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Scilex and IPMC announce joint venture for obesity drug

Published 12/10/2024, 07:13 AM
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PALO ALTO, Calif. - Scilex Holding Company (NASDAQ: SCLX), a leader in non-opioid pain management with a market capitalization of $90.5 million, and IPMC, part of the Bio Innovation Consortium, have declared the creation of a joint venture named Scilex Bio. The announcement comes as Scilex's stock shows recent momentum, gaining over 10% in the past week according to InvestingPro data. This new entity will focus on the development and commercialization of KDS2010, a novel oral tablet currently in Phase 2 clinical trials for the treatment of obesity and neurodegenerative diseases, including Alzheimer's disease.

KDS2010, which operates by controlling GABA levels in astrocytes, has shown favorable results in Phase 1 trials involving 88 participants. The drug aims to offer a safer and more effective treatment for obesity compared to current alternatives that can cause side effects like vomiting and nausea. The joint venture will hold global rights for KDS2010, with Scilex contributing $50 million of Semnur Pharmaceuticals, Inc. common stock and IPMC providing the exclusive rights to the compound. This strategic investment comes as Scilex maintains a current ratio of 0.2, indicating potential liquidity challenges according to InvestingPro analysis.

The global market for obesity medication, which reached $24 billion last year, is expected to surge, with annual sales forecasts for emerging drug treatments anticipated to hit $150 billion by the early 2030s. Moreover, the Alzheimer’s drug market is projected to exceed $15 billion by 2030 in major markets, driven by new drugs that slow cognitive decline.

Scilex's CEO, Jaisim Shah, expressed enthusiasm about the partnership with IPMC and the potential of KDS2010 to redefine treatment standards for obesity and CNS diseases. Dr. Jay Chun, a Scilex board member, also highlighted the molecule's innovative mechanism and safety profile as key to advancing treatment options.

The formation and operational commencement of Scilex Bio are expected in Q1-2025, subject to the finalization of definitive agreements between Scilex and IPMC. This collaboration aligns with both companies' commitment to addressing unmet medical needs and improving patient outcomes. While analysts maintain a strong buy consensus with price targets ranging from $4 to $14, InvestingPro data suggests the company faces near-term profitability challenges, with additional insights available to subscribers.

This news article is based on a press release statement from Scilex Holding Company.

In other recent news, Scilex Holding Co has been navigating a series of significant developments. The biopharmaceutical company is selling a significant portion of its stock to meet debt obligations as part of a financial restructuring plan. The sale proceeds will cover the scheduled principal installments that Scilex owes to Oramed Pharmaceuticals Inc (NASDAQ:ORMP). and other note holders.

Scilex has also negotiated waivers for potential defaults on its financial obligations, preventing immediate acceleration of payment obligations under the senior secured promissory note and the Tranche B notes. Furthermore, the firm appointed BPM LLP as its new independent registered public accounting firm, a move decided by the Audit Committee of the Board of Directors.

In other developments, David Lemus resigned from Scilex's Board of Directors for personal and professional reasons. The company also reported Q3 net sales growth for its non-opioid pain management products, with ZTlido sales reaching between $11.0 million and $13.0 million. These are the most recent developments at Scilex Holding Company.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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