Scilex says not a debtor in Sorrento’s voluntary Chapter 11 filing

Scilex Holding Company (SCLX), a majority-owned subsidiary of Sorrento Therapeutics (SRNE), together with Sorrento, issued the following statements. Henry Ji, Ph.D., Chairman and CEO of Sorrento, commented: "Today, Sorrento Therapeutics, Inc. and its wholly-owned direct subsidiary, Scintilla Pharmaceuticals, Inc., commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. While Scilex is majority-owned by Sorrento, Scilex is not a debtor in Sorrento Therapeutics’ voluntary Chapter 11 filing. Scilex will continue to operate its business as usual. As of its chapter 11 filing, Sorrento had over approximately $1 billion in assets, including a $125 million arbitration award against NantPharma, LLC for a dispute related to Sorrento’s sale of Cynviloq. The company had approximately $235 million in liabilities as of its filing and faced a short-term liquidity crunch, due to insufficient cash or other short-term assets to satisfy certain obligations. Included among those obligations was a $175 million arbitration award against Sorrento, which was reduced to enforceable judgments on February 7, 2023 in favor of NantCell, Inc. and Immunotherapy NANTibody LLC. While $125 million of those judgements was stayed for 70 days, $50 million was not stayed and could be enforced immediately. Sorrento assessed that enforcement actions with respect to the $50 million unstayed portion of these judgements, such as attachment of Sorrento’s assets and bank accounts, could lead to significant business disruption. As a result, Sorrento sought chapter 11 relief to safeguard business operations and its ability to continue developing life-saving therapeutics, while protecting and maximizing value for stakeholders." Jaisim Shah, CEO and President of Scilex Holding Company, added: "Scilex is not a debtor in Sorrento’s chapter 11 filing and will continue to operate business as usual, with a focus on growing revenues, offering innovative, non-opioid pain management products, and developing meaningfully differentiated programs that address significant unmet needs and lead to better health outcomes for the millions of acute and chronic pain patients."