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Sorrento ‘buy’ rating maintained at HCW as new JV to develop targeted cancer therapies

Last updated: 12:44 10 Jul 2015 EDT, First published: 10:44 10 Jul 2015 EDT

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Sorrento currently has three programs in pre-clinical development against cancer

Sorrento Therapeutics (NASDAQ:SRNE) had its “buy” rating reiterated at HC Wainwright which cited a new joint venture the biopharmaceutical company has entered with NantBioScience.

Sorrento entered into the joint venture yesterday with NantBioScience, a company founded by Dr. Patrick Soon-Shiong, to develop novel small molecule therapies against cancer. 

According to the agreement, Sorrento would contribute drug candidates targeting c-myc, HIF-1a, and TRIAL, and $40M in funding, in return for a 40 percent stake. 

This is the fourth collaboration between Sorrento and Dr. Soon-Shiong in the last seven months, following the formation of a joint venture, Nantibody, in December 2014, the license agreement with NantCell in March 2015, and the sale of Cynviloq rights to NantPharma in May 2015. 

Sorrento currently has three programs in pre-clinical development against cancer: 1) fully human therapeutic antibodies derived from the proprietary G-MAB library; 2) antibody drug conjugates using the company’s C-Lock and K-Lock technologies; and 3) Chimeric Antigen Receptor Tumor-attacking Neukoplasts (CAR.TNK) for adoptive NK cell immunotherapies. 

HCW said that with this latest collaboration, Sorrento’s oncology platform now covers the full range of cancer treatments including chemotherapy, targeted therapies, cell-based therapies, and immunotherapy programs. 

“We believe that, if these small molecules are successfully developed, they could not only be used as single-agent treatments but could also be used in innovative combinations with the other therapeutics under development,” analyst Swayampakula Ramakanth said in a research note to investors today. “Though we recognize the potential of these programs, we await clarity regarding the program details before assigning value in our financial models.”

In support of the NantBioScience joint venture, Sorrento also announced an agreement to in-license BC001, a specific inhibitor of HIF-1a, from Globavir Biosciences, a company in which Sorrento is currently invested in, for up to $80M in regulatory and commercial milestone payments. 

HIF-1a is up-regulated in a variety of solid tumors including breast, prostate, and colon cancers, and is known to potentiate cancer cell survival and proliferation in the hypoxic tumor environment. BC001 is able to specifically inhibit HIF-1a at nanomolar concentrations and has demonstrated efficacy at inhibiting tumor growth and vascularization in a preclinical mouse breast cancer model. 

“We expect management to announce the details of the development timeline in the near future,” Ramakanth wrote.

Shares of the San Diego, California-based company has rallied 65 percent this year and were trading at $16.47, down 1.4 percent, at 10:41 a.m. in New York.

 

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