Proceeds from the
financing commitment will be used to enhance the launch and
commercialization of Scilex’s three FDA-approved non-opioid pain
management products (ZTlido®, Gloperba® and Elyxyb™) for the treatment of acute and chronic pain.
The
financing will enable further investment in Scilex’s non-opioid pain
management portfolio, accelerating its mission to launch innovative
non-opioid pain management products in major markets.
PALO
ALTO, Calif., March 21, 2023 (GLOBE NEWSWIRE) -- Scilex Holding Company
(Nasdaq: SCLX, “Scilex”), a majority-owned subsidiary of Sorrento
Therapeutics, Inc. (OTC: SRNEQ), an innovative revenue-generating
company focused on acquiring, developing and commercializing non-opioid
pain management products for the treatment of acute and chronic pain,
announced that it has entered into a securities purchase agreement with
YA II PN, Ltd., a Cayman Islands exempt limited partnership managed by
Yorkville Advisors Global, LP (”Yorkville”), for the issuance and sale
of unsecured convertible debentures in the principal amount of up to $25
million.
The convertible debentures will be issued and sold in
three tranches as follows: (i) $10.0 million upon the signing of the
definitive agreement with respect to the debentures (the “First Closing
Date”), (ii) $7.5 million upon the filing of a registration statement
with the U.S. Securities and Exchange Commission (“SEC”) relating to the
shares of common stock underlying the convertible debentures, and (iii)
$7.5 million at the time such registration statement is declared
effective by the SEC.
The
convertible debentures will bear interest at a rate of 7.00% per year
and will mature on December 21, 2023, the date that is nine months
following the First Closing Date.
Subject to the terms and
conditions of the convertible debentures, Yorkville has the right to
convert all or any portion of the convertible debentures at its option
into shares of Scilex’s common stock at a price of $8.00 per share (the
“Conversion Price”). The Conversion Price is subject to a one-time reset
equal to the average of the daily VWAP for the three consecutive
trading days immediately prior to the date that is 60 days after the
First Closing Date, if such average is less than the Conversion Price in
effect as of such date.
Scilex intends to use the proceeds to enhance the commercialization
of Scilex’s three non-opioid pain management products for the treatment
of acute and chronic pain. Scilex’s suite of FDA-approved non-opioid
pain management products include:
ZTlido®, a lidocaine topical system approved for the relief of neuropathic pain associated with post-herpetic neuralgia. ZTlido®
was strategically designed to address the limitations of current
prescription lidocaine patches by providing significantly improved
adhesion and continuous pain relief throughout the 12-hour
administration period.
Gloperba®, an
FDA-approved, novel, oral solution of a widely used anti-gout agent
(colchicine) for the prophylaxis of gout flares in adults. No other
liquid formulation is currently approved by the FDA for the treatment of
gout.
ELYXYB™,
a first-line treatment and the only FDA-approved, ready-to-use oral
solution for the acute treatment of migraine, with or without aura, in
adults.1 There is strong evidence for use of NSAIDs as a
first-line treatment for migraine, and ELYXYB™ (celecoxib) is in the
same class of agents, is fast acting and has the potential to have the
lowest GI side effects of all NSAIDs.2 ELYXYB™ has the potential to further expand Scilex’s non-opioid portfolio in broader acute pain indications.
“We are pleased to conclude this agreement with Yorkville, which will provide funding to expand ZTlido® promotion worldwide and enhance the launch and commercialization of Gloperba®
and ELYXYB™. We believe the acute and chronic pain patients are not
well served with the current options on the market. A recent report from
the Centers for Disease Control and Prevention states that opioids do
not provide clinically meaningful pain relief and are not first line
therapy for acute and chronic pain3,” said Jaisim Shah, Chief Executive Officer and President of Scilex.
The
convertible debentures and the common stock issuable upon conversion
thereof have not been registered under the U.S. Securities Act of 1933,
as amended (the “Securities Act”) or any state securities law.
Accordingly, the securities may not be offered or sold in the United
States except pursuant to an effective registration statement or an
applicable exemption from the registration requirements of the
Securities Act and applicable state laws. Scilex has granted Yorkville
registration rights requiring Scilex to register the resale of the
shares of the underlying common stock.
