Actionable news
All posts from Actionable news
Actionable news in SRNE: Sorrento Therapeutics, Inc.,

Sorrento Therapeutics Bottoming At $5.00 To $6.00 Per Share And Offering Material Upside

Sorrento Therapeutics stock is down from a high of $24.30 down to the current price of $6.00.

The market cap of $225m is covered 50% by cash on hand and SRNE’s holding of NK.

Promising drug development pipeline offers significant upside in 2016 including $1.2BN in milestone payments from the sale of Cynviloq.

Additionally, the company benefits from its partnership with Dr. Patrick Soon-Shiong a billionaire doctor and biotech entrepreneur.

Finally, the technical picture indicates limited downside making SRNE my top biotech stock for 2016.

Business Description

Sorrento Therapeutics (NASDAQ:SRNE) is a development stage biopharmaceutical company engaged in the discovery, acquisition, development and commercialization of proprietary drug therapeutics.

Its primary focus is oncology, including the treatment of chronic cancer pain, but it's also developing therapeutic products for other indications, including immunology and infectious diseases.

About Dr. Patrick Soon-Shiong

To better understand SRNE's development pipeline and the investment thesis one must first understand who Dr. Patrick Soon-Shiong is including his prior success developing other U.S. medical and biotech companies. For further information on Dr. Patrick Soon-Shiong see here, here and here.

Dr. Patrick Soon-Shiong is the richest doctor in the world, a medical version of Elon Musk which has had considerable success both advancing medical science and as an entrepreneur. The table below gives an overview of the companies he has successfully founded and completely or partially exited, either via an IPO or a trade sale.

In total, Dr. Patrick Soon-Shiong has created nearly $8BN in shareholder value including $6BN for himself. His net worth is estimated at $12.2BN by Forbes making him #35 on the Forbes 400 list. Additionally, he is considered the richest man in Los Angeles.

The paths of Dr. Patrick Soon-Shiong and SRNE have been interlinked since December 14, 2015, when Dr. Patrick Soon-Shiong became the largest shareholder of SRNE with a 19.9% stake purchased at $5.80 per share. In addition, SRNE granted Dr. Patrick Soon-Shiong a 3 year warrant to purchase additional 1.7m shares of common stock at an exercise price of $5.80 per share. Currently, Dr. Patrick Soon-Shiong is the largest shareholder of SRNE with a 21.3% aggregate holding according to Bloomberg.

A 30 minute interview with Dr. Patrick Soon-Shiong with Larry King can be viewed by clicking



The table below includes a financial summary of SRNE. Its $225 market cap is roughly 50% covered by cash on hand ($59m and SRNE's stake in NK currently valued at $66m). The company has sufficient cash on hand to fund itself until end of 2016.

Development Drug Pipeline

SRNE has a clinical development pipeline with multiple potential drugs including JV's and partnerships. These include:


SRNE had been developing a biosimilar drug to Celgene's Abraxane a second generation paclitaxel. Cynviloq is a so-called "third generation paclitaxel" formulation for the potential treatment of metastatic breast cancer, non-small cell lung cancer, pancreatic cancer and other solid tumors.

Abraxane was acquired by Celgene (NASDAQ:CELG) when it acquired Abraxis BioScience Inc for $2.9 billion in cash and stock on June 30, 2010. Abraxane had been founded by Dr. Patrick Soon-Shiong who had helped developed the drug formula and owned 80% of the equity at the time the transaction was announced.

A biosimilar (also known as follow on biologic or subsequent entry biologic) is a biologic medical product which is almost an identical copy of an original product that is manufactured by a different company. Biosimilars are...