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Proposed Stock Offering Sinks Sorrento Therapeutics Inc (SRNE)

Shares of Sorrento Therapeutics Inc (NASDAQ:SRNE) have fallen 22% in extended-market trading after the biopharmaceutical company announced a proposed public offering of common stock, all of which will be offered and sold by Sorrento. Both Cantor Fitzgerald and FBR will be book  runners of the offering, with the exact pricing and size to be determined. Judging by the market reaction, however, it certainly seems that many investors expect the price of the offering to be at a considerable discount to Wednesday’s closing price of $2.95 per share.

Sorrento Therapeutics’ primary therapeutic focus is oncology, including the treatment of chronic cancer pain. The company’s potential products in the pipeline include Chimeric Antigen Receptor-T Cell programs, resiniferatoxin, and biosimilar/biobetter antibodies clinical development programs.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

According to our data, the smart money wasn’t too bullish on Sorrento in Q4. Of the 742 elite funds we track, 4 funds owned $31.43 million of Sorrento Therapeutics Inc (NASDAQ:SRNE) and accounted for 11.10% of the float on December 31, down from 5 funds and $50.34 million on September 30. In terms of specific activity surrounding Sorrento Therapeutics Inc (NASDAQ:SRNE), Leonard A. Potter‘s Wildcat Capital Management maintained its stake of 2.799 million shares in Q4, while Bihua Chen‘s Cormorant Asset Management started a new stake of 1.9 million shares in the same time period.

The Bottom Line

Sorrento Therapeutics Inc (NASDAQ:SRNE) shares have fallen sharply in extended-market trading due to a proposed stock offering. For more reading, check out ‘11 Most Sold Non Prescription Drugs‘.

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