November 25, 2019 / 12:49 PM / 7 months ago

UPDATE 1-Sorrento Therapeutics rejects all-cash takeout proposal; shares jump

(Adds background, details on company's product)

Nov 25 (Reuters) - Sorrento Therapeutics Inc said on Monday it had rejected an unsolicited buyout proposal from two pharmaceutical companies, saying it significantly undervalued the drugmaker and was not in the best interests of its shareholders.

The all-cash deal on Saturday offered between $3 and $5 for each of Sorrento's outstanding shares, the company said.

At the higher-end of the offer, Sorrento would have been valued at $709.4 million, while its current market capitalization stands at nearly $227 million.

Sorrento, meanwhile, said its pending discussions for licensing and collaboration partnerships for its immuno-oncology products alone represent more value than the proposal.

Sorrento's shares, which closed at $1.60 on Friday, jumped 30% in premarket trading.

The cancer therapy developer has one therapy, ZTlido, approved in the United States for relieving nerve pain following shingles infection.

Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Maju Samuel and Shinjini Ganguli

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