BiQ: UPDATED--A Quick Look at Scilex Holding Company (SCLX)

I've been slowly building a position in Scilex Holdings, which I consider to be an extremely speculative name and should be approached with a very healthy amount of caution.

SCLX owns the majority interest in Semnur Pharmaceuticals, which is developing SEMDEXA as the first non-opioid targeted treatment for treating sciatica. The clinical trial results from the P3 trial can be found here: https://semnurpharma.com/wp-content/uploads/2024/07/0505-1705-Knezevic-Results-from-a-pivotal-Phase-3.pdf.

To provide a little extra background, here's a timeline of major events in the evolution of SCLX:

• In 2017, now-bankrupt Sorrento Therapeutics acquired SCLX by purchasing 72% of its common stock for $47.6M.
• In 2019, Sorrento engineered a merger between SCLX and Semnur Pharmaceuticals, creating Scilex Holding Company, now under the ticker SCLX.
• In November 2022, SCLX entered a SPAC business combination with Vickers Vantage Corp, providing it with access to $100M in capital.
• In December 2022, Sorrento declared a stock dividend consisting of 76M shares of SCLX common stock to Sorrento shareholders. Just weeks after, Sorrento filed for bankruptcy; however, by spinning out the SCLX shares prior to the bankruptcy, SCLX shares were not included in the bankruptcy proceedings.
• In September 2023, Sorrento sold the remainder of its SCLX stock back to SCLSX, completing the separation of the two companies.
• In September 2025, Semnur underwent a SPAC combination with Denali Capital Acquisition Corp, valued at $2B.

Obviously, SCLX has a very complicated history. What seems apparent to me, however, is that Sorrento moved quickly (and controversially) to protect ownership of SCLX from being subject to the bankruptcy proceedings by issuing the shares as a dividend to shareholders.

Sciatica pain represents a huge TAM, especially for a company wiith a MC of under $100M (even less when I first entered.) What caught my interest recently was that SCLX entered into a financing agreement with Datavault ai (DVLT) to exchange 20% of Semnur stock for $200M in Bitcoin. SCLX then turned around and invested $150M (presumably of the $200M) back into DVLT at a price of around $.52/share. DVLT is currently trading at $3.60/sh.

So first, let me say this is all just a little dodgy for a pharma company. My BS radar is on high alert, but so far I haven't been able to find anything specifically wrong with any of this, except that it is very irregular for a pharma company. Still, I strongly recommend a lot of caution here. SCLX and Semnur have a very complicated history.

After the transaction, DVLT owns 20% of Semnur, and SCLX owns the remaining 80%. If DVLT was willing to exchange $200M in bitcoin for 20% of Semnur, theoretically, that means they thought Semnur was worth $1B. The MC of SCLX, which owns 80% of Semnur, currently stands at under $100M, which includes their 80% ownership in Semnur, $50M (much more now) in bitcoin, plus 278,914,094 shares of DVLT stock, which is currently worth over $1B at today's share price for DVLT.

Honestly, none of this makes any sense. Looking at DVLT's financials, I am at a loss to explain how they paid $200M in bitcoin to SCLX. I need to do some more digging here. Also, although SEMDEXA P3 results look very encouraging, the drug isn't even approved yet, and the company plans to run a second P3 trial. Why did DVLT value Semnur at $1B and invest $200M in bitcoin for 20% of the stock? I don't know the answer, which is why I remain extremely cautious. However, it might be something at least worth keeping on your radar to see how the story develops. Either way, it should be interesting.

I hold SCLX in my personal, speculative portfolio. It is NOT a BiQAP stock.

SCLX share price at time of publication: $18.74
DVLT share price at time of publication: $3.60

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