When Sorrento Therapeutics (NASDAQ:SRNE) claimed that it made a breakthrough to Covid-19, that should raise alarm bells. Instead, SRNE stock traded as high as $9.00, triple its previous close. The CEO said that "We want to emphasize there is a cure. There is a solution that works 100 percent."
Astute investors should recognize that no true biotechnology firm would make such a claim. Sorrento may just want to get attention and push up the value of its stock. Its balance sheet is poor with a debt/equity of 2 times.
In the labs, the "cure" may work but the disease does not operate in an isolated lab where conditions are controlled. What matters is that the cure works in vivo. The human body, let alone animal models, is more complex. So if Sorrento’s treatment works, then the scientific community may take it seriously.
SRNE said that it discovered an antibody (STI-1499) that flushes out the virus. But antibodies are not always harmless.
The company may start Phase 1 and 2 trials in the next few weeks. And if the FDA speeds up the timeline for its development, the company may potentially come up with real-world results within a few months.
SRNE stock is speculative. Avoid.
