What happened

Shares of Sorrento Therapeutics (NASDAQ:SRNE) are sinking 16.2% as of 11:02 a.m. EDT on Monday. Two factors appear to be primarily behind the decline. On Sunday, the U.S. Food and Drug Administration (FDA) granted Emergency Use Authorization (EUA) to convalescent plasma in treating COVID-19. Also, the Financial Times reported on Sunday that the Trump administration is considering fast-tracking AstraZeneca's (NASDAQ:AZN) COVID-19 vaccine candidate to make it available prior to the U.S. election in November.

So what

Why would the FDA's EUA for convalescent plasma and a potentially faster green light for AstraZeneca's COVID-19 vaccine candidate affect 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.

Gloved hand stopping wood blocks that spell COVID-19 from knocking over other wood blocks

Image source: Getty Images.

However, the news might 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. Also, AstraZeneca stated publicly that it hasn't discussed a fast track for COVID-19 vaccine candidate AZD1222, adding that "it would be premature to speculate on that possibility."

Sorrento has multiple coronavirus-related programs. The company is evaluating abivertinib in a phase 2 clinical study for treating 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.

Now what

Like other clinical-stage biotech stocks focused on COVID-19, Sorrento Therapeutics is likely to remain highly volatile with the fast pace of developments in the fight against the novel coronavirus. Although what happens with potential rivals could be important, the main thing for investors to watch is the company's progress with its own COVID-19 programs.

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