Cover Page
Cover Page | 12 Months Ended |
Dec. 31, 2022 | |
Cover [Abstract] | |
Document Type | S-1 |
Amendment Flag | false |
Entity Registrant Name | Scilex Holding Company |
Entity Central Index Key | 0001820190 |
Entity Ex Transition Period | false |
Entity Emerging Growth Company | true |
Entity Small Business | false |
Entity Filer Category | Non-accelerated Filer |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 2,184 | $ 4,338 |
Accounts receivable, net | 21,236 | 14,268 |
Inventory | 1,378 | 2,562 |
Prepaid expenses and other | 4,810 | 1,835 |
Total current assets: | 29,608 | 23,003 |
Property and equipment, net | 772 | 805 |
Operating lease right-of-use asset | 1,131 | 1,303 |
Intangibles, net | 40,591 | 38,802 |
Goodwill | 13,481 | 13,481 |
Other long-term assets | 944 | 538 |
Total assets | 86,527 | 77,932 |
Current liabilities: | ||
Accounts payable | 8,450 | 4,284 |
Accrued payroll | 1,354 | 3,733 |
Accrued rebates and fees | 30,893 | 7,362 |
Accrued expenses | 3,136 | 3,259 |
Current portion of deferred consideration | 264 | 0 |
Current portion of debt | 0 | 37,950 |
Related party payable | 0 | 92,724 |
Related party note payable | 0 | 19,608 |
Current portion of operating lease liabilities | 745 | 500 |
Total current liabilities: | 44,842 | 169,420 |
Long-term portion of deferred consideration | 3,387 | 0 |
Long-term debt, net | 0 | 72,037 |
Related party note payable, net | 0 | 23,503 |
Derivative liabilities | 1,231 | 35,700 |
Operating lease liabilities | 665 | 1,148 |
Other long-term liabilities | 163 | 0 |
Total liabilities | 50,288 | 301,808 |
Commitments and contingencies (See Note 10) | ||
Stockholders' Deficit: | ||
Preferred stock, $0.0001 par value, 45,000,000 shares authorized; 29,057,097 and 0 issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 3 | 0 |
Common stock, $0.0001 par value, 740,000,000 shares authorized; 141,348,856 and 132,858,484 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 14 | 13 |
Additional paid-in capital | 412,136 | 128,661 |
Accumulated deficit | (375,914) | (352,550) |
Total stockholders' equity/(deficit) | 36,239 | (223,876) |
Total liabilities and stockholders' equity/(deficit) | $ 86,527 | $ 77,932 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2022 | Nov. 10, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 45,000,000 | 45,000,000 | |
Preferred stock, shares issued | 29,057,097 | 0 | |
Preferred stock, shares outstanding | 29,057,097 | 0 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 740,000,000 | 740,000,000 | 740,000,000 |
Common stock, shares issued | 141,348,856 | 132,858,484 | |
Common stock, shares outstanding | 141,348,856 | 132,858,484 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net revenue | $ 38,034 | $ 31,317 | $ 23,560 |
Operating costs and expenses: | |||
Cost of revenue | 10,797 | 3,634 | 2,149 |
Research and development | 9,054 | 9,201 | 9,961 |
Selling, general and administrative | 64,895 | 50,582 | 42,970 |
Intangible amortization | 3,922 | 3,738 | 3,738 |
Total operating costs and expenses | 88,668 | 67,155 | 58,818 |
Loss from operations | (50,634) | (35,838) | (35,258) |
Other (income) expense: | |||
(Gain) loss on derivative liability | (8,310) | 300 | (800) |
(Gain) loss on debt extinguishment, net | (28,634) | 12,463 | 0 |
Scilex Pharma Notes principal increase | 0 | 28,000 | 0 |
Interest expense | 9,604 | 11,764 | 13,116 |
Loss (gain) on foreign currency exchange | 66 | 54 | (2) |
Total other (income) expense | (27,274) | 52,581 | 12,314 |
Loss before income taxes | (23,360) | (88,419) | (47,572) |
Income tax expense (benefit) | 4 | 5 | (53) |
Net loss | $ (23,364) | $ (88,424) | $ (47,519) |
Earnings Per Share [Abstract] | |||
Net loss per share attributable to common stockholders - basic | $ (0.17) | $ (0.67) | $ (0.36) |
Net loss per share attributable to common stockholders - diluted | $ (0.17) | $ (0.67) | $ (0.36) |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | |||
Weighted average number of shares during the period-basic | 134,226 | 132,858 | 132,891 |
Weighted average number of shares during the period -diluted | 134,226 | 132,858 | 132,891 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY / (DEFICIT) - USD ($) $ in Thousands | Total | Legacy Common Stock | Common Stock | Preferred Stock Member | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2019 | $ (90,029) | $ 20 | $ 126,578 | $ (216,607) | ||
Balance (in Shares) at Dec. 31, 2019 | 197,310 | |||||
Retroactive application of the recapitalization due to the Business Combination Value | 20 | $ (20) | $ 13 | 7 | ||
Retroactive application of the recapitalization due to the Business Combination Shares | (197,310) | 132,888 | ||||
Effect of business combination in value | (90,009) | $ 13 | 126,585 | (216,607) | ||
Effect of business combination (in Shares) | 132,888 | |||||
Stock options exercised value | $ 50 | 50 | ||||
Stock options exercised (In Shares) | 38 | 38 | ||||
Stock-based compensation | $ 5,395 | 5,395 | ||||
Distribution to sorrentos | (9,600) | (9,600) | ||||
Cancellation of ordinary shares (in Shares) | (68) | |||||
Net income (loss) | (47,519) | (47,519) | ||||
Balance at Dec. 31, 2020 | $ (141,683) | $ 13 | 122,430 | (264,126) | ||
Balance (in Shares) at Dec. 31, 2020 | 132,858 | |||||
Stock options exercised (In Shares) | 0 | |||||
Stock-based compensation | $ 5,822 | 5,822 | ||||
Adjustment to shares issued in Semnur Acquisition | 409 | 409 | ||||
Net income (loss) | (88,424) | (88,424) | ||||
Balance at Dec. 31, 2021 | (223,876) | $ 13 | 128,661 | (352,550) | ||
Balance (in Shares) at Dec. 31, 2021 | 132,858 | |||||
Stock options exercised value | $ 96 | 96 | ||||
Stock options exercised (In Shares) | 202 | 202 | ||||
Stock-based compensation | $ 5,280 | 5,280 | ||||
Shares issued pursuant to the terms of the Debt Exchange Agreement, (In shares) | 2,906 | 29,057 | ||||
Shares issued pursuant to the terms of the Debt Exchange Agreement | 289,733 | $ 3 | 289,730 | |||
Shares issued as a result of the Business Combination, net of transaction activities | (8,706) | $ 1 | (8,707) | |||
Shares issued as a result of the Business Combination, net of transaction activities (In Shares) | 5,133 | |||||
Aardvark SP-104 license transfer from Sorrento, net of discount value | (4,127) | (4,127) | ||||
Aardvark SP-104 discount amortization | (35) | (35) | ||||
Shares issued to Yorkville pursuant to Yorkville Purchase Agreement | 1,238 | 1,238 | ||||
Shares issued to Yorkville pursuant to Yorkville Purchase Agreement (In Shares) | 250 | |||||
Net income (loss) | (23,364) | (23,364) | ||||
Balance at Dec. 31, 2022 | $ 36,239 | $ 14 | $ 3 | $ 412,136 | $ (375,914) | |
Balance (in Shares) at Dec. 31, 2022 | 141,349 | 29,057 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | |||
Net loss | $ (23,364) | $ (88,424) | $ (47,519) |
Adjustments to reconcile net loss to net cash used for operating activities: | |||
Depreciation and amortization | 3,961 | 3,779 | 3,777 |
Amortization of debt issuance costs and debt discount | 3,142 | 7,909 | 10,664 |
Scilex Pharma Notes principal increase | 0 | 28,000 | 0 |
Payment on the Scilex Pharma Notes attributed to accreted interest related to the debt discount | (21,190) | (12,487) | (10,866) |
(Gain) loss on debt extinguishment, net | (28,634) | 12,463 | 0 |
Non-cash operating lease cost | 492 | 372 | 825 |
Stock-based compensation expenses | 5,280 | 5,822 | 5,395 |
(Gain) loss on derivative liability | (8,310) | 300 | (800) |
Forfeitures of Private Warrants | 1,697 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivables, net | (6,968) | (1,142) | (598) |
Inventory | 1,184 | (1,417) | 2,379 |
Prepaid expenses and other | (2,629) | 1,479 | (1,035) |
Other long term assets | 350 | 0 | 2,580 |
Accounts payable | 2,806 | (3,836) | (4,062) |
Accrued Payroll | (2,379) | (21) | 1,247 |
Accrued expenses | (123) | 664 | (1,066) |
Accrued rebates and fees | 23,531 | (255) | 3,117 |
Other liabilities | (392) | (80) | (604) |
Related party payable | 30,125 | 18,210 | 5,105 |
Other long-term liabilities | 163 | 0 | 0 |
Net cash used for operating activities | (21,258) | (28,664) | (31,461) |
Investing activities | |||
Acquisition consideration paid in cash for Romeg intangible asset acquisition | (2,060) | 0 | 0 |
Purchase of property and equipment | (7) | 0 | (25) |
Net cash used for investing activities | (2,067) | 0 | (25) |
Financing activities | |||
Proceeds from the Business Combination | 3,375 | 0 | 0 |
Transaction costs paid related to the Business Combination | (2,949) | 0 | 0 |
Repayment of principal on the Scilex Pharma Notes | (84,808) | (33,387) | (58,927) |
Repayment on other loans | (18,800) | (48,832) | 0 |
Proceeds from other loans | 9,857 | 47,832 | 11,007 |
Proceeds from stock options exercised | 96 | 0 | 50 |
Proceeds from related party payable | 51,900 | 47,850 | 18,400 |
Proceeds from related party note payable | 62,500 | 14,700 | 10,300 |
Net cash provided by financing activities | 21,171 | 28,163 | (19,170) |
Net change in cash and cash equivalents | (2,154) | (501) | (50,656) |
Cash and cash equivalents at beginning of period | 4,338 | 4,839 | 55,495 |
Cash and cash equivalents at end of period | 2,184 | 4,338 | 4,839 |
Supplemental disclosures of non-cash investing and financing activities | |||
Related party debt converted to equity pursuant to Debt Exchange Agreement | 289,733 | ||
Deferred consideration for Romeg intangible asset acquisition | 3,650 | 0 | 0 |
Non-cash consideration in Semnur acquisition | 0 | 409 | 0 |
Other Loan Forgiveness | 0 | 1,536 | 0 |
Promissory Note issued to Sorrento in exchange for the SP-104 license, net of discount | 4,162 | 0 | 0 |
Fair value adjustment to derivative liability in troubled debt restructuring | 30,400 | 0 | 0 |
Acquisition of right-of-use asset | 320 | 0 | 0 |
Issuance of shares to Yorkville pursuant to Yorkville Purchase Agreement | 1,238 | ||
Non-cash distribution to Sorrento | 0 | 0 | 9,600 |
Scilex Pharma Notes principal increase | 0 | 28,000 | 0 |
Accrual for transaction costs related to the Business Combination | 1,372 | 0 | 0 |
Transaction costs obligation assumed by Sorrento | $ 5,148 | $ 0 | $ 0 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | 1. Nature of Operations and Basis of Presentation Organization and Principal Activities Scilex Holding Company (“Scilex” and together with its wholly owned subsidiaries, the “Company”) is the successor entity to Vickers Vantage Corp. I (“Vickers”). Vickers was formed on February 21, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Scilex was originally formed in 2019 and is a majority-owned subsidiary of Sorrento Therapeutics, Inc. (“Sorrento”). Scilex has two wholly owned subsidiaries, Scilex Pharmaceuticals Inc. (“Scilex Pharma”) and Semnur Pharmaceuticals, Inc. (“Semnur”). The Company is a commercial biopharmaceutical company focused on acquiring, developing and commercializing non-opioid 12-hour in-licensed FDA-approved SP-102 (“SP-102” SP-103 (“SP-103”), SP-104 low-dose (“SP-104”), SP-102, SP-103, SP-104, The Business Combination On March 17, 2022, Scilex entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Vickers and Vantage Merger Sub, Inc., a wholly-owned subsidiary of Vickers (“Vickers Merger Sub”). Pursuant to the terms of the Merger Agreement, Vickers Merger Sub merged with and into Scilex, Inc. (f/k/a Scilex Holding Company and now a wholly owned subsidiary of Scilex) (“Legacy Scilex”), with Legacy Scilex surviving the merger and becoming a wholly-owned subsidiary of Vickers (collectively, the “Business Combination”). On November 10, 2022, Vickers consummated the Business Combination pursuant to the terms of the Merger Agreement. Vickers acquired all of the outstanding equity interests of Legacy Scilex. As a result of the Business Combination, Scilex received net proceeds of approximately $3.4 million. Additionally, all existing related party indebtedness between Legacy Scilex and Sorrento totaling $290.6 million was converted into equity interests in Vickers in connection with the consummation of the Business Combination and pursuant to the terms of the Debt Exchange Agreement (see Note 12). The Company, as the successor entity of Vickers, will operate as “Scilex Holding Company” and was listed on the Nasdaq Capital Market under the new ticker symbol “SCLX” on November 11, 2022. At the closing of the Business Combination, 197,566,338 and 25,151,428 shares of Legacy Scilex Common Stock (“Legacy Scilex Common Stock”) and Legacy Scilex stock options, respectively, were converted to 133,060,534 shares of Common Stock (“Common Stock”) as part of the consideration using the 0.673498:1 ratio of the Company Common Stock to Legacy Scilex Common Stock (the “Common Stock Exchange Ratio”) and 16,939,436 shares of Common Stock were reserved for Legacy Scilex optionholders. Pursuant to the terms of the Debt Exchange Agreement (see Note 12), $290.6 million was converted to 29,057,097 shares of Preferred Stock (“Preferred Stock”) and 2,905,710 shares of Common Stock. In addition, pursuant to the terms of the debt agreement entered between the Vickers Venture Fund VI Pte Ltd, Vickers Venture Fund VI (Plan) Pte Ltd (“Sponsors”) and Vickers (“Vickers Debt Agreement”), the aggregate amount of loans that the Sponsors funded Vickers to finance the transaction costs (“Working Capital Loans”) at the closing of the Business Combination of $5,330,557 was converted to 533,057 shares of Common Stock. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Vickers was treated as the “acquired” company for accounting purposes and the Business Combination was treated as the equivalent of the Company issuing stock for the net assets of Vickers, accompanied by a recapitalization. Upon the closing of the Business Combination, the net assets of Vickers were recorded at historical cost, with no goodwill or other intangible assets recorded. The Company’s legal, accounting and other fees directly attributable to the Business Combination were initially capitalized within prepaid expenses and other current assets on the consolidated balance sheets, of which $9.1 million has been offset against the equity proceeds in the Business Combination and $0.4 million was attributed to the liability-classified Private Warrants and, as such, were expensed upon the closing of the Business Combination. Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The accompanying consolidated financial statements include the accounts of the Company as well as its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash and cash equivalents by periodically evaluating the credit quality of its primary financial institution. Although the balance at times may exceed federally-insured limits, the Company has not experienced any losses on such accounts. Fair Value of Financial Instruments The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. • Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. • Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. As of December 31, 2022 and 2021, the carrying amount of cash equivalents approximates their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, prepaid expenses, accounts receivable, and accounts payable. Accounts Receivable, Net Accounts receivable are presented net of allowances for expected credit losses and prompt payment discounts. Accounts receivable consists of trade receivables from product sales to customers, which are generally unsecured. Estimated credit losses related to trade accounts receivable are recorded as general and administrative expenses and as an allowance for expected credit losses within accounts receivable, net. The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for expected credit losses. Inventory The Company determines inventory cost on a first-in, first-out on-hand pre-launch Property and Equipment, Net Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally five to seven years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the respective lease on a straight-line basis. The cost of repairs and maintenance is expensed as incurred. Acquisitions The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including in-process be recorded at their fair values as of the acquisition date on the Company`s consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred. When the Company determines net assets acquired do not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded and contingent consideration such as payments upon achievement of various developmental, regulatory and commercial milestones generally is not recognized at the acquisition date. In an asset acquisition, up-front The Company has acquired and may continue to acquire the rights to develop and commercialize new product candidates. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. Upon commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life. Capitalized IPR&D is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. Goodwill and Other Long-Lived Assets Goodwill, which has an indefinite life, represents the excess cost over fair value of net assets acquired. Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. The Company has one reporting unit. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, patent rights, and acquired technology, for impairment by considering competition by products prescribed for the same indication, the likelihood and estimated future entry of non-generic Contingent Consideration The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with applicable milestones, discount rates and the related probabilities and payment structure in the contingent consideration arrangement. Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the consolidated statement of operations. Other than contingent consideration that is accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity, Derivatives and Hedging Public Warrants and Private Placement Warrants Upon completion of the Business Combination, the Company assumed public and private placement warrants (“Public Warrants” and “Private Warrants”) that were issued by Vickers in connection with its initial public offering (declared effective by the Securities and Exchange Commission (“SEC”) on January 11, 2021) whereby holders of the public and private placement warrants are entitled to acquire ordinary shares of Vickers. Subsequent to the Business Combination, the Public Warrants were accounted for as equity per FASB ASC Subtopic No. 815-40, Contracts on an Entity’s Own Equity Subsequent to the Business Combination, the Private Warrants were accounted for as liabilities per ASC Subtopic 815-40. 815-40 fixed-for-fixed Debt The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates. This involves estimating future net product sales, determining interest expense, determining the amortization period of the debt discount, as well as determining the classification between current and long-term portions. Derivative Liabilities Derivative liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expire, with changes in the fair value between reporting periods recorded as other income or expense. Research and Development Costs The Company expenses the cost of research and development as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and preclinical materials as well as other contracted services, license fees and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with FASB ASC Topic 730, Research and Development. Income Taxes The provisions of the FASB ASC Topic 740, Income Taxes Subtopic 740-10, The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2022 and 2021, the Company maintained a full valuation allowance against its deferred tax assets. Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use Revenue Recognition The Company’s revenue is generated from product sales within the United States. The Company does not incur significant direct costs to obtain contracts with its customers. Revenue from product sales is fully comprised of sales of ZTlido. The Company’s performance obligation with respect to sales of ZTlido is satisfied at a point in time, when control is transferred upon delivery of product to the customer. The Company considers control to have transferred upon delivery because the customer has legal title to the product, physical possession of the product has been transferred to the customer, the customer has significant risks and rewards of ownership of the product, and the Company has a present right to payment at that time. Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2022 and 2021 were not material. Revenues from product sales are recorded net of reserves established for commercial and government rebates, fees and chargebacks, wholesaler and distributor fees, sales returns and prompt payment discounts. Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations. Rebates and Chargebacks Rebates are discounts which the Company pays under either government or private health care programs. Government rebate programs include state Medicaid drug rebate programs, the Medicare coverage gap discount programs and the Tricare programs. Commercial rebate and fee programs relate to contractual agreements with commercial healthcare providers, under which the Company pays rebates and fees for access to and position on that provider’s patient drug formulary. Rebates and chargebacks paid under government programs are generally mandated under law, whereas private rebates and fees are generally contractually negotiated by the Company with commercial healthcare providers. Both types of rebates vary over time. The Company records a reduction to gross product sales at the time the customer takes title to the product based on estimates of expected rebate claims. The Company monitors the sales trends and adjusts for these rebates on a regular basis to reflect the most recent rebate experience and contractual obligations. Reserves for rebates and chargebacks are now separately presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheet. Prompt Payment Discounts The Company provides its customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The prompt payment discount reserve is based on actual gross sales and contractual discount rates. Reserves for prompt payment discounts are included in accounts receivable, net on the consolidated balance sheets. Service Fees The Company compensates its customer and others in the distribution chain for wholesaler and distribution services. The Company has determined such services received to date are not distinct from the Company’s sale of products to the customer and, therefore, these payments have been recorded as a reduction of revenue. Product Returns The Company is obligated to accept the return of products sold that are expiring within six months, damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the term of its sales contracts, and estimates allowances for such amounts at the time of sale. The Company estimates the amount of its product sales that may be returned by its customer and record this estimate as a reduction of revenue in the period the related product revenue is recognized. Co-Payment Patients who have commercial insurance or pay cash and meet certain eligibility requirements may receive co-payment co-payment Customer Concentration Risk Prior to April 2, 2022, sales to the Company’s sole distributor represented 100% of net revenue. On April 2, 2022, the Company announced the expansion of its direct distribution network to national and regional wholesalers and pharmacies. The distributor continued to provide traditional third-party logistics functions for the Company. The Company had four customers during the year ended December 31, 2022, which individually generated 10% or more of the Company’s total revenue. These customers accounted for 83% of the Company’s revenue for the year ended December 31, 2022, individually ranging between 19% to 24%. As of December 31, 2022, these customers represented 90% of the Company’s outstanding accounts receivable, individually ranging between 24% to 36%. Additionally, during the fiscal years ended December 31, 2022 and 2021, the Company purchased inventory from its sole supplier, Itochu. This exposes the Company to concentration of customer and supplier risk. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses for the years ended December 31, 2022, 2021, and 2020. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation—Stock Compensation non-employee’s For purposes of determining the inputs used in the calculation of stock-based compensation, the Company determines the expected life assumption for options issued using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period since the Company does not have historic exercise behavior. Then the Company determines an estimate of option volatility based on an assessment of historical volatilities of comparable companies whose share prices are publicly available. The Company uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted, any fluctuations in these calculations could have a material effect on the results presented in our consolidated statement of operations. Segments Operating segments are identified as components of an entity where separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assessing performance. The Company has determined that its chief operating decision maker is its Chief Executive Officer, as he is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions. The Company is engaged primarily in the development of non-opioid Net Loss per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class Under the two-class As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers 2021-08 |
Liquidity and Going Concern
Liquidity and Going Concern | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern | 2. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management has assessed the Company’s ability to continue as a going concern for at least one year after the date the financial statements are issued. On March 18, 2019, Scilex acquired Semnur and the acquisition was accounted for as an asset acquisition (see Note 3). The Company anticipates the cash needed for the development of Semnur’s primary product candidate in development, SP-102, SP-103, within one year after the date these consolidated financial statements are issued. Semnur has no historical revenue and the Company will be responsible for funding all development and commercialization efforts and capital funding needs possibly through private or public equity or debt financings, strategic collaborations or other arrangements. On May 12, 2022, the Company entered into a Bill of Sale (see Note 3), with Sorrento to acquire rights, title and interest in the SP-104 SP-104 On June 14, 2022, the Company entered into a license and commercialization agreement with Romeg (see Note 3). The transaction was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in the single asset, acquired licenses. The Company anticipates incurring costs related to the commercial launch and marketing of GLOPERBA. On September 12, 2022, Scilex and Scilex Pharma entered into a Debt Exchange Agreement (see Note 12) with Sorrento, pursuant to which all related party indebtedness that remained outstanding as of immediately prior to the closing of the Business Combination was converted into equity interests in the Company. In September 2022, the Company exercised the Early Paydown Provision (see Note 7) to fully extinguish the Scilex Pharma Notes (see Note 7). In August 2022 and September 2022, the Company made principal payments towards the outstanding Scilex Pharma Notes totaling $41.4 million. Pursuant to Amendment No. 4 (see Note 7), a principal balance of $28.0 million was forgiven by the Scilex Pharma Note Purchasers (see Note 7) upon the Company’s exercise of the Early Paydown Provision. The Company funded the principal payments with cash-on As of December 31, 2022, the Company’s negative working capital was $15.2 million, including cash and cash equivalents of approximately $2.2 million. During the year ended December 31, 2022, the Company had operating losses of $50.6 million and cash flows used for operations of $21.3 million. The Company had an accumulated deficit of approximately $375.9 million as of December 31, 2022. The Company has plans to obtain additional resources to fund its currently planned operations and expenditures for at least twelve months from the issuance of these consolidated financial statements through a combination of equity offerings, debt financings, collaborations, government contracts or other strategic transactions. The Company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. (“Yorkville”) on November 17, 2022 (as amended and restated on February 8, 2023), and a Standby Equity Purchase Agreement with B. Riley Principal Capital II, LLC (“B. Riley”) on January 8, 2023 whereby the Company has the right, but not the obligation, to sell to Yorkville and B. Riley up to $500.0 million each of shares of its Common Stock at its request any time during the 36 months following the date on which the registration statement related to each such purchase agreement has been declared effected by the SEC, subject to certain conditions (see Note 8 and Note 14). The Company’s plans are also dependent upon the success of future sales of ZTlido, which is still in the early stages of commercialization, and are dependent upon, among other things, the success of the Company’s marketing of ZTlido. Should the Company’s sales of ZTlido not materialize at the expected rate contemplated in the Company’s business plan, due to the COVID-19 SP-102, SP-103, SP-104, |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block [Abstract] | |
Acquisitions | 3. Acquisitions SP-104 On May 12, 2022, the Company entered into a bill of sale and assignment and assumption agreement (the “Bill of Sale”), with Sorrento. Pursuant to the Bill of Sale, Sorrento sold, conveyed, assigned and transferred to the Company all of its rights, title and interest in and to Sorrento’s Delayed Burst Release Low Dose Naltrexone (“DBR-LDN”) “SP-104 “SP-104 As consideration for the SP-104 As the successor to the Aardvark Asset Purchase Agreement, the Company is obligated to pay Aardvark (i) $3,000,000, upon initial approval by the FDA of a new drug application for the SP-104 SP-104 SP-104 The transaction was accounted for as an asset acquisition as substantially all the value of the gross assets was concentrated in a single asset, SP-104 Derivatives and Hedging Distinguishing Liabilities from Equity GLOPERBA License Agreement On June 14, 2022, the Company entered into a license agreement (the “Romeg License Agreement”) with RxOmeg Therapeutics, LLC (a/k/a Romeg Therapeutics, Inc.) (“Romeg”). Pursuant to the Romeg License Agreement, among other things, Romeg granted the Company (1) a transferable license, with the right to sublicense, under the patents and know-how know-how As consideration for the license under the Romeg License Agreement, the Company paid Romeg an up-front mid-single low-double The transaction was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in a single asset, which is the Initial Licensed Product. In connection with the Romeg License Agreement, the Company recorded an intangible asset for acquired licenses of $5.7 million, which is comprised of the upfront license fee of $2.0 million and a deferred consideration of $3.7 million that is the present value of the future minimum royalty payments and immaterial transaction costs. The contingent sales milestones and sale volume-based future royalties were determined to meet a scope exception for derivative under ASC Topic 815, and will not be recognized until the contingencies are realized. No contingent consideration was recognized as a liability or included in the fair value of the assets as of December 31, 2022. The Company determined the useful life of the intangible asset to be 15 years, which approximates the life of the licensed patents covering the Initial Licensed Product. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements The following table presents the Company’s financial assets and liabilities that are measured at fair value (in thousands): Fair value measurements at December 31, 2022 Balance Quoted Prices Significant Significant Assets Cash and cash equivalents $ 2,184 $ 2,184 $ — $ — Total assets measured at fair value $ 2,184 $ 2,184 $ — $ — Liabilities Derivative liabilities $ 1,231 $ — $ — $ 1,231 Other long-term liabilities 163 — — 163 Total liabilities measured at fair value $ 1,394 $ — $ — $ 1,394 Fair value measurements at December 31, 2021 Balance Quoted Prices Significant Significant Assets Cash and cash equivalents $ 4,338 $ 4,338 $ — $ — Total assets measured at fair value $ 4,338 $ 4,338 $ — $ — Liabilities Derivative liabilities $ 35,700 $ — $ — $ 35,700 Total liabilities measured at fair value $ 35,700 $ — $ — $ 35,700 Cash and cash equivalents The Company’s financial assets carried at fair value are comprised of cash and cash equivalents. Cash and cash equivalents consist of money market accounts and bank deposits which are highly liquid and readily tradable. These assets are valued using inputs observable in active markets for identical securities. Derivative liabilities The Company recorded a gain of $8.3 million, loss of $0.3 million, and gain of $0.8 million on derivative liabilities for the years ended December 31, 2022, 2021, and 2020, respectively, which was attributed to compound derivative liabilities associated with the Scilex Pharma Notes (see Note 7) and Private Warrants. The fair value of the derivative liability associated with the Scilex Pharma Notes decreased by $30.4 million immediately after entry into Amendment No. 4 (see Note 7) associated with the Scilex Pharma Notes on June 2, 2022. The fair value of the derivative liability associated with the Scilex Pharma Notes was estimated using the discounted cash flow method combined with a Monte Carlo simulation model including consideration of the terms of Amendment No. 4. Significant Level 3 assumptions used in the measurement included a 6.1% risk adjusted net sales forecast and an effective debt yield of 21.5%. The Scilex Pharma Notes were fully extinguished in September 2022 (see Note 7) and, as such, there were no remaining loan derivative liabilities associated with the Scilex Pharma Notes as of December 31, 2022. At the closing of the Business Combination, the Company assumed a derivative warrant liability of $2.5 million related to Private Warrants (See Note 8). The fair value of derivative warrant liability related to Private Warrants was $1.2 million as of December 31, 2022. The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the year ended December 31, 2022: Fair value Ending Balance at December 31, 2019 $ 33,400 Loan derivative liability 2,800 Re-measurement (800 ) Ending Balance at December 31, 2020 $ 35,400 Re-measurement 300 Balance at December 31, 2021 $ 35,700 Private Warrant liability acquired as part of the Business Combination 2,545 Forfeiture of Private Warrants 1,696 Change in fair value measurement (38,710 ) Balance at December 31, 2022 $ 1,231 Warrant Liability Measurement The derivative warrant liability was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the warrant is the expected volatility of the Common Stock. The expected volatility assumption is based on historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants. A summary of the inputs used in valuing the derivative warrant liabilities is as follows: December 31, November 10, Fair value Fair Value Equity Value $ 3.99 $ 9.01 Exercise Price $ 11.50 $ 11.50 Term (in years) 4.86 5.00 Volatility 35.0 % 10.0 % Risk-free rate 3.94 % 3.91 % Dividend yield 0.00 % 0.00 % Call option value $ 0.30 $ 0.62 Contingent Consideration The Development Milestone Payment represents a liability under the scope of ASC Topic 480, Distinguishing Liabilities from Equity SP-104, SP-104, SP-104, 10.0 There were no transfers between fair value measurement levels during the years ended December 31, 2022, 2021, and 2020. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment, Net Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Computers & equipment $ 77 $ 77 Furniture 118 118 Leasehold improvements 55 48 Construction in progress 689 689 Property and equipment, gross 939 932 Less: Accumulated depreciation (167 ) (127 ) Property and equipment, net $ 772 $ 805 Depreciation expense for each of the years ended December 31, 2022, 2021, and 2020 was $40 thousand, $39 thousand, and $40 thousand, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets As of December 31, 2022 and December 31, 2021, the Company had recorded goodwill of $13.5 million. The Company performed a qualitative test for goodwill impairment during the fourth quarter of 2022. Based upon the results of the qualitative testing, the Company concluded that it is more-likely-than-not two-step The Company’s intangible assets, excluding goodwill, are composed of patent rights, acquired technology, acquired licenses, and assembled workforce. Amortization of the intangible assets that have finite useful lives is generally recorded on a straight-line basis over their useful lives. A summary of the Company’s identifiable intangible assets as of December 31, 2022 and December 31, 2021 is as follows (in thousands): December 31, 2022 Gross carrying amount Accumulated amortization Intangibles, net Patent rights $ 32,630 $ 13,415 $ 19,215 Acquired technology 21,940 6,216 15,724 Acquired licenses 5,711 184 5,527 Assembled workforce 500 375 125 Total intangible assets $ 60,781 $ 20,190 $ 40,591 December 31, 2021 Gross carrying amount Accumulated amortization Intangibles, net Patent rights $ 32,630 $ 11,239 $ 21,391 Acquired technology 21,940 4,754 17,186 Assembled workforce 500 275 225 Total intangible assets $ 55,070 $ 16,268 $ 38,802 On June 14, 2022, the Company entered into Romeg License Agreement to acquire an exclusive license to use GLOPERBA from Romeg (see Note 3). The Company determined the acquisition of licenses to be an asset acquisition. The fair value of consideration transferred of $5.7 million was assigned to acquired licenses with an amortization period of approximately 15 years. As of December 31, 2022, the weighted average remaining life for identifiable intangible assets was 10.4 years. Aggregate amortization expense was $3.9 million, $3.7 million, and $3.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. Patent rights and acquired technology are amortized over a 15-year 5-year Estimated future amortization expense related to intangible assets at December 31, 2022 is as follows (in thousands): Year Ended December 31, Amount 2023 $ 4,106 2024 4,031 2025 4,006 2026 4,006 2027 4,006 Thereafter 20,436 Total $ 40,591 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt 2018 Purchase Agreements and Indenture On September 7, 2018, Scilex Pharma and Sorrento entered into Purchase Agreements (the “2018 Purchase Agreements”) with certain investors (collectively, the “Scilex Pharma Note Purchasers”). Pursuant to the 2018 Purchase Agreements, on September 7, 2018, Scilex Pharma, among other things, issued and sold to the Scilex Pharma Note Purchasers senior secured notes due 2026 in an aggregate principal amount of $224.0 million (the “Scilex Pharma Notes”) for an aggregate purchase price of $140.0 million (the “Offering”). The Scilex Pharma Notes were governed by an indenture (as amended, the “Indenture”) with Scilex Pharma, as issuer, U.S. Bank National Association, a national banking association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), and Sorrento, as guarantor. Pursuant to the Indenture, Sorrento agreed to irrevocably and unconditionally guarantee, on a senior unsecured basis, the punctual performance and payment when due of all obligations of Scilex Pharma under the Indenture (the “Guarantee”). The principal amount of the Scilex Pharma Notes increased by $28.0 million on February 15, 2022 as a result of actual cumulative net sales of ZTlido from the issue date of the Scilex Pharma Notes through December 31, 2021 not equal or exceeding $481.0 million. As a result, the Company recorded the increase of $28.0 million in principal and non-operating Effective February 14, 2022, Scilex Pharma issued to Sorrento a draw notice under the Letter of Credit as required under the terms of the Indenture because actual cumulative net sales of ZTlido from the issue date of the Scilex Pharma Notes through December 31, 2021 were less than a specified sales threshold for such period. As a result of the draw notice being issued, Sorrento paid to Scilex Pharma $35.0 million in a single lump-sum On June 2, 2022, Sorrento and Scilex Pharma entered into a Consent Under and Amendment No. 4 to Indenture (the “Amendment No. 4”) with U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) and the Scilex Note Purchasers. Pursuant to Amendment No. 4, (1) on June 3, 2022, Scilex Pharma repurchased approximately $41.4 million of the aggregate principal amount of the outstanding Scilex Pharma Notes at 100% of the principal amount thereof, (2) the Scilex Note Purchasers agreed that Scilex Pharma can repurchase the remaining principal amount of the Scilex Pharma Notes at any time on or before September 30, 2022 for $41.4 million (subject to reduction for any quarterly royalty payments) and upon such repurchase the Scilex Note Purchasers will forgive and discharge $28.0 million of the aggregate principal amount of the Scilex Pharma Notes (the “Early Paydown Provision”), (3) the minimum cash requirement under the Indenture was reduced to $5.0 million in aggregate unrestricted cash equivalents at the end of each calendar month, and (4) the maximum aggregate principal amount on the promissory note issued by Scilex Pharma to Sorrento on October 5, 2018 was increased from up to $25.0 million to up to $50.0 million. The Company funded the repurchase with cash-on-hand In September 2022, the Company exercised the Early Paydown Provision to fully extinguish the Scilex Pharma Notes. In August and September 2022, the Company made principal payments towards the outstanding Scilex Pharma Notes totaling $1.7 million and $39.7 million, respectively. Pursuant to Amendment No. 4, $28.0 million of principal amount on the Scilex Pharma Notes was forgiven by the Scilex Pharma Note Purchasers and the Scilex Pharma Notes were fully extinguished in September 2022. The Company funded the repurchase with cash-on-hand Borrowings of the Scilex Notes consisted of the following (in thousands): December 31, 2021 Principal $ 133,997 Unamortized debt discount (30,597 ) Unamortized debt issuance costs (2,228 ) Carrying value 101,172 Current portion (29,135 ) Long term portion 72,037 Estimated fair value $ 115,400 The Company made principal payments of $106.0 million, $45.9 million, and $69.8 million during the years ended December 31, 2022, 2021, and 2020, respectively. The amount of debt discount and debt issuance costs included in interest expense for the years ended December 31, 2022, 2021, and 2020 was approximately $3.1 million, $7.9 million and $10.7 million, respectively. The Company recorded a gain on debt extinguishment of $28.6 million, a loss on debt extinguishment of $12.5 million, and no gain/loss on debt extinguishment in connection with its repayments of principal made during the years ended December 31, 2022, 2021, and 2020, respectively. Related Party Notes Payable On October 5, 2018, Scilex Pharma issued to Sorrento a promissory note (see Note 12). On March 18, 2019, the Company entered into a note payable with Sorrento (see Note 12). On February 14, 2022, Sorrento paid to Scilex Pharma $35.0 million in a single lump-sum SP-104 2020 Revolving Credit Facility On December 14, 2020, Scilex Pharma entered into the Credit and Security Agreement (the “Credit Agreement”) with CNH Finance Fund I, L.P. (“CNH”) which provides Scilex Pharma with the ability to incur indebtedness under an accounts receivable revolving loan facility in an aggregate amount of $10.0 million and the incurrence of liens and the pledge of collateral to CNH in connection with the revolving loan facility. Under the terms of the Credit Agreement, interest will accrue daily on the principal amount outstanding at a rate per annum equal to the Wall Street Journal Prime Rate plus 1.75%. All indebtedness incurred and outstanding will be due and payable in full on January 1, 2024; unless the Credit Agreement is earlier terminated. As of December 31, 2021, the outstanding balance was $8.8 million. On February 16, 2022, the Company notified CNH that it was terminating the Credit Agreement, effective March 18, 2022. Upon termination, all principal balances and interest accrued were settled. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity The consolidated statement of stockholders’ equity has been retroactively adjusted for all periods to reflect the Business Combination and reverse recapitalization described in Note 1. The balances as of December 31, 2022 and 2021 from the consolidated financial statements of the Company as of that date, share activity (Preferred Stock, Common Stock, and additional paid-in-capital) Common Stock Upon the closing of the Business Combination, pursuant to the terms of the Amended and Restated Certificate of Incorporation, the Company authorized 740,000,000 shares of Common Stock with a par value of $0.0001. As of December 31, 2022 and December 31, 2021, there were 141,348,856 shares issued and 132,858,484 of Common Stock outstanding, respectively. In connection with the closing of the Business Combination, all previously issued and outstanding shares of Legacy Scilex Common Stock and Legacy Scilex stock options were converted into shares of Common Stock pursuant to the Common Stock Exchange Ratio. The Company has retroactively adjusted shares issued and outstanding prior to November 10, 2022 to give effect to the Common Stock Exchange Ratio to determine the number of shares of Common Stock into which they were converted. Voting The holders of the Common Stock are entitled to one vote for each share of the Common Stock held at all meetings of stockholders. Dividends Common stockholders are entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors. No dividends have been declared as of December 31, 2022. The Stockholder Agreement, dated as of September 12, 2022, between Vickers and Sorrento (the “Stockholder Agreement”), provides that the Company will be prohibited from taking certain actions without the consent of Sorrento. Such actions include, among other things, the payment of dividends on shares of the Common Stock. Liquidation Rights Subject to the rights of the holders of Preferred Stock, in the event of our liquidation, dissolution or winding-up, Preferred Stock Upon the closing of the Business Combination, $290.6 million of all existing related party indebtedness between Scilex, Scilex Pharma, and Sorrento were cancelled in exchange for the issuance of preferred shares of Scilex (“Series A Preferred Shares” or “Series A Preferred Stock”). In connection with the closing of the Business Combination, all issued Scilex Series A Preferred Shares were cancelled and converted into the right to receive 1) one share of domesticated parent preferred shares (“New Scilex Preferred Stock” or “Preferred Stock”) par value of $0.0001 per share, and 2) one-tenth Prior to the Conversion, Legacy Scilex filed a Second Amended Certificate of Incorporation (defined below) to increase the authorized number of shares to 45,000,000 shares and a Certificate of Designation (“Certificate of Designation”) to designate the rights, preferences, and privileges of Scilex Series A Preferred Shares. In connection with the closing of the Business Combination, the Company filed the Certificate of Designation and issued 29,057,097 shares of the Series A Preferred Stock to Sorrento. As of December 31, 2022, there were 29,057,097 shares of Preferred Stock outstanding. There were no Preferred Stock outstanding at December 31, 2021. The Company’s Board of Directors have authority to issue such shares of Preferred Stock in one or more series, to establish, from time to time the number of shares to be included in each such series, and to fix the dividend, voting, and other rights, preferences, and privileges of the shares. Other than the Series A Preferred Stock issued to Sorrento in connection with the closing of the Business Combination, there are no other Preferred Stock outstanding and the Company has no current plans to issue any other shares of preferred stock. Voting The holders of shares of Preferred Stock will be entitled to vote, together with the holders of shares of Common Stock and not separately as a class, on all matters upon which holders of shares of Common Stock have the right to vote. The holders of shares of Preferred Stock will be entitled to one vote for each share of Common Stock that such share of Preferred Stock would otherwise be convertible into pursuant to a deemed conversion on the record date for the determination of the stockholders entitled to vote. Pursuant to the Stockholder Agreement, holders of Series A Preferred Stock have the right to designate each director to be nominated, elected or appointed to the Board of Directors of the Company. The Series A Preferred Stock also has certain protective provisions, such as requiring a written consent of the holders of Series A Preferred Stock to change or amend their rights, powers, privileges, limitations and restrictions. Dividends Holders of the Preferred Stock are not entitled to dividends unless the Company pays dividends to holders of the Common Stock and shall be entitled to receive, when, as and if declared by our Board, such dividends (whether in cash or other property) as are paid to holders of the Common Stock to the same extent as if such holders of Series A Preferred Stock had been deemed to convert their shares of Preferred Stock into Common Stock and had held such shares of Common Stock on the record date for such dividends and distributions. Such payments will be made concurrently with the dividend or distribution to the holders of the Common Stock. Liquidation Rights Subject to the rights of the holders of parity shares (if any), in the event of our liquidation, dissolution or winding-up, Assumed Public Warrants and Private Warrants Following the consummation of the Business Combination, holders of the Public Warrants and Private Warrants are entitled to acquire Common Stock of the Company. The warrants are exercisable on the later of (a) the completion of a Business Combination and (b) 12 months from the closing of Vickers’s Initial Public Offering. The warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Each warrant entitles the holder to purchase one share of Common Stock for $11.50 per share. If the reported last sale price of the Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The Company will not be required to net cash settle the warrants. As of December 31, 2022, there are 6,899,988 Public Warrants outstanding. In connection with the closing of the Business Combination, 3,104,000 Private Warrants were transferred to Sorrento pursuant to the Warrant Transfer Agreement between Vickers, the Sponsors, Sorrento and Maxim Group, LLC where Sorrento acquired all rights, title and interests to such Private Warrants (“Warrant Transfer Agreement”). As of December 31, 2022, there are 4,104,000 Private Warrants outstanding, of which 3,104,000 Private Warrants are held by Sorrento and 1,000,000 Private Warrants are held by Sponsors. Legacy Scilex Common Stock and Preferred Stock Prior to the Business Combination, Legacy Scilex had the authority to issue 200,000,000 shares of common stock, par value $0.0001 per share and 20,000,000 shares of preferred stock, par value $0.0001 per share per the Certificate of Incorporation dated February 27, 2019. The Certificate of Incorporation was amended and restated on March 4, 2019 (“First Amended Certificate of Incorporation”), in which Legacy Scilex had the authority to issue 350,000,000 shares of common stock, par value $0.0001 per share and 20,000,000 shares of preferred stock, par value $0.0001 per share. The First Amended and Restated Certificate of Incorporation was amended and restated on November 10, 2022 (“Second Amended Certificate of Incorporation”). As a result of the Second Amended Certificate of Incorporation, Legacy Scilex had the authority to issue 785,000,000 shares, consisting of 740,000,000 shares of common stock and 45,000,000 shares of preferred stock. Immediately prior to the Conversion, there were 197,566,338 shares of Legacy Scilex Common Stock outstanding and 29,057,097 shares of Series A Preferred Stock, par value $0.0001 per share, of Legacy Scilex outstanding. Yorkville Standby Equity Purchase Agreement On November 17, 2022, the Company entered into a Standby Equity Purchase Agreement (the “Yorkville Purchase Agreement”) with Yorkville, whereby the Company has the right, but not the obligation, to sell to Yorkville up to $500.0 million of shares of its Common Stock at its request any time during the 36 months following the execution of the Yorkville Purchase Agreement, subject to certain conditions. Pursuant to the Yorkville Purchase Agreement, the shares of Common Stock, if any, that the Company elects to sell to Yorkville pursuant to a sale of Common Stock (each such sale, a “Yorkville Advance”) will be purchased at a price equal to 98% of the lowest daily volume weighted average price of the Common Stock for any trading day (“VWAP”) during the two consecutive trading days commencing on the date of delivery of a written purchase notice to Yorkville (each, a “Yorkville Advance Notice”). As consideration for Yorkville’s commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Yorkville Purchase Agreement, upon execution of the Yorkville Purchase Agreement, the Company issued 250,000 shares of Common Stock to Yorkville and paid $10.0 thousand in structuring fees. The registration statement on Form S-1 No. 333-268607) Refer to Note 14 “Subsequent Event” below for a subsequent event related to the Yorkville Purchase Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Product Development Agreement In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with two parties (the “Developers”), one of which is ITOCHU CHEMICAL FRONTIER Corporation (“Itochu”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and SP-103 Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25% and 35% to the Developers based on net profits. During the year ended December 31, 2022, Scilex Pharma made royalty payments in the amount of $2.3 million. As of December 31, 2022, Scilex Pharma had ending balances of accrued royalty payables of $2.2 million. Net profits are defined as net sales, less cost of goods and marketing expenses. Net sales are defined as total gross sales of any Product, less all applicable deductions, to the extent accrued, paid or allowed in the ordinary course of business with respect to the sale of such Product, and to the extent that they are in accordance with U.S. GAAP. If Scilex Pharma were to sublicense the licensed technologies, the Developers will receive the same proportion of any sublicensing fees received therefrom. The Product Development Agreement will continue in full force and effect until October 2, 2028, the date that is ten years from the date of the first commercial sale of ZTlido. The Product Development Agreement will renew automatically for subsequent successive one-year 6-month On February 16, 2017, Scilex Pharma entered into a Commercial Supply Agreement (as amended, the “Supply Agreement”) with the two Developers to provide commercial supply of ZTlido and SP-103 Exclusive Distribution Agreement In August 2015, Scilex Pharma entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) to appoint an exclusive third-party logistics distribution provider (the “Distributor”) and as an authorized distributor of record of ZTlido in the United States, its territories, possessions and commonwealths for an agreed schedule of fees, subject to a 3% annual adjustment. The Distribution Agreement has an initial term of three years following the first shipment of FDA-approved gross-to-net Sales Operations Services In January 2016, Scilex Pharma entered into a project agreement with a vendor to provide sales operations services and detailing services, which was subsequently superseded by a new project agreement entered into in September 2018 (the “Project Agreement”). In connection with the detailing services, the Project Agreement provides that the vendor will provide Scilex Pharma with full-time sales representatives who shall detail the Product by making calls pursuant to a call plan on targets. These sales representatives are to be managed by field talent managers and a national project director, each of whom will also be provided by the vendor. In connection with the sales operation services, the vendor will provide certain services required for the initial implementation and ongoing operation of the sales force. On July 1, 2020, Scilex Pharma and the vendor entered into a work order in which the parties agreed to convert substantially all of the sales representatives allocated under the Project Agreement to become employees of Scilex Pharma. The vendor continued to provide sales operations services, fleet management services and sample accountability services. The work order was in effect until June 30, 2022 and was extended for one year upon the mutual agreement of both parties. Either party may terminate the work order with 90 days’ notice. Scilex Pharma paid an implementation fee of $59.0 thousand and will pay fixed monthly fees of $63.7 thousand to $65.8 thousand for ongoing services. The Company recognized an expense of $0.9 million, $1.9 million, and $10.5 million within selling, general and administrative expenses for services performed for the years ended December 31, 2022, 2021, and 2020, respectively, including implementation fees, fixed monthly fees and pass-through costs. Litigation In the normal course of business, the Company may be named as a defendant in one or more lawsuits. Other than the following three lawsuits, the Company is not a party to any outstanding material litigation and management is not aware of any legal proceedings that, individually or in the aggregate, are deemed to be material to the Company’s financial condition or results of operations. From time to time the Company may become involved in various legal proceedings, including those that may arise in the ordinary course of business. Sanofi-Aventis U.S. LLC and Hisamitsu America, Inc. Litigation On February 23, 2021, the Company filed an action in the U.S. District Court for the Northern District of California against Sanofi-Aventis U.S. LLC and Hisamitsu America, Inc., two manufacturers of OTC lidocaine patch products, alleging, among other things, false and deceptive advertising and unfair competition under the Lanham Act and California state laws by those companies regarding their respective OTC patch products (the “Sanofi-Aventis & Hisamitsu Litigation”). This lawsuit seeks, among other relief, damages and an injunction enjoining the defendants from continuing to make false or misleading statements of fact about their respective OTC lidocaine patch products. The defendants have filed motions to dismiss, which have narrowed slightly the Company’s claims, but which motions the court has largely rejected. Discovery is proceeding. The case is currently scheduled for trial to begin on July 24, 2023. The Company cannot make any predictions about the outcome in this matter or the timing thereof. Former Employee Litigation On March 12, 2021, the Company filed an action in the Delaware Court of Chancery against Anthony Mack, former President of Scilex Pharma, and Virpax Pharmaceuticals, Inc. (“Virpax”), a company now headed by Mr. Mack, alleging, among other things, breach by Mr. Mack of his non-compete non-compete non-compete non-compete ZTlido Patent Litigation On June 22, 2022, the Company filed a complaint against Aveva Drug Delivery Systems, Inc., Apotex Corp., and Apotex, Inc. (together, “Apotex”) in the U.S. District Court for the Southern District of Florida (the “ZTlido Patent Litigation”) alleging infringement of certain Orange Book listed patents covering ZTlido (the “ZTlido Patents”). The ZTlido Patent Litigation was initiated following the submission by Apotex, in accordance with the procedures set out in the Hatch-Waxman Act, of an ANDA. Apotex’s ANDA seeks approval to market a generic version of ZTlido prior to the expiration of the ZTlido Patents and alleges that the ZTlido Patents are invalid, unenforceable, and/or not infringed. The Company is seeking, among other relief, an order that the effective date of any FDA approval of Apotex’s ANDA be no earlier than the expiration of the asserted patents listed in the Orange Book, the latest of which expires on May 10, 2031, and such further and other relief as the court may deem appropriate. Apotex is subject to a 30-month Operating Leases The Company leases administrative and research and development facilities under various non-cancelable right-of-use As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company calculates the associated lease liability and corresponding right-of-use finance leases The components of lease expense were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease cost* $ 469 $ 623 $ 904 * Inclusive of variable lease costs, sublease income, and impairment, which were immaterial for the periods presented. Supplemental quantitative information related to leases includes the following: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (746 ) $ (654 ) ROU assets obtained in exchange for new operating lease liabilities $ 320 $ — Weighted average remaining lease term in years—operating leases 1.8 2.8 Weighted average discount rate—operating leases 11.8 % 12.2 % In June 2022, the Company entered into a new non-cancelable Approximate future minimum lease payments under operating leases were as follows (in thousands): Year Ended December 31, Amount 2023 $ 872 2024 703 2025 — 2026 — 2027 — Total lease payments 1,575 Less imputed interest (165 ) Total lease liabilities 1,410 Less current portion of lease liability 745 Lease liability, net of current portion $ 665 |
Stock Incentive and Employee Be
Stock Incentive and Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive and Employee Benefit Plans | 9. Stock Incentive and Employee Benefit Plans The consolidated statements of stockholders’ equity / (deficit) have been retroactively adjusted for all periods to reflect the Business Combination and reverse recapitalization described in Note 1. The balances as of December 31, 2022, 2021, 2020 from the consolidated financial statements of the Company as of that date, share activity (stock options) and per share amounts were retroactively adjusted, where applicable, using the Common Stock Exchange Ratio. 2017 Equity Incentive Plan In June 2017, Scilex Pharma adopted the Scilex Pharmaceuticals Inc. 2017 Equity Incentive Plan (the “Scilex Pharma 2017 Plan”). The Scilex Pharma 2017 Plan reserved 24.0 million shares of Scilex Pharma common stock. Stock options granted under the Scilex Pharma 2017 Plan typically vest 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining options vest each month thereafter. The Scilex Pharma 2017 Plan was amended and restated on July 5, 2018. In connection with the corporate reorganization in March 2019, the Scilex Pharma 2017 Plan was terminated, and each option to purchase Scilex Pharma’s common stock outstanding and unexercised immediately prior to reorganization was cancelled and substituted for that number of options to acquire Legacy Scilex Common Stock. Scilex Holding Company 2019 Stock Option Plan The Board of Directors of the Company adopted the Scilex Holding Company 2019 Stock Option Plan (the “2019 Stock Option Plan” or “Prior Plan”) on May 28, 2019. The 2019 Stock Option Plan was approved by the Company’s stockholders on June 7, 2019. As of December 31, 2019, 30.0 million shares of Scilex Common Stock of the Company were reserved for issuance pursuant to the 2019 Stock Option Plan. Stock options granted under the 2019 Stock Option Plan typically vest with respect to 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining shares on each monthly anniversary thereafter. Upon the consummation of the Business Combination, the 2019 Stock Option Plan was terminated and no further awards were granted under the 2019 Stock Option Plan thereafter. However, the 2019 Stock Option Plan will continue to govern outstanding awards granted under the terms of the Equity Incentive Plan (defined below). Scilex Holding Company 2022 Equity Incentive Plan The Board of Directors of the Company adopted the Scilex Holding Company 2022 Equity Incentive Plan (the “Equity Incentive Plan”) on October 17, 2022. The 2022 Equity Incentive Plan was approved by the stockholders and became effective on November 9, 2022. The total number of common shares for which incentive stock options (“ISOs”) may be granted under the Equity Incentive Plan is not to exceed 14,622,712 shares plus a number of shares of Common Stock equal to the number of shares subject to outstanding stock awards granted under the Prior Plan (“Returning Shares”), if any, as such shares become available from time to time, which the amount will be increased commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to the lesser of (i) 4% of the total number of shares of Common Stock outstanding on December 31 of the preceding year, (ii) 7,311,356 shares of Common Stock, and (iii) such number of shares of the Common Stock determined by the Board or the compensation committee of the Board prior to January 1 of a given year. As of December 31, 2022, there were no options to purchase shares of Common Stock outstanding under the Equity Incentive Plan and options to purchase 16,939,436 shares of the Common Stock were outstanding under previous plans. Total stock-based compensation recorded within operating expenses was $5.3 million, $5.8 million, and $5.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. The total unrecognized compensation costs related to unvested employee and non-employee Scilex Holding Company 2022 Employee Stock Purchase Plan On October 17, 2022, the Board adopted the Scilex Holding Company 2022 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the stockholders and became effective on November 9, 2022. The purpose of the ESPP is to secure and retain the services of new employees, to retain the services of existing employees, and to provide incentives for such individuals to exert maximum efforts toward the success of the Company. The ESPP includes two components. One component is designed to allow eligible U.S. employees to purchase the Common Stock in a manner that may qualify for favorable tax treatment under Section 423 of the Internal Revenue Code of 1986 (“Code”) (the “423 Component”) and accordingly, it will be construed in a manner that is consistent with the requirements of Section 423 of the Code. The other component will permit the grant of purchase rights that do not qualify for such favorable tax treatment (the “Non-423 The Board administers the ESPP and will have the authority to determine how and when purchase rights are granted and the provisions of each offering. Initially, the total number of shares of the Common Stock that may be issued under the ESPP will not exceed 1,462,271 shares of the Common Stock. The number of shares of the Common Stock that will be reserved for issuance will automatically increase on January 1 of each year for a period of up to ten years, commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to the lesser of (i) 1% of the total number of shares of the Common Stock outstanding on December 31 of the immediately preceding calendar year; (ii) 1,827,839 shares of the Common Stock; and (iii) such number of shares of the Common Stock determined by the Board or the compensation committee of the Board prior to January 1 of a given year, provided however, that the Board may act prior to January 1 of a given calendar year to provide that there will be no increase for such calendar year or the increase for such year will be a lesser number of shares than the amount set forth in clauses (i) to (iii) above. As of December 31, 2022, there were no shares outstanding under the ESPP. Option Valuation The Company calculates the fair value of stock-based compensation awards granted to employees and nonemployees using the Black-Scholes option-pricing method. The Black-Scholes option-pricing method requires the use of subjective assumptions, including stock price volatility, the expected life of stock options, risk free interest rate and the fair value per share of the underlying common stock on the date of grant. The assumptions used in the Black-Scholes option-pricing method related to options issued to employees and nonemployees for the year ended 2020 is set forth below: Year Ended December 31, 2020 Weighted—average grant date fair value $ 1.23 Expected dividend yield 0.00 % Expected stock-price volatility 90.00 % Risk-free interest rate 0.53 % Term of options 5.6 Fair value per share of common stock on date of grant $ 1.72 Exercise price $ 1.72 Expected dividend yield Expected stock-price volatility Risk-free interest rate zero-coupon Expected term of options The following represents a summary of the options outstanding at December 31, 2022, 2021, and 2020 and changes during the years then ended (in thousands, other than weighted-average exercise price): Options Weighted average exercise price Aggregate Intrinsic Value Outstanding at December 31, 2019 17,114 $ 1.59 2,183 Granted 4,172 1.72 Exercised (38 ) 1.34 Forfeited/Cancelled (502 ) 1.40 Outstanding at December 31, 2020 20,746 1.63 2,172 Granted — — Exercised — — Forfeited/Cancelled (1,778 ) 1.01 Outstanding at December 31, 2021 18,968 1.68 915 Granted — — Exercised (202 ) 0.47 Forfeited/Cancelled (1,827 ) 1.72 Outstanding at December 31, 2022 16,939 $ 1.68 38,942 Exercisable at December 31, 2022 14,487 $ 1.70 Employee Benefit Plan The Company maintains a defined contribution 401(k) plan available to eligible employees, which is administered by Sorrento. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company made matching contributions to the 401(k) plan totaling $0.3 million for each of the years ended December 31, 2022, 2021, and 2020, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Total loss before income taxes for the years ended December 31, 2022, 2021 and 2020 did not include a foreign component. The components of the provision expense (benefit) were as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Current income tax expense (benefit): Federal $ — $ — $ — State 4 5 (53 ) Total current 4 5 (53 ) Deferred income tax expense (benefit): Federal (10,396 ) (12,981 ) (3,970 ) State (1,851 ) (2,472 ) (130 ) Total deferred (12,247 ) (15,453 ) (4,100 ) Changes in tax rate 1,347 31 93 Changes in valuation allowance 10,900 15,422 4,007 Total income tax benefit from continuing operations $ 4 $ 5 $ (53 ) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 48,984 $ 39,714 Debt related interest 15,272 12,205 Capitalized research and development 2,014 — Tax credit carryforwards 1,630 1,630 Stock based compensation 1,602 3,233 Accrued expense and reserves 568 1,517 Operating lease liabilities 315 404 Other 77 236 Total deferred tax assets 70,462 58,939 Less valuation allowance (67,543 ) (56,643 ) Total deferred tax assets 2,919 2,296 Deferred tax liabilities: Intangible assets (2,666 ) (1,975 ) Operating lease right-of-use (253 ) (319 ) Other — (2 ) Total deferred tax liabilities (2,919 ) (2,296 ) Net deferred tax liabilities $ — $ — The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Income tax benefit at federal statutory rate $ (4,905 ) $ (19,150 ) $ (9,408 ) Valuation allowance 10,900 15,422 4,007 Debt discount and interest limitation (9,293 ) 8,954 (806 ) Compensation expense 2,469 224 166 Acquisition related charges 992 75 63 Prior year true-up (713 ) (3,968 ) 6,955 State, net of federal tax benefit (174 ) (2,545 ) (1,164 ) Income tax credits and incentives — — (101 ) Other 728 993 235 Income tax benefit $ 4 $ 5 $ (53 ) The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the deferred tax assets will not be realized. Due to such uncertainties surrounding the realization of the deferred tax assets, the Company maintains a valuation allowance of $67.5 million against its deferred tax assets as of December 31, 2022. Realization of the deferred tax assets will be primarily dependent upon the Company’s ability to generate sufficient taxable income prior to the expiration of its net operating losses. As of December 31, 2022, the Company had $205.6 million and $106.9 million of federal and state net operating loss carryforwards, respectively. The net operating loss carryforwards begin to expire in 2035 and 2034 for federal and state, respectively. The Company also had federal research and development income tax credits of $2.0 million which will begin to expire in 2035. Internal Revenue Code Section 382 rules apply to limit a corporation’s ability to utilize existing net operating loss and tax credit carryforwards once the corporation experiences an ownership change as defined in Section 382. For the years ended December 31, 2022 and 2021, there was no impact of such limitations on the Company’s income tax provision. The Company is subject to taxation in U.S. federal and state tax jurisdictions. All of the Company’s tax years will remain open for three years for examination by the federal and state tax authorities from the date of utilizations of net operating loss. There are no active tax compliance audits as of December 31, 2022. A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands): 2022 2021 2020 Beginning balance $ 408 $ 406 $ 385 Increase related to prior year tax positions — 2 — Decrease related to prior year tax positions — — (4 ) Increase related to current year tax positions — — 25 Ending balance $ 408 $ 408 $ 406 At December 31, 2022, 2021, and 2020, $0.4 million, $0.4 million and $0.4 million, respectively, of the Company’s total unrecognized tax benefits, if recognized, would impact the effective tax rate, however given the full valuation allowance in the jurisdiction in which the unrecognized tax benefits relate to, the impact on the effective tax rate would be nil. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. No interest or penalties have been recognized as of and for the periods ended December 31, 2022, 2021, and 2020. The Company believes that no material amount of the liabilities for uncertain tax positions are expected to reverse within 12 months of December 31, 2022. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 12. Related Party Transactions As of December 31, 2020, approximately 14.7% of the outstanding capital stock of the Company was held by Itochu. On January 13, 2021, 34,889,868 shares of Legacy Scilex representing all outstanding capital stock of Legacy Scilex held by Itochu were acquired by non-related Semnur is party to an Assignment Agreement, dated August 6, 2013 (the “Assignment Agreement”), with Shah Investor LP (“Shah Investor”). Mahendra Shah, Ph.D., who has served on the Company’s board of directors since March 2019, is the managing partner of Shah Investor. Pursuant to the Assignment Agreement, Shah Investor assigned certain intellectual property to Semnur and Semnur agreed to pay Shah Investor a contingent quarterly royalty in the low-single SP-102. On January 1, 2017, a Transition Services Agreement (“TSA”) was executed between Scilex Pharma and Sorrento. Pursuant to the TSA, Sorrento agreed, at the Company’s request, to provide directly or indirectly certain administrative, financial, legal, tax, insurance, facility, information technology and other services. In addition to the services provided under the TSA, Sorrento retains insurance coverage on behalf of the Company. During the years ended December 31, 2022, 2021, and 2020 the total cost of services and insurance, including an agreed-upon markup, provided to the Company and recognized in general and administrative expenses was $3.8 million, $4.0 million, and $2.3 million, respectively. On March 18, 2019, the Company entered into a note payable with Sorrento with an initial principal amount of $16.5 million for the acquisition of Semnur. The note is interest bearing at the lesser of (a) 10% simple interest per annum, and (b) the maximum interest rate permitted under law. Interest is due and payable annually. The note payable is payable upon demand and may be prepaid in whole or in part at any time without penalty or premium. During the years ended December 31, 2022, 2021, and 2020 Sorrento made advances to the Company in the amount of $27.5 million, $6.6 million, and $13.7 million respectively, under the note payable. All outstanding related party indebtedness immediately prior to the closing of the Business Combination was converted to equity pursuant to the Debt Exchange Agreement (defined below) and therefore the last day the debt outstanding was November 10, 2022 (see Note 12). The outstanding principal balance of the note on November 10, 2022 and December 31, 2021 was $47.1 million and $19.6 million, respectively, which was recorded under the current related party note payable in the Company’s consolidated balance sheets. As of November 10, 2022 and December 31, 2021, the Company had ending balances resulting from the accrued interest on the note payable of $7.2 million and $3.9 million, respectively, which was recorded under related party payable in the Company’s consolidated balance sheets. The proceeds from the note payable were used to finance the operations of the Company. On October 5, 2018, Scilex Pharma issued to Sorrento a promissory note in the amount of approximately $21.7 million for certain amounts previously advanced to Scilex Pharma by Sorrento (the “Intercompany Note”). Scilex Pharma may borrow up to an aggregate of $25.0 million of principal amount under the note payable. The promissory note is interest bearing at the lesser of (a) 10% simple interest per annum, and (b) the maximum interest rate permitted under law. All outstanding principal amounts and accrued interest was due upon maturity on August 31, 2026. On October 22, 2018, Sorrento purchased from the Legacy Scilex 24,117,608 shares of the Legacy Scilex Common Stock in exchange for the repayment of $21.7 million of indebtedness under this promissory note. During the years ended December 31, 2022, 2021, and 2020, Sorrento made advances to Scilex Pharma in the amount of $0, $8.1 million, and $10.3 million respectively, under the promissory note. As of November 10, 2022 and December 31, 2021, the Company had ending balances resulting from the accrued interest on the note payable of $5.1 million and $3.1 million, respectively, which was recorded under related party payable in the Company’s consolidated balance sheets. As of November 10, 2022 and December 31, 2021, Scilex Pharma’s outstanding principal balance under the promissory note was $23.5 million, which was recorded under the non-current The Company received $35.0 million in February 2022 to fund the payment of Scilex Pharma Notes as described in Note 7. The $35.0 million received in February 2022 was due no earlier than February 2030 and was recorded under the non-current Additional funding received from Sorrento was due on demand and recorded under the related party payable in the Company’s consolidated balance sheets. As of November 10, 2022, related party payables due to Sorrento included $61.7 million to cover working capital requirements, $100.0 million for repurchases of Scilex Pharma Notes, and $18.2 million for litigation fees (see Note 7). As of December 31, 2021, related party payables due to Sorrento consisted of $35.7 million to cover working capital requirements, $51.0 million for repurchases of Scilex Pharma Notes, and $6.0 million to pay litigation fees. As of December 31, 2022, the Company had a $1.8 million related party receivable from Sorrento related to certain invoices paid on behalf of Sorrento, which was fully reserved (see Note 14). On May 12, 2022, the Company entered into the Bill of Sale, with Sorrento (see Note 3). Pursuant to the Bill of Sale, the Company assumed all of Sorrento’s rights, liabilities and obligations under Aardvark Asset Purchase Agreement. The Company issued the 2022 Promissory Note to Sorrento as consideration transferred. The 2022 Promissory Note matures seven years from the date of issuance and bears interest at the rate equal to the lesser of (a) 2.66% simple interest per annum and (b) the maximum interest rate permitted under law. As of November 10, 2022, the outstanding balance, net of discount, under the 2022 Promissory Note was $4.2 million, which was recorded under the non-current Debt Exchange Agreement On September 12, 2022, the Company and Scilex Pharma entered into a Contribution and Satisfaction of Indebtedness Agreement (the “Debt Exchange Agreement”) with Sorrento, pursuant to which (i) Sorrento shall contribute to the Company all amounts (including accrued interest thereon, if any) for certain loans and other amounts provided by Sorrento to the Company that remain outstanding as of immediately prior to the closing of the Business Combination (the “Aggregate Outstanding Amount” or “Outstanding Indebtedness”), including with respect to the Scilex Pharma Notes, an intercompany promissory note issued by Scilex Pharma to Sorrento in the amount of approximately $27.5 million for certain amounts previously advanced to Scilex Pharma by Sorrento, and the other notes payable to Sorrento described above (see Note 7), in exchange for the issuance by the Company to Sorrento of Preferred Stock of the Company, (ii) the Company shall contribute to Scilex Pharma the portion of such Outstanding Indebtedness that is owed by Scilex Pharma to Sorrento as a contribution of capital for no consideration, and (iii) upon the occurrence of the events described in clauses (i) and (ii), the Aggregate Outstanding Amount and the Outstanding Indebtedness shall be satisfied in full. Pursuant to the terms of the Debt Exchange Agreement effective as of immediately prior to, and contingent upo On November 10, 2022, all existing related party indebtedness between Scilex, Scilex Pharma, and Sorrento totaling $290.6 million was converted into equity interests in the Company in connection with the consummation of the Business Combination and pursuant to the terms of the Debt Exchange Agreement. This amount was converted to 29,057,097 shares of Scilex Preferred Stock and 2,905,710 shares of the Company’s Common Stock. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 13. Loss Per Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class For the years ended December 31, 2022, 2021, and 2020, basic loss per share is computed using the two-class two-class The following table sets forth the reconciliation of basic and diluted loss per share for the years ended December 31, 2022, 2021, and 2020 (in thousands except per share data): Year Ended December 31, 2022 2021 2020 Net loss attributable to Scilex $ (23,364 ) $ (88,424 ) $ (47,519 ) Net loss attributable to participating securities $ — $ — $ — Net loss attributable to common stockholders $ (23,364 ) $ (88,424 ) $ (47,519 ) Weighted average common shares outstanding 134,226 132,858 132,891 Effect of Dilutive Securities — — — Denominator for Diluted Loss per Share—Adjusted for Dilutive Securities 134,226 132,858 132,891 Basic and Diluted Loss Per Share $ (0.17 ) $ (0.67 ) $ (0.36 ) The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented: Year Ended December 31, 2022 2021 2020 Stock options 16,939,093 18,967,724 20,746,432 Public Warrants 6,899,988 — — Private Warrants 4,104,000 — — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. Subsequent Events The Company has evaluated subsequent events for recognition and disclosure purposes in the audited consolidated financial statements as of December 31, 2022. Except as described below, or as otherwise indicated in the footnotes, the Company has concluded that no events or transactions have occurred that require disclosure. B. Riley Standby Equity Purchase Agreement On January 8, 2023, the Company entered into a Standby Equity Purchase Agreement (the “B. Riley Purchase Agreement”) with B. Riley, whereby the Company shall have the right, but not the obligation, to sell to B. Riley up to $500.0 million of its shares of the Company’s Common Stock at the Company’s request any time during the 36 months following the execution of the B. Riley Purchase Agreement, subject to certain conditions. The Company expects to use the net proceeds received from this for working capital and general corporate purposes. As consideration for B. Riley’s commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the B. Riley Purchase Agreement, the Company issued 250,000 shares of Common Stock to B. Riley in connection with the execution of the B. Riley Purchase Agreement on January 12, 2023. Subsequent to the execution of the B. Riley Purchase Agreement, the Company sold an aggregate of 127,241 shares of Common Stock pursuant to the B. Riley Purchase Agreement for aggregate net proceeds to the Company of approximately $1 million. Scilex Holding Company 2023 Inducement Plan On January 17, 2023, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of the Company adopted the Scilex Holding Company 2023 Inducement Plan (the “Plan”). The Plan will serve to advance the interests of the Company by providing a material inducement for the best available individuals to join the Company as employees by affording such individuals an opportunity to acquire a proprietary interest in the Company. The Plan provides for the grant of equity-based awards in the form of non-statutory Amendment to the Yorkville Purchase Agreement On February 8, 2023, the Company entered into an Amended and Restated Standby Equity Purchase Agreement with Yorkville (the “A&R Yorkville Purchase Agreement”), amending, restating and superseding the Yorkville Purchase Agreement dated November 17, 2022. Pursuant to the A&R Yorkville Purchase Agreement, the shares of Common Stock, if any, that the Company elects to sell to Yorkville pursuant to a Yorkville Advance will be purchased at a price equal to 98% of the lowest daily volume weighted average price of the Common Stock for any trading day on the date of delivery of a written purchase notice to Yorkville. Subsequent to December 31, 2022, the Company sold an aggregate of 85,000 shares of Common Stock pursuant to the A&R Yorkville Purchase Agreement for aggregate net proceeds to the Company of approximately $0.6 million. Elyxyb License On February 12, 2023, the Company acquired from BioDelivery Sciences International, Inc. (“BSDI”) and Collegium Pharmaceutical, Inc. (“Collegium”, and together with BDSI, the “Collegium Sellers”) the rights to certain patents, trademarks, regulatory approvals, data, contracts, and other rights related to ELYXYB (celecoxib oral solution) (the “Product”) and its commercialization in the United States and Canada (the “Territory”). As consideration for the acquisition, the Company assumed various rights and obligations under that certain asset purchase agreement, dated August 3, 2021 (the “DRL APA”), between BDSI and Dr. Reddy’s Laboratories Limited, a company incorporated under the laws of India (“DRL”), including a license from DRL including an irrevocable, royalty-free, exclusive license to know-how know-how Sorrento Chapter 11 filing On February 13, 2023, Sorrento, together with its wholly-owned direct subsidiary, Scintilla Pharmaceuticals, Inc., commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. While the Company is majority-owned by Sorrento, the Company is not a debtor in Sorrento’s voluntary Chapter 11 filing and management does not expect this will impact the Company and will continue to operate its business as usual. As of December 31, 2022, the Company had a $1.8 million receivable from Sorrento, which was fully reserved. |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The accompanying consolidated financial statements include the accounts of the Company as well as its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amounts of expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company minimizes its credit risk associated with cash and cash equivalents by periodically evaluating the credit quality of its primary financial institution. Although the balance at times may exceed federally-insured limits, the Company has not experienced any losses on such accounts. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. • Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. • Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. As of December 31, 2022 and 2021, the carrying amount of cash equivalents approximates their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as cash, prepaid expenses, accounts receivable, and accounts payable. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable are presented net of allowances for expected credit losses and prompt payment discounts. Accounts receivable consists of trade receivables from product sales to customers, which are generally unsecured. Estimated credit losses related to trade accounts receivable are recorded as general and administrative expenses and as an allowance for expected credit losses within accounts receivable, net. The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for expected credit losses. |
Inventory | Inventory The Company determines inventory cost on a first-in, first-out on-hand pre-launch |
Property and Equipment | Property and Equipment, Net Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally five to seven years. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the respective lease on a straight-line basis. The cost of repairs and maintenance is expensed as incurred. |
Acquisitions | Acquisitions The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including in-process be recorded at their fair values as of the acquisition date on the Company`s consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred. When the Company determines net assets acquired do not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded and contingent consideration such as payments upon achievement of various developmental, regulatory and commercial milestones generally is not recognized at the acquisition date. In an asset acquisition, up-front The Company has acquired and may continue to acquire the rights to develop and commercialize new product candidates. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite-lived until the completion or abandonment of the associated research and development efforts. Upon commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life. Capitalized IPR&D is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. |
Contingent Consideration | Contingent Consideration The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with applicable milestones, discount rates and the related probabilities and payment structure in the contingent consideration arrangement. Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the consolidated statement of operations. Other than contingent consideration that is accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity, Derivatives and Hedging |
Goodwill and Other Long-Lived Assets | Goodwill and Other Long-Lived Assets Goodwill, which has an indefinite life, represents the excess cost over fair value of net assets acquired. Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. The Company has one reporting unit. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, patent rights, and acquired technology, for impairment by considering competition by products prescribed for the same indication, the likelihood and estimated future entry of non-generic |
Public Warrants and Private Placement Warrants | Public Warrants and Private Placement Warrants Upon completion of the Business Combination, the Company assumed public and private placement warrants (“Public Warrants” and “Private Warrants”) that were issued by Vickers in connection with its initial public offering (declared effective by the Securities and Exchange Commission (“SEC”) on January 11, 2021) whereby holders of the public and private placement warrants are entitled to acquire ordinary shares of Vickers. Subsequent to the Business Combination, the Public Warrants were accounted for as equity per FASB ASC Subtopic No. 815-40, Contracts on an Entity’s Own Equity Subsequent to the Business Combination, the Private Warrants were accounted for as liabilities per ASC Subtopic 815-40. 815-40 fixed-for-fixed |
Debt | Debt The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates. This involves estimating future net product sales, determining interest expense, determining the amortization period of the debt discount, as well as determining the classification between current and long-term portions. |
Derivative Liabilities | Derivative Liabilities Derivative liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are exercised or expire, with changes in the fair value between reporting periods recorded as other income or expense. |
Research and Development Costs | Research and Development Costs The Company expenses the cost of research and development as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and preclinical materials as well as other contracted services, license fees and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with FASB ASC Topic 730, Research and Development. |
Income Taxes | Income Taxes The provisions of the FASB ASC Topic 740, Income Taxes Subtopic 740-10, The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2022 and 2021, the Company maintained a full valuation allowance against its deferred tax assets. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use |
Revenue Recognition | Revenue Recognition The Company’s revenue is generated from product sales within the United States. The Company does not incur significant direct costs to obtain contracts with its customers. Revenue from product sales is fully comprised of sales of ZTlido. The Company’s performance obligation with respect to sales of ZTlido is satisfied at a point in time, when control is transferred upon delivery of product to the customer. The Company considers control to have transferred upon delivery because the customer has legal title to the product, physical possession of the product has been transferred to the customer, the customer has significant risks and rewards of ownership of the product, and the Company has a present right to payment at that time. Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2022 and 2021 were not material. Revenues from product sales are recorded net of reserves established for commercial and government rebates, fees and chargebacks, wholesaler and distributor fees, sales returns and prompt payment discounts. Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations. Rebates and Chargebacks Rebates are discounts which the Company pays under either government or private health care programs. Government rebate programs include state Medicaid drug rebate programs, the Medicare coverage gap discount programs and the Tricare programs. Commercial rebate and fee programs relate to contractual agreements with commercial healthcare providers, under which the Company pays rebates and fees for access to and position on that provider’s patient drug formulary. Rebates and chargebacks paid under government programs are generally mandated under law, whereas private rebates and fees are generally contractually negotiated by the Company with commercial healthcare providers. Both types of rebates vary over time. The Company records a reduction to gross product sales at the time the customer takes title to the product based on estimates of expected rebate claims. The Company monitors the sales trends and adjusts for these rebates on a regular basis to reflect the most recent rebate experience and contractual obligations. Reserves for rebates and chargebacks are now separately presented as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheet. Prompt Payment Discounts The Company provides its customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The prompt payment discount reserve is based on actual gross sales and contractual discount rates. Reserves for prompt payment discounts are included in accounts receivable, net on the consolidated balance sheets. Service Fees The Company compensates its customer and others in the distribution chain for wholesaler and distribution services. The Company has determined such services received to date are not distinct from the Company’s sale of products to the customer and, therefore, these payments have been recorded as a reduction of revenue. Product Returns The Company is obligated to accept the return of products sold that are expiring within six months, damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the term of its sales contracts, and estimates allowances for such amounts at the time of sale. The Company estimates the amount of its product sales that may be returned by its customer and record this estimate as a reduction of revenue in the period the related product revenue is recognized. Co-Payment Patients who have commercial insurance or pay cash and meet certain eligibility requirements may receive co-payment co-payment |
Customer Concentration Risk | Customer Concentration Risk Prior to April 2, 2022, sales to the Company’s sole distributor represented 100% of net revenue. On April 2, 2022, the Company announced the expansion of its direct distribution network to national and regional wholesalers and pharmacies. The distributor continued to provide traditional third-party logistics functions for the Company. The Company had four customers during the year ended December 31, 2022, which individually generated 10% or more of the Company’s total revenue. These customers accounted for 83% of the Company’s revenue for the year ended December 31, 2022, individually ranging between 19% to 24%. As of December 31, 2022, these customers represented 90% of the Company’s outstanding accounts receivable, individually ranging between 24% to 36%. Additionally, during the fiscal years ended December 31, 2022 and 2021, the Company purchased inventory from its sole supplier, Itochu. This exposes the Company to concentration of customer and supplier risk. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses for the years ended December 31, 2022, 2021, and 2020. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Compensation—Stock Compensation non-employee’s For purposes of determining the inputs used in the calculation of stock-based compensation, the Company determines the expected life assumption for options issued using the simplified method, which is an average of the contractual term of the option and its ordinary vesting period since the Company does not have historic exercise behavior. Then the Company determines an estimate of option volatility based on an assessment of historical volatilities of comparable companies whose share prices are publicly available. The Company uses these estimates as variables in the Black-Scholes option pricing model. Depending upon the number of stock options granted, any fluctuations in these calculations could have a material effect on the results presented in our consolidated statement of operations. |
Segments | Segments Operating segments are identified as components of an entity where separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions on how to allocate resources and assessing performance. The Company has determined that its chief operating decision maker is its Chief Executive Officer, as he is responsible for making decisions regarding the allocation of resources and assessing performance as well as for strategic operational decisions. The Company is engaged primarily in the development of non-opioid |
Net Loss per Share | Net Loss per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class Under the two-class As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers 2021-08 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets measured on a recurring basis | The following table presents the Company’s financial assets and liabilities that are measured at fair value (in thousands): Fair value measurements at December 31, 2022 Balance Quoted Prices Significant Significant Assets Cash and cash equivalents $ 2,184 $ 2,184 $ — $ — Total assets measured at fair value $ 2,184 $ 2,184 $ — $ — Liabilities Derivative liabilities $ 1,231 $ — $ — $ 1,231 Other long-term liabilities 163 — — 163 Total liabilities measured at fair value $ 1,394 $ — $ — $ 1,394 Fair value measurements at December 31, 2021 Balance Quoted Prices Significant Significant Assets Cash and cash equivalents $ 4,338 $ 4,338 $ — $ — Total assets measured at fair value $ 4,338 $ 4,338 $ — $ — Liabilities Derivative liabilities $ 35,700 $ — $ — $ 35,700 Total liabilities measured at fair value $ 35,700 $ — $ — $ 35,700 |
Schedule of the derivative liabilities measured at fair value using significant unobservable inputs Level 3 | The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the year ended December 31, 2022: Fair value Ending Balance at December 31, 2019 $ 33,400 Loan derivative liability 2,800 Re-measurement (800 ) Ending Balance at December 31, 2020 $ 35,400 Re-measurement 300 Balance at December 31, 2021 $ 35,700 Private Warrant liability acquired as part of the Business Combination 2,545 Forfeiture of Private Warrants 1,696 Change in fair value measurement (38,710 ) Balance at December 31, 2022 $ 1,231 |
Schedule of quantitative information regarding Level 3 fair value measurements | The primary unobservable input utilized in determining the fair value of the warrant is the expected volatility of the Common Stock. The expected volatility assumption is based on historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants. A summary of the inputs used in valuing the derivative warrant liabilities is as follows: December 31, November 10, Fair value Fair Value Equity Value $ 3.99 $ 9.01 Exercise Price $ 11.50 $ 11.50 Term (in years) 4.86 5.00 Volatility 35.0 % 10.0 % Risk-free rate 3.94 % 3.91 % Dividend yield 0.00 % 0.00 % Call option value $ 0.30 $ 0.62 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment | Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Computers & equipment $ 77 $ 77 Furniture 118 118 Leasehold improvements 55 48 Construction in progress 689 689 Property and equipment, gross 939 932 Less: Accumulated depreciation (167 ) (127 ) Property and equipment, net $ 772 $ 805 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of identifiable intangible assets | A summary of the Company’s identifiable intangible assets as of December 31, 2022 and December 31, 2021 is as follows (in thousands): December 31, 2022 Gross carrying amount Accumulated amortization Intangibles, net Patent rights $ 32,630 $ 13,415 $ 19,215 Acquired technology 21,940 6,216 15,724 Acquired licenses 5,711 184 5,527 Assembled workforce 500 375 125 Total intangible assets $ 60,781 $ 20,190 $ 40,591 December 31, 2021 Gross carrying amount Accumulated amortization Intangibles, net Patent rights $ 32,630 $ 11,239 $ 21,391 Acquired technology 21,940 4,754 17,186 Assembled workforce 500 275 225 Total intangible assets $ 55,070 $ 16,268 $ 38,802 |
Estimated future amortization expense related to intangible assets | Estimated future amortization expense related to intangible assets at December 31, 2022 is as follows (in thousands): Year Ended December 31, Amount 2023 $ 4,106 2024 4,031 2025 4,006 2026 4,006 2027 4,006 Thereafter 20,436 Total $ 40,591 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of borrowings of the scilex notes consisted | Borrowings of the Scilex Notes consisted of the following (in thousands): December 31, 2021 Principal $ 133,997 Unamortized debt discount (30,597 ) Unamortized debt issuance costs (2,228 ) Carrying value 101,172 Current portion (29,135 ) Long term portion 72,037 Estimated fair value $ 115,400 The Company made principal payments of $106.0 million, $45.9 million, and $69.8 million during the years ended December 31, 2022, 2021, and 2020, respectively. The amount of debt discount and debt issuance costs included in interest expense for the years ended December 31, 2022, 2021, and 2020 was approximately $3.1 million, $7.9 million and $10.7 million, respectively. The Company recorded a gain on debt extinguishment of $28.6 million, a loss on debt extinguishment of $12.5 million, and no gain/loss on debt extinguishment in connection with its repayments of principal made during the years ended December 31, 2022, 2021, and 2020, respectively. |
Stock Incentive and Employee _2
Stock Incentive and Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options Valuation Assumption Used | The assumptions used in the Black-Scholes option-pricing method related to options issued to employees and nonemployees for the year ended 2020 is set forth below: Year Ended December 31, 2020 Weighted—average grant date fair value $ 1.23 Expected dividend yield 0.00 % Expected stock-price volatility 90.00 % Risk-free interest rate 0.53 % Term of options 5.6 Fair value per share of common stock on date of grant $ 1.72 Exercise price $ 1.72 |
Schedule of Stock Options Outstanding Activity | The following represents a summary of the options outstanding at December 31, 2022, 2021, and 2020 and changes during the years then ended (in thousands, other than weighted-average exercise price): Options Weighted average exercise price Aggregate Intrinsic Value Outstanding at December 31, 2019 17,114 $ 1.59 2,183 Granted 4,172 1.72 Exercised (38 ) 1.34 Forfeited/Cancelled (502 ) 1.40 Outstanding at December 31, 2020 20,746 1.63 2,172 Granted — — Exercised — — Forfeited/Cancelled (1,778 ) 1.01 Outstanding at December 31, 2021 18,968 1.68 915 Granted — — Exercised (202 ) 0.47 Forfeited/Cancelled (1,827 ) 1.72 Outstanding at December 31, 2022 16,939 $ 1.68 38,942 Exercisable at December 31, 2022 14,487 $ 1.70 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease cost* $ 469 $ 623 $ 904 * Inclusive of variable lease costs, sublease income, and impairment, which were immaterial for the periods presented. |
Schedule of Leases Supplemental Quantitative Information | Supplemental quantitative information related to leases includes the following: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (746 ) $ (654 ) ROU assets obtained in exchange for new operating lease liabilities $ 320 $ — Weighted average remaining lease term in years—operating leases 1.8 2.8 Weighted average discount rate—operating leases 11.8 % 12.2 % |
Schedule of Lease Maturities of Lease Liabilities | were as follows (in thousands): Year Ended December 31, Amount 2023 $ 872 2024 703 2025 — 2026 — 2027 — Total lease payments 1,575 Less imputed interest (165 ) Total lease liabilities 1,410 Less current portion of lease liability 745 Lease liability, net of current portion $ 665 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Benefit for Income Taxes | The components of the provision expense (benefit) were as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Current income tax expense (benefit): Federal $ — $ — $ — State 4 5 (53 ) Total current 4 5 (53 ) Deferred income tax expense (benefit): Federal (10,396 ) (12,981 ) (3,970 ) State (1,851 ) (2,472 ) (130 ) Total deferred (12,247 ) (15,453 ) (4,100 ) Changes in tax rate 1,347 31 93 Changes in valuation allowance 10,900 15,422 4,007 Total income tax benefit from continuing operations $ 4 $ 5 $ (53 ) |
Schedule of Deferred Tax Liabilities and Related Valuation Allowance | The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 48,984 $ 39,714 Debt related interest 15,272 12,205 Capitalized research and development 2,014 — Tax credit carryforwards 1,630 1,630 Stock based compensation 1,602 3,233 Accrued expense and reserves 568 1,517 Operating lease liabilities 315 404 Other 77 236 Total deferred tax assets 70,462 58,939 Less valuation allowance (67,543 ) (56,643 ) Total deferred tax assets 2,919 2,296 Deferred tax liabilities: Intangible assets (2,666 ) (1,975 ) Operating lease right-of-use (253 ) (319 ) Other — (2 ) Total deferred tax liabilities (2,919 ) (2,296 ) Net deferred tax liabilities $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Income tax benefit at federal statutory rate $ (4,905 ) $ (19,150 ) $ (9,408 ) Valuation allowance 10,900 15,422 4,007 Debt discount and interest limitation (9,293 ) 8,954 (806 ) Compensation expense 2,469 224 166 Acquisition related charges 992 75 63 Prior year true-up (713 ) (3,968 ) 6,955 State, net of federal tax benefit (174 ) (2,545 ) (1,164 ) Income tax credits and incentives — — (101 ) Other 728 993 235 Income tax benefit $ 4 $ 5 $ (53 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows for the years ended December 31, 2022, 2021, and 2020 (in thousands): 2022 2021 2020 Beginning balance $ 408 $ 406 $ 385 Increase related to prior year tax positions — 2 — Decrease related to prior year tax positions — — (4 ) Increase related to current year tax positions — — 25 Ending balance $ 408 $ 408 $ 406 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of the reconciliation of basic and diluted loss per share | The following table sets forth the reconciliation of basic and diluted loss per share for the years ended December 31, 2022, 2021, and 2020 (in thousands except per share data): Year Ended December 31, 2022 2021 2020 Net loss attributable to Scilex $ (23,364 ) $ (88,424 ) $ (47,519 ) Net loss attributable to participating securities $ — $ — $ — Net loss attributable to common stockholders $ (23,364 ) $ (88,424 ) $ (47,519 ) Weighted average common shares outstanding 134,226 132,858 132,891 Effect of Dilutive Securities — — — Denominator for Diluted Loss per Share—Adjusted for Dilutive Securities 134,226 132,858 132,891 Basic and Diluted Loss Per Share $ (0.17 ) $ (0.67 ) $ (0.36 ) |
Schedule of potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share | The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented: Year Ended December 31, 2022 2021 2020 Stock options 16,939,093 18,967,724 20,746,432 Public Warrants 6,899,988 — — Private Warrants 4,104,000 — — |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Nov. 10, 2022 | Dec. 31, 2022 | Apr. 02, 2022 | |
Description of Organization and Business Operations (Details) [Line Items] | ||||
Transaction costs amount | $ 3,400 | |||
Common stock exchange ratio, description | as part of the consideration using the 0.673498:1 ratio of the Company Common Stock to Legacy Scilex Common Stock | |||
Common stock shares reserved for future issuance | 16,939,436 | |||
Vickers Debt Agreement [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Offset against the equity proceeds | $ 9,100 | |||
Liability classified private warrants | 400 | |||
Debt Exchange Agreement [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of stock, amount | $ 290,600 | |||
Customer Concentration Risk [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Percentage of net revenue, sole distributor | 100% | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Four Customer [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Concentration risk, percentage | 83% | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Minimum [Member] | Four Customer [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Concentration risk, percentage | 19% | |||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Maximum [Member] | Four Customer [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Concentration risk, percentage | 24% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Four Customer [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Concentration risk, percentage | 90% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Minimum [Member] | Four Customer [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Concentration risk, percentage | 24% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Maximum [Member] | Four Customer [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Concentration risk, percentage | 36% | |||
Common Stock [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of stock, shares | 133,060,534 | |||
Common Stock [Member] | Vickers Debt Agreement [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of stock, amount | $ 5,330,557 | |||
Conversion of stock, shares | 533,057 | |||
Common Stock [Member] | Debt Exchange Agreement [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of stock, shares | 2,905,710 | |||
Preferred Stock [Member] | Debt Exchange Agreement [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of stock, shares | 29,057,097 | |||
Legacy Scilex Common Stock [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of common stock | 197,566,338 | |||
Legacy Scilex Stock Options [Member] | ||||
Description of Organization and Business Operations (Details) [Line Items] | ||||
Conversion of common stock | 25,151,428 |
Liquidity and Going Concern (Ad
Liquidity and Going Concern (Additional Information) (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||||
Sep. 28, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 08, 2023 | |
Liquidity and Going Concern [Line Items] | ||||||
Negative working capital | $ 15,200 | |||||
Cash and cash equivalents | 2,184 | $ 4,338 | ||||
Loss from operations | (50,634) | (35,838) | $ (35,258) | |||
Net cash used in operating activities | 21,300 | |||||
Accumulated deficit | (375,914) | (352,550) | ||||
Proceeds from related party | $ 51,900 | $ 47,850 | $ 18,400 | |||
Funding Commitment Letter [Member] | Maximum [Member] | ||||||
Liquidity and Going Concern [Line Items] | ||||||
Debt, Maximum Amount During Period | $ 500,000 | |||||
Sorrento [Member] | ||||||
Liquidity and Going Concern [Line Items] | ||||||
Proceeds from related party | $ 34,000 | |||||
Scilex Pharma Notes [Member] | ||||||
Liquidity and Going Concern [Line Items] | ||||||
Repayments of debt | $ 41,400 | |||||
Debt principal forgive | $ 28,000 |
Acquisitions (Additional Inform
Acquisitions (Additional Information) (Details) - USD ($) | Jun. 14, 2022 | May 12, 2022 | Dec. 31, 2022 | Mar. 18, 2019 |
Sorrento [Member] | ||||
Business Acquisition [Line Items] | ||||
Initial principal amount | $ 16,500,000 | |||
Patents [Member] | Sorrento [Member] | ||||
Business Acquisition [Line Items] | ||||
Amount due for New Drug Application | $ 3,000,000 | |||
Payment upon the achievement of net sales | 20,000,000 | |||
License Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Development Milestones Payment was recognized under other long-term liabilities | $ 200,000 | |||
Romeg License Agreement [Member] | License Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Payment upon the achievement of net sales | $ 13,000,000 | |||
Contingent consideration, liability | 0 | |||
Up-front license fee | 2,000,000 | |||
Intangible asset | 5,700,000 | |||
Payments for Royalties | $ 7,100,000 | |||
Deferred consideration | $ 3,700,000 | |||
Intangible asset useful life | 15 years | |||
2022 Promissory Note [Member] | Sorrento [Member] | ||||
Business Acquisition [Line Items] | ||||
Initial principal amount | 5,000,000 | |||
Notes Payable, Related Parties | $ 4,100,000 | |||
Subordinated Borrowing, Interest Rate | 2.66% |
Fair Value Measurements (Additi
Fair Value Measurements (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2022 | Nov. 10, 2022 | Jun. 02, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||||||
(Gain) loss on derivative liability | $ (8,310) | $ 300 | $ (800) | ||||
Liabilities, Fair Value Adjustment | $ 30,400 | ||||||
Risk Adjusted Net Sales Forecast | 6.10% | ||||||
Debt Securities, Available-for-Sale, Weighted Average Yield | 21.50% | ||||||
Common stock upon conversation of cash | $ 3,000 | ||||||
Discount rate of FDA | 10% | 10% | |||||
Development Milestone Payment | $ 200 | ||||||
Derivative warrant liability private warrants | $ 1,200 | ||||||
Private Placement [Member] | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Derivative warrant liability private warrants | $ 2,500 |
Fair Value Measurements (Detai
Fair Value Measurements (Details) - Schedule of fair value assets measured on a recurring basis - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||||
Cash and cash equivalents | $ 2,184 | $ 4,338 | ||
Total assets measured at fair value | $ 2,184 | $ 4,338 | ||
Liabilities: | ||||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative Liability, Noncurrent | Derivative Liability, Noncurrent | ||
Derivative Liability | $ 1,231 | $ 35,700 | $ 35,400 | $ 33,400 |
Other long-term liabilities | 163 | 0 | ||
Total liabilities measured at fair value | 1,394 | 35,700 | ||
Level 1 [Member] | ||||
Assets: | ||||
Cash and cash equivalents | 2,184 | 4,338 | ||
Total assets measured at fair value | 2,184 | 4,338 | ||
Liabilities: | ||||
Derivative Liability | 0 | 0 | ||
Other long-term liabilities | 0 | |||
Total liabilities measured at fair value | 0 | 0 | ||
Level 2 [Member] | ||||
Assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Total assets measured at fair value | 0 | 0 | ||
Liabilities: | ||||
Derivative Liability | 0 | 0 | ||
Other long-term liabilities | 0 | |||
Total liabilities measured at fair value | 0 | 0 | ||
Level 3 [Member] | ||||
Assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Total assets measured at fair value | 0 | 0 | ||
Liabilities: | ||||
Derivative Liability | 1,231 | 35,700 | ||
Other long-term liabilities | 163 | |||
Total liabilities measured at fair value | $ 1,394 | $ 35,700 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Schedule of the derivative liabilities measured at fair value using significant unobservable inputs Level 3 - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||
Fair value, Beginning | $ 35,700 | $ 35,400 | $ 33,400 |
Loan derivative liability | 2,800 | ||
Re-measurement of fair value | 300 | (800) | |
Private Warrant liability acquired as part of the Business Combination | 2,545 | ||
Forfeiture of Private Warrants | 1,696 | ||
Change in fair value measurement | (38,710) | ||
Fair value, Ending | $ 1,231 | $ 35,700 | $ 35,400 |
Fair Value Measurements (Det_2
Fair Value Measurements (Details) - Schedule of derivative component of the obligation is initially valued and classified as a derivative liability - $ / shares | 12 Months Ended | |
Nov. 10, 2022 | Dec. 31, 2022 | |
Schedule of derivative component of the obligation is initially valued and classified as a derivative liability [Abstract] | ||
Equity Value | $ 9.01 | $ 3.99 |
Exercise price | $ 11.5 | $ 11.5 |
Term (in years) | 5 years | 4 years 10 months 9 days |
Volatility | 10% | 35% |
Risk-free rate | 3.91% | 3.94% |
Dividend yield | 0% | 0% |
Call option value | $ 0.62 | $ 0.3 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 939 | $ 932 |
Less: Accumulated depreciation | (167) | (127) |
Property and equipment, net | 772 | 805 |
Computers & equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 77 | 77 |
Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 118 | 118 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 55 | 48 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 689 | $ 689 |
Property and Equipment (Additio
Property and Equipment (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 40 | $ 39 | $ 40 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 | Jun. 14, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining life for identifiable intangible assets | 10 years 4 months 24 days | ||||
Amortization expense | $ 3,922 | $ 3,738 | $ 3,738 | ||
Romeg License Agreement | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Asset acquisition consideration transferred amount | $ 5,700 | ||||
Remaining Amortization Period | 15 years | ||||
Patent rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Remaining Amortization Period | 15 years | ||||
Assembled workforce | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Remaining Amortization Period | 5 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of identifiable intangible assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 60,781 | $ 55,070 |
Accumulated amortization | 20,190 | 16,268 |
Intangibles, net | 40,591 | 38,802 |
Patent rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 32,630 | 32,630 |
Accumulated amortization | 13,415 | 11,239 |
Intangibles, net | 19,215 | 21,391 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 21,940 | 21,940 |
Accumulated amortization | 6,216 | 4,754 |
Intangibles, net | 15,724 | 17,186 |
Acquired licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 5,711 | |
Accumulated amortization | 184 | |
Intangibles, net | 5,527 | |
Assembled workforce | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 500 | 500 |
Accumulated amortization | 375 | 275 |
Intangibles, net | $ 125 | $ 225 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated future amortization expense of intangible assets (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Year Ended December 31, | |
2023 | $ 4,106 |
2024 | 4,031 |
2025 | 4,006 |
2026 | 4,006 |
2027 | 4,006 |
Thereafter | 20,436 |
Total | $ 40,591 |
Debt (Additional Information) (
Debt (Additional Information) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||||||
Jan. 01, 2024 | Sep. 30, 2022 | Jun. 03, 2022 | Jun. 02, 2022 | Feb. 15, 2022 | Oct. 05, 2018 | Sep. 07, 2018 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 28, 2022 | Aug. 31, 2022 | Jun. 30, 2022 | May 12, 2022 | Feb. 16, 2022 | Feb. 14, 2022 | Dec. 14, 2020 | |
Debt Instrument [Line Items] | ||||||||||||||||||
Actual cumulative net sales | $ 481,000 | |||||||||||||||||
Increase of Principal Balance | $ 28,000 | |||||||||||||||||
Principal payments | $ 106,000 | 45,900 | $ 69,800 | |||||||||||||||
Debt issuance costs | 3,100 | 7,900 | 10,700 | |||||||||||||||
(Gain) loss on debt extinguishment, net | (28,634) | 12,463 | $ 0 | |||||||||||||||
2018 Purchase Agreements and Indenture | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Purcahse price | $ 140,000 | |||||||||||||||||
Increase of Principal Balance | 28,000 | |||||||||||||||||
Subordinated loan | $ 35,000 | |||||||||||||||||
Note Principal Reduction Amount | 20,000 | |||||||||||||||||
AggregatePrincipalAmount | $ 224,000 | |||||||||||||||||
Related Party Notes Payable [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Promissory note | $ 5,000 | $ 35,000 | ||||||||||||||||
Minimum [Member] | 2018 Purchase Agreements and Indenture | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Cash Requirement | $ 10,000 | |||||||||||||||||
2020 Revolving Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Outstanding principal amount | $ 8,800 | |||||||||||||||||
Accounts receivable revolving loan facility in an aggregate amount | $ 10,000 | |||||||||||||||||
Line Of Credit Facility Interest Rate | 1.75% | |||||||||||||||||
Amendment Number Four [Member] | 2018 Purchase Agreements and Indenture | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Forgiven amount | $ 28,000 | $ 28,000 | ||||||||||||||||
Note Principal Reduction Amount | 41,400 | $ 41,400 | ||||||||||||||||
Repurchase Principal In Percentage | 100% | |||||||||||||||||
Cash Received | 15,000 | $ 34,000 | ||||||||||||||||
Minimum Cash Requirement | 5,000 | 5,000 | ||||||||||||||||
Outstanding principal amount | $ 39,700 | 39,700 | $ 1,700 | |||||||||||||||
Principal payments | $ 28,000 | |||||||||||||||||
(Gain) loss on debt extinguishment, net | $ (28,600) | |||||||||||||||||
Fair value decrease | $ 30,400 | |||||||||||||||||
Carrying value increased | $ 30,400 | |||||||||||||||||
Amendment Number Four [Member] | Maximum [Member] | 2018 Purchase Agreements and Indenture | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
AggregatePrincipalAmount | $ 50,000 | $ 25,000 |
Debt - Summary of borrowings of
Debt - Summary of borrowings of the scilex notes consisted (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Debt Disclosure [Abstract] | |
Principal | $ 133,997 |
Unamortized debt discount | (30,597) |
Unamortized debt issuance costs | (2,228) |
Carrying value | 101,172 |
Current portion | (29,135) |
Long term portion | 72,037 |
Estimated fair value | $ 115,400 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | |||||
Nov. 17, 2022 | Nov. 10, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 04, 2019 | Feb. 27, 2019 | |
Shareholders' Equity (Details) [Line Items] | ||||||
Preference shares, authorized | 45,000,000 | 45,000,000 | ||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares authorized | 740,000,000 | 740,000,000 | 740,000,000 | |||
Common stock, shares issued | 141,348,856 | 132,858,484 | ||||
Common stock, shares outstanding | 141,348,856 | 132,858,484 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preference shares issue | 29,057,097 | 0 | ||||
Preference shares outstanding | 29,057,097 | 0 | ||||
Share price | $ 18 | |||||
Price per warrant | $ 0.01 | |||||
Warrants outstanding | 6,899,988 | |||||
Series A Preferred Stock [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Preference shares, authorized | 45,000,000 | |||||
Preferred stock, par value | $ 0.0001 | |||||
Preference shares issue | 29,057,097 | |||||
Preference shares outstanding | 29,057,097 | 0 | ||||
Common Stock [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Share price | $ 11.5 | |||||
Preferred Stock Member | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Shares issued, value | $ 290,600,000 | |||||
First Amended Certificate of Incorporation [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares issued | 350,000,000 | 200,000,000 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Preference shares issue | 20,000,000 | 20,000,000 | ||||
Second Amended Certificate of Incorporation [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Common stock, shares issued | 740,000,000 | |||||
Common stock, shares outstanding | 197,566,338 | |||||
Preference shares issue | 45,000,000 | |||||
Shares issued, shares | 785,000,000 | |||||
Second Amended Certificate of Incorporation [Member] | Series A Preferred Stock [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Preferred stock, par value | $ 0.0001 | |||||
Preference shares outstanding | 29,057,097 | |||||
Equity Purchase Agreement [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Shares issued, value | $ 500,000,000 | |||||
Purchase of stock, percentage | 98% | |||||
Equity Purchase Agreement [Member] | Common Stock [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Shares issued, shares | 250,000 | |||||
Structuring fees | $ 10,000 | |||||
Warrants [Member] | Warrant Transfer Agreement [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Warrants outstanding | 4,104,000 | |||||
Warrant to transfer shares | 3,104,000 | |||||
Warrants [Member] | Warrant Transfer Agreement [Member] | Sponsor [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Warrants outstanding | 1,000,000 | |||||
Warrants [Member] | Warrant Transfer Agreement [Member] | Sorrento Therapeutics, Inc. [Member] | ||||||
Shareholders' Equity (Details) [Line Items] | ||||||
Warrants outstanding | 3,104,000 |
Stock Incentive and Employee _3
Stock Incentive and Employee Benefit Plans - Schedule of Stock Options Valuation Assumption Used (Details) - $ / shares | 12 Months Ended | |||
Nov. 10, 2022 | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Expected dividend yield | 0% | 0% | ||
Term of options | 5 years | 4 years 10 months 9 days | ||
Fair value per share of common stock on date of grant | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Exercise price | $ 11.5 | $ 11.5 | ||
Black-Scholes Option Pricing Method [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Weighted -average grant date fair value | $ 1.23 | |||
Expected dividend yield | 0% | |||
Expected stock-price volatility, maximum | 90% | |||
Risk-free interest rate, minimum | 0.53% | |||
Term of options | 5 years 7 months 6 days | |||
Fair value per share of common stock on date of grant | $ 1.72 | |||
Exercise price | $ 1.72 |
Stock Incentive and Employee _4
Stock Incentive and Employee Benefit Plans - Schedule of Stock Options Outstanding Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Payment Arrangement [Abstract] | ||||
Options Outstanding, Beginning Balance | 18,968 | 20,746 | 17,114 | |
Options Outstanding, Granted | 0 | 0 | 4,172 | |
Options Outstanding, Exercised | (202) | 0 | (38) | |
Options Outstanding, Forfeited/Cancelled | (1,827) | (1,778) | (502) | |
Options Outstanding, Ending Balance | 16,939 | 18,968 | 20,746 | |
Options Outstanding, Exercisable | 14,487 | |||
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 1.68 | $ 1.63 | $ 1.59 | |
Weighted Average Exercise Price, Granted | 0 | 0 | 1.72 | |
Weighted Average Exercise Price, Exercised | 0.47 | 0 | 1.34 | |
Weighted Average Exercise Price, Forfeited/Cancelled | 1.72 | 1.01 | 1.4 | |
Weighted Average Exercise Price, Outstanding, Ending Balance | 1.68 | $ 1.68 | $ 1.63 | |
Weighted Average Exercise Price, Exercisable | $ 1.7 | |||
Aggregate Intrinsic Value, Outstanding | $ 38,942 | $ 915 | $ 2,172 | $ 2,183 |
Stock Incentive and Employee _5
Stock Incentive and Employee Benefit Plans (Additional Information) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2022 | Jun. 30, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 10, 2022 | Nov. 09, 2022 | Dec. 31, 2019 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common stock shares reserved for future issuance | 16,939,436 | |||||||
Number of option outstanding to purchase common stock | 16,939 | 16,939 | 18,968 | 20,746 | 17,114 | |||
Stock-based compensation expenses | $ 5,280 | $ 5,822 | $ 5,395 | |||||
Employee benefit plan contributions by employer | $ 300 | 300 | 300 | |||||
2017 Equity Incentive Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common stock shares reserved for future issuance | 14,622,712 | 24,000,000 | 14,622,712 | |||||
Stock options vesting description | Stock options granted under the Scilex Pharma 2017 Plan typically vest 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining options vest each month thereafter | |||||||
2019 Stock Option Plan [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common stock shares reserved for future issuance | 30,000,000 | |||||||
Stock options vesting description | Plan. Stock options granted under the 2019 Stock Option Plan typically vest with respect to 1/4th of the shares on the first anniversary of the vesting commencement date and 1/48th of the remaining shares on each monthly anniversary thereafter. | |||||||
2022 Equity Incentive Plan Member | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Shares of common stock reserved for future issuance, description | if any, as such shares become available from time to time, which the amount will be increased commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to the lesser of (i) 4% of the total number of shares of Common Stock outstanding on December 31 of the preceding year, (ii) 7,311,356 shares of Common Stock, and (iii) such number of shares of the Common Stock determined by the Board or the compensation committee of the Board prior to January 1 of a given year. | |||||||
Percentage of total number of shares of common stock outstanding | 4% | |||||||
Common stock capital incremental shares reserved for future issuance each year | 7,311,356 | 7,311,356 | ||||||
Number of option outstanding to purchase common stock | 16,939,436 | 16,939,436 | ||||||
Total unrecognized compensation cost related to unvested stock option grants | $ 2,700 | $ 2,700 | ||||||
Weighted average period over grant | 1 year 4 months 24 days | |||||||
Stock-based compensation expenses | $ 5,300 | $ 5,800 | $ 5,400 | |||||
2022 Employee Stock Purchase Plan | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Common stock shares reserved for future issuance | 1,462,271 | |||||||
Shares of common stock reserved for future issuance, description | The number of shares of the Common Stock that will be reserved for issuance will automatically increase on January 1 of each year for a period of up to ten years, commencing on January 1, 2023 and ending on (and including) January 1, 2032, in an amount equal to the lesser of (i) 1% of the total number of shares of the Common Stock outstanding on December 31 of the immediately preceding calendar year; (ii) 1,827,839 shares of the Common Stock; and (iii) such number of shares of the Common Stock determined by the Board or the compensation committee of the Board prior to January 1 of a given year, provided however, that the Board may act prior to January 1 of a given calendar year to provide that there will be no increase for such calendar year or the increase for such year will be a lesser number of shares than the amount set forth in clauses (i) to (iii) above | |||||||
Percentage of total number of shares of common stock outstanding | 1% | |||||||
Common stock capital incremental shares reserved for future issuance each year | 1,827,839 | 1,827,839 | ||||||
Number of option outstanding to purchase common stock | 0 | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease cost* | $ 469 | $ 623 | $ 904 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Leases Supplemental Quantitative Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ (746) | $ (654) |
ROU assets obtained in exchange for new operating lease liabilities | $ 320 | $ 0 |
Weighted average remaining lease term in years—operating leases | 1 year 9 months 18 days | 2 years 9 months 18 days |
Weighted average discount rate—operating leases | 11.80% | 12.20% |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Lease Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
2023 | $ 872 | |
2024 | 703 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Total lease payments | 1,575 | |
Less imputed interest | (165) | |
Total lease liabilities | 1,410 | |
Less current portion of lease liability | 745 | $ 500 |
Lease liability, net of current portion | $ 665 |
Commitments and Contingencies_4
Commitments and Contingencies (Additional Information) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 60 Months Ended | |||||
Jul. 01, 2020 | Aug. 31, 2015 | Feb. 28, 2013 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2022 | Jun. 30, 2022 | |
Commitments and Contingencies [Line Items] | ||||||||
Finance lease liabilities | $ 0 | $ 0 | ||||||
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Derivative Liability, Noncurrent | Derivative Liability, Noncurrent | ||||||
Product Development Agreement [Member] | Developers [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Royalty payments | $ 2,300,000 | |||||||
Accrued royalty payables | 2,200,000 | $ 2,200,000 | ||||||
Agreement maturity date | Oct. 02, 2028 | |||||||
Agreement maturity renewal description | The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon 6-month written notice. | |||||||
Product Development Agreement [Member] | Developers [Member] | Minimum [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Royalty payment percentage related to future years | 25% | |||||||
Product Development Agreement [Member] | Developers [Member] | Maximum [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Royalty payment percentage related to future years | 35% | |||||||
Exclusive Distribution Agreement [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Agreement maturity renewal description | shall automatically renew for additional terms of one year each, unless written notice of termination is given by either party at least 30 days prior to the end of the initial term or any renewal term. | |||||||
Annual adjustment distribution fee percentage related to future years | 3% | |||||||
Agreement initial term | 3 years | |||||||
Exclusive Distribution Agreement [Member] | Minimum [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Distribution fees | 1% | |||||||
Exclusive Distribution Agreement [Member] | Maximum [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Distribution fees | 2% | |||||||
Project Agreement [Member] | Vendor [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Agreement maturity date | Jun. 30, 2022 | |||||||
Agreement maturity renewal description | extended for one year upon the mutual agreement of both parties. Either party may terminate the work order with 90 days’ notice. | |||||||
Sales operation implementation fees | $ 59,000 | |||||||
Project Agreement [Member] | Vendor [Member] | Selling, General and Administrative Expenses [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Sales operation implementation fees | $ 900,000 | $ 1,900,000 | $ 10,500,000 | |||||
Project Agreement [Member] | Vendor [Member] | Minimum [Member] | Monthly [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Sales operation implementation fees | 63,700 | |||||||
Project Agreement [Member] | Vendor [Member] | Maximum [Member] | Monthly [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Sales operation implementation fees | $ 65,800 | |||||||
Non-cancelable Lease Agreements [Member] | Administrative Facility [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Operating lease, lease term | 26 months | |||||||
Non-cancelable Lease Agreements [Member] | Minimum [Member] | Research and Development Facilities [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Operating lease, remaining lease term | 1 year 7 months 6 days | 1 year 7 months 6 days | ||||||
Operating lease, lease term | 3 years | 3 years | ||||||
Non-cancelable Lease Agreements [Member] | Maximum [Member] | Research and Development Facilities [Member] | ||||||||
Commitments and Contingencies [Line Items] | ||||||||
Operating lease, remaining lease term | 1 year 10 months 24 days | 1 year 10 months 24 days | ||||||
Operating lease, lease term | 5 years | 5 years |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Benefit for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current expense: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 4 | 5 | (53) |
Total current | 4 | 5 | (53) |
Deferred | |||
Federal | (10,396) | (12,981) | (3,970) |
State | (1,851) | (2,472) | (130) |
Total deferred | (12,247) | (15,453) | (4,100) |
Changes in tax rate | 1,347 | 31 | 93 |
Changes in valuation allowance | 10,900 | 15,422 | 4,007 |
Total | $ 4 | $ 5 | $ (53) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Liabilities and Related Valuation Allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating loss carryforwards | $ 48,984 | $ 39,714 |
Debt related interest | 15,272 | 12,205 |
Capitalized research and development | 2,014 | 0 |
Tax credit carryforwards | 1,630 | 1,630 |
Stock based compensation | 1,602 | 3,233 |
Accrued expense and reserves | 568 | 1,517 |
Operating lease liabilities | 315 | 404 |
Others | 77 | 236 |
Total Deferred Tax Assets | 70,462 | 58,939 |
Valuation allowance | (67,543) | (56,643) |
Total Deferred Tax Assets | 2,919 | 2,296 |
Deferred Tax Liabilities: | ||
Intangible assets | (2,666) | (1,975) |
Operating lease right-of-use assets | (253) | (319) |
Other | 0 | (2) |
Total Deferred Tax Liabilities | (2,919) | (2,296) |
Net deferred tax liabilities | $ 0 | $ 0 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at federal statutory rate | $ (4,905) | $ (19,150) | $ (9,408) |
Valuation allowance | 10,900 | 15,422 | 4,007 |
Debt discount and interest limitation | (9,293) | 8,954 | (806) |
Compensation expense | 2,469 | 224 | 166 |
Acquisition related charges | 992 | 75 | 63 |
Prior year true-up and carryback | (713) | (3,968) | 6,955 |
State, net of federal tax benefit | (174) | (2,545) | (1,164) |
Income tax credits and incentives | 0 | 0 | (101) |
Other | 728 | 993 | 235 |
Total | $ 4 | $ 5 | $ (53) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 408 | $ 406 | $ 385 |
Increase related to prior year tax positions | 0 | 2 | 0 |
Decrease related to prior year tax positions | 0 | 0 | (4) |
Increase related to current year tax positions | 0 | 0 | 25 |
Ending Balance | $ 408 | $ 408 | $ 406 |
Income Taxes (Additional Inform
Income Taxes (Additional Information) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | |||
Deferred tax assets, valuation allowance | $ 67,543 | $ 56,643 | |
Research and development income tax credits | $ 2,000 | ||
Tax credit carry forwards expiration year | 2035 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 400 | 400 | $ 400 |
Income tax expense, interest and penalties | 0 | $ 0 | $ 0 |
Liabilities for uncertain tax positions | 0 | ||
Federal [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 205,600 | ||
Operating loss carryforwards, expiration year | 2035 | ||
State [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 106,900 | ||
Operating loss carryforwards, expiration year | 2034 |
Related Party Transactions (Add
Related Party Transactions (Additional Information) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Nov. 10, 2022 | Sep. 12, 2022 | Oct. 22, 2018 | Oct. 05, 2018 | Feb. 28, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 12, 2022 | Jan. 13, 2021 | Mar. 18, 2019 | |
Related Party Transaction [Line Items] | |||||||||||
Common Stock, Shares, Outstanding | 141,348,856 | 132,858,484 | |||||||||
Working Capital | $ 15,200,000 | ||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||||
Sorrento [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
General and administrative expenses | $ 3,800,000 | $ 4,000,000 | $ 2,300,000 | ||||||||
Initial principal amount | $ 16,500,000 | ||||||||||
Interest rate | 10% | 10% | |||||||||
Advances in note payable | $ 25,000,000 | 27,500,000 | 6,600,000 | 13,700,000 | |||||||
Outstanding principal balance | $ 47,100,000 | 19,600,000 | |||||||||
Accrued Interest | 7,200,000 | 3,900,000 | |||||||||
Promissory note issued | $ 21,700,000 | ||||||||||
Debt Instrument, Maturity Date | Aug. 31, 2026 | ||||||||||
Repayment of indebtedness | $ 21,700,000 | ||||||||||
Related party note payable, net | 23,500,000 | 23,500,000 | |||||||||
Related party receivable | 1,800,000 | ||||||||||
Sorrento [Member] | Promissory note | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Advances in note payable | 0 | 8,100,000 | 10,300,000 | ||||||||
Accrued Interest | 5,100,000 | 3,100,000 | |||||||||
Itochu [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Common Stock, Shares, Outstanding | 34,889,868 | ||||||||||
Inventory purchased | $ 6,700,000 | 5,700,000 | $ 1,000,000 | ||||||||
Outstanding capital stock, percent | 14.70% | ||||||||||
Scilex Pharma [Member] | Sorrento [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party note payable, net | $ 35,000,000 | ||||||||||
Proceeds from Sale of Notes Receivable | $ 35,000,000 | ||||||||||
Working Capital | 61,700,000 | 35,700,000 | |||||||||
Repurchases of Notes | 100,000,000 | 51,000,000 | |||||||||
Litigation Fees | 18,200,000 | $ 6,000,000 | |||||||||
Aardvark Asset Purchase Agreement [Member] | Sorrento [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Interest rate | 2.66% | ||||||||||
Related party note payable, net | $ 4,200,000 | ||||||||||
Debt Exchange Agreement [Member] | Sorrento [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Promissory note issued | $ 27,500,000 | ||||||||||
Preferred stock, par value | $ 0.0001 | ||||||||||
Debt Exchange Descriptions | the Aggregate Outstanding Amount plus the amount equal to 10% of the Aggregate Outstanding Amount divided by (ii) $11.00 (rounded up to the nearest whole share); provided, that in no event would the Aggregate Outstanding Amount exceed $ 310,000,000 | ||||||||||
Related party indebtedness converted into shares | 29,057,097 | ||||||||||
Converted into common stock | 2,905,710 | ||||||||||
Conversion of stock, amount | $ 290,600,000 | ||||||||||
Aggregate Outstanding Amount | $ 310,000,000 | ||||||||||
Price per share (in Dollars per share) | $ 11 | ||||||||||
Aggregate outstanding amount equal percentage | 10% |
Loss Per Share - Schedule of th
Loss Per Share - Schedule of the reconciliation of basic and diluted loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net loss attributable to Scilex | $ (23,364) | $ (88,424) | $ (47,519) |
Net loss attributable to participating securities | 0 | 0 | 0 |
Net loss attributable to common stockholders | $ (23,364) | $ (88,424) | $ (47,519) |
Effect of Dilutive Securities | 0 | 0 | 0 |
Denominator for Diluted Loss per Share - Adjusted for Dilutive Securities | $ 134,226 | $ 132,858 | $ 132,891 |
Weighted Average Number of Shares Outstanding, Diluted | 134,226 | 132,858 | 132,891 |
Earnings Per Share, Basic | $ (0.17) | $ (0.67) | $ (0.36) |
Diluted Loss Per Share | $ (0.17) | $ (0.67) | $ (0.36) |
Loss Per Share - potentially di
Loss Per Share - potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 16,939,093 | 18,967,724 | 20,746,432 |
Public Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,899,988 | 0 | 0 |
Private Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,104,000 | 0 | 0 |
Subsequent Events (Additional I
Subsequent Events (Additional Information (Details) - USD ($) $ in Thousands | Feb. 08, 2023 | Jan. 08, 2023 | Jan. 17, 2023 | Jan. 12, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 141,348,856 | 132,858,484 | ||||
Common Stock, Value, Issued | $ 14 | $ 13 | ||||
Subsequent Event [Member] | Inducement Plan [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares available for grant | 1,400,000 | |||||
Subsequent Event [Member] | Purchase Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 250,000 | |||||
Common Stock, Value, Issued | $ 500,000 | |||||
Subsequent Event [Member] | B. Riley Purchase Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock sold | 127,241 | |||||
Proceeds from sale of common stock | $ 1,000 | |||||
Subsequent Event [Member] | A&R Yorkville Purchase Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock sold | 85,000 | |||||
Proceeds from sale of common stock | $ 600 |