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Scilex Holding Company, a Sorrento Therapeutics, Inc. Subsidiary Announces Expansion of Ztlido® Managed Care Coverage for Additional 33 Million Lives

PALO ALTO, Calif., Aug. 19, 2021 (GLOBE NEWSWIRE) -- Scilex Holding Company (SCILEX), a subsidiary of Sorrento Therapeutics, Inc. (NASDAQ: SRNE), announced that, effective September 1, 2021, ZTlido® (lidocaine topical system) 1.8% has been added to multiple formularies, including two national PBMs (Pharmacy Benefit Managers), a national health plan and two regional health plans – thereby expanding coverage by up to 33 million lives. ZTlido (zee-tee-lie-doh) is indicated for relief of pain associated with post-herpetic neuralgia (PHN), also referred to as post-shingles pain.

“With this expansion, up to 65% of lives nationally have covered or better access to ZTlido, with a reduction in need for prior authorization,” said Jaisim Shah, President and Chief Executive Officer of Scilex Holding Company. “ZTlido provides fast and significant PHN pain relief that can be sustained over time – without the trade-offs associated with other widely used options, notably impaired cognition and weight gain (seen with gabapentinoids), and analgesic tolerance and risk of addiction (seen with opioids). 1-4 In fact, ZTlido can be used in combination to optimize gabapentinoids by delivering additive, remarkable pain relief without adding to systemic adverse events – and the combination has the potential to reduce the use of opioids.”1,5,6,*

However, not all lidocaine patch products are created equal. ZTlido 1.8% uses proprietary ZTech advanced technology to provide 9x greater bioavailability versus 5% lidocaine patch and superior adhesion proven in head-to-head studies, and while showering, bathing or exercising.7-12 This ensures that pain relief is delivered for the full treatment duration, without interrupting a patient’s routine.

ZTlido was approved by the U.S. Food and Drug Administration (FDA) in 2018 for relief of pain associated with post-herpetic neuralgia (PHN) in adults. Side effects of ZTlido include application site reactions such as, irritation, erythema, and pruritus.

About ZTlido® (lidocaine topical system) 1.8%

Indication: ZTLIDO is indicated for relief of pain associated with post-herpetic neuralgia (PHN) in adults.

Important Safety Information

Contraindications: ZTLIDO is contraindicated in patients with a known history of sensitivity to local anesthetics of the amide type, or to any other component of the product.

Warnings and Precautions: Accidental exposure can occur even after a ZTLIDO patch has been used. Small children or pets could suffer serious adverse effects from chewing or ingesting a new or used ZTLIDO patch. Store and dispose of patches properly and keep out of reach of children and pets.

Excessive dosing or overexposure to lidocaine can occur. Longer duration of application, application of more than the recommended number of patches, smaller patients, or impaired elimination may all contribute to increased blood concentration levels of lidocaine. If lidocaine overdose is suspected, check drug blood concentration. Management of overdose includes close monitoring, supportive care, and symptomatic treatment.

Cases of methemoglobinemia have been reported with local anesthetic use, although patients with glucose-6-phosphate dehydrogenase deficiency, congenital or idiopathic methemoglobinemia, cardiac or pulmonary compromise, or concurrent exposure to oxidizing agents or their metabolites are more susceptible to developing clinical manifestations of the condition. Signs and symptoms include cyanotic skin discoloration and/or abnormal coloration of the blood and may occur immediately or may be delayed after exposure. Methemoglobin levels may continue to rise leading to more serious central nervous system and cardiovascular adverse effects. Discontinue ZTLIDO and any other oxidizing agents. Depending on severity of the symptoms, patients may respond to supportive care or may require treatment with methylene blue, exchange transfusion, or hyperbaric oxygen.

Application site reactions can occur during or immediately after treatment with ZTLIDO. This may include development of blisters, bruising, burning sensation, depigmentation, dermatitis, discoloration, edema, erythema, exfoliation, irritation, papules, petechia, pruritus, vesicles, or may be the locus of abnormal sensation. These reactions are generally mild and transient, resolving spontaneously within a few minutes to hours. If application site reactions occur while the topical system is being worn, advise the patient to remove ZTLIDO and not to reapply until skin reactions subside.

Hypersensitivity cross-reactions may be possible for patients allergic to PABA derivatives. Manage hypersensitivity reactions by conventional means.

Eye exposure with ZTLIDO should be avoided. If eye contact occurs, immediately wash out the eye with water or saline and protect the eye (such as, eyeglasses/eyewear) until sensation returns.

Adverse Reactions: Side effects of ZTLIDO include application site reactions such as irritation, erythema, and pruritus. These are not all of the adverse reactions that may occur. Please see Full Prescribing Information for more information.

Use in Specific Populations: Use of ZTLIDO during lactation should be used with caution as lidocaine is excreted into breast milk. The limited human data with lidocaine in pregnant woman is not sufficient to inform drug-associated risk for major birth defects and miscarriage.

To report SUSPECTED ADVERSE REACTIONS, contact SCILEX Pharmaceuticals Inc. at 1-866-SCILEX3 or contact FDA at 1-800-FDA-1088 or www.fda.gov/medwatch.

Please click here for full Prescribing Information.

*Less is More: ZTlido 1.8% uses proprietary ZTech advanced technology for proven bioequivalence to 5% lidocaine patch, but with 9x greater bioavailability.7-9 Data are from studies performed with 5% lidocaine patch.

About Sorrento Therapeutics, Inc.
Sorrento is a clinical stage, antibody-centric, biopharmaceutical company developing new therapies to treat cancers and COVID-19. Sorrento’s multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as fully human antibodies (“G-MAB™ library”), clinical stage immuno-cellular therapies (“CAR-T”, “DAR-T™”), antibody-drug conjugates (“ADCs”), and clinical stage oncolytic virus (“Seprehvir™”). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including COVIGUARD™, COVI-AMG™, COVISHIELD™, Gene-MAb™, COVI-MSC™ and COVIDROPS™; and diagnostic test solutions, including COVITRACK™, COVI-STIX™ and COVITRACE™.

Sorrento’s commitment to life-enhancing therapies for patients is also demonstrated by our effort to advance a first-in-class (TRPV1 agonist) non-opioid pain management small molecule, resiniferatoxin (“RTX”), and SP-102 (10 mg, dexamethasone sodium phosphate viscous gel) (SEMDEXA™), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, and to commercialize ZTlido® (lidocaine topical system) 1.8% for the treatment of post-herpetic neuralgia. RTX has completed a Phase IB trial for intractable pain associated with cancer and a Phase 1B trial in osteoarthritis patients. SEMDEXA is in a pivotal Phase 3 trial for the treatment of lumbosacral radicular pain, or sciatica. ZTlido® was approved by the FDA on February 28, 2018.

For more information visit www.sorrentotherapeutics.com.

About Scilex Holding

Scilex Holding Company, a subsidiary of Sorrento, is a commercial-stage, non-opioid pain management company focused on the development and commercialization of topical and injectable therapies. Scilex targets indications with high unmet needs and large market opportunities with non-opioid therapies for the treatment of patients with moderate to severe pain. Scilex launched its first commercial product in October 2018 and is developing its late-stage pipeline, which includes a pivotal Phase 3 candidate and one Phase 2 and one Phase 1/2 candidate. Its commercial product, ZTlido® (lidocaine topical system) 1.8%, or ZTlido®, is a prescription lidocaine topical product approved by the U.S. Food and Drug Administration for the relief of pain associated with post-herpetic neuralgia, which is a form of post-shingles nerve pain. Scilex’s three product candidates are SP-102 (injectable dexamethasone sodium phosphate viscous gel product containing 10 mg dexamethasone), or SEMDEXA™, a Phase 3, novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, with FDA Fast Track status; SP-103 (lidocaine topical system) 5.4%, or SP-103, a Phase 2, next-generation, triple-strength formulation of ZTlido®, for the treatment of low back pain, and SP-104, 4.5 mg Delayed Burst Release Low Dose Naltrexone Hydrochloride (DBR-LDN) Capsule, for the treatment of chronic pain, fibromyalgia, and chronic post-COVID syndrome (“long haul COVID” or “long COVID”) in multiple Phase 1 programs planned to be initiated this year. For further information regarding the SP-102 Phase 3 efficacy trial, see NCT identifier NCT03372161 – Corticosteroid Lumbar Epidural Analgesia for Radiculopathy – Full Text View – ClinicalTrials.gov

Scilex Holding Company is headquartered in Palo Alto, California, with operations in both Palo Alto and San Diego, California. For further information please visit www.scilexpharma.com.

Forward-Looking Statement

This press release and any statements made for and during any presentation or meeting contain forward-looking statements related to Sorrento Therapeutics, Inc. and its subsidiaries, including but not limited to Scilex Holding Company, under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding the advantages of ZTlido over other products, including with respect to trade-offs associated with other available options and its bioavailability and adhesive qualities; the use of ZTlido in combination with gabapentinoids and any potential reduction in the use of opioids; ZTlido’s ability to deliver pain relief for the full treatment duration; and Scilex’s and Sorrento’s prospects and strategy and other forward-looking statements. Risks and uncertainties that could cause our actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to: that ZTlido may not be commercially successful and other risks that are described in Sorrento’s most recent periodic reports filed with the Securities and Exchange Commission, including Sorrento’s Annual Report on Form 10-K for the year ended December 31, 2020, and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, including the risk factors set forth in those filings. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement in this press release except as required by law.

Media and Investor Relations Contact:

Alexis Nahama, DVM (SVP Corporate Development)
Email: [email protected]
Telephone: 1.858.203.4120

Sorrento® and the Sorrento logo are registered trademarks of Sorrento Therapeutics, Inc.
G-MAB™, DAR-T™, COVIGUARD™, COVI-AMG™, COVISHIELD™, Gene-MAb™, COVIDROPS™, COVI-MSC™, COVITRACK™, COVITRACE™ and COVISTIX™ are trademarks of Sorrento Therapeutics, Inc.
SEMDEXA™ is a trademark of Semnur Pharmaceuticals, Inc.
SCILEX® and ZTlido® are registered trademarks of Scilex Pharmaceuticals Inc.
All other trademarks are the property of their respective owners.

©2021 Sorrento Therapeutics, Inc. All Rights Reserved.

References:

  1. Rehm S, Binder A, Baron R. Post-herpetic neuralgia: 5% lidocaine medicated plaster, pregabalin, or a combination of both? A randomized, open, clinical effectiveness study. Curr Med Res Opin. 2010;26(7):1607‐1619.
  2. Baron R, Mayoral V, Leijon G, Binder A, Steigerwald I, Serpell M. 5% lidocaine medicated plaster versus pregabalin in post‐herpetic neuralgia and diabetic polyneuropathy: an open‐label, non‐inferiority two‐stage RCT study. Curr Med Res Opin. 2009;25(7):1663‐1676.
  3. Rowbotham MC, Davies PS, Verkempinck C, Galer BS. Lidocaine patch: double‐blind controlled study of a new treatment method for post‐herpetic neuralgia. Pain. 1996;65(1):39‐44.
  4. Sabatowski R, Hans G, Tacken I, Kapanadze S, Buchheister B, Baron R. Safety and efficacy outcomes of long-term treatment up to 4 years with 5% lidocaine medicated plaster in patients with post-herpetic neuralgia. Curr Med Res Opin. 2012;28(8):1337-1346.
  5. Clere F, Delorme‐Morin C, George B, et al. 5% lidocaine medicated plaster in elderly patients with postherpetic neuralgia: results of a compassionate use programme in France. Drugs Aging. 2011;28(9):693‐702.
  6. Amato F, Duse G, Consoletti L, et al. Efficacy and safety of 5% lidocaine‐medicated plasters in localized pain with neuropathic and/or inflammatory characteristics: an observational, real‐world study. Eur Rev Med Pharmacol Sci. 2017;21(18):4228‐4235.
  7. LIDODERM® (lidocaine patch 5%) [prescribing information]. Malvern, PA: Endo Pharmaceuticals Inc; 2018.
  8. Data on file. SCILEX Pharmaceuticals Inc. SCI-LIDO-PK-001.
  9. Gudin J, Argoff C, Nalamachu s. 1.8% lidocaine patch (ZTlido): review of a new formulation. Postgrad Med. 2015;127(suppl):S44-S45.
  10. Webster L, Mallick-Searle T, Adler JA, Greuber E, Patel K, Vought K. ZTlido® (lidocaine topical system) 1.8% has superior adhesion compared to generic Mylan lidocaine patch 5%. Poster presented at: PAINWeek; September 3-7, 2019; Las Vegas, NV.
  11. SCILEX Pharmaceuticals Inc. Data on file: SCI-LIDO-ADH-003.
  12. SCILEX Pharmaceuticals Inc. Data on file: SCI-LIDO-ADH-002.

Sours: https://www.globenewswire.com/news-release/2021/08/19/2283614/0/en/Scilex-Holding-Company-a-Sorrento-Therapeutics-Inc-Subsidiary-Announces-Expansion-of-Ztlido-Managed-Care-Coverage-for-Additional-33-Million-Lives.html
  • Preliminary Q3 2020 net sales of ZTlido® of approximately $7.2 million, quarter-over-quarter growth of 26% compared to $5.7MM in Q2-2020 despite the continued impact of COVID-19 pandemic.

  • The Phase 3 pivotal trial investigating SP-102 non-opioid therapy for lumbosacral radicular pain/ sciatica is over 90% enrolled and top-line data is expected to be announced by Q2-2021, despite the ongoing COVID-19 pandemic, which delayed or put on hold hundreds of other clinical trials around the world.

  • SP-102 could potentially be the first FDA approved epidural steroid product for the treatment of sciatica with the potential to replace the current 10 to 11 million off-label epidural steroid injections administered each year in the U.S.

PALO ALTO, Calif., Oct. 07, 2020 (GLOBE NEWSWIRE) -- Scilex Holding Company (“Scilex”), a majority-owned subsidiary of Sorrento Therapeutics, Inc. (Nasdaq: SRNE, "Sorrento"), today announced continuous sales growth in ZTlido® from quarter to quarter in 2020. Scilex expects third quarter 2020 ZTlido® net sales to grow 26% to approximately $7.2MM, compared to $5.7MM in Q2-2020. The preliminary third quarter 2020 net sales information presented in this press release is based on Scilex’s current expectations and may be adjusted as a result of, among other things, completion of customary quarterly review procedures.

Scilex’s SP-102 (SEMDEXA™) is currently being evaluated in a pivotal Phase 3 clinical trial in the U.S. to evaluate patients with lumbosacral radicular pain/sciatica. The trial is expected to complete enrollment in the fourth quarter of 2020 and top-line data is expected in the second quarter of 2021. Scilex intends to use the results from this pivotal Phase 3 trial to discuss with U.S. health authorities the basis for licensure application to the U.S. Food and Drug Administration (FDA) for this high unmet need indication where no treatments have been approved and which is responsible for millions of people suffering in the U.S. alone. Scilex has extensive clinical and pre-clinical data (including multiple Phase 2 clinical trials) with the novel viscous formulation of SP-102, which was designed to provide extended local effect for sciatica patients. The robust data collected over the course of the company’s multi-year clinical development program will be presented to the U.S. FDA as part of a new drug application.

The CLEAR (“Corticosteroid Lumbar Epidural Analgesia for Radiculopathy”) clinical study is a randomized, double-blind, placebo-controlled Phase 3 trial that is expected to enroll 400 patients with lumbosacral radicular pain at 40+ sites across the U.S. The primary endpoint of the study is mean change in the Numeric Pain Rating Scale (NPRS) for leg pain with SP-102 epidural injection compared to intramuscular injection of placebo over four weeks. The secondary endpoints include other measures of pain at 4 and 12 weeks as well as time to repeat injection of SP-102, safety and function. The study includes an open-label extension to build the safety database of patients treated with SP-102. “We are anxiously awaiting a new injectable formulation of dexamethasone and registration for treatment of radicular pain based on results of a large, randomized placebo-controlled multi-center trial. If approved by the FDA, SP-102 would be the first corticosteroid for epidural injections addressing safety issues with steroid medications, currently used off-label, and an important addition to armamentarium of interventional pain physicians,” said Dr. Steve Cohen, Chief of Pain Medicine and Professor of Anesthesiology & Critical Care Medicine, Neurology and Physical Medicine & Rehabilitation, Johns Hopkins School of Medicine, and Professor of Anesthesiology and Physical Medicine & Rehabilitation, Walter Reed National Military Medical Center, Uniformed Services University of the Health Sciences.

SP-102 is a novel, non-opioid injectable viscous gel formulation in development for the treatment of lumbosacral radicular pain, containing no neurotoxic preservatives, surfactants, solvents or particulates. The SP-102 formulation is administered by epidural injection. Based on preclinical and clinical studies conducted to date, it extends the residency time at the site of injection and has not demonstrated the safety concerns that led the FDA to issue a class warning on the currently off-label use of injectable corticosteroids to include information about the risk of serious neurologic events with epidural steroid injections (ESIs).

“Lumbosacral radicular pain, otherwise known as sciatica, is commonly treated by off-label epidural steroid injections. There are an estimated ten to eleven million epidural steroid injections administered per year in the U.S. alone and there are no approved steroids for epidural injections.2 The clinical results for the pivotal Phase 3 trial for SP-102 will be a seminal milestone for Scilex and may provide encouraging news for the many millions of people who are confronting debilitating radicular pain/sciatica. We believe that SP-102 could be the first FDA-approved epidural steroid product for patients suffering from this common, painful condition,” said Jaisim Shah, President and Chief Executive Officer of Scilex.

In 2019, the overall estimated number of ESI procedures in the U.S. was 11.6 million across all Medicare and private coverage patients, with lumbar radiculopathy / sciatica procedures comprising approximately 88% of all ESIs administered. Despite widespread utilization of ESIs, concerns persist in the market about particulate steroids and potential side effect and safety concerns (e.g., stroke) from current off-label use. As a result, a significant unmet medical need exists within the market for a potent, non-particulate ESI formulation that demonstrated safety and effectiveness in controlled clinical trial evaluations.1

In the U.S., more than 30 million people live with low back and radicular pain, with this population expected to grow as the population ages.4,5 Many patients experience moderate to severe pain with intolerance and/or inadequate response to current analgesic therapies such as opioids and nonsteroidal anti-inflammatory drugs (NSAIDs).6,7 There is a great need for highly effective analgesic medications to provide patient relief without the toxicity and tolerability challenges of NSAIDs and opioids.5 Opioid prescriptions account for about 40 percent of the chronic pain market and carry a well-known risk of abuse and misuse, underscoring the need for alternative pain therapies without the medical and societal challenges.5,8

Chronic pain affects 100 million, or almost one- in-three, Americans9, with nearly 33 million patients suffering from lower back pain in the U.S.10, and costs the United States approximately $560 to $635 billion annually., Government agencies, physicians, patients, and payers are looking for alternatives to opioids to reduce the risk of dependency or addiction, and serious side effects (such as respiratory depression and constipation), while still offering potent solutions for people living with chronic pain.

About Sorrento Therapeutics, Inc.

Sorrento is a clinical stage, antibody-centric, biopharmaceutical company developing new therapies to treat cancers and COVID-19. Sorrento's multimodal, multipronged approach to fighting cancer is made possible by its extensive immuno-oncology platforms, including key assets such as fully human antibodies ("G-MAB™ library"), clinical stage immuno-cellular therapies ("CAR-T", "DAR-T"), antibody-drug conjugates ("ADCs"), and clinical stage oncolytic virus ("Seprehvir®", “Seprehvec™”). Sorrento is also developing potential antiviral therapies and vaccines against coronaviruses, including COVIDTRAP™, ACE-MAB™, COVI-MAB™, COVI-GUARD™, COVI-SHIELD™, COVI-AMG™ and T-VIVA-19™; and diagnostic test solutions, including COVI-TRACK™, COVI-STIX™ and COVI-TRACE™.

Sorrento's commitment to life-enhancing therapies for patients is also demonstrated by our effort to advance a first-in-class (TRPV1 agonist) non-opioid pain management small molecule, resiniferatoxin ("RTX"), and ZTlido® (lidocaine topical system) 1.8% for the treatment of post-herpetic neuralgia. RTX has completed a phase 1B trial for intractable pain associated with cancer and a phase 1B trial in osteoarthritis patients. ZTlido® was approved by the FDA on February 28, 2018. SP-102 is undergoing a Phase 3 pivotal trial for the treatment of lumbosacral radicular pain/sciatica.

For more information visit www.sorrentotherapeutics.com

About Scilex Holding Company.

Scilex Holding Company, a majority-owned subsidiary of Sorrento Therapeutics, Inc. (Nasdaq: SRNE), is a commercial-stage, non-opioid pain management company focused on the development and commercialization of topical and injectable therapies. Scilex targets indications with high unmet needs and large market opportunities with non-opioid therapies for the treatment of patients with moderate to severe chronic pain. Scilex launched its first commercial product in October 2018 and is developing its late-stage pipeline, which includes a pivotal Phase 3 candidate and a Phase 2 candidate. Its commercial product, ZTlido® (lidocaine topical system) 1.8%, or ZTlido, is a prescription lidocaine topical product approved by the U.S. Food and Drug Administration for the relief of pain associated with postherpetic neuralgia, which is a form of post-shingles nerve pain. Scilex’s two product candidates are SP-102 (10 mg, dexamethasone sodium phosphate viscous gel), or SEMDEXA™, a Phase 3, novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, and SP-103 (lidocaine topical system) 5.4%, or SP-103, a Phase 2, next-generation, triple-strength formulation of ZTlido, for the treatment of chronic low back pain.

Forward-Looking Statements

This press release and any statements made for and during any presentation or meeting concerning the matters discussed in this press release contain forward-looking statements related to Sorrento Therapeutics, Inc. and its subsidiaries, including but not limited to Scilex Holding Company, Scilex Pharmaceuticals, Inc. and Semnur Pharmaceuticals, Inc. under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding the expected timing for completing enrollment for the Phase 3 trial for SP-102; expected third quarter 2020 ZTlido® net sales; the expected timing for receipt of top-line data for the Phase 3 trial for SP-102; discussions with the FDA and health authorities regarding any new drug application for SP-102; clinical trial endpoints; expectations that SP-102 may be the first FDA-approved epidural steroid product for the treatment of sciatica; the outcome of the data from a clinical trial for SP-102; Scilex Holding’s prospects; future clinical trials and the results thereof and market and patient population trends. Risks and uncertainties that could cause our actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to risks related to the completion of the customary quarterly financial statement review procedures; clinical development risks, including risks in the progress, timing, cost, and results of clinical trials and product development programs; risks that prior test, study and trial results may not be replicated in future studies and trials; risks that SP-102 may not meet all endpoints of the clinical study and that the data may not support an NDA submission; risks of difficulties or delays in obtaining regulatory approvals and risks related to the global impact of COVID-19. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release and we undertake no obligation to update any forward-looking statement in this press release except as may be required by law.

Media and Investor Relations

Contact: Alexis Nahama, SVP Corporate Development
Telephone: 1.858.203.4120
Email: [email protected]
Website: www.sorrentotherapeutics.com

Sorrento® and the Sorrento logo are registered trademarks of Sorrento Therapeutics, Inc.

G-MAB™, COVI-GUARDTM, COVI-SHIELD™, COVI-AMG™, COVIDTRAP™, T-VIVA-19™, COVI-MAB™, ACE-MABTM, COVI-TRACK™, COVI-STIX™ and COVI-TRACE™ are trademarks of Sorrento Therapeutics, Inc.

ZTlido® is a trademark owned by Scilex Pharmaceuticals Inc.

All other trademarks are the property of their respective owners.

© 2020 Sorrento Therapeutics, Inc. All Rights Reserved.

References

(1) Syneos Health Consulting; Syneos is a leading management consulting firm specializing in life sciences industry
(2) NEJM July 3, 2014 Editorial: Epidural Glucocorticoid Injections in Patients with Lumbar Spinal Stenosis; Gunnar B.J. Andersson, M.D., Ph.D.
(3) Institute of Medicine, National Center for Health Statistics, and Datamonitor December 2009
(4) Decisions Resources Group. Chronic Pain: Disease Landscape and Forecast. 2016; 76 & 80
(5) Decisions Resources Group. Chronic Pain: Disease Landscape and Forecast. 2016; 40
(6) Decisions Resources Group. Chronic Pain: Disease Landscape and Forecast. 2016; 62
(7) Decisions Resources Group. Chronic Pain: Disease Landscape and Forecast. 2016; 62
(8) Decisions Resources Group. Chronic Pain: Disease Landscape and Forecast. 2016; 8
(9) 2015 NIH Report: David B. Reuben, Anika A. H. Alvanzo, Takamaru Ashikaga, G. Anne Bogat, Christopher M. Callahan, Victoria Ruffing, David C. Steffens. National Institutes of Health Pathways to Prevention Workshop: The Role of Opioids in the Treatment of Chronic Pain. Annals of Internal Medicine, 2015; DOI: 10.7326/M14-2775
(10) Decision Resources Group (2016)

Sours: https://www.yahoo.com/now/scilex-holding-company-subsidiary-sorrento-100000328.html
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Why Sorrento Therapeutics Was Right to Reject Takeover Bids With A 245% Premium

Takeover bids offering a 245% premium over Sorrento Therapeutics's (NASDAQ:SRNE) $1.45 share price last month might seem like a seize-the-day sort of moment. Especially considering Sorrento's financial situation.

The company's earnings missed analyst estimates for the past four quarters and it reported sales of $5.8 million in the most recent quarter, while its net loss was about $64 million. But the biotech company with a pipeline in immuno-oncology and non-opioid pain management didn't snap up the takeover offers, and instead sent the two unidentified buyers, offering between $3 and $5 per share, on their way.

Scientists research in a lab.

IMAGE SOURCE: GETTY IMAGES.

While it's impossible to peer into the crystal ball and be assured that Sorrento made the right decision (or not), its focus on non-opioid pain treatments supports the idea that the company is better off alone or with another buyer that will pay a higher price.

U.S. struggles with opioid addiction

Non-opioid treatments for pain are a major area of interest as the U.S. faces an epidemic of opioid addiction. The crisis stems from the late 1990s when pharmaceutical companies assured doctors that opioid painkillers wouldn't lead to addiction. In fact, they did, and according to the National Institute on Drug Abuse, more than 47,000 Americans died of opioid overdose just in 2017. The overall pain management market, which includes devices as well as medicines, will reach $52 billion by 2022, according to a BCC Research report.

Sorrento launched the ZTlido lidocaine patch, its first non-opioid pain treatment, in October 2018. Another plus: The patch is destined for a growing market, treating pain from postherpetic neuralgia. The condition affects those with a compromised immune system, and most at risk are the elderly, those who have suffered from shingles, and AIDS patients. A report by Persistence Market Research predicts the market will be valued at $908.4 million by 2026. Although drugs dominate with about 80% share of the treatment market, the patches segment will grow at the highest compound annual growth rate -- 5.6% -- among all other treatment types through this time period, the report showed.

ZTlido sales jump 63%

In an October presentation, Sorrento said sales of ZTlido increased 63% to $4.66 million in the second quarter from the first quarter. (The product  is sold by Sorrento's Scilex subsidiary, which is considering an initial public offering of its own, submitting a draft registration to the SEC in September.)

The big players in the postherpetic neuralgia market are exactly that: big. Companies including Pfizer(NYSE:PFE), Teva(NYSE:TEVA), Mylan(NASDAQ:MYL) and Endo(NASDAQ:ENDP) take in more than half of the revenue globally, the Persistence Market Research report showed. The negative here is that Sorrento, with a market cap of about $600 million, is facing powerhouses. Market capitalizations of Pfizer, Teva, Mylan,and Endoeach top $1 billion, with Pfizer the largest at $210 billion. That said, Sorrento, as a smaller player, has an opportunity to get its product noticed and perhaps even attract other takeover offers as competitors seek to expand in the treatment area or new players attempt to enter the market.

Sorrento has a second investigational product in the non-opioid space. Resiniferatoxin, a single injection treatment for terminal cancer pain, works by blocking pain signals from tumor tissue to the spine. That candidate is in Phase 1 studies.

The two analysts covering Sorrento are bullish on the stock and the average price target is $24.50. The idea of a buyer paying a premium of more than 500% over the current price seems a bit too optimistic in light of the company's losses and the string of missed forecasts. Considering the opportunity in pain management, though, Sorrento might have been right when it said last month's takeover offer undervalued its assets. Currently, with aspirin and ibuprofen too weak to handle severe pain, there aren't a lot of options for non-opioid pain management. Therefore, companies like Sorrento that have developed treatments and have gathered positive clinical trial data from products in the pipeline hold a valuable asset. It would seem reasonable to say that between the 245% premium Sorrento rejected and the 500% premium analysts predict, there might be a middle ground.

What does this mean for investors?

At the moment, questions regarding Sorrento's near-term plans make it difficult to put a perfect price tag on the company. Sorrento hasn't released details regarding a possible Scilex IPO, meaning investors can't determine how it might impact the company's financial and product outlook.

In the immuno-oncology treatment area, Sorrento is in licensing discussions with other biopharmaceutical companies. The results of those talks would also have an impact on Sorrento's value. Investors interested in Sorrento should keep an eye on the Scilex IPO news and the licensing discussions as updates about either could be a catalyst for the stock. And at the same time, all eyes will be on Sorrento's progress in the pain market to see whether it can stand out among the big players or attract a higher bid. When it comes to Sorrento, the best strategy right now might be to watch and wait. 

Sours: https://www.fool.com/investing/2019/12/05/why-sorrento-therapeutics-was-right-to-reject-take.aspx
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