Sorrento Provides Manufacturing Support for COVID-19 Treatment; What’s Next?
The battle against COVID-19 is well underway, and now’s the time to send in the big guns. Sorrento Therapeutics (SRNE) is on it, offering both active and passive immunization strategies. As a result, it has received positive investor attention, as demonstrated by its 35% one-month gain.As part of these efforts, the healthcare name, which develops therapies to reduce the malignancy of life-threatening tumors, improves the safety of current treatments and brings solutions to make living with cancer more tolerable, partnered with Celularity. Celularity is a privately-held cell therapeutics company that specializes in transformative allogeneic cellular therapies developed from the postpartum human placenta.Serving as a welcome piece of good news, on April 2, it was revealed that the FDA approved Celularity's Investigational New Drug (IND) application for the use of CYNK-001, its natural killer (NK) cell-based immunotherapy candidate to treat critically and severely ill patients with COVID-19. This means that Celularity can kick off a Phase 1/2 study with up to 86 patients.How does Sorrento play into the collaboration? It will bring its manufacturing might to the table. As per the terms of the agreement, Celularity can make use of existing capacity in Sorrento’s top of the line cGMP cell therapy manufacturing facilities in San Diego, CA.Weighing in on SRNE for H.C. Wainwright, analyst Raghuram Selvaraju notes, “The addition of Sorrento’s cGMP manufacturing capacity is slated to facilitate the rapid scale-up and sustained production of Celularity’s novel CYNK-001 cell therapy for use in its Phase 1/2 clinical study in COVID-19 infected adults, as well as its existing clinical programs in acute myeloid leukemia (AML), multiple myeloma (MM) and glioblastoma multiforme (GBM).”Additionally, Selvaraju believes that SRNE’s multi-faceted COVID-19 development pipeline contains several advantages. Along with the natural killer cell therapy, the company is advancing its COVIDTRAP ACE2-Fc protein, which binds to the S1 domain of the SARS-CoV-2 virus’ spike protein and is designed to block the virus from binding and infecting respiratory epithelial cells, a next-generation, gene-encoded antibody vaccine against COVID-19, which is being developed in conjunction with SmartPharm Therapeutics and its ACE-MAB fusion protein from its collaboration with Mabpharm. If that wasn’t enough, the pipeline also includes a vaccine candidate, STI-6991.Based on all of the above, Selvaraju stayed with the bulls, leaving a Buy rating and $ 24 price target on the stock. This target puts the upside potential at an astounding 866%. (To watch Selvaraju’s track record, click here)Looking at the consensus breakdown, it has been relatively quiet when it comes to other analyst activity. Only one other analyst has published a recent review, but it was also bullish. Therefore, the consensus rating is a Moderate Buy. The $ 22.50 average price target suggests 803% upside potential. (See Sorrento 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.