Biotechnology’s Cancer Crusher

Last week, I wrote about the billionaire Patrick Soon-Shiong becoming the Elon Musk of biotech. And true to form, we saw his impact on the market after Monday’s announcement that a subsidiary of his NantWorks company was partnering with Sorrento Therapeutics (Nasdaq: SRNE) to develop cancer and autoimmune drugs.

As soon as the news of this partnership hit the streets, Sorrento’s stock price soared more than 80%, closing at $8.48 on Thursday.

Patrick Soon-Shiong, currently worth $13.1 billion, has been methodically adding companies aiming for eradicating cancer through high-tech methodology. Once united, this family network of companies will bring together a variety of specialties: advanced semi-conductor technology, supercomputing, advanced networks and augmented intelligence to diagnose and treat cancer patients with efficiency and speed.

Soon-Shiong’s company will buy a 19.9% equity stake of Sorrento at $5.80 (closing price Friday before deal was announced), adding up to a total investment of 7,188,061 shares for $41,690,754. Patrick’s company also has a three-year warrant to purchase an additional 1,724,138 shares at $5.80 apiece.

The joint venture comprises a $20 million investment and the development of a product called immunotherapy antibody IV.

Shortly after locking up the deal, Soon-Shiong issued a statement: “Combining NantWorks’ cutting edge expertise in genomic and molecular profiling of cancer patients and Sorrento’s industry-leading G-MAB antibody technology, we believe will enable us to develop multiple novel therapies for malignant disorders where there is currently a significant unmet need.”

The announcement caused the social media chatter surrounding Sorrento to increase more than 1,000% giving this stock a lot of rapid momentum. There were also some early warning indicators, such as upticks in the volume of social media chatter messages, before the deal was even completed.

This can be seen in the chart below overlaying social media chatter volume (blue bars) over Sorrento’s stock price.

Image Sorrento chart

See larger image

I’m currently tracking trends surrounding Patrick Soon-Shiong’s efforts and utilizing my Social Media Collective Intelligence system and providing alerts in my Biotech Intel Trader service.

As always, I will continue to monitor the market’s social media collective intelligence and keep you updated on the latest trends.

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Ben

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About Author

Ben Benoy is a veteran of the U.S. Marine Corps and has been an active retail trader since 2006. He identifies investment opportunities based on key social media trends. He first identified the concept in 2008 and has since developed a tool for tracking investment “chatter” between social media users. His proprietary Social Media Stock Sentiment system has developed into a state-of-the-art platform that identifies and classifies chatter about stocks through algorithms and other indicators to forecast stock-price direction. Ben’s track record speaks for itself — over the past 12 months, his system boasts a win rate of 82.2% on 112 stock trades.