Sorrento Therapeutics craters on stock offering

April 13, 2017 4:25 PM PT

Sorrento Therapeutics lost nearly 40 percent of its value Thursday after the San Diego biotech company priced a public stock offering. The company is selling 23,625,084 shares for $2.00 each.

Shares of Sorrento Therapeutics, which is developing cancer therapies, closed at $1.80, down $1.15 or 39 percent.

All of the shares are being offered by the company. The underwriters have an option to buy up to 3,543,763 more shares, for up to 30 days.

The offering is made under a shelf registration statement declared effective by the Securities and Exchange Commission on December 3, 2014. The preliminary prospectus supplement can be found at j.mp/sorrentotx.

Shares closed Jan. 3 at $5.05 each. Over the last year, shares have reached a high of $8.35 and a low of $1.75.

Among its products under development, the company is making cellular immunotherapies for cancer. It has developed versions of the breakthrough CAR T cell immunotherapy and other cell-based cancer therapies.

But while that approach currently requires genetic engineering of cells taken from the patient, Sorrento Therapeutics’ version uses “off-the-shelf” immune cells. This is expected to lower costs by employing economies of scale.

In April, Sorrento Therapeutics said its CAR T cell therapy for colorectal cancer that had metastasized to the liver passed a Phase 1b trial, after previously passing a Phase 1 trial.

Last June, the company announced a cancer immunotherapy deal with Chinese drug maker Shenyang Sunshine Pharmaceutical Co.

The company’s most clinically advanced drugs are four monoclonal antibodies that have completed Phase 3 trials in China, according to its Web site. These are “biosimilar” drugs based on four brand-name monoclonals: Erbitux, Remicade, Xolair, and Simulect. Biosimilars can be sold when patent exclusivity for the original monoclonal has expired.

Cantor Fitzgerald & Co. is lead book-running manager for the offering. FBR Capital Markets & Co. is a joint book-running manager. Oppenheimer & Co. and Aegis Capital Corp. are co-lead managers and Joseph Gunnar & Co., Rodman & Renshaw and Roth Capital Partners are co-managers.

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