What happened

During the first hour of trading Wednesday morning, shares of the commercial-stage biotech Sorrento Therapeutics (SRNE.Q) gapped up by as much as 8.3% on fairly heavy volume. Since this rocket-like start to today's trading session, the drugmaker's shares have cooled off to some degree, but they were still higher by a respectable 4.3% as of 11:45 a.m. ET Wednesday morning. 

What's sparking this latest rally in Sorrento's stock? Ahead of the opening bell, the company announced that the Food and Drug Administration (FDA) had granted fast track designation to its investigational drug and device product candidate, SP-103. SP-103 is a non-opioid-based pain reliever indicated for acute low back pain.

So what

This coveted regulatory designation will reportedly allow Sorrento's subsidiary, Scilex Holding Company, to seek approval for SP-103 from the FDA on a rolling basis. In theory, a rolling review ought to lead to a faster approval under ideal conditions. 

If SP-103 makes it to a formal regulatory review and ultimately gets approved as a treatment for acute low back pain, it would enter a fairly sizable market. What's more, acute low back pain is typically treated with highly addictive opioids with a questionable efficacy profile. As a result, SP-103 could quite possibly rake in hundreds of millions in sales as an effective alternative to opioids in this large and underserved indication.  

Now what

Is this regulatory news a good reason to buy Sorrento's shares? While I'm overall bullish on this biotech stock, non-opioid pain therapies have been a mixed bag from a clinical development standpoint. That doesn't mean that SP-103 won't succeed where others have failed, but this product candidate will arguably need exceptionally strong late-stage data in this indication to win over skeptical investors.