Sorrento Therapeutics Inc (NASDAQ:SRNE) shares are getting cut in half Monday morning after the company filed for Chapter 11 bankruptcy. 

What Happened: Sorrento and its subsidiary, Scintilla Pharmaceuticals, commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code on Monday. 

The debtors will continue to operate their businesses throughout the Chapter 11 process. Sorrento also intends to seek approval of a variety of "first day" motions containing customary relief intended to assure its ability to continue ordinary operations.

The filing comes in the wake of a court ruling, which upheld a decision to award significant payment for damages related to a legal battle with NantCell and NANTibody. On Feb. 7, the court confirmed the Nant Award and issued a 70-day stay of enforcement of the judgment beyond $50 million. 

Following the confirmation, the company believed that NantCell and NANTibody would imminently take steps to levy the company’s assets, which would cause significant disruption and harm to its business, including the company's ability to continue developing its pipeline of drugs.

To protect Sorrento's business and maximize its value, the company filed for Chapter 11 bankruptcy.

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SRNE Price Action: Sorrento has a 52-week high of $3.21. It's making new 52-week lows in Monday's premarket session.

The stock was down 45.7% at 51 cents at the time of publication, according to Benzinga Pro.

Photo: Tatiana from Pixabay.