We are investigating Sorrento Therapeutics, Inc. (SRNE) (“Sorrento” or the “Company”) for potential violations of the federal securities laws.
On May 15, 2020, Sorrento announced that it had discovered an antibody that had “demonstrated 100% inhibition of SARS-CoV-2 virus infection.” On that same day, Henry Ji, founder and Chief Executive Officer of Sorrento referred to Sorrento’s breakthrough as a “cure.” On this news, Sorrento’s stock price increased $4.14 per share to close at $6.76 on May 15, 2020, on unusually heavy trading volume. The Company’s stock price continued to climb after hours and opened at $9.98 per share on May 18, 2020, trading at a high of $10.00 per share that same day, which represented an increase of 281.7% from the May 14, 2020 closing price. Then, on May 20, 2020, Hindenburg Research (“Hindenburg”) issued a report (the “Hindenburg Report”) casting doubt on the validity of Sorrento’s claims and calling them “sensational,” “nonsense” and “too good to be true.” In support of its conclusions, Hindenburg cited discussions with researchers at Mount Sinai, who reportedly characterized Sorrento’s announcement as “very hyped” and stated that “nothing in medicine is 100%.” Finally, on May 22, 2020, BioSpace published an article citing a May 21, 2020 interview with Henry Ji, in which Ji reportedly “insist[ed]” that Sorrento had not characterized its breakthrough as a cure.” On this news, Sorrento’s stock price fell $4.93 per share, or 49.4%, from the Class Period high, closing at $5.07 per share on May 22, 2020.