Shares of Sorrento Therapeutics are lower by nearly 50% in pre-market trading on Monday after the company filed for Chapter 11 bankruptcy protection in Texas.
An 8-K from the company on Monday morning read: "To protect the Company’s business and maximize its value, on February 13, 2023, the Company and its wholly-owned direct subsidiary, Scintilla Pharmaceuticals, Inc. (together with the Company, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”)."
"The Debtors have requested that the Chapter 11 proceedings be jointly administered under the caption In re Sorrento Therapeutics, Inc., et al. (the “Chapter 11 Cases”). The Debtors continue to operate their business in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors intend to seek approval of a variety of 'first day' motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations during the Chapter 11 Cases," it continues.
The company was well known for making bold claims at the beginning of the Covid pandemic in an exclusive with Fox News, suggesting a "cure" for Covid was forthcoming:
A California-based biopharmaceutical company claims to have discovered an antibody that could shield the human body from the coronavirus and flush it out of a person’s system within four days, Fox News has exclusively learned.
Later Friday, Sorrento Therapeutics will announce their discovery of the STI-1499 antibody, which the San Diego company said can provide "100% inhibition" of COVID-19, adding that a treatment could be available months before a vaccine hits the market.
"We want to emphasize there is a cure. There is a solution that works 100 percent," Dr. Henry Ji, founder and CEO of Sorrento Therapeutics, told Fox News. "If we have the neutralizing antibody in your body, you don't need the social distancing. You can open up a society without fear."
Sorrento Therapeutics says it has discovered an antibody that prevents Covid-19 from infecting healthy cells.— Cheddar News (@cheddar) May 20, 2020
CEO and co-founder Dr. Henry Ji details the discovery and lays out the plans for the antibody to begin clinical trials. $SRNE #CheddarLive pic.twitter.com/c1aulQXEtd
The comments drew the ire of short seller Hindenburg Research, who pointed out in May of 2020 that it was skeptical of the company's claims. "We see significant downside from these levels and believe the company is already in the process of severely diluting its new unsuspecting investor base. We believe regulators should closely scrutinize the company’s actions over the last several weeks," the firm said almost 3 years ago.
The company then claimed in August of 2020 it was going to "take action" against Hindenburg.
"I am giving them a fair warning shot. Just cover yourself, don't ruin your family," CEO Henry Ji said in August 2020. "Sorrento will collaborate with law enforcement and regulators to ensure that any criminal activity is investigated and rectified," the company added at the time.
$SRNE founder and CEO Dr. Henry Ji responded to short sellers and others skeptical of his company, stating that there are "a lot of investors suspecting this is another pump and dump, which is typical, which is normal, but we don't believe that's the case." https://t.co/vwEXmiqFqB— zach (@zbiotech) May 22, 2020