A biotech company that once claimed to have a 'cure' for COVID-19 just filed for bankruptcy, sending shares plunging 61%

• Sorrento Therapeutics plunged as much as 61% on Monday after the biotech company filed for bankruptcy.
• The company made headlines in 2020 after its founder claimed Sorrento discovered a COVID-19 "cure."

Sorrento Therapeutics, a biotech company working on a COVID-19 therapy and once targeted by short-seller Hindenburg Research, plunged as much as 61% after the firm filed for Chapter 11 bankruptcy protection on Monday.

Shares of the company traded around 39 cents at 1:15 p.m. ET.

Sorrento made headlines in May of 2020 when founder Dr. Henry Ji claimed that the company discovered a cure to COVID-19, which caused its stock to soar 243% in a single day. This took the company's market cap from millions to well over a billion.

"We want to emphasize there is a cure. There is a solution that works 100 percent," Ji told Fox News, a statement that was refuted by health care experts. "If we have the neutralizing antibody in your body, you don't need the social distancing. You can open up a society without fear."

Hindenburg released a scathing report on the biotech firm following Ji's comments, which caused Sorrento's stock to drastically decline in value.

Over two years later the company has landed in bankruptcy court amid mounting debt and ongoing lawsuits, causing investors to offload shares and cut the company's stock value by more than half. Sorento is heading towards a 52-week low on Monday as a result.