What happened
Shares of Scilex Holdings (SCLX 2.29%) were up around 14% as of 2:30 p.m. ET on Monday. The healthcare stock is still down more than 55% this year.
So what
Scilex makes non-opioid pain management products to treat acute and chronic pain. The company's shares gained after it received a buy rating on Monday from H.C. Wainwright analyst Ram Selvaraju with a $12 price target. Investors piled in a bit as the price seemed like a bargain after hitting a 52-week low of $1.21 last week. The stock had been sliding because of the impending bankruptcy of its parent company, Sorrento Therapeutics. However, Scilex already has an court-approved agreement to buy back its shares from Sorrento.
Now what
There are plenty of issues still swirling around Scilex. On Friday, the company said it was hiring a law firm to investigate manipulation of its stock by short-sellers. The company said that it believes its shares have been targeted to drive the stock down and is engaging Warshaw Burstein and Christian Attar Law to investigate any potential wrongdoing by short-sellers. Whether or not there was any illegal manipulation, news of that sort could scare away investors.
The company has three products that have been approved by the Food and Drug Administration (FDA): Elyxyb, an oral treatment for acute migraine, which it launched in February; topical lidocaine patch ZTlido; and gout treatment Gloperba.
In the second quarter, the company reported six-month revenue of $23.2 million, up 57% year over year, and a six-month net loss of $57.4 million compared to a loss of $26.9 million in the same period a year ago. The company also reported cash of $35 million, which does not give it a long runway to turns things around.
