Back on November 25, 2019, two unnamed biopharmaceutical companies tried to acquire Sorrento Therapeutics. If that’s not a ringing endorsement of the value of this company and its portfolio, I don’t know what is.
What’s interesting is that SRNE stock really moved today in after-hours trading.
Novartis bought The Medicines Company (NASDAQ:MDCO) for $9.7 billion. Merck & Co. (MRK) bought ArQule (ARQL) for $2.7 billion. Sanofi (SNY) just bought SoCal’s Synthorx THOR. Roche (RHHBY) is trying to buy Spark Therapeutics (ONCE). The point is, mergers and acquisitions have picked up in the biotech space as companies look to keep up with competitors through acquisitions. Sorrento Therapeutics Board rejected the low-ball offer from the two unnamed companies, but you can bet that other companies are looking at buying Sorrento Therapeutics too.
On November 25, 2019, Sorrento Therapeutics, Inc. (NASDAQ: SRNE, “Sorrento” or the “Company”), confirmed that on November 23, 2019, it received an unsolicited, non-binding term sheet proposal submitted by two biopharmaceutical companies, to acquire all of the issued and outstanding shares of the Company for between $3.00 and $5.00 per share in cash.
After reviewing the proposal in consultation with its advisors, Sorrento’s Board of Directors (the “Board”) determined that the offer significantly undervalued Sorrento and was not in the best interest of the Company’s stockholders. Accordingly, the Board unanimously rejected the proposal.
The Company is in active late-stage licensing and collaboration discussions with leading biopharmaceutical companies for the Company’s immuno-oncology products, including multiple targets to be deployed within the KOKI DAR-T platform. The Company believes that these pending transactions alone represent potential short- and long-term value creation significantly exceeding the current all cash proposal.
Dr. Henry Ji, Chairman and Chief Executive Officer, said, “the Sorrento Board of Directors and management team are committed to serving the best interests of the Company and Sorrento stockholders, and are confident in the Company’s strategic direction and our ability to implement it.”
The offers for Sorrento Therapeutics are probably coming in so often now that the company announced on December 9, 2019, that Mr. Edgar Lee has been appointed to its Board of Directors. Mr. Lee is currently a Managing Director at Oaktree Capital Management. Mr. Lee founded and was the portfolio manager of Oaktree’s $5.5bn Strategic Credit strategy. He was also the Chief Executive Officer and Chief Investment Officer of Oaktree’s three business development companies (BDCs) including Oaktree Specialty Lending (Nasdaq: OCSL) and Oaktree Strategic Income Corporations (Nasdaq: OCSI). Prior to joining Oaktree in 2007, Mr. Lee worked at UBS Investment Bank in Los Angeles and Lehman Brothers in New York. He received a B.A. degree in economics from Swarthmore College and his master’s degree from Harvard University. Mr. Lee serves as a director of Neo Performance Materials (TSX: NEO) and previously served on the boards of Nine Entertainment and Charter Communications.
Dr. Henry Ji, Chairman and CEO, commented, “We are very excited to have Edgar to join our board. He brings not only deep knowledge in capital markets and innovative financing but also practical expertise in strategic planning in the biopharma industry.”
Mr. Lee stated, “Sorrento has a highly unique portfolio of valuable assets and a team of incredibly talented and innovative scientists. I have tremendous respect for Henry and the other board members and I am honored to have the opportunity to work with them.”