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Sorrento could be the next breakout stock. Find out why!

21 Jan Sorrento could be the next breakout stock. Find out why!

Sorrento Therapeutics, Inc. (NASDAQ: SRNE) is in the spotlight after receiving a “Buy” rating along with a $30 price target from Ram Selvaraju an analyst at H.C Wainwright, implying a nearly 275% upside from its current levels. We take a look at reasons for the positive outlook below.

Sorrento Therapeutics, Inc. (NASDAQ: SRNE)

Market Cap: $2.75B; Current Share Price: 10.03 USDChart
Data by YCharts

Synergistic Immuno-Oncology Portfolio

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Sorrento Therapeutics is engaged in developing cutting-edge therapies to address the unmet needs in cancer, pain and COVID-19. The Company uses a multimodal, multipronged approach to combat cancer by leveraging its novel immuno-oncology portfolio consisting of CAR T, DAR T, Antibody-Drug Conjugates and Oncolytic Virus programs.

Sofusa, a lymphatic targeting device that can deliver antibodies to the lymphatic system to fight cancer, complements its cancer-targeting approaches. The Company has developed a broad fully human antibody library (“G-MAB™”) which has generated human antibodies such as PD-1, PD-L1, CD38, CD123, CD47, c-MET, VEGFR2 and various others under development, in its fight against cancer. Sorrento is evaluating a combination of approaches to treat indications such as multiple myeloma, lung cancer, and other adult and pediatric cancers.

Dr. Henry Ji, CEO of Sorrento Therapeutics states

“Our unique portfolio of I-O platform assets is unrivaled in the industry. It includes immune checkpoint inhibitors, bispecific antibodies, antibody-drug conjugates (ADCs) as well as chimeric antigen receptor (CAR) and dimeric antigen receptor (DAR) based cellular therapies, and most recently we’ve added oncolytic viruses (Seprehvir™, Seprehvec™). Each asset individually shows great promise; put together we feel they have the potential to break through the most difficult cancer challenges”

According to a report by Research and Markets, the Global Immuno-oncology market is projected to reach over US$ 100 Billion by 2022. The Company’s immuno-oncology pipeline consists of CD38 CAR-T and CD38 DAR-T for treatment of Multiple Myeloma; CD38 ADC for Amyloidosis; Seprehvir™and Seprehvec™ for treatment of solid tumors and ABIVERTINIB for NSCLC.

A Novel Non-Opioid Profile

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Resiniferatoxin (RTX), a first in class TRPV1 agonist and a non-opioid molecule, is its lead candidate for pain management. The candidate provides long-lasting effects with single administration and has the potential to transform pain management by its potency and non-opioid profile. RTX is undergoing pre-pivotal trials in osteoarthritis and end of life cancer pain.

The candidate is also undergoing pivotal trials for treatment of arthritic elbow pain in companion dogs.

Opioid based medicine has given rise to an addiction endemic, with prescription drug overdose becoming one of the leading causes of preventable deaths in the U.S, prompting the government to declare a public health emergency in 2017.

This has resulted in growth in the non-opioid based drugs segment, with increasing emphasis being laid on research and development in finding non-opioid alternatives to managing chronic pain. According to a study published by BBC research named “Non-opioid Pain Treatment: Global Markets to 2022” the global market for non-opioid pain treatment which was $ 9.9 billion in 2017, is estimated to grow at a CAGR of 18% and reach $ 22.6 billion by 2022.

A History of Strategic Acquisitions and Licensing
The Company acquired its Antibody Drug Conjugation (ADC) technologies through Concortis Biosystems Corp in 2013. Resiniferatoxin (RTX) was acquired through Sherrington Pharmaceuticals Inc in 2013. Sorrento out-licensed PD-L1 to Lee’s Pharma for the greater China market in 2014. Furthermore the Company formed ImmuneOncia, a joint venture with Yuhan Pharmaceuticals in 2016.

In 2016, Sorrento acquired Bioserv Corporation for its cGMP manufacturing operations besides ZTlido® through a majority stake in Scilex Pharmaceuticals. The Company also established Levena Suzhou Biopharma Co. LTD to extend Antibody Drug Conjugation (ADC) services.

In 2017, the company bought Virttu Biologics Limited and acquired its Oncolytic Virus platform. In addition it also formed Celularity, in collaboration with Celgene and United Therapeutics (NASDAQ: UTHR).

In 2018, Sorrento acquired the Sofusa® Lymphatic Delivery System from Kimberly-Clark.

In 2019, the Company formed Scilex Holding and merged Semnur Pharmaceuticals and Scilex Pharma.

In 2020, the Company licensed two programs namely Abivertinib from ACEA Therapeutics and HP-LAMP diagnostic platform from Columbia University, besides acquiring SmartPharm Therapeutics.

Cellularity, a Company developing cellular-based medicines is likely to go public through a Special purpose acquisition merger with GX Acquisition Corp. Additionally, Sorrneto also holds 8.2 million shares of NantKwest,  a clinical-stage, natural killer cell-based therapeutics company, which is merging with ImmunityBio.

A Promising COVID-19 Program Pipeline
Sorrento has entered a licensing agreement with Columbia University, for rights to  one-step diagnostic test namely COVI-TRACE, which can analyze saliva samples to detect SARS-CoV-2 virus and give positive or negative color change in as little as 30-minutes. The test offers multiple advantages such as easy on-site deployment, sensitivity and specificity of 97% and 100% in preliminary studies, no need for nasal swabs or special laboratory equipment.

Furthermore the Company is developing COVI-STIX, a lateral flow immunoassay for rapid SARS-CoV-2 antigen detection and COVI-TRACKTM, an in vitro diagnostic test kit for the detection of IgG and IgM antibodies. The pipeline also consists of COVI-GUARD, a Neutralizing Antibody that reduces the risk of Antibody Dependent Enhancement of SARS-CoV-2 infection, COVI-DROPS™ intranasal formulation of COVI-AMG™. , COVI-SHIELD, a Neutralizing Antibody Cocktail to name a few.

The Company has already submitted an application for Emergency Use Authorization (EUA) to the FDA for COVI-STIX (Diagnostic) antigen test and intends to submit the application for COVI-TRACE™ (diagnostic). Meanwhile COVI-TRACK™ Platinum (diagnostic) is in the final stages of manufacturing and clinical testing. These tests could be particularly useful for mass testing in public gatherings and may find favor with governments worldwide.

Key Takeaways
Sorrento Therapeutics has a diverse pipeline of candidates in three distinct therapeutic areas that have large unmet need. The Company’s interest in two cell-based immunotherapy companies one of which is likely to go public this year may further drive its value. Sorrento’s COVID-19 focused products show great potential for worldwide adoption, which will add further value.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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References

https://sorrentotherapeutics.com/research/pipeline/

https://www.businesswire.com/news/home/20200206005504/en/The-Global-Immuno-oncology-Market-is-Anticipated-to-Cross-US-100-Billion-by-2022—ResearchAndMarkets.com

https://finance.yahoo.com/news/sorrento-stock-could-hit-30-013131062.html

https://cdn2.hubspot.net/hubfs/308401/HLC%20Report%20Overviews/HLC206A%20Report%20Overview.pdf?utm_campaign=HLC206A&utm_source=hs_automation&utm_medium=email&utm_content=60798142&_hsenc=p2ANqtz-_AqFLV9qBAxvZjIPRuK2FIJdtmjRspJTMYpIb1OfuHL6KUlvL1P21qgVGPcw9P

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