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NASDAQ:SCLX
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Scilex Holding Company (NASDAQ:SCLX) is a revenue-generating company that is focused on addressing one of the biggest issues facing humanity today—that of the overuse of opioids. Scilex is focused on developing non-opioid pain management products that provide the relief patients so desperately need, while avoiding the debilitating addiction that often comes with the use of opioids. Roughly 80,000 Americans died in 2022 from the overuse of opioids and there is no doubt that a good number of those started their opioid use to reduce physical pain of various types.
Scilex recognizes this problem and is committed to developing and commercializing solutions. And this isn’t a clinical stage company, although Scilex has several exciting products in the development pipeline. Scilex currently has one major product on the market—ZTlido, which is a topical pain-relieving patch that has better adhesion and better proven pain reduction than comparable products. Sales of ZTlido are increasing as more doctors become aware of the product and its benefits.
The company isn’t just resting on the success that ZTlido is showing, but pushing to get more pain-relieving products into the market to help patients that need pain relief. One of the major characteristics of this company that we appreciate and believe adds to the value proposition in the infrastructure already in place for ZTlido that can easily accommodate future pain-relieving solutions. The company has a national sales force in place that will target many of the same doctors and distributors for all its products, meaning that won’t have to add substantially to labor costs with the launch of each new product into the market. Additionally, the company has its manufacturing facility with its partner in Japan in place already with ZTlido. And that facility has seen the potential for added demand from Scilex and added capacity to meet future demand. This ability to scale up production and marketing without adding to costs in a substantive way leads us to believe that SCLX is poised to move higher as margins and profitability grow.
The company recently reported 3Q earnings that showed a loss of $0.63 per share, which was a larger loss than anticipated but the miss was largely due to an increase in selling expenses, which we believe will ultimately benefit the company and enhance the investing case behind SCLX.
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