Scilex Holding Co. (SCLX) PT Lowered to $8 at H.C. Wainwright

H.C. Wainwright analyst Raghuram Selvaraju lowered the price target on Scilex Holding Co. (NASDAQ: SCLX) to $8.00 (from $12.00) while maintaining a Buy rating.

The analyst commented: "Early last month, Scilex announced launching of co-pay programs for both ZTlido and ELYXYB with the out-of-pocket costs for its product portfolio for commercially insured patients capped at $25 monthly, with certain eligible patients paying as low as $0. This applies to the company's post-herpetic neuralgia (PHN) pain product, ZTlido, and its migraine product, Elyxyb. In addition, on April 1, 2024, a multi-state Medicaid pharmaceutical purchasing group added ELYXYB to its purchasing pool to make it eligible for 13 states’ Medicaid programs. Scilex also reported in March 2024 that the out-of-pocket costs for its product portfolio for commercially insured patients is slated to be capped at $25 monthly, with certain eligible patients paying as low as $0. This applies to the company's ZTlido, Elyxyb, and Gloperba brands. We note that ZTLido and Elyxyb are already commercially available in the U.S., while Gloperba is slated to launch during 1H24. Scilex has also been working with its co-pay savings card adjudicators to resolve the recent breakdown of processing of insurance claims by Change Healthcare, a division of UnitedHealth Group (UNH; not rated), following a cyber-attack on Change Healthcare's IT systems. The processing issues were deemed resolved as of late March 2024. We reiterate our Buy rating, while lowering our 12-month price target to $8 from the previous $12 per share. This reflects the impact of dilution from the most recent equity financing and our expectations for additional equity dilution going forward, as well as adjustments to our market model assumptions and DCF parameters."

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