The Sorrento Therapeutics Inc (NASDAQ: SRNE) stock price rallied 42.2% after the U.S. Bankruptcy Court for the Southern District of Texas allowed the company to access a $75 million loan from JMB Capital Partners as part of the company’s chapter 11 bankruptcy case.
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Investors cheered the move as the debtor-in-possession funding would keep Sorrento afloat as its chapter 11 bankruptcy case filed on February 13, 2023, continues. As a result, the firm now has adequate liquidity to fund its daily operations. The court scheduled the final hearing for the funding package for March 29, 2023.
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Sorrento had over $1 billion in assets at its chapter 11 bankruptcy filing. However, the company and its wholly-owned subsidiary Scintilla Pharmaceuticals, Inc. sought chapter 11 relief to protect its business and ensure that its operations continue due to a litigation creditor's threat of specific actions.
The company also wanted to project and maximize value for its stakeholders by preventing the litigation creditor from forcing the company into liquidation. The company received approval of its “First Day” motions covering its employee wages and cash management motion on February 16, 2023, allowing it to continue operating as usual.
Sorrento Therapeutics also revealed that Scilex Holding Company, which it majority owns, is not a debtor in the chapter 11 bankruptcy case. Therefore, Scilex continues to operate as usual while focusing on growing revenues and offering non-opioid pain management solutions.
Scilex is also keen to develop innovative and significantly differentiated treatments that address significant unmet needs, leading to better health outcomes for millions of acute and chronic pain patients.
Dr Henry Ji, PhD, Sorrento’s Chairman and CEO, commented: “We are pleased to have received approval from the Court for this financing, which will ensure Sorrento has the liquidity and ability to continue normal business operations, including the payment of employee wages and benefits and post-petition vendor obligations. We will continue our important work of developing new and innovative therapies for patients struggling with cancer, intractable pain, infectious disease, and more.”
Over 13 million Sorrento shares had changed hands at the time of writing.
*This is not investment advice.
Sorrento Therapeutics (SRNE) stock price.
The Sorrento Therapeutics (SRNE) stock price rallied 42.24% to trade at $0.55, from Tuesday’s closing price of $0.39.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.