Sorrento Therapeutics (SRNE) Unit Agrees to Acquire SCILEX Pharmaceuticals
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Scintilla Pharmaceuticals, Inc. ("Scintilla"), a subsidiary of Sorrento Therapeutics, Inc. (NASDAQ: SRNE), has entered into a binding term sheet to acquire SCILEX Pharmaceuticals, Inc. ("SCILEX"). Scintilla's lead program is resiniferatoxin ("RTX") for the treatment of intractable cancer pain.
SCILEX, based in Malvern, PA, is engaged in the development and commercialization of products focused on the treatment of pain. SCILEX's lead product candidate, ZTlido™ (lidocaine patch 1.8%), is a branded lidocaine patch formulation being developed for the treatment of postherpetic neuralgia, the chronic pain that sometimes develops with shingles. The patch technology can be adapted to other applications. In July 2015, SCILEX filed a new drug application ("NDA") for ZTlido™. The SCILEX team is meeting with U.S. Food & Drug Administration ("FDA") in the next few weeks in preparation of a planned NDA re-submission for a potential FDA action date in mid-2017. The direct costs for re-submission are estimated to be less than $3 million. In addition to ZTlido™, the SCILEX pipeline includes line extensions of ZTlido™ as well as other novel patch technologies in development.
The acquisition is contingent upon completion of each parties' due diligence and other customary closing conditions. In consideration for the acquisition, SCILEX equity holders will receive up to $70 million in stock of Scintilla, following the next equity financing of Scintilla. Joseph Gunnar & Co., LLC provided a fairness opinion to Sorrento.
"The pending acquisition of SCILEX creates a unique business for Scintilla as a specialized pain management company with a potential near term commercial product in ZTlido™," said Dr. Henry Ji, President and CEO of Sorrento. Dr. Ji added, "The contribution of SCILEX's assets and experienced management team in combination with our RTX program immediately positions Scintilla with the pipeline and leadership to develop and commercialize new pain management solutions. The SCILEX transaction represents a concrete step taken by Sorrento to focus on the development of high-impact clinical and near commercial-stage therapeutic products."
"We are excited about the potential transaction with Scintilla," stated Anthony Mack, CEO of SCILEX. "By combining Scintilla's novel product candidate, RTX and our product candidate, ZTlido™, we believe we have a strong pain company with multiple later stage opportunities."
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