Scilex Holding Company Reports 43% Revenue Growth in Q3 2024 Despite Net Loss

Scilex Holding Company reported its financial results for the third quarter of 2024, revealing a net revenue of $14.4 million, a 43% increase from $10.1 million in the same period last year. For the nine months ending September 30, 2024, total revenue reached $41.7 million, up from $33.3 million in 2023. The growth in revenue was primarily driven by increased sales of its products, particularly ELYXYB, which saw a 54% rise in sales volume, and the launch of GLOPERBA in June 2024. Despite the revenue increase, the company reported a net loss of $4.4 million for the quarter, a significant improvement compared to a loss of $35.5 million in the prior year.

In terms of operational changes, Scilex has made strategic moves to enhance its product portfolio. The company launched ELYXYB in April 2023 and GLOPERBA in June 2024, expanding its offerings in the non-opioid pain management market. Additionally, Scilex is developing three product candidates: SP-102, SP-103, and SP-104, with SP-102 having completed a Phase 3 study. The company has also been actively managing its financial obligations, having fully repaid its Convertible Debentures in March 2024 and recently entered into a Tranche B Securities Purchase Agreement to refinance part of its Oramed Note.

Scilex's balance sheet as of September 30, 2024, showed total assets of $100.4 million, a slight decrease from $101.3 million at the end of 2023. The company reported current liabilities of $281.5 million, leading to a stockholders' deficit of $211.3 million. The accumulated deficit increased to $556.6 million, reflecting the ongoing investment in product development and commercialization efforts. The company had cash and cash equivalents of approximately $0.1 million, raising concerns about its liquidity and ability to meet future obligations.

The filing also highlighted the company's reliance on a limited number of customers, with four customers accounting for 96% of its revenue in the third quarter. This concentration poses a risk to revenue stability. Furthermore, Scilex is navigating challenges related to its supply chain, as it relies on sole or single-source suppliers for key products. The company is actively seeking to diversify its supplier base to mitigate potential disruptions.

Looking ahead, Scilex's management expressed caution regarding its ability to continue as a going concern, citing substantial doubt due to its accumulated losses and negative working capital. The company plans to secure additional funding through equity offerings, debt financing, and strategic collaborations to support its operations and product development initiatives. The success of its commercialization efforts for ZTlido, GLOPERBA, and ELYXYB will be critical in determining its financial stability and growth trajectory in the coming months.