Sorrento Therapeutics, Inc.'s Bankruptcy Court Requires Brokerages to Provide Information Related to Scilex Common Stock

Rhea-AI Summary

Sorrento Therapeutics (OTC: SRNEQ) announced a court order on April 4, 2023, requiring top brokers to disclose information regarding Scilex Holding Company (NASDAQ: SCLX) shares amidst its Chapter 11 proceedings initiated on February 13, 2023. This follows Sorrento's December 30, 2022, dividend announcement of 76 million Scilex shares, which brokerages have not reported to Broadridge Financial Solutions for Scilex's upcoming shareholder meeting on April 6, 2023. Sorrento seeks to maximize stakeholder value while navigating its bankruptcy case, with Scilex not being a debtor in the proceedings.

Positive

• None.

Negative

• Sorrento's Chapter 11 filing raises concerns about its financial stability and operational continuity.
• Failure of brokerages to report Scilex shares may affect shareholder voting and corporate governance.
• The Chapter 11 case introduces significant uncertainty regarding Sorrento's future business operations.

SAN DIEGO, April 4, 2023 /PRNewswire/ -- Sorrento Therapeutics, Inc. (OTC: SRNEQ, "Sorrento"), a biopharmaceutical company dedicated to the development of life-saving therapeutics to treat cancer, intractable pain, and infectious disease, today announced that the U.S. Bankruptcy Court for the Southern District of Texas entered an order requiring the top 25 brokers, dealers, banks, and other nominees that act as agents for Sorrento shareholders (the "Brokerages") to provide Sorrento with information related to the common stock of Scilex Holding Company (NASDAQ: SCLX, "Scilex"), in connection with Sorrento's chapter 11 case that was filed on February 13, 2023. 

As previously disclosed, on December 30, 2022, Sorrento announced a dividend to its shareholders of 76 million shares of common stock of Scilex, a substantial amount of which was distributed to the Brokerages, who hold the distributed shares in custody as agents for Sorrento shareholders. The Brokerages, however, have failed to report the ownership of such shares to Broadridge Financial Solutions, Inc., the entity designated to collect, verify, and tabulate shareholder votes for Scilex's annual shareholder meeting on April 6, 2023. The Bankruptcy Court's order requires the Brokerages to provide Sorrento certain information regarding the ownership and trading of Scilex common stock.

As previously disclosed, due to the possibility of certain actions by a litigation creditor, Sorrento and its wholly-owned, non-operating subsidiary Scintilla Pharmaceuticals, Inc. sought chapter 11 relief to safeguard its business and ensure the continuation of business operations, while protecting and maximizing value for stakeholders. Scilex is not a debtor in the chapter 11 case.

About Sorrento Therapeutics, Inc.

Sorrento is a clinical and commercial stage biopharmaceutical company developing new therapies to treat cancer, pain (non-opioid treatments), autoimmune disease and COVID-19. Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as next-generation tyrosine kinase inhibitors ("TKIs"), fully human antibodies ("G-MAB™ library"), immuno-cellular therapies ("DAR-T™"), antibody-drug conjugates ("ADCs"), and oncolytic virus ("Seprehvec™"). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including STI-1558 and COVI-MSC™; and diagnostic test solutions, including COVIMARK™. 

Sorrento's commitment to life-enhancing therapies for patients is also demonstrated by our effort to advance a TRPV1 agonist, non-opioid pain management small molecule, resiniferatoxin ("RTX"), and SP-102 (10 mg, dexamethasone sodium phosphate viscous gel) (SEMDEXA™), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, and to commercialize ZTlido® (lidocaine topical system) 1.8% for the treatment of postherpetic neuralgia (PHN). RTX has been cleared for a Phase II trial for intractable pain associated with cancer and a Phase II trial in osteoarthritis patients. Positive final results from the Phase III Pivotal Trial C.L.E.A.R. Program for SEMDEXA™, its novel, non-opioid product for the treatment of lumbosacral radicular pain (sciatica), were announced in March 2022. ZTlido® was approved by the FDA on February 28, 2018.

For more information visit www.sorrentotherapeutics.com.

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 Sorrento 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 Sorrento's ability to operate and grow its business, Sorrento's liquidity following the DIP financing, Sorrento's ability to safeguard its business operations and protect and maximize value for stakeholders, Sorrento's long-term objectives and commercialization plans, future opportunities for Sorrento, Sorrento's future business strategies, the expected cash resources of Sorrento and the expected uses thereof; Sorrento'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 ELYXYB™, SP-102 (SEMDEXA™), SP-103, SP-104 or any of Sorrento's product candidates, if approved by the FDA; Sorrento's development and commercialization plans; and Sorrento's products, product candidates, technologies and prospects.

Risks and uncertainties that could cause Sorrento's actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to: Sorrento's ability to enforce on its arbitration award in the Cynviloq Arbitration, general economic, political and business conditions; risks related to the ongoing COVID-19 pandemic; the risk that the potential product candidates that Sorrento 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 Sorrento's product candidates; the risk that Sorrento will be unable to successfully market or gain market acceptance of its product candidates; the risk that Sorrento's product candidates may not be beneficial to patients or successfully commercialized; the risk that Sorrento 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 results of the Phase 2 trial for SP-103 or Phase 1 trials for 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 Sorrento's filings with the SEC, and relating to the voluntary proceedings under Chapter 11 in the Bankruptcy Court (the "Chapter 11 Cases"), Sorrento's ability to continue operating in the ordinary course while the Chapter 11 Cases are pending, the timing and outcome of the Chapter 11 Cases, Sorrento's ability to obtain timely approval by the Bankruptcy Court of the motions filed in the Chapter 11 Cases and any effects of the Chapter 11 Cases on the enforcement of the arbitration award in the Cynviloq Arbitration and Sorrento's ability to comply with the restrictions imposed by the terms and conditions of the DIP financing. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement in this press release except as may be required by law.

Contacts:

For Sorrento Therapeutics, Inc.

Media Contact
The Levinson Group
212-202-2754
Email: sorrento@tlgcommunications.com
Website: www.sorrentotherapeutics.com

Sorrento® and the Sorrento logo are registered trademarks of Sorrento Therapeutics, Inc.

G-MAB™, DAR-T™, Seprehvec™, SOFUSA™, COVI-MSC™, COVIMARK™,Fujovee™ and Ovydso™ are trademarks of Sorrento Therapeutics, Inc.

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

All other trademarks are the property of their respective owners.

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SOURCE Sorrento Therapeutics, Inc.

FAQ

What recent court order affected Sorrento Therapeutics related to Scilex shares?

On April 4, 2023, a U.S. Bankruptcy Court ordered brokerages to disclose information regarding Scilex Holding Company's shares as part of Sorrento Therapeutics' Chapter 11 proceedings.

When did Sorrento Therapeutics file for Chapter 11?

Sorrento Therapeutics filed for Chapter 11 on February 13, 2023.

What did Sorrento Therapeutics announce on December 30, 2022?

Sorrento announced a dividend distribution of 76 million shares of Scilex common stock to its shareholders.

How does the bankruptcy filing impact Sorrento's shareholders?

The bankruptcy filing raises concerns about Sorrento's financial stability and the impact on its operations and shareholder value.

What is the significance of the upcoming Scilex shareholder meeting on April 6, 2023?

The meeting is significant as it involves voting on corporate matters, which may be affected by the brokerages' failure to report Scilex shares.