0000950170-23-021743 | 10-Q | XBRL Viewer

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Liquidity and Going Concern (Additional Information) (Details) - USD ($)			3 Months Ended
	Mar. 21, 2023	Nov. 17, 2022	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Liquidity and Going Concern [Line Items]
Shares issued, shares			250,000
Negative working capital			$ 33,500,000
Cash and cash equivalents			5,069,000	$ 2,184,000
Loss from operations			(25,473,000)		$ (8,806,000)
Net cash used in operating activities			7,700,000
Accumulated deficit			(406,667,000)	$ (375,914,000)
Principle amount of issued debt			$ 10,000.0
Common stock, par value			$ 0.0001	$ 0.0001
Equity Purchase Agreement with Yorkville and B. Riley [Member]
Liquidity and Going Concern [Line Items]
Convertible Debenture principal Amount	$ 25,000,000.0
Principle amount of issued debt			$ 10,000,000.0
Convertible Debt Issued And Sold			9,600,000
A&R Yorkville Purchase Agreement [Member]
Liquidity and Going Concern [Line Items]
Right to sell maximum number of common stock shares		$ 500,000,000.0	$ 500,000,000.0
Common stock, par value		$ 0.0001
A&R Yorkville Purchase Agreement [Member] \| Common Stock [Member]
Liquidity and Going Concern [Line Items]
Shares issued, shares				250,000

Condensed Consolidated Statements of Stockholders' Equity / (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Preferred Stock Member	Additional Paid-in Capital	Accumulated Deficit
Balance at Dec. 31, 2021	$ (223,876)	$ 13	$ 0	$ 128,661	$ (352,550)
Balance (in Shares) at Dec. 31, 2021		132,858	0
Stock options exercised value	96			96
Stock options exercised (in shares)		202
Stock-based compensation	1,355			1,355
Net income (loss)	(9,143)				(9,143)
Balance at Mar. 31, 2022	$ (231,568)	$ 13	$ 0	130,112	(361,693)
Balance (in Shares) at Mar. 31, 2022		133,060	0
Balance at Dec. 31, 2022		$ 14	$ 3	412,136	(375,914)
Balance (in Shares) at Dec. 31, 2022	36,239	141,349	29,057
Shares issued under Standby Equity Purchase Agreements, value	$ 1,869			1,869
Shares issued under Standby Equity Purchase Agreements		462
Retainer shares issued	$ 1	$ 1
Retainer share issued (in Shares)		4,000
Stock options exercised (in shares)	0
Stock-based compensation	$ 3,720			3,720
Net income (loss)	(30,753)				(30,753)
Balance at Mar. 31, 2023	$ 11,076	$ 15	$ 3	$ 417,725	$ (406,667)
Balance (in Shares) at Mar. 31, 2023		145,811	29,057

Debt (Additional Information) (Details) - USD ($)		3 Months Ended
Debt (Additional Information) (Details) - USD ($)	Mar. 21, 2023	Mar. 31, 2023	Mar. 31, 2022
Debt Instrument [Line Items]
Principle amount of issued debt		$ 10,000.0
Loss on debt extinguishment, net		0	$ 4,799,000
Equity Purchase Agreement with Yorkville and B. Riley [Member]
Debt Instrument [Line Items]
Principle amount of issued debt		$ 10,000,000.0
Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Principle amount of issued debt	$ 25,000,000.0
Debt instrument, description		The Securities Purchase Agreement provides that the Convertible Debentures will be issued and sold at a purchase price equal to 96% of the applicable principal amount in three tranches as follows: (i) $10.0 million upon the signing of the Securities Purchase Agreement, which was funded on March 21, 2023, (ii) $7.5 million upon the filing of a registration statement on Form S-1 with the SEC to register the resale by Yorkville of any shares of Common Stock issuable upon conversion of the Convertible Debentures under the Securities Act and (iii) $7.5 million at the time such registration statement is declared effective by the SEC.
Debt interest rate	7.00%
Debt maturity date	Dec. 21, 2023
Debt conversion price	$ 8.00
Debt Instrument Principal Amount, Percentage	5.00%
Debt payment terms		The Company has the option to repay either (i) in cash, with premium equal to 5% in respect of the principal amount of such payment, or (ii) by submitting a notice under the A&R Yorkville Purchase Agreement, or a series of Yorkville advances, or any combination of (i) or (ii) as determined by the Company. In case of (ii), the proceeds from the shares sold to Yorkville are applied against the outstanding amounts.
Convertible Debentures Issued Percent	96.00%
Redemption Premium		10.00%
Tranche One \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Principle amount of issued debt	$ 10,000,000.0
Tranche Two \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Principle amount of issued debt	7,500,000
Tranche Three \| Securities Purchase Agreement [Member]
Debt Instrument [Line Items]
Principle amount of issued debt	$ 7,500,000

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value assets measured on a recurring basis

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the level of inputs used in such measurements (in thousands):


	March 31, 2023
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Convertible Debentures	$	9,600	$	—	$	—	$	9,600
Derivative liabilities		6,484		—		—		6,484
Other long-term liabilities		168		—		—		168
Total liabilities measured at fair value	$	16,252	$	—	$	—	$	16,252


	December 31, 2022
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Derivative liabilities	$	1,231	$	—	$	—	$	1,231
Other long-term liabilities		163		—		—		163
Total liabilities measured at fair value	$	1,394	$	—	$	—	$	1,394

Schedule of the derivative liabilities measured at fair value using significant unobservable inputs Level 3

The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the three months ended March 31, 2023 (in thousands):


	Fair Value
Ending Balance as of December 31, 2022	$	1,231
Change in fair value measurement		5,253
Ending Balance as of March 31, 2023	$	6,484

Schedule of quantitative information regarding Level 3 fair value measurements

A summary of the inputs used in valuing the derivative warrant liabilities is as follows:


	March 31,			December 31,
	2023			2022
Equity value	$	8.20		$	3.99
Exercise price	$	11.50		$	11.50
Term, in years		4.61			4.86
Volatility		30.0	%		35.0	%
Risk-free rate		3.61	%		3.94	%
Dividend yield		0.0	%		0.0	%
Call option value	$	1.58		$	0.30

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

+ References + Details

Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and equipment

Property and equipment, net consists of the following (in thousands):


	March 31,			December 31,
	2023			2022
Construction in progress	$	689		$	689
Furniture		118			118
Computers and equipment		77			77
Leasehold improvements		55			55
Property and equipment, gross		939			939
Less: Accumulated depreciation		(177	)		(167	)
Property and equipment, net	$	762		$	772

Accrued expenses Textblock

Accrued expenses consists of the following (in thousands):


	March 31,		December 31,
	2023		2022
Accrued professional service fees	$	3,405	$	2,024
Accrued sales and marketing costs		1,525		574
Accrued research and development costs		789		459
Accrued others		960		79
Accrued expenses	$	6,679	$	3,136

Acquisitions (Additional Information) (Details) - USD ($) $ in Thousands			3 Months Ended
	Jun. 14, 2022	May 31, 2022	Mar. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Payment to acquire license			$ 0
Common Stock, Value, Issued			$ 15	$ 14
Common Stock, Shares, Issued			145,811,298	141,348,856
Patents [Member] \| Sorrento [Member]
Business Acquisition [Line Items]
Payment upon the achievement of net sales		$ 20,000
Amount due for New Drug Application		$ 3,000
License Agreement
Business Acquisition [Line Items]
Development milestones payment was recognized under other long-term liabilities			$ 200	$ 200
License Agreement \| Romeg License Agreement [Member]
Business Acquisition [Line Items]
Up-front license fee	$ 2,000
Payment upon the achievement of net sales	13,000
Payments for royalties	7,100
Intangible asset	5,700
Deferred consideration	$ 3,700
Contingent consideration, liability			$ 0	$ 0

Fair Value Measurements (Details) - Schedule of quantitative information regarding Level 3 fair value measurements - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Options per share fair value	$ 18.00
Term (in years)	4 years 7 months 9 days	4 years 10 months 9 days

Fair Value Measurements (Details) - Schedule of fair value assets measured on a recurring basis - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Assets:
Cash and cash equivalents	$ 5,069	$ 2,184
Liabilities:
Convertible debenture	$ 9,600
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Derivative Liability, Noncurrent	Derivative Liability, Noncurrent
Derivative liabilities	$ 6,484	$ 1,231
Other long-term liabilities	168	163
Total liabilities measured at fair value	16,252	1,394
Level 1 [Member]
Liabilities:
Convertible debenture	0
Derivative liabilities	0	0
Other long-term liabilities	0	0
Total liabilities measured at fair value	0	0
Level 2 [Member]
Liabilities:
Convertible debenture	0
Derivative liabilities	0	0
Other long-term liabilities	0	0
Total liabilities measured at fair value	0	0
Level 3 [Member]
Liabilities:
Convertible debenture	9,600
Derivative liabilities	6,484	1,231
Other long-term liabilities	168	163
Total liabilities measured at fair value	$ 16,252	$ 1,394

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Components of Lease Expense

The lease expense was $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively, and included variable lease costs, sublease income and impairment, which were immaterial for the periods presented.

Schedule of Leases Supplemental Quantitative Information

Supplemental quantitative information related to leases includes the following:


	Three Months Ended March 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	(216	)	$	(167	)
Weighted average remaining lease term in years — operating leases		1.4			2.6
Weighted average discount rate — operating leases		11.8	%		12.2	%

Schedule of Lease Maturities of Lease Liabilities

Approximate future minimum lease payments under operating leases were as follows (in thousands):


	Amount
2023 (Remainder of 2023)	$	656
2024		703
2025		—
2026		—
2027		—
Total lease payments		1,359
Less imputed interest		(125	)
Total lease liabilities		1,234
Less current portion of lease liability		773
Lease liability, net of current portion	$	461

Restatement of Previously Issued Financial Statements (Details) - Schedule of impact of these adjustments to the financial statement, as previously reported - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Condensed Financial Statements, Captions [Line Items]
Warrant Liability	$ 6,484	$ 1,231
Total Liabilities	74,975	50,288
Ordinary Shares	15	14
Additional Paid-in Capital	417,725	412,136
Accumulated Deficit	(406,667)	(375,914)
Total Shareholders’ Equity (Deficit)	$ 11,076	$ 36,239

- Definition

Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Summary of Significant Accounting Policies (Details) - Schedule of the calculation of basic and diluted net income per ordinary share - $ / shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Weighted average number of shares and assumed conversions - diluted	141,660,000	133,026,000
Net loss per share attributable to common stockholders - diluted	$ (0.22)	$ (0.07)
Denominator:
Weighted average number of shares outstanding - basic	141,660,000	133,026,000
Basic net income (loss) per ordinary share	$ (0.22)	$ (0.07)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Goodwill and Intangible Assets - Summary of identifiable intangible assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 60,781	$ 60,781
Accumulated amortization	21,217	20,190
Intangibles, net	39,564	40,591
Patent rights
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	32,630	32,630
Accumulated amortization	13,959	13,415
Intangibles, net	18,671	19,215
Acquired technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	21,940	21,940
Accumulated amortization	6,582	6,216
Intangibles, net	15,358	15,724
Acquired licenses
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	5,711	5,711
Accumulated amortization	276	184
Intangibles, net	5,435	5,527
Assembled workforce
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	500	500
Accumulated amortization	400	375
Intangibles, net	$ 100	$ 125

Balance Sheet Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 939	$ 939
Less: Accumulated depreciation	(177)	(167)
Property and equipment, net	762	772
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	689	689
Furniture [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	118	118
Computers & equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	77	77
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 55	$ 55

Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

13. Subsequent Events

The Company has evaluated subsequent events for recognition and disclosure purposes in the unaudited condensed consolidated financial statements as of March 31, 2023. Except as described below, or as otherwise indicated in the footnotes, the Company has concluded that no events or transactions have occurred that require disclosure.

Pursuant to the Securities Purchase Agreement with Yorkville, the Company issued additional Convertible Debentures in an aggregate principal amount of $15.0 million in April 2023 for $14.4 million in net cash proceeds. The Convertible Debentures bear interest at an annual rate of 7.0% and will mature on December 21, 2023. In April 2023, Yorkville elected to convert $5.0 million of the outstanding principal and accrued interest of the first Convertible Debentures issued to Yorkville, resulting in the issuance of 632,431 shares of Common Stock at a conversion price of $8.00 per share.

In April 2023, the Company modified the lease term for its principal executive offices located in Palo Alto, California. The modification extended the lease term for an additional three years, with the lease term expiring in September 2027.

On May 4, 2023, the Company’s stockholders approved the amendment to the Equity Incentive Plan to (i) increase the number of shares authorized for issuance thereunder by 10,000,000 shares from 20,276,666 shares to 30,276,666 shares, (ii) increase the number of shares authorized for issuance thereunder pursuant to the exercise of ISOs to 30,276,666 shares, and (iii) modify the commencement date of the automatic increase in the number of shares authorized for issuance thereunder pursuant to the exercise of ISOs to January 1, 2024.

Loss Per Share - potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share (Details) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	48,004,805	27,943,081
Convertible Debentures
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,250,000	0
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	31,751,018	16,939,093
Public Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,899,787	6,899,988
Private Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,104,000	4,104,000
Retainer Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,000,000	0

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 5,069	$ 2,184
Accounts receivable, net	19,244	21,236
Inventory	2,275	1,378
Prepaid expenses and other	4,516	4,810
Total current assets:	31,104	29,608
Property and equipment, net	762	772
Operating lease right-of-use asset	987	1,131
Intangibles, net	39,564	40,591
Goodwill	13,481	13,481
Other long term assets	153	944
Total assets	86,051	86,527
Current liabilities:
Accounts payable	9,817	8,450
Accrued payroll	1,713	1,354
Accrued rebates and fees	35,629	30,893
Accrued expenses	6,679	3,136
Current portion of deferred consideration	391	264
Convertible debentures	9,600	0
Current portion of operating lease liabilities	773	745
Total current liabilities:	64,602	44,842
Long-term portion of deferred consideration	3,260	3,387
Derivative liabilities	6,484	1,231
Operating lease liabilities	461	665
Other long-term liabilities	168	163
Total liabilities	74,975	50,288
Commitments and contingencies (See Note 10)
Stockholders' Deficit:
Preferred stock, $0.0001 par value, 45,000,000 shares authorized; 29,057,097 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	3	3
Common stock, $0.0001 par value, 740,000,000 shares authorized; 145,811,298 and 141,348,856 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	15	14
Additional paid-in capital	417,725	412,136
Accumulated deficit	(406,667)	(375,914)
Total stockholders' equity	11,076	36,239
Total liabilities and stockholders' equity	$ 86,051	$ 86,527

Nature of Operations and Basis of Presentation (Additional Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Description of Organization and Business Operations (Details) [Line Items]
Receivables	$ 3,200
Shares issued, shares	250,000
Prepaid expenses and other	$ 4,516	$ 4,810
Customer Concentration Risk [Member]
Description of Organization and Business Operations (Details) [Line Items]
Percentage of net revenue, sole distributor	10.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	82.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Minimum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	20.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| Maximum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	32.00%
Customer Concentration Risk [Member] \| Accounts Receivable [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	93.00%
Customer Concentration Risk [Member] \| Accounts Receivable [Member] \| Minimum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	21.00%
Customer Concentration Risk [Member] \| Accounts Receivable [Member] \| Maximum [Member] \| Three Customers [Member]
Description of Organization and Business Operations (Details) [Line Items]
Concentration risk, percentage	37.00%

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net loss	$ (30,753)	$ (9,143)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	1,037	944
Amortization of debt issuance costs and debt discount	0	1,852
Payment on the Scilex Pharma Notes attributed to accreted interest related to the debt discount	0	(6,368)
Loss on debt extinguishment, net	0	4,799
Non-cash operating lease cost	144	99
Stock-based compensation	3,720	1,355
Loss (gain) on derivative liability	5,253	(7,500)
Changes in operating assets and liabilities:
Accounts receivables, net	1,992	(1,144)
Inventory	(897)	622
Prepaid expenses and other	294	(3,324)
Other long-term assets	997
Accounts payable	2,001	533
Accrued Payroll	359	405
Accrued expenses	3,543	2,436
Accrued rebates and fees	4,736	0
Other liabilities	(175)	(12)
Related party payable	0	3,715
Other long-term liabilities	5	0
Net cash used for operating activities	(7,744)	(10,731)
Financing activities
Proceeds from issuance of shares under Standby Equity Purchase Agreements	1,663	0
Proceeds from issuance of Convertible debentures	9,600	0
Transaction costs paid related to the Business Combination	(634)	0
Repayment of principal on the Scilex Pharma Notes	0	(15,217)
Repayment on other loans	0	(18,788)
Proceeds from other loans		9,869
Proceeds from stock options exercised	0	96
Proceeds from related party payable	0	1,500
Proceeds from related party note payable	0	62,500
Net cash proceeds from financing activities	10,629	39,960
Net change in cash and cash equivalents	2,885	29,229
Cash and cash equivalents at beginning of period	2,184	4,338
Cash and cash equivalents at end of period	5,069	33,567
Supplemental disclosure of non-cash financing activity
Issuance of shares to B.Riley pursuant to B. Riley Purchase Agreement	$ 1,869	$ 0

Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the level of inputs used in such measurements (in thousands):


	March 31, 2023
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Convertible Debentures	$	9,600	$	—	$	—	$	9,600
Derivative liabilities		6,484		—		—		6,484
Other long-term liabilities		168		—		—		168
Total liabilities measured at fair value	$	16,252	$	—	$	—	$	16,252


	December 31, 2022
	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities
Derivative liabilities	$	1,231	$	—	$	—	$	1,231
Other long-term liabilities		163		—		—		163
Total liabilities measured at fair value	$	1,394	$	—	$	—	$	1,394

Convertible Debentures

In March 2023, the Company issued the Convertible Debentures in the principal amount of $10.0 million (see Note 7). The fair value as of March 31, 2023 was based on the cash proceeds at issuance.

Derivative Liabilities

The Company recorded a loss of $5.3 million and gain of $7.5 million on derivative liabilities for the three months ended March 31, 2023 and 2022, respectively, which was attributed to the private placement warrants that the Company assumed from Vickers in November 2022 in connection with the Business Combination (“Private Warrants”), and compound derivative liabilities associated with the senior secured notes issued by Scilex Pharma in September 2018 (the “Scilex Pharma Notes”), respectively. At the closing of the Business Combination in November 2022, the Company assumed a derivative warrant liability of $2.5 million related to Private Warrants. The fair value of derivative warrant liability related to Private Warrants was $6.5 million as of March 31, 2023.


	Fair Value
Ending Balance as of December 31, 2022	$	1,231
Change in fair value measurement		5,253
Ending Balance as of March 31, 2023	$	6,484

Warrant Liability Measurement

The derivative warrant liability was valued using the Black-Scholes option pricing model, which is considered to be Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the warrant is the expected volatility of the Common Stock. The expected volatility assumption is based on historical volatilities of comparable companies whose share prices are publicly available as well as the implied volatility of the Public Warrants, described in Note 8 of the Notes to Consolidated Financial Statements in the Annual Report on Form 10-K. A summary of the inputs used in valuing the derivative warrant liabilities is as follows:


	March 31,			December 31,
	2023			2022
Equity value	$	8.20		$	3.99
Exercise price	$	11.50		$	11.50
Term, in years		4.61			4.86
Volatility		30.0	%		35.0	%
Risk-free rate		3.61	%		3.94	%
Dividend yield		0.0	%		0.0	%
Call option value	$	1.58		$	0.30

Contingent Consideration Related to SP-104 Acquisition

The Development Milestone Payment related to the SP-104 Assets represents an obligation to potentially settle a fixed value in a variable number of shares of Common Stock and requires remeasurement at fair value through settlement.

Upon the achievement of FDA approval for a new drug application for SP-104, the Company will transfer $3.0 million in cash or shares of Common Stock, at the discretion of the Company. The fair value of the contingent consideration liability associated with Development Milestone Payment was estimated using a probability-weighted discounted cash flow method. Significant unobservable inputs assumptions included the likelihood of receiving FDA approval for SP-104, expected timing for receipt of FDA approval for SP-104, and a discount rate of 9.6%. As of March 31, 2023, the fair value of contingent consideration related to the Development Milestone Payment was $0.2 million.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Loss Per Share - Schedule of the reconciliation of basic and diluted loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net loss for basic loss per share available to common stockholders	$ (30,753)	$ (9,143)
Net loss for diluted loss per share available to common stockholders	$ (30,753)	$ (9,143)
Weighted average number of shares outstanding - basic	141,660,000	133,026,000
Weighted average number of shares and assumed conversions - diluted	141,660,000	133,026,000
Basic Loss Per Share	$ (0.22)	$ (0.07)
Diluted Loss Per Share	$ (0.22)	$ (0.07)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders.

+ References + Details

Income Taxes (Additional Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Line Items]
Income tax (benefit) expense	$ 8	$ 3

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Balance Sheet Components - Schedule of Acrcued expenses - Details (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Accrued professional service fees	$ 3,405	$ 2,024
Accrued sales and marketing costs	1,525	574
Accrued research and development costs	789	459
Accrued others	960	79
Accrued expenses	$ 6,679	$ 3,136

Subsequent Events (Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	May 04, 2023	Apr. 01, 2023	Mar. 31, 2023	Mar. 31, 2022
Subsequent Event [Line Items]
Proceeds from convertible debt			$ 9,600	$ 0
Shares issued, shares			250,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Debt principal amount		$ 15,000
Proceeds from convertible debt		$ 14,400
Debt interest rate		7.00%
Debt maturity date		Dec. 21, 2023
Common Stock at a conversion price		$ 8.00
Cnvertible debenture to number of common stock		632,431
Additional principal amount		$ 5,000
Subsequent Event [Member] \| Equity Incentive Plan [Member]
Subsequent Event [Line Items]
Number of shares authorized before increment under the plan	20,276,666
Increase number of shares authorized for issuance	10,000,000
Number of shares authorized under the plan	30,276,666

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 09, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity File Number	001-39852
Entity Central Index Key	0001820190
Entity Tax Identification Number	92-1062542
Entity Registrant Name	Scilex Holding Company
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	960 San Antonio Road
Entity Address, City or Town	Palo Alto
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94303
City Area Code	650
Local Phone Number	516-4310
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	SCLX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		146,489,207

Stock Incentive and Employee Benefit Plans - Schedule of Stock Options Outstanding Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Options Outstanding, Beginning Balance	16,939
Options Outstanding, Granted	14,820
Options Outstanding, Forfeited/Cancelled	(8)
Options Outstanding, Ending Balance	31,751	16,939
Options Outstanding, Exercisable	16,078
Weighted Average Exercise Price, Outstanding, Beginning Balance	$ 1.68
Weighted Average Exercise Price, Granted	8.08
Weighted Average Exercise Price, Forfeited/Cancelled	3.55
Weighted Average Exercise Price, Outstanding, Ending Balance	4.67	$ 1.68
Weighted Average Exercise Price, Exercisable	$ 1.93
Outstanding, Weighted-average Remaining Contractual Life, (in Years)	8 years	7 years
Exercisable, Weighted-average Remaining Contractual Life, (in Years)	6 years 4 months 24 days
Aggregate Intrinsic Value, Outstanding	$ 112,019	$ 38,942
Aggregate Intrinsic Value, Exercisable	$ 100,773

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

10. Commitments and Contingencies

Product Development Agreement

In February 2013, Scilex Pharma became a party to a product development agreement (as amended, the “Product Development Agreement”) with Itochu and Oishi Koseido Co., Ltd. (“Oishi,” and together with Itochu, the “Developers”), pursuant to which the Developers will manufacture and supply lidocaine tape products, including ZTlido and SP-103 (the “Products”), for Scilex Pharma. The Developers initially developed and have intellectual property rights relating to the Products. Pursuant to the Product Development Agreement, Scilex Pharma acquired an exclusive right to develop and commercialize the Products worldwide except for Japan. The Developers are responsible for sourcing and supplying lidocaine for development and commercialization purposes.

Pursuant to the Product Development Agreement, Scilex Pharma is required to make aggregate royalty payments between 25% and 35% to the Developers based on net profits. For the three months ended March 31, 2023, Scilex Pharma made royalty payments in the amount of $2.2 million. As of March 31, 2023 and December 31, 2022, Scilex Pharma had ending balances of accrued royalty payables of $2.1 million and $2.2 million, respectively. Net profits are defined as net sales, less cost of goods and marketing expenses. Net sales are defined as total gross sales of any Product, less all applicable deductions, to the extent accrued, paid or allowed in the ordinary course of business with respect to the sale of such Product, and to the extent that they are in accordance with GAAP. If Scilex Pharma were to sublicense the licensed technologies, the Developers will receive the same proportion of any sublicensing fees received therefrom. The Product Development Agreement will continue in full force and effect until October 2, 2028, the date that is ten years from the date of the first commercial sale of ZTlido. The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon 6-month written notice.

On February 16, 2017, Scilex Pharma entered into a Commercial Supply Agreement (as amended, the “Supply Agreement”) with the two Developers to provide commercial supply of ZTlido and SP-103 to Scilex Pharma. The Supply Agreement contains standard terms regarding term, termination, payment, product quality and supply. In addition, the agreement provides additional terms regarding the calculation and amount of marketing expenses that may be deducted from net sales for purposes of determining the amount of net profit under the Product Development Agreement.

Litigation

In the normal course of business, the Company may be named as a defendant in one or more lawsuits. Other than the following three lawsuits, the Company is not a party to any outstanding material litigation and management is not aware of any legal proceedings that, individually or in the aggregate, are deemed to be material to the Company’s financial condition or results of operations.

From time to time the Company may become involved in various legal proceedings, including those that may arise in the ordinary course of business.

Sanofi-Aventis U.S. LLC and Hisamitsu America, Inc. Litigation

On February 23, 2021, the Company filed an action in the U.S. District Court for the Northern District of California against Sanofi-Aventis U.S. LLC and Hisamitsu America, Inc., two manufacturers of over-the-counter (“OTC”) lidocaine patch products, alleging, among other things, false and deceptive advertising and unfair competition under the Lanham Act and California state laws by those companies regarding their respective OTC patch products (the “Sanofi-Aventis & Hisamitsu Litigation”). This lawsuit seeks, among other relief, damages and an injunction enjoining the defendants from continuing to make false or misleading statements of fact about their respective OTC lidocaine patch products. The defendants have filed motions to dismiss, which have narrowed slightly the Company's claims, but which motions the court has largely rejected. Discovery is proceeding. The case is currently scheduled for trial to begin in December 2023. The Company cannot make any predictions about the outcome in this matter or the timing thereof.

Former Employee Litigation

On March 12, 2021, the Company filed an action in the Delaware Court of Chancery against Anthony Mack, former President of Scilex Pharma, and Virpax Pharmaceuticals, Inc. (“Virpax”), a company now headed by Mr. Mack, alleging, among other things, breach by Mr. Mack of his non-compete agreement with the Company, breach of fiduciary duty, and tortious interference by Virpax with that non-compete agreement (the “Former Employee Litigation”). This lawsuit seeks, among other relief, damages and an injunction enjoining Mr. Mack from further violating his non-compete agreement and enjoining Virpax from tortiously interfering with Mr. Mack’s non-compete agreement. The case was tried from September 12, 2022 to September 14, 2022. Post-trial briefing and closing arguments have been concluded and the case is under submission to the Court. The Company cannot make any predictions about the outcome in this matter or the timing thereof.

ZTlido Patent Litigation

On June 22, 2022, the Company filed a complaint against Aveva Drug Delivery Systems, Inc., Apotex Corp., and Apotex, Inc. (together, “Apotex”) in the U.S. District Court for the Southern District of Florida (the “ZTlido Patent Litigation”) alleging infringement of certain Orange Book listed patents covering ZTlido (the “ZTlido Patents”). The ZTlido Patent Litigation was initiated following the submission by Apotex, in accordance with the procedures set out in the Hatch-Waxman Act, of an abbreviated new drug application (“ANDA”). Apotex’s ANDA seeks approval to market a generic version of ZTlido prior to the expiration of the ZTlido Patents and alleges that the ZTlido Patents are invalid, unenforceable, and/or not infringed. The Company is seeking, among other relief, an order that the effective date of any FDA approval of Apotex’s ANDA be no earlier than the expiration of the asserted patents listed in the Orange Book, the latest of which expires on May 10, 2031, and such further and other relief as the court may deem appropriate. Apotex is subject to a 30-month stay preventing it from selling a generic version of ZTlido during that time. The stay should expire no earlier than November 11, 2024. Trial in the ZTlido Patent Litigation has been scheduled for June 3, 2024. The Company cannot make any predictions about the final outcome of this matter or the timing thereof.

Operating Leases

The Company leases administrative and research and development facilities under various non-cancelable lease agreements. Facility leases generally provide for periodic rent increases and may include options to extend. As of March 31, 2023, the Company’s leases have remaining lease terms of approximately 1.3 to 1.6 years. The terms of the Company’s leases, ranging from 3 to 5 years, include extension options that were not reasonably certain to be exercised. Many of the Company’s leases are subject to variable lease payments. Variable lease payments are recognized in the period in which the obligations for those payments are incurred, are not included in the measurement of the right-of-use (“ROU”) assets or lease liabilities, and are immaterial. Additionally, the Company subleases certain properties to third parties. Sublease income is recognized on a straight-line basis and is immaterial.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company calculates the associated lease liability and corresponding ROU asset upon lease commencement using a discount rate

based on a credit-adjusted secured borrowing rate commensurate with the term of the lease. As of March 31, 2023, the Company has no finance leases.

Supplemental quantitative information related to leases includes the following:


	Three Months Ended March 31,
	2023			2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (in thousands)	$	(216	)	$	(167	)
Weighted average remaining lease term in years — operating leases		1.4			2.6
Weighted average discount rate — operating leases		11.8	%		12.2	%

Approximate future minimum lease payments under operating leases were as follows (in thousands):


	Amount
2023 (Remainder of 2023)	$	656
2024		703
2025		—
2026		—
2027		—
Total lease payments		1,359
Less imputed interest		(125	)
Total lease liabilities		1,234
Less current portion of lease liability		773
Lease liability, net of current portion	$	461

Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions

11. Related Party Transactions

As of March 31, 2023, the Company had a $3.2 million receivable from Sorrento, which was fully reserved. The Company will evaluate the collectability of this receivable on a quarterly basis going forward.

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	45,000,000	45,000,000
Preferred stock, shares issued	29,057,097	29,057,097
Preferred stock, shares outstanding	29,057,097	29,057,097
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	740,000,000	740,000,000
Common stock, shares issued	145,811,298	141,348,856
Common stock, shares outstanding	145,811,298	141,348,856

Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

As of March 31, 2023 and December 31, 2022, the Company had recorded goodwill of $13.5 million. No goodwill impairment was recognized for the three months ended March 31, 2023 and 2022.

Amortization of the intangible assets that have finite useful lives is generally recorded on a straight-line basis over their useful lives. A summary of the Company’s identifiable intangible assets as of March 31, 2023 and December 31, 2022 is as follows (in thousands):


	March 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	13,959	$	18,671
Acquired technology		21,940		6,582		15,358
Acquired licenses		5,711		276		5,435
Assembled workforce		500		400		100
Total intangible assets	$	60,781	$	21,217	$	39,564


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	13,415	$	19,215
Acquired technology		21,940		6,216		15,724
Acquired licenses		5,711		184		5,527
Assembled workforce		500		375		125
Total intangible assets	$	60,781	$	20,190	$	40,591

As of March 31, 2023, the weighted average remaining life for identifiable intangible assets was 10.2 years. Aggregate amortization expense was $1.0 million and $0.9 million for the three months ended March 31, 2023 and 2022, respectively.

Estimated future amortization expense related to intangible assets as of March 31, 2023 is as follows (in thousands):


	Amount
2023 (Remainder of 2023)	$	3,079
2024		4,031
2025		4,006
2026		4,006
2027		4,006
Thereafter		20,436
Total	$	39,564

Stock Incentive and Employee Benefit Plans

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock Incentive and Employee Benefit Plans

9. Stock Incentive and Employee Benefit Plan

2017 Scilex Pharmaceuticals Inc. Equity Incentive Plan

In June 2017, the Board of Directors of the Company adopted the Scilex Pharmaceuticals Inc. Equity Incentive Plan (the “Scilex Pharma 2017 Plan”). In connection with the corporate reorganization in March 2019, the Scilex Pharma 2017 Plan was terminated. Accordingly, after such time, no additional awards were granted under the Scilex Pharma 2017 Plan.

Scilex Holding Company 2019 Stock Option Plan

In May 2019, the Board of Directors of the Company adopted the Scilex Holding Company 2019 Stock Option Plan (the “2019 Stock Option Plan”) which subsequently was amended in December 2020. The 2019 Stock Option Plan was terminated at the closing of the Business Combination, and no further awards have been granted under the 2019 Stock Option Plan thereafter. However, the 2019 Stock Option Plan will continue to govern outstanding awards granted thereunder.

Scilex Holding Company 2022 Equity Incentive Plan

In October 2022, the Board of Directors of the Company adopted the Scilex Holding Company 2022 Equity Incentive Plan (the “Equity Incentive Plan”). The total number of shares of Common Stock for which incentive stock options (“ISOs”) may be granted under the Equity Incentive Plan is not to exceed 20,276,666 shares which was increased from 14,622,712 as a result of the automatic annual increase on January 1, 2023 pursuant to the Equity Incentive Plan provisions.

As of March 31, 2023, options to purchase 31,751,018 shares of Common Stock were outstanding under all equity incentive plans.

Scilex Holding Company 2023 Inducement Plan

On January 17, 2023, the compensation committee of the Board of Directors of the Company adopted the Scilex Holding Company 2023 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity-based awards in the form of non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, and other awards solely to prospective employees of the Company or an affiliate of the Company provided that certain criteria are met. The initial maximum number of shares available for grant under the Inducement Plan is 1,400,000 shares of Common Stock (subject to adjustment for recapitalizations, stock splits, reorganizations and similar transactions). No awards were granted under the Inducement Plan during the three months ended March 31, 2023.

Option Valuation

The Company calculates the fair value of stock-based compensation awards granted to employees and nonemployees using the Black-Scholes option-pricing method. The Black-Scholes option-pricing method requires the use of subjective assumptions, including stock price volatility, the expected life of stock options, risk free interest rate and the fair value per share of the underlying Common Stock on the date of grant. The assumptions used in the Black-Scholes option-pricing method related to options issued to employees and nonemployees for the three months ended March 31, 2023 are set forth below:


		Three Months Ended
		March 31, 2023
Expected dividend yield		0.00%
Expected stock-price volatility		40.00%
Risk-free interest rate		3.59% - 3.91%
Term of options		6.25
Fair value per share of common stock on date of grant		$ 7.27 - $ 8.08
Exercise price		$ 7.27 - $ 8.08

The following table summarizes stock option activity during the three months ended March 31, 2023 (shares in thousands):


	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life, in years		Aggregate Intrinsic Value
Outstanding as of December 31, 2022		16,939		$	1.68		7.0	$	38,942
Granted		14,820		$	8.08
Forfeited/Cancelled		(8	)	$	3.55
Outstanding as of March 31, 2023		31,751		$	4.67		8.0	$	112,019
Exercisable as of March 31, 2023		16,078		$	1.93		6.4	$	100,773

Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the Common Stock for the options that had exercise prices that were lower than the per share fair value of the Common Stock as of the measurement date of the intrinsic value. The weighted-average grant date fair value per share of stock options granted during the three months ended March 31, 2023 was $3.66 per share. No options were exercised during the three months ended March 31, 2023.

Total stock-based compensation recorded within operating expenses was $3.7 million and $1.4 million for the three months ended March 31, 2023 and 2022, respectively.

The total unrecognized compensation costs related to unvested employee and non-employee stock option grants as of March 31, 2023 was $53.0 million, which the Company expects to recognize over a weighted-average period of approximately 3.6 years.

Scilex Holding Company 2022 Employee Stock Purchase Plan

On October 17, 2022, the Board of Directors of the Company adopted the Scilex Holding Company 2022 Employee Stock Purchase Plan (the “ESPP”).

As of March 31, 2023, the total number of shares of the Common Stock that may be issued under the ESPP shall not exceed 2,875,759, which was increased from 1,462,271 shares as a result of automatic annual increase on January 1, 2023. As of March 31, 2023, there were no shares of Common Stock issued under the ESPP.

Employee Benefit Plan

The Company maintains a defined contribution 401(k) plan available to eligible employees, which is administered by Sorrento. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company made matching contributions to the 401(k) plan totaling $0.1 million for each of the three months ended March 31, 2023 and 2022, respectively.

Retainer Shares

On February 13, 2023, the Company entered into a Stock Issuance Agreement (the “SIA”) with a law firm for the provision of legal services to the Company. Under the SIA, the Company issued 4,000,000 shares of Common Stock

to the law firm (the “Retainer Shares”). The Retainer Shares are held by the law firm as collateral for the current and future outstanding legal fees due from the Company.

At the option of the law firm, the Retainer Shares may be sold and the net proceeds may be applied against the outstanding legal fees. The Retainer Shares not applied against the outstanding legal fees due will be returned to the Company.

As of March 31, 2023, it was not probable that any of the Retainer Shares would be applied against any outstanding legal fees and the aggregate amount of $2.5 million due by the Company to the law firm was included in accounts payable in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2023. The outstanding balance due was paid in full in April 2023.

Shareholders' Equity (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Nov. 17, 2022	Mar. 31, 2023	Dec. 31, 2022
Shareholders' Equity (Details) [Line Items]
Common stock, shares issued		145,811,298	141,348,856
Share price		$ 18.00
Price per warrant		$ 0.01
Warrants outstanding		6,899,787	6,899,988
Shares issued, shares		250,000
Common Stock, Value, Issued		$ 15	$ 14
Common Stock [Member]
Shareholders' Equity (Details) [Line Items]
Price per warrant		$ 11.50
A R Yorkville Purchase Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Purchase of stock, percentage		98.00%
Common stock sold		85,000
Proceeds from sale of common stock		$ 600
Right to sell maximum number of common stock shares	$ 500,000	$ 500,000
A R Yorkville Purchase Agreement [Member] \| Common Stock [Member]
Shareholders' Equity (Details) [Line Items]
Shares issued, shares			250,000
B. Riley Purchase Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Common stock, shares issued		250,000
Purchase of stock, percentage		98.00%
Common stock sold		127,241
Proceeds from sale of common stock		$ 1,000
Right to sell maximum number of common stock shares	$ 500,000
Warrants [Member] \| Warrant Transfer Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Warrants outstanding		4,104,000	4,104,000
Warrants [Member] \| Warrant Transfer Agreement [Member] \| Sponsor [Member]
Shareholders' Equity (Details) [Line Items]
Warrants outstanding		1,000,000	1,000,000
Warrants [Member] \| Warrant Transfer Agreement [Member] \| Sorrento Therapeutics, Inc. [Member]
Shareholders' Equity (Details) [Line Items]
Warrants outstanding		3,104,000	3,104,000

Commitments and Contingencies - Schedule of Lease Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
2023 (Remainder of 2023)	$ 656
2024	703
2025	0
2026	0
2027	0
Total lease payments	1,359
Less imputed interest	(125)
Total lease liabilities	1,234
Less current portion of lease liability	773	$ 745
Lease liability, net of current portion	$ 461

Fair Value Measurements (Details) - Schedule of The Inputs Used In Valuing The Derivative Warrant Liabilities - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Schedule of derivative component of the obligation is initially valued and classified as a derivative liability [Abstract]
Equity Value	$ 8.20	$ 3.99
Exercise price	$ 11.50	$ 11.50
Term (in years)	4 years 7 months 9 days	4 years 10 months 9 days
Volatility	30.00%	35.00%
Risk-free rate	3.61%	3.94%
Dividend yield	0.00%	0.00%
Call option value	$ 1.58	$ 0.30

Related Party Transactions (Additional Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Apr. 01, 2023	Dec. 31, 2022
Related Party Transactions (Details) [Line Items]
Shares issued, shares	250,000
Additional amount borrowed	$ 417,725		$ 412,136
Subsequent Event [Member]
Related Party Transactions (Details) [Line Items]
Initial principal amount		$ 15,000
Sorrento [Member]
Related Party Transactions (Details) [Line Items]
Accounts receivable	$ 3,200

Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Nature of Operations and Basis of Presentation

1. Nature of Operations and Basis of Presentation

Organization and Principal Activities

Scilex Holding Company (“Scilex” and together with its wholly owned subsidiaries, the “Company”) is the successor entity to Vickers Vantage Corp. I (“Vickers”), a special purpose acquisition company. The Company is an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain. The Company was originally formed in 2019 and is a majority-owned subsidiary of Sorrento Therapeutics, Inc. (“Sorrento”). Scilex currently has three wholly owned subsidiaries, Scilex Inc. (“Legacy Scilex”), Scilex Pharmaceuticals Inc. (“Scilex Pharma”) and Semnur Pharmaceuticals, Inc. (“Semnur”). The business combination with Vickers (“Business Combination”) was closed in November 2022.

The Company launched its first commercial product in October 2018, ZTlido (lidocaine topical system) 1.8% (“ZTlido”), a prescription lidocaine topical system that is designed with novel technology to address the limitations of current prescription lidocaine therapies by providing significantly improved adhesion and continuous pain relief throughout the 12-hour administration period. The Company in-licensed the exclusive right to commercialize GLOPERBA (colchicine USP) oral solution (“GLOPERBA”), a Federal Drug Administration (“FDA”)-approved prophylactic treatment for painful gout flares in adults, in the United States (“U.S.”). In February 2023, the Company acquired the rights related to ELYXYB (celecoxib oral solution) (“ELYXYB”) and the commercialization thereof in the U.S. and Canada. ELYXYB is a first line treatment and the only FDA-approved, ready to use oral solution for the acute treatment of migraine, with or without aura, in adults. In April 2023, the Company launched ELYXYB in the U.S. The Company is planning to commercialize GLOPERBA in the U.S. in 2023.

The Company is currently developing three product candidates, SP-102 (10 mg, dexamethasone sodium phosphate viscous gel), a Phase 3, novel, viscous gel formulation of a widely used corticosteroid for epidural injections to treat lumbosacral radicular pain, or sciatica (“SP-102” or “SEMDEXA”), SP-103 (lidocaine topical system) 5.4% (“SP-103”), for the treatment of acute low back pain, and SP-104 (4.5 mg, low-dose naltrexone hydrochloride delayed-burst release low dose naltrexone hydrochloride capsules) (“SP-104”), a novel formulation for the treatment of fibromyalgia that has completed multiple Phase 1 trial programs and is expected to initiate Phase 2 trials in 2023. Since inception, the Company has devoted substantially all of its efforts to the development of SP-102, SP-103, SP-104, and the commercialization of ZTlido. In 2023, the Company will also devote efforts on the commercialization of GLOPERBA and ELYXYB.

Sorrento Chapter 11 Filing

On February 13, 2023, Sorrento, together with its wholly-owned direct subsidiary, Scintilla Pharmaceuticals, Inc., commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. While the Company is majority-owned by Sorrento, the Company is not a debtor in Sorrento’s voluntary Chapter 11 filing. As of March 31, 2023, the Company had a $3.2 million receivable from Sorrento, which was fully reserved. The Company will evaluate the collectability of this receivable on a quarterly basis going forward.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, include all adjustments of a normal recurring nature necessary to present fairly, in all material respects, the Company’s consolidated financial position,

results of operations and cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on March 7, 2023 (the “Annual Report on Form 10-K”). The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods.

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates.

Customer Concentration Risk

The Company had three customers during the three months ended March 31, 2023, each of which individually generated 10% or more of the Company’s total revenue. These customers accounted for 82% of the Company’s revenue for the three months ended March 31, 2023, individually ranging between 20% to 32%. As of March 31, 2023, these customers represented 93% of the Company’s outstanding accounts receivable, individually ranging between 21% to 37%. Additionally, during the three months ended March 31, 2023 and 2022, the Company purchased inventory from its sole supplier, Itochu Chemical Frontier Corporation (“Itochu”). This exposes the Company to concentration of customer and supplier risk. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses during the three months ended March 31, 2023 and 2022.

Significant Accounting Policies

There have been no significant changes to the accounting policies during the three months ended March 31, 2023, as compared to the significant accounting policies described in Note 1 of the Notes to Consolidated Financial Statements in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K, except for the policy titled “Convertible Debentures” below.

Convertible Debentures

The Company has elected the fair value option to account for the Convertible Debentures (as defined in Note 2 “Liquidity and Going Concern” below) that were issued in March 2023, discussed further in Note 7. The Company recorded the Convertible Debentures at fair value upon issuance with changes in fair value recorded as Change in fair value of convertible debentures in the unaudited Condensed Consolidated Statements of Operations, with the exception of changes in fair value due to instrument-specific credit risk, if any, which are recorded as a component of other comprehensive income. Interest expense related to the Convertible Debentures is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to the Convertible Debentures were expensed as incurred.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022. ASU 2021-08 should be applied prospectively to business combinations occurring on or after the adoption date. The Company adopted this guidance as of January 1, 2023 and the adoption did not have a material impact on the Company's unaudited condensed consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value. Recognizing such a restriction as a separate unit of account is also not permitted. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2023 and the adoption did not have a material impact on the Company's unaudited condensed consolidated financial statements.

Goodwill and Intangible Assets (Additional Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 13,481		$ 13,481
Weighted average remaining life for identifiable intangible assets	10 years 2 months 12 days
Amortization expense	$ 1,027	$ 935

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Shareholders' Equity

3 Months Ended

Mar. 31, 2023

Stockholders' Equity Note [Abstract]

SHAREHOLDERS’ EQUITY

8. Stockholders’ Equity

Public Warrants and Private Warrants

Upon completion of the Business Combination, the Company assumed the Private Warrants and the public warrants to purchase Common Stock (the “Public Warrants”, and together with the Private Warrants, the “Warrants”).

Holders of the Warrants are entitled to acquire shares of Common Stock. The Warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Each Warrant entitles the holder to purchase one share of Common Stock for $11.50 per share.

If the reported last sale price of the Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders, the Company may redeem all the Public Warrants at a price of $0.01 per warrant upon not less than 30 days’ prior written notice.

If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The Company will not be required to net cash settle the Warrants. As of March 31, 2023 and December 31, 2022, there were 6,899,787 and 6,899,988 Public Warrants outstanding, respectively.

As of each of March 31, 2023 and December 31, 2022, there were 4,104,000 Private Warrants outstanding, of which 3,104,000 Private Warrants were held by Sorrento and 1,000,000 Private Warrants were held by Vickers Venture Fund VI Pte Ltd and Vickers Venture Fund VI (Plan) Pte Ltd (collectively, the “Sponsors”).

A&R Yorkville Purchase Agreement

Pursuant to the A&R Yorkville Purchase Agreement, the Company has the right, but not the obligation, in its sole and absolute discretion, to sell to Yorkville up to $500.0 million of shares of Common Stock at its request and subject to certain conditions by delivering written notice to Yorkville at any time until the first day of the month following the 36-month anniversary of the date on which the Company’s registration statement on Form S-1 registering such shares has been declared effective by the SEC. Pursuant to the A&R Yorkville Purchase Agreement, the shares of Common Stock, if any, that the Company elects to sell to Yorkville pursuant to a sale of Common Stock will be purchased at a price equal to 98% of the VWAP (as defined below) during the applicable pricing period for such advance, which shall be the period commencing upon receipt by Yorkville of an advance notice from the Company (or the open of regular trading hours, if later) and ending on 4:00 p.m. on the same day. For purposes of the A&R Yorkville Purchase Agreement, “VWAP” means, for a specified period, the volume weighted average price of the Common Stock on the Nasdaq Capital Market for such period as reported by Bloomberg L.P. through its “AQR” function. Pursuant to the terms of the Original Purchase Agreement, the Company filed a registration statement on Form S-1 (File No. 333-268607) (as it may be amended or supplemented from time to time, the “Yorkville Registration Statement”) related to the Original Purchase Agreement with the SEC on November 30, 2022 (following the execution of the Original Purchase Agreement). The Yorkville Registration Statement was initially declared effective by the SEC on December 9, 2022.

In connection with the execution of the Original Purchase Agreement, the Company issued to Yorkville 250,000 shares of Common Stock. During the three months ended March 31, 2023, the Company sold 85,000 shares of Common Stock pursuant to the A&R Yorkville Purchase Agreement for aggregate net proceeds of $0.6 million.

B. Riley Purchase Agreement

Pursuant to the B. Riley Purchase Agreement, the Company has the right, but not the obligation, to sell to B. Riley up to $500.0 million of shares of Common Stock, subject to certain limitations and conditions set forth therein, from time to time at the Company’s sole and absolute discretion, during the term of the B. Riley Purchase Agreement.

The Company’s right to sell shares of Common Stock pursuant to the B. Riley Purchase Agreement shall end on the first day of the month following the 36-month anniversary of the date on which the B. Riley Registration Statement (as defined below) was initially declared effective by the SEC. Pursuant to the terms of the B. Riley Purchase Agreement, the Company filed a registration statement on Form S-1 (File No. 333-269205) (as it may be amended or supplemented from time to time, the “B. Riley Registration Statement”) related to the B. Riley Purchase Agreement with the SEC on January 12, 2023 (following the execution of the B. Riley Purchase Agreement). The B. Riley Registration Statement was initially declared effective by the SEC on January 20, 2023.

The shares of Common Stock, if any, that the Company elects to sell to B. Riley pursuant to an advance under the B. Riley Purchase Agreement will be purchased at a price equal to 98% of the VWAP (as defined in such agreement) during the pricing period prescribed therein.

In connection with the execution of the B. Riley Purchase Agreement, the Company issued to B. Riley 250,000 shares of Common Stock. Subsequent to the execution of the B. Riley Purchase Agreement and as of March 31, 2023, the Company sold an aggregate of 127,241 shares of Common Stock for aggregate net proceeds of $1.0 million.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-Paragraph 13
-Subparagraph (b)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Commitments and Contingencies (Additional Information) (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Feb. 28, 2013	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Commitments and Contingencies [Line Items]
Finance lease liabilities		$ 0
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]		Derivative Liability, Noncurrent
Lease Expense		$ 200	$ 100
Product Development Agreement [Member] \| Developers [Member]
Commitments and Contingencies [Line Items]
Royalty payments		2,200
Accrued royalty payables		$ 2,100		$ 2,200
Agreement maturity date	Oct. 02, 2028
Agreement maturity renewal description	The Product Development Agreement will renew automatically for subsequent successive one-year renewal periods unless Scilex Pharma or the Developers terminate it upon 6-month written notice.
Product Development Agreement [Member] \| Developers [Member] \| Minimum [Member]
Commitments and Contingencies [Line Items]
Royalty payment percentage related to future years	25.00%
Product Development Agreement [Member] \| Developers [Member] \| Maximum [Member]
Commitments and Contingencies [Line Items]
Royalty payment percentage related to future years	35.00%
Non-cancelable Lease Agreements [Member] \| Minimum [Member] \| Research and Development Facilities [Member]
Commitments and Contingencies [Line Items]
Operating lease, remaining lease term		1 year 3 months 18 days
Operating lease, lease term		3 years
Non-cancelable Lease Agreements [Member] \| Maximum [Member] \| Research and Development Facilities [Member]
Commitments and Contingencies [Line Items]
Operating lease, remaining lease term		1 year 7 months 6 days
Operating lease, lease term		5 years

Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of the reconciliation of basic and diluted loss per share

The following table sets forth the reconciliation of basic and diluted loss per share for the three months ended March 31, 2023 and 2022 (in thousands except per share data):


	Three Months Ended March 31,
	2023			2022
Net loss for basic loss per share available to common stockholders	$	(30,753	)	$	(9,143	)
Net loss for diluted loss per share available to common stockholders	$	(30,753	)	$	(9,143	)
Weighted average number of shares outstanding - basic		141,660			133,026
Effect of dilutive securities		—			—
Weighted average number of shares and assumed conversions - diluted		141,660			133,026
Loss per share
Basic	$	(0.22	)	$	(0.07	)
Diluted	$	(0.22	)	$	(0.07	)

Schedule of potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share

The following potentially dilutive outstanding securities were excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:


	March 31,		December 31,
	2023		2022
Stock options		31,751,018		16,939,093
Public Warrants		6,899,787		6,899,988
Private Warrants		4,104,000		4,104,000
Retainer shares		4,000,000		—
Convertible Debentures		1,250,000		—
Total		48,004,805		27,943,081

Stock Incentive and Employee Benefit Plans (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Feb. 13, 2023	Mar. 31, 2023	Mar. 31, 2022	Jan. 17, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of option outstanding to purchase common stock		31,751			16,939
Options granted weighted-average grant date fair value		$ 3.66
Stock options exercised (in shares)		0
Stock-based compensation expenses		$ 3,720	$ 1,355
Unrecognized compensation cost related to unvested stock option grants		53,000
Employee benefit plan contributions by employer		100	100
Stock issued for services, shares	4,000,000
Accrued legal fees		$ 2,500
Weighted average period over grant		3 years 7 months 6 days
Operating Expenses
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expenses		$ 3,700	$ 1,400
2022 Equity Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of option outstanding to purchase common stock		31,751,018
Common stock shares reserved for future issuance					14,622,712
2022 Equity Incentive Plan \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock shares reserved for future issuance					20,276,666
2023 Inducement Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares available for grant				1,400,000
2022 Employee Stock Purchase Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of option outstanding to purchase common stock		0
Common stock shares reserved for future issuance		1,462,271
2022 Employee Stock Purchase Plan \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock shares reserved for future issuance		2,875,759

Balance Sheet Components (Additional Information) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 10	$ 10

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net revenue	$ 10,582	$ 6,812
Operating costs and expenses:
Cost of revenue	3,591	1,144
Research and development	2,736	2,631
Selling, general and administrative	28,701	10,908
Intangible amortization	1,027	935
Total operating costs and expenses	36,055	15,618
Loss from operations	(25,473)	(8,806)
Other (income) expense:
Loss (gain) on derivative liability	5,253	(7,500)
Loss on debt extinguishment, net	0	4,799
Interest (income) expense, net	(1)	3,031
Loss on foreign currency exchange	20	4
Total other expense	5,272	334
Loss before income taxes	(30,745)	(9,140)
Income tax expense	8	3
Net loss	$ (30,753)	$ (9,143)
Earnings Per Share [Abstract]
Net loss per share attributable to common stockholders - basic	$ (0.22)	$ (0.07)
Net loss per share attributable to common stockholders - diluted	$ (0.22)	$ (0.07)
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Weighted average number of shares during the period-basic	141,660,000	133,026,000
Weighted average number of shares during the period -diluted	141,660,000	133,026,000

Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Total	$ 8	$ 3

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of identifiable intangible assets

A summary of the Company’s identifiable intangible assets as of March 31, 2023 and December 31, 2022 is as follows (in thousands):


	March 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	13,959	$	18,671
Acquired technology		21,940		6,582		15,358
Acquired licenses		5,711		276		5,435
Assembled workforce		500		400		100
Total intangible assets	$	60,781	$	21,217	$	39,564


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Intangibles, net
Patent rights	$	32,630	$	13,415	$	19,215
Acquired technology		21,940		6,216		15,724
Acquired licenses		5,711		184		5,527
Assembled workforce		500		375		125
Total intangible assets	$	60,781	$	20,190	$	40,591

Estimated future amortization expense related to intangible assets

Estimated future amortization expense related to intangible assets as of March 31, 2023 is as follows (in thousands):


	Amount
2023 (Remainder of 2023)	$	3,079
2024		4,031
2025		4,006
2026		4,006
2027		4,006
Thereafter		20,436
Total	$	39,564

Commitments and Contingencies - Schedule of Leases Supplemental Quantitative Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ (216)	$ (167)
Weighted average remaining lease term in years - operating leases	1 year 4 months 24 days	2 years 7 months 6 days
Weighted average discount rate - operating leases	11.80%	12.20%

Balance Sheet Components

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

5. Balance Sheet Components

Property and equipment, net

Property and equipment, net consists of the following (in thousands):


	March 31,			December 31,
	2023			2022
Construction in progress	$	689		$	689
Furniture		118			118
Computers and equipment		77			77
Leasehold improvements		55			55
Property and equipment, gross		939			939
Less: Accumulated depreciation		(177	)		(167	)
Property and equipment, net	$	762		$	772

Depreciation expense was $10 thousand for both of the three months ended March 31, 2023 and 2022, respectively.

Accrued Expenses

Accrued expenses consists of the following (in thousands):


	March 31,		December 31,
	2023		2022
Accrued professional service fees	$	3,405	$	2,024
Accrued sales and marketing costs		1,525		574
Accrued research and development costs		789		459
Accrued others		960		79
Accrued expenses	$	6,679	$	3,136

Nature of Operations and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, include all adjustments of a normal recurring nature necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations and cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on March 7, 2023 (the “Annual Report on Form 10-K”). The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods.
Use of Estimates	Use of Estimates The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates.
Customer Concentration Risk	Customer Concentration Risk The Company had three customers during the three months ended March 31, 2023, each of which individually generated 10% or more of the Company’s total revenue. These customers accounted for 82% of the Company’s revenue for the three months ended March 31, 2023, individually ranging between 20% to 32%. As of March 31, 2023, these customers represented 93% of the Company’s outstanding accounts receivable, individually ranging between 21% to 37%. Additionally, during the three months ended March 31, 2023 and 2022, the Company purchased inventory from its sole supplier, Itochu Chemical Frontier Corporation (“Itochu”). This exposes the Company to concentration of customer and supplier risk. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses during the three months ended March 31, 2023 and 2022.
Significant Accounting Policies	Significant Accounting Policies There have been no significant changes to the accounting policies during the three months ended March 31, 2023, as compared to the significant accounting policies described in Note 1 of the Notes to Consolidated Financial Statements in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K, except for the policy titled “Convertible Debentures” below.
Convertible Debentures	Convertible Debentures The Company has elected the fair value option to account for the Convertible Debentures (as defined in Note 2 “Liquidity and Going Concern” below) that were issued in March 2023, discussed further in Note 7. The Company recorded the Convertible Debentures at fair value upon issuance with changes in fair value recorded as Change in fair value of convertible debentures in the unaudited Condensed Consolidated Statements of Operations, with the exception of changes in fair value due to instrument-specific credit risk, if any, which are recorded as a component of other comprehensive income. Interest expense related to the Convertible Debentures is included in the changes in fair value. As a result of applying the fair value option, direct costs and fees related to the Convertible Debentures were expensed as incurred.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022. ASU 2021-08 should be applied prospectively to business combinations occurring on or after the adoption date. The Company adopted this guidance as of January 1, 2023 and the adoption did not have a material impact on the Company's unaudited condensed consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”), which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value. Recognizing such a restriction as a separate unit of account is also not permitted. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2023 and the adoption did not have a material impact on the Company's unaudited condensed consolidated financial statements.

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

7. Debt

Convertible Debentures

On March 21, 2023, the Company entered into the Securities Purchase Agreement with Yorkville pursuant to which the Company would issue and sell to Yorkville Convertible Debentures in an aggregate principal amount of up to $25.0 million. The Securities Purchase Agreement provides that the Convertible Debentures will be issued and sold at a purchase price equal to 96% of the applicable principal amount in three tranches as follows: (i) $10.0 million upon the signing of the Securities Purchase Agreement, which was funded on March 21, 2023, (ii) $7.5 million upon the filing of a registration statement on Form S-1 with the SEC to register the resale by Yorkville of any shares of Common Stock issuable upon conversion of the Convertible Debentures under the Securities Act and (iii) $7.5 million at the time such registration statement is declared effective by the SEC.

The Convertible Debentures bear interest at an annual rate of 7.00% and will mature on December 21, 2023. The outstanding principal amount is to be repaid in equal installments that are due every 30 days beginning on May 20, 2023, which is 60 days after the date on which the first Convertible Debenture was issued to Yorkville. The Convertible Debentures provide a conversion right, in which any portion of the outstanding and unpaid principal and any accrued but unpaid interest, may be converted into shares of Common Stock, at a conversion price of $8.00 per share at the option of the holder of the Convertible Debentures.

The Company has the option to repay either (i) in cash, with premium equal to 5% in respect of the principal amount of such payment, or (ii) by submitting a notice under the A&R Yorkville Purchase Agreement, or a series of Yorkville advances, or any combination of (i) or (ii) as determined by the Company. In case of (ii), the proceeds from the shares sold to Yorkville are applied against the outstanding amounts.

The redemption amount shall be equal to the outstanding principal balance being redeemed by the Company, plus the redemption premium of 10% of the principal amount being redeemed, plus all accrued and unpaid interest in respect of such redeemed principal amount.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
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-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Fair Value Measurements (Additional Information) (Details) - USD ($)			3 Months Ended
	Mar. 21, 2023	Nov. 30, 2022	Mar. 31, 2023	Mar. 31, 2022
Subsidiary, Sale of Stock [Line Items]
Principle amount of issued debt			$ 10,000.0
Loss (gain) on derivative liability			5,253,000	$ (7,500,000)
Common stock upon conversation of cash			$ 3,000,000.0
Discount rate of FDA			9.60%
Development Milestone Payment			$ 200,000
Derivative warrant liability private warrants			6,500,000
Equity Unit Purchase Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Principle amount of issued debt			$ 10,000,000.0
Convertible Debenture principal Amount	$ 25,000,000.0
Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Derivative warrant liability private warrants		$ 2,500,000
Securities Purchase Agreement [Member]
Subsidiary, Sale of Stock [Line Items]
Principle amount of issued debt	$ 25,000,000.0

Liquidity and Going Concern

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity and Going Concern

2. Liquidity and Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Management has assessed the Company’s ability to continue as a going concern for at least one year after the issuance date of the accompanying unaudited condensed consolidated financial statements.

On November 17, 2022, the Company entered into a standby equity purchase agreement (the “Original Purchase Agreement”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”). On February 8, 2023, the Company entered into an amended and restated standby equity purchase agreement with Yorkville (the “A&R Yorkville Purchase Agreement”), amending, restating and superseding the Original Purchase Agreement. On January 8, 2023, the Company entered into a standby equity purchase agreement (the “B. Riley Purchase Agreement” and together with A&R Yorkville Purchase Agreement, the “Standby Equity Purchase Agreements”) with B. Riley Principal Capital II, LLC (“B. Riley”). Pursuant to each of the Standby Equity Purchase Agreements, the Company has the right, but not the obligation, to sell to each of Yorkville and B. Riley up to $500.0 million of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) at its request any time during the 36 months following the date on which the registration statement related to each such purchase agreement was initially declared effective by the SEC, subject to certain conditions, which are discussed further in Note 8.

As consideration for Yorkville’s and B. Riley’s respective commitment to purchase shares of Common Stock at the Company's direction, the Company issued 250,000 commitment shares to each of Yorkville (the “Yorkville Commitment Shares”) and B. Riley (the “B. Riley Commitment Shares”).

On March 21, 2023, the Company entered into a securities purchase agreement with Yorkville (the “Securities Purchase Agreement”) pursuant to which the Company would issue and sell to Yorkville convertible debentures in an aggregate principal amount of up to $25.0 million (the “Convertible Debentures”). As of March 31, 2023, Convertible Debentures in the principal amount of $10.0 million (for net cash proceeds of $9.6 million) were issued and sold pursuant to the Securities Purchase Agreement, which is discussed further in Note 7.

As of March 31, 2023, the Company’s negative working capital was $33.5 million, including cash and cash equivalents of approximately $5.1 million. During the three months ended March 31, 2023, the Company had operating losses of $25.5 million and cash flows used for operations of $7.7 million. The Company had an accumulated deficit of $406.7 million as of March 31, 2023.

The Company has plans to obtain additional resources to fund its currently planned operations and expenditures for at least twelve months from the issuance of these unaudited condensed consolidated financial statements through a combination of equity offerings, debt financings, collaborations, government contracts or other strategic transactions. The Company’s plans are also dependent upon the success of future sales of ZTlido and ELYXYB, which is still in the early stages of commercialization, and the future commercialization of GLOPERBA.

Although the Company believes such plans, if executed, should provide the Company with financing to meet its needs, successful completion of such plans is dependent on factors outside the Company’s control. As a result, management has concluded that the aforementioned conditions, among other things, raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the unaudited condensed consolidated financial statements are issued.

Private Placement (Details)	Mar. 31, 2023 $ / shares
Private Placement (Details) [Line Items]
Price per warrant	$ 0.01

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of the reconciliation of basic and diluted loss per share

The following table sets forth the reconciliation of basic and diluted loss per share for the three months ended March 31, 2023 and 2022 (in thousands except per share data):


	Three Months Ended March 31,
	2023			2022
Net loss for basic loss per share available to common stockholders	$	(30,753	)	$	(9,143	)
Net loss for diluted loss per share available to common stockholders	$	(30,753	)	$	(9,143	)
Weighted average number of shares outstanding - basic		141,660			133,026
Effect of dilutive securities		—			—
Weighted average number of shares and assumed conversions - diluted		141,660			133,026
Loss per share
Basic	$	(0.22	)	$	(0.07	)
Diluted	$	(0.22	)	$	(0.07	)

Acquisitions

3 Months Ended

Mar. 31, 2023

Disclosure Text Block [Abstract]

Acquisitions

3. Acquisitions

SP-104 Acquisition

In May 2022, the Company acquired the Delayed Burst Release Low Dose Naltrexone asset and intellectual property rights for the treatment of chronic pain, fibromyalgia and chronic post-COVID syndrome (collectively, the “SP-104 Assets”). Pursuant to the acquisition provisions, the Company is obligated to pay Aardvark Therapeutics, Inc. (“Aardvark”) (i) $3.0 million upon initial approval by the FDA of a new drug application for the SP-104 Assets (which amount may be paid in shares of Common Stock or cash, in the Company’s sole discretion) (the “Development Milestone Payment”) and (ii) $20.0 million in cash, upon achievement of certain net sales by the Company of a commercial product that uses the SP-104 Assets (the “Sales Milestone Payment”). The Company will also pay Aardvark certain royalties in the single digits based on percentages of annual net sales by the Company of a commercial product that uses the SP-104 Assets.

The Sales Milestone Payment and sale volume-based future royalties were determined to meet a scope exception for derivative accounting and will not be recognized until the contingencies are realized. The SP-104 Development Milestone Payment represents a liability, which will be measured at fair value for each reporting period. As of March 31, 2023 and December 31, 2022, the contingent consideration associated with Development Milestones Payment was $0.2 million, recorded in the other long-term liabilities.

GLOPERBA License Agreement

In June 2022, the Company entered into a license agreement (the “Romeg License Agreement”) with RxOmeg Therapeutics, LLC (a/k/a Romeg Therapeutics, Inc.) (“Romeg”). Pursuant to the Romeg License Agreement, among other things, Romeg granted the Company (a) a transferable license, with the right to sublicense, to (i) commercialize the pharmaceutical product comprising liquid formulations of colchicine for the prophylactic treatment of gout in adult humans (the “Initial Licensed Product” or “GLOPERBA”) in the United States of America (including its territories) (the “GLOPERBA Territory”), (ii) develop other products comprising the Initial Licensed Product as an active pharmaceutical ingredient (the “Licensed Products”) and commercialize any such products and (iii) manufacture Licensed Products anywhere in the world, solely for commercialization in the GLOPERBA Territory; and (b) an exclusive, transferable license, with right to sublicense, to use the trademark GLOPERBA and logos, designs, translations, and modifications thereof in connection with the commercialization of the Initial Licensed Product solely in the GLOPERBA Territory. The Initial Licensed Product, GLOPERBA, was approved and made available in the United States in 2020.

As consideration for the license under the Romeg License Agreement, the Company paid Romeg an up-front license fee of $2.0 million, and has agreed to pay Romeg (a) upon the Company’s achievement of certain net sales milestones, certain milestone payments in the aggregate amount of up to $13.0 million, (b) certain royalties in the mid-single digit to low-double digit percentages based on annual net sales of the Licensed Products by the Company during the applicable royalty term under the Romeg License Agreement, and (c) minimum quarterly royalty payments totaling $7.1 million commencing on the first year anniversary of the effective date of the Romeg License Agreement and ending on the later of (i) expiration of the last to expire of the licensed patents covering the Licensed

Products in the GLOPERBA Territory or (ii) the tenth anniversary of the effective date of the Romeg License Agreement.

In connection with the Romeg License Agreement, the Company recorded an intangible asset for acquired licenses of $5.7 million, which is comprised of the upfront license fee of $2.0 million and deferred consideration of $3.7 million that is the present value of the future minimum royalty payments and immaterial transaction costs. No contingent consideration was recognized as a liability or included in the fair value of the assets as of March 31, 2023 or December 31, 2022.

ELYXYB Acquisition

On February 12, 2023, the Company entered into an asset purchase agreement (the “ELYXYB APA”) with BioDelivery Sciences International, Inc. (“BDSI”) and Collegium Pharmaceutical, Inc. (“Collegium”, and together with BDSI, the “Sellers”) to acquire the rights to certain patents, trademarks, regulatory approvals, data, contracts,

and other rights related to ELYXYB and its commercialization in the United States and Canada (the “ELYXYB Territory”).

As consideration for the acquisition, the Company assumed various rights and obligations under the asset purchase agreement between BDSI and Dr. Reddy’s Laboratories Limited, a company incorporated under the laws of India (“DRL”), dated August 3, 2021 (the “DRL APA”), including an irrevocable, royalty-free, exclusive license to know-how and patents of DRL related to ELYXYB and necessary or used to exploit ELYXYB in the ELYXYB Territory. No cash consideration was or will be payable to Sellers for such acquisition; however, the obligations under the DRL APA that were assumed by the Company include contingent sales and regulatory milestone payments and sales royalties. The Company is also obligated to make quarterly royalty payments to DRL on sales of ELYXYB in the ELYXYB Territory. As of March 31, 2023, no milestone payments had been accrued as there were no potential milestones yet considered probable of achievement.

Income Taxes - Schedule of Components of Benefit for Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Deferred
Total	$ 8	$ 3

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Stock Incentive and Employee Benefit Plans - Schedule of Stock Options Valuation Assumption Used (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%
Expected stock -price volatility	30.00%	35.00%
Term of options	4 years 7 months 9 days	4 years 10 months 9 days
Fair value per share of common stock on date of grant	$ 0.0001	$ 0.0001
Exercise price	$ 11.50	$ 11.50
Black-Scholes Option Pricing Method [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected dividend yield	0.00%
Expected stock -price volatility	40.00%
Risk-free interest rate, minimum	3.59%
Risk-free interest rate, maximum	3.91%
Term of options	6 years 3 months
Black-Scholes Option Pricing Method [Member] \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Fair value per share of common stock on date of grant	$ 7.27
Exercise price	7.27
Black-Scholes Option Pricing Method [Member] \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Fair value per share of common stock on date of grant	8.08
Exercise price	$ 8.08

Loss Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Loss Per Share

12. Loss Per Share

The following table sets forth the reconciliation of basic and diluted loss per share for the three months ended March 31, 2023 and 2022 (in thousands except per share data):


	Three Months Ended March 31,
	2023			2022
Net loss for basic loss per share available to common stockholders	$	(30,753	)	$	(9,143	)
Net loss for diluted loss per share available to common stockholders	$	(30,753	)	$	(9,143	)
Weighted average number of shares outstanding - basic		141,660			133,026
Effect of dilutive securities		—			—
Weighted average number of shares and assumed conversions - diluted		141,660			133,026
Loss per share
Basic	$	(0.22	)	$	(0.07	)
Diluted	$	(0.22	)	$	(0.07	)


	March 31,		December 31,
	2023		2022
Stock options		31,751,018		16,939,093
Public Warrants		6,899,787		6,899,988
Private Warrants		4,104,000		4,104,000
Retainer shares		4,000,000		—
Convertible Debentures		1,250,000		—
Total		48,004,805		27,943,081

Fair Value Measurements (Details) - Schedule Of The Derivative Liabilities Measured at Fair Value $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Fair Value Disclosures [Abstract]
Fair value, beginning	$ 1,231
Fair value, ending	6,484
Level 3 [Member]
Fair Value Disclosures [Abstract]
Fair value, beginning	1,231
Change in fair value measurement	5,253
Fair value, ending	$ 6,484

Stock Incentive and Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Options Valuation Assumption Used

The assumptions used in the Black-Scholes option-pricing method related to options issued to employees and nonemployees for the three months ended March 31, 2023 are set forth below:


		Three Months Ended
		March 31, 2023
Expected dividend yield		0.00%
Expected stock-price volatility		40.00%
Risk-free interest rate		3.59% - 3.91%
Term of options		6.25
Fair value per share of common stock on date of grant		$ 7.27 - $ 8.08
Exercise price		$ 7.27 - $ 8.08

Schedule of Stock Options Outstanding Activity

The following table summarizes stock option activity during the three months ended March 31, 2023 (shares in thousands):


	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life, in years		Aggregate Intrinsic Value
Outstanding as of December 31, 2022		16,939		$	1.68		7.0	$	38,942
Granted		14,820		$	8.08
Forfeited/Cancelled		(8	)	$	3.55
Outstanding as of March 31, 2023		31,751		$	4.67		8.0	$	112,019
Exercisable as of March 31, 2023		16,078		$	1.93		6.4	$	100,773

Goodwill and Intangible Assets - Estimated future amortization expense of intangible assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
As of March 31,2023
2023 (Remainder of 2023)	$ 3,079
2024	4,031
2025	4,006
2026	4,006
2027	4,006
Thereafter	20,436
Total	$ 39,564	$ 40,591