Scilex pany(SCLX) - 2024 Q1 - Quarterly Report

Financial Performance - Net revenue for Q1 2024 was $10,884,000, a 2.85% increase from $10,582,000 in Q1 2023[22] - Net loss for Q1 2024 was $24,377,000, compared to a net loss of $30,753,000 in Q1 2023, indicating a 20.7% improvement[22] - For the three months ended March 31, 2024, Scilex Pharma reported a net loss of $24.4 million compared to a net loss of $30.8 million for the same period in 2023, representing a 20% improvement in net loss year-over-year[169] - Net revenue for the three months ended March 31, 2024, was $10.9 million, an increase of $0.3 million compared to $10.6 million in 2023, driven by a 28% increase in gross product sales of ZTlido and the commencement of ELYXYB sales[205] Operating Costs and Expenses - Total operating costs and expenses decreased to $30,362,000 in Q1 2024 from $36,055,000 in Q1 2023, representing a reduction of 15.5%[22] - Selling, general and administrative expenses rose to $29.3 million in Q1 2024 from $28.7 million in Q1 2023, driven by increases in advisory, financing, and personnel expenses[209] - Research and development expenses rose to $3,108,000 in Q1 2024, up from $2,736,000 in Q1 2023, reflecting a 13.6% increase[22] - Research and development expenses increased to $3.1 million in Q1 2024 from $2.7 million in Q1 2023, primarily due to increased costs associated with SP-102 and ELYXYB[208] Cash and Liquidity - Cash and cash equivalents decreased to $1,818,000 as of March 31, 2024, down from $3,921,000 at the end of 2023[20] - As of March 31, 2024, the company had cash and cash equivalents of approximately $1.8 million[215] - The Company reported negative working capital of $215.0 million, with cash and cash equivalents of approximately $1.8 million[53] - The Company has an outstanding balance of $16.3 million under a Revolving Facility with eCapital Healthcare Corp. as of March 31, 2024[51] Assets and Liabilities - Total assets decreased to $91,240,000 as of March 31, 2024, from $101,309,000 at the end of 2023, a decline of 10%[20] - Total liabilities increased to $281,026,000 as of March 31, 2024, compared to $274,247,000 at the end of 2023, an increase of 2.8%[20] - As of March 31, 2024, total indebtedness is $112.5 million, down from $128.9 million as of December 31, 2023, representing a decrease of approximately 12.5%[216] Shareholder and Equity Information - The weighted average number of shares during Q1 2024 was 102,407,000, down from 141,660,000 in Q1 2023[22] - The Company entered into an ATM Sales Agreement allowing for the sale of up to $170 million of Common Stock, with 92,295 shares sold for net proceeds of approximately $0.1 million as of March 31, 2024[131] - The Company issued 4,000,000 shares of Common Stock to a law firm as Retainer Shares for legal services[147] - As of March 31, 2024, there were 20,129,644 shares of Common Stock reserved for future issuance under the 2022 Equity Incentive Plan[137] Product Development and Commercialization - Scilex Holding Company focuses on non-opioid pain management products, with five wholly owned subsidiaries and a business combination with Vickers completed in November 2022[28] - The company launched ELYXYB in April 2023, a first-line treatment for migraines, and expects to commercialize GLOPERBA in the U.S. in the first half of 2024[29] - Scilex is developing three product candidates: SP-102, SP-103, and SP-104, with significant efforts on commercialization of ZTlido, GLOPERBA, and ELYXYB in 2024[30] - The company has a development pipeline that includes three product candidates: SP-102 (SEMDEXA), SP-103, and SP-104, with SP-102 having completed a pivotal Phase 3 study[180] Legal and Regulatory Matters - The Company entered into a settlement agreement with Virpax Pharmaceuticals, which includes an initial payment of $3.5 million and potential future royalty payments of 6% on certain drug candidates[158] - Scilex Pharma is involved in ongoing litigation regarding patent infringements related to ZTlido, with a trial scheduled for July 8, 2024[160] Debt and Financing - The Company fully repaid $25 million in Convertible Debentures in March 2024[50] - The Company entered into a Yorkville SPA to issue Convertible Debentures up to $25.0 million, with $10.0 million funded on March 21, 2023, and subsequent tranches funded in April 2023[80] - The outstanding principal balance of the Oramed Note is $92.9 million as of March 31, 2024, reduced from $96.9 million as of December 31, 2023[217] Miscellaneous - The Company has an accumulated deficit of $514.6 million as of March 31, 2024[53] - The Company recorded goodwill of $13.5 million as of March 31, 2024, with no impairment recognized during the three months ended March 31, 2024[78] - The Company recorded a loss of $0.5 million attributed to warrant liabilities for the three months ended March 31, 2024[67]