Will Sorrento Therapeutics Stock Continue To Make Fresh Lows?

BRAZIL – 2020/08/26: In this photo illustration the Sorrento Therapeutics logo seen displayed on a … [+] smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

The stock of Sorrento Therapeutics (NASDAQ: SRNE), a clinical stage biopharma company that develops treatments for cancer and neurodegenerative diseases among others, has seen a decline of 16% over the last month, while it is down 17% over the last five trading days. Actually there were multiple positive developments for the company over the recent weeks. Firstly, the company announced that the U.S. FDA has given clearance to proceed with an early stage clinical trial for Seprehvir – a modified version of the common human herpes simplex virus with an ability to destroy tumor cells and also stimulate anti-tumor patient immune responses. Secondly, the company announced another contract for 10 million COVISTIX tests (for Covid-19) in Mexico. More recently, the company announced that its COVISTIX test can also detect Omicron.

Despite these positive developments, SRNE stock has plunged over the recent days. This can be attributed to the overall perception of the market that the demand for Covid-19 products, including tests, will be much lower in 2022. Although Omicron cases are rising across the globe, the consensus so far, is that it has a lower death rate. Furthermore, COVISTIX is still not approved in the U.S. SRNE stock has been on a volatile ride over the last year or so with its 52-week high of $17.25 and 52-week low of under $5, the levels it is trading at currently.

Given that SRNE stock is down 16% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a decline in SRNE stock over the next month. Out of 581 instances in the last nine years that SRNE stock saw a twenty-one day fall of 16% or more, only 263 of them resulted in SRNE stock rising over the subsequent one month period (twenty-one trading days). This historical pattern reflects 263 out of 581, or about 45% chance of a rise in SRNE stock over the coming month, implying that SRNE stock is best avoided for now, and it may continue to make fresh lows. See our analysis on Sorrento Therapeutics Stock Chance of A Rise for more details.

While SRNE stock may see lower levels going forward, it is helpful to see how its peers stack up. Check out Sorrento Therapeutics Stock Comparison With Peers to see how SRNE stock compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last nine years data

  • After moving -16.5% or more over a five-day period, the stock rose in the next five days on 46% of the occasions.
  • After moving -23.8% or more over a ten-day period, the stock rose in the next ten days on 53% of the occasions
  • After moving -15.6% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 45% of the occasions.

This pattern suggests that there is a higher chances of a decline in SRNE stock in the near term.



Sorrento Therapeutics Stock Return (Recent) Comparison With Peers

  • Five-Day Return: ALNY highest at 5.3%; SRNE lowest at -16.5%
  • Ten-Day Return: TGTX highest at 4.2%; SRNE lowest at -23.8%
  • Twenty-One Days Return: TGTX highest at 13.2%; SRNE lowest at -15.6%

While SRNE stock may see lower levels, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Xylem vs. Merck.

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