PALO ALTO, Calif. - Scilex Holding Company (NASDAQ:SCLX), a firm engaged in the development and commercialization of treatments for neurodegenerative, cardiometabolic diseases, and non-opioid pain management, announced the completion of a registered direct offering. The company's stock, which has declined over 65% in the past six months according to InvestingPro data, appears undervalued based on Fair Value analysis. The offering included over 26 million shares of common stock, pre-funded warrants to purchase around 2.4 million shares, and common warrants to purchase up to approximately 57.5 million shares. The combined offering price was set at $0.59 per share and $0.5899 per pre-funded warrant.
The exercise price for the pre-funded warrants is $0.0001 per share, and they are immediately exercisable post-offering. The common warrants, exercisable six months from issuance, have an exercise price of $0.6490 per share, with half expiring in five years and the remainder in two and a half years.
Scilex raised gross proceeds of roughly $17 million before fees and other expenses. These funds, supplemented by existing capital, are earmarked for general corporate purposes, including working capital, commercialization, research and development, clinical trials, and potential acquisitions or debt repayment. InvestingPro data reveals the company's current ratio of 0.2 indicates tight liquidity, making this capital raise particularly crucial for operations.
This transaction was conducted under a shelf registration statement filed with the SEC on December 22, 2023, and declared effective on January 11, 2024. The securities were offered via a prospectus supplement and accompanying prospectus available on the SEC's website.
Scilex's portfolio includes FDA-approved products for pain management and migraine treatment, as well as product candidates in various development stages. The company has demonstrated solid revenue growth of 9.41% and maintains a healthy gross profit margin of 68.24%, according to InvestingPro analysis, which offers 8 additional key insights about the company's financial health and market position. These candidates include a Phase 3 completed corticosteroid for sciatica and a Phase 2 completed lidocaine topical system for acute low back pain, among others.
The company's forward-looking statements highlight intentions to use the offering's net proceeds and plans to launch and initiate trials for other products in 2024, but these statements are subject to risks and uncertainties that may impact actual results.
The information in this article is based on a press release statement from Scilex Holding Company.
In other recent news, Scilex Holding Company has made significant strides in its financial and operational performance. The biotech firm secured $17 million in a stock and warrant sale, a strategic financial move involving the sale of over 26 million shares of common stock and warrants. This capital raise is crucial for Scilex, which is facing significant short-term liquidity challenges.
In addition to this, Scilex announced a joint venture with IPMC, named Scilex Bio, to develop and commercialize KDS2010, a novel obesity and neurodegenerative disease treatment currently in Phase 2 clinical trials. The joint venture will hold global rights for KDS2010, with Scilex contributing $50 million of Semnur Pharmaceuticals, Inc. common stock and IPMC providing the exclusive rights to the compound.
Analysts from H.C. Wainwright maintain a Buy rating on Scilex, indicating a positive outlook for the company. The company also reported Q3 net sales growth for its non-opioid pain management products, with ZTlido sales reaching between $11.0 million and $13.0 million.
Furthermore, Scilex announced the resignation of David Lemus from its Board of Directors for personal and professional reasons, leaving a vacancy yet to be filled. The company also appointed BPM LLP as its new independent registered public accounting firm, ensuring high standards of financial reporting and compliance.
These are the most recent developments at Scilex Holding Company, reflecting its ongoing efforts to manage its financial health and operational performance.
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