Shares of Sorrento Therapeutics (NASDAQ:SRNE) were up 4.7% as of 10:33 a.m. EDT on Wednesday after rising as much as 14.9% earlier in the day. Why did the stock bounce back after plunging earlier this week? Sorrento didn't report any news that would provide a catalyst. Instead, it appears that some investors viewed the sell-off as overdone.
The kind of volatility seen with Sorrento isn't unusual for a clinical-stage biotech stock. That's especially true for biotechs developing experimental COVID-19 therapies and vaccines, an area that's moving at a blazingly fast pace.
Sorrento's decline earlier this week stemmed from a couple of stories in the fight against COVID-19. The U.S. Food and Drug Administration (FDA) gave emergency use authorization (EUA) to convalescent plasma in treating COVID-19 on Sunday. The Financial Times also reported on Sunday that the COVID-19 vaccine candidate being developed by AstraZeneca and the University of Oxford could be fast-tracked for EUA by the Trump administration.
The EUA for convalescent plasma could have a greater impact on Sorrento. It's possible that the antibody therapies the biotech is developing could have a harder time gaining market share (assuming approval) if convalescent plasma proves to be effective in treating COVID-19. However, some investors appeared to realize today that all of this is only conjecture.
Sorrento doesn't have any coronavirus-related products on the market yet. That could change in the not-too-distant future, though. The company hopes to soon receive EUA for its COVI-TRACK antibody test. It also expects to file for an EUA for its COVI-TRACE diagnostic test.