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Scilex Holding Co (NASDAQ:SCLX), a biopharmaceutical company, has negotiated an extension for a payment due to Oramed Pharmaceuticals (NASDAQ:ORMP) Inc. as part of their existing agreement. The payment, originally scheduled for September 23, 2024, was first extended to today, and has now been further postponed to October 8, 2024.
The company, based in Palo Alto, California, had previously agreed to pay Oramed $2 million, with $1.7 million allocated to an amortization payment due March 21, 2025, and the remaining $300,000 for the purchase of specific warrants. This payment is part of the Letter Agreement signed on September 20, 2024, between the two entities.
The extension comes as Scilex seeks additional time to finalize its convertible debt financing, which was announced earlier today. The Consent and Side Letter, detailing the extension, was filed as an exhibit in the company's recent SEC Form 8-K filing.
Scilex Holding specializes in biological products and is incorporated in Delaware. The company's common stock and warrants are traded on The Nasdaq Stock Market under the symbols SCLX and SCLXW, respectively.
The latest developments were disclosed in a Form 8-K filed with the U.S. Securities and Exchange Commission, which serves as the basis for this news report. The agreement's details are outlined in the attached Consent and Side Letter, which forms part of the public document count associated with the filing.
In other recent news, Scilex Holding Company has been making significant strides in non-opioid pain management. The company has secured a $50 million convertible note offering, involving key stakeholders such as Murchinson, 3i (LON:III) LP, and Oramed Pharmaceuticals, Inc.
This strategic move is part of Scilex's plan to refinance existing debt and bolster long-term growth. In a separate transaction, Oramed and other institutional investors are expected to acquire an 8% royalty on net sales of certain Scilex products, including ZTlido, with a total purchase price of $5 million.
Additionally, Scilex has entered into an agreement with Oramed Pharmaceuticals, committing to a payment of $2 million, part of which will be used to repurchase warrants from Oramed. The company also fulfilled a $10 million loan obligation through product delivery to FSF 33433 LLC, providing specified quantities of Scilex's ZTlido product.
In terms of product developments, the U.S. Food and Drug Administration has approved updates to the labeling of GLOPERBA®, a gout treatment, for precision dosing. This could potentially improve patient outcomes and adherence.
InvestingPro Insights
Recent InvestingPro data provides additional context to Scilex Holding Co's (NASDAQ:SCLX) financial situation. The company's market capitalization stands at $119.08 million, reflecting its current market valuation. Despite a quarterly revenue growth of 30.11% in Q2 2024, Scilex faces financial challenges. The company's operating income for the last twelve months as of Q2 2024 was -$99.14 million, with an operating income margin of -195.02%, indicating significant operational losses.
InvestingPro Tips highlight that Scilex's short-term obligations exceed its liquid assets, which aligns with the company's need to extend its payment to Oramed Pharmaceuticals. Additionally, analysts do not anticipate the company to be profitable this year, underscoring the importance of the ongoing convertible debt financing mentioned in the article.
These insights provide a clearer picture of Scilex's financial position and the context behind its payment extension negotiations. Investors seeking a more comprehensive analysis can find 6 additional InvestingPro Tips for SCLX on the InvestingPro product page.
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