Scilex Holding Company Files Emergency Motion in the United States Bankruptcy Court for the Southern District of Texas for Entry of an Order Compelling the Production of Books and Records from certain Brokers, Dealers, Banks and other Nominees Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure

Rhea-AI Summary

Scilex Holding Company has filed an emergency motion for the production of books and records from certain brokers, dealers, banks, and other nominees. The motion was filed in the U.S. Bankruptcy Court for the Southern District of Texas. Scilex previously provided proposals to Short Sellers and lenders of short positions, offering them the opportunity to cover their positions and avoid further expenses. The Short Seller Proposal ended on October 27, 2023, while the Lender Proposal is still in effect until October 31, 2023.

Positive

• Scilex Holding Company filed an emergency motion for the production of books and records, indicating a proactive approach to resolving any potential issues. The proposals provided to Short Sellers and lenders offer a chance to cover positions and avoid additional expenses.

Negative

• None.

PALO ALTO, Calif., Oct. 27, 2023 (GLOBE NEWSWIRE) -- Scilex Holding Company (Nasdaq: SCLX, “Scilex” or “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 filed an emergency motion (the “Motion”) for entry of an order compelling the production of books and records from certain brokers, dealers, banks and other nominees pursuant to Rule 2004 of the federal rules of bankruptcy procedure in the U.S. Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).   Attached to this press release is the court motion filed by Scilex on October 27, 2023.

On October 3, 2023, Scilex provided a proposal to parties with short positions (the “Short Sellers”) in shares of Scilex common stock that were part of the previously announced dividend of Scilex common stock (the “Scilex Dividend Stock”) then-held by Sorrento Therapeutics, Inc. (OTC: SRNEQ, “Sorrento”) who had not yet closed or covered their respective short positions in the Scilex Dividend Stock (“Short Seller Proposal”). As previously noted, Scilex believes that, with no objections from the participating Short Sellers and with widespread support and assistance from such Short Sellers’ brokers and/or agents, there should be no further excuses for continuing to hold the short positions in Scilex. The Short Seller Proposal provided those Short Sellers with the opportunity to cover their short positions and avoid any continuing fees, interest, and other expenses associated with any short positions, as well as an opportunity to accept the terms provided in Sorrento’s ongoing Chapter 11 proceedings in order to obtain a release from Scilex for any claims and causes of action related to any potential naked short selling or other similar market manipulative behavior.   The Short Seller Proposal ended on October 27, 2023.

On October 4, 2023, Scilex also provided a similar proposal to the lenders of the short positions in Scilex Dividend Stock held by the Short Sellers (“Lender”). Specifically, under this “Lender Proposal,” (i) any Lender that requires the immediate return of Scilex Dividend Stock that was loaned to Short Sellers, and (ii) once the applicable Short Sellers have closed out such short positions in the Scilex Dividend Stock, Scilex will provide a release of any claims and causes of action related to naked short selling or other similar market manipulative behavior. Such release will be provided after Scilex receives written confirmation of the above two actions. This Lender Proposal is still in effect and will end on October 31, 2023.

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 is uncompromising in its focus to become the global pain management leader committed to social, environmental, economic, and ethical principles to responsibly develop pharmaceutical products to maximize quality of life. Results from the Phase III Pivotal Trial C.L.E.A.R. Program for SEMDEXA^TM, its novel, non-opioid product for the treatment of lumbosacral radicular pain (sciatica), were announced in March 2022. Scilex participated in the type C meeting for purposes of pre-NDA discussion with the FDA and reached agreement path forward to file an NDA for SP-102 (SEMDEXA^TM) in Lumbosacral Radicular Pain (Sciatica) from the FDA.   Scilex targets indications with high unmet needs and large market opportunities with non-opioid therapies for the treatment of patients with moderate to severe pain.  Scilex launched its first commercial product ZTlido^® in October 2018, in-licensed a commercial product Gloperba^® in June 2022, and launched its third FDA-approved product Elyxyb^TM in April 2023. It is also developing its late-stage pipeline, which includes a pivotal Phase 3 candidate, and one Phase 2 and one Phase 1 candidate.  Its commercial product, ZTlido^® (lidocaine topical system) 1.8%, or ZTlido^®, is a prescription lidocaine topical product approved by the U.S. Food and Drug Administration for the relief of pain associated with post-herpetic neuralgia, which is a form of post-shingles nerve pain.  Scilex in-licensed the exclusive right to commercialize Gloperba^® (colchicine USP) oral solution, an FDA-approved prophylactic treatment for painful gout flares in adults, in the U.S. Scilex in-licensed the exclusive rights to commercialize Elyxyb^TM (celecoxib oral solution) in the U.S. and Canada, the only FDA-approved ready-to-use oral solution for the acute treatment of migraine, with or without aura, in adults. Scilex launched Elyxyb^TM in April 2023, and is planning to commercialize Gloperba^® by 2024, and is well-positioned to market and distribute those products.   Scilex’s three product candidates are SP-102 (injectable dexamethasone sodium phosphate viscous gel product containing 10 mg dexamethasone), or SEMDEXA™, a Phase 3, novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, with FDA Fast Track status; SP-103 (lidocaine topical system) 5.4%, a Phase 2 study, triple-strength formulation of ZTlido^®, for the treatment of chronic neck pain, with FDA Fast Track status. We received our SP-103 Phase 2 top-line results in August 2023 and the trial achieved its objectives characterizing safety, tolerability and preliminary efficacy of SP-103 in [acute low back pain associated with muscle spasms]. SP-103 was safe and well-tolerated. Increase of lidocaine load in topical system by three times, compared with approved ZTlido, 5.4% vs. 1.8%, did not result in signs of systemic toxicity or increased application site reactions with daily applications over one month treatment. We will continue to analyze the SP-103 Phase 2 trial data along with a recently completed investigator study of ZTlido in patients with chronic neck pain which also has showed promising top-line efficacy and safety results. Scilex is planning to initiate Phase 2/3 trial in chronic neck pain in 2024; and SP-104, 4.5 mg Delayed Burst Release Low Dose Naltrexone Hydrochloride (DBR-LDN) Capsule, for the treatment of chronic pain, fibromyalgia that has completed multiple Phase 1 trial programs and is expected to initiate Phase 2 trials 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 Motion and the potential for the Bankruptcy Court to refuse to grant the Motion, statements regarding the anticipated timing for completion of the Lender Proposal and procedures for participating in the Lender Proposal and executing a release agreement, Scilex’s plans to initiate a Phase 2/3 trial in chronic neck pain in 2024 and plans to initiate Phase 2 trials in 2024 for SP-104, Scilex’s belief that it is well positioned to continue its growth over the next several years, Scilex’s long-term objectives and commercialization plans, Scilex’s potential to attract new capital, future opportunities for Scilex, Scilex’s future business strategies, the expected cash resources of Scilex and the expected uses thereof; Scilex’s current and prospective product candidates, planned clinical trials and preclinical activities and potential product approvals, as well as the potential for market acceptance of any approved products and the related market opportunity; statements regarding ZTlido^®, Gloperba^®, ELYXYB^®, SP-102 (SEMDEXA™), SP-103 or SP-104, if approved by the FDA; Scilex’s development and commercialization plans; and Scilex’s products, technologies and prospects.  

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: 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 the ongoing COVID-19 pandemic; 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 for SP-102, SP-103 or SP-104 may not be successful; risks that the prior results of the clinical 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 set forth in Scilex’s filings with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this 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 the subject of an exclusive, transferable license to use the registered trademark by Scilex Holding Company.

All other trademarks are the property of their respective owners.

© 2023 Scilex Holding Company All Rights Reserved.

FAQ

What is the emergency motion filed by Scilex Holding Company?

Scilex Holding Company filed an emergency motion for the production of books and records from certain entities in the U.S. Bankruptcy Court for the Southern District of Texas.

What is the Short Seller Proposal?

The Short Seller Proposal offered Short Sellers the opportunity to cover their positions in Scilex Dividend Stock and avoid further fees, interest, and expenses.

What is the Lender Proposal?

The Lender Proposal offers lenders of short positions the chance to have the Scilex Dividend Stock returned and receive a release of claims and causes of action related to naked short selling or market manipulative behavior.