Sorrento Therapeutics Inc (NASDAQ: SRNE) has recaptured the attention of Wallstreet after the company obtained authorisation to commence Phase 2 trials for its COVID-19 experimental treatment COVI-DROPS. COVIDROPS is a intranasal formulation of Sorrento’s COVI-AMG™ neutralizing antibody that aims to boost immunity by blocking the infection and spread of the virus.
Sorrento holds a dynamic portfolio of COVID-19 treatments/testing kits in the pipeline. In addition, the company holds an arsenal of therapeutic developments in the Immunotherapy, Pain and Lymphatic Delivery fields. Sorrento’s diverse pipeline has not gone unnoticed on Wallstreet, with an average 12 month price target suggesting a 239% upside.
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Why are investors excited about SRNE stock?
Over the past month, Sorrento Therapeutics have made serious ground in the progression of a number of treatments and testing kits in their pipeline. The company has announced COVI-MSC and COVIDROPS have recieved regulatory approval to commence Phase 2 trials. Analyst Raghuram Selvaraju from HC Wainwright noted that COVI-MSC could be granted Emergency Use Authorization (EUA) before the end of the year. This is assuming the results from Phase 2 trial are positive. See the full Sorrento Therapeutics pipeline here.
Analysts are bullish on SRNE stock
Across the board of 3 Wallstreet analysts, the general consensus is overwhelmingly bullish. The average price target currently stands at $30.33 a share, maintaining a healthy upside of 239.38%. Here are the following targets from Wallstreet:
B. Riley Securities – Analyst Mayank Mamtani initiated coverage with a 12 month price target of $26 a share.
Alliance Global Partners – Analyst James Molloy initiated coverage with a Buy rating. Alliance currently hold the street high price target of $35 a share.
H.C Wainwright – Analyst Raghuram Selvaraju, Ph.D initiated coverage with a Buy rating and a price target of $30 a share. In addition, the analyst noted investors should be aware of the “near-term value drivers from Sorrento’s extensive portfolio of assets targeting the complications caused by COVID-19 infection.”
Revenue forecast for SRNE
Firstly, in the first quarter of 2021 Sorrento generated $14.25 Million in revenue, with close to an even split between their product and service revenues. For the remainder of 2021 analysts expect the company to generate $1.09 Billion (according to Yahoo Finance data). However, depending on the results of the COVID-19 treatments/testing kits in the pipeline analysts see revenue reaching as high as $3 Billion. In similar fashion the lower end targets estimate revenue as low as $78 Million for 2021. As we can see the standard deviation between the high end range targets and low range are drastically far apart.
Furthermore, analysts estimate the company to generate a similar amount of revenue in 2022 with an average target of $1.09 Billion. In our previous article, we discussed Analyst James Malloy from Alliance Global Partners noted two COVID testing kits (COVI-STIX & COVID-TRACK) which are on track for EUA approval, could provide $500 million in sales each in 2021.
In summary, it is clear Sorrento’s diverse portfolio of treatments and COVID-19 testing kits has been noticed on Wallstreet. Furthermore, SRNE still maintains a average price target 239% above the current trading price. As a result, we can see investors beginning to build momentum around the stock. However, it is important to note SRNE stock has faced high levels of volatility as a result of their COVID-19 trials. Therefore, we can expect similar levels of volatility to continue into 2022.
Written by Tyger Fitzpatrick at Youth Investment Group
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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