. 10, investors excited about Sorrento's attempts to address the COVID-19 pandemic drove the stock 818% higher. The stock has tumbled about 42% since Aug. 11, when a short-seller's report accused the company of misleading the public about a saliva-based, rapid COVID-19 diagnostic that it had licensed from Columbia University for just $5 million upfront and potential royalties if the FDA gives it a thumbs up.
The abrupt ousting of a CFO isn't the only reason to be nervous about Sorrento's future. The company finished March with just $21.9 million in cash after its increasingly diverse operations lost $270 million over the previous 12 months. Revenue from contract manufacturing and ZTildo, a lidocaine lotion for post-herpetic neuralgia reached just $7.7 million in the second quarter.
Sorrento could begin running clinical trials with STI-1499, its COVID-19 treatment candidate soon. On Aug. 19, the company submitted an investigational new drug application for STI-1499, the approval of which is a prerequisite to begin giving the treatment to trial volunteers.