We said last month that a short squeeze was brewing in SRNE stock. This was when shares were trading just above $4. Fast-forward a month and we are at the $8 level and we believe new highs are coming in SRNE stock. The shorts led by the “Night King of Biotech” Adam Feuerstein have gotten bolder and have shorted 34% of the float. This is a $400 million bet that SRNE is heading lower. With our subscribers up 100% so far, we still think there are much bigger gains to be had in SRNE stock.
About SRNE Stock
First up, here’s a little background info for those that aren’t familiar with SRNE stock. Sorrento is a clinical-stage, antibody-centric, biopharmaceutical company developing new therapies to treat cancers. Sorrento’s multimodal multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as fully human antibodies (“G-MAB™ library”), clinical-stage immuno-cellular therapies (“CAR-T”, “DAR-T”), antibody-drug conjugates (“ADCs”), and clinical-stage oncolytic virus (“Seprehvir®”). Sorrento is also developing potential antiviral therapies, and vaccines against coronaviruses, including COVIDTRAP™, ACE-MAB™, COVI-MAB™, COVI-GUARD™, and COVI-SHIELD™.
SRNE Stock Antibodies
The key to understanding SRNE stock is realizing that at its heart, it’s an antibody company. An antibody is a protective protein produced by the immune system in response to the presence of a foreign substance. Cancer cells, bacteria, and viruses, like the one that causes COVID-19, are foreign substances and therefore, theoretically can be impeded or neutralized by antibodies. A vaccine is meant to safely expose a person’s body to a pathogen to teach it to create these neutralizing antibodies. Sorrento’s approach skips the need to teach the body and introduces the neutralizing antibodies directly in vivo. This allows the approach to be administered to healthy and infected people alike.
COVID-19 vaccine candidate
Sorrento Therapeutics has chosen a COVID-19 vaccine candidate, dubbed T-VIVA-19, to advance into the clinic and, if successful, into the marketplace. It says T-VIVA-19 is a recombinant fusion protein of the spike protein S1 domain and the Fc portion of the human IgG1 antibody. The company also says its existing bulk drug substance manufacturing capacity should enable it to make up to 100M doses per month. Dr. Henry Ji, Chairman, and CEO of Sorrento Therapeutics said:
“If successful and approved, we plan to produce the T-VIVA-19 vaccine in our therapeutic antibody cGMP production facility in San Diego. Due to the potentially low dose administration of T-VIVA-19, which may be one milligram per person or less, we believe our existing cGMP manufacturing facility is capable of producing bulk drug substance rS1-Fc for up to 100 million doses a month. Unlike other vaccine candidates, our rS1-Fc protein production could utilize our existing therapeutic antibody manufacturing processes, and we, therefore, believe it would be simple and easy to scale up.”
SRNE Stock Buyout Offers
Sorrento Therapeutics has turned down at least three takeover offers that we are aware of. Reports are that one was in the neighborhood of $7 a share and Ji said no. Obviously, that was the right move now that the stock is $8. While he could have taken the sure thing, Ji obviously believes SRNE stock is worth a lot more. After all, insiders own 34% of the company.
Furthermore, when you look at Moderna, which has no FDA approved drugs and there are a number of questions about its vaccine, SRNE stock is a double-digit stock. SRNE stock has a current market cap of $1.6 billion compared to Moderna’s $30 billion market cap.
Moderna does not have a lock on being the only Covid-19 vaccine, just take a look at one of the 45 volunteers in Moderna Therapeutics’ coronavirus vaccine trial. Ian Haydon, 29, shared his experience after receiving a coronavirus jab which followed a visit to the urgent care unit, vomiting then passing out, and eventually recovering after a few days. He is one of the four people reported to have experienced severe adverse reactions to the candidate vaccine.
Samsung Biologics and ImmuneOncia
The latest news concerns Sorrento Therapeutics’ stake in ImmuneOncia. ImmuneOncia is a clinical-stage immuno-oncology-centric biopharmaceutical company established in 2016 as a joint venture company between Yuhan and Sorrento Therapeutics.
Today it was announced that Samsung Biologics (207940.KS) and ImmuneOncia Therapeutics held a signing ceremony today for a contract to develop and manufacture five candidate molecules, expanding upon the two companies’ existing CDO partnership first established in 2018.
Under this extended deal with ImmuneOncia, Samsung Biologics will provide a full scope of CDO services from cell line development, process development, non-clinical and clinical material manufacturing, to IND submission support for global clinical trials of five candidates from ImmuneOncia’s pipelines.
ImmuneOncia’s portfolio comprises diverse immune checkpoint antibodies including IMC-002, a CD47-targeting antibody that is currently undergoing a global phase 1 study based on the successful IND-filing approval obtained through the development and manufacturing partnership with Samsung Biologics.
The problem with speculating on small-cap biotechs is the constant bashing from short-sellers determined to push the price down and make money. SRNE stock has been battling the shorts since day one; however, the company is winning not only the battles but the war itself. All it takes is one positive data point to hit and the stock is off and running. In our view, it’s not a matter of if the shorts will be squeezed, but when. Considering that 25% of the float was short last month and now it’s 34%, the coming short squeeze is going to be epic. Grab your popcorn and get ready!
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in NASDAQ:SRNE or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article.