Scilex Holding Company, a subsidiary of Sorrento Therapeutics, has executed non-binding term sheets with Oramed Pharmaceuticals and Sorrento, subject to entry into definitive documentation. These term sheets pertain to a securities transfer and senior secured note issuance. The transactions, expected to close on or about September 19, 2023, involve Scilex acquiring shares of Scilex common and preferred stock, as well as warrants, from Sorrento for a total consideration of $110 million. Scilex will also issue a senior secured note to Oramed, secured by Scilex’s assets, to cover Sorrento’s $100 million senior secured debtor in possession term loan facility.
Scilex Holding Company (Nasdaq: SCLX, “Scilex” or “Company”), a majority-owned subsidiary of Sorrento Therapeutics, Inc. (OTC: SRNEQ, “Sorrento”), an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain, announced that on September 11, 2023, Scilex, Oramed Pharmaceuticals Inc. (Nasdaq: ORMP, “Oramed”) and Sorrento executed non-binding term sheets relating to, among other things, the Securities Transfer (as defined below) (the “Securities Transfer Term Sheet”) (which the official committee of unsecured creditors and the official committee of equity security holders in Sorrento’s bankruptcy cases have each signed as “Consenting Parties” thereto) and the Note (as defined below) (the “Note Term Sheet” and together with the Securities Transfer Term Sheet, the “Scilex Term Sheets”). After a hearing before the Bankruptcy Court in Sorrento’s bankruptcy cases on September 12, 2023, such court entered a final order approving the Scilex Term Sheets. The Scilex Term Sheets are subject to entry into definitive documentation relating thereto. The transactions contemplated by the Scilex Term Sheets are expected to close on or about September 19, 2023.
Pursuant to the Securities Transfer Term Sheet, the parties to the Securities Transfer Term Sheet agreed that the Company would be declared the new successful bidder and would acquire all of the shares of Scilex common stock owned by Sorrento (other than such shares held in abeyance by Sorrento on behalf of certain warrant holders of Sorrento), (ii) all of the shares of Scilex preferred stock owned by Sorrento, and (iii) all of the warrants for the purchase of shares of Scilex common stock owned by Sorrento (the “Transfer Warrants”)(collectively, the “Securities Transfer”) for aggregate consideration consisting of: (i) $110 million (comprised of cash payments of $10 million and assumption of certain indebtedness of Sorrento in the amount of $100 million); plus (ii) the assumption by the Company of certain legal fees and expenses in the amount of approximately $12.25 million; plus (iii) a credit bid of all amounts owed to the Company under the junior secured term loan facility provided by the Company to Sorrento.
The Note Term Sheet provides that, among other things, the Company will issue a senior secured note to Oramed in an amount equal to the unpaid principal and accrued and unpaid interest under Sorrento’s $100 million senior secured debtor in possession term loan facility with Oramed (as noted above, the original aggregate principal amount of such facility is $100 million), secured by a senior lien on substantially all of the Company’s assets, subject to certain exclusions as set forth in the Note Term Sheet (the “Note”).
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
“This transaction is a testament to our significant execution over the past few years as well as our board’s confidence in our multi-faceted strategy to continue to build long term value for our shareholders. Approximately four years ago, we successfully merged Semnur Pharmaceuticals and Scilex Pharmaceuticals into Scilex Holding Company. On November 10, 2022, we completed our business combination to become a public company and began trading on Nasdaq on November 11, 2022. Our achievements over these past years demonstrates the ability of our management team to execute on its goals. This transaction reinforces the confidence we have in our strategy and our commitment to deliver long-term value to our shareholders,” said Jaisim Shah, President and Chief Executive Officer of Scilex.
Source: Bio Space
