NEW YORK (TheStreet) -- Sorrento Therapeutics (SRNE) shares are up 15.74% to $13.31 in morning trading on Friday after the biopharmaceutical drug developer announced that NantPharma agreed to acquire its potential cancer treatment Cynviloq in a deal that could potentially reach a value of about $1.3 billion.
NantPharma agreed to purchase Igdrasol, a subsidiary of Sorrento which has been developing Cynviloq in trials. Sorrento will receive $90 million in cash up front for Igdrasol with a potential for up to $1.2 billion in regulatory and sales milestone payments.
"We are extremely pleased with the recent Cynviloq TRIBECA™ study results and excited that Dr. Patrick Soon-Shiong and his NantPharma team plan to expand Cynviloq into multiple cancer indications, as well as combine it with immunomodulatory antibodies and cell therapies from Sorrento's pipeline," said Sorrento CEO Dr. Henry Ji.
"This major transaction will enhance Sorrento's mission of bringing innovative therapies to patients in need quickly and efficiently. It puts our lead program into the hands of a team that has the experience, commitment and resources to develop and launch a major cancer drug. This transaction not only validates our prior Igdrasol acquisition, it also delivers significant financial return, while potentially offering much more in the long run to our shareholders," Ji said.
TheStreet Ratings team rates SORRENTO THERAPEUTICS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SORRENTO THERAPEUTICS INC (SRNE) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."