What do investors like to see after a stock doubles? How about another double? That's exactly what Sorrento Therapeutics (SRNE.Q) stock has done. It soared a little over 100% in 2020 and has doubled yet again so far in 2021.

Excitement about the biotech's COVID-19 programs has fueled this fantastic performance. But is Sorrento a good coronavirus stock to buy now?

Coronavirus model on a pile of $100 bills

Image source: Getty Images.

A packed pipeline

Few companies have as many programs targeting COVID-19 as Sorrento. The small biotech's pipeline includes 11 coronavirus candidates.

Sorrento requested U.S. emergency use authorization (EUA) for its COVI-TRACK antibody test in June 2020. In December, the company filed for EUA for its COVI-STIX rapid COVID-19 test. It also licensed a rapid saliva-based diagnostic test (branded as COVI-TRACE) from Columbia University.

The biotech is conducting phase 2 studies in the U.S. and Brazil evaluating abivertinib in treating COVID-19 patients. The U.S. study is expected to complete in May, although preliminary data could be available earlier. 

Sorrento has two experimental antibody therapies targeting COVID-19 in phase 1 testing -- COVI-GUARD for treating inpatients and COVID-AMG for treating outpatients. It also recently announced encouraging results from a phase 1b study evaluating experimental stem cell therapy COVID-MSC in treating patients with COVID-19-induced acute respiratory distress (ARD) or acute respiratory distress syndrome (ARDS). 

In addition, Sorrento's pipeline includes four preclinical COVID-19 programs. In November, the biotech filed with the U.S. Food and Drug Administration (FDA) to advance one of those programs, intranasal antibody therapy COVID-DROPS, into early stage clinical testing. 

COVID-19 isn't Sorrento's only focus, though. The company has seven cancer immunotherapies in development, six of which are already in clinical testing. Its pipeline also includes four other programs in phase 1 and phase 2 studies. 

Hurdles to jump

There are a couple of old adages that come to mind after reviewing Sorrento's packed pipeline: "Don't count your chickens before they hatch," or "a bird in the hand is worth two in the bush." In other words, just because Sorrento has a lot of pipeline programs doesn't mean all (or any) of those programs will make it to market.

As a case in point, the FDA still hasn't granted EUA to Sorrento's COVI-TRACK antibody test more than seven months after its initial submission. That's not to say that the company won't eventually win EUA for COVI-TRACK or for its other COVID-19 tests. However, a filing for EUA doesn't mean that authorization is necessarily forthcoming.

Several of Sorrento's therapeutic candidates targeting COVID-19 look promising, but it's important to recognize that all of them have several hurdles to jump. Most candidates in phase 1 or phase 2 testing never win FDA approval.

Sorrento also faces the continual challenge of funding its vast array of programs. In its last reported quarter, the company posted a net loss of $87 million. Sorrento's cash position stood at only $75.2 million at the end of September. 

To buy or not to buy?

It's not unusual for biotech stocks to be valued at a lot more than their financial history would merit on its own. However, Sorrento's market cap of close to $3.5 billion seems high considering that most of its pipeline candidates are only in early stages.

I think it's quite possible that Sorrento could achieve success with some of its programs and fuel even more gains. B. Riley Securities analyst Mayank Mamtani even predicts the stock could nearly double again from its current level. 

My concern, though, is that there are still too many uncertainties about Sorrento's pipeline. Most investors would be better off staying on the sidelines with the stock for now, in my view.