Shares of Scilex (NASDAQ: SCLX) were down more than 14% as of 1 p.m. ET on Monday, despite the company announcing positive phase 2 trial results for its non-opioid pain therapy SP-103. The healthcare stock is down more than 50% so far this year.

Scilex makes non-opioid pain management products to treat acute and chronic pain. Its products include topical lidocaine Ztlido, approved to treat pain associated with post-herpetic neuralgia (PHN), a type of post-shingles nerve pain; Elyxyb, approved to treat acute migraines; and Gloperba, approved to treat flares from gout in adults. The company, which is majority owned by Sorrento Therapeutics, saw its shares fall after it announced last week phase 2 trials for SP-103 to treat acute lower back pain. In the trials, the product showed good safety and efficacy, the company said.

The timing is confusing, but the reason for the drop had nothing to do with the trial and everything to do with Sorrento, which filed for bankruptcy back in February. Sorrento got court approval last week to sell its shares of Scilex back to Scilex for $110 million, including a $5 million payment in advance. As part of the deal, Scilex is on the hook for $12 million of legal fees that Sorrento must pay the law firm Paul Hastings. The deal is expected to close on Sept. 19.

Continue reading

Source Fool.com