Scilex Holding Company Announces Closing of $10 Million Bought Deal Offering

Rhea-AI Summary

Scilex Holding Company (SCLX) successfully closes public offering, raising approximately $10 million for non-opioid pain management products. The company plans to utilize the proceeds for various corporate purposes.

Insights

Financial Analyst

The closing of Scilex Holding Company's public offering and the issuance of common stock and warrants represent a significant capital infusion for the company, amounting to approximately $10 million before expenses. This financial move is indicative of the company's strategy to strengthen its balance sheet and secure funding for various corporate activities. From a financial perspective, the offering price of $1.70 per share and warrant, combined with the underwriting discounts, provides insight into the current valuation the market is placing on Scilex's shares.

Investors and stakeholders should note that the company's decision to allocate net proceeds towards working capital, commercialization and potential acquisitions could signal an aggressive growth strategy. However, such strategies also carry risks, as the success of the investments and the commercialization of non-opioid pain management products are not guaranteed. The market's response to this offering and subsequent share performance could be influenced by the company's ability to effectively deploy the raised capital.

Market Research Analyst

Scilex's focus on non-opioid pain management products is particularly relevant given the ongoing opioid crisis and the increasing demand for alternative pain treatments. The successful closing of their public offering reflects investor confidence in the potential market for such products. As the company plans to invest in commercialization and research and development, this could position Scilex as a competitive player in a market that is expected to grow due to rising awareness and regulatory support for non-opioid treatments.

Market trends suggest that the pain management sector is ripe for innovation and companies that can offer effective and safe alternatives to opioids may capture significant market share. The impact of Scilex's investments in this area will depend on their ability to navigate the regulatory landscape and succeed in clinical trials, which are crucial steps in bringing new medical products to market.

Legal Expert

The reference to the 'shelf' registration statement on Form S-3 indicates Scilex's compliance with SEC regulations, allowing for a more streamlined process for the company to issue securities in the future. This legal framework is essential for investors to understand as it reflects the company's preparedness to access capital markets efficiently. The effectiveness of the SEC's declaration and the availability of the prospectus supplement are key legal steps that provide transparency and protect investor interests.

Moreover, the legal stipulation that there will be no sale of these securities in jurisdictions where it would be unlawful ensures adherence to various state and international securities laws. This compliance minimizes legal risks for the company and its investors, which is a crucial consideration for any stakeholder evaluating the company's governance and risk management practices.

PALO ALTO, Calif., March 05, 2024 (GLOBE NEWSWIRE) -- Scilex Holding Company (Nasdaq: SCLX, “Scilex” or the “Company”), an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain, today announced the closing of its previously announced public offering of 5,882,353 shares of common stock of the Company and accompanying common warrants (the “Common Warrants”) to purchase up to 5,882,353 shares of common stock, at a combined public offering price of $1.70, less underwriting discounts and commissions.

Rodman & Renshaw LLC and StockBlock Securities LLC were the underwriters and acted as the joint book-running managers for the offering.

The Company has granted to the underwriters a 30-day option to purchase up to an additional 882,352 shares of common stock and/or Common Warrants at the public offering price, less underwriting discounts and commissions. The gross proceeds to the Company, before deducting underwriting discounts and commissions and offering expenses and assuming no exercise of the underwriters’ option to purchase additional shares of common stock and/or Common Warrants, were approximately $10 million. The Company intends to use the net proceeds from the offering, together with its existing cash and cash equivalents and short-term investments, for working capital and general corporate purposes, which may include capital expenditures, commercialization expenditures, research and development expenditures, regulatory affairs expenditures, clinical trial expenditures, acquisitions of new technologies and investments, business combinations and the repayment, refinancing, redemption or repurchase of indebtedness or capital stock.

The securities described above were offered by the Company pursuant to a “shelf” registration statement on Form S-3 (File No. 333-276245), as amended, which was originally filed with the Securities and Exchange Commission (the “SEC”) on December 22, 2023, and declared effective by the SEC on January 11, 2024. The securities were offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A prospectus supplement and accompanying prospectus relating to the offering have been filed with the SEC and are available on the SEC’s website at http://www.sec.gov. Electronic copies of the prospectus supplement and accompanying prospectus may also be obtained by contacting Rodman & Renshaw LLC at 600 Lexington Avenue, 32nd Floor, New York, NY 10022, by telephone at (212) 540-4440, or by email at info@rodm.com; and StockBlock Securities LLC at 600 Lexington Avenue, 32nd Floor, New York, NY 10022, by telephone at (212) 540-4440, or by email at info@stockblock.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Scilex Holding Company

Scilex Holding Company is an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Scilex targets indications with high unmet needs and large market opportunities with non-opioid therapies for the treatment of patients with acute and chronic pain and are dedicated to advancing and improving patient outcomes. Scilex’s commercial products include: (i) ZTlido® (lidocaine topical system) 1.8%, a prescription lidocaine topical product approved by the U.S. Food and Drug Administration (the “FDA”) for the relief of neuropathic pain associated with postherpetic neuralgia, which is a form of post-shingles nerve pain; (ii) ELYXYB®, a potential first-line treatment and the only FDA-approved, ready-to-use oral solution for the acute treatment of migraine, with or without aura, in adults; and (iii) GLOPERBA®, the first and only liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults, expected to launch in 2024.

In addition, Scilex has three product candidates: (i) SP-102 (10 mg, dexamethasone sodium phosphate viscous gel) (“SEMDEXA™” or “SP-102”), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica for which Scilex has completed a Phase 3 study; (ii) SP-103 (lidocaine topical system) 5.4%, (“SP-103”), a next-generation, triple-strength formulation of ZTlido, for the treatment of chronic neck pain and for which Scilex has recently completed a Phase 2 trial in low back pain; and (iii) SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride being developed for the treatment of fibromyalgia, for which Phase 1 trials were completed in the second quarter of 2022 and a Phase 2 clinical trial is expected to commence in 2024.

Scilex Holding Company is headquartered in Palo Alto, California.

Forward-looking Statements

This press release and any statements made for and during any presentation or meeting concerning the matters discussed in this press release contain forward-looking statements related to Scilex and its subsidiaries under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding the intended use of the net proceeds from the public offering, Scilex’s plans to launch GLOPERBA® in 2024 and plans to initiate Phase 2 trial in 2024 for SP-104.

Risks and uncertainties that could cause Scilex’s actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to: statements related to the intended use of proceeds from the public offering; risks associated with the unpredictability of trading markets and whether a market will be established for Scilex’s common stock; general economic, political and business conditions; risks related to COVID-19 (and other similar disruptions); the risk that the potential product candidates that Scilex develops may not progress through clinical development or receive required regulatory approvals within expected timelines or at all; risks relating to uncertainty regarding the regulatory pathway for Scilex’s product candidates; the risk that Scilex will be unable to successfully market or gain market acceptance of its product candidates; the risk that Scilex’s product candidates may not be beneficial to patients or successfully commercialized; the risk that Scilex has overestimated the size of the target patient population, their willingness to try new therapies and the willingness of physicians to prescribe these therapies; risks that the outcome of the trials and studies for SP-102, SP-103 or SP-104 may not be successful or reflect positive outcomes; risks that the prior results of the clinical and investigator-initiated trials of SP-102 (SEMDEXA™), SP-103 or SP-104 may not be replicated; regulatory and intellectual property risks; and other risks and uncertainties indicated from time to time and other risks described in Scilex’s most recent periodic reports filed with the SEC, including Scilex’s Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent Quarterly Reports on Form 10-Q filed with the SEC, including the risk factors set forth in those filings. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release, and Scilex undertakes no obligation to update any forward-looking statement in this press release except as may be required by law.

Contacts:

Investors and Media
Scilex Holding Company
960 San Antonio Road
Palo Alto, CA 94303
Office: (650) 516-4310

Email: investorrelations@scilexholding.com

Website: www.scilexholding.com

SEMDEXA™ (SP-102) is a trademark owned by Semnur Pharmaceuticals, Inc., a wholly-owned subsidiary of Scilex Holding Company. A proprietary name review by the FDA is planned.

ZTlido^® is a registered trademark owned by Scilex Pharmaceuticals Inc., a wholly-owned subsidiary of Scilex Holding Company.

GLOPERBA®^® is the subject of an exclusive, transferable license to use the registered trademark by Scilex Holding Company.

ELYXYB® is a registered trademark owned by Scilex Holding Company.

All other trademarks are the property of their respective owners.

© 2024 Scilex Holding Company All Rights Reserved.

FAQ

What is the purpose of Scilex Holding Company's public offering?

Scilex Holding Company conducted the public offering to raise funds for working capital and general corporate purposes.

How much money did Scilex Holding Company raise through the public offering?

Scilex Holding Company raised approximately $10 million through the public offering.

Who were the underwriters for Scilex Holding Company's public offering?

Rodman & Renshaw LLC and StockBlock Securities LLC served as the underwriters and joint book-running managers for the offering.

What is the public offering price of Scilex Holding Company's common stock?

The public offering price of Scilex Holding Company's common stock was $1.70 per share.

How can interested parties access information about the offering?

Interested parties can access information about the offering through the SEC's website or by contacting Rodman & Renshaw LLC and StockBlock Securities LLC.