NEW YORK, NY / ACCESSWIRE / July 9, 2020 / Pomerantz LLP announces that a class action lawsuit has been filed against Sorrento Therapeutics, Inc. ("Sorrento" or the "Company") (SRNE) and certain of its officers. The class action, filed in United States District Court for the Southern District of California, and indexed under 20-cv-01066, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Sorrento securities between May 15, 2020, and May 22, 2020, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Sorrento securities during the class period, you have until July 27, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Sorrento is a clinical-stage biopharmaceutical company that engages in the development of therapies for the treatment of cancer, autoimmune, inflammatory, and neurodegenerative diseases.
On May 8, 2020, Sorrento announced a collaboration with Mount Sinai Health System ("Mount Sinai") for the purpose of "generat[ing] antibody products that would act as a ‘protective shield' against SARS-CoV-2 coronavirus infection, potentially blocking and neutralizing the activity of the virus in naïve at-risk populations as well as recently infected individuals."
On May 15, 2020, during pre-market hours, news sources reported that Sorrento had announced the discovery of the STI-1499 antibody, which the Company described as providing "100% inhibition" of COVID-19. That same day, Defendant Henry Ji, Ph.D. ("Ji"), founder and Chief Executive Officer ("CEO") of Sorrento referred to Sorrento's breakthrough as a "cure."
On this news, Sorrento's stock price rose $4.14 per share, or 158.02%, to close at $6.76 per share on May 15, 2020, on unusually heavy trading volume. The stock continued to increase after hours and opened at $9.98 per share on May 18, 2020, trading at a high of $10.00 per share that same day, which represented an increase of 281.68% from the May 14, 2020 closing price.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Sorrento had overstated the prospects of the STI-1499 antibody for completely inhibiting COVID-19; (ii) the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Company's financial results; and (iii) as a result, the Company's public statements were materially false and misleading at all relevant times.
On May 18, 2020, during pre-market hours, Vital Knowledge Media, an online investor information resource, expressed skepticism over Sorrento's announcement regarding the discovery of the STI-1499 antibody, describing the Company's statements as "very disingenuous" and stating that "some of the narratives around drugs and vaccines" needed to be tempered.
On this news, Sorrento's stock price fell $0.26 per share, or 3.85%, to close at $6.50 per share on May 18, 2020.
On May 19, 2020, during pre-market hours, BayStreet.ca Media Corp ("BayStreet"), a leading Canadian online investor news resource, published an article entitled "Sell Sorento," which alleged that statements made by Defendant Ji about the STI-1499 antibody were misleading. Specifically, the article called into question Ji's representations to Fox News, wherein Ji stated "[w]e want to emphasize there is a cure" and "[t]here is a solution that works 100 percent," noting that "[a]stute investors should recognize that no true biotechnology firm would make such a claim" and "Sorrento may just want to get attention and push up the value of its stock" given that "[i]ts balance sheet is poor with a debt/equity of 2 times." The article ultimately concluded by calling the Company's stock "speculative" and cautioned investors to "[a]void."
On this news, Sorrento's stock price fell $1.08 per share, or 16.62%, to close at $5.42 per share on May 19, 2020.
On May 20, 2020, Hindenburg Research ("Hindenburg") published a report (the "Hindenburg Report") doubting the validity of Sorrento's claims and calling them "sensational," "nonsense" and "too good to be true." Hindenburg spoke with researchers at Mount Sinai who stated that Sorrento's announcement was "very hyped" and that "nothing in medicine is 100%." The Hindenburg Report also asserted that Sorrento faced significant solvency concerns ahead of its announcement regarding a supposed COVID-19 cure, citing statements by former employees, and asserted that "Sorrento's actions are manipulative at the worst possible time and simply amount to an attempt to shamelessly profiteer off the pandemic."
However, that same day, Defendant Ji appeared on Yahoo! Finance to rebut the Hindenburg Report, stating that "investor[s] suspecting . . . another pump and dump" were wrong and that "when you see a virus is not infecting the healthy cell, you know you have the real deal" and "eventually the market [will] catch up."
On the Hindenburg Report and rebuttal news, Sorrento's stock price closed at $5.70 per share on May 20, 2020, representing a decline of $4.30 per share, or 43.00%, from the Class Period high, on unusually high volume.
Finally, on May 22, 2020, Hindenburg published a post on Twitter, alleging that, moments ago, Defendant Ji had "walked back his comments about having a cure," that Hindenburg "believe[s] this amounts to flagrant securities fraud when compared to his statements to Fox [News] last week," and "encourag[ed] regulators to investigate any stock sales in the interim." Specifically, Hindenburg cited comments Ji made in an interview with BioSpace, an online life science industry news outlet. The BioSpace article stated that in a May 21, 2020 interview with Defendants Ji and Mark R. Brunswick, Ph.D. ("Brunswick"), Ji "insist[ed] that they did not say it was a cure." Ji is quoted as saying:
On this news, Sorrento's stock price closed at $5.07 per share on May 22, 2020, representing a decline of $4.93 per share, or 49.3%, from the Class Period high, on unusually high volume.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
SOURCE: Pomerantz LLP
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