Sorrento Therapeutics Inc (SRNE)

[dia76ca]

Alliance Global initiated coverage today with. Listed as a BUY. Target is $35

We are initiating coverage of Sorrento Therapeutics (SRNE) with a Buy rating and
a $35 price target. SRNE combines one of the most active and promising pipelines
in the COVID space with a potentially transformative non-opioid pain pipeline, and
adds in a deep oncology pipeline. Most of SRNE's pipeline has significant catalysts
over the next 1-4 quarters, with multiple late stage clinical data read-outs and multiple
potential Emergency Use Authorization (EUA) launches as well. In their COVID pipeline
SRNE has 3 focus areas: 1) Diagnostics - with 2 accurate rapid-turnaround antigen and
antibody tests; 2) Therapeutics - with multiple monoclonal antibody (mAbs) neutralizing
antibodies and a 3-mAb cocktail in development to target potential mutations; and 3)
Rescue Treatments - with a re-purposed oncology compound for Acute Respiratory
Distress Syndrome (ARDS) COVID patients, and a BTK inhibitor also to treat ARDS. In
their pain portfolio SRNE has 2 novel non-opioid pain compounds targeting 3 separate
pain states in osteoarthritis (OA) pain, cancer pain, and sciatica pain that could each
help dramatically reduce the overuse of ineffective and addictive long-acting opioids. In
their immuno-oncology pipeline SRNE has multiple late stage shots on goal including
Abivertinib for NSCLC & B-cell lymphomas with Phase 3 data in 1H21, as well as a
next generation DAR-T platform for multiple myeloma and an oncolytic virus platform
for solid tumors. We are initiating coverage with a Buy rating and a $35 price target
based on a sum-of-the-parts, primarily based on our expectations for the company's
COVID pipeline. We value SRNE's COVID pipeline at $21.50/share altogether, the nonopioid
pain pipeline at $6/share altogether, and the Immuno-oncology pipeline at $4.50/
share altogether. We value the remaining assets and cash, less long term debt (end
'22E) at $3/share for our $35 price target.