Sorrento Gaining Ground on Debt Repayment, Senior Analyst Says Buy
Sorrento Therapeutics shares (SRNE) edged up 5% in after-hours trading on Friday, after the company said it had now prepaid all of its outstanding term loans on June 12, 2020.
The debt, consisting of an initial term loan of $ 100 million and an additional term loan of $ 20 million from funds affiliated with Oaktree Capital Management, LP, was incurred in November 2018.
The news follows biopharma’s filing of a prospectus supplement dated April 27 for a public offering of up to $ 250 million of its common stock. The shares are being sold through Alliance Global Partners, alongside a 36-month purchase agreement with Arnaki Ltd, a British Virgin Islands company, for up to $ 250 million.
At the same time, Sorrento terminated a share distribution agreement, dated October 1, 2019 with JMP Securities LLC, covering shares valued at up to $ 75 million. During the term of the deal, the company ultimately raised $ 7.4 million.
Sorrento shares are currently trading up 37% year-to-date, and analysts have a Moderate purchase consensus on the outlook for the title. The average analyst price target of $ 24 indicates significant upside potential from current levels. (See the analysis of SRNE shares on TipRanks).
Sorrento recently revealed that in preclinical testing, the company’s monoclonal antibody (MaB), STI-4938, codenamed COVIDTRAP, inhibited SARS-CoV-2 viral infection in vitro.
Sorrento also has another antibody in development, STI-1499 (COVI-SHIELD), which recently showed promising in vitro results as it was able to completely block the SARS-CoV-2 virus.
While it is still early days for both antibodies, HC Wainwright analyst Ram selvaraju is encouraged by the positive results. “We continue to believe that Sorrento could position itself as a leader in the fight against the pandemic, with multiple potential therapeutic approaches in its pipeline alongside the COVI-TRACK IVD antibody test,” said the analyst.
Indeed, its COVI-TRACK in vitro The diagnostic test kit enables independent detection of antibodies in patients exposed to the SARS-CoV-2 virus. In eight minutes or less, the SRNE says its test reveals whether someone has been exposed or potentially had coronavirus, and then created antibodies to fight the infection.