Scilex Holding Amends Merger Agreement with Denali

Scilex Holding Co, a biopharmaceutical company with annual revenues of $56.59 million and a market capitalization of $31.52 million, has revised the terms of its previously announced merger agreement with Denali Capital Acquisition Corp. The amendment, filed on Monday, comes as a strategic step to address the de-listing of Denali’s securities from the Nasdaq Capital Market and their subsequent quotation on the OTC Markets. According to InvestingPro data, Scilex has demonstrated strong revenue growth of 21% over the last twelve months, despite challenging market conditions.

Under the terms of the amendment, which was executed on April 16, 2025, the two companies have agreed to extend the deadline for completing the business combination to September 30, 2025. This extension provides additional time for the companies to meet the merger conditions, including the possibility of a further extension to December 11, 2025, if mutually agreed upon. The timing of this merger is crucial, as InvestingPro analysis suggests the company is currently undervalued, with analyst price targets ranging from $218 to $490 per share, significantly above its current trading price of $6.02.

The merger, first disclosed in a September 3, 2024 SEC filing, will result in Denali’s subsidiary, Denali Merger Sub Inc., merging into Scilex’s subsidiary, Semnur Pharmaceuticals, Inc., with Semnur surviving as a wholly owned subsidiary of Denali.

The amendment also includes adjustments to certain covenants to reflect the change in the listing of Denali’s securities. These securities, previously listed on the Nasdaq, will now be quoted on the OTC Markets, a less regulated exchange.

Investors are advised that Denali has filed a Registration Statement on Form S-4, which includes a preliminary prospectus and proxy statement regarding the proposed transaction. This document, once finalized, will be sent to Denali’s shareholders ahead of an extraordinary general meeting where they will vote on the merger.

The merger is anticipated to bring together Scilex’s expertise in developing non-opioid pain management therapies with Denali’s strategic and financial resources, aiming to create a stronger presence in the biopharmaceutical industry.

The companies have cautioned that this report contains forward-looking statements subject to risks and uncertainties, including but not limited to the ability to complete the merger and the anticipated benefits of the combined company. However, InvestingPro analysis reveals positive indicators, including expected net income growth and sales growth for the current year. Subscribers to InvestingPro can access 10 additional exclusive tips about Scilex’s financial outlook and market position.

This news is based on the latest 8-K filing by Scilex Holding Co with the SEC and reflects the company’s current plans regarding the proposed business combination with Denali Capital Acquisition Corp.

In other recent news, Scilex Holding Company announced significant developments that could impact its market position. Scilex reported that the U.S. FDA granted Orphan Drug Designation for its colchicine formulation, Gloperba, aimed at treating pericarditis, a rare heart condition. This designation provides Scilex with potential marketing exclusivity for seven years upon approval. Additionally, Health Canada approved Scilex’s ELYXYB for acute migraine treatment, offering a new option for the nearly five million Canadians affected by migraines. In a strategic move, Scilex declared a 1-for-35 reverse stock split to comply with Nasdaq’s minimum bid price requirements, reducing its outstanding shares from approximately 243 million to about 6.9 million. This corporate action led Boral (OTC:BOALY) Capital to downgrade Scilex’s stock rating from Buy to Hold, as they await the split’s impact on the company’s valuation. The reverse stock split will not alter shareholder ownership percentages, but fractional shares will be compensated with cash. Scilex continues to focus on expanding its portfolio, including a proposed joint venture with IPMC to target neurodegenerative and cardiometabolic diseases.

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