Shares of Sorrento Therapeutics (NASDAQ:SRNE) are rising sharply on Monday and were up by 10.8% as of 1:43 p.m. EDT after jumping by as much as 14.6% earlier in the trading session. The biopharmaceutical company did not report any news, but perhaps the market is responding to comments made by Mad Money host Jim Cramer regarding Sorrento Therapeutics on his show on Friday, April 23.
Jim Cramer’s comments hardly painted a bullish picture of Sorrento Therapeutics. During the lightning round bell — when he gives quick and short answers to callers’ questions on various stocks — Cramer said the following: “There’ll be a news release and it’ll spike 3-4 points … and that’ll give you a chance to get out.” Note that Sorrento Therapeutics is a clinical-stage biopharmaceutical company with a rich pipeline that includes more than half a dozen coronavirus-related programs, among many others.
It wouldn’t be surprising if some news concerning one of the company’s pipeline candidates sent its stock price higher. However, if that happens, Cramer thinks it would provide a good opportunity for investors to “get out.” This comment suggests that while Cramer believes there is some upside potential for the stock (which may help explain today’s jump), he doesn’t think Sorrento Therapeutics is a good long-term bet.
For what it’s worth, I am also of the opinion that Sorrento Therapeutics isn’t a good pick, at least not for investors focused on the long game. Sure, the healthcare company does have a raft of pipeline candidates, and a couple of its COVID-19 diagnostic test kits have earned emergency use authorization.
But with most of its experimental treatments still in their early testing phases, Sorrento Therapeutics has a lot to prove. That is especially true considering its stock price has jumped by 229% in the past 12 months in part thanks to its coronavirus-related efforts. I wouldn’t even consider initiating a position in Sorrento Therapeutics until the company produces more positive results from clinical trials, especially late-stage studies.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.