Please ensure Javascript is enabled for purposes of website accessibility

Why Sorrento Therapeutics Stock Is Ripping Higher Today

By George Budwell – Updated Sep 17, 2020 at 9:42AM

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

Its COVID-19 antibody gets clearance to begin human trials.

What happened

Shares of the mid-cap biopharma Sorrento Therapeutics (SRNE 1.29%) jumped by as much as 35% in pre-market trading Thursday morning. The stock is heating up today in response to the Food and Drug Administration clearing Sorrento's COVID-19 neutralizing antibody, COVI-Guard (STI-1499), for a phase 1 trial in hospitalized patients.

The trial is reportedly being designed for rapid adaptive expansion, including international sites in Brazil. By taking this approach, Sorrento hopes to have a clear line of sight on the drug's preliminary safety and efficacy features in a short period of time. 

A blood vial labeled coronavirus blood test positive.

Image source: Getty Images.

So what

The main goal of this initial trial is to lay the groundwork for larger clinical studies, which can subsequently be used to apply for emergency use authorization (EUA). What appears to have grabbed investors' collective attention this morning is that Sorrento noted in its press release that an EUA submission could be in the hands of the FDA before year's end.

That's a big deal because Sorrento is well behind both Eli Lilly and Regeneron Pharmaceuticals in the COVID-19 neutralizing antibody race. Lilly, for instance, has already launched a phase 3 trial for its COVID-19 antibody candidate LY-CoV555. Pivotal data from that ongoing study is expected by next March. 

Now what

Is Sorrento a screaming buy in the wake of this regulatory development? While it does sport a rather healthy risk profile, the company appears to be dramatically undervalued relative to its near-term growth prospects -- especially if COVI-Guard becomes one of the first antibodies on the market via an EUA later this year. Put simply, risk-tolerant investors may want to scoop up some shares of this red-hot biotech stock today. 

George Budwell 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sorrento Therapeutics, Inc. Stock Quote
Sorrento Therapeutics, Inc.
$1.57 (1.29%) $0.02
Eli Lilly and Company Stock Quote
Eli Lilly and Company
$326.42 (1.51%) $4.87
Regeneron Pharmaceuticals, Inc. Stock Quote
Regeneron Pharmaceuticals, Inc.
$732.27 (-0.39%) $-2.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

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