Will a single antibody be enough to stomp out a COVID-19 infection? Sorrento Therapeutics (SRNE) says no. Rather, the company believes that an antibody cocktail could be capable of providing protection against a SARS-CoV-2 coronavirus infection, with the cocktail remaining effective should the virus mutate.
To find the select few with the ability to block the S1 protein’s interaction with human angiotensin-converting enzyme 2 (ACE2), the receptor used for viral entrance into human cells, SRNE assessed billions of antibodies. Now, after announcing yet another monoclonal antibody (MaB), STI-4938 (COVIDTRAP), was able to inhibit SARS-CoV-2 viral infection in vitro, some members of the Street think SRNE has what it takes to provide a weapon against the deadly virus.
Dawson James analyst Jason Kolbert is standing squarely in the bull camp. He points out that COVIDTRAP, an ACE2-Fc decoy protein, binds firmly to the SARS-CoV-2 virus’ spike protein, with SRNE already getting encouraging feedback from the FDA based on the rapid development.
Additionally, Kolbert notes that this positive development comes on the heels of encouraging results for its other antibody, STI-1499 (COVI-SHIELD), which was able to completely block the SARS-CoV-2 virus. The analyst added, “What was also equally impressive was the low dose, which suggests the antibody ‘fits’ its target extraordinarily well and, as such, can work at a very low dose. This could translate into the ability to scale up rapidly to millions of treatments at a very effective cost of goods.”
With two promising antibodies, SRNE has the basis for a COVID-19 cocktail. Kolbert added, “Through the U.S.’s Project Warp Speed, it’s possible we could see this cocktail move rapidly to commercialization.”
Speaking to its manufacturing capabilities, management has said it can produce up to two hundred thousand doses per month, with it currently planning on producing a million doses. The company also thinks it has the capacity to manufacture tens of millions of doses in a short period of time to meet the large demand.
While Kolbert puts the probability of success at only 50%, “given the size of the indication, the valuation potential for COVID alone is large.”
As a result, the analyst left both his Buy recommendation and $24 price target unchanged. This target conveys his confidence in SRNE’s ability to soar 483%. (To watch Kolbert’s track record, click here)
What does the rest of the Street have to say about SRNE? Only one other analyst has published a review recently, but it was also bullish. At $24, the average price target matches Kolbert’s. (See Sorrento stock analysis on TipRanks)
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