Zacks Small Cap Research – SCLX Grows Revenue and Boosts Marketing – Technologist

By Brad Sorensen, CFA

NASDAQ:SCLX

READ THE FULL SCLX RESEARCH REPORT

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 112,000 Americans died in 2023 from overdoses and there we have no doubt that a good number of those involved opioid use at some point to reduce physical pain of various types.

Scilex continues to grow its product offerings and distribution channels, leading to more patients being helped and more revenue coming in. Proof of the progress the company is making came in the form of the annual report, which showed improving revenue and a greater commitment to its marketing team, which we continue to believe will pay off in the coming quarters as the company brings new products to market. Specifically:

• Revenues grew close to 23% year over year, beating our expectations.

• Selling costs increased significantly, resulting in a bigger loss per share, but we believe that is a cost worth taking as the company is already seeing sales increase from the bigger commitment to marketing.

• Prescription of Ztlido, the company’s main product, increased more than 25.3% in 2023 over 2022.

• The company is preparing to launch a new gout treatment in 2024.

• The company is expecting to expand markets Elyxyb, the company’s oral solution for the acute treatment of migraine, in 2024.

These results and plans for the future reinforce our belief that SCLX is poised to resume its move higher and that investors continue to underestimate the value of treatments the company currently has and is developing. We urge investors to take a look at a company that is earning revenue, growing that revenue in a meaningful way, and adding to its portfolio of very important treatments before the rest of the investing community realized the story developing at Scilex.

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