What happened

Shares of Sorrento Therapeutics (NASDAQ:SRNE) were skyrocketing 38.5% as of 12:24 p.m. EST on Wednesday. The huge gain came after the biotech announced positive preliminary results on Tuesday evening from its phase 1b study evaluating its COVI-MSC in treating COVID-19.

So what

The fortunes of small biotech stocks like Sorrento depend on good results from clinical studies of their pipeline candidates. And the results announced last night for COVI-MSC, its experimental stem cell therapy, were very good.

Older man in a hospital bed with a healthcare professional standing next to him

Image source: Getty Images.

Sorrento reported that the first three patients enrolled in its phase 1b study of COVI-MSC were discharged from the hospital within only one week of beginning infusions of the experimental therapy. These patients previously suffered from acute respiratory distress (ARD) or acute respiratory distress syndrome (ARDS) caused by COVID-19.

The company said that one of the patients had been in the hospital for three weeks before receiving COVI-MSC. Another of the patients had been previously discharged but had to be readmitted because of a recurrence of ARD. These patients and a third patient in Sorrento's study improved rapidly after infusions of COVI-MSC.

It's important to keep in mind, though, that these results are very early and only include a small number of patients. There's no guarantee that COVI-MSC will deliver such great results in a larger group of patients.

Now what

Sorrento hopes to advance COVI-MSC to a controlled phase 2 study. In the meantime, the company is seeking Emergency Use Authorization for its COVI-STIX antibody test for COVID-19, and is evaluating several other potential coronavirus therapies in clinical studies.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.