What’s Next For Sorrento Therapeutics Stock After A Large 50% Rise In A Month?

The stock price of Sorrento Therapeutics (NASDAQ: SRNE), a clinical stage biopharma company that develops treatments for cancer and neurodegenerative diseases among others, has seen a solid 49% rise over the last twenty-one trading sessions, led by multiple positive developments. The company last week announced that U.K.’s Medicines and Healthcare Products Regulatory Agency has authorized Sorrento to begin a phase 2 efficacy trial of its COVI-DROPS, an experimental drug to combat Covid-19. Despite a rise in vaccination rates for Covid-19, there is still a need for an approved drug to treat the infection, making this announcement important and positive for Sorrento. If successful, Sorrento will look for regulatory approvals in other countries as well. Earlier this month, the company announced completion of the Acea Therapeutics acquisition. Acea’s Abivertinib is a late stage drug that has shown positive clinical trial results in non-small cell lung cancer and B-Cell Lymphoma.

Now that SRNE stock has seen a rise of 49% in twenty-one trading days, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a higher chance of a decline in SRNE stock over the next month. Out of 260 instances in the last ten years that Sorrento stock saw a twenty-one day rise of 49% or more, 140 of them resulted in SRNE stock falling over the subsequent one month period (twenty-one trading days). This historical pattern reflects 140 out of 260, or about 54% chance of a decline in SRNE stock over the coming month. Also, the stock has seen a large rally in a short period of time, and it may be prudent for long-term investors to wait for a dip to buy SRNE stock. See our analysis on Sorrento Therapeutics Stock Chances of Decline for more details.

Twenty-One Days: SRNE 49%, vs. S&P500 3.7%; Outperformed market

(10% likelihood event; 46% probability of rise over next 21 days)

• Sorrento Therapeutics stock rose 49% the last twenty-one trading days (one month), compared to the broader market (S&P500) rise of 3.7%
• A change of 49% or more over twenty-one trading days is a 10% likelihood event, which has occurred 260 times out of 2516 in the last 10 years
• Of these 260 instances, the stock has seen a positive movement over the next twenty-one trading days on 120 occasions
• This points to only a 46% probability for the stock rising over the next twenty-one trading days

Ten Days: SRNE 26%, vs. S&P500 1.4%; Outperformed market

(12% likelihood event; 42% probability of rise over next 10 days)

• Sorrento Therapeutics stock rose 26% over the last ten trading days (two weeks), compared to the broader market (S&P500) rise of 1.4%
• A change of 26% or more over ten trading days is a 12% likelihood event, which has occurred 292 times out of 2517 in the last 10 years
• Of these 292 instances, the stock has seen a positive movement over the next ten trading days on 122 occasions
• This points to only a 42% probability for the stock rising over the next ten trading days

While SRNE stock see a drop, 2020 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 Johnson & Johnson vs Quest Diagnostics.

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