Company: SCLXW
Filing Date: 2025-05-15
Form Type: 424B3
Source: 0000950170-25-071920
Chunk: 68

Company: Scilex Holding Co
Filing Date: 2025-05-15
Form: 424B3
Chunk 68
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 disease. We contributed 5.0 million shares of Semnur Common Stock owned by us to Scilex Bio, Inc. in exchange for a 60% ownership interest in Scilex Bio, Inc. and IPMC Company contributed certain assets to Scilex Bio, Inc. in exchange for a 40% ownership interest in Scilex Bio, Inc. In connection with the formation of Scilex Bio, Inc. and the related transactions, on April 16, 2025, we entered into a Consent, Waiver and Amendment re Tranche A Senior Secured Promissory Note with Oramed, and we entered into a Consent, Waiver and Amendment re Tranche B Senior Secured Convertible Note with each of the Tranche B Noteholders.

Components of Our Results of Operations

Net Revenue

Net revenue consists of product sales of ZTlido, ELYXYB and GLOPERBA in the United States. For product sales of ZTlido, ELYXYB and GLOPERBA, we record gross-to-net sales adjustments for government and commercial rebates, chargebacks, wholesaler and distributor fees, sales returns, special marketing programs, and prompt payment discounts. We expect that any net revenue we generate will fluctuate from year to year as a result of the unpredictability of the demand for our product.

Operating Costs and Expenses

Cost of Revenue

Cost of revenue consists of the cost of purchasing ZTlido, ELYXYB and GLOPERBA from our manufacturing partners, inventory write-downs related to expiration dates for on-hand inventory, cost of shipments, and royalty payments to our manufacturers. We expect the cost of revenue to fluctuate with related sales revenue.

Research and Development

Research and development expenses are expensed when incurred and consist primarily of costs incurred for our research activities, including the development of our product candidates, and include:

costs related to clinical trials;

salaries, benefits and other related costs, including stock-based compensation expense for personnel engaged in research and development functions; and

costs related to outside consultants.

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We expect our research and development expenses to increase, as we will incur incremental expenses associated with our product candidates that are currently under development and in clinical trials. Product candidates in later stages of clinical development generally have higher development costs, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, we expect to incur significant research and development expenses in connection with our clinical