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Sorrento: New Platform Further Underscores the Bull Case
Stock Analysis & Ideas

Sorrento: New Platform Further Underscores the Bull Case

Not content with boasting a pipeline bursting at the seams with multiple candidates in various stages of development, Sorrento Therapeutics (SRNE) has now added another arrow to the quiver.

On Monday, the company announced it is forming a new subsidiary called ADNAB. The new entity will advance and commercialize a technology platform which was developed by the Mayo Clinic to produce antibody-drug conjugates (ADC). The platform has been exclusively licensed to Sorrento.

An immune complex of nanoparticle albumin-bound drug products, which are non-covalently connected to tumor-targeting monoclonal antibodies (mAb’s), ADNAB was developed by Svetomir Markovic, M.D., Ph.D., and his team of researchers at Mayo Clinic.

Nine potential ADNAB candidates have been created by the team, two of which are currently in the process of enrolling patients for an FDA-supervised, human trial.

The ADNAB platform will make use of Sorrento’s G-MAB library of fully humanized monoclonal antibodies, which makes itwell-placed to deliver an extensive collection of product candidates to combat liquid and solid tumors.

Sorrento, however, believes the platform has potential to be effective in areas other than oncology and work has already begun on developing it for auto-immune diseases.

Later this year, the company intends to file several Investigational New Drug (IND) applications and will also apply for Breakthrough Therapy designation in both ovarian and endometrial cancers.

H.C. Wainwright analyst Ram Selvaraju thinks the new entity is good news for investors.

In our view, ADNAB’s formation merely underscores Sorrento’s expertise and commitment to developing next-generation antibody-based drugs using a variety of disruptive, cutting-edge technology platforms,” the 5-star analyst said. “We also note that entities like ADNAB could, if successful, be spun out of Sorrento into independent listed companies, thus unlocking further shareholder value.”

All in all, Selvaraju keeps a Buy rating on SRNE shares backed by a $30 price target. Investors could be pocketing gains of ~82%, should the analyst’s forecast work out as planned. (To watch Selvaraju’s track record, click here)

Selvaraju’s colleagues are just as bullish; 3 additional Buys add up to a Strong Buy consensus rating. The analysts project ~70% of upside over the next 12 months, given the average price target clocks in at $28. (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.

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