Good news? Sorrento Therapeutics annouces 2 major catalysts in the past week. The first came on August 19,2020. The company announced it has submitted FDA IND Filing for Covi-Guard neutralizing and high potency antibody against SARS-CoV-2. This is excellent news which shows the company is sticking to strict timelines it has set for itself.
The second catalyst came a day later. On August 20, 2020; Sorrento announced they've entered into a merger agreement to acquire Smartpharm and will work to develop a pipeline of Gene-Encoded therapeutic antibodies. The company will begin by starting with neutralizing antibodies to treat Covid-19 and cancer therapeutics. The merger is expected to commence in the beginning of September 2020.
Some might wonder why the market is slow to react to such positive news? Intriguing question it is, however it wouldn't be the first time a delayed reaction to good news from Sorrento has occured. Most recently, the company announced it was in the process of acquiring a saliva based diagnostic test which was created by a professor at Columbia University. The stock waited a week before the news was spread far and wide and we saw it run to set a new 52-week high.
It is understandable that investors are wary of diving into the stock right away, as recent short and distort tactics have pushed the stock down from recent highs twice this year. Both instances of the stock price declines came on the heels of strategically timed false reports put out by Hindenburg Research citing annonymous sources for their claims. Moreover, Sorrento has fought back this time with a press release on August 12, 2020 stating that it would take action against Hindenburg Research for statements believed intended to manipulate it's stock price.
Therefore, the next bull run for Sorrento could be the Real Deal and possibly your last chance to get into this gem of a company at bargain prices. With Hindenburg on the sidelines for fear of legal action and a cease and desist statement put out by the company, there's little in the way of keeping this stock from soaring. Don't just take my word for it, take a look at institutional buying in the 3rd quater of this year. The smart money is picking up shares left and right. Institutional ownership has increased drastically from the 2Q of around 15% to just under 25% as of the writing of this article.
Why follow the smart money? Well I like to say that institutions are not in the business of losing money, unless you're Lakewood capital and thought it would be a good idea to short Sorrento. Therefore, if the smart money is in, then so shall I be in. I hope the false reports from the shorts haven't discouraged you too much. As they say on the investing message boards: "Do your Due Dilligence and know what you own."