PALO ALTO, Calif. - Scilex Holding Company (NASDAQ:SCLX), a company specializing in non-opioid pain management products, has reported to regulatory authorities about what it believes to be illicit market manipulation activities affecting its stock. In letters addressed to the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), Scilex outlined concerns regarding potentially illegal "naked" short selling practices that could be undermining shareholder value and infringing on shareholder rights.
The company, headquartered in Palo Alto, California, is actively engaged in the development and commercialization of treatments for acute and chronic pain without the use of opioids. Their portfolio includes FDA-approved products such as ZTlido® for post-shingles nerve pain, ELYXYB® for migraines, and the soon-to-be-launched Gloperba® for gout flare prophylaxis. Additionally, Scilex is advancing a pipeline of product candidates, including SP-102 (SEMDEXA™), SP-103, and SP-104, aimed at addressing unmet needs in pain management.
Scilex's management has taken a firm stance against the alleged manipulative short selling, emphasizing the importance of maintaining a fair trading environment for its common stock. The company has made the letters sent to the SEC and FINRA publicly available for download, underscoring its commitment to transparency and shareholder interests.
The press release from Scilex also contained forward-looking statements regarding the company's expectations about the extent of the suspected market manipulation and the potential legal ramifications. However, these statements involve risks and uncertainties, including the unpredictable nature of trading markets and regulatory outcomes.
Investors and media interested in Scilex's actions and its product offerings can refer to the company's website for more information. This news article is based on a press release statement from Scilex Holding Company.
InvestingPro Insights
As Scilex Holding Company (NASDAQ:SCLX) takes a stand against alleged stock manipulation, a closer look at the company's financial health and stock performance through InvestingPro data may offer insights. Scilex's market capitalization stands at a modest $141.71 million, reflecting the size and growth stage of the firm. The company's recent history of financial performance shows a concerning picture, with a negative P/E ratio of -0.92 for the last twelve months as of Q1 2024, indicating that the company is not currently profitable.
Moreover, Scilex's gross profit margin appears robust at 66.14% for the same period, demonstrating a strong ability to control the cost of goods sold relative to revenue. However, this has not translated into positive operating income, as indicated by an operating income margin of -226.01%. These metrics suggest that while Scilex can generate a healthy gross profit from its sales, operating expenses are significantly high, impacting the bottom line.
Investors may also note the significant volatility in the company's stock price. Despite a strong return over the last month of 33.61%, the one-year price total return as of the same date reflects a steep decline of -81.22%. This volatility is underscored by two InvestingPro Tips: Scilex operates with a significant debt burden and may have trouble making interest payments on its debt, which could be contributing factors to the stock's performance.
For those considering a deeper dive into Scilex's financials and stock performance, InvestingPro offers additional tips that could be valuable. There are 5 more InvestingPro Tips available, which could provide further context to the company's situation. Interested readers can explore these tips and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing their investment analysis tools.
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