Scilex pany(SCLX)2025-01-17 21:34Financial Performance - Net revenue for the three months ended September 30, 2024, was $14.4 million, compared to $10.1 million in the same period in 2023[22] - Net loss for the three months ended September 30, 2024, was $4.4 million, compared to $35.5 million in the same period in 2023[22] - Net loss per share for the three months ended September 30, 2024, was $0.03, compared to $0.63 in the same period in 2023[22] - Total net operating costs and expenses for the three months ended September 30, 2024, were $34.4 million, compared to $48.9 million in the same period in 2023[22] - Comprehensive loss for the three months ended September 30, 2024, was $1.2 million, compared to $35.5 million in the same period in 2023[22] - Net loss for Q1 2024 was $24.37 million, increasing to $37.58 million in Q2 2024, and further to $4.39 million in Q3 2024[23] - Net loss for Q1 2023 was $30.75 million, decreasing to $26.65 million in Q2 2023, and increasing to $35.53 million in Q3 2023[24] - Net loss for the nine months ended September 30, 2024, was $(66.3 million), compared to $(92.9 million) in the same period in 2023, showing a reduction in losses[27] - The company's net loss for the three months ended September 30, 2024 was $4.4 million, compared to $35.5 million for the same period in 2023[211] - The company's net loss for the nine months ended September 30, 2024 was $66.3 million, compared to $92.9 million for the same period in 2023[211] Cash and Liquidity - Cash and cash equivalents decreased from $3.9 million in December 2023 to $77 thousand in September 2024[21] - Total cash, cash equivalents, and restricted cash increased to $8.116 million as of September 30, 2024, compared to $4.729 million as of December 31, 2023[45] - Net cash proceeds from operating activities were $16.8 million for the nine months ended September 30, 2024, compared to $(15.3 million) used in the same period in 2023[27] - The company had an outstanding balance of $14.3 million under the Revolving Facility as of September 30, 2024, which was fully repaid by October 8, 2024[58] - The company received a $10.0 million FSF Deposit on June 18, 2024, and issued a warrant to purchase up to 3,250,000 shares of Common Stock at $1.20 per share[60] - The company delivered 28,000 cartons of ZTlido to Endeavor in November 2024, fully satisfying the remaining obligations of the FSF Deposit[62] - The company reported a negative working capital of $241.7 million and an accumulated deficit of $556.6 million as of September 30, 2024[63] - The company plans to fund operations through equity offerings, debt financings, collaborations, and future sales of ZTlido, ELYXYB, and GLOPERBA[64] - Scilex Pharma paid off all obligations under the eCapital Credit Agreement on October 8, 2024, terminating the agreement and related documents[109] - The company made mandatory prepayments of $9,578,835 and $7,000,000 to Oramed, representing 70% of net cash proceeds from the Registered Direct Offering and FSF Deposit, respectively[111] - The company issued $50 million in Tranche B Notes on October 7, 2024, with $22.5 million in cash received from investors and $22.5 million in exchange for a reduction in the principal balance of the Oramed Note[215] Assets and Liabilities - Accounts receivable decreased from $34.6 million in December 2023 to $31.6 million in September 2024[21] - Inventory decreased from $4.2 million in December 2023 to $2.4 million in September 2024[21] - Total stockholders' deficit increased from $172.94 million at the end of 2023 to $211.32 million by September 30, 2024[23] - Total stockholders' deficit increased from $36.24 million at the end of 2022 to $162.69 million by September 30, 2023[24] - The company recorded $1.2 million in allowances for credit losses on accounts receivable as of September 30, 2024, compared to no allowances as of December 31, 2023[46] - The weighted-average interest rate for short-term loans, including Convertible Debentures, the Oramed Note, and FSF Deposit, was 13.43% as of September 30, 2024, slightly down from 13.55% as of December 31, 2023[49] - The fair value of the Oramed Note was $69.9 million as of September 30, 2024, with a discount rate of 52.00%, resulting in a $7.6 million loss in fair value change for the nine months ended September 30, 2024[76] - The FSF Deposit had a fair value of $14.7 million as of September 30, 2024, with a $4.7 million loss in fair value change for the nine months ended September 30, 2024[77] - The company recorded a gain of $2.4 million in derivative liabilities for the nine months ended September 30, 2024, with a fair value of $11.5 million related to outstanding warrants[80][81] - The company issued a convertible promissory note with a principal amount of up to $180,000, with a balance of $30.1 thousand as of September 30, 2024[85] - The fair value of the Oramed Note was $69.9 million as of September 30, 2024, classified as a current liability[114] - The fair value of the FSF Deposit was $14.7 million as of September 30, 2024, classified as a current liability[123] - The company recorded goodwill of $13.5 million as of September 30, 2024, with no impairment recognized[94] - Intangible assets, net decreased from $36.5 million in December 2023 to $33.5 million in September 2024, with patent rights accounting for $15.4 million[95] - Estimated future amortization expense for intangible assets is $33.5 million, with $16.4 million expected after 2028[96] - The company issued Convertible Debentures totaling $25.0 million, with $15.0 million issued in April 2023 for $14.4 million in net cash proceeds[97][101] - The company repaid $4.4 million of Convertible Debentures during the first quarter of 2024, reducing the outstanding balance to $0[101][103] - Scilex Pharma entered into a Revolving Facility agreement for up to $30.0 million, with interest accruing at the Wall Street Journal Prime Rate plus 1.5%[104][105] - Scilex Pharma's outstanding balance under the Revolving Facility was $14.3 million as of September 30, 2024, and $17.0 million as of December 31, 2023[107] - The Oramed Note has a principal amount of $101.9 million, with six principal installments totaling $101.9 million, and an exit fee of approximately $3.1 million due upon full repayment[111] - The company entered into a Commitment Letter with FSF Lender for a $100.0 million loan, with $85.0 million due within 70 days of receiving the FSF Deposit and $15.0 million within 60 days of the Initial Closing[119] - The FSF Deposit of $10.0 million was received on June 18, 2024, and is creditable towards the $85.0 million required at the Initial Closing[120] - The company issued a Deposit Warrant to FSF Lender for 3,250,000 shares of Common Stock at an exercise price of $1.20 per share, expiring five years from issuance[120] - The fair value of the Fee Warrant issued to IVI was $0.3 million as of the date of issuance[124] - The company delivered 28,000 cartons of ZTlido to Endeavor, fully satisfying the remaining obligations of the FSF Deposit by December 31, 2024[125] - The fair value of the FSF Deposit increased by $4.69 million, resulting in an ending balance of $14.69 million as of September 30, 2024[126] - The company provided a $20.0 million Junior DIP Facility to Sorrento with an annual interest rate of 12.00%, which was fully settled by September 21, 2023[127][129][130] - The company repurchased 60,068,585 shares of Common Stock, 29,057,097 shares of Preferred Stock, and 4,490,617 warrants from Sorrento, with the Preferred Stock valued at $52.6 million[131][135] - The company issued Penny Warrants with a fair value of $10.4 million as of September 21, 2023, exercisable at $0.01 per share[143] - The company accrued $1.3 million in excise tax liability related to stock repurchases under the Sorrento SPA[144][146] - As of September 30, 2024, there were 5,467,692 Public Warrants and 1,000,000 Private Warrants outstanding[152][153] - The company repurchased 4,000,000 SPAC Warrants from Oramed on September 20, 2024, which were subsequently cancelled[152] - The company sold 96,982 shares of Common Stock under the A&R Yorkville Purchase Agreement for net proceeds of $0.2 million during the nine months ended September 30, 2024[158] - The company terminated the A&R Yorkville Purchase Agreement effective March 25, 2024[158] - The company did not sell any shares under the B. Riley Purchase Agreement during the nine months ended September 30, 2024 and terminated the agreement effective February 16, 2024[162] - The company sold 92,295 shares of Common Stock under the ATM Sales Agreement for net proceeds of approximately $0.1 million as of September 30, 2024[167] - The company completed a Bought Deal Offering on March 5, 2024, selling 5,882,353 shares of Common Stock and warrants at a combined price of $1.564 per share, raising approximately $9.2 million[169] - The company conducted a Registered Direct Offering on April 23, 2024, selling 15,000,000 shares of Common Stock and warrants at $1.00 per share, raising $15 million before fees[172] - As of September 30, 2024, the company had 20,129,644 shares of Common Stock reserved for future issuance under the Equity Incentive Plan[181] - The company had 34,361,475 stock options outstanding as of September 30, 2024, with a weighted-average exercise price of $4.17[183] - Total stock-based compensation was $10.9 million for the nine months ended September 30, 2024[184] - The company had $31.5 million in unrecognized compensation costs related to unvested stock options as of September 30, 2024, expected to be recognized over 2.6 years[185] - Total stock-based compensation for the ESPP was $74.2 thousand and $196.3 thousand for the three and nine months ended September 30, 2024, respectively[187] - As of September 30, 2024, 167,369 shares of Common Stock were issued under the ESPP[187] - The Company made matching contributions to the 401(k) plan totaling $0.5 million and $0.3 million for the nine months ended September 30, 2024 and 2023, respectively[190] - Scilex Pharma made royalty payments of $2.8 million and $1.1 million for the three months ended September 30, 2024 and 2023, respectively, and $7.2 million and $5.3 million for the nine months ended September 30, 2024 and 2023, respectively[195] - Total royalty expense recorded within cost of revenue was $2.2 million and $1.8 million for the three months ended September 30, 2024 and 2023, respectively, and $6.9 million and $6.1 million for the nine months ended September 30, 2024 and 2023, respectively[195] - The Company issued 4,000,000 shares of Common Stock to a law firm under the 2023 SIA and 10,000,000 shares under the 2024 SIA[191] - The Company entered into a settlement agreement with Virpax, which included payments of $3.5 million (Initial Payment), $2.5 million by July 1, 2024, and potential royalty payments of 6% of annual Net Sales for certain drug candidates[201] - The Company is appealing a court decision that found Aveva's product does not infringe the Company's ZTlido Patents[204] - The Company entered into a Settlement Agreement with Takeda to resolve the GLOPERBA Patent Litigation and obtained a non-exclusive license for certain patents[205] - The company's operating lease expense was $0.3 million for each of the three months ended September 30, 2024 and 2023, and $0.8 million for each of the nine months ended September 30, 2024 and 2023[209] - The company's total lease payments under operating leases are approximately $2.8 million, with a total lease liability of $2.4 million as of September 30, 2024[210] - The company's weighted average remaining lease term for operating leases is 3.0 years, with a weighted average discount rate of 11.0% as of September 30, 2024[210] - The company recognized additional ROU assets and corresponding lease liabilities of $2.5 million due to a lease term modification for its principal executive offices in April 2023[208] - The company issued October Common Warrants exercisable for 7.5 million shares of Common Stock at $1.09 per share, with the exercise price reduced to $1.04 per share after the December RDO[216] - The company issued 2.2 million Placement Agent Shares and Placement Agent Warrants exercisable for 3.7 million shares of Common Stock in connection with the Tranche B Notes offering[219] - The company is responsible for $2 million in placement agent fees and $950,000 in non-accountable legal fees related to the Tranche B Notes offering[218] Product Development and Commercialization - The company launched ELYXYB in the U.S. in April 2023 and commercialized GLOPERBA in the U.S. in June 2024[30] - The company is developing three product candidates: SP-102, SP-103, and SP-104, with SP-102 completing a Phase 3 study and SP-103 completing a Phase 2 trial in Q3 2023[31] - The company acquired SP-104 Assets in May 2022, with potential milestone payments of $3.0 million upon FDA approval and $20.0 million upon achieving certain net sales[66] - The company paid an upfront license fee of $2.0 million to Romeg and agreed to potential milestone payments of up to $13.0 million, with royalties ranging from mid-single digit to low-double digit percentages based on annual net sales of licensed products[70] - The company recorded an intangible asset of $5.7 million for acquired licenses, including a $2.0 million upfront fee and $3.7 million in deferred consideration for future minimum royalty payments[71] - The company acquired rights to ELYXYB in the U.S. and Canada, assuming obligations including contingent sales and regulatory milestone payments, with accrued royalty payables of $0.1 million as of September 30, 2024[73] Equity and Stock Transactions - Common stock shares increased from 160,084 at the end of 2023 to 191,791 by September 30, 2024, primarily due to equity issuances[23] - Common stock shares increased from 141,349 at the end of 2022 to 154,185 by September 30, 2023, primarily due to equity issuances[24] - Stock-based compensation expenses totaled $3.56 million in Q1 2024, $3.61 million in Q2 2024, and $3.71 million in Q3 2024[23] - Stock-based compensation expenses totaled $3.72 million in Q1 2023, $3.59 million in Q2 2023, and $3.51 million in Q3 2023[24] - The company sold 92,295 shares of Common Stock under the ATM Sales Agreement for net proceeds of approximately $0.1 million as of September 30, 2024[59] - The company entered into a merger agreement with Semnur and Denali Merger Sub on August 30, 2024[86] - Semnur's equity value is $2.5 billion as per the Semnur Merger Agreement[89] - The Company purchased 500,000 Class B ordinary shares from the Sponsor for $2 million in cash and 300,000 shares of Common Stock, totaling $2.3 million[90] - The company issued 4,000,000 shares of Common Stock to a law firm under the 2023 SIA and 10,000,000 shares under the 2024 SIA[191] Legal and Regulatory Matters - The Company is appealing a court decision that found Aveva's product does not infringe the Company's ZTlido Patents[204] - The Company entered into a Settlement Agreement with Takeda to resolve the GLOPERBA Patent Litigation and obtained a non-exclusive license for certain patents[205] - The company entered into a settlement agreement with Virpax, which included payments of $3.5 million (Initial Payment),