Sorrento Pops 8% Pre-Market On FDA Application For Covid-19 Test

Shares of Sorrento Therapeutics spiked 8% in Wednesday’s pre-market trading after the drugmaker filed for emergency use of its COVID-19 test with the US Food and Drug Administration (FDA).

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Specifically, Sorrento (SRNE) announced that the FDA application is for the emergency use authorization (EUA) of its COVI-STIX rapid diagnostic test for the detection of the SARS-CoV-2 virus nucleocapsid antigen in nasal samples of patients.

According to the latest testing results, the COVI-STIX generates results within 15 minutes. A positive detection can be seen within two minutes for patient samples with high viral load. Going forward, Sorrento is evaluating the potential for COVI-STIX using a saliva sample as well.

The COVI-STIX test requires mixing the sample with a buffer and applying it through the cassette, which displays a black line if the viral antigen is detected. This technology is suited for rapid laboratory, point-of-care testing or at-home use, the company said on its website.

Sorrento is a clinical stage, antibody-centric, biopharmaceutical company developing new therapies to treat cancers. In addition, the company is developing potential antiviral therapies and vaccines against coronaviruses, including COVI-GUARD and COVI-AMG, as well as diagnostic tests, including COVI-TRACK and COVI-TRACE.

On a year-to-date basis, Sorrento shares have had a stellar journey, soaring 114% sparked by investor hopes for the development of its COVID-19 therapies and tests, including its COVI-SHIELD, an antibody cocktail treatment.

Sorrento has received one recent Buy rating from Dawson James analyst Jason Kolbert, who published a price target of $21 (191% upside potential).

“We assume that the company successfully develops COVI-SHIELD (and non-opioid Pain Medication, RTX),” Kolbert wrote in a note to investors. “We apply a probability of success of just 50%, but given the size of the indication, the valuation potential for COVID alone is significant. For Sorrento, we additionally apply a 30% discount rate.” (See SRNE stock analysis on TipRanks).