Please ensure Javascript is enabled for purposes of website accessibility

These Nasdaq Biotech Stocks Doubled in 2020. Here's Why They're Soaring on Friday

By Dan Caplinger - Jan 15, 2021 at 3:55PM

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

Success tends to bring more success.

The Nasdaq Composite (^IXIC 0.00%) has been doing very well in recent months, rising to set dozens of new record closing highs. On Friday, Nasdaq investors decided it was time for a pause, as the benchmark fell about half a percent just before 3 p.m. EST.

However, some individual Nasdaq stocks managed to post huge gains on Friday. In the biotech industry, Sorrento Therapeutics (SRNE 6.94%) and Bionano Genomics (BNGO 3.38%) both more than doubled shareholders' money in 2020. But they haven't let up steam, and they're looking to build on their past stock-price appreciation and deliver more profits for their investors. Indeed, one of those stocks has already doubled again in 2021 because of Friday's big rise.

BNGO Chart

BNGO data by YCharts.

Investors hope for continued Sorrento success

Shares of Sorrento Therapeutics were up another 19% on Friday. Investors have been optimistic about the biotech's lineup of COVID-19-related products, which include prospective vaccines, treatments, and diagnostic tests.

The latest catalyst for Sorrento's share-price gains appeared to come from repeated comments from a bullish stock analyst at H.C. Wainwright. Wainwright has had a buy rating on the stock for a long time and raised its target price on Sorrento to $30 per share in late July 2020 on hopes that the COVI-TRACE saliva-based COVID-19 diagnostic test would prove to be a game changer in detecting the disease. Since then, Sorrento has filed for emergency-use authorization for its COVI-STIX shallow-nasal swab quick-test.

Researcher in lab coat looking at microscope, with vials nearby.

Image source: Getty Images.

Sorrento's stock climbed 102% in 2020 and added another 40% so far this year, but that has many investors getting impatient about the slow pace of progress toward getting actual approvals from regulators. The company is well behind many of its rivals, and it's unclear how much market share Sorrento would be able to win over, even if it gets some of its products approved.

For now, shareholders will be watching closely to see if the U.S. Food and Drug Administration (FDA) moves forward with emergency-use authorization for COVI-STIX. A win at the FDA could put some investors' minds more at ease about Sorrento's future.

A double-double for Bionano

Meanwhile, Bionano Genetics climbed 14% on Friday afternoon. After a nearly 150% rise in 2020, today's gains bring Bionano's return in the first two weeks of 2021 to nearly 160%.

The past couple of weeks have been momentous for Bionano. Its four-day symposium on next-generation cytogenomics has revealed a lot of information about the company, introducing many investors to its Saphyr optical genome mapping system. Bionano also managed to raise cash in a secondary stock offering, selling 29 million shares at $3.05 per share, to bring in $88.5 million. Participants in the secondary offering are already sitting on gains of more than 150% on their shares.

Bullish investors are optimistic about Bionano's potential to treat disease. For instance, one study looked at the genes that can indicate the risk of autism spectrum disorder, as well as revealing multiple variants that could help scientists with future breakthroughs.

Nevertheless, seeing a stock rise 15 times just since mid-December will inevitably have some thinking that Bionano needs to see a big correction. That might well happen, but even a substantial share-price pullback wouldn't necessarily mean that the future for Bionano's business doesn't look bright.

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.
SRNE
$1.54 (6.94%) $0.10
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$11,434.74 (0.00%) $0.00
Bionano Genomics, Inc. Stock Quote
Bionano Genomics, Inc.
BNGO
$1.53 (3.38%) $0.05

*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 service.

Stock Advisor Returns
332%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

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.