Scilex Holding Company Sends Letter to U.S. House of Representatives on Illegal Market Manipulation of the Common Stock of Scilex Holding Company

Rhea-AI Summary

Scilex Holding Company (Nasdaq: SCLX) has sent a letter to the U.S. House of Representatives regarding illegal market manipulation of its common stock. The company highlights concerns over 'naked short' selling or maintaining 'naked short' positions, which may violate SEC Regulation SHO. These practices are believed to reduce shareholder value and infringe upon shareholders' rights. Scilex is committed to combating this manipulative and illegal short selling to protect its stock and shareholder interests. Further details can be accessed on Scilex's official website.

Positive

• Scilex Holding Company is actively addressing illegal market manipulation, which could reassure investors about the company's commitment to protecting shareholder value.
• The company is proactive in fighting manipulative practices, potentially leading to a more stable stock performance.
• Public action against 'naked short' selling may enhance investor confidence and could attract more investment.

Negative

• The presence of illegal market manipulation in Scilex's stock could indicate underlying vulnerabilities.
• Ongoing legal battles or regulatory scrutiny might result in increased operational costs and divert management's attention.
• The exposure of 'naked short' selling practices could negatively impact short-term stock prices until resolved.

Legal Expert

The letter sent by Scilex Holding Company to the U.S. House of Representatives highlights concerns over potential illegal market manipulation through 'naked short' selling. This practice involves selling shares that the seller does not own and has not borrowed, which can artificially drive down the stock price. Such actions might violate SEC Regulation SHO, which is designed to prevent abusive short-selling practices.

For retail investors, this move by Scilex signifies a proactive approach to safeguard shareholder value and ensure market integrity. If successful, it could lead to regulatory scrutiny and potentially curb manipulative trading practices, thereby stabilizing the stock. However, the effectiveness of this measure will depend on the response from regulatory bodies and the enactment of any subsequent enforcement actions.

In the short term, investor sentiment may improve as the company takes a strong stance against market manipulation. In the long term, a potential reduction in manipulative trading could lead to more accurate stock pricing, reflecting the company's true market value.

Understanding 'naked short' selling is important for investors. It is a risky practice as it can lead to significant price distortions. Regulation SHO mandates that short sellers must locate and secure the shares before shorting to prevent such risks. Scilex’s effort thus aims at ensuring compliance with these regulations, fostering a fairer trading environment.

Market Research Analyst

From a market perspective, Scilex’s action against alleged market manipulation could have immediate impacts on stock dynamics. Publicizing this issue might deter further illegal activities and restore investor confidence. It also signals to the market that Scilex is vigilant in protecting its stock's integrity, which could attract more cautious and long-term investors.

This development might set a precedent for other companies facing similar issues, potentially influencing broader market practices and regulatory policies. The heightened awareness and potential regulatory interventions can lead to more transparent and fair market conditions overall.

While the long-term benefits of this action include stabilized stock prices and possibly increased market trust, there are short-term risks including potential volatility as the market digests this news. Investors should be prepared for varying market reactions as regulatory bodies investigate these claims.

For retail investors, it's essential to watch for any regulatory updates following this letter. Changes in trading regulations or enforcement actions can significantly impact market behavior and Scilex’s stock performance.

PALO ALTO, Calif., May 24, 2024 (GLOBE NEWSWIRE) -- Scilex Holding Company (Nasdaq: SCLX, “Scilex” or “Company”), an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain, today sends a letter to the U.S. House of Representatives on illegal market manipulation of the common stock of Scilex.

The practice of manipulative or abusive “naked short” selling or maintaining “naked short” positions may constitute a violation of SEC Regulation SHO.   Scilex Management is determined to combat manipulative and illegal short selling of Scilex common stock which has the effect of reducing shareholder value and infringing on shareholders’ rights.

A copy of the letter to U.S. House of Representatives can be download here.

For more information on Scilex Holding Company, refer to www.scilexholding.com

For more information on ZTlido^® including Full Prescribing Information, refer to www.ztlido.com.

For more information on ELYXYB^®, including Full Prescribing Information, refer to www.elyxyb.com.

For more information on Gloperba^®, including Full Prescribing Information, refer to www.gloperba.com.

https://www.facebook.com/scilex.pharm

https://www.linkedin.com/company/scilex-holding-company/

info@scilexholding.com

About Scilex Holding Company

Scilex Holding Company is an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Scilex targets indications with high unmet needs and large market opportunities with non-opioid therapies for the treatment of patients with acute and chronic pain and are dedicated to advancing and improving patient outcomes.    Scilex’s commercial products include: (i) ZTlido® (lidocaine topical system) 1.8%, a prescription lidocaine topical product approved by the U.S. Food and Drug Administration (the “FDA”) for the relief of neuropathic pain associated with postherpetic neuralgia, which is a form of post-shingles nerve pain; (ii) ELYXYB®, a potential first-line treatment and the only FDA-approved, ready-to-use oral solution for the acute treatment of migraine, with or without aura, in adults; and (iii) Gloperba®, the first and only liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults, expected to launch in the first half of 2024.

In addition, Scilex has three product candidates: (i) SP-102 (10 mg, dexamethasone sodium phosphate viscous gel) (“SEMDEXA^TM” or “SP-102”), a novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica, for which Scilex has completed a Phase 3 study and has granted Fast Track status from the FDA in 2017; (ii) SP-103 (lidocaine topical system) 5.4%, (“SP-103”), a next-generation, triple-strength formulation of ZTlido, for the treatment of chronic neck pain and for which Scilex has recently completed a Phase 2 trial in low back pain. SP-103 has granted Fast Track status from the FDA in low back pain; and (iii) SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-release capsules) (“SP-104”), a novel low-dose delayed-release naltrexone hydrochloride being developed for the treatment of fibromyalgia, for which Phase 1 trials were completed in the second quarter of 2022.

Scilex Holding Company is headquartered in Palo Alto, California.

Forward-Looking Statements

This press release and any statements made for and during any presentation or meeting concerning the matters discussed in this press release contain forward-looking statements related to Scilex and its subsidiaries under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements include statements regarding Scilex’s beliefs as to the extent of short selling and market manipulation of its stock and that of Sorrento and any potential violations of law and legal challenges with respect to the foregoing that are described in this press release.  

Risks and uncertainties that could cause Scilex’s actual results to differ materially and adversely from those expressed in our forward-looking statements, include, but are not limited to: risks associated with the unpredictability of trading markets and whether a market will be established for Scilex’s common stock; general economic, political and business conditions; risks related to COVID-19 (and other similar disruptions); the risk that the potential product candidates that Scilex develops may not progress through clinical development or receive required regulatory approvals within expected timelines or at all; risks relating to uncertainty regarding the regulatory pathway for Scilex’s product candidates; the risk that Scilex will be unable to successfully market or gain market acceptance of its product candidates; the risk that Scilex’s product candidates may not be beneficial to patients or successfully commercialized; the risk that Scilex has overestimated the size of the target patient population, their willingness to try new therapies and the willingness of physicians to prescribe these therapies; risks that the outcome of the trials and studies for SP-102, SP-103 or SP-104 may not be successful or reflect positive outcomes; risks that the prior results of the clinical and investigator-initiated trials of SP-102 (SEMDEXA™), SP-103 or SP-104 may not be replicated; regulatory and intellectual property risks; and other risks and uncertainties indicated from time to time and other risks described in Scilex’s most recent periodic reports filed with the Securities and Exchange Commission, including Scilex’s Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q that the Company has filed or may file, including the risk factors set forth in those filings. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and Scilex undertakes no obligation to update any forward-looking statement in this press release except as may be required by law.

Contacts:

Investors and Media
Scilex Holding Company
960 San Antonio Road
Palo Alto, CA 94303
Office: (650) 516-4310

Email: investorrelations@scilexholding.com

Website: www.scilexholding.com

SEMDEXA™ (SP-102) is a trademark owned by Semnur Pharmaceuticals, Inc., a wholly-owned subsidiary of Scilex Holding Company. A proprietary name review by the FDA is planned.

ZTlido^® is a registered trademark owned by Scilex Pharmaceuticals Inc., a wholly-owned subsidiary of Scilex Holding Company.

Gloperba^® is the subject of an exclusive, transferable license to use the registered trademark by Scilex Holding Company.

ELYXYB^® is a registered trademark owned by Scilex Holding Company.

All other trademarks are the property of their respective owners.

© 2024 Scilex Holding Company All Rights Reserved.

FAQ

What was Scilex Holding Company's recent action about?

Scilex Holding Company sent a letter to the U.S. House of Representatives addressing illegal market manipulation of its common stock.

Why did Scilex Holding Company address the U.S. House of Representatives?

Scilex addressed the U.S. House of Representatives to highlight concerns over illegal 'naked short' selling practices affecting its common stock.

What is 'naked short' selling?

'Naked short' selling involves selling shares that the seller does not own or has not borrowed, which can manipulate stock prices.

How does 'naked short' selling affect Scilex Holding Company's stock?

'Naked short' selling can reduce shareholder value and infringe upon shareholders' rights by manipulating stock prices.

What regulatory violation is implicated in Scilex Holding Company's letter?

The letter implies a potential violation of SEC Regulation SHO, which governs short selling practices.

What is the stock symbol for Scilex Holding Company?

The stock symbol for Scilex Holding Company is SCLX.