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Sorrento Therapeutics, Inc.

Case Details

Class Period: May 15, 2020 - May 22, 2020
Date Filed: May 26, 2020
Case Number: 3:20cv00966
Jurisdiction: California Southern District Court
Days Left to
Seek Plaintiff:
24

Case Summary

The lawsuit alleges that Sorrento failed to disclose that: (i) the Company’s initial finding of “100% inhibition” in an in vitro virus infection will not necessarily translate to success or safety in vivo, or in person; (ii) the Company’s finding was not a “cure” for COVID-19; and (ii) as a result of the foregoing, the lawsuit alleges that Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis in violation of section 10(b) of the Securities Exchange Act of 1934. 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, Defendant Henry Ji, founder and Chief Executive Officer of Sorrento referred to Sorrento’s breakthrough as a “cure.” On this news, Sorrento shares increased $4.14 to close at $6.76 on May 15, 2020. The stock continued to increase after hours and opened at $9.98 on May 18, 2020, trading at a high of $10.00 that same day, which represented an increase of 281.7% from the May 14, 2020 closing price. On May 20, 2020, Hindenburg Research issued a report doubting the validity of Sorrento’s claims and calling them “sensational,” “nonsense” and “too good to be true.” On this news, Sorrento shares closed at $5.70 per share on May 20, 2020, representing a decline of $4.30, or 43.0%, from the Class Period high. Finally, on May 22, 2020, BioSpace published an article stating that in a May 21, 2020 interview with Defendants Ji and Brunswick, Ji “insist[ed] that they did not say it was a cure.” On this news, Sorrento shares closed at $5.07 per share on May 22, 2020, representing a decline of $4.93, or 49.4%, from the Class Period high.

 

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