Sorrento Therapeutics Stock Nosedives After Filing Bankruptcy Paperwork

  • COVID-19 drug and vaccine developer Sorrento Therapeutics Inc (NASDAQ: SRNE) is filing for bankruptcy following a lengthy legal dispute.

  • The biotech submitted its Chapter 11 filing, per an SEC filing, after losing an arbitration battle to billionaire Patrick Soon-Shiong’s NantPharma LLC in December 2022.

  • The filing comes after a court ruling upheld a decision of the American Arbitration Association to award millions of dollars in damages related to a legal dispute with NantCell and NANTibody.

  • In April 2019, Sorrento filed an action in the Los Angeles Superior Court derivatively on behalf of Immunotherapy NANTibody LLC against NantCell Inc and Patrick Soon-Shiong, among others, related to several breaches in June 2015.

  • The parties are currently engaged in discovery in the Derivative Action, with a jury trial likely in 2023. In 2020, the company additionally filed a legal action against Patrick Soon-Shiong in the Court, asserting claims for fraudulent inducement and common law fraud, alleging that, among other things, Dr. Soon-Shiong acquired the drug Cynviloq to halt its progression to the market.

  • Related: Sorrento Touts Positive Early-Stage Trial Data From Oral COVID-19 Therapy.

  • The arbitrator awarded NantCell nearly $156.8 million and NANTibody close to $17 million.

  • In December 2022, the arbitrator in the Cynviloq Arbitration issued an award granting contractual damages of $125 million to the company, reflecting the value of lost milestone payments for the approval of Cynviloq for breast and lung cancer.

  • Price Action: SRNE shares are down 55.60% at $0.42 on the last check Monday.

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