Scilex Holding Co, a biopharmaceutical company, has received a warning from The Nasdaq Stock Market due to its stock price falling below the minimum required bid price for continued listing. The notice, received on November 1, 2024, indicates that Scilex’s common stock has not met the $1.00 minimum bid price for 30 consecutive business days as required by Nasdaq Listing Rule 5550(a)(2).
The company, which trades under the ticker symbol SCLX, has been given an initial period of 180 calendar days, or until April 30, 2025, to regain compliance with the minimum bid price requirement. During this time, Scilex’s stock will remain listed on The Nasdaq Capital Market. To comply, the company’s stock must close at $1.00 per share or higher for at least ten consecutive business days within the grace period.
If Scilex fails to meet the requirement by the April 30, 2025 deadline, it may receive a second grace period of 180 days, provided it meets all other initial listing standards for The Nasdaq Capital Market, except for the minimum bid price. The company would also need to inform Nasdaq of its plan to cure the deficiency, which could involve a reverse stock split.
Scilex has stated its intention to actively monitor its stock price and explore options to regain compliance. However, there is no certainty that the company will be successful in meeting the minimum bid price requirement or maintaining compliance with other Nasdaq listing standards.
In other recent news, Scilex Holding Company reported progress in several key areas. The company announced a consensus with the FDA for a New Drug Application for SP-103, a product candidate for chronic neck pain treatment. The company’s research suggests a significant market opportunity for SP-103, with projected peak annual sales of $1.2 billion by the 6th year following its launch.
Scilex also secured a $50 million convertible note offering with stakeholders including Murchinson, 3i (LON:) LP, and Oramed Pharmaceuticals (NASDAQ:). H.C. Wainwright maintained its Buy rating on Scilex, citing the company’s recent financial maneuvers.
In addition, the company is exploring strategic options for its subsidiary, Scilex Pharmaceuticals, potentially considering a spinoff or public listing outside the United States.
Scilex reported growth in Q3 net sales for its non-opioid pain management products, with the net sales of ZTlido reaching between $11.0 million and $13.0 million. The company also extended a payment deadline in its agreement with Oramed Pharmaceuticals and fulfilled a $10 million loan obligation through product delivery to FSF 33433 LLC.
Finally, the U.S. Food and Drug Administration approved updates to the labeling of GLOPERBA®, a gout treatment, for precision dosing, and Scilex received Drug Distributor Accreditation from the National Association of Boards of Pharmacy.
InvestingPro Insights
Recent InvestingPro data provides additional context to Scilex Holding Co’s (SCLX) current situation. Despite the Nasdaq warning, the company has shown a significant return over the last week, with a 1-week price total return of 11.42% as of the latest data. This short-term positive momentum is further supported by a strong 1-month price total return of 16.84%.
However, the company faces financial challenges that align with its stock price issues. InvestingPro Tips reveal that SCLX is not profitable over the last twelve months, and analysts do not anticipate the company will be profitable this year. This is reflected in the negative P/E ratio of -0.79 for the last twelve months as of Q2 2024.
On a more positive note, InvestingPro Tips suggest that SCLX’s valuation implies a strong free cash flow yield, which could be attractive to investors looking beyond current profitability issues. For readers interested in a deeper analysis, InvestingPro offers 5 additional tips that could provide further insights into SCLX’s financial health and market position.
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