Market Briefing For Wednesday, Aug.25

Summer slumbers stay shrugged-off, although there's a lot that sobering to the world, to our major Allies, and with curiosity about what really happens in Kabul next week, given it's hard to belief POTUS didn't thumb his nose at the Taliban and care more about cooperating with our NATO Allies who went into the combat zone at our request, and who also need to extract their people.

With that said (and a feeling that Biden will feel pressure if we leave any large number of Americans, Allies or support staff, and not conform to the 'red-line' a Taliban spokesman mentions. Or maybe the secret meeting of CIA Director Burns with the Taliban chief, didn't result in a successful 'pow-wow' basically.

Meanwhile there's a lot of money sloshing around, and the last time I used the term in a concerning way was 2007 when anticipating an 'Epic Debacle'. That isn't on the menu now, but tomorrow's Jackson Hole reflections from the Fed heads, might serve to remind us that the Fed itself is a huge contributor to all of this, and in fact we knew that on the eve of calling the March 2020 bottom.

Now we're in an extended 'lala land' for the Indexes, but not broad market. So an argument exists (I'm part of that) for shakeouts within context of uptrends in an overall sense. But there are no bargains in the expensive merchandise (and at a certain point the big momentum stocks have to be viewed thusly), since a lot of the fundamental rationale for their pricey is often (not always) ludicrous.

Executive summary:

  • The market has ignored news that Vice President Harris was 'targeted' by a 'Havana Syndrome' attack, either in Singapore or on-arrival today in Vietnam, while unclear where the attack occurred, this should be serious, over 100 U.S. diplomats and CIA officers have been similarly assaulted.
  • Reuters reported it as being Singapore, CBS reported it as if she was just arriving in Hanoi, and another implied it wasn't her but making sure our Embassy was 'safe' for her to visit (what about the staff?), I think this was a targeted attack against VP Harris, because of the story's variations, as if they are trying to create a diverting spin from what really happened.
  • When she spoke at a news conference with Vietnam's Prime Minister, it was clear he wants 'common sense' and a China respecting international law and rights of navigation at sea.
  • Our VP did much the same, noting that China continues to 'coerce and intimidate' in the South China Sea, and up to now media hasn't shared the truth about the 'microwave' attack on her or whatever happened, nor her important firm comments to reporters (is China suspect?).
  • In-event she has permanent neurological damage (we pray not of course) then you have an unprecedented situation of a President clearly suffering cognitive dissonance, a VP that's questionable, and Pelosi in the wings, if thinking about that is enough to have the media circling their spinning, for sure I do get that, but sooner or later accurate versions may appear.
  • The stock market holds, pretty impressive ahead of 'virtual Jackson Hole', and it faded late in the day just as we thought likely for the late going.
  • President Biden's decision to complete US withdrawal by August 31 (that is not 'doable' for the number of evacuees and refugees) probably means that CIA Director William Burns did not achieve an extension in his secret meeting in Kabul this morning with the chief terrorist who the CIA once put in a Pakistani prison for 8 years, no affection there and Burns truly is a master spy, so if he can't move the barbarians, perhaps no one can.
  • The United States routinely befriends 'former' enemy states, but this isn't a conventional end of a war, it's not even Vietnam, it's allowing an Islamic state with a mission proselytizing or murder of everyone encountered, it is hard to understand why (in the past or now) anyone thought otherwise.
  • I fully understand the initial reaction to hearing we won't leave until rescue missions are finished, which also contradicts (not the first time) remarks to the contrary by POTUS the other day, but he slipped in 'contingencies'.
  • if CIA gave the middle finger to Taliban (and they may have), the outcome might be the same without risk to our troops, problem is the enemy now is in-possession of too many modern American weapons.
  • We can't very easily destroy or bomb all, since they're already dispersed (where they're concentrated we can and probably should, just as soon as our troops get out or stay and shoot their way out), if we have to shoot our way out then there should be no accommodation or financial fund release by the NY Fed, no matter what, as the US will need to grow more 'spine', of course the basic issue of leaving Afghanistan was made by Trump and now it's the execution which was essentially botched then improved a bit.
  • Dr. Fauci's (Freudian slip?) reference to 'getting control of COVID by Fall of 2022', was later 'corrected' to Spring of 2022, clearly it's not going away, even as we really hope 'peak COVID' is occurring now in some states, but basically Fauci & Co. is telling you this isn't going away anytime soon, for that I again blame them for failing to fund new mAb's and pills far sooner.
  • Since 'hope is not a strategy' there is every expectation for needs not just for vaccines but antiviral treatments at all stages (see Sorrento remarks), I realize this gives Sorrento time for success, but it's sad it takes so long.
  • Today's (latest licensing deal) between Sorrento (SRNE) and Texas A&M clearly puts a 'pill' in their plans for combating COVID, and that along with nasal drops/spray vaccines may be ideal combinations for much of the world.
  • By the way the Supreme Court refused to block evictions, so as sad as it all is, the visual looks bad as AirBnB provides housing to Afghan migrants (truly worthy gesture), but not to Americans displaced for many reasons (and not saying they should, just that the optics are tough to take-in).

With the rise of 'COVID / delta' or possibly other variants to contend with, it's a good time to summarize the portfolio of solutions for this and other areas of Sorrento's pipeline. The focus should be on delivering at least one or two into a stage of 'approval' or marketing anytime now, with more toward year-end.

Sorrento is our speculative (emphasis on that word) pick of the year, so even if it's inappropriate for many investors, we need to keep focused on how they are moving, which is better than before. While it was not what attracted us to this name, oncology is their primary realm. They have 4 priority portfolios:

  • Expanding immediate focus on COVID. It has 17 programs that deal with every stage of COVID. (Testing, diagnostics, treatment and salvage drug therapy too.) In this area it only has one EUA (tests for sale in Mexico but no specifics reported yet), others ideally follow in coming months. The latest C1 vaccine and oral MPro inhibitors (that's today's Texas A&M deal with MPro a pill for COVID), so both have enormous potential.
  • A huge potential market is the next area of focus: non-opioid pain relief. It currently markets a product with sales projected over $100 million this year. SP-102 sales are expected in 2022 and might reach the billions.
  • Their traditional oncology focus spills over into efficacy for COVID too, as is undergoing testing in Brazil and the U.K., plus Abivertinib sales in China could start any day and later globally. ADNAB,CAR-T, DAR-T and other technologies target dozens of indications, with many in phase 2 now.


  • finally (although at the pace of Dr. Ji's deals there is no finality nor should there be, just pick up the pace of getting more to market), we have a key product nobody seems to notice: 'they' (Sorrento) will be licensing their proprietary Sofusa lymphatic delivery system to Big Pharma. While we're not sure (rumors), it's possible the first such licensee might be Amgen (AMGN).

Additionally, with very key partnerships (some are acquisitions, others license agreements) investments, and even ARK, their 'animal business' that's quite promising, Sorrento is well positioned to achieve success in all these priority areas, as obviously shows that CEO Dr. Ji (controversial character) does plan for this to be a substantial pharmaceutical firm, not just a biotech. If so he was just too early proclaiming his great successes, and paid a reputational price.

If there's risk, it's of being taken over (though unlikely with a huge float) with a limited upside of maybe 2-4x current price, because if SRNE hits on a few of their cylinders with approvals, their organic appreciation could be greater over a couple years. Again it's investment speculation, not a trade or low risk either we emphasize. They are reasonably funded, could liquidate holdings in others they own, or could do a 'secondary offering'. It's the last I'd be more worried of (because of dilution), but that presumably would also dilute insider options. I'd note that bothers me more than their projects, as several should succeed.


I called Sorrento a screaming buy for speculators around or just under 8, as the brief dips into the high 7's were just too inviting. Institutions did increase holdings, although some likely lent their shares out to shorts for huge income for some time. I suspect that phase is over or ending. Sorrento needs to 'snag the brass ring' just once soon, and shares should spike to the teens, and then we'll see. Hope this simplified what they're working on and more


We have market jitters ahead of Jackson Hole, but perhaps enough residual strength to survive some fairly hawkish Fed-head remarks ahead.

However, listening to Dr. Fauci, with his comments about getting control of COVID by Fall, and then he said Spring, of 2022... well that should keep the Fed's 'tapering' limited. But the Fed needs to get on with it, and exit TINA.

P.S. POTUS told U.S. aid groups to prepare for 50,000 Afghan refugees, they will be vetted abroad before entering the USA. This will finish in a week?

This is an excerpt from Gene Inger's Daily Briefing, which typically includes one or two videos as well as more charts and analyses. You can subscribe for  more

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.
Adam Reynolds 2 years ago Member's comment

How much will #Amgen pay to acquire #Sorrento? 🤔