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Sorrento: Breaking Down B. Riley’s New Bullish Call

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Diversifying a portfolio is often cited as a safe investing strategy, but it is also the game plan adopted by Sorrento Therapeutics (SRNE).

This varied approach could provide investors with some unseemly returns over the next 12 months. So claims B Riley analyst Mayank Mamtani.

The 5-star analyst initiated coverage on SRNE with a Buy rating and $26 price target. Should the target be met, investors could pocket gains of 74% over the next 12 months. (To watch Mamtani’s track record, click here)

Driving Mamtani’s optimistic take is the company’s three-pronged opportunity.

“With three shots on goal—therapeutic antibodies for a variety of diseases, including COVID-19; non-opioid pain therapies across multiple indications; and a very early-stage immunotherapy effort—SRNE is well positioned for success,” the analyst said.

Sorrento’s diversified portfolio is in various stages of progress but has multiple catalysts on the horizon.

On the immunotherapy front, the company’s pipeline is based on Sorrento’s proprietary G-MAB library and remains mostly in the early stages of development, while on the Covid-19 battlefield, the company is taking the fight to the pandemic from almost every possible angle. From diagnostics via rapid test COVI-STIX for which it has already filed for an EUA (emergency use authorization) to neutralizing antibody treatments such as COVI-AMG (STI-2020), to “targeted therapies aimed at reversing the course of severe C-19 disease— led by allogeneic adipose-derived mesenchymal stem cells (COVI-MSC) and abivertinib.”

Only last week, Sorrento reported positive preliminary results from the phase 1b study of COVI-MSC and it is currently designing the Phase 2 study.

The third aspect of Mamtani’s Sorrento’s bull thesis is reserved for its pain product portfolio, which the analyst says has the potential “to be industry leading.”

The “crown jewel” here is bestowed upon resiniferatoxin (RTX), which has been given orphan drug status for the treatment of intractable pain with end-stage cancer. The candidate is currently in Phase 3 testing for OsteoArthritis (OA) knee pain and intractable cancer pain will also enter pivotal studies in 2021.

Alongside the internal pipeline, the company has made “strategic investments” in Celularity and ImmunityBio, which remain “underappreciated.” Via its stake in these cell-based immunotherapy companies, Sorrento has “access to several next-generation platform modalities,” which will further help it to “compete in crowded but high-growth spaces like C-19 and cancer therapeutics.”

Turning back to Wall Street, Mamtani is not the only Street analyst impressed with Sorrento. 3 other recent reviews have all reached the same conclusion – Buy. SRNE's Strong Buy consensus rating is backed by a $28 average price target, suggesting gains of 85% over the next 12 months. (See SRNE stock analysis on TipRanks)

To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.