Sorrento Therapeutics (NASDAQ:SRNE) has jumped completely into the COVID-19 arena with tests, treatments, and vaccines against the novel coronavirus. In this Fool Live video, Healthcare and Cannabis Bureau Chief Corinne Cardina and longtime Motley Fool contributor Brian Orelli discuss the massive pivot the biotech has taken. They also discuss the repurposing of drugs to treat COVID-19
Corinne Cardina: The last stock we're going to dive into deeply is Sorrento Therapeutics. This company is a lot different than the ones we've talked about before. This is only founded in 2009. It has a $2.8 billion market cap, so it's a lot smaller than the giants we've talked about so far. It's a clinical stage biotech, meaning it does not have products on the market yet. It is focused on developing innovative treatments for cancer, pain, and COVID-19. This company has seven COVID-19 programs in its pipeline. None of them are in phase 3 yet. Its programs include tests, antibody treatments, and even a vaccine candidate, all early stage. Let's talk about CovaGuard. This is its neutralizing antibody treatment. They've just received clearance for phase 1 in hospitalized COVID-19 patients. The company is targeting a potential emergency-use authorization submission as early as before the end of the year. That's a mouthful but that's drug company speak for you. In pre-clinical studies, CovaGuard demonstrated 100 percent in vitro neutralizing effect against coronavirus. This prevented the infection of healthy cells. Let's talk about what even was Sorrento before COVID-19 and how has this past year changed the company as an investment and as a business.
Brian Orelli: Yeah. They were a really small company and a really early stage company working on a pain management drug called resiniferatoxin. Then they also have a cell therapy which is called dimeric antigen receptor-T cells. You know about CAR-T's which are chimeric antigen receptor-T cells. Basically, it's a play off of CAR-T. They were developing that for cancers just like CAR-T's are developed for cancer. But they've gone all-in on coronavirus. It's great to see, but I think that I'm a little worried about the depth there. We've got a lot of programs in really early stage and they also could be following through on any of them to a great deal. That's my biggest concern with this company.
Corinne Cardina: Yeah, absolutely. On the flip side of that, there seem to be a lot of repurpose drugs that companies are testing as treatments for COVID-19. Obviously remdesivir, originally that was an Ebola treatment, but we're also seeing Eli Lilly (NYSE:LLY) and Incyte (NASDAQ:INCY). They are testing Incyte's rheumatoid arthritis drug, Olumiant, and Roche's (OTC:RHHBY) Actemra, that's another one. What are your thoughts on this strategy of combining existing drugs for other things and testing that out to see if it helps with treating COVID-19?
Brian Orelli: Those are both rheumatoid arthritis drugs, and the reason why they're testing them is because part of the problem with COVID-19 patients is that their immune systems overreact to the virus and then they start killing the actual cells in the patient, then that causes many of the symptoms of COVID-19 in the most severe patients. The strategy has been hit or miss. Eli Lilly and Incyte's drug combined with remdesivir looked better than remdesivir alone. It reduced the amount of time to recovery by a day, so went from eight days to seven days. Roche's drug was a complete flop. It could have to do with the mechanisms of action. Eli Lilly and Incyte's drug is a JAK inhibitor and Roche's drug is a IL-6 inhibitor. IL-6 signals to the immune cell to be activated and then it goes through a cascade that includes JAKs. But the JAK inhibitors might actually be working better than the IL-6 because there are other ILs. There's the IL [...] interleukin and it's a signaling molecule that signals for immune cells to become active. There's other IL [...] interleukins and they all work through the JAK pathway. It may be that the JAK inhibitor is going to work better than the IL inhibitors just because they're blocking more of the potential pathways that can cause the immune system to overreact.
Corinne Cardina: Is this the cytokine storm that doctors have noticed in certain patients? Is that what all of these elements play into? The overreaction of the inflammatory reaction?
Brian Orelli: Yeah. Interleukins are cytokines, which investors may know it also from CAR-T's. CAR-T's have this cytokine storm where you're convincing the immune system to attack the tumor but then it gets ramped up and then it starts attacking everything. That exactly, that's a cytokine storm.