On December 6, 2021 Scilex Holding Company ("Scilex"), a subsidiary of Sorrento Therapeutics, Inc. (Nasdaq: SRNE, "Sorrento"), and Vickers Vantage Corp. I, a Cayman Islands corporation (NASDAQ: VCKA) ("SPAC"), reported the signing of a letter of intent for a proposed business combination (Press release, Sorrento Therapeutics, DEC 6, 2021, View Source [SID1234596536]).
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Scilex is dedicated to the development and commercialization of non-opioid pain management products for treatment of acute and chronic pain. Scilex’s commercial product ZTLIDO (lidocaine topical system) 1.8%, a non-opioid prescription lidocaine topical product approved by the U.S. Food and Drug Administration for the relief of pain associated with postherpetic neuralgia, shows continued sales growth of 35% year over year despite the continued impact of the COVID-19 pandemic. SP-102 (SEMDEXA) is the first non-opioid novel injectable corticosteroid gel formulation product in Phase 3 development for the treatment of lumbar radicular pain, containing no preservatives, surfactants, solvents, or particulates. If approved by the FDA, SP-102 (SEMDEXA) will be available in a pre-filled syringe formulation and will be administered as an epidural injection for the treatment of sciatica. Based on preclinical and clinical studies to date, SP-102 (SEMDEXA) extends the residency time at the site of injection and has not demonstrated the safety concerns that led the FDA to warn against using other injectable steroid formulations by the epidural route of administration.
By 2022, the overall estimated number of epidural steroid injection (ESI) procedures in the U.S. is expected to be 12.1 million across all Medicare and private coverage patients, with lumbar radiculopathy/sciatica procedures comprising approximately 88% of all ESIs administered, according to a proprietary study by Syneos Health Consulting. Despite widespread utilization of ESIs, concerns persist in the market about particulate and solution steroids and potential side effect and safety concerns (e.g., stroke) from current off-label use. Opioid prescriptions account for about 40% of the chronic back pain market and carry a well-known risk of abuse and misuse, underscoring the need for alternate pain therapies without the medical and societal challenges.2,5 As a result, a significant unmet medical need exists within the market for a novel, non-particulate ESI formulation that demonstrates safety and effectiveness in controlled clinical trial evaluations.7
In the U.S., more than 30 million people suffer from low back and radicular pain. This population is expected to grow as the overall population ages.1,2 Many patients experience moderate to severe pain with intolerance of and/or inadequate response to current analgesic therapies such as opioids and nonsteroidal anti-inflammatory drugs (NSAIDs).3,4 There is a great need for highly effective analgesic medications to provide patient relief without the toxicity and tolerability challenges of NSAIDs and opioids.2 Opioid prescriptions account for about 40% of the chronic back pain market and carry a well-known risk of abuse and misuse, underscoring the need for alternate pain therapies without the medical and societal challenges.2,5
Henry Ji, Chairman and Chief Executive Officer of Sorrento Therapeutics, Inc. and Executive Chairperson of Scilex said, "If completed, this transaction could propel us into the next phase of growth, and we are excited to work towards partnering with a world-class group of investors at Vickers who recognize the opportunity for much needed change in the treatment of millions of patients suffering from acute and chronic pain worldwide."
Jaisim Shah, President and Chief Executive Officer of Scilex, stated, "I am excited to lead Scilex as we continue to work to deliver best-in-class non-opioid therapies for patients in acute and chronic pain. We are moving rapidly toward potential commercialization of our late-stage non-opioid pain programs while continuing to grow our early pipeline to address this high unmet need area with the ongoing opioid crisis of today and in the future. We believe this proposed business combination could set Scilex on its path to becoming a highly resourceful leader in delivering best-in-class therapies for non-opioid pain management."
"Scilex’s leaders have done an exceptional job of building the company to date. We were particularly interested in partnering Vickers Vantage with a company with novel best-in-class approaches and treatments in high unmet need areas, a deep pipeline and an exceptional management team. We believe Scilex embodies such a platform and company, with its focus on addressing high unmet need with non-opioid therapies in this time of the worsening opioid crisis. We believe that a proposed merger of Scilex and Vickers Vantage Corp I could build near and long-term value for shareholders," said Jeffrey Chi, Chairman and Chief Executive Officer of Vickers Vantage Corp I.
Terms of Letter of Intent
Completion of the proposed transaction is subject to the negotiation of a definitive merger agreement (the "Merger Agreement"), approval by the SPAC’s and Scilex’s boards of directors, satisfaction of the conditions negotiated in the proposed Merger Agreement and approval of the proposed transaction by the SPAC’s shareholders. Accordingly, there can be no assurance that a Merger Agreement will be entered into or that the proposed transaction will be consummated. Further, readers are cautioned that those portions of the letter of intent that describe the proposed transaction, including the consideration to be issued therein, are subject to change.
The letter of intent contemplates the combined company (the "Combined Company") changing its name to Scilex Holding Company and being led by Scilex’s current management team. The letter of intent provides for gross proceeds of up to $140 million, dependent on the level of SPAC shareholders that exercise redemption rights. Assuming execution of the proposed Merger Agreement and consummation of the proposed transaction, the Combined Company expects to capitalize on the commercialization of ZTlido (lidocaine topical system) 1.8%, a best-in-class prescription lidocaine topical product approved by the U.S. Food and Drug Administration for the relief of pain associated with postherpetic neuralgia; 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 acute 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 in multiple Phase 1 programs to be initiated in 2021.
Assuming the SPAC and Scilex enter into the proposed Merger Agreement, the parties will look to seek approval from the SPAC’s shareholders in the first half of 2022.
Contingent upon execution of the Merger Agreement, the SPAC would file a registration statement on Form S-4 with the SEC, which would include a proxy statement/prospectus, and each party would file other documents regarding the proposed transaction with the SEC.