NASDAQ:SCLX
READ THE FULL SCLX RESEARCH REPORT
Scilex Holding Company (NASDAQ:SCLX) is a revenue-generating company that is focused on addressing one of the biggest issues facing humanity today—that of the overuse of opioids. Scilex is focused on developing non-opioid pain management products that provide the relief patients so desperately need, while avoiding the debilitating addiction that often comes with the use of opioids. Roughly 112,000 Americans died in 2023 from overdoses and there we have no doubt that a good number of those involved opioid use at some point to reduce physical pain of various types.
Scilex continues to grow its product offerings and distribution channels, leading to more patients being helped and more revenue coming in.
The company has three products on the market right now, which we’ve discussed in previous reports, but Scilex also has three treatments in the pipeline that we believe are as important, if not more so, than the company’s current commercialized portfolio.
• SP-102, or Semdexa, is on track to become the first FDA-approved alternative to off-label steroid injections, which, according to the company, are administered over 12 million times annually in the US.
o The treatment has met primary and secondary endpoints in the Phase 3 trial and has been granted Fast Track status by the FDA for treatment of lumbar radicular and sciatica pain.
• SP-103 has also been granted Fast Track status by the FDA for the treatment of chronic neck pain.
o The company is planning for a Phase 2/3 trial in 2024 after a successful Phase 2 trial.
• SP-104 is being studied to treat fibromyalgia, which, according to the CDC, impacts an estimated 4 million Americans, with women twice as likely as men to suffer from the condition.
o The treatment has completed multiple Phase 1 trials successfully and the company is preparing for a Phase 2 trial.
The company has proven that it can bring products to market successfully, and then grow the market share and revenue generation ability of those products and we’re looking forward to seeing the expanding portfolio of Scilex products positively impacting millions of lives.
The company recently released its 1Q2024 results, and while revenue and earnings were slightly below expectations, growth continues, and the company remains focused on growing sales and is investing in the resources to do so. The highlights of the report are:
• Net revenues grew from $10.6 million in the year-ago quarter to $10.9 million in the just announced quarter, helped by a 28% increase in gross product sales of ZTlido.
o Gross revenues increased by 34% over the same period.
• Selling costs increased by $600,000 versus a year ago, and we believe that is a cost worth taking as the company is already seeing sales increase from the bigger commitment to marketing.
• The company is preparing to launch a new gout treatment, Gloperba, in the first half of 2024.
• The company is expecting to expand markets for Elyxyb, the company’s oral solution for the acute treatment of migraine, in 2024, with the company already filing a New Drug Submission to Canada’s drug authority.
o As part of a recently announced Final Approval of a Settlement Agreement with Takeda Pharmaceuticals, Scilex entered into a License Agreement with Takeda granting the company a non-exclusive license to certain patents owned by Takeda.
o Based on that resolution, Scilex has now submitted a copy of that Consent Judgment to the FDA and requested that the FDA convert its tentative approval of Scilex Pharma’s proposed label expansion for Gloperba into a final approval of the expanded Gloperba label. With the resolution of this patent issue, the company believes that it has satisfied all requirements for final FDA approval of the expanded Gloperba label.
o According to company management, the expansion of Gloperba would provide the company with the ability to utilize dosing flexibility of liquid formulation to address unmet medical needs and provide specific dosing guidance to patients with renal impairment as set out below:
â–ª Patients with mild or moderate renal or hepatic impairment should be considered for dose adjustment.
â–ª For patients with severe renal impairment, the starting dose should be 0.3 mg/day.
â–ª For patients undergoing dialysis, the total recommended dose should be 0.3 mg and be given twice a week.
o A recent market research study conducted by Scilex among rheumatologists revealed a high degree of interest in Gloperba as a liquid colchicine formulation designed for precision dosing. Specifically, clinicians using colchicine for prophylaxis of gout flares in adults indicated a strong likelihood to use Gloperba instead of tablets/capsules in certain at-risk patient populations who have a clinical need for lowered precision dosing to mitigate the risk of colchicine toxicity.
After the quarter end, the company entered into a securities purchase agreement in which the company agreed to sell 15 million shares of common stock and warrants to purchase up to 15 million more, with the aggregate gross proceeds to the company amounting to $15 million.
These results and plans for the future reinforce our belief that SCLX is poised to resume its move higher and that investors continue to underestimate the value of treatments the company currently has and is developing. We urge investors to take a look at a company that is earning revenue, growing that revenue in a meaningful way, and adding to its portfolio of very important treatments before the rest of the investing community realizes the story developing at Scilex.
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