SRNE Chapter 11 Filing
On February 13, the COVID-19 medication and vaccine manufacturer Sorrento Therapeutics (SRNE:NSD) filed for Chapter 11 bankruptcy in a Texas court, causing its shares to fall by over 70%. The filing followed a court judgment that supported the American Arbitration Association’s decision to award damages in the millions of dollars in a legal battle with NantCell and NANTibody.
Despite being a prominent player in the COVID-19 medicine and vaccine research industry, Sorrento’s shares experienced a phenomenal response, with more than 91.8 million shares changing hands compared to the 65-day average of 1 million.
In December, Sorrento stated that the FDA has given their mRNA-based COVID-19 vaccine candidate, which targets Omicron variations, authorization to begin clinical trials. However, the company’s future ambitions have been placed into doubt by the bankruptcy filing.
Scilex Holding Company, a majority-owned subsidiary of Sorrento, also saw a decline in its stock price in response to the news, with SRNE stock shares trading 34% lower. The producer of non-opioid pain treatments had just announced the acquisition of U.S. and Canadian rights to Elyxyb, an FDA-approved treatment for migraines.
Short-sellers and a passionate retail investor base have debated Sorrento’s stock, with Seeking Alpha contributor Kevin Mak dubbing it a “battleground” in January. The bankruptcy filing and consequent share price decline are certain to spark additional discussions and arguments concerning the future of Sorrento and its subsidiary.