Trine Acquisition Corp

TRNE Details

Volatile Returns and Acquisition of Desktop Metals: Trine Acquisition Corp (NYSE: TRNE) operates as a blank check company which was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, and similar business combination with one and more businesses. As on 14 September 2020, the market capitalization of the company stood at ~USD 451.72 million.

WeissLaw LLP Investigates Trine Acquisition Corp.: WeissLaw LLP is investigating for any likely violations of fiduciary duty by the board of Trine Acquisition Corp. with regards to its proposed merger with Desktop metal Inc. WeissLaw is investigating if the proposed merger is acted in the best interest of TRNE's public shareholders.

Desktop Metals to Become Public: Desktop Metal is likely to become publicly listed through a business combination with Trine Acquisition Corp. Post the acquisition, the combined entity is expected to have an equity value of US$2.5 billion. Under the terms of agreement, TRNE will acquire Desktop Metal via reverse merger, which will result in Desktop Metal to become a publicly listed company. At closing of the deal, the majority stake will lie with the existing shareholders of the Desktop Metals and the current TRNE shareholders and new PIPE investors will own a stake of ~33% of the combined company. 

Stock Recommendation: Post the acquisition, Desktop metals will receive $575 million in gross proceeds, comprised of TRNE $300 million of cash held in trust and a $275 million fully committed common stock PIPE at $10.00 per share. The stock of TRNE is trading close to its 52-weeks’ high level of $12.60 and thus retains limited potential for further growth. The stock of TRNE gave a positive return of 24.3% in the past three months. On technical front, the stock of TRNE has a support level of ~$10.50 and a resistance level of ~$12.60. Considering the current trading levels, volatile returns in the past three months, acquisition of Desktop metals and key risks, we suggest investors to avoid the stock at the closing price of $12.04, down by 3.68% on 14 September 2020.

TRNE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Sorrento Therapeutics, Inc.

SRNE Details

Synergies from SmartPharm and Decent Financial Performance: Sorrento Therapeutics, Inc. (NYSE: SRNE) is a healthcare company which is engaged in the innovative therapies that will improve the lives of those who suffer from cancer, intractable pain, and COVID-19. As on 14 September 2020, the market capitalization of the company stood at ~$1.90 billion.

Sorrento Secures Exclusive License from Mayo Clinic for Antibody-Drug: The company has entered an exclusive license agreement with Mayo Clinic for a potential breakthrough technology platform. The company will now be able to generate antibody-drug-nanoparticle albumin-bound (nab) immune complexes (ADNICs), which will potentially address the limitations of current ADC technology. The platform has indicated clinical benefits in an FDA-cleared investigator and is protected by a rich intellectual property portfolio.

Closing of SmartPharm Acquisition: The company has completed the acquisition of SmartPharm for a total consideration of $19.4 million. SmartPharm is developing DNA and RNA gene delivery platforms for COVID-19 and rare diseases. Upon completion of the merger, SmartPharm stockholders are entitled to receive ~1.76 million shares of Sorrento based on a price of ~$10.60.

Financial Highlights (For the Quarter Ended 30 June 2020): During the quarter ended 30 June 2020, the company reported an increase in total revenue to $9.007 million, up from $7.72 million. In the same time span, gross profit of the company stood at $6.75 million as compared to $5.28 million in the previous quarter.

Quarterly Financial Highlights (Source: Company Reports)

Stock Recommendation: The company is likely to benefit from the development and commercialization of Mayo Clinic technology by generating and developing multiple next-generation ADNIC product candidates for the potential treatment of cancer, COVID-19, and other human diseases. The stock of SRNE gave a positive return of 52.3% in the past three months. The stock of SRNE is inclined towards its 52-weeks’ low level of $1.39, proffering a decent opportunity for accumulation. On a Technical basis, the stock of SRNE has a support level of ~$5.812 and a resistance level of ~$11.82. On a TTM basis, the stock SRNE is trading at an EV/Sales multiple of 1.1x, lower than the industry median (Healthcare) of 7.3x, and thus seems undervalued. Considering the current trading levels, decent financial performance and acquisition of Smartpharm, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $7.45, up by 17.88% on 14 September 2020, owing to its recent release of agreement with Mayo Clinic.

SRNE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.