PALO ALTO, Calif. - Scilex Holding Company (NASDAQ:SCLX), a firm specializing in non-opioid pain management solutions, has reached a settlement agreement approved by the U.S. Bankruptcy Court for the Southern District of Texas. This settlement pertains to a legal action involving Scilex's subsidiary, Scilex Pharmaceuticals Inc., and Virpax Pharmaceuticals Inc., in the context of Sorrento Therapeutics (OTC:SRNEQ), Inc.'s bankruptcy proceedings.
The agreement, which follows a term sheet announced on February 26, 2024, includes the resolution of claims against Virpax Pharmaceuticals, with Virpax agreeing to pay Scilex a total of $6 million in two installments. The first payment of $3.5 million is due by March 18, 2024, and the second payment of $2.5 million by July 1, 2024.
Additionally, Virpax has committed to pay royalties on the net sales of certain drug candidates, should they be sold. These royalties will be 6% of annual net sales for each of the drugs: Epoladerm, Probudur, and Envelta, and will continue until the expiration of the last valid patent claim or regulatory exclusivity period for each product.
The settlement provides mutual releases of all claims between the involved parties as of March 14, 2024, although litigation against Anthony Mack, former President of Scilex Pharma and founder of Virpax, will continue as the plaintiffs have not released him from claims.
Scilex Holding Company, headquartered in Palo Alto, California, is known for its FDA-approved products such as ZTlido® for neuropathic pain associated with postherpetic neuralgia, ELYXYB® for acute migraine treatment, and Gloperba® for gout flare prophylaxis. The company also has several product candidates in development, including SP-102 for sciatica pain, which has completed Phase 3 trials and received Fast Track status from the FDA.
The information is based on a press release statement from Scilex Holding Company.
InvestingPro Insights
As Scilex Holding Company navigates through its subsidiary's legal proceedings and bankruptcy settlements, it's crucial for investors to consider the financial health and market position of the companies involved. Sorrento Therapeutics, Inc. (NASDAQ: SRNEQ), the parent company of Scilex Pharmaceuticals Inc., exhibits several financial challenges that could impact its operations and stock performance.
InvestingPro Tips for Sorrento Therapeutics reveal that the company operates with a significant debt burden and may struggle to make interest payments on its debt, as indicated by the company's negative P/E ratio of -0.17 for the last twelve months as of Q2 2023. This situation is compounded by the fact that Sorrento is quickly burning through cash. Moreover, analysts anticipate a sales decline in the current year, which could further strain the company's financial resources.
From a market perspective, Sorrento Therapeutics' stock has experienced substantial volatility, with a 1 Month Price Total Return as of mid-2024 showing a dramatic decrease of -70.83%. Additionally, the company's Market Cap stands at a modest 7.61M USD, reflecting the stock's diminished value. The InvestingPro Fair Value estimate for Sorrento is currently at 0.15 USD, suggesting a potential undervaluation given its recent closing price of 0.01 USD.
These insights underscore the importance of thorough due diligence for investors considering Scilex Holding Company or its related entities. For a more comprehensive analysis, including additional InvestingPro Tips, visit https://www.investing.com/pro/SRNEQ. Subscribers can use the coupon code PRONEWS24 to receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a total of 20 InvestingPro Tips for Sorrento Therapeutics that can guide investment decisions.
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