What happened
This is not a good week to be Sorrento Therapeutics (SRNE.Q -35.00%) or one of its investors. Despite an encouraging pop on Thursday, the company's shares were still down by slightly over 9% from the start of the week. Counterintuitively, the big lurch downwards came just after a blast of ostensibly good news.
So what
Tuesday afternoon, Sorrento announced that the U.S. Food and Drug Administration (FDA) cleared its Resiniferatoxin (RTX), a non-opioid medication aimed at treating knee pain arising from osteoarthritis, for a Phase 2 clinical trial. The clinical-stage biotech said in a press release that the Phase 2 study will be aimed at determining the recommended dose for its Phase 3 trial. Both the Phase 2 and Phase 3 testing is to be effected with bigger patient populations, which is typical in later-stage trials.
Image source: Getty Images.
The RTX news is welcome, if not exactly surprising given that the drug performed well in earlier-stage trials. Sorrento wrote that those studies "confirm the clinical potential of the RTX drug for long-term control of pain associated with osteoarthritis of the knee."
Now what
The subsequent stock-price drop following the announcement was more puzzling. Sorrento has lately risen to prominence on its lineup of COVID-19 product candidates, a long list that includes both diagnostics and drugs.
So perhaps the latest development with RTX is serving as an uncomfortable reminder that the company has yet to bring one of those goods to the U.S. market -- which hasn't yet fully escaped the threat of the disease.
