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5		-= Overview =
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7		-At its core, Sorrento (SRNE) Therapeutics is an antibody-centric company and leverage its proprietary G-MAB™ library and targeted delivery modalities to generate the next generation of cancer therapeutics. The company's validated fully human antibodies include PD-1, PD-L1, CD38, CD123, CD47, c-MET, VEGFR2, CCR2, OX40, TIGIT and CD137 among others. The company's vision is to leverage these antibodies in conjunction with proprietary targeted delivery modalities to generate the next generation of cancer therapeutics. These modalities include proprietary antibody drug conjugates (“ADCs”), bispecific approaches, as well as TCR-like antibodies. With LA Cell, Inc. (“LA Cell”), its joint venture with City of Hope, its objective is to become the global leader in the development of antibodies against intracellular targets such as STAT3, mutant KRAS, MYC, p53 and TAU. Additionally, Sorrento Therapeutics has acquired and are assessing the regulatory and strategic path forward for its portfolio of late stage biosimilar/biobetter antibodies based on Erbitux®, Remicade®, Xolair®, and Simulect® as these may represent nearer term commercial opportunities.{{footnote}}https://fintel.io/doc/sec-srne-sorrento-therapeutics-10k-2018-march-16-17951{{/footnote}}
	7	+= Summary =
8	8
9		-Although the company intend to retain ownership and control of product candidates by advancing their development, the company regularly also consider, (i) partnerships with pharmaceutical or biopharmaceutical companies and (ii) license or sale of certain products in each case, in order to balance the risks and costs associated with drug discovery, development and commercialization with efforts to maximize its stockholders’ returns. The company's partnering objectives include generating revenue through license fees, milestone-related development fees and royalties as well as profit shares or joint ventures to generate potential returns from its product candidates and technologies.
	9	+* Sorrento is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain, autoimmune disease and COVID-19.
	10	+* Sorrento recently acquired Virex Health and taken majority ownership of Zhengzhou Fortune Bioscience Co.
10	10
11		-= Strategy =
12	12
13		-The company's primary goal is to deliver clinically meaningful therapies to patients and their families, globally. In immuno-oncology, the company aim to deliver next generation therapeutics to transform cancer into a treatable or chronically manageable disease. Across all its programs, Sorrento Therapeutics is focused on addressing severe unmet medical needs where its therapies can change the natural course of disease or significantly improve a patient’s quality of life. The company's core strategic objectives and resources are focused on:
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15		-1. Advancing its lead product candidates through the clinic. These include the initiation of Phase I, Phase II and potentially accelerated approval trials for its cellular therapies, oncolytic virus immunotherapy and RTX in oncology and/or hematology indications.
16		-1. Continuing the development of its preclinical programs with the aim of filing several new INDs over the next 5 years. These include moving its checkpoint inhibitors from its core antibody portfolio into the clinic with several of its strategic partners, while internally focusing on advancing its transformational intracellular targeting antibodies (“iTAbs”), with LA Cell.
17		-1. Collaborating with key opinion leaders and leading clinical and research institutes to enhance its preclinical and clinical development plans. The company currently have such agreements in place with the Karolinska Institute, The Scripps Research Institute (“TRSI”), the NIH, City of Hope, Tufts Medical School, and Roger Williams Medical Center, among others.
18		-1. Manufacturing its preclinical and clinical materials in-house. Sorrento Therapeutics has established a quality control and quality assurance program, which includes a set of standard operating procedures and specifications designed to ensure that its products are manufactured in accordance with current good manufacturing practices (“cGMPs”), and other applicable domestic and foreign regulations.
19		-1. Exploring strategic relationships to share in the risk reward of its core franchises and to derive near term value from its non-core franchise, such as its pain franchise. The company's partnering objectives include generating revenue through license fees, milestone-related development fees and royalties as well as profit shares or joint ventures to generate potential returns from its product candidates and technologies.
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21		-**Segment Information and Financial Information about Geographic Areas**
	15	+Sorrento is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease and COVID-19.
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23		-Sorrento Therapeutics has determined that the company operate in one operating segment. See Note 3 to the notes to its consolidated financial statements accompanying this Form 10-K for further information. All of its revenues from continuing operations are essentially attributed to the United States. All of its long-lived assets are essentially located within the United States.
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25		-**Pipeline and Product Candidates** An overview of its core programs is provided in the table below:
	18	+Recent developments
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27		-[[image:https://www.sec.gov/Archives/edgar/data/850261/000156459017004944/g2017032201495452347322.jpg]]
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29		-= Recent Developments =
	21	+Sorrento Successfully Completes Phase 1 Study, an Oral Treatment and Prevention of COVID-19
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31		-**Binding Term Sheet Regarding Acquisition of Semnur Pharmaceuticals, Inc.**
	23	+[[https:~~/~~/investors.sorrentotherapeutics.com/news-releases/news-release-details/sorrento-successfully-completes-phase-1-study-and-proceeding>>url:https://investors.sorrentotherapeutics.com/news-releases/news-release-details/sorrento-successfully-completes-phase-1-study-and-proceeding]]
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33		-On August 15, 2016, the Company’s subsidiary, Scintilla Pharmaceuticals, Inc. (“Scintilla”) and Semnur Pharmaceuticals, Inc. (“Semnur”) entered into a binding term sheet (the “Semnur Binding Term Sheet”) setting forth the terms and conditions by which Scintilla will, through a subsidiary, purchase all of the issued and outstanding equity of Semnur (the “Semnur Acquisition”). The Semnur Binding Term Sheet provides that, contingent upon the execution of a definitive agreement between the parties (the “Definitive Agreement”) and subject to certain conditions, Scintilla will, at the closing of the Semnur Acquisition (the “Semnur Closing”), make an initial payment of $60.0 million (the “Initial Consideration”) to the equityholders of Semnur in exchange for all of the issued and outstanding equity of Semnur. The Initial Consideration will consist of $40.0 million in cash and $20.0 million in shares of its common stock (the “Semnur Stock Consideration”). The Semnur Binding
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35		-Term Sheet also provides that the number of shares of its common stock comprising the Semnur Stock Consideration will be calculated based on the volume weighted average closing price of its common stock for the 30 consecutive trading days ending on the date that is three days prior to the execution of the Definitive Agreement. $6.0 million of the Semnur Stock Consideration will be placed into escrow, a portion of which will be held for a period of up to six or 12 months to secure certain obligations of Semnur and its equityholders in connection with the Semnur Acquisition. At the Semnur Closing, the company will enter into a registration rights agreement with certain of Semnur’s equityholders, pursuant to which the company will agree to seek the registration for resale of the shares of its common stock comprising the Semnur Stock Consideration.
	26	+Oct. 17, 2022; Sorrento Successfully Completes Phase 1 Study and Is Proceeding to Implement Global Registrational Trials with STI-1558, an Oral Mpro Inhibitor as a Standalone Oral Treatment and Prevention of COVID-19 without the Need for a Ritonavir Booster. The study done on n 58 healthy volunteers.
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37		-In addition to the Initial Consideration, Scintilla may pay additional consideration of up to $140.0 million to Semnur’s equityholders upon Scintilla’s completion of certain clinical studies and trials, receipt of certain regulatory approvals and the achievement of certain sales targets following the Semnur Closing.
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39		-Under the Semnur Binding Term Sheet, either party may terminate the Semnur Binding Term Sheet.
	29	+A phase 1 trial in participants infected with SARS-CoV-2 has been initiated in China (MPR-COV-101CN), and a total 56 participants will be enrolled to assess the safety, tolerability, and efficacy in 3 MAD dose cohorts (300 mg BID, 600 mg BID and 800 mg BID daily for 7.5 days). Eight participants infected with SARS-CoV-2 in the first MAD dose cohort of 300 mg BID have been dosed.
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41		-As of June 30, 2017, the Semnur Acquisition had not closed. The final terms of the Semnur Acquisition are subject to the negotiation and finalization of the Definitive Agreement and any other agreements relating to the Semnur Acquisition, and the material terms of the Semnur Acquisition are expected to differ from those set forth in the Semnur Binding Term Sheet. In addition, the Semnur Closing will be subject to various customary and other closing conditions.
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43		-A member of its board of directors is Semnur’s Chief Executive Officer and a member of Semnur’s Board of Directors and currently owns approximately 5.5% of Semnur’s total outstanding capital stock. Joseph Gunnar & Co., LLC provided an opinion to its board of directors opining that the consideration to be paid by Scintilla in the Semnur Acquisition is fair, from a financial point of view, to its stockholders.
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45		-**Public Offering of Common Stock**
	33	+Acquired a Majority Ownership in Zhengzhou Fortune Bioscience
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47		-On April 13, 2017, the company entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co., as representative of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “Offering”) of 23,625,084 shares of its common stock. The public offering price was $2.00 per share of its common stock and the Underwriters agreed to purchase the shares of its common stock pursuant to the Underwriting Agreement at a price of $1.8571 per share. Under the terms of the Underwriting Agreement, the company also granted to the Underwriters an option, exercisable in whole or in part at any time for a period of 30 days from the date of the closing of the Offering, to purchase up to an additional 3,543,763 shares of its common stock at the public offering price.
	35	+[[https:~~/~~/investors.sorrentotherapeutics.com/news-releases/news-release-details/sorrento-announces-it-has-acquired-majority-ownership-diagnostic>>url:https://investors.sorrentotherapeutics.com/news-releases/news-release-details/sorrento-announces-it-has-acquired-majority-ownership-diagnostic]]
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49		-On April 19, 2017, the Offering was completed and resulted in net proceeds of approximately $43.5 million (excluding any sale of shares of common stock pursuant to the option granted to the Underwriters), after deducting underwriting discounts and commissions and estimated Offering expenses payable by it.
	37	+Feb. 17, 2022; Sorrento Therapeutics, Inc. announced the acquisition of a majority ownership of Zhengzhou Fortune Bioscience Co., Ltd. (“FortuneBio”). This acquisition is in response to dramatically increasing demands worldwide and planned product build-up in anticipation of potential additional approvals for Sorrento’s COVISTIXTM COVID-19 VIRUS Rapid Antigen Detection Test.
50	50
51		-**Acquisition of Virttu Biologics Limited**
52	52
53		-On April 27, 2017, the company entered into a Share Purchase Agreement (the “Virttu Purchase Agreement”) with TNK Therapeutics, Inc., its majority-owned subsidiary (“TNK”), Virttu Biologics Limited (“Virttu”), the shareholders of Virttu (the “Virttu Shareholders”) and Dayspring Ventures Limited, as the representative of the Virttu Shareholders, pursuant to which, among other things, TNK acquired from the Virttu Shareholders 100% of the outstanding ordinary shares of Virttu (the “Virttu Acquisition”).
	40	+FortuneBio specializes in the manufacture of lateral flow diagnostic tests with numerous approved products marketed in over 20 countries for pregnancy tests, fecal occult blood test, and drug abuse test kits. FortuneBio has an ISO 13885 facility and is capable of producing tens of millions of lateral flow tests per month. FortuneBio is currently expanding production capabilities to meet COVISTIX demand worldwide.
54	54
55		-Virttu focuses on the development of oncolytic viruses that infect and selectively multiply in and destroy tumor cells without damaging healthy tissue. Its lead oncolytic virus candidate, Seprehvir, infects and replicates in cancer cells selectively, leaving normal cells unharmed.
56	56
57		-Under the Virttu Purchase Agreement, the total amount of the consideration payable to the Virttu Shareholders in the Virttu Acquisition is equal to $25 million, less Virttu’s net debt (the “Virttu Base Consideration”). An additional $10 million contingent consideration is payable upon the achievement of certain regulatory milestones (as described below) (the “Regulatory Approval Consideration”).
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59		-At the closing of the Virttu Acquisition (the “Closing”), the company issued to the Virttu Shareholders consideration valued at approximately $2.2 million, which consisted primarily of an aggregate of 797,081 shares (the “Virttu Closing Shares”) and approximately $557,000 in cash (the “Cash Consideration”). The issuance of the Closing Shares and the payment of the Cash Consideration satisfied TNK’s obligation to pay 20% of the Virttu Base Consideration at the Closing. Under the terms of the Virttu Purchase Agreement, the company agreed to provide additional consideration to the Virttu Shareholders, as follows:
	44	+Sorrento Completes Acquisition of Virex Health
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61		-Upon a financing resulting in gross proceeds (individually or in the aggregate) to TNK of at least $50.0 million (a “Qualified Financing”), TNK will issue to the Virttu Shareholders an aggregate number of shares of its capital stock (“TNK Capital Stock”) as is equal to the quotient obtained by dividing 80% of the Virttu Base Consideration by the lowest per share price paid by investors in the Qualified Financing (the “TNK Financing Consideration”); provided, however, that 20% of the TNK Financing Consideration shall be held in escrow until April 27, 2018 (the “Financing Due Date”), to be used to, among other things, satisfy the indemnification obligations of the Virttu Shareholders. In the event that a Qualified Financing does not occur, then on the Financing Due Date, the company will issue to the Virttu Shareholders an aggregate number of shares of its common stock as is equal to the quotient obtained by dividing 80% of the Virttu Base Consideration, by $5.55 (as adjusted, as appropriate, to reflect any stock splits or similar events affecting its common stock after the Closing). Within 45 business days after Virttu becomes aware that certain governmental bodies in the United States, the European Union, the United Kingdom or Japan have approved for commercialization, on or before October 26, 2024, Seprehvir (or any enhancement, combination or derivative thereof) as a monotherapy or in combination with one or more other active components (each of the first two such approvals by a governmental body being a “Regulatory Approval”), TNK shall pay half of the Regulatory Approval Consideration to the Virttu Shareholders, in a combination of (a) up to $5.0 million in cash (the “Regulatory Approval Cash”) and/or (b) (i) such number of shares of its common stock as is equal to the quotient obtained by dividing $5.0 million less the Regulatory Approval Cash (the “Regulatory Approval Share Value”) by the 30 Day VWAP (as defined below) of one share of its common stock; (ii) if TNK has completed its first public offering of TNK Capital Stock, the number of shares of TNK Capital Stock as is equal to the quotient obtained by dividing the Regulatory Approval Share Value by the 30 Day VWAP of one share of TNK Capital Stock; or (iii) such number of shares of common stock of a publicly traded company as is equal to the quotient obtained by dividing the Regulatory Approval Share Value by the volume weighted average price of the relevant security, as reported on the Nasdaq Capital Market (or other principal stock exchange or securities market on which the shares are then listed or quoted) for the thirty trading days immediately following the receipt of Regulatory Approval (the “30 Day VWAP”), with the composition of the Regulatory Approval Consideration to be at TNK’s option. In order for a second regulatory approval to qualify as a Regulatory Approval under the Purchase Agreement, the second approval must be granted by a different governmental body in a different jurisdiction than that which granted the first Regulatory Approval.
	46	+[[https:~~/~~/investors.sorrentotherapeutics.com/news-releases/news-release-details/sorrento-completes-acquisition-virex-health-will-commercialize>>url:https://investors.sorrentotherapeutics.com/news-releases/news-release-details/sorrento-completes-acquisition-virex-health-will-commercialize]]
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63		-**Celularity Transaction**
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65		-On November 1, 2016, the company loaned $5.0 million to Celularity, Inc., a research and development company (“Celularity”), pursuant to a promissory note issued by it to Celularity, as amended (as so amended, the “Celularity Note”), in connection with the entry into a nonbinding term sheet by it, TNK and Celularity. Pursuant to the terms of the Celularity Note, the loan will be due and payable in full on the earlier of November 1, 2017 and the occurrence of an event of default under the Celularity Note (the “Maturity Date”). In the event that Celularity meets certain minimum financing conditions prior to the Maturity Date, all outstanding amounts under the Celularity Note shall be forgiven and converted to equity. On May 31, 2017, the company loaned an additional $2.0 million to Celularity pursuant to the terms of the Celularity Note. On June 14, 2017, the company loaned an additional $1.0 million to Celularity. Additionally, on July 7, 2017, the company loaned an additional $2.0 million to Celularity.
	49	+February 1, 2022; Sorrento Therapeutics, Inc. announced that it has completed the acquisition of Virex Health, Inc., a Boston, MA based company (“Virex”), spun out of the labs of Professors Mark Grinstaff and Scott Schaus at BU, on February 1, 2022. The proprietary Virex Technology utilizes enzymatic and electrochemical amplification to detect picogram level biological analytes, such as SARS-CoV-2 and its variants, Flu A/B, as well as markers for liver cancer, inflammation and hormone monitoring.
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67		-On June 12, 2017, the company entered into a Contribution Agreement (the “Contribution Agreement”) with TNK and Celularity, pursuant to which, among other things, the company and TNK agreed to contribute certain intellectual property rights related to its proprietary chimeric antigen receptor (“CAR”) constructs and related CARs to Celularity in exchange for shares of Celularity’s Series A Preferred Stock equal to 25% of Celularity’s outstanding shares of capital stock, calculated on a fully-diluted basis. The contribution will be made pursuant to a License and Transfer Agreement to be entered into by and among it, TNK and Celularity.
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69		-As of June 30, 2017, the transactions contemplated by the Contribution Agreement had not closed.
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	53	+
	54	+Financial Highlights
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	56	+
	57	+
	58	+December 31, 2021 Results.
	59	+
	60	+[[https:~~/~~/investors.sorrentotherapeutics.com/static-files/a641bd98-736e-434f-823d-fc2305ee0423>>url:https://investors.sorrentotherapeutics.com/static-files/a641bd98-736e-434f-823d-fc2305ee0423]]
	61	+
	62	+Revenues were $52.9 million for the year ended December 31, 2021, as compared to $40.0 million for the year ended December 31, 2020. Revenues in its Sorrento Therapeutics segment increased from $13.7 million to $24.4 million for the year ended December 31, 2021 compared to the prior year and were primarily attributed to higher contract manufacturing service revenues. Revenues in its Scilex segment increased from $26.3 million to $28.5 million for the year ended December 31, 2021 compared to the prior year due to increased product sales of ZTlido.
	63	+
	64	+
	65	+Cost of revenues for the years ended December 31, 2021 and 2020 were $13.0 million and $9.9 million, respectively, and relate to product sales, the sale of customized reagents and providing contract manufacturing services. The costs generally include employee-related expenses, including salary and benefits, direct materials and overhead costs including rent, depreciation, utilities, facility maintenance and insurance. Cost of revenues for its Sorrento Therapeutics segment increased by $1.6 million and was driven by the increase in revenues. Cost of revenues for its Scilex segment increased by $1.5 million as compared to the prior year and was attributable to higher sales volumes of ZTlido.
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	67	+
	68	+Research and development expenses for the years ended December 31, 2021 and 2020 were $206.9 million and $111.3 million, respectively. Research and development expenses primarily include expenses associated with isolating and advancing human antibody drug candidates derived from its libraries, as well as advancing its RTX, COVID-19, SP-102, Oncolytic Virus, antibody drug conjugate (?ADC?) and oncology programs. Such expenses consist primarily of salaries and personnel-related expenses, stock-based compensation expense, clinical development expenses, preclinical testing, lab supplies, consulting costs, depreciation and other expenses.
	69	+
	70	+Research and development expenses for its Sorrento Therapeutics segment increased by $96.3 million as compared to the prior fiscal year and were primarily driven by higher headcount and increased clinical development costs spent on advancing its various research and development programs.
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	73	+Research and development expenses for its Scilex segment decreased by $0.8 million as compared to the prior fiscal year and were primarily driven by lower clinical development costs.
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	77	+
	78	+Company Overview
	79	+
	80	+
	81	+Sorrento is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease and COVID-19.  Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as fully human antibodies (“G-MAB™ library”), immuno-cellular therapies (“DAR-T™”), antibody-drug conjugates (“ADCs”), and oncolytic virus (“Seprehvec™”). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including  COVI-AMG™, COVIDROPS™, COVISHIELD™, FUJOVEE™ (Abivertinib) and OQORY™ (Covi-MSC), and diagnostic test solutions, including COVITRACK™ and COVIMARK™. The COVISTIX™ COVID-19 Virus Rapid Antigen Detection Test is approved under Emergency Use Authorization (EUA) in Mexico by COFEPRIS and in Brazil by ANVISA and cleared for commercialization.
	82	+
	83	+[[https:~~/~~/investors.sorrentotherapeutics.com>>url:https://investors.sorrentotherapeutics.com]]
	84	+
	85	+
	86	+Manufacturing
	87	+
	88	+The company's manufacturing facilities as below
	89	+
	90	+[[https:~~/~~/sorrentotherapeutics.com/manufacturing/>>url:https://sorrentotherapeutics.com/manufacturing/]]
	91	+
	92	+
	93	+Judicial Manufacturing (Antibodies, Cell Therapies)
	94	+
	95	+State-of-the-art cGMP antibody and cell therapy manufacturing facility located in San Diego, CA, initially designed to be a multi-product facility for the manufacture of bulk purified proteins and antibodies for use as therapeutics. The redesigned facility meets applicable cGMP requirements for manufacture of Investigational New Drugs, and now includes capabilities for cellular therapies.
	96	+
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	98	+
	99	+Bioserv Aseptic Fill and Finish Contract Manufacturing Facility
	100	+
	101	+Now part of Sorrento’s core capabilities, Bioserv, a cGMP contract manufacturing service organization was acquired and integrated. With facilities/cleanrooms and mature quality systems, Bioserv provides aseptic and non-aseptic fill/finish services including lyophilization for the biotechnology, pharmaceutical and diagnostic industries, as well as labeling/kitting and long-term controlled room temperature, cold and frozen storage.
	102	+
	103	+
	104	+bioserve
	105	+
	106	+Camino Santa Fe Oncolytic Virus Production Facility
	107	+
	108	+Sorrento’s viral production facility includes process development and analytical testing laboratories as well as cGMP clean rooms. Operations supported include cell culture, purification, fill and finish processes as well as analytical assay development and quality control testing. The facility is licensed by the CA Food and Drug Branch and has successfully manufactured drug substances and drug products for pre-clinical, PHASE I and PHASE II clinical trials.
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	111	+
	112	+ADC Conjugation, Payload and Linker Synthesis Facility
	113	+
	114	+Sorrento operates its cGMP facility for Antibody Drug Conjugate (ADC) production in Suzhou, China, under the Levena Biopharma brand name. The site has been in operation since 2016 and can support clinical cGMP production of drug linkers as well as antibody conjugation. With full analytical support capabilities and a facility equipped to handle highly potent API (isolator), the site has supported over 20 clinical batches for clinical trials worldwide.
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	117	+
	118	+Sofusa Research and Manufacturing Facility
	119	+
	120	+SOFUSA manufacturing capabilities in Atlanta, GA include precision nanofabrication techniques alongside assembly and testing of device components. The operation is able to support manufacturing of custom devices to support both preclinical studies and Phase I and II clinical trials. In addition, the SOFUSA research center is a fully functional small animal lab with state-of-the-art imaging capabilities (NIRF, IVIS, PET-CT) to fully characterize the impact of lymphatic delivery relative to traditional injections and infusions.
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	122	+
	123	+Subsidiaries and Partnership
	124	+
	125	+<gorup img>
	126	+
	127	+
	128	+Company History
	129	+
	130	+<table>
	131	+
	132	+
	133	+References
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	135	+
71	71	= References =
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73	73	{{putFootnotes/}}