Scilex Holding Company’s Wholly Owned Subsidiary, Scilex Pharmaceuticals Inc., Enters into a Term Sheet with Virpax Pharmaceuticals, Inc. Regarding a Mutual Release and Settlement Agreement
PALO ALTO, Calif., Feb. 26, 2024 (GLOBE NEWSWIRE) — Scilex Holding Company (Nasdaq:SCLX, “Scilex” or “Company”), an innovative revenue-generating company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain, today announced that its wholly owned subsidiary, Scilex Pharmaceuticals Inc. (“Scilex Pharma”), and Sorrento Therapeutics, Inc. (“Sorrento”) entered into a term sheet with Virpax Pharmaceuticals, Inc. (“Virpax”) regarding a mutual release and settlement agreement (the “Settlement Term Sheet”) relating to an action (the “Action”) filed by Scilex Pharma and Sorrento (together, the “Plaintiffs”) against Anthony Mack, former President of Scilex Pharma and Virpax, a company founded and then headed by Mr. Mack. Pursuant to the Settlement Term Sheet, the parties have agreed to enter a definitive settlement agreement by or before March 1, 2024 to resolve the ongoing disputes and provide for, among other things, that Virpax will be obligated to make the following payments to the Company to settle the Action: (i) $3.5 million by March 1, 2024 (the “Initial Payment”); (ii) $2.5 million by July 1, 2024 (the “Second Payment”) and (iii) to the extent any of the following drug candidates are ever sold, royalty payments of (a) 6% of annual Net Sales (as defined in the Settlement Term Sheet) of Epoladerm; (b) 6% of annual Net Sales of Probudur and (c) 6% of annual Net Sales of Envelta. Such royalty payments will end upon (i) expiration of the last-to-expire valid patent claim of Virpax or its licensor covering the manufacture, use or sale of such product in such country; and (ii) expiration of any period of regulatory exclusivity for such product in such country.