Scilex Holding Company Has Appealed Lower Court Decision to the U.S. Court of Appeals for the Federal Circuit in Washington, DC and Will Continue to Vigorously Pursue its Infringement Action Against Aveva

Rhea-AI Summary

Scilex Holding Company (NASDAQ: SCLX) has appealed a lower court decision to the U.S. Court of Appeals for the Federal Circuit regarding its patent infringement lawsuit against Aveva Drug Delivery Systems. The case stems from May 2022, when Aveva submitted an Abbreviated New Drug Application (ANDA) to the FDA with a Paragraph IV notice concerning Scilex's ZTlido patents.

Initially filed in June 2022 at the U.S. District Court for the Southern District of Florida, the lawsuit alleged infringement of Scilex's Orange Book-listed patents for ZTlido. Following a trial in July 2024, the District Court ruled that Aveva's proposed product did not infringe Scilex's patents. The company is now vigorously pursuing an appellate review, with CEO Jaisim Shah expressing confidence in the strength of ZTlido's intellectual property portfolio.

Positive

• Company has additional ZTlido patents pending for follow-on programs
• Multiple layers of intellectual property protection for ZTlido franchise

Negative

• District Court ruled against SCLX, finding no patent infringement by Aveva
• Potential threat to ZTlido market exclusivity if appeal is unsuccessful
• Legal expenses continue as litigation extends through appeal process

Insights

Legal Expert

Scilex is currently navigating a challenging patent litigation scenario that introduces significant uncertainty for its ZTlido franchise. The District Court's ruling that Aveva's proposed product doesn't infringe Scilex's patents represents a substantial setback in their efforts to protect market exclusivity. Patent appeals to the Federal Circuit typically have about a 25-30% success rate for overturning district court decisions, making this an uphill battle.

The Paragraph IV ANDA challenge is particularly significant as it directly threatens Scilex's market protection. If Scilex ultimately loses this appeal, Aveva could potentially receive FDA approval to market a competing lidocaine patch, which would likely impact Scilex's market share and pricing power for ZTlido. This type of litigation is common in the pharmaceutical industry, but the first-instance loss weakens Scilex's negotiating position.

The CEO's reference to "additional patents forthcoming" suggests a layered IP defense strategy that could provide secondary protection even if this specific appeal fails. This is a standard approach in pharmaceutical IP strategy—developing a patent estate with multiple layers of protection. However, the immediate concern remains focused on the patents currently being litigated, which appear vulnerable based on the district court's findings.

Pharmaceutical Industry Expert

This patent challenge against Scilex's ZTlido product represents a common but significant threat in the pharmaceutical industry. ZTlido (lidocaine topical system 1.8%) is one of Scilex's key marketed products for post-herpetic neuralgia, and maintaining exclusivity is crucial for preserving its value proposition in the non-opioid pain management segment where the company focuses.

The litigation centers around Aveva's Abbreviated New Drug Application, which specifically challenges Scilex's Orange Book-listed patents. These challenges typically target the most commercially relevant patent protection and aim to bring generic alternatives to market before patent expiration. The initial court ruling against Scilex is concerning, as successful ANDA challenges can lead to premature generic entry and substantial revenue erosion.

While the immediate decision is unfavorable, Scilex's multi-layered patent strategy—including forthcoming patents mentioned by the CEO—may provide some insulation even if this specific appeal fails. For smaller specialty pharmaceutical companies like Scilex (with a market cap of approximately $50.8 million), protecting key franchises from generic competition is particularly critical for maintaining revenue streams and supporting development of their pipeline. The ongoing appeal creates uncertainty that will likely persist for 12-18 months as the Federal Circuit reviews the case.

PALO ALTO, Calif., March 26, 2025 (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 and, following the formation of its proposed joint venture with IPMC Company, in neurodegenerative and cardiometabolic disease, reiterates that it has appealed a lower court decision to the U.S. Court of Appeals for the Federal Circuit in Washington, DC and will continue to vigorously pursue its infringement action on appeal against Aveva Drug Delivery Systems, Inc. (“Aveva”).

In May 2022, Scilex received notice that a pharmaceutical maker, Aveva and its former related entities, Apotex Corp. and Apotex Inc. (collectively, the “Apotex Parties”), had submitted an Abbreviated New Drug Application (ANDA) to the U.S. Food and Drug Administration (“FDA”) and had filed a Paragraph IV notice, alerting both the FDA and Scilex that the proposed product may infringe Scilex’s ZTlido patents that are listed in the FDA’s “Approved Drug Products with Therapeutic Equivalence Evaluations” publication (the FDA’s “Orange Book”). In response, Scilex filed a patent infringement lawsuit against those parties in June 2022, in the U.S. District Court for the Southern District of Florida (the “District Court”), alleging infringement of Scilex’s Orange Book-listed patents covering ZTlido. The Apotex parties were later dismissed from the lawsuit.

Following the trial in July 2024, the District Court found that the proposed product did not infringe Scilex’s patents. Scilex has appealed that decision to the U.S. Court of Appeals for the Federal Circuit in Washington, DC. Scilex intends to continue to vigorously pursue its infringement action on appeal.

“We remain steadfast in our belief in the strength and validity of our ZTlido intellectual property and that Aveva is infringing on our patents. In light of the Court’s decision, we are pursuing an appellate review at the U.S. Court of Appeals for the Federal Circuit as warranted. We firmly believe we have built a strong portfolio of intellectual property and that the ZTlido franchise is well protected on multiple levels. The infringement suit is ongoing, and we have additional patents that are forthcoming for the follow-on programs,” said Jaisim Shah, President and Chief Executive Officer of Scilex.

For more information on Scilex Holding Company, refer to www.scilexholding.com

For more information on Semnur Pharmaceuticals, Inc., refer to www.semnurpharma.com

For more information on ZTlido^®, including Full Prescribing Information, refer to www.ztlido.com.

For more information on ELYXYB^®, including Full Prescribing Information, refer to www.elyxyb.com.

For more information on Gloperba^®, including Full Prescribing Information, refer to www.gloperba.com.

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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 and, following the formation of its proposed joint venture with IPMC Company, in neurodegenerative and cardiometabolic disease. 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 is 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.

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 and was granted Fast Track status from the FDA in 2017; (ii) SP-103 (lidocaine topical system) 5.4%, (“SP-103”), a next-generation, triple-strength formulation of ZTlido, for the treatment of acute pain and for which Scilex has recently completed a Phase 2 trial in acute low back pain. SP-103 has been granted Fast Track status from the FDA 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.

Scilex Holding Company is headquartered in Palo Alto, California.

About Semnur Pharmaceuticals, Inc.

Semnur Pharmaceuticals, Inc. (“Semnur”), a wholly-owned subsidiary of Scilex, is a clinical late-stage specialty pharmaceutical company focused on the development and commercialization of novel non-opioid pain therapies. Semnur’s product candidate, SP-102 (SEMDEXA™), is the first non-opioid novel gel formulation administered epidurally in development for patients with moderate to severe chronic radicular pain/sciatica.

Semnur Pharmaceuticals, Inc. 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 final outcome of the patent infringement lawsuit or the timing thereof, any additional patents that are forthcoming for the follow-on programs, Scilex’s proposed joint venture with IPMC Company and the potential development and commercialization of treatments for obesity, neurodegenerative, cardiometabolic disease.

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: Scilex’s ability to obtain and maintain proprietary protection for its products, technology and know-how and to prevent others from infringing on its proprietary rights, Scilex’s ability to consummate a joint venture or any other transaction with IPMC Company and develop and commercialize treatments for obesity, neurodegenerative, cardiometabolic disease; 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; 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 Securities and Exchange Commission, including Scilex’s Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q that the Company has filed or may file 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 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.

© 2025 Scilex Holding Company All Rights Reserved.

FAQ

What is the current status of SCLX's patent infringement lawsuit against Aveva?

SCLX is appealing the District Court's decision to the U.S. Court of Appeals after the lower court ruled in July 2024 that Aveva's proposed product did not infringe Scilex's ZTlido patents.

When did Aveva file the ANDA challenging SCLX's ZTlido patents?

Aveva filed the Abbreviated New Drug Application (ANDA) with a Paragraph IV notice in May 2022, challenging Scilex's ZTlido patents listed in the FDA's Orange Book.

What was the outcome of SCLX's initial patent lawsuit in the District Court?

Following the trial in July 2024, the U.S. District Court for the Southern District of Florida found that Aveva's proposed product did not infringe Scilex's patents.

How might the patent dispute affect SCLX's ZTlido franchise?

The outcome could impact ZTlido's market exclusivity, though Scilex claims the franchise is well-protected with multiple patents and additional patents forthcoming for follow-on programs.