Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 08, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SORRENTO THERAPEUTICS, INC. | ||
Entity Central Index Key | 0000850261 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 856.3 | ||
Entity Common Stock, Shares Outstanding (in shares) | 551,281,154 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | SRNEQ | ||
Entity File Number | 001-36150 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 4955 Directors Place | ||
Entity Tax Identification Number | 33-0344842 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92121 | ||
City Area Code | 858 | ||
Local Phone Number | 203-4100 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | None. | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | San Diego, California | ||
Auditor Firm ID | 42 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 23,634 | $ 36,665 |
Marketable investments | 26,344 | 90,217 |
Accounts receivables, net | 24,469 | 18,715 |
Inventory | 9,976 | 8,106 |
Prepaid expenses | 8,807 | 11,804 |
Other current assets | 3,143 | 7,482 |
Total current assets | 96,373 | 172,989 |
Property and equipment, net | 51,971 | 41,325 |
Operating lease right-of-use assets | 86,464 | 85,173 |
Intangibles, net | 136,902 | 259,705 |
Goodwill | 80,269 | 79,525 |
Equity investments | 17,176 | 51,271 |
Other assets, net | 3,685 | 4,830 |
Total assets | 472,840 | 694,818 |
Current liabilities: | ||
Accounts payable | 47,515 | 27,414 |
Accrued payroll and related benefits | 7,884 | 21,503 |
Accrued expenses and liabilities | 58,756 | 37,975 |
Accrued legal settlements | 174,752 | |
Current portion of deferred revenue | 652 | 1,108 |
Current portion of operating lease liabilities | 13,880 | 11,539 |
Current portion of contingent consideration | 397 | 397 |
Acquisition consideration | 7,800 | 7,537 |
Current portion of debt | 16,286 | 31,980 |
Total current liabilities | 327,922 | 139,453 |
Long-term debt, net of discount | 19,130 | 110,627 |
Deferred tax liabilities, net | 591 | 2,426 |
Deferred revenue | 7,098 | 118,942 |
Derivative liabilities | 300 | 35,700 |
Operating lease liabilities | 85,208 | 83,431 |
Contingent consideration | 48,949 | 124,349 |
Other long-term liabilities | 5,311 | 1,761 |
Total liabilities | 494,509 | 616,689 |
Commitments and contingencies (Note 11) | ||
Sorrento Therapeutics, Inc. equity (deficit) | ||
Common stock, $0.0001 par value; 750,000,000 shares authorized and 522,817,137 and 314,573,225 shares issued and outstanding at December 31, 2022 and 2021, respectively | 52 | 32 |
Additional paid-in capital | 1,988,753 | 1,513,758 |
Accumulated other comprehensive income | 1,501 | 1,026 |
Accumulated deficit | (1,959,447) | (1,386,604) |
Treasury stock, 7,568,182 shares at cost at December 31, 2022 and 2021 | (49,464) | (49,464) |
Total Sorrento Therapeutics, Inc. stockholders' equity (deficit) | (18,605) | 78,748 |
Noncontrolling interests | (3,064) | (619) |
Total equity (deficit) | (21,669) | 78,129 |
Total liabilities and equity (deficit) | $ 472,840 | $ 694,818 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 522,817,137 | 314,573,225 |
Common stock, shares outstanding (in shares) | 522,817,137 | 314,573,225 |
Treasury stock, shares (in shares) | 7,568,182 | 7,568,182 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
Revenues | $ 62,839 | $ 52,904 | $ 39,986 |
Operating costs and expenses: | |||
Research and development | 221,226 | 206,922 | 111,340 |
Acquired in-process research and development | 12,272 | 24,208 | 42,992 |
Selling, general and administrative | 182,337 | 196,856 | 116,179 |
Intangible amortization | 4,325 | 4,140 | 4,053 |
(Decrease) increase on contingent consideration | (75,400) | 9,198 | |
Loss on impairment of intangible assets | 124,190 | ||
Legal settlements, net | 64,752 | ||
Total operating costs and expenses | 567,154 | 454,355 | 284,504 |
Loss from operations | (504,315) | (401,451) | (244,518) |
Gain (loss) on derivative liabilities | 7,316 | (300) | 6,600 |
Loss on marketable and equity investments | (83,919) | (15,013) | |
Gain (loss) on debt extinguishment | 27,009 | (6,695) | (51,939) |
Scilex Notes principal increase | (28,000) | ||
Interest expense, net | (8,574) | (10,224) | (20,157) |
Other income (loss) | 736 | (845) | (566) |
Loss before income tax | (561,747) | (462,528) | (310,580) |
Income tax benefit | (2,416) | (33,516) | (2,014) |
Loss on equity method investments | (18,426) | (126) | (5,844) |
Net loss | (577,757) | (429,138) | (314,410) |
Net loss attributable to noncontrolling interests | (4,914) | (813) | (15,949) |
Net loss attributable to Sorrento | $ (572,843) | $ (428,325) | $ (298,461) |
Net loss per share - basic per share attributable to Sorrento | $ (1.37) | $ (1.45) | $ (1.30) |
Net loss per share - diluted per share attributable to Sorrento | $ (1.37) | $ (1.45) | $ (1.30) |
Weighted-average shares outstanding during period - basic shares attributable to Sorrento (in shares) | 419,315 | 294,774 | 229,823 |
Weighted-average shares outstanding during period - diluted shares attributable to Sorrento (in shares) | 419,315 | 294,774 | 229,823 |
Product | |||
Revenue: | |||
Revenues | $ 44,996 | $ 28,735 | $ 26,628 |
Operating costs and expenses: | |||
Cost of product sold and services | 28,913 | 3,851 | 2,149 |
Service | |||
Revenue: | |||
Revenues | 17,843 | 24,169 | 13,358 |
Operating costs and expenses: | |||
Cost of product sold and services | $ 4,539 | $ 9,180 | $ 7,791 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (577,757) | $ (429,138) | $ (314,410) |
Other comprehensive income: | |||
Foreign currency translation adjustments | 475 | 506 | 790 |
Total other comprehensive income | 475 | 506 | 790 |
Comprehensive loss | (577,282) | (428,632) | (313,620) |
Comprehensive loss attributable to noncontrolling interests | (4,914) | (813) | (15,949) |
Comprehensive loss attributable to Sorrento | $ (572,368) | $ (427,819) | $ (297,671) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Equity Compensation Plans | Scilex Pharmaceuticals, Inc | SmartPharm | ACEA Therapeutics, Inc | Common Stock | Common Stock Equity Compensation Plans | Common Stock SmartPharm | Common Stock ACEA Therapeutics, Inc | Treasury Stock | Additional Paid-in Capital | Additional Paid-in Capital Equity Compensation Plans | Additional Paid-in Capital Scilex Pharmaceuticals, Inc | Additional Paid-in Capital SmartPharm | Additional Paid-in Capital ACEA Therapeutics, Inc | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest | Noncontrolling Interest Scilex Pharmaceuticals, Inc |
Balance at Dec. 31, 2019 | $ 32,756 | $ 18 | $ (49,464) | $ 788,122 | $ (270) | $ (659,818) | $ (45,832) | ||||||||||||
Balance, shares (in shares) at Dec. 31, 2019 | 167,799,000 | 7,568,000 | |||||||||||||||||
Issuance of common stock upon exercise of stock options | 5,578 | 5,578 | |||||||||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 1,339,000 | ||||||||||||||||||
Issuance of common stock upon exercise of warrants | 92,773 | $ 3 | 92,770 | ||||||||||||||||
Issuance of common stock upon issuance of warrants (in shares) | 33,091,000 | ||||||||||||||||||
Issuance of common stock upon acquisition | 9,544 | $ 19,421 | 9,544 | $ 19,421 | |||||||||||||||
Issuance of common stock upon acquisition (in shares) | 1,997,000 | 1,832,000 | |||||||||||||||||
Issuance of common stock, net | 317,865 | $ 7 | 317,858 | ||||||||||||||||
Issuance of common stock, net (in shares) | 69,228,000 | ||||||||||||||||||
Adjustment to noncontrolling interest | 790 | ||||||||||||||||||
Changes to noncontrolling interests from increased ownership in Scilex Holding | (55,005) | (92,366) | 37,361 | ||||||||||||||||
Stock-based compensation | 31,419 | 31,419 | |||||||||||||||||
Foreign currency translation adjustment | 790 | 790 | |||||||||||||||||
Net loss | (314,410) | (298,461) | (15,949) | ||||||||||||||||
Balance at Dec. 31, 2020 | 140,731 | $ 28 | $ (49,464) | 1,172,346 | 520 | (958,279) | (24,420) | ||||||||||||
Balance, shares (in shares) at Dec. 31, 2020 | 275,286,000 | 7,568,000 | |||||||||||||||||
Issuance of common stock upon exercise of warrants | 9,050 | $ 1 | 9,049 | ||||||||||||||||
Issuance of common stock upon issuance of warrants (in shares) | 2,550,000 | ||||||||||||||||||
Issuance of common stock upon acquisition | 13,690 | $ 42,168 | $ 1 | 13,689 | $ 42,168 | ||||||||||||||
Issuance of common stock upon acquisition (in shares) | 1,565,000 | 5,519,000 | |||||||||||||||||
Issuance of common stock, net | 201,826 | $ 10,218 | $ 2 | 201,824 | $ 10,218 | ||||||||||||||
Issuance of common stock, net (in shares) | 25,483,000 | 1,603,000 | |||||||||||||||||
Changes to noncontrolling interests from increased ownership in Scilex Holding | (23,963) | 23,963 | |||||||||||||||||
Changes to noncontrolling interests from increased ownership in Scilex Holding (in shares) | 2,567,000 | ||||||||||||||||||
Other changes to noncontrolling interests | 651 | 651 | |||||||||||||||||
Stock-based compensation | 88,427 | 88,427 | |||||||||||||||||
Foreign currency translation adjustment | 506 | 506 | |||||||||||||||||
Net loss | (429,138) | (428,325) | (813) | ||||||||||||||||
Balance at Dec. 31, 2021 | $ 78,129 | $ 32 | $ (49,464) | 1,513,758 | 1,026 | (1,386,604) | (619) | ||||||||||||
Balance, shares (in shares) at Dec. 31, 2021 | 314,573,000 | 7,568,000 | |||||||||||||||||
Issuance of common stock upon exercise of stock options (in shares) | 24,332 | ||||||||||||||||||
Issuance of common stock upon acquisition | $ 4,434 | 4,434 | |||||||||||||||||
Issuance of common stock upon acquisition (in shares) | 1,280,000 | ||||||||||||||||||
Issuance of common stock, net | 402,334 | $ 1,198 | $ 20 | 402,314 | $ 1,198 | ||||||||||||||
Issuance of common stock, net (in shares) | 205,375,000 | 1,589,000 | |||||||||||||||||
Scilex shares issued as a result of Scilex Business Combination, net of transaction activities | $ (6,775) | $ (8,773) | $ 1,998 | ||||||||||||||||
Scilex shares issued to Yorkville pursuant to Yorkville Purchase Agreement with Scilex | 1,237 | 1,237 | |||||||||||||||||
Purchase of public warrants of Scilex common stock | $ (439) | $ (439) | |||||||||||||||||
Changes to noncontrolling interests from increased ownership in Scilex Holding | 471 | 471 | |||||||||||||||||
Stock-based compensation | 75,024 | 75,024 | |||||||||||||||||
Foreign currency translation adjustment | 475 | 475 | |||||||||||||||||
Net loss | (577,757) | (572,843) | (4,914) | ||||||||||||||||
Balance at Dec. 31, 2022 | $ (21,669) | $ 52 | $ (49,464) | $ 1,988,753 | $ 1,501 | $ (1,959,447) | $ (3,064) | ||||||||||||
Balance, shares (in shares) at Dec. 31, 2022 | 522,817,000 | 7,568,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net loss | $ (577,757) | $ (429,138) | $ (314,410) |
Adjustments to reconcile net loss to net cash used for operating activities: | |||
Depreciation and amortization | 13,245 | 12,462 | 11,007 |
Non-cash operating lease cost | 4,230 | 3,855 | 3,702 |
Non-cash interest expense and amortization of debt issuance costs | 6,792 | 9,162 | 12,897 |
Scilex Notes principal increase | 28,000 | ||
Payments on notes attributed to accreted interest related to the debt discounts | (22,973) | (13,172) | |
Stock-based compensation | 74,847 | 90,188 | 31,419 |
Acquired in-process research and development | 12,272 | 24,208 | 42,992 |
(Gain) loss on debt extinguishment, net | (27,009) | 6,695 | 51,939 |
(Gain) loss on derivative liability | (7,316) | 300 | (6,600) |
Loss on marketable and equity investments | 83,919 | 15,013 | |
Loss on equity method investments | 18,426 | 126 | 5,844 |
Loss on impairment of intangible assets | 124,190 | ||
(Gain) loss on contingent consideration | (75,400) | 9,198 | |
Non-cash inventory adjustments | 10,962 | ||
Deferred income taxes | (1,836) | (35,927) | (2,125) |
Changes in operating assets and liabilities, excluding effect of acquisitions: | |||
Accounts receivable | (5,680) | (2,957) | (1,051) |
Inventory | (9,510) | (6,276) | 1,532 |
Accrued payroll | (13,442) | (111) | 4,945 |
Prepaid expenses, deposits and other assets | 6,803 | (5,743) | 4,913 |
Accounts payable | 9,870 | (3,878) | (3,677) |
Accrued legal settlements | 174,752 | ||
Accrued expenses and other liabilities | 19,980 | 20,747 | (1,188) |
Deferred revenue | (112,300) | (1,024) | (362) |
Other | (922) | (3,549) | (1,313) |
Net cash used for operating activities | (293,857) | (281,821) | (159,536) |
Investing activities: | |||
Proceeds from sale of marketable investments | 124,767 | ||
Purchases of property and equipment | (13,657) | (8,871) | (6,528) |
Net cash provided by (used for) investing activities | (28,518) | 79,847 | (39,923) |
Financing activities: | |||
Proceeds from exercises of stock options and warrants | 1,198 | 15,420 | 98,351 |
Proceeds from short-term debt, net of issuance costs | 96,071 | 49,743 | 18,587 |
Repayments of debt and other obligations | (188,311) | (85,656) | (205,564) |
Payments related to Semnur Share Exchange | (55,000) | ||
Net cash provided by financing activities | 311,718 | 181,332 | 174,239 |
Net change in cash, cash equivalents and restricted cash | (10,657) | (20,642) | (25,220) |
Net effect of exchange rate changes on cash | (2,374) | 843 | 915 |
Cash, cash equivalents and restricted cash at beginning of period | 36,665 | 56,464 | 80,769 |
Cash, cash equivalents and restricted cash at end of period | 23,634 | 36,665 | 56,464 |
Cash paid during the period for: | |||
Income taxes | 29 | 1,200 | |
Interest | 1,173 | 1,060 | 3,419 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Scilex Notes principal increase | 28,000 | ||
ACEA acquisition consideration paid in equity | 42,168 | ||
Right-of-use assets obtained in exchange for new and amended operating lease liabilities | 5,592 | 49,459 | 1,878 |
Other acquisitions, license agreements and investments consideration paid in equity | 13,689 | 9,544 | |
Changes to noncontrolling interests from increased ownership in Scilex Holding | 23,963 | ||
Deferred consideration for intangible asset acquisition | 3,650 | ||
Short-term debt | 7,304 | ||
Property and equipment costs incurred but not paid | 6,790 | 1,253 | 600 |
Public Offering Of Common Stock And Warrants 2019 | |||
Financing activities: | |||
Proceeds from issuance of common stock | 402,334 | 201,825 | 317,865 |
SmartPharm | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Acquisition consideration paid in equity | 19,421 | ||
Scilex Pharmaceuticals, Inc | |||
Financing activities: | |||
Proceeds from Business Combination | 3,375 | ||
Transaction costs paid related to Business Combination | (2,949) | ||
Supplemental disclosures of non-cash investing and financing activities: | |||
Changes to noncontrolling interests related to Business Combination | 1,998 | ||
Business Combination transaction costs incurred but not paid | 7,001 | ||
Scilex Pharmaceuticals, Inc | Yorkville Purchase Agreement | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Shares issued pursuant to Purchase Agreement | 1,237 | ||
Virex Health, Inc | |||
Investing activities: | |||
Acquisition consideration paid in cash, net of cash acquired | (6,544) | ||
Supplemental disclosures of non-cash investing and financing activities: | |||
Acquisition consideration paid in equity | 4,434 | ||
ACEA Therapeutics, Inc | |||
Investing activities: | |||
Acquisition consideration paid in cash, net of cash acquired | (754) | ||
Other Acquisitions and Investments | |||
Investing activities: | |||
Acquisition consideration paid in cash, net of cash acquired | $ (8,317) | $ (35,295) | $ (33,395) |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | 1. Organization and Signi ficant Accounting Policies Description of Business Sorrento Therapeutics, Inc. (the “Company”) is a clinical and commercial stage biopharmaceutical company developing a portfolio of next generation treatments for three major therapeutic areas: cancer, infectious disease and pain. The Company’s multimodal, multipronged approach to fighting cancer is made possible by its immuno-oncology platforms, including its fully human antibodies (“G-MAB library”), ACEA small molecule library, immuno-cellular therapies (“DAR-T”), antibody-drug conjugates (“ADCs”) and oncolytic virus (“Seprehvec”). The Company is also developing potential antiviral therapies against COVID-19, including FUJOVEE (Abivertinib) and its rapid diagnostic test, including COVIMARK (launched as COVISTIX in Mexico and Brazil). In November 2022, Scilex Holding Company (“Scilex”), a majority owned subsidiary of the Company, completed its business combination with Vickers Vantage Corp. I, a special purpose acquisition company (see Note 7). Scilex launched ZTlido® in 2018 as a prescription lidocaine topical product. Scilex is also developing pipeline product candidates, including SEMDEXA. Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company`s subsidiaries. For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. All intercompany balances and transactions have been eliminated in consolidation. The Company operates in two operating and reportable segments, Sorrento Therapeutics and Scilex. The Sorrento Therapeutics segment is organized around infectious disease and the Company’s immuno-oncology therapeutic area, leveraging its proprietary G-MAB antibody library and targeted delivery modalities to generate the next generation of cancer therapeutics. The Scilex segment is largely organized around the Company’s non-opioid pain management operations. See Note 14 . Voluntary Filing Under Chapter 11 As previously reported in the Company’s Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 13, 2023, the Company and its wholly owned direct subsidiary, Scintilla Pharmaceuticals, Inc. (together with the Company, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 proceedings are jointly administered under the caption In re Sorrento Therapeutics, Inc., et al. (the “Chapter 11 Cases”). The Debtors continue to operate their business in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. At hearings before the Bankruptcy Court on February 16, 2023 and February 21, 2023, the Debtors obtained approval from the Bankruptcy Court of certain “first day” motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations during the Chapter 11 Cases. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of money market accounts and bank deposits, which are highly liquid and readily tradable. Fair Value of Financial Instruments The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. • Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. • Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The carrying amounts of cash equivalents approximate their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts receivable and payable, and other financial instruments in current assets and current liabilities. Accounts Receivable, Net Accounts receivable are presented net of allowances for expected credit losses and consist of trade receivables from sales and services provided to customers, which are generally unsecured. The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for doubtful accounts. The allowance for expected credit losses is not material. Inventory The Company determines inventory cost on a first-in, first-out basis. The Company reduces the carrying value of inventories to a lower of cost or net realizable value for those items that are potentially excess, obsolete or slow-moving. The Company considers the need for allowances for excess and obsolete inventor y based upon historical experience, sales trends, and specific categories of inventory and expiration dates for inventory on hand. As of December 31, 2022, net inventory was $ 10.0 million, comprised of $ 3.4 million of finished goods and $ 6.6 million of raw materials and supplies. As of December 31, 2021, net inventory was $ 8.1 million, comprised of $ 4.7 million of finished goods and $ 3.3 million of raw materials and supplies. Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years . Leasehold improvements are amortized over the lesser of the life of the lease or the life of the asset. Repairs and maintenance are charged to expense as incurred. Acquisitions The Company first determines whether a set of assets acquired constitutes a business and should be accounted for as a business combination. The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including in-process research and development (“IPR&D”) projects and liabilities assumed be recorded at their fair values as of the acquisition date on the Company`s consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred. When the Company determines assets acquired do not meet the definition of a business combination, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded and contingent consideration such as payments upon achievement of various developmental, regulatory and commercial milestones generally is not recognized at the acquisition date. In an asset acquisition, up-front payments allocated to IPR&D projects at the acquisition date and subsequent milestone payments are charged to expense in the Company`s consolidated statements of operations unless there is an alternative future use. Contingent Consideration The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with applicable milestones, discount rates and the related probabilities and payment structure in the contingent consideration arrangement. Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the consolidated statement of operations. Contingent consideration arrangements assumed in an asset acquisition will be measured and accrued when such contingency is resolved. Acquired In-Process Research and Development The Company has acquired, and may continue to acquire, the rights to develop and commercialize new drug candidates. The up-front payments to acquire new drug compounds or drug delivery devices, as well as future milestone payments associated with assets that do not meet the definition of a derivative and that are deemed probable to achieve, are immediately expensed as acquired IPR&D, provided that the drug candidates have not achieved regulatory approval for marketing and, absent obtaining such approval, have no alternative future use. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life. Capitalized IPR&D is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. Goodwill and Other Long-Lived Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired. Goodwill is reviewed at the reporting unit level for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. During its goodwill impairment review, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, acquired technology, customer relationships, patent and license rights, for impairment by considering the expected use of the assets and the effects of obsolescence, demand, anticipated technological advances, market influences and other economic factors. The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparison of the assets’ net book value to future net undiscounted cash flows that the assets are expected to genera te. Commitments and Contingencie s The Company accrues for commitments and contingencies when, after considering the facts and circumstances of each matter as then known, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are generally expensed as incurred. The consideration related to a gain contingency is recorded in the consolidated financial statements during the period in which all underlying events or contingencies are resolved and the gain is realized. Debt, Including Debt With Detachable Warrants Detachable warrants are evaluated for the classification of warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with equity-classified warrants, the proceeds from the issuance of debt are first allocated to the debt and the warrants at their relative estimated fair values. The portion of the proceeds allocated to the warrants are accounted for as paid-in capital and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and beneficial conversion features, are allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separate accounting as derivative financial instruments pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging . If the amount allocated to the convertible debt results in an effective per share conversion price less than the fair value of the Company’s common stock on the commitment date, the intrinsic value of this beneficial conversion feature is recorded as a discount to the convertible debt with a corresponding increase to additional paid in capital. The beneficial conversion feature discount is equal to the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date, unless limited by the remaining proceeds allocated to the debt. The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates, including future net product sales, in determining interest expense, amortization period of the debt discount, as well as the classification between current and long-term portions. In estimating future net product sales, the Company assesses prevailing market conditions using various external market data against the Company’s anticipated sales and planned commercial activities. Consequently, the Company imputes interest on the carrying value of the debt and records interest expense using an imputed effective interest rate. The Company reassesses the expected payments each reporting period and accounts for any changes through an adjustment to the effective interest rate on a prospective basis, with a corresponding impact to the classification of the Company’s current and long-term portions. Derivative Liabilities Derivative liabilities are recorded on the Company`s consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded as other income or expense. Investments in Other Entities The Company holds a portfolio of investments in equity securities. Investments in entities over which the Company has significant influence, but not a controlling interest, are accounted for using the equity method, with the Company’s share of earnings or losses reported in loss on equity method investments. The Company’s investments in non-marketable securities are carried at cost, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. The Company’s investments in marketable equity securities are measured at fair value. Research and Development Costs The Company expenses the cost of research and development as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and preclinical materials as well as other contracted services, license fees and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with FASB ASC Topic 730, Research and Development . Income Taxes The provisions of the FASB ASC Topic 740 “Income Taxes,” addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has uncertain tax positions. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2022, the Company maintained a full valuation allowance against its deferred tax assets, with the exception of an amount equal to its deferred tax liabilities that are scheduled to reverse against the Company's deferred tax assets. Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company`s leases do not provide an implicit rate, it 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. The operating lease ROU asset also includes any lease payments made and is reduced by lease incentives. The Company’ s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Revenue Recognition The Company`s revenues are generated from product sales, the sale of customized reagents and other materials, contract manufacturing services, and other service revenues. The following table shows revenue disaggregated by product and service type for the years ended December 31, 2022, 2021 and 2020 (in thousands): Years Ended December 31, 2022 2021 2020 Scilex Pharmaceuticals Inc. product sales, net $ 38,033 $ 28,546 $ 26,331 Sorrento Therapeutics, Inc. product revenues, net 6,963 189 297 Net total product revenues $ 44,996 $ 28,735 $ 26,628 Concortis Biosystems Corporation service revenues 8,719 15,599 7,730 Bioserv Corporation service revenues 2,971 4,672 4,976 Other service revenues 6,153 3,898 652 Total service revenues $ 17,843 $ 24,169 $ 13,358 The Company is obligated to accept from customers the return of products sold that are damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the terms of its sales contracts and estimates allowances for such amounts at the time of sale. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. Scilex Product Sales Revenues from Scilex product sales is fully comprised of sales of ZTlido. The Company's performance obligation with respect to sales of ZTlido is satisfied at a point in time, which transfers control upon delivery of product to the customer. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time. The Company identified a single performance obligation. Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2022 was not material. Sales of ZTlido are generated within the United States. Prior to April 2, 2022, sales to Scilex’s sole distributor represented 100 % of Scilex's net revenue. On April 2, 2022, Scilex announced the expansion of its direct distribution network to national and regional wholesalers and pharmacies. The distributor continued to provide traditional third-party logistics functions for Scilex. The Company had four customers during the year ended December 31, 2022, which individually generated 10% or more of the Company’s total revenue. These customers accounted for 78 % of the Company’s revenue for the year ended December 31, 2022, individually ranging between 19 % to 24 %. As of December 31, 2022, these customers represented 82 % of the Company’s outstanding accounts receivable, individually ranging between 24 % to 36 %. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses for the years ended December 31, 2022, 2021, and 2020. For product sales, Scilex records gross-to-net sales adjustments for government and managed care rebates, chargebacks, wholesaler and distributor fees, sales returns and prompt payment discounts. Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations. Rebates are discounts that the Company pays under either government or private health care programs. Government rebate programs include state Medicaid drug rebate programs, the Medicare coverage gap discount programs and the Tricare programs. Commercial rebate and fee programs relate to contractual agreements with commercial healthcare providers, under which the Company pays rebates and fees for access to and position on that provider’s patient drug formulary. Rebates and chargebacks paid under government programs are generally mandated under law, whereas private rebates and fees are generally contractually negotiated with commercial healthcare providers. Both types of rebates vary over time. The Company records a reduction to gross product sales at the time the customer takes title to the product based on estimates of expected rebate claims. The Company monitors the sales trends and adjust for these rebates on a regular basis to reflect the most recent rebate experience and contractual obligations. Reserves for rebates and chargebacks are recorded as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheet. The Company had $ 30.9 million and $ 7.4 million of accrued rebates and fees included in accrued expenses and liabilities on its consolidated balance sheets as of December 31, 2022 and 2021, respectively. Sorrento Product Revenues Most of Sorrento product revenues are comprised of sales of COVISTIX, the Company's lateral flow rapid diagnostic test for detection of the SARS-CoV-2 virus. The Company considers control to have transferred upon delivery where the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time. The Company identified a single performance obligation. During the year ended December 31, 2022, nearly all COVISTIX sales were generated in Mexico and sales returns were immaterial. Concortis Biosystems Corporation ( “ Concortis ” ) Contract manufacturing revenue associated with sales of customized reagents related to delivering proprietary cytotoxins, linkers and linker-toxins is recognized at a point in time upon the transfer of control, which is generally upon shipment given the short contract terms of two months or less generally. Revenue associated with contract development and manufacturing of highly customized ADC services related to providing synthetic expertise to antibodies provided by customers is recognized over time as the service and related deliverables are highly customized and unique to each customer’s needs, which does not have alternative use to the Company. The Company also has an enforceable right to the payment for the ADC services completed to date. In recognizing the revenue over time, the Company measures its progress using an input method based on the effort it expends toward the satisfaction of its performance obligations. The Company estimates the amount of effort it expends including the time it will take the Company to complete the activities relative to the estimated total effort to satisfy each performance obligation. This approach requires the Company to make estimates and use judgement. If the Company’s estimates or judgements change over the course of the contract, they may affect the timing and amount of revenue that the Company recognizes in the current and future periods. The estimated revenue expected to be recognized for future performance obligations associated with contract development and manufacturing services was approximately $ 0.7 million and $ 0.2 million as of December 2022 and 2021, respectively. Bioserv Corporation ( “ Bioserv ” ) Contract manufacturing services associated with the Company’s Bioserv operations related to finish and fill activities for drug products and reagents are recognized ratably over the contract term, which reflects the transfer of services to the customer because the manufactured products are highly customized and do not have an alternative use to the Company. As of December 31, 2022, the estimated revenue expected to be recognized for future performance obligations associated with contract manufacturing services was immaterial compared to approximately $ 0.1 million as of December 31, 2021. Other Service Revenues If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. If the license to the Company’s intellectual property is bundled with other promises that are not distinct, the Company assesses the nature of the combined performance obligation to determine whether it is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company records a non-refundable, up-front license fee under current license agreements as deferred revenue upon receipt of the payment if it is determined not to be distinct from the ongoing performance obligation. License revenue is recognized over the term when the ongoing performance obligation is satisfied (see Note 7 ). As of December 31, 2022, future performance obligations for license revenues relate to the ImmuneOncia Therapeutics, Inc. (“ImmuneOncia”) license agreement. The total consideration for the ImmuneOncia license performance obligation, effective September 1, 2016, represented $ 9.6 million. The estimated revenue expected to be recognized for future performance obligations, as of December 31, 2022, was approximatel y $ 6.6 mi llion. The Company expects to recognize license revenue of approximately $ 0.5 million of the remaining performance obligation annually through the remaining term. The Company applied judgment in estimating the 20 -year contract term, analogous to the expected life o f the patent, over which revenue is recognized over time given the ongoing performance obligation related to the Company's participation on a steering committee for the technologies under the agreement. In November 2020, the Company was awarded a contract with the Defense Advanced Research Projects Agency (“DARPA Contract”) and co-funded by the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, to develop a rapid countermeasure to COVID-19 using gene-encoded neutralizing antibodies. The contract provided funding of up to $ 34.0 million for the development through Phase II clinical studies of a gene-encoded antibody that could enable rapid protection from and/or treatment of SARS-CoV-2 infection and COVID-19. The DARPA Contract was concluded and the cumulative funding received was $ 3.1 million as of December 31, 2022. The Company recognized $ 0.1 million, $ 2.8 million and $ 0.2 million in grant revenue associated with the DARPA Contract during the years e nded December 31, 2022, 2021 and 2020, respectively, which is included within other service revenue. The SARS-CoV-2 antibody project remains a component of the Company's pipeline. The Company recorded $ 1.8 million in other service revenues associated with Celularity Inc. (“Celularity”) for the year ended December 31, 2022. The Company held an ownership interest of approximately 13.71 % of Celularity on a non-diluted basis at December 31, 2022. The Company recorded $ 3.0 million in other service r evenues associated with ImmuneOncia for the year ended December 31, 2022. The Company held an ownership interest of approximately 32.0 % of ImmuneOncia on a non-diluted basis at December 31, 2022. |
Liquidity and Going Concern
Liquidity and Going Concern | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern | 2. Liquidity an d Going Concern The accompanying 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. The Company has negative working capital and recurring losses from operations, recurring negative cash flows from operations and substantial cumulative net losses to date. In addition, associated with the voluntary filing of Chapter 11 in February 2023 (see Note 1 and Note 16 for details), the Company plans to lower its operating budget and further reduce the scale of its operations. The Company expects to incur significant professional fees and other costs in connection with and throughout the Chapter 11 Cases. The Company expects to continue operations in the normal course for the duration of the Chapter 11 Cases. To ensure ordinary course operations, the Company obtained approval from the Bankruptcy Court for certain “first day” motions to continue its ordinary course operations after the filing date. The Company also received interim approval from the Bankruptcy Court for $ 75.0 million of financing from JMB Capital Partners Lending, LLC, which will provide it with immediate liquidity so that the Company can continue operating its business as usual during the Chapter 11 Cases and pay the costs and professional fees associated therewith. However, for the duration of the Chapter 11 Cases, the Company’s operations and ability to develop and execute its business plan, its financial condition, liquidity and its continuation as a going concern are subject to a high degree of risk and uncertainty associated with the Chapter 11 Cases. The outcome of the Chapter 11 Cases is dependent upon factors that are outside of the Company’s control, including actions of the Bankruptcy Court. The Company can give no assurances that it will be able to secure additional sources of funds to support its operations, or, if such funds are available to the Company, that such additional financing will be sufficient to meet its needs. As such, management cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements are issued. As a result, management has concluded that the aforementioned conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable, the Company may have to significantly delay, scale back or discontinue the development or commercialization of one or more of its product candidates. The Company may also seek collaborators for one or more of its current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available. The consolidated financial statements do not reflect any adjustments that might be necessary if the Company is unable to continue as a going concern. If the Company raises additional funds by issuing equity securities, substantial dilution to existing stockholders would result. If the Company raises additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict the Company’s ability to operate its business. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurements at December 31, 2022 Balance Quoted Significant Significant Assets: Marketable investments $ 26,344 $ 26,344 $ — $ — Total assets $ 26,344 $ 26,344 $ — $ — Liabilities: Derivative liabilities - non-current $ 300 $ — $ — $ 300 Current portion of contingent consideration 397 — — 397 Contingent consideration - non-current 48,949 — — 48,949 Total liabilities $ 49,646 $ — $ — $ 49,646 Fair Value Measurements at December 31, 2021 Balance Quoted Significant Significant Assets: Marketable investments $ 90,217 $ 2,560 $ — $ 87,657 Total assets $ 90,217 $ 2,560 $ — $ 87,657 Liabilities: Derivative liabilities - non-current $ 35,700 $ — $ — $ 35,700 Current portion of contingent consideration 397 — — 397 Contingent consideration, non-current 124,349 — — 124,349 Total liabilities $ 160,446 $ — $ — $ 160,446 Marketable Investment s As disclosed in Note 5 , the Company holds 20,422,124 shares of Class A Common Stock of Celularity, of which 19,922,124 shares were subject to certain transfer restrictions as of December 31, 2021. The transfer restrictions lapsed on July 16, 2022. The shares held by the Company are measured at fair value at each reporting period based on the closing price of Celularity’s common stock on the last trading day of each reporting period. Prior to July 16, 2022, the shares subject to transfer restrictions were adjusted for a discount for lack of marketability. As of July 16, 2022, the shares previously subject to transfer restrictions were transferred to Level 1 due to the use of the quoted market price to measure fair value. Changes in fair value of the Company’s investment in Celularity since December 31, 2021 are as follows (Level 3): (in thousands) Fair Value Beginning Balance at December 31, 2021 $ 87,657 Change in fair value measurement of Restricted Shares ( 26,098 ) Transfer from Level 3 to Level 1 ( 61,559 ) Ending Balance at December 31, 2022 $ — Contingent Consideration The Company recorded a gain of $ 75.4 million and a loss of $ 9.2 million during the years ended December 31, 2022 and 2021 respectively, which related to the change in fair value of the contingent consideration associated with its acquisition of ACEA Therapeutics, Inc. (“ACEA”) (see Note 7 for details). The Company assesses the fair value of contingent consideration using a discounted cash flow method combined with a Monte Carlo simulation model. Significant Level 3 assumptions used in the measurement included revenue projections, estimated probabilities of successful commercialization and discount rates of 21.9 % and 15.0 % as of December 31, 2022 and 2021, respectively. There were no changes to the fair value of contingent consideration during the year ended December 31, 2020. As discussed in Note 16 , the Company commenced voluntary Chapter 11 proceedings on February 13, 2023, which will require reorganization. The Company does not believe it is a recognized subsequent event that impacts the assessment of the contingent consideration associated with ACEA acquisition as of December 31, 2022. The Company will assess its impact as of March 31, 2023. The following table includes a summary of the changes to contingent consideration liabilities, during the years ended December 31, 2022 and 2021: (in thousands) Fair Value Balance at December 31, 2020 $ 947 Change in fair value measurement 9,198 Contingent consideration related to the acquisition of ACEA Therapeutics, Inc. 114,601 Balance at December 31, 2021 124,746 Change in fair value measurement ( 75,400 ) Balance at December 31, 2022 $ 49,346 Derivative Liabilities The Company recorded a gain on derivative liabilities of $ 7.3 million, a loss on derivative liabilities of $ 0.3 million and a gain on derivative liabilities of $ 6.6 million during the years ended December 31, 2022, 2021 and 2020, respectively, which primarily related to the derivative liability associated with the Scilex Notes (as defined in Note 8 ). The fair value of the derivative liability was estimated using the discounted cash flow method combined with a Monte Carlo simulation model including consideration of the terms of the Indenture Amendment (as defined in Note 8 ) and included a 6.1 % risk adjusted net sales forecast and an effective debt yield of 21.5 %. The Scilex Notes were fully extinguished in September 2022 (see Note 8 for additional details) and, as such, there were no remaining derivative liabilities associated with the Scilex Notes as of December 31, 2022. The gain on derivative liabilities recorded in 2020 further related to the compound derivative liabilities associated with the Term Loans (as defined in Note 8 ). The Term Loans were paid in full as of December 31, 2020 and the associated derivative liabilities were relieved. Significant Level 3 inputs and assumptions for derivative liabilities associated with the Term Loans included the estimated probabilities of satisfying certain commercial and financial milestones using a with and without discounted cash flow approach. In connection with the Business Combination (as defined in Note 14 ) in November 2022, Scilex assumed private placement warrants (“Private Warrants”), which are revalued at each subsequent balance sheet date, with fair value changes recognized in the consolidated statement of operations. The Company estimates the value of these warrants using a Black-Scholes option pricing formula. The Company recognized a gain on derivative liabilities related to Private Warrants of $ 2.0 million during the year ended December 31, 2022. The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the years ended December 31, 2022 and 2021: (in thousands) Fair Value Balance at December 31, 2020 $ 35,400 Change in fair value measurement 300 Balance at December 31, 2021 35,700 Private Warrants 620 Change in fair value measurement ( 36,020 ) Balance at December 31, 2022 $ 300 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property a nd Equipment Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Furniture and fixtures $ 1,813 $ 1,709 Office equipment 3,497 3,525 Capitalized software 98 98 Machinery and lab equipment 63,595 56,076 Leasehold improvements 16,158 15,529 Construction in progress 18,230 7,878 103,391 84,815 Less accumulated depreciation ( 51,420 ) ( 43,490 ) $ 51,971 $ 41,325 Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $ 8.9 million, $ 8.3 million and $ 7.0 million, respectively. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | 5. Inve stments The Company’s investments include investments accounted for as equity method investments, equity investments without readily determinable fair value and equity investments with readily determinable fair value. As of December 31, 2022, the Company’s equity method investments include an ownership interest in Immunotherapy NANTibody, LLC (“NANTibody”), NantCancerStemCell, LLC (“NantStem”), Zhengzhou Fortune Bioscience Co. (“ZFB”), Deverra Therapeutics, Inc. (“Deverra”) and ImmuneOncia, among others. The Company’s equity investments without readily determinable fair value include an ownership interest in NantBioScience, Inc. (“NantBioScience”), Aardvark Therapeutics, Inc. (“Aardvark”) and Elsie Biotechnologies, Inc. (“Elsie”), among others. The Company’s equity investments with readily determinable fair value include an ownership interest in Celularity. The Company recorded impairment losses totaling $ 39.0 million associated with its investments during the year ended December 31, 2022, as further described below. The Company recorded no impairment losses associated with its investments during the year ended December 31, 2021. The Company recorded an impairment loss of approximately $ 3.8 million related to an equity method investment during the year ended December 31, 2020. Celularity In July 2021, Celularity, a company of which the Company held an equity interest, commenced trading on the Nasdaq Capital Market under the ticker “CELU”. As of December 31, 2022, the Company owned 20,422,124 shares of Class A common stock of Celularity. During the years ended December 31, 2022 and 2021, the Company did not sell any shares of its investment and recorded unrealized losses on marketable investments of $ 63.9 million and $ 39.8 million, respectively, in connection with the changes in fair value of its Celularity investment. The Company’s investment in Celularity is included within marketable investments within its consolidated balance sheets. Dr. Henry Ji, the Company’s Chief Executive Officer and Chairperson, and Jaisim Shah, a member of the Company’s Board of Directors, each served on the board of directors of Celularity from June 2017 until the closing of the merger of Celularity with GX Acquisition Corp. (the “Celularity Merger”) in July 2021. Dr. Robin L. Smith, who served as a member of the Company’s Board of Directors from December 2019 through November 15, 2021, served on the board of directors of Celularity from August 2019 until the closing of the Celularity Merger in July 2021 and has served on the board of directors of Celularity since the closing of the Celularity Merger in July 2021. ImmunityBio In March 2021, NantKwest, Inc. and ImmunityBio completed a 100 % stock-for-stock merger (the “ ImmunityBio Merger”). The combined company operates under the name ImmunityBio, Inc. and its shares of common stock commenced trading on the Nasdaq Global Select Market under the ticker, “IBRX”. Prior to the closing of the ImmunityBio Merger, the Company owned 10,000,000 shares of common stock of ImmunityBio, and received 8,190,000 shares of ImmunityBio common stock (Nasdaq: IBRX) post-merger. The Company sold 8,190,000 shares of ImmunityBio common stock during the year ended December 31, 2021 for net proceeds to the Company of $ 124.0 million. In connection with the disposal of its investment in ImmunityBio, the Company recorded a realized gain on marketable investments of $ 24.1 million during the year ended December 31, 2021. The Company had no remaining shares of ImmunityBio common stock as of December 31, 2021. Aardvark During the year ended December 31, 2021, the Company paid $ 10.0 million in cash for an aggregate of 7,777,864 shares of Series B Preferred Stock of Aardvark. The Company accounts for its investment in Aardvark as an equity investment without a readily determinable fair value and carries its investment in Aardvark at cost, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. Tien Lee, MD, a member of the board of directors of Scilex, is the founder and chief executive officer of Aardvark. Kim D. Janda, Ph.D., a member of the Board of Directors of the Company, is a member of the advisory board of Aardvark. There were no observable price changes, and the Company recorded no impairment for its investment in Aardvark during the year ended December 31, 2022. Deverra During the year ended December 31, 2021, the Company paid approximately $ 10.2 million in consideration for an aggregate of 5,622,703 shares of common stock of Deverra, a development-stage, biotechnology company focused on developing cellular immunotherapy programs. The Company’s payment consisted of (i) the cancellation of certain promissory notes issued by Deverra to the Company with an aggregate principal amount of $ 6.0 million and unpaid accrued interest of approximately $ 0.1 million and (ii) a cash payment of $ 4.1 million. The Company initially agreed to make additional investments in Deverra, but the Company and Deverra subsequently terminated the Company’s obligation to make such additional investments. The Company determined that its investment in Deverra’s common stock represented an equity method investment and that substantially all of the fair value of the underlying assets of Deverra related to a single IPR&D asset. The Company immediately expensed all costs associated with the investment and the total consideration paid was expensed as acquired in-process research and development during the year ended December 31, 2021. The Company has a variable interest in Deverra and Deverra is deemed to be a variable interest entity (“VIE”). In connection with the Company’s purchase of Deverra common stock, Dr. Henry Ji, Ph.D., the Company’s Chief Executive Officer and Chairperson, and Jaisim Shah, a member of the Company’s Board of Directors, were appointed to the board of directors of Deverra. Despite their participation in the Board, the Company is not, however, the primary beneficiary of the VIE as it does not have the power to direct the activities of Deverra, although management determined it does have significant influence. Elsie During the year ended December 31, 2021, the Company paid $ 10.0 million in cash for 10,000,000 shares of Series A Preferred Stock of Elsie. The Company accounts for its investment in Elsie as an equity investment without a readily determinable fair value and carries its investment in Elsie at cost, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. In connection with the Company’s purchase of Elsie Series A Preferred Stock, Dr. Henry Ji was appointed to the board of directors of Elsie. During the year ended December 31, 2022, the Company recorded an impairment charge of $ 10.0 million related to its investment in Elsie. NANTibody The Company’s investment in NANTibody was reported in equity method investments on its consolidated balance sheets and its share of NANTibody’s income or loss was recorded in loss on equity method investments on its consolidated statement of operations. The Company’s investment in NANTibody had a carrying value of zero as of each of December 31, 2022 and 2021 due to the Company’s share of cumulative losses. The Company continues to hold 40 % of the outstanding equity of NANTibody and NantCell holds the remaining 60 %. NANTibody recorded a net loss of $ 1.3 million, $ 0.7 million and $ 0.1 million fo r the twelve months ended September 30, 2022, 2021 and 2020, respectively. As of September 30, 2022, NANTibody had $ 2.4 million in curre nt assets, $ 11.4 million in curr ent liabilities, $ 0.1 million in noncurrent assets and no noncurrent liabilities. As of September 30, 2021, NANTibody had $ 2.4 million in current assets, $ 9.6 million in current liabilities, $ 0.1 million in noncurrent assets and no noncurrent liabilities. The financial statements of NANTibody are not received sufficiently timely for the Company to record its portion of earnings or loss in the current financial statements and therefore the Company reports its portion of earnings or loss on a one quarter lag. NantCancerStemCell (“NantStem ” ) The Company’s investment in NantStem is reported in equity method investments on its consolidated balance sheets and its share of NantStem’s net income or loss was recorded in loss on equity method investments on its consolidated statement of operations. The Company continues to hold 20 % of the outstanding equity of NantStem and NantBio holds the remaining 80 % as of December 31, 2022. During the fourth quarter of 2022, the Company determined that the carrying value of its investment in NantStem was negatively impacted by the arbitration decisions and subsequent litigation actions associated with NantCell, NANtibody and NantPharma, LLC (see Note 11 for details), and that it had incurred an impairment. As such, the Company recorded a loss of $ 19.0 million for impairment of the total carrying value of the investment in NantStem at December 31, 2022. The carrying value of the Company’s investment in NantStem was approximately $ 18.5 million as of December 31, 2021. NantStem recorded net income of $ 1.9 million and $ 0.1 million for the twelve months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, NantStem ha d $ 85.3 million in current assets, of which $ 71.2 million was a note receivable with related party Nant entities, no current liabilities, $ 0.1 million in noncurrent assets and no noncurrent liabilities. As of September 30, 2021, NantStem had $ 83.1 million in current assets, no curre nt liabilities, $ 0.5 million in noncurrent assets and no noncurrent liabilities. The financial statements of NantStem were not received sufficiently timely for the Company to record its portion of earnings or loss in the current financial statements and therefore the Company reports its portion of earnings or loss on a one quarter lag. NantBio The Company's investment in NantBio was reported in equity investments on its consolidated balance sheets. In April 2015, the Company purchased 1.0 million shares of NantBio common stock for $ 10.0 million. The Company continues to hold approximately 0.5 % of the outstanding equity of NantBio as of December 31, 2022. During the fourth quarter of 2022, the Company determined that the carrying value of its investment in NantBio was negatively impacted by the arbitration decisions and subsequent litigation actions associated with NantCell, NANtibody and NantPharma, LLC (see Note 11 for details), and that it had incurred an impairment. As such, the Company recorded a loss of $ 10.0 million for its total carrying value of the investment in NantBio at December 31, 2022. The carrying value of the Company’s investment in NantBio was approximately $ 10 million as of December 31, 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Goodwill tot aled $ 80.3 million as of December 31, 2022. Goodwill for the Sorrento Therapeutics segment and Scilex segment was $ 73.6 million and $ 6.7 million, respectively, as of December 31, 2022. T he Sorrento Therapeutics segment had a negative carrying value as of December 31, 2022. Goodwill and intangible assets are assessed annually for impairment on October 1 and more frequently whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined that the full carrying amount of an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset exceeds its fair value. In June 2022, the Company decided to pause for future evaluation the development of Abivertinib, which was acquired from ACEA in 2021 (see Note 7 for details), for the treatment of hospitalized COVID-19 patients. This event led to an assessment to determine if an impairment occurred for the associated IPR&D assets in the second quarter of 2022. Based on a quantitative analysis for impairment performed at June 30, 2022, the Company determined that approximately $ 90.8 million associated with the IPR&D assets, which are in the Sorrento Therapeutics segment, had been impaired and recorded an impairment charge within the loss on impairment of intangible assets in the consolidated statement of operations during the second quarter of 2022. The quantitative analysis is considered a Level 3 non-recurring fair value measurement and was based on the discounted cash flow method that estimates the present value of risk adjusted projected cash flow derived from the IPR&D assets using a discount rate of 16 % at June 30, 2022. During the fourth quarter of 2022, the Company discontinued the development of Abivertinib for the treatment of COVID-19, which resulted in additional impairment of $ 32.0 million associated with the remaining IPR&D asset balance at December 31, 2022. Additionally, the Company recorded an impairment loss of $ 1.4 million associated with other IPR&D intangible assets at December 31, 2022, as a result of revised timelines for commercialization. The Company performed an evaluation of goodwill, including a qualitative analysis of the Company's reporting units at December 31, 2022, and it determined that it was not more likely than not that an impairment of goodwill existed at either of the reporting units at December 31, 2022. Amortization for the intangible assets that have finite useful lives is generally recorded on a straight-line basis over their useful lives. Intangible assets with indefinite useful lives totalin g $ 94.2 million are included in acquired in-process research and development in the table below. A summary of the Company’s identifiable intangible assets as of December 31, 2022 and 2021 is as follows (in thousands): December 31, 2022 Weighted Gross Accumulated Intangibles, Customer relationships 2 $ 1,585 $ 1,479 $ 106 Acquired technology 19 3,410 1,588 1,822 Acquired in-process research and development — 94,240 — 94,240 Technology placed in service 15 21,940 6,216 15,724 Patent rights 15 32,720 13,463 19,257 Assembled workforce 5 605 465 140 Internally developed software 2 520 434 86 Acquired licenses 15 5,711 184 5,527 Total intangible assets $ 160,731 $ 23,829 $ 136,902 December 31, 2021 Weighted Gross Accumulated Intangibles, Customer relationships 2 $ 1,585 $ 1,453 $ 132 Acquired technology 19 3,410 1,412 1,998 Acquired in-process research and development — 218,430 — 218,430 Technology placed in service 15 21,940 4,754 17,186 Patent rights 15 32,720 11,283 21,437 Assembled workforce 5 605 343 262 Internally developed software 2 520 260 260 Total intangible assets $ 279,210 $ 19,505 $ 259,705 As of December 31, 2022, the remaining weighted average life for identifiable intangible assets subject to amortization is 13.7 years. Aggregate amortization expense for years en ded December 31, 2022 and 2021 was $ 4.3 million and $ 4.1 million, respectively. Estimated future amortization expense related to intangible assets, excluding indefinite-lived intangible assets, at December 31, 2022 is as follows (in thousands): Years Ending December 31, Amount 2023 $ 4,416 2024 4,239 2025 4,214 2026 4,214 2027 4,187 Thereafter 21,393 Total $ 42,663 |
Significant Agreements and Cont
Significant Agreements and Contracts | 12 Months Ended |
Dec. 31, 2022 | |
Significant Agreements And Contracts [Abstract] | |
Significant Agreements and Contracts | 7. Significant Agree ments and Contracts Romeg License Agreement On June 14, 2022, the Company's majority-owned subsidiary, Scilex, 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 Scilex (a) a transferable license, with the right to sublicense, under the patents and know-how specified therein (with such license to know-how being exclusive for the limited purposes specified therein) to (i) commercialize the pharmaceutical product comprising liquid formulations of colchicine for the prophylactic treatment of gout in adult humans (the “Initial Licensed Product”) in the United States of America (including its territories) (the “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 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 Territory. As consideration for the license under the Romeg License Agreement, Scilex paid Romeg an up-front license fee of $ 2.0 million, and has agreed to pay Romeg (a) upon Scilex ’ 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 Product by Scilex during the applicable royalty term under the Romeg License Agreement, and (c) a minimum quarterly royalty payment 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 Romeg Licensed Products in the Territory or (ii) the tenth anniversary of the effective date of the License Agreement. License Agreement, Scilex recorded an intangible asset for the acquired license of $ 5.7 million, which is comprised of the upfront license fee of $ 2.0 million and a deferred consideration of $ 3.7 million that is the present value of the future minimum royalty payments and immaterial transaction costs. The contingent sales milestones and sale volume-based future royalties were determined to meet a scope exception for derivatives under ASC Topic 815, Derivatives and Hedging , and not to be probable at either June 30 or December 31, 2022; therefore, they were not recognized as a liability or included in the fair value of the asset as of each of June 30 and December 31, 2022. The Company determined the useful life of the intangible asset to be 15 years , which approximates the life of the licensed patents covering the Initial Licensed Product. Zhengzhou Fortune Bioscience Co., Ltd. In May 2022, the Company completed an acquisition of 51 % of the equity interests of Zhengzhou Fortune Bioscience Co., Ltd (“ZFB”) for $ 5.0 million in cash under a joint venture agreement and equity subscription agreement, as amended (collectively, the “ZFB Agreements”). ZFB is a manufacturer in China of lateral flow diagnostic tests, including COVISTIX, the Company’s COVID-19 virus rapid antigen detection test kit currently being sold in Mexico. Under the ZFB Agreements, the Company has the option to acquire from the minority equity holder the remaining 49 % of the aggregate equity interests of ZFB for $ 50.0 million before December 31, 2022 (the “Subsequent Transaction”), which was extended to June 30, 2023 in the fourth quarter of 2022. If the Subsequent Transaction does not occur, the Company or ZFB may terminate the ZFB Agreements, and the Company’s 51 % of equity interest in ZFB will be redeemed by ZFB for $ 5.0 million. In September 2022, the Company entered an amendment (the “Amendment”) to the ZFB Agreements, pursuant to which, among other things, the Company’s equity interest in ZFB was reduced from 51 % to 49 % through a transfer of 2 % of the Company’s equity interest in ZFB to the other shareholder of ZFB for a payment of $ 0.2 million and the Company’s representation on ZFB’s board of directors was reduced from three out of five total directors to two out of five total directors. The transfer of the 2 % of the equity interest of ZFB was completed, and the Company received $ 0.2 million from the other shareholder of ZFB in September 2022. In May 2022, the Company determined that it held a variable interest in ZFB at completion of the acquisition of 51 % of the equity interest in ZFB, which is determined to be a variable interest entity (“VIE”). The Company further determined that it was the primary beneficiary of the VIE because the Company had control over ZFB through its control over ZFB’s board of directors, had ownership of a majority of voting equity interests and had other sole decision-making rights under the ZFB Agreements to direct the most important activities of ZFB. The Company accounted for the transaction as a business combination and applied the acquisition method of accounting in May 2022. Upon execution of the Amendment and completion of the 2 % equity interest transfer in September 2022, the Company determined that it is no longer the primary beneficiary of ZFB as a VIE because it lost control over ZFB. As a result of this assessment, the Company derecognized all of ZFB's assets and liabilities from the Company’s consolidated financial statements in September 2022, recorded the Company’s 49 % retained equity interest at its fair value of $ 4.8 million, which approximates the net consideration paid to ZFB, at September 30, 2022 and recorded a gain from the deconsolidation of $ 0.3 million. Subsequent to the deconsolidation, the Company determined it has significant influence over ZFB’s operating and financial policies and recorded its 49 % equity interest as an equity method investment. At December 31, 2022, the Company recorded $ 3.0 million account payables to ZFB. In February 2023, the Company entered into a repurchase agreement with ZFB, for the buyback of the Company's remaining 49 % equity interest in ZFB for net proceeds of $ 1.8 million, consisting of $ 4.8 million offset by $ 3.0 million in accounts payable. Acquisition of Virex On February 1, 2022 , the Company completed the acquisition of Virex Health, Inc. ( “Virex”), a developer of at-home diagnostic platforms based in Boston, Massachusetts. In accordance with ASC Topic 805, the Company recorded conside ration transferred totaling $ 11.4 million, including $ 6.8 million in cash, $ 0.1 million in transaction costs paid in cash and 1,281,662 shares of the Company's common stock, or $ 4.5 million of consideration based on the Company's closing share price on February 1, 2022. In connection with the acquisition of Virex, the Company may pay up to $ 10.0 million in contingent consideration in a combination of cash and stock subject to the achievement of certain regulatory milestones. The transaction was accounted for as an asset acquisition since substantially all the value of the gross assets was concentrated in a single asset. No contingent consideration was recorded as of December 31, 2022. The Company fully expensed an amount of $ 11.7 million, representing the consideration transferred, net of short-term liabilities assumed, to acquired IPR&D. Acquisition of ACEA Therapeutics, Inc. On June 1, 2021 (the “Closing Date”), the Company completed the acquisition of ACEA pursuant to the terms of the Agreement and Plan of Merger (the “ACEA Merger Agreement”), dated as of April 2, 2021 , whereby ACEA became a wholly owned subsidiary of the Company. With operations in both China and the United States, ACEA is developing multiple clinical and preclinical-stage new chemical entity compounds, including the late clinical drug candidate, Abivertinib. The final purchase price allocation was calculated based on an upfront consideration of $ 44.1 million, which was based on the Company’s closing share price on June 1, 2021, and resulted in separate and distinct intangible assets comprised of acquired IPR&D of $ 190.8 million, of which $ 122.8 million associated with Abivertinib for the treatment of COVID-19 was deemed impaired and written off during the year ended December 31, 2022 (see Note 6 for details), goodwill of $ 36.0 million, fair value of debt assumed of approximately $ 32.1 million, deferred tax liabilities of $ 31.4 million and other net assets of approximately $ 2.9 million. Goodwill largely reflects the broad-spectrum and synergistic infrastructures and expertise in pharmaceutical and biological drug discovery, development and manufacturing, and expanded geographic coverage in China and North America and is not deductible for tax purposes. Acquisition costs related to the acquisition of ACEA were not material. Pursuant to the terms of the ACEA Merger Agreement, a portion of the closing consideration equal to (i) $ 38,059,326 was used to repay certain existing indebtedness of ACEA, which amount was paid to the holders thereof in the form of shares of common stock of the Company and an aggregate of 5,519,469 shares (“Indebtedness Shares”) of the Company’s common stock were issued in respect thereof based on a price per share equal to $ 6.8955 (representing the volume weighted average closing price per share of the Company’s common stock, as reported on The Nasdaq Stock Market LLC, for the 10 consecutive trading days ending on the date that was three trading days prior to the Closing Date) and (ii) $ 100,000 was set aside for expenses incurred by the shareholders’ representative thereunder. The Indebtedness Shares were subject to a true-up, as set forth in the ACEA Merger Agreement, if the price at which such shares were issued is greater than the closing price of the Company’s common stock on the date that is six months after June 1, 2021. The Company recorded $ 7.5 million associated with the true-up as a current liability within acquisition consideration at December 31, 2022. In addition to the Closing Consideration, the Company will pay the ACEA equityholders (i) up to $ 450.0 million in additional payments, subject to the receipt of certain regulatory approvals and achievement of certain net sales targets with respect to the assets acquired from ACEA and (ii) five to ten percent of the annual net sales on specified royalty-bearing products (the “Earn-Out Consideration”). The fair value of the Earn-Out Consideration, excluding any acquisition consideration associated with the Indebtedness Shares, was $ 48.4 million and $ 123.8 million as of December 31, 2022 and 2021, respectively (see Note 3 for details). The amount referenced in clause (i) of the preceding sentence includes the amounts that would have otherwise been due to ACEA under that certain License Agreement, dated July 13, 2020, between the Company and ACEA, which agreement was terminated in its entirety upon completion of the acquisition of ACEA. Asset Purchase Agreement with Aardvark Therapeutics, Inc. In April 2021, the Company entered into an asset purchase agreement (the “Aardvark Asset Purchase Agreement”) with Aardvark to acquire Aardvark’s Delayed Burst Release Low Dose Naltrexone (DBR-LDN), or ARD-301, asset and intellectual property rights, for the treatment of chronic pain, fibromyalgia and chronic post-COVID syndrome. As consideration for the purchase of the assets, the Company paid Aardvark an upfront license fee of $ 5.0 million comprised of 616,655 shares of the Company’s common stock, and which was expensed as acquired in-process research and development during the year ended December 31, 2021. The Company also agreed to pay Aardvark (i) milestone payments upon the receipt of certain regulatory approvals and (ii) milestone payments upon the Company’s achievement of certain commercial sales milestones. The Company will also pay certain royalties in the mid-single digit to low-double digit percentages of annual net sales by the Company. Tien Lee, MD, a member of the board of directors of Scilex, is the founder and chief executive officer of Aardvark. Kim D. Janda, Ph.D., a member of the board of directors of the Company, is a member of the advisory board of Aardvark. As discussed in Note 5 , the Company holds an investment interest in Aardvark. Acquisition of SmartPharm Therapeutics, Inc. On September 1, 2020, the Company completed the acquisition of SmartPharm, a gene-encoded protein therapeutics company developing non-viral DNA and RNA gene delivery platforms for COVID-19, Influenza and rare diseases with broad potential for application in enhancing antibody-centric therapeutics. The total base consideration paid to the holders of capital stock of SmartPharm in the acquisition was $ 19.5 million, which was comprised of approximately 1.8 million shares of the Company’s common stock. The purchase price allocation resulted in net identifiable assets of $ 19.5 million, which included separate and distinct indefinite lived intangible assets comprised of acquired in-process research and development of $ 13.9 million, goodwill of $ 5.3 million and other net assets of $ 0.3 million. Goodwill largely reflects the synergies expected to be achieved with SmartPharm’s gene delivery platforms and the assembled workforce. Goodwill is not deductible for tax purposes. License Agreements License Agreement with Icahn School of Medicine at Mount Sinai In March 2021, the Company entered into an exclusive license agreement (the “Mount Sinai License Agreement”) with Icahn School of Medicine at Mount Sinai (“Mount Sinai”) to acquire a worldwide, exclusive, sublicensable license to certain of Mount Sinai’s patents and monoclonal antibodies as well as certain related technical information (“Licensed Products”) to develop, manufacture, commercialize, and exploit related products and services for all fields, uses, and applications, including for the diagnosis, prevention, treatment and cure of coronavirus. As consideration for the Mount Sinai License Agreement, the Company paid Mount Sinai an upfront license fee of $ 7.5 million, comprised of 851,305 shares of the Company’s common stock, which was expensed as acquired in-process research and development during the year ended December 31, 2021. The Company also agreed to pay Mount Sinai (i) certain milestone payments upon the achievement of certain clinical trial and regulatory milestones, and (ii) certain royalties in the low-single digit to mid-single digit percentages of annual net sales of Licensed Products by the Company and a share of any sublicense revenue received by the Company from sublicensees. License Agreement with ACEA Therapeutics, Inc. In July 2020, the Company entered into a License Agreement (the “ACEA License Agreement”) with ACEA Therapeutics, Inc. (“ACEA”). Pursuant to the ACEA License Agreement, ACEA granted the Company an exclusive license and right under certain patents and certain know-how and other intellectual property (“Licensed Know-How”) to fully utilize, exploit and commercialize (i) the Licensed Know-How, (ii) Abivertinib (AC0010), a selective, orally available irreversible small molecule tyrosine kinase inhibitor to Bruton’s tyrosine kinase and mutant epidermal growth factor receptor, including any improvements thereto, and (iii) (a) any composition, product or component part thereof, and (b) any and all services offered in connection or associated therewith, in all fields of use, including the diagnosis, treatment and/or cure of any human disease or disorder worldwide, other than the People’s Republic of China. As consideration for the license under the ACEA License Agreement, the Company paid ACEA an up-front license fee of $ 15.0 million in cash, which was expensed as acquired in-process research and development during the year ended December 31, 2020. The Company also agreed to pay ACEA certain milestone payments under the ACEA License Agreement; however, upon completion of the acquisition of ACEA, the ACEA License Agreement was terminated in its entirety and no further payments will be due under the ACEA License Agreement. License Agreement with The Trustees of Columbia University in the City of New York In July 2020, the Company entered into an Exclusive License Agreement (the “Columbia License Agreement”) with The Trustees of Columbia University in the City of New York (“Columbia”). Pursuant to the Columbia License Agreement, Columbia granted the Company (i) an exclusive license under certain patents, other intellectual property and materials to discover, develop, commercialize and exploit certain products and services (“Products”) in all diagnostic applications of high-performance loop-mediated isothermal amplification (“HP-LAMP”) for coronaviruses and influenza viruses (the “Field”) worldwide, subject to certain limitations. Pursuant to the Columbia License Agreement, Columbia also granted to the Company an option, exercisable for twelve months from the effective date of the Columbia License Agreement and subject to the satisfaction of certain conditions, to acquire an exclusive worldwide license to such patents, other intellectual property and materials for additional diagnostic application(s) of HP-LAMP (other than for coronaviruses and influenza viruses), subject to certain limitations. As consideration for the license under the Columbia License Agreement, the Company paid Columbia an up-front license fee of $ 5.0 million in cash, which was expensed as acquired in-process research and development during the year ended December 31, 2020. The Company also agreed to pay Columbia (i) an earned royalty on the net sales of Products in the Field worldwide, and (ii) minimum annual royalty payments of $ 1.0 million no later than ten days following the first bona fide commercial sale of a Product to a third-party customer and on an annual basis thereafter. In addition, the Company agreed to pay Columbia a percentage of certain non-royalty sublicense revenue and other payments received by the Company from its sublicensees as consideration for the grant of any sublicense, option or similar rights. Pursuant to the Columbia License Agreement, the Company also agreed to pay certain one-time, development milestone payments to Columbia upon the receipt of certain regulatory approvals or the first commercial sale of certain Products for diagnostic applications within the Field. License Agreement with Mayo Foundation In September 2020, the Company entered into a patent and know-how license agreement (the “Mayo License Agreement”) with Mayo Foundation for Medical Education and Research (“Mayo”). Pursuant to the Mayo License Agreement, Mayo granted the Company a sublicensable license under certain of Mayo’s patents, know-how, and materials relating to targeted nanoparticle therapies (“Patent Rights”, “Know-How”, and “Materials”, respectively) to reproduce, use, commercialize, and exploit related products, processes and services (“Licensed Products”) for the prevention, diagnosis and/or treatment of human diseases and conditions worldwide. As consideration for the license under the Mayo License Agreement, the Company paid Mayo an upfront license fee of $ 9.3 million comprised of approximately $ 2.3 million in cash and 996,803 shares of the Company’s common stock, which was expensed as acquired in-process research and development during the year ended December 31, 2020. The Company also agreed to (i) reimburse Mayo up to $ 3.4 million for preclinical and clinical research expenses associated with the Know-How, Patent Rights and Materials arising prior to the entry into the Mayo License Agreement, and (ii) reimburse Mayo approximately $ 2.0 million for expenses related to the development and manufacturing of the Materials arising prior to the entry into the Mayo License Agreement. Such reimbursements were paid and expensed as acquired in-process research and development during the year ended December 31, 2020. The Company also agreed to pay Mayo (i) certain milestone payments upon the initiation of certain clinical trials, (ii) certain milestone payments upon the receipt of certain regulatory approvals, and (iii) certain milestone payments upon the achievement of certain commercial sales milestones. The Company will also pay certain royalties in the low-single digit to mid-single digit percentages of annual net sales of Licensed Products by the Company and a share of any sublicense revenue received by the Company from sublicensees. License Agreement with Personalized Stem Cells, Inc. In October 2020, the Company entered into a license agreement (the “PSC License Agreement”) with Personalized Stem Cells, Inc. (“PSC”). Pursuant to the PSC License Agreement, PSC granted the Company an exclusive license and right under certain patents, certain know-how and other intellectual property to fully utilize, exploit and commercialize certain products and services using allogeneic adipose-derived stem cells for or in respect of human health, including the diagnosis and treatment and/or cure of any human disease or disorder (excluding commercial sales for the diagnosis, treatment and/or cure of SARS-CoV-2 or other respiratory diseases in the People’s Republic of China) worldwide (excluding the People’s Republic of China for products directed at COVID-19 or other respiratory diseases). PSC also agreed to transfer certain cell lines composed of stromal vascular cells, master cell banks and finished final drug lots (the “Product Materials”) to the Company. The Company agreed to grant PSC rights to use data derived by the Company from a certain Phase I COVID-19 study for PSC’s own programs that are not competitive with the businesses or activities of the Company, and for PSC to sublicense such data to third parties for research, development and regulatory purposes. As consideration for the license under the PSC License Agreement, the Company paid PSC an upfront license fee of $ 3.5 million in cash, which was expensed as acquired in-process research and development during the year ended December 31, 2020. The Company also agreed to pay PSC (i) a milestone payment upon the issuance of a regulatory approval, and (ii) certain milestone payments upon PSC’s manufacture and delivery of the Product Materials to the Company. The Company will also pay royalties in the low-single digit percentages of annual net sales of licensed products and services by the Company and a share of any sublicense revenue received by the Company from sublicensees. License Agreement with NantCell In April 2015, the Company and NantCell entered into a license agreement. Under the terms of the agreement, the Company granted an exclusive license to NantCell covering patent rights, know-how and materials related to certain antibodies, ADCs and two CAR-TNK products. NantCell agreed to pay a royalty not to exceed five percent ( 5 %) to the Company on any net sales of products from the assets licensed by the Company to NantCell. In addition to the future royalties payable under this agreement, NantCell paid an upfront payment of $ 10.0 million to the Company and issued 10 million shares of NantCell common stock to the Company valued at $ 100.0 million based on an equity sale of NantCell common stock to a third party. The Company terminated the agreement, effective January 29, 2020. The termination and remedies related to such termination were litigated in an arbitration before the American Arbitration Association. The result of the arbitration held, among other things, that the Company has no further obligations under the license agreement with NantCell (see the information under the heading “Litigation” in Note 11 for additional information). The Company has no deferred revenue balance associated with this license agreement as of December 31, 2022. The upfront payment and the value of the equity interest received was recorded as deferred revenue at the time the agreement was entered into and continued to be recorded as deferred revenue as of December 31, 2021. On March 9, 2021, NantKwest, Inc. and ImmunityBio (formerly known as NantCell, Inc.) completed their previously announced 100 % stock-for-stock merger (see Note 5 ). |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Sorrento Therapeutics 2018 Purchase Agreements and Indenture for Scilex Pharma On September 7, 2018, Scilex Pharmaceuticals, Inc. (“Scilex Pharma”) entered into Purchase Agreements (the “2018 Purchase Agreements”) with certain investors (collectively, the “Scilex Note Purchasers”) and the Company. Pursuant to the 2018 Purchase Agreements, on September 7, 2018, Scilex Pharma, among other things, issued and sold to the Scilex Note Purchasers senior secured notes due 2026 in an aggregate principal amount of $ 224.0 million (the “Scilex Notes” ) for an aggregate purchase price of $ 140.0 million (the “Scilex Notes Offering”). In connection with the Scilex Notes Offering, Scilex Pharma also entered into an Indenture (the “Indenture”) governing the Scilex Notes with U.S. Bank National Association, a national banking association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”), and the Company. Pursuant to the Indenture, the Company agreed to irrevocably and unconditionally guarantee, on a senior unsecured basis, the punctual performance and payment when due of all obligations of Scilex Pharma under the Indenture. Actual cumulative net sales of ZTlido from the issue date of the Scilex Notes through December 31, 2021 did not equal or exceed 95 % of a predetermined target sales threshold for such period , which resulted in a $ 28.0 million increase in the principal amount of the Scilex Notes, effective February 15, 2022 . As a result, the Company recorded the increase of $ 28.0 million in principal and non-operating expense at December 31, 2021. Effective February 14, 2022, Scilex Pharma issued to the Company a draw notice under the irrevocable standby letter of credit issued by the Company to Scilex Pharma as required under the terms of the Indenture because actual cumulative net sales of ZTlido from the issue date of the Scilex Notes through December 31, 2021, were less than a specified sales threshold for such period. As a result of the draw notice being issued, the Company paid to Scilex Pharma $ 35.0 million in a single lump-sum amount as a subordinated loan. Per the terms of the Amendment, in February 2022, Scilex Pharma repurchased Scilex Notes from the holders thereof on a pro rata basis in an aggregate amount equal to $ 20.0 million at a purchase price in cash equal to 100 % of the principal amount thereof. On June 2, 2022, the Company and Scilex Pharma entered into a Consent Under and Amendment No. 4 to Indenture (the “Indenture Amendment”) with U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) and the Scilex Note Purchasers. Pursuant to the Indenture Amendment, (1) on June 3, 2022, Scilex Pharma repurchased approximately $ 41.4 million of the aggregate principal amount of the outstanding Scilex Notes at 100 % of the principal amount thereof, (2) the Scilex Note Purchasers agreed that Scilex Pharma can repurchase the remaining principal amount of the Scilex Notes at any time on or before September 30, 2022 for $ 41.4 million (subject to reduction for any quarterly royalty payments) and upon such repurchase the Scilex Note Purchasers will forgive and discharge $ 28.0 million of the aggregate principal amount of the Scilex Notes (the “Early Paydown Provision”), (3) the minimum cash requirement under the Indenture was reduced to $ 5.0 million in aggregate unrestricted cash equivalents at the end of each calendar month, and (4) the maximum aggregate principal amount of that certain Intercompany Promissory Note issued by Scilex Pharma to the Company on October 5, 2018 was increased from up to $ 25.0 million to up to $ 50.0 million. The Company concluded that the Indenture Amendment was a troubled debt restructuring for accounting purposes. The future undiscounted cash flows of the Scilex Notes were higher than the carrying value of the Scilex Notes at the time of the entry into the Indenture Amendment, and accordingly, no gain was recognized in the quarter ended June 30, 2022. Due to a decrease of $ 30.4 million in the fair value of the Scilex Notes Derivative caused by the Indenture Amendment, the carrying value of the Scilex Notes was increased by $ 30.4 million, totaling $ 74.9 million at June 30, 2022 . In September 2022, Scilex Pharma exercised the Early Paydown Provision to fully extinguish the Scilex Notes. In August and September 2022, the Company made principal payments towards the outstanding Scilex Notes totaling $ 1.7 million and $ 39.7 million, respectively. Pursuant to the Indenture Amendment, $ 28.0 million of principal amount on the Scilex Notes was forgiven by the Scilex Note Purchasers and the Scilex Notes were fully extinguished in September 2022. The Company recorded a gain on debt extinguishment of $ 33.4 million during the three months ended September 30, 2022. There are no derivative liabilities associated with the Scilex Notes, as of December 31, 2022. To estimate the fair value of the Scilex Notes, the Company used the discounted cash flow method under the income approach, which involved significant Level 3 inputs and assumptions, combined with a Monte Carlo simulation as appropriate. The value of the debt instrument was based on the present value of future principal payments and the discounted rate of return reflective of the Company’s credit risk. Borrowings of the Scilex Notes consisted of the following (in thousands): December 31, 2022 2021 Principal $ — $ 133,998 Unamortized debt discount — ( 30,601 ) Unamortized debt issuance costs — ( 2,235 ) Carrying value $ — $ 101,162 Estimated fair value $ — $ 115,400 The Company made principal payments of $ 106.0 million, $ 45.9 million and $ 69.8 million during the fiscal years ended December 31, 2022, 2021 and 2020, respectively. Debt discount and debt issuance costs, which are presented as a direct reduction of the Scilex Notes in the consolidated balance sheets, were amortized as interest expense using the effective interest method. The amount of debt discount and debt issuance costs included in interest expense for the fiscal years ended December 31, 2022, 2021 and 2020 was approximat ely $ 3.1 million, $ 7.9 million and $ 10.6 million, resp ectively. The Company recorded a gain on debt extinguishm ent of $ 28.6 million and a loss on debt extinguishment of $ 14.0 million in connection with its repayments of principal made during the years ended December 31, 2022 and 2021, respectively. The Company identified a number of embedded derivatives that required bifurcation from the Scilex Notes and that were separately accounted for in the consolidated financial statements as derivative liabilities prior to the extinguishment. Certain of these embedded features included default interest provisions, contingent rate increases, contingent put options, optional and automatic acceleration provisions and tax indemnification obligations. The fair value of the derivative liabilities associated with the Scilex Notes was estimated using the discounted cash flow method under the income approach combined with a Monte Carlo simulation model. This involved significant Level 3 inputs and assumptions, including a risk adjusted net sales forecast, an effective debt yield, estimated marketing approval probabilities for SP-103 and an estimated probability of an initial public offering by Scilex that satisfied certain valuation thresholds and timing considerations. Bridge Loan Agreements On September 30, 2022, the Company entered into a Bridge Loan Agreement (the “September Bridge Loan Agreement”) pursuant to which the Company borrowed $ 41.6 million in the form of a bridge loan (the “September Bridge Loan”), which bore interest at 6 % per annum and matured on January 31, 2023 . The Company received proceeds of $ 41.2 million net of transaction fees of $ 0.4 million and paid approximately $ 1.3 million in advisory fees, which were recorded as a debt discount. As of December 31, 2022, $ 0.1 million unamortized debt discount remained. The amount of debt discount and debt issuance costs included in interest expense for the year ended December 31, 2022 was $ 0.9 million. The Company repaid $ 36.0 million of the September Bridge Loan during the fourth quarter of 2022 and repaid the remaining principal in January 2023. The Company recorded a loss on debt extinguishment of $ 0.7 million in connection with its repayments of principal made on the September Bridge Loan during the year ended December 31, 2022. On February 16, 2022, the Company entered into a Bridge Loan Agreement pursuant to which the Company borrowed $ 45.0 million in the form of a bridge loan (the “February Bridge Loan”), which bore no interest and matured on June 16, 2022 . The amount of debt discount and debt issuance costs included in interest expense for the year ended December 31, 2022 was $ 0.9 million. The Company fully repaid the February Bridge Loan in June 2022. The Company recorded a loss on debt extinguishment of $ 0.9 million in connection with its repayments of principal made on the February Bridge Loan during the year ended December 31, 2022. ACEA Significant Debt Arrangements At the closing of the transactions contemplated by the ACEA Merger Agreement and as a result thereof, on June 1, 2021, the Company, as the indirect parent to Hangzhou ACEA Pharmaceutical Research Co., Ltd. (“ACEA Hangzhou”) and Zhejiang ACEA Pharmaceutical Co., Ltd. (“ACEA Zhejiang”), each of which are indirect subsidiaries of ACEA, succeeded to the financial obligations of ACEA Hangzhou and ACEA Zhejiang, each of whom are parties to agreements with ACEA Bio (Hangzhou) Co., Ltd. (“ACEA Bio”) (an entity unrelated to ACEA, ACEA Hangzhou and ACEA Zhejiang), as set forth below. Pursuant to that certain contract, dated as of August 15, 2018, between ACEA Hangzhou and ACEA Bio, ACEA Hangzhou borrowed an aggregate of approximately $ 29.1 million ( 184,600,000 RMB) from ACEA Bio in a series of loans thereunder (the “Contract”). Each loan under the Contract is for a period of 10 years and the maturity dates thereof range from December 31, 2024 to December 31, 2028 . Each loan is interest free for the first five years , after which time the interest rate is 5.39 % per annum. As part of the final purchase price allocation, the Company estimated the fair value of the Contract to be approximately $ 17.1 million. Borrowings under significant debt arrangements assumed in connection with the Company’s acquisition of ACEA consisted of the following (in thousands): December 31, December 31, Principal $ 26,718 $ 29,048 Unamortized debt discount ( 7,878 ) ( 10,642 ) Carrying value $ 18,840 $ 18,406 Estimated fair value $ 15,000 $ 17,100 The following table provides a schedule of future repayments under the Contract (in thousands): 2023 $ — 2024 984 2025 3,257 2026 5,630 2027 10,566 2028 6,281 Total $ 26,718 2018 Oaktree Term Loan Agreement In November 2018, the Company entered into a Term Loan Agreement (the “Loan Agreement”) with certain funds and accounts managed by Oaktree Capital Management, L.P. (collectively, the “Lenders”) and Oaktree Fund Administration, LLC, as administrative and collateral agent, for an initial term loan of $ 100.0 million (the “Initial Loan”). In May 2019, the Company entered into an amendment to the Loan Agreement, under which terms the Lenders agreed to make available to the Company $ 20.0 million (the “Early Conditional Loan”, and collectively, with the Initial Loan, the “Term Loans”). In connection with the Loan Agreement, in November 2018, the Company issued to the Lenders warrants to purchase 6,288,985 shares of the Company’s common stock (the “Initial Warrants”). The Initial Warrants have an exercise price per share of $ 3.28 and are exercisable through May 7, 2029. During the year ended December 31, 2020, the Company repaid $ 120.0 million of outstanding principal under the Term Loans plus approximately $ 9.4 million of related prepayment premium, exit fees and accrued interest thereon. In connection with the repayment of outstanding principal, the Company recorded a loss on debt settlement of $ 51.9 million. Interest expense recognized for stated interest on the Term Loans totaled $ 3.0 million for the year ended December 31, 2020. Debt discount and debt issuance costs were amortized as interest expense using the effective interest method. The amount of debt discount and debt issuance costs included in interest expense on the Term Loans for the year ended December 31, 2020 was approximately $ 2.2 million. 2020 Revolving Credit Facility On December 14, 2020, Scilex Pharma entered into the Credit and Security Agreement (the “Credit Agreement”) with CNH Finance Fund I, L.P. (“CNH”) which provided Scilex Pharma with the ability to incur indebtedness under an accounts receivable revolving loan facility in an aggregate amount of up to $ 10.0 million and the incurrence of liens and the pledge of collateral to CNH in connection with the revolving loan facility. As of December 31, 2021, the outstanding balance was $ 8.8 million. On February 16, 2022, the Company notified CNH that it was terminating the Credit Agreement, effective March 18, 2022. The balance of the indebtedness, including principal, interest, fees and charges, was settled by the Company on the termination date. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 9. S tockholders’ Equity Sorrento Therapeutics At-the-Market Sales Agreement On April 27, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners, as sales agent (the “Agent”), pursuant to which the Company could offer and sell through or to the Agent up to $ 250.0 million in shares of its common stock (the “Shares”). On December 4, 2020, the Company entered into Amendment No. 1 (the “December 2020 Amendment”) to the Sales Agreement, which amended the Sales Agreement to provide that the Company could offer and sell, from time to time, through or to the Agent, up to an additional $ 450.0 million in shares of the Company’s common stock, such that the Company could offer and sell up to an aggregate of $ 700.0 million in shares of its common stock pursuant to the Sales Agreement, as amended by the December 2020 Amendment (the “Original Amended Sales Agreement”). On December 3, 2021, the Company amended and restated the Original Amended Sales Agreement to include Cantor Fitzgerald & Co., B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC as additional sales agents for the Company’s “at the market offering” program (the “Amended and Restated Sales Agreement”). On December 23, 2021, the Company entered into Amendment No. 1 (the “December 2021 Amendment”) to the Amended and Restated Sales Agreement with Cantor Fitzgerald & Co., B. Riley Securities, Inc. and H.C. Wainwright & Co., LLC (the “Sales Agents”). The December 2021 Amendment amended the Amended and Restated Sales Agreement to provide that the Company may offer and sell, from time to time, through or to the Sales Agents, as sales agents and/or principals, up to an additional $ 5,000,000,000 in shares of the Company’s common stock (the “Additional Shares”), such that the Company may offer and sell up to an aggregate of $ 5,442,943,290 in shares of its common stock (the “Offering”) pursuant to the Amended and Restated Sales Agreement, as amended by the December 2021 Amendment (the “Amended Sales Agreement”), but not above 3.0% inclusive of $ 442,943,290 in shares sold pursuant to the Original Amended Sales Agreement and the Amended and Restated Sales Agreement through December 22, 2021. Subject to the terms and conditions of the Amended Sales Agreement, each Sales Agent will use its commercially reasonable efforts to sell the shares of the Company’s common stock from time to time, based upon the Company’s instructions. Under the Amended Sales Agreement, the Sales Agents may sell the shares of the Company’s common stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Company has no obligation to sell any shares of its common stock pursuant to the Amended Sales Agreement, and may at any time suspend offers under it. The Offering will terminate upon (i) the election of the Sales Agents upon the occurrence of certain adverse events, (ii) three business days’ advance notice from the Company to the Sales Agents or a Sales Agent (with respect to itself) to the Company, or (iii) the sale of all $ 5,442,943,290 of shares of the Company’s common stock pursuant thereto. Under the terms of the Amended Sales Agreement, the Sales Agents will be entitled to a commission at an initial fixed rate of 3.0 % of the gross proceeds from each sale of shares of the Company’s common stock under the Amended Sales Agreement, which percentage may be adjusted (but not above 3.0 %) based on the aggregate amount of securities sold by the Sales Agents pursuant to the Amended Sales Agreement. As discussed in Note 16 , on February 13, 2023, the Debtors commenced voluntary proceedings under Chapter 11. Sales of shares of the Company’s common stock under the Amended Sales Agreement are subject to the pre-approval by the Bankruptcy Court during the pendency of the Chapter 11 Cases. During the years ended December 31, 2022, 2021 and 2020, the Company sold an aggregate of 205,374,865 , 21,085,014 and 30,991,918 shares of its common stock, respectively, pursuant to the Original Amended Sales Agreement and the Amended and Restated Sales Agreement for aggregate net proceeds to the Company of approximat ely $ 402.3 million, $ 175.6 million and $ 227.7 million, respectively. Common Stock Purchase Agreement In April 2020, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Arnaki Ltd. (the “Purchaser”), pursuant to which the Purchaser was committed to purchase up to an aggregate of $ 250.0 million of shares of the Company’s common stock over the 36-month term of the Purchase Agreement. During the year ended December 31, 2020, the Company sold an aggregate of 1,423,077 shares of its common stock pursuant to the Purchase Agreement for aggregate net proceeds of $ 8.0 million. Effective October 27, 2020, the Company voluntarily terminated the Purchase Agreement. The Purchase Agreement was terminable at will by the Company with no penalty. Aspire Transaction In February 2020, the Company entered into a Common Stock Purchase Agreement (the “Aspire Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”), pursuant to which Aspire Capital was committed to purchase up to an aggregate of $ 75.0 million of shares of the Company’s common stock over a 24-month term. Upon execution of the Aspire Purchase Agreement, the Company issued to Aspire Capital 897,308 shares of the Company’s common stock as a commitment fee. The Company used and is using proceeds it received under the Aspire Purchase Agreement for working capital and general corporate purposes and for the repayment of the Term Loans. On April 24, 2020, the Aspire Purchase Agreement terminated effective immediately in accordance with its terms as the Company issued and sold, as of such date, an aggregate of 33,825,010 shares of the Company’s common stock for the full $ 75.0 million of shares available for issuance thereunder. Equity Distribution Agreement In April 2020, the Company voluntarily terminated the Equity Distribution Agreement, dated October 1, 2019 (the “Distribution Agreement”), that the Company entered into with JMP Securities LLC (“JMP Sales Agent”), effective immediately. Pursuant to the Distribution Agreement, the Company could offer and sell, from time to time, through the JMP Sales Agent, shares of the Company’s common stock having an aggregate offering price of up to $ 75,000,000 . During the term of the Distribution Agreement, the Company sold an aggregate of 2,120,149 shares of its common stock thereunder for aggregate gross proceeds to the Company of approximately $ 7.4 million. The Distribution Agreement was terminable at will by the Company with no penalty. Scilex Holding Company Dividend On December 30, 2022, the Company’s Board of Directors (the “Board”) declared a stock dividend (the “Dividend”) consisting of an aggregate of 76,000,000 shares (the “Dividend Stock”) of common stock, par value $ 0.0001 per share, of Scilex (“Scilex Common Stock”) held by the Company to record holders of (i) the Company’s common stock (such stock, the “Company Common Stock” and such record holders, the “Record Common Holders”) as of the close of business on January 9, 2023 (the “Record Date”) and (ii) certain warrants to purchase Company Common Stock that, among other things, had not been exercised prior to the ex-dividend date under the rules of The Nasdaq Stock Market LLC (and which had or may have the right to participate in the Dividend pursuant to the terms of their respective warrants). On January 5, 2023, the Board fixed the date on which the Dividend would be paid to be January 19, 2023 (the “Payment Date”), such Payment Date being within 60 days following the Record Date. On January 19, 2023, the Dividend was paid. No fractional shares were issued in connection with the Dividend and the equityholders of the Company who otherwise were entitled to receive fractional shares of the Dividend Stock received cash (without interest or deduction) in lieu of such fractional shares in an amount equal to the product obtained by multiplying (a) $ 5.87 , the closing price of the Scilex Common Stock on the Nasdaq Capital Market on the Record Date, by (b) the fraction of one share of Scilex Common Stock that such equityholder would have otherwise been entitled to receive as a Dividend in respect of shares of Company Common Stock held by such equityholder (after aggregating all such fractional shares otherwise issuable to such equityholder in connection with the Dividend). The Dividend Stock is subject to certain transfer restrictions through May 11, 2023. Following the payment of the Dividend, as of March 6, 2023 the Company's ownership interest in Scilex is 42.5 %. Yorkville Standby Equity Purchase Agreement On November 17, 2022, Scilex entered into a Standby Equity Purchase Agreement (the "Yorkville Purchase Agreement") with YA II PN, Ltd. (“Yorkville”), whereby Scilex has the right, but not the obligation, to sell to Yorkville up to $ 500.0 million of shares of its common stock from time to time at Scilex’s sole and absolute discretion any time during the 36 months following the execution of the Yorkville Purchase Agreement, subject to certain conditions. As consideration for Yorkville's commitment to purchase shares of Common Stock at Scilex’s direction upon the terms and subject to the conditions set forth in the Yorkville Purchase Agreement, upon execution of the Yorkville Purchase Agreement, Scilex issued 250,000 shares of its common stock to Yorkville and paid a $ 10,000 structuring fee. On February 8, 2023, Scilex entered into an Amended and Restated Standby Equity Purchase Agreement with Yorkville (the “A&R Yorkville Purchase Agreement”), amending, restating and superseding the Yorkville Purchase Agreement dated November 17, 2022. Pursuant to the A&R Yorkville Purchase Agreement, the shares of common stock, if any, that Scilex elects to sell to Yorkville pursuant to a Yorkville Advance will be purchased at a price equal to 98 % of the lowest daily volume weighted average price of the Scilex common stock for any trading day on the date of delivery of a written purchase notice to Yorkville. B. Riley Standby Equity Purchase Agreement On January 8, 2023, Scilex entered into a Standby Equity Purchase Agreement (the "B. Riley Purchase Agreement") with B. Riley Principal Capital II, LLC (“B. Riley”), whereby Scilex shall have the right, but not the obligation, to sell to B. Riley up to $ 500.0 million of its shares of Scilex’s common stock from time to time at Scilex’s sole and absolute discretion any time during the 36 months following the execution of the B. Riley Purchase Agreement, subject to certain conditions. As consideration for B. Riley’s commitment to purchase shares of common stock at Scilex’s direction upon the terms and subject to the conditions set forth in the B. Riley Purchase Agreement, upon execution of the B. Riley Purchase Agreement, Scilex issued 250,000 shares of its common stock to B. Riley and paid a $ 10,000 structuring fee. |
Stock Incentive and Employee Be
Stock Incentive and Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive and Employee Benefit Plans | 10. Stock In centive and Employee Benefit Plans 2019 Stock Incentive Plan In September 2019, the Company’s stockholders approved the Sorrento Therapeutics, Inc. 2019 Stock Incentive Plan (the “2019 Plan”). The 2019 Plan replaced and superseded the Company’s Amended and Restated 2009 Stock Incentive Plan (the “2009 Plan”) and no further awards will be granted under the 2009 Plan. The 2019 Plan provides for the grant of incentive stock options, non-incentive stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards, restricted stock unit awards and performance awards to eligible recipients. Recipients of stock options shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the Stock Plan is ten years . Employee option grants generally vest 25 % on the first anniversary of the original vesting commencement date, with the balance vesting monthly over the remaining three years . The following table summarizes stock option activity as of December 31, 2022 under the 2019 Plan and the 2009 Plan, and the changes for the period then ended (dollar values in thousands, other than weighted-average exercise price): Options Outstanding Weighted- Aggregate Outstanding at December 31, 2021 22,515,513 $ 6.19 — Options Granted 550,000 1.61 Options Canceled ( 2,179,421 ) 6.41 Options Exercised ( 24,332 ) 2.32 Outstanding at December 31, 2022 20,861,760 $ 6.05 $ — Vested and Expected to Vest at December 31, 2022 20,861,760 $ 6.05 $ — The aggregate intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $ 0.0 million, $ 5.2 million and $ 4.1 million, respectively. The fair value of employee stock options was estimated at the grant date using the following assumptions: Years Ended December 31, 2022 2021 2020 Weighted-average grant date fair value $ 1.33 $ 7.49 $ 4.54 Dividend yield — — — Volatility 110 % 110 % 105 % Risk-free interest rate 2.90 % 0.96 % 0.46 % Expected life of options (years) 5.7 5.7 5.7 The assumed dividend yield was based on the Company’s expectation of not paying dividends on its common stock in the foreseeable future. The expected volatility is based on the historical volatility of the Company's stock. The risk-free interest rate is based on the U.S. Treasury yield curve over the expected term of the option. The weighted average expected life of options was estimated using the average of the contractual term and the weighted average vesting term of the options. Under the 2019 Plan and the Company’s prior equity award and option plans, total stock-based compensation recorded as operating expense was $ 27.9 million, $ 29.7 million and $ 15.0 million for the years ended December 31, 2022, 2021 and 2020, respectively. The total unrecognized compensation cost related to unvested employee and director stock option grants and restricted stock units (“RSUs”) as of December 31, 2022 was $ 61.0 million and the weighted average period over which these grants are expected to vest is 2.1 years. The following table summarizes RSU activity as of December 31, 2022 under the 2019 Plan and the changes for the period then ended: Number of Shares Weighted- Outstanding at December 31, 2021 3,433,896 $ 9.50 RSUs Granted 6,355,500 1.79 RSUs Released ( 768,531 ) 9.53 RSUs Cancelled ( 736,367 ) 7.82 Outstanding at December 31, 2022 8,284,498 $ 3.73 Scilex Plan The Board of Directors of Scilex adopted the Scilex Holding Company 2022 Equity Incentive Plan (the “Scilex Plan”) on October 17, 2022. The Scilex Plan was approved by Scilex’s stockholders and became effective on November 9, 2022. Upon the consummation of the Business Combination, the Scilex Holding Company 2019 Stock Option Plan (the “Prior Plan”) was terminated and no further awards were granted under the Prior Plan thereafter. However, the Prior Plan will continue to govern outstanding awards granted under the terms of the Scilex Plan. For Scilex, total stock-based compensation recorded as operating expenses was $ 5.3 million, $ 5.8 million and $ 5.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. The total unrecognized compensation cost related to unvested employee and director stock option grants as of December 31, 2022, was $ 2.7 million and the weighted average period over which these grants are expected to vest is 1.4 years. As of December 31, 2022, options to purchase 25,151,428 shares of the common stock of Scilex were outstanding and 16,939,436 shares were reserved for awards available for future issuance under the Scilex Plan. Employee Stock Purchase Plan On October 16, 2020 at the Company’s 2020 Annual Meeting of Stockholders (the “Annual Meeting”), the Company’s stockholders approved the Company’s 2020 Employee Stock Purchase Plan (“ESPP”). Under the terms of the ESPP, the Company’s employees can elect to have up to 15 % of their annual compensation, up to a maximum of $ 25,000 per year, withheld to purchase shares of the Company’s common stock for a purchase price equal to 85 % of the lesser of the fair market value per share (at closing) of the Company’s common stock on (i) the commencement date of the six-month offering period, or (ii) the respective purchase date. The initial offering period commenced on November 6, 2020 and ended on May 5, 2021, with subsequent offering periods commencing on May 6 th of each year and ending on November 5 th of the following year. Total stock-based compensation recorded as operating expense for the ESPP was $ 0.2 million and $ 1.1 million for the years ended December 31, 2022 and 2021, respectively. CEO Performance Award On August 7, 2020, the Compensation Committee of the Company`s Board of Directors (the “Compensation Committee”) approved a grant to Henry Ji, Ph.D., the Company’s Chairman of the Board, Chief Executive Officer and President, of a 10-year CEO performance award tied solely to achieving market capitalization milestones (the “CEO Performance Award”), subject to the approval of the Company’s stockholders at the Annual Meeting. The CEO Performance Award consists of a 10 -year option to purchase an aggregate of 24,935,882 shares of the Company’s common stock, which was equal to 10 % of the Company’s outstanding shares of common stock on the day prior to the date of grant, and vests in ten tranches. Each of the ten tranches vests only if a market capitalization milestone is achieved, which requires two market capitalization prongs to be met to achieve each milestone: (1) a six calendar month trailing average (based on trading days); and (2) a 30 calendar day trailing average (based on trading days). To meet the first market capitalization milestone, the Company’s current market capitalization must increase to $ 5.0 billion. For the next two milestones, the Company’s market capitalization must continue to increase in additional $ 2.0 billion increments. For the three milestones thereafter, the Company’s market capitalization must increase in additional $ 3.0 billion increments. For the next three milestones thereafter, the Company’s market capitalization must increase in additional $ 4.0 billion increments. For the final milestone, the Company’s market capitalization must increase by an additional $ 5.0 billion. Thus, for Dr. Ji to fully vest in the award, the Company’s market capitalization must increase to $ 35.0 billion. The exercise price per share subject to the CEO Performance Award is $ 17.30 , which is a 20 % premium to the closing sales price of the Company’s common stock on August 7, 2020, the date the CEO Performance Award was approved by the Compensation Committee. The CEO Performance Award was approved by the Company`s stockholders at the Annual Meeting held on October 16, 2020, which represents the date of grant for accounting purposes. Recognition of stock-based compensation expense of all the tranches commenced on the date of grant, as the probability of meeting the ten market capitalization milestones is not considered in determining the timing of expense recognition. The expense will be recognized ratably over the expected vesting period of each respective tranche. If the related market capitalization milestone is achieved earlier than its expected achievement period, then the stock-based compensation expense for that vesting tranche will be accelerated and recorded in the period in which the associated milestone is achieved. The market capitalization requirement is considered a market condition under FASB ASC Topic 718 Compensation – Stock Compensation and is estimated on the grant date using Monte Carlo simulations. Key assumptions for estimating the performance-based awards fair value at the date of grant included, volatility of the Company’s common stock price, post-vesting exercise behavior, and the derived service period. Total stock-based compensation recorded as operating expense for the CEO Performance Award was $ 41.6 million and $ 51.8 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company had approximately $ 46.1 million of total unrecognized stock-based compensation expense remaining under the CEO Performance Award if all market capitalization milestones are achieved. The assumptions used in determining this valuation included an expected volatility of 91.0 %, a dividend yield of zero , a risk-free interest rate of 0.75 %, and an expected remaining t erm of 9.8 years. As of December 31, 2022, the expected remaining term is 7.8 years. Common Stock Reserved for Future Issuance As of December 31, 2022, approximately 74.8 million shares of common stock were reserved for future issuance, comprised of 16.0 million shares for common stock warrants, 24.9 million for the CEO Performance Award, 6.4 million reserved for future issuance under the ESPP plan and approximately 8.3 million shares under stock incentive plans. As of December 31, 2022, approximately 39.2 million shares of common stock remained available for grant under the 2019 Plan. Employee Benefit Plan The Company maintains a defined contribution 401(k) plan available to eligible employees. 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 $ 2.2 million, $ 1.7 million and $ 1.4 million, fo r the years ended December 31, 2022, 2021 and 2020, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments a nd Contingencies Litigation In the normal course of business, the Company may be named as a defendant in one or more lawsuits. Other than as set forth below, the Company is not a party to any outstanding material litigation and management is currently 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. On April 3, 2019, the Company filed two legal actions against, among others, Patrick Soon-Shiong and entities controlled by him, asserting claims for, among other things, fraud and breach of contract, arising out of Dr. Soon-Shiong’s purchase of the drug Cynviloq from the Company in May 2015. The actions allege that Dr. Soon-Shiong and the other defendants, among other things, acquired the drug Cynviloq for the purpose of halting its progression to the market. Specifically, the Company has filed: • An arbitration demand with the American Arbitration Association in Los Angeles, California, against NantPharma, LLC (“NantPharma”), and Chief Executive Officer Patrick Soon-Shiong, related to alleged fraud and breaches of the Stock Sale and Purchase Agreement, dated May 14, 2015, entered into between NantPharma and the Company, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2015. On May 24, 2019, NantCell, Inc., Dr. Soon-Shiong and Immunotherapy NANTibody LLC (“NANTibody”) General Counsel Charles Kim filed a motion in the Los Angeles Superior Court (the “Court”) to stay or dismiss the Company’s arbitration demand. On October 9, 2019, the Court denied the motion to stay or dismiss the arbitration demand, and the arbitration continued against NantPharma (the “NantPharma Arbitration”). On March 5, 2020, the Company filed a legal action against Dr. Soon-Shiong in the Court, asserting claims for fraudulent inducement and common law fraud, arising out of Dr. Soon-Shiong’s purchase of the drug Cynviloq from the Company in May 2015. The action alleges that, among other things, Dr. Soon-Shiong acquired the drug Cynviloq for the purpose of halting its progression to the market. In connection with filing this civil action in the Court, where the Company will have the right to a jury trial against Dr. Soon-Shiong, the Company dismissed Dr. Soon-Shiong from the NantPharma Arbitration; and • An action in the Court derivatively on behalf of NANTibody against NantCell, Inc., NANTibody Board Member and NantCell, Inc., Chief Executive Officer Patrick Soon-Shiong, and NANTibody officer Charles Kim, related to several breaches of the June 11, 2015 Limited Liability Company Agreement for NANTibody entered into between the Company and NantCell, Inc. The suit also alleges breaches of fiduciary duties and seeks, inter alia, a declaration that the Assignment Agreement entered into on July 2, 2017, between NantPharma and NANTibody is void and an equitable unwinding of the Assignment Agreement. The suit calls for the restoration of $ 90.05 million to the NANTibody capital account, thereby restoring the Company’s equity method investment in NANTibody to its invested amount as of June 30, 2017 of $ 40.0 million. On May 24, 2019, NantCell, Inc. and Dr. Soon-Shiong filed a cross-complaint against the Company and Dr. Henry Ji, seeking unspecified damages, as well as additional punitive damages and specific performance, related to alleged fraud, alleged breaches of the Exclusive License Agreement for certain antibodies (dated June 11, 2015 and entered into between NANTibody, LLC and the Company), and alleged tortious interference with contract. On May 24, 2019, NANTibody and NantPharma filed a new complaint in the action against the Company and Dr. Henry Ji, seeking unspecified damages, as well as additional punitive damages and specific performance, related to alleged fraud, alleged breaches of the Stock Sale and Purchase Agreement, alleged breaches of the Exclusive License Agreement for certain antibodies (dated April 21, 2015 and entered into between NantCell, Inc. and the Company), and alleged tortious interference with contract. On July 8, 2019, the Company and Dr. Henry Ji filed motions to compel the cross-complaint and new action to arbitration. On October 9, 2019, the Court granted the motions to compel to arbitration all of the claims brought by NANTibody, NantCell, Inc. and NantPharma, and denied the motions to compel as to the claims brought by Dr. Soon-Shiong. Subsequently, NANTibody, NantCell, Inc., and NantPharma have re-filed their claims in arbitration with the American Arbitration Association (the “NantCell/NANTibody Arbitration”). On May 4, 2020, the Company filed counterclaims against NANTibody and NantCell related to breaches of the April 21, 2015 and June 11, 2015 Exclusive License Agreements. The claims against Dr. Soon-Shiong have been stayed pending resolution of the claims filed in arbitration. The original derivative action is no longer stayed, and the parties are currently engaged in discovery in the suit. On December 20, 2022, the arbitrator in the NantPharma Arbitration issued an award (the “Cynviloq Award”) granting contractual damages of $ 125.0 million to the Company, reflecting the value of lost milestone payments for the approval of Cynviloq for the treatment of breast and lung cancers. The Company will pursue confirmation and enforcement of this award in the Court. The Company filed a petition to confirm the award with the Los Angeles Superior Court on February 2, 2023. NantPharma filed an opposition motion to vacate the award on February 13, 2023. The Court will hold a hearing on the petition to confirm and opposition to vacate on March 16, 2023. These contractual damages represent a gain contingency as of December 31, 2022, and, therefore, were not recorded by the Company in the consolidated statement of operations for the year ended December 31, 2022. On December 2, 2022, the arbitrator in the NantCell/NANTibody Arbitration issued an award (the “Antibody Award”) granting contractual damages and pre-award interest in the amounts of $ 156,829,562 to NantCell and $ 16,681,521 to NANTibody, exclusive of post-award, prejudgment interest, which will accrue at 9 % per annum. The award also held that Sorrento has no further obligations under the Exclusive License Agreement with NANTibody. The Exclusive License Agreement with NantCell remains in effect only with respect to one anti-PD-L1 antibody that previously was delivered by Sorrento to NantCell. Sorrento has no further obligation to contribute any materials or know-how to NantCell with respect to that antibody but will receive potential future royalties on future net sales. The Company continues to hold 40 % of the outstanding equity of NANTibody. The award does not resolve the additional, legal proceedings brought by Sorrento against Patrick Soon-Shiong and entities controlled by him, which remain pending. On December 21, 2022, NantCell and NANTibody filed in the Los Angeles Superior Court a petition to confirm the NantCell/NANTibody Arbitration award. On January 16, 2023, the Company filed in the Court a petition to vacate the award. On February 7, 2023, the Court granted the Nant Entities’ petition, entered judgement upon the Antibody Award and ordered the Company to pay to the Nant entities the previously disclosed amounts awarded in the Antibody Award. On February 6, 2023, the Company applied ex parte to the Court for a stay of enforcement of the judgment entered upon the Antibody Award until the Company is procedurally able to seek an offset of the judgment entered upon the Antibody Award by the amount of the Cynviloq Award that the Company has petitioned the Court to confirm and enter judgment upon. The Nant Entities opposed the Company’s ex parte application. On February 7, 2023, the Court granted the Company’s ex parte application in part. The Court stayed enforcement of the Antibody Award judgment for seventy days only to the extent the Antibody Award judgment exceeds the approximately $ 50.0 million offset that the Company intends to seek based on the difference of the amounts of the Antibody Award and the Cynviloq Award. Until April 18, 2023, the Nant Entities are therefore empowered to enforce the judgment entered on the Antibody Award only up to the amount of $ 50.0 million. The Company has recorded an accrued legal settlement in the consolidated balance sheet of $ 174.8 million, including post-award interest, as of December 31, 2022, related to the NantCell/NANTibody Arbitration award. As the award held that Sorrento has no further obligations under the Exclusive License Agreement, the deferred revenue balance of $ 110.0 million was extinguished as of December 31, 2022. This resulted in a net loss of $ 64.8 million during the year ended December 31, 2022, and is recorded in legal settlements expense in the consolidated statement of operations. For a discussion of the Company’s ongoing bankruptcy proceedings, see Note 16 . On May 26, 2020, Wasa Medical Holdings filed a putative federal securities class action in the U.S. District Court for the Southern District of California, Case No. 3:20-cv-00966-AJB-DEB, against the Company, its President, Chief Executive Officer and Chairman of the Board of Directors, Henry Ji, Ph.D., and its SVP of Regulatory Affairs, Mark R. Brunswick, Ph.D. The action alleges that the Company, Dr. Ji and Dr. Brunswick made materially false and/or misleading statements to the investing public by publicly issuing false and/or misleading statements regarding STI-1499 and its ability to inhibit the SARS-CoV-2 virus infection and that such statements violated Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The suit seeks to recover damages caused by the alleged violations of federal securities laws, along with the plaintiffs’ reasonable costs and expenses incurred in the lawsuit, including counsel fees and expert fees. On June 11, 2020, Jeannette Calvo filed a second putative federal securities class action in the U.S. District Court for the Southern District of California, Case No. 3:20-cv-01066-JAH-WVG, against the same defendants alleging the same claims and seeking the same relief. On February 12, 2021, the U.S. District Court for the Southern District of California issued an order consolidating the cases and appointing a lead plaintiff, Andrew Zenoff (“Plaintiff”), and lead counsel. On April 5, 2021, Plaintiff filed a consolidated amended complaint in accordance with the U.S. District Court for the Southern District of California’s scheduling order. Pursuant to that scheduling order, the defendants filed a motion to dismiss on May 20, 2021 and Plaintiff filed his opposition to the motion on July 2, 2021. The defendants’ reply was filed on August 4, 2021. On or about November 18, 2021, the U.S. District Court for the Southern District of California issued an order granting the motion to dismiss with leave to amend. On November 30, 2021, Plaintiff filed a first amended consolidated complaint. On December 30, 2021, the defendants filed a motion to dismiss the first amended consolidated complaint. Pursuant to a stipulated scheduling order, the Plaintiff filed his opposition to the motion on February 7, 2022, and the defendants filed their reply on February 28, 2022. On April 11, 2022, the U.S. District Court for the Southern District of California issued an order granting the motion to dismiss with leave to file an amended complaint by April 22, 2022. Plaintiff did not file an amended complaint by April 22, 2022. On June 2, 2022, the U.S. District Court for the Southern District of California directed the clerk of the court to enter judgment in favor of defendants and close the case. On June 3, 2022, judgment was entered in favor of defendants, and the case was closed. On June 30, 2022, Plaintiff filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit (Case No. 22-55641). On October 3, 2022, Plaintiff/Appellant filed an opening brief. On December 2, 2022, the defendants/appellees’ filed their answering brief. On January 23, 2023, Plaintiff/Appellant filed his reply brief. The Company is defending these matters vigorously. On July 26, 2021, Sachin Chaudhari filed a verified stockholder derivative complaint in the U.S. District Court for the Southern District of California, Case No. 0723211, against Dr. Ji, Dr. Brunswick and the Company’s Board of Directors as defendants and against the Company, as a nominal defendant. The action alleges, among other things, that defendants breached their fiduciary duties, violated Section 20(a) of the Securities Exchange Act of 1934, as amended, engaged in waste and were unjustly enriched in connection with the alleged false and misleading statements to the investing public by publicly issuing false and/or misleading statements regarding STI-1499 and its ability to inhibit the SARS-CoV-2 virus infection. The suit seeks to recover on behalf of the Company those damages caused by the alleged breaches of duty and related claims, along with the plaintiffs’ reasonable costs and expenses incurred in the lawsuit, including counsel fees and expert fees. On July 27, 2021, Michael Sabatina filed a verified stockholder derivative complaint in the Delaware Chancery Court, Case No. 2021-0654 against Dr. Ji and Dr. Brunswick, as defendants, and against the Company as a nominal defendant, alleging the same general claims and seeking the same general relief. Both of these derivative cases have been stayed by their respective courts pending resolution of the motion to dismiss the federal securities class action described above. The Company is defending these matters vigorously. Operating Leases The Company leases administrative, research and development, sales and marketing and manufacturing facilities under various non-cancelable lease agreements. Facility leases generally provide for periodic rent increases, and many contain escalation clauses and renewal options. As of December 31, 2022, the Com pany’s leases have remaining lease terms of approximately 0.6 to 15.8 years, some of which include options to extend the lease terms for up to five years , and some of which allow for early termination. Many of the Company’s leases are subject to variable lease payments. Variable lease payments are recognized in the period in which the obligation for those payments are incurred, are not included in the measurement of the ROU assets or lease liabilities and are immaterial. As of December 31, 2022, the Company has no finance leases. Operating lease costs were approximately $ 16.6 million, $ 12.5 million and $ 10.1 million for the years ended December 31, 2022, 2021 and 2020, respect ively, and were primarily comprised of long-term operating lease costs. Short-term operating lease costs were immaterial. Supplemental quantitative information related to leases includes the following (in thousands): Year ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 13,638 $ 11,225 ROU assets obtained in exchange for new and amended operating lease liabilities $ 5,592 $ 49,459 Weighted average remaining lease term in years 13.9 15.1 Weighted average discount rate 12.8 % 12.4 % Maturities of lease liabilities are as follows (in thousands): Years ending December 31, Operating 2023 $ 15,484 2024 15,397 2025 14,373 2026 14,064 2027 14,285 Thereafter 155,323 Total lease payments 228,926 Less imputed interest ( 129,838 ) Total lease liabilities as of December 31, 2022 $ 99,088 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Inco me Taxes Total loss before income taxes summarized by region for the years ended December 31, 2022, 2021 and 2020 is as follows (in thousands): 2022 2021 2020 United States $ ( 570,609 ) $ ( 466,562 ) $ ( 315,516 ) Foreign ( 9,564 ) 3,908 ( 908 ) Total $ ( 580,173 ) $ ( 462,654 ) $ ( 316,424 ) The components of the provision expense (benefit) were as follows for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Current income tax expense (benefit): Federal $ — $ — $ ( 19 ) State 40 38 72 Foreign ( 620 ) 2,375 58 Total current ( 580 ) 2,413 111 Deferred income tax expense (benefit): Federal ( 127,565 ) ( 80,858 ) ( 55,321 ) State ( 28,570 ) ( 11,999 ) ( 2,730 ) Foreign ( 69 ) 178 ( 288 ) Total deferred ( 156,204 ) ( 92,679 ) ( 58,339 ) Changes in tax rate ( 910 ) ( 223 ) 507 Changes in valuation allowance 155,278 56,973 55,707 Total income tax benefit from continuing operations $ ( 2,416 ) $ ( 33,516 ) $ ( 2,014 ) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2022 and 2021 (in thousands): 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 201,349 $ 181,428 Deferred revenue 1,685 25,626 Tax credit carryforwards 52,851 33,126 Intangible assets 47,115 37,627 Capitalized research and development 50,118 — Accrued expense and reserves 42,190 4,582 Operating lease liabilities 23,295 19,734 Debt related interest 29,292 26,002 Stock based compensation 9,957 10,516 Other 441 677 Total deferred tax assets 458,293 339,318 Less valuation allowance ( 416,642 ) ( 261,238 ) Total deferred tax assets 41,651 78,080 Deferred tax liabilities: Investment in common stock ( 2,646 ) ( 16,372 ) Operating lease right-of-use assets ( 20,328 ) ( 17,592 ) Intangible assets ( 18,989 ) ( 44,640 ) Other ( 279 ) ( 1,902 ) Total deferred tax liabilities ( 42,242 ) ( 80,506 ) Net deferred tax liabilities $ ( 591 ) $ ( 2,426 ) The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Income tax benefit at federal statutory rate $ ( 121,836 ) $ ( 97,157 ) $ ( 66,449 ) Valuation allowance 155,278 56,973 55,707 State, net of federal tax benefit ( 14,371 ) ( 5,826 ) ( 3,339 ) Debt discount and interest limitation ( 9,293 ) 8,954 896 Income tax credits and incentives ( 14,684 ) ( 9,549 ) ( 3,685 ) Compensation expense 18,022 14,472 4,446 Acquisition related charges ( 13,314 ) 2,711 583 Prior year true-up and carryback ( 6,269 ) ( 3,209 ) 7,790 Other 4,051 ( 885 ) 2,037 Income tax benefit $ ( 2,416 ) $ ( 33,516 ) $ ( 2,014 ) The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the deferred tax assets will not be realized. Due to such uncertainties surrounding the realization of the domestic deferred tax assets, the Company maintains a valuation allowance of $ 416.6 million against its deferred tax assets as of December 31, 2022. Realization of the deferred tax assets will be primarily dependent upon the Company's ability to generate sufficient taxable income prior to the expiration of its net operating losses. The change in valuation allowance also included approximately $ 0.1 million in 2022 and $ 41.6 million in 2021 attributable to the Virex and ACEA acquisitions, respectively. As of December 31, 2022, the Company had $ 875.5 million, $ 304.3 million and $ 4.0 million of federal, state and foreign net operating loss carryforwards, respectively. $ 3.3 million, $ 0.1 million and $ 0.1 million of the net operating loss carryforwards begin to expire in 2035 , 2029 and 2024 for federal, state and foreign, respectively. The Company also had research and development and orphan drug income tax credits of $ 43.6 million and $ 28.5 million for federal and state, respectively. $ 0.1 million of the federal income tax credits begin to expire in 2034 , while the state income tax credits carryforward indefinitely. Internal Revenue Code Section 382 rules apply to limit a corporation's ability to utilize existing net operating loss and tax credit carryforwards once the corporation experiences an ownership change as defined in Section 382. The Company has undergone ownership changes for purposes of Section 382 in the current and prior years. For the year ended December 31, 2022, the ownership change may result in limitations on the utilization of certain deferred tax assets in future periods of which the Company is carrying a full valuation allowance against. If any deferred tax assets were to expire unused because of Section 382 limitations, there would be a corresponding adjustment to the related valuation allowance. The Company is subject to taxation in the U.S., various state tax jurisdictions and various foreign tax jurisdictions. The Company's tax years starting on January 1, 2007 through December 31, 2022 are open and subject to examination by the U.S. and state taxing authorities due to the carryforward of net operating losses and research and development credits. There are no active audits as of December 31, 2022. The Company made the accounting policy election to treat taxes due on U.S. inclusions in taxable income related to Global Intangible Low-Taxed Income as a current period expense when incurred (the “period cost method”). As of December 31, 2022, the Company has accumulated undistributed earnings generated by foreign subsidiaries previously subject to U.S. taxation on foreign earnings as required by the Tax Cuts and Jobs Act of 2017. Any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of its foreign investments would generally be limited to foreign and state taxes. The Company intends, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet future U.S. cash needs. A reconciliation of the beginning and ending amount of unrecognized tax expense (benefits) is as follows for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Beginning balance $ 9,133 $ 6,397 $ 5,336 Increase related to prior year tax positions 1,323 258 133 Increase related to current year tax positions 5,722 2,442 928 Increase related to acquisitions 3 36 — Ending balance $ 16,181 $ 9,133 $ 6,397 At December 31, 2022, 2021 and 2020, $ 13.2 million, $ 8.3 million and $ 5.6 million, respectively, of the Company’s total unrecognized tax benefits, if recognized, would impact the effective tax rate. However, given the full valuation allowance in the jurisdiction in which the unrecognized tax benefits relate to, the impact on the effective tax rate would be nil. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. No interest or penalties have been recognized as of and for the periods ended December 31, 2022, 2021 or 2020. The Company believes that no material amount of the liabilities for uncertain tax positions are expected to reverse within 12 months of December 31, 2022. |
Related Party Agreements and Ot
Related Party Agreements and Other | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Agreements and Other | 13. Related Party A greements and Other During the year ended December 31, 2022, the Company completed an acquisition of 49 % of the equity interests of Zhengzhou Fortune Bioscience Co., Ltd (“ZFB”) for $ 4.8 million in cash under a joint venture agreement and equity subscription agreement, as amended (collectively, the “ZFB Agreements”). ZFB is a manufacturer in China of lateral flow diagnostic tests, including COVISTIX, the Company’s COVID-19 virus rapid antigen detection test kit currently being sold in Mexico. Under the ZFB Agreements, the Company has the option to acquire from the minority equity holder the remaining 51 % of the aggregate equity interests of ZFB for $ 50.0 million before June 30, 2023 (the “Subsequent Transaction”). If the Subsequent Transaction does not occur, the Company or ZFB may terminate the ZFB Agreements, and the Company’s 49 % of equity interest in ZFB will be redeemed by ZFB for $ 4.8 million. The Company has the right to appoint two out of five total directors of ZFB. Jaisim Shah, a member of the Company’s Board of Directors, was Semnur’s Chief Executive Officer, a member of its Board of Directors and a stockholder of Semnur prior to the acquisition transaction. Semnur is party to an Assignment Agreement with Shah Investor LP, pursuant to which Shah Investor LP assigned certain intellectual property to Semnur and Semnur agreed to pay Shah Investor LP a contingent quarterly royalty in the low-single digits based on quarterly net sales of any pharmaceutical formulations for local delivery of steroids by injection developed using such intellectual property, which would include SEMDEXA. Mahendra Shah, Ph.D., who served on the board of directors of Scilex from March 2019 to October 2020, is the managing partner of Shah Investor LP. As of December 31, 2020, approximately 14.7 % of the outstanding capital stock of Scilex represented a noncontrolling interest and was held by ITOCHU CHEMICAL FRONTIER Corporation. Scilex Pharma has entered into a product development agreement (the “Product Development Agreement”) with ITOCHU CHEMICAL FRONTIER Corporation and another party (together, the “Developers”), which together serve as the sole manufacturer and supplier to Scilex Pharma for lidocaine tape products, including ZTlido and SP-103 (each, a “Product”). Effective January 19, 2021, ITOCHU CHEMICAL FRONTIER Corporation no longer held any shares of outstanding capital stock of Scilex. During the years ended December 31, 2022, 2021 and 2020, Scilex Pharma purchased approximately $ 6.7 million, $ 5.7 million and $ 1.0 million of inventory from the Developers pursuant to the Product Development Agreement , respectively . 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. 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 U.S. GAAP. If Scilex Pharma were to sublicense the licensed technologies, the Developers will receive the same proportion of any sub-licensing 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 July 15, 2020, the Company entered into a consulting agreement with Kim Janda, Ph.D., a member of the Company’s Board of Directors, pursuant to which Dr. Janda will provide consulting and advisory services in exchange for (i) a one-time fee of $ 250,000 , which is payable at a rate of 1/12th per month over twelve months , and (ii) an option to purchase up to 150,000 shares of the Company’s common stock, which was granted on August 7, 2020 and vests at a rate of 1/48th per month commencing on July 15, 2020 . On October 8, 2021, the Company entered into an amendment to the consulting agreement with Dr. Janda whereby the one-time fee was increased to $ 301,091 , payable through September 30, 2022 . On May 13, 2020, the Company entered into a license agreement with Pulsar Therapeutics, Inc. (“Pulsar”), pursuant to which it licensed Pulsar’s nanoparticle technology for vaccine and antibody uses in exchange for a cash payment, certain royalties of net sales, a sublicense fee and an investment by the Company in Pulsar through the transfer of 1.0 million shares of the Company’s common stock in exchange for a 5.0 % equity interest in Pulsar. As of the date of the investment, Henry Ji, Ph.D., a member of the Company’s Board of Directors and the Company’s Chief Executive Officer and President, was a director and chairperson of the board of directors of Pulsar and owned approximately 45.0 % of Pulsar’s outstanding shares, and Jaisim Shah, a member the Company’s Board of Directors, owned approximately 5.0 % of Pulsar’s outstanding shares. On May 15, 2020, the Company acquired a 50 % equity interest in Cytimm Therapeutics, Inc. (“Cytimm”) in exchange for an investment of $ 2.5 million by the Company. As of the date of the acquisition, Henry Ji, Ph.D., a member of the Company’s Board of Directors and the Company’s Chief Executive Officer and President, was a director, the chairperson of the board of directors and a stockholder of Cytimm. In April 2021, the Company entered into the Aardvark Asset Purchase Agreement with Aardvark, as further described in Note 7 . As discussed in Note 5 , the Company holds an investment interest in Aardvark. In May 2021, the Company paid $ 5.0 million in cash for 3,888,932 shares of Series B Preferred Stock of Aardvark. In July 2021, the Company paid consideration of $ 5.0 million in cash for an additional 3,888,932 shares of Series B Preferred Stock of Aardvark, resulting in an increase in the Company ’ s ownership interest in Aardvark to approximately 8 % . Tien Lee, MD, a member of the board of directors of Scilex, is the founder and chief executive officer of Aardvark. Kim D. Janda, Ph.D., a member of the board of directors of the Company, is a member of the advisory board of Aardvark. During the year December 31, 2021, the Company paid approximately $ 10.2 million in consideration for 5,622,703 shares of common stock of Deverra, as further described in Note 5. In connection with the Company’s purchase of Deverra common stock, Dr. Henry Ji, Ph.D., a member of the Company’s Board of Directors and the Company’s Chief Executive Officer and Chairperson, and Jaisim Shah, a member of the Company’s Board of Directors, were appointed to the board of directors of Deverra. In addition, on December 7, 2021, the Company loaned Deverra an aggregate of $ 1.0 million in consideration of a promissory note, which the Company wrote off during the year ended December 21, 2022 as such amount was deemed uncollectible. During the year ended December 31, 2021, the Company paid $ 10.0 million in cash for 10,000,000 shares of Series A Preferred Stock of Elsie, as further described in Note 5 . In connection with the Company's purchase of Elsie Series A Preferred Stock, Dr. Henry Ji, Ph.D., a member of the Company’s Board of Directors and the Company’s Chief Executive Officer and President, was appointed to the board of directors of Elsie. During the year ended December 31, 2022, the Company purchased 1.4 million Scilex warrants for a total of $ 0.4 million, all of which were outstanding at December 31, 2022. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 14. Segment Information The Company reports segment information based on the management approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), which is the Company’s Chief Executive Officer, for making decisions and assessing performance as the source of the Company’s reportable segments. The CODM allocates resources and assesses the performance of each operating segment based on licensing, product sales and services revenue, operating expenses, and operating income (loss) before interest and taxes. The Company has determined its reportable segments to be Sorrento Therapeutics and Scilex based on the information used by the CODM. Sorrento Therapeutics . The Sorrento Therapeutics segment is developing a portfolio of next generation treatments for three major therapeutic areas: cancer, infectious disease and pain. Scilex . The Scilex segment is largely organized around the Company’s non-opioid pain management operations. Revenues from the Scilex segment are exclusively derived from the sale of ZTlido. On November 10, 2022, Scilex consummated the previously-announced business combination (the “Business Combination”) pursuant to that certain Agreement and Plan of Merger, dated as of March 17, 2022 (as amended, restated or supplemented from time to time, including by Amendment No. 1 to Agreement and Plan of Merger, dated as of September 12, 2022) (the “Merger Agreement”), by and among Scilex, Vantage Merger Sub Inc., Scilex’s then-wholly owned subsidiary (the “Merger Sub”), and the pre-Business Combination Scilex Holding Company (“Legacy Scilex”). Pursuant to the terms of the Merger Agreement, Scilex effected a deregistration under the Cayman Islands Companies Act (as revised) and a domestication under Section 388 of the Delaware General Corporation Law, as amended (the “DGCL”), pursuant to which Scilex’s jurisdiction of incorporation was changed from the Cayman Islands to the State of Delaware, and, on the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the DGCL, Merger Sub merged with and into Legacy Scilex (the “Merger” or the “Business Combination”), with Legacy Scilex surviving as Scilex’ s wholly owned subsidiary. In connection with the Business Combination, Scilex changed its name from Vickers Vantage Corp. I to Scilex Holding Company. On November 11, 2022, shares of Scilex Holding Company began trading on the Nasdaq Capital Market under the ticker symbol “SCLX”, after the completion of its business combination with Vickers Vantage Corp. I, a special purpose acquisition company. As a result of the Business Combination, Scilex received net proceeds of approximately $ 3.4 million. The associated transaction cost of $ 9.1 million was offset against equity proceeds of $ 0.4 million from the Business Combination. Additionally, the Company's ownership interest in Scilex decreased to 96.0 % while maintaining its controlling financial interest, therefore the Company recorded a $ 2.0 million increase in noncontrolling interest as of December 31, 2022. With the exception of unrestricted cash balances, the Company’s CODM does not regularly review asset information by reportable segment. The majority of long-lived assets for both segments are located in the United States. The following table presents information about the Company’s reportable segments for the years ended December 31, 2022, 2021 and 2020 (in thousands): Years Ended December 31, 2022 2021 2020 (in thousands) Sorrento Scilex Total Sorrento Scilex Total Sorrento Scilex Total External revenues $ 24,805 $ 38,034 $ 62,839 $ 24,358 $ 28,546 $ 52,904 $ 13,655 $ 26,331 $ 39,986 Operating expenses 479,571 87,583 567,154 387,200 67,155 454,355 225,687 58,817 284,504 Operating (loss) income ( 454,766 ) ( 49,549 ) ( 504,315 ) ( 362,842 ) ( 38,609 ) ( 401,451 ) ( 212,032 ) ( 32,486 ) ( 244,518 ) Unrestricted cash 21,400 2,234 23,634 32,178 4,487 36,665 51,475 4,989 56,464 |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 15. Loss Per Share For the years ended December 31, 2022, 2021 and 2020, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share of common stock is calculated to give effect to all dilutive securities, using the treasury stock method and the if-converted method for potentially dilutive shares of common stock issuable upon the Semnur Share Exchange, which is described in Note 7 . The following table sets forth the reconciliation of basic and diluted earnings per share for the years ended December 31, 2022, 2021 and 2020 (in thousands, except per share data): Years Ended December 31, 2022 2021 2020 Numerator Net loss attributable to Sorrento $ ( 572,843 ) $ ( 428,325 ) $ ( 298,461 ) Net loss attributable to Semnur holders of Scilex — — — Net loss used for basic and diluted earnings per share ( 572,843 ) ( 428,325 ) ( 298,461 ) Denominator for basic loss per share 419,315 294,774 229,823 Potentially dilutive shares of Sorrento common stock issuable upon Semnur Share Exchange — — — Denominator for loss earnings per share 419,315 294,774 229,823 Basic loss per share $ ( 1.37 ) $ ( 1.45 ) $ ( 1.30 ) Diluted loss per share $ ( 1.37 ) $ ( 1.45 ) $ ( 1.30 ) The potentially dilutive stock options and warrants that have been excluded because the effect would have been anti-dilutive consisted of the following (in thousands): Years Ended December 31, 2022 2021 2020 Outstanding options 20,862 22,516 18,763 Outstanding RSUs 8,284 3,434 — Outstanding warrants 16,020 16,020 18,605 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events Voluntary Filing Under Chapter 11 As previously reported in the Company’s Current Report on Form 8-K filed with the SEC on February 13, 2023, the Company and its wholly owned direct subsidiary, Scintilla Pharmaceuticals, Inc. (together with the Company, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 proceedings are jointly administered under the caption In re Sorrento Therapeutics, Inc., et al. (the “Chapter 11 Cases”). The Debtors continue to operate their business in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. At hearings before the Bankruptcy Court on February 16, 2023 and February 21, 2023, the Debtors obtained approval from the Bankruptcy Court of certain “first day” motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations during the Chapter 11 Cases. DIP Term Sheet As previously reported in the Company’s Current Report on Form 8-K filed with the SEC on February 22, 2023, the Debtors executed that certain Debtor-In-Possession Term Loan Facility Summary of Terms and Conditions (the “DIP Term Sheet”) with JMB Capital Partners Lending, LLC (“JMB Capital” or the “DIP Lender”), pursuant to which JMB Capital (or its designees or its assignees) are providing the Debtors with a non-amortizing super-priority senior secured term loan facility in an aggregate principal amount not to exceed $ 75,000,000 in term loan commitments (the “DIP Facility”), subject to the terms and conditions set forth in the DIP Term Sheet. On February 20, 2023, the Debtors filed the Debtors’ Emergency Motion For Entry of Interim and Final Orders (I) Authorizing The Debtors to (A) Obtain Senior Secured Superpriority Postpetition Financing and (B) Use Cash Collateral, (II) Granting Liens and Providing Claims With Superpriority Administrative Expense Status, (III) Modifying The Automatic Stay, (IV) Scheduling A Final Hearing, and (V) Granting Related Relief (the “DIP Motion”) seeking the Bankruptcy Court’s approval of the DIP Facility and certain related relief. A copy of the DIP Term Sheet was attached to the Motion. At a hearing before the Bankruptcy Court on February 21, 2023, the Bankruptcy Court granted the DIP Motion and entered an interim order (the “Interim DIP Order”) approving the DIP Facility on an interim basis and providing the Debtors with the necessary liquidity to continue to operate in Chapter 11. Upon entry of the Interim DIP Order and satisfaction of all applicable conditions precedent, as set forth in the DIP Term Sheet, the Debtors were authorized to make a single, initial draw of $ 30,000,000 on the DIP Facility (the “Initial Draw”). Definitive financing documentation, including a credit agreement and other documents evidencing the DIP Facility (collectively, the “DIP Documents”), will be negotiated and executed as soon as possible following the Initial Draw on the DIP Facility. The remaining amount of the DIP Facility will be available to the Debtors, subject to entry of an order granting the DIP Motion on a final basis (the “Final Order”) and compliance with the terms, conditions, and covenants to be set forth in the definitive DIP Documents, through additional draws of no less than $ 5,000,000 each upon five business days’ written notice to the DIP Lender. The DIP Facility contains economic and other terms that are the most favorable to the Debtors compared to the other proposals received by the Debtors, including, among others: (i) immediate access to interim financing of up to $ 30,000,000 (with up to $ 75,000,000 to be available in the aggregate), (ii) minimum draws of $ 5,000,000 , (iii) interest at a per annum rate equal to 14 % payable in cash on the first day of each month in arrears (and a default interest rate that shall accrue at an additional per annum rate of 3 % plus the non-default interest, payable in cash on the first day of each month), and (iv) other fees and charges as described in the DIP Term Sheet. The DIP Facility is secured by first-priority liens on substantially all of the Debtors’ unencumbered assets, subject to certain enumerated exceptions, and second-priority liens on those assets of the Debtors that are encumbered by certain permitted liens (as set forth in the Interim DIP Order). The DIP Facility matures on the earliest of: (i) July 31, 2023 ; (ii) the effective date of any Chapter 11 plan of reorganization with respect to the Debtors; (iii) the consummation of any sale or other disposition of all or substantially all of the assets of the Debtors pursuant to section 363 of the Bankruptcy Code; (iv) the date of the acceleration of the DIP Loans and the termination of the DIP Commitments in accordance with the DIP Documents (each as defined in the DIP Term Sheet); (v) dismissal of the Chapter 11 Cases or conversion of the Chapter 11 Cases into cases under chapter 7 of the Bankruptcy Code; and (vi) forty-five (45) days after the filing of the DIP Motion (or such later date as agreed to by the DIP Lender), unless the Final Order has been entered by the Bankruptcy Court on or prior to such date. The DIP Facility does not contain a roll-up or cross-collateralization of prepetition debt or otherwise dictate how prepetition claims will be addressed in a Chapter 11 plan. The Debtors anticipate seeking final approval of the DIP Facility at a final hearing on the DIP Motion on or around March 29, 2023, or any such other date that is no later than forty-five (45) days following the date of filing of the DIP Motion, as required under the DIP Term Sheet. Listing On February 13, 2023, the Company received written notice (the “Delisting Notice”) from the staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Chapter 11 Cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, the staff of Nasdaq had determined that the Company’s common stock will be delisted from Nasdaq. In the Delisting Notice, the staff of Nasdaq referenced the Chapter 11 Cases and associated public concerns raised by them, concerns regarding the residual equity interest of the existing listed securities holders and concerns about the Company’s ability to sustain compliance with all requirements for continued listing on Nasdaq. The Delisting Notice also indicated that the Company may appeal Nasdaq’s determination pursuant to procedures set forth in Nasdaq Listing Rule 5800 Series. On February 21, 2023, the Company requested an appeal of Nasdaq’s determination and a hearing before a Nasdaq hearings panel. The Company subsequently determined not to continue with the appeal process. In accordance with the Delisting Notice, trading of the Company’s common stock on Nasdaq was suspended at the opening of business on February 23, 2023, and at such time, the Company’s common stock commenced trading on the Pink Open Market under the symbol “SRNEQ”. Elyxyb License On February 12, 2023, Scilex acquired from BioDelivery Sciences International, Inc. (“BSDI”) and Collegium Pharmaceutical, Inc. (“Collegium”, and together with BDSI, the “Collegium Sellers”) the rights to certain patents, trademarks, regulatory approvals, data, contracts, and other rights related to ELYXYB (celecoxib oral solution) (the “Product”) and its commercialization in the United States and Canada (the “Territory”). As consideration for the acquisition, Scilex assumed various rights and obligations under that certain asset purchase agreement, dated August 3, 2021 (the “DRL APA”), between BDSI and Dr. Reddy’s Laboratories Limited, a company incorporated under the laws of India (“DRL”), including a license from DRL including an irrevocable, royalty-free, exclusive license to know-how and patents of DRL related to the Product and necessary or used to exploit the Product in the Territory. Additionally, under the DRL APA, Collegium Sellers granted Scilex an irrevocable, royalty-free, exclusive license to know-how related to the Product and necessary or used to exploit the Product in the Territory. No cash consideration was or will be payable to Collegium Sellers for such acquisition; however, the obligations under the DRL APA that were assumed by Scilex include obligations to pay royalties for sales of the Product in the Territory for all indications and additional amounts if certain milestones are achieved. The Failure of Silicon Valley Bank On March 10, 2023, the Company became aware that the Federal Deposit Insurance Corporation (“FDIC”) issued a press release (the “FDIC press release”) stating that Silicon Valley Bank, Santa Clara, California (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. On March 12, 2023, the Treasury Department announced that depositors of SVB will have access to all of their money starting March 13, 2023. The Company had approximately $ 2.8 million cash deposited with SVB as of each of December 31, 2022, February 13, 2023 when the Debtors commenced the Chapter 11 Cases in the Bankruptcy Court, and March 10, 2023. On March 14, 2023, the Company regained access to the full amount of its cash that was deposited with SVB. |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Sorrento Therapeutics, Inc. (the “Company”) is a clinical and commercial stage biopharmaceutical company developing a portfolio of next generation treatments for three major therapeutic areas: cancer, infectious disease and pain. The Company’s multimodal, multipronged approach to fighting cancer is made possible by its immuno-oncology platforms, including its fully human antibodies (“G-MAB library”), ACEA small molecule library, immuno-cellular therapies (“DAR-T”), antibody-drug conjugates (“ADCs”) and oncolytic virus (“Seprehvec”). The Company is also developing potential antiviral therapies against COVID-19, including FUJOVEE (Abivertinib) and its rapid diagnostic test, including COVIMARK (launched as COVISTIX in Mexico and Brazil). In November 2022, Scilex Holding Company (“Scilex”), a majority owned subsidiary of the Company, completed its business combination with Vickers Vantage Corp. I, a special purpose acquisition company (see Note 7). Scilex launched ZTlido® in 2018 as a prescription lidocaine topical product. Scilex is also developing pipeline product candidates, including SEMDEXA. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company`s subsidiaries. For consolidated entities where the Company owns or is exposed to less than 100% of the economics, the Company records net income (loss) attributable to noncontrolling interests in its consolidated statements of operations equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. All intercompany balances and transactions have been eliminated in consolidation. The Company operates in two operating and reportable segments, Sorrento Therapeutics and Scilex. The Sorrento Therapeutics segment is organized around infectious disease and the Company’s immuno-oncology therapeutic area, leveraging its proprietary G-MAB antibody library and targeted delivery modalities to generate the next generation of cancer therapeutics. The Scilex segment is largely organized around the Company’s non-opioid pain management operations. See Note 14 . |
Voluntary Filing Under Chapter 11 | Voluntary Filing Under Chapter 11 As previously reported in the Company’s Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 13, 2023, the Company and its wholly owned direct subsidiary, Scintilla Pharmaceuticals, Inc. (together with the Company, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 proceedings are jointly administered under the caption In re Sorrento Therapeutics, Inc., et al. (the “Chapter 11 Cases”). The Debtors continue to operate their business in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. At hearings before the Bankruptcy Court on February 16, 2023 and February 21, 2023, the Debtors obtained approval from the Bankruptcy Court of certain “first day” motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations during the Chapter 11 Cases. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable; however, actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of money market accounts and bank deposits, which are highly liquid and readily tradable. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows accounting guidance on fair value measurements for financial instruments measured on a recurring basis, as well as for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price, or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs to value its financial instruments: • Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments. • Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace. • Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires it to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed or initial amounts recorded may not be indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The carrying amounts of cash equivalents approximate their fair value based upon quoted market prices. Certain of the Company’s financial instruments are not measured at fair value on a recurring basis, but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts receivable and payable, and other financial instruments in current assets and current liabilities. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable are presented net of allowances for expected credit losses and consist of trade receivables from sales and services provided to customers, which are generally unsecured. The Company reviews reserves and makes adjustments based on historical experience and known collectability issues and disputes. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for doubtful accounts. The allowance for expected credit losses is not material. |
Inventory | Inventory The Company determines inventory cost on a first-in, first-out basis. The Company reduces the carrying value of inventories to a lower of cost or net realizable value for those items that are potentially excess, obsolete or slow-moving. The Company considers the need for allowances for excess and obsolete inventor y based upon historical experience, sales trends, and specific categories of inventory and expiration dates for inventory on hand. As of December 31, 2022, net inventory was $ 10.0 million, comprised of $ 3.4 million of finished goods and $ 6.6 million of raw materials and supplies. As of December 31, 2021, net inventory was $ 8.1 million, comprised of $ 4.7 million of finished goods and $ 3.3 million of raw materials and supplies. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are generally three to five years . Leasehold improvements are amortized over the lesser of the life of the lease or the life of the asset. Repairs and maintenance are charged to expense as incurred. |
Acquisitions, Contingent Consideration and Acquired In-Process Research and Development | Acquisitions The Company first determines whether a set of assets acquired constitutes a business and should be accounted for as a business combination. The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired, including in-process research and development (“IPR&D”) projects and liabilities assumed be recorded at their fair values as of the acquisition date on the Company`s consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred. When the Company determines assets acquired do not meet the definition of a business combination, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded and contingent consideration such as payments upon achievement of various developmental, regulatory and commercial milestones generally is not recognized at the acquisition date. In an asset acquisition, up-front payments allocated to IPR&D projects at the acquisition date and subsequent milestone payments are charged to expense in the Company`s consolidated statements of operations unless there is an alternative future use. Contingent Consideration The fair value of contingent consideration liabilities assumed in business combinations is recorded as part of the purchase price consideration of the acquisition, and is determined using a discounted cash flow model or Monte Carlo simulation model. The significant inputs of such models are not observable in the market, such as certain financial metric growth rates, volatility rates, projections associated with applicable milestones, discount rates and the related probabilities and payment structure in the contingent consideration arrangement. Fair value adjustments to contingent consideration liabilities are recorded through operating expenses in the consolidated statement of operations. Contingent consideration arrangements assumed in an asset acquisition will be measured and accrued when such contingency is resolved. Acquired In-Process Research and Development The Company has acquired, and may continue to acquire, the rights to develop and commercialize new drug candidates. The up-front payments to acquire new drug compounds or drug delivery devices, as well as future milestone payments associated with assets that do not meet the definition of a derivative and that are deemed probable to achieve, are immediately expensed as acquired IPR&D, provided that the drug candidates have not achieved regulatory approval for marketing and, absent obtaining such approval, have no alternative future use. Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon commercialization of the relevant research and development project, the Company amortizes the acquired IPR&D over its estimated useful life. Capitalized IPR&D is reviewed annually for impairment or more frequently as changes in circumstance or the occurrence of events suggest that the remaining value may not be recoverable. |
Goodwill and Other Long-Lived Assets | Goodwill and Other Long-Lived Assets Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of net assets acquired. Goodwill is reviewed at the reporting unit level for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. During its goodwill impairment review, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. The Company evaluates its long-lived and intangible assets with definite lives, such as property and equipment, acquired technology, customer relationships, patent and license rights, for impairment by considering the expected use of the assets and the effects of obsolescence, demand, anticipated technological advances, market influences and other economic factors. The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparison of the assets’ net book value to future net undiscounted cash flows that the assets are expected to genera te. |
Commitments and Contingencies | Commitments and Contingencie s The Company accrues for commitments and contingencies when, after considering the facts and circumstances of each matter as then known, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are generally expensed as incurred. The consideration related to a gain contingency is recorded in the consolidated financial statements during the period in which all underlying events or contingencies are resolved and the gain is realized. |
Debt, Including Debt With Detachable Warrants | Debt, Including Debt With Detachable Warrants Detachable warrants are evaluated for the classification of warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with equity-classified warrants, the proceeds from the issuance of debt are first allocated to the debt and the warrants at their relative estimated fair values. The portion of the proceeds allocated to the warrants are accounted for as paid-in capital and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of embedded derivatives and beneficial conversion features, are allocated to the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separate accounting as derivative financial instruments pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging . If the amount allocated to the convertible debt results in an effective per share conversion price less than the fair value of the Company’s common stock on the commitment date, the intrinsic value of this beneficial conversion feature is recorded as a discount to the convertible debt with a corresponding increase to additional paid in capital. The beneficial conversion feature discount is equal to the difference between the effective conversion price and the fair value of the Company’s common stock at the commitment date, unless limited by the remaining proceeds allocated to the debt. The Company may enter financing arrangements, the terms of which involve significant assumptions and estimates, including future net product sales, in determining interest expense, amortization period of the debt discount, as well as the classification between current and long-term portions. In estimating future net product sales, the Company assesses prevailing market conditions using various external market data against the Company’s anticipated sales and planned commercial activities. Consequently, the Company imputes interest on the carrying value of the debt and records interest expense using an imputed effective interest rate. The Company reassesses the expected payments each reporting period and accounts for any changes through an adjustment to the effective interest rate on a prospective basis, with a corresponding impact to the classification of the Company’s current and long-term portions. |
Derivative Liabilities | Derivative Liabilities Derivative liabilities are recorded on the Company`s consolidated balance sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded as other income or expense. |
Investments in Other Entities | Investments in Other Entities The Company holds a portfolio of investments in equity securities. Investments in entities over which the Company has significant influence, but not a controlling interest, are accounted for using the equity method, with the Company’s share of earnings or losses reported in loss on equity method investments. The Company’s investments in non-marketable securities are carried at cost, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. The Company’s investments in marketable equity securities are measured at fair value. |
Research and Development Costs | Research and Development Costs The Company expenses the cost of research and development as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and preclinical materials as well as other contracted services, license fees and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with FASB ASC Topic 730, Research and Development . |
Income Taxes | Income Taxes The provisions of the FASB ASC Topic 740 “Income Taxes,” addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The Company has determined that it has uncertain tax positions. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of December 31, 2022, the Company maintained a full valuation allowance against its deferred tax assets, with the exception of an amount equal to its deferred tax liabilities that are scheduled to reverse against the Company's deferred tax assets. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company`s leases do not provide an implicit rate, it 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. The operating lease ROU asset also includes any lease payments made and is reduced by lease incentives. The Company’ s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Revenue Recognition | Revenue Recognition The Company`s revenues are generated from product sales, the sale of customized reagents and other materials, contract manufacturing services, and other service revenues. The following table shows revenue disaggregated by product and service type for the years ended December 31, 2022, 2021 and 2020 (in thousands): Years Ended December 31, 2022 2021 2020 Scilex Pharmaceuticals Inc. product sales, net $ 38,033 $ 28,546 $ 26,331 Sorrento Therapeutics, Inc. product revenues, net 6,963 189 297 Net total product revenues $ 44,996 $ 28,735 $ 26,628 Concortis Biosystems Corporation service revenues 8,719 15,599 7,730 Bioserv Corporation service revenues 2,971 4,672 4,976 Other service revenues 6,153 3,898 652 Total service revenues $ 17,843 $ 24,169 $ 13,358 The Company is obligated to accept from customers the return of products sold that are damaged or do not meet certain specifications. The Company may authorize the return of products sold in accordance with the terms of its sales contracts and estimates allowances for such amounts at the time of sale. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. Scilex Product Sales Revenues from Scilex product sales is fully comprised of sales of ZTlido. The Company's performance obligation with respect to sales of ZTlido is satisfied at a point in time, which transfers control upon delivery of product to the customer. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time. The Company identified a single performance obligation. Invoicing typically occurs upon shipment and the length of time between invoicing and when payment is due is not significant. The aggregate dollar value of unfulfilled orders as of December 31, 2022 was not material. Sales of ZTlido are generated within the United States. Prior to April 2, 2022, sales to Scilex’s sole distributor represented 100 % of Scilex's net revenue. On April 2, 2022, Scilex announced the expansion of its direct distribution network to national and regional wholesalers and pharmacies. The distributor continued to provide traditional third-party logistics functions for Scilex. The Company had four customers during the year ended December 31, 2022, which individually generated 10% or more of the Company’s total revenue. These customers accounted for 78 % of the Company’s revenue for the year ended December 31, 2022, individually ranging between 19 % to 24 %. As of December 31, 2022, these customers represented 82 % of the Company’s outstanding accounts receivable, individually ranging between 24 % to 36 %. The Company monitors the financial condition of its customers, limits its credit exposure by setting credit limits, and has not experienced any credit losses for the years ended December 31, 2022, 2021, and 2020. For product sales, Scilex records gross-to-net sales adjustments for government and managed care rebates, chargebacks, wholesaler and distributor fees, sales returns and prompt payment discounts. Such variable consideration is estimated in the period of the sale and is estimated using a most likely amount approach based primarily upon provisions included in the Company’s customer contract, customary industry practices and current government regulations. Rebates are discounts that the Company pays under either government or private health care programs. Government rebate programs include state Medicaid drug rebate programs, the Medicare coverage gap discount programs and the Tricare programs. Commercial rebate and fee programs relate to contractual agreements with commercial healthcare providers, under which the Company pays rebates and fees for access to and position on that provider’s patient drug formulary. Rebates and chargebacks paid under government programs are generally mandated under law, whereas private rebates and fees are generally contractually negotiated with commercial healthcare providers. Both types of rebates vary over time. The Company records a reduction to gross product sales at the time the customer takes title to the product based on estimates of expected rebate claims. The Company monitors the sales trends and adjust for these rebates on a regular basis to reflect the most recent rebate experience and contractual obligations. Reserves for rebates and chargebacks are recorded as accrued rebates and fees under current liabilities within the Company’s consolidated balance sheet. The Company had $ 30.9 million and $ 7.4 million of accrued rebates and fees included in accrued expenses and liabilities on its consolidated balance sheets as of December 31, 2022 and 2021, respectively. Sorrento Product Revenues Most of Sorrento product revenues are comprised of sales of COVISTIX, the Company's lateral flow rapid diagnostic test for detection of the SARS-CoV-2 virus. The Company considers control to have transferred upon delivery where the customer has legal title to the asset, physical possession of the asset has been transferred to the customer, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time. The Company identified a single performance obligation. During the year ended December 31, 2022, nearly all COVISTIX sales were generated in Mexico and sales returns were immaterial. Concortis Biosystems Corporation ( “ Concortis ” ) Contract manufacturing revenue associated with sales of customized reagents related to delivering proprietary cytotoxins, linkers and linker-toxins is recognized at a point in time upon the transfer of control, which is generally upon shipment given the short contract terms of two months or less generally. Revenue associated with contract development and manufacturing of highly customized ADC services related to providing synthetic expertise to antibodies provided by customers is recognized over time as the service and related deliverables are highly customized and unique to each customer’s needs, which does not have alternative use to the Company. The Company also has an enforceable right to the payment for the ADC services completed to date. In recognizing the revenue over time, the Company measures its progress using an input method based on the effort it expends toward the satisfaction of its performance obligations. The Company estimates the amount of effort it expends including the time it will take the Company to complete the activities relative to the estimated total effort to satisfy each performance obligation. This approach requires the Company to make estimates and use judgement. If the Company’s estimates or judgements change over the course of the contract, they may affect the timing and amount of revenue that the Company recognizes in the current and future periods. The estimated revenue expected to be recognized for future performance obligations associated with contract development and manufacturing services was approximately $ 0.7 million and $ 0.2 million as of December 2022 and 2021, respectively. Bioserv Corporation ( “ Bioserv ” ) Contract manufacturing services associated with the Company’s Bioserv operations related to finish and fill activities for drug products and reagents are recognized ratably over the contract term, which reflects the transfer of services to the customer because the manufactured products are highly customized and do not have an alternative use to the Company. As of December 31, 2022, the estimated revenue expected to be recognized for future performance obligations associated with contract manufacturing services was immaterial compared to approximately $ 0.1 million as of December 31, 2021. Other Service Revenues If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. If the license to the Company’s intellectual property is bundled with other promises that are not distinct, the Company assesses the nature of the combined performance obligation to determine whether it is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company records a non-refundable, up-front license fee under current license agreements as deferred revenue upon receipt of the payment if it is determined not to be distinct from the ongoing performance obligation. License revenue is recognized over the term when the ongoing performance obligation is satisfied (see Note 7 ). As of December 31, 2022, future performance obligations for license revenues relate to the ImmuneOncia Therapeutics, Inc. (“ImmuneOncia”) license agreement. The total consideration for the ImmuneOncia license performance obligation, effective September 1, 2016, represented $ 9.6 million. The estimated revenue expected to be recognized for future performance obligations, as of December 31, 2022, was approximatel y $ 6.6 mi llion. The Company expects to recognize license revenue of approximately $ 0.5 million of the remaining performance obligation annually through the remaining term. The Company applied judgment in estimating the 20 -year contract term, analogous to the expected life o f the patent, over which revenue is recognized over time given the ongoing performance obligation related to the Company's participation on a steering committee for the technologies under the agreement. In November 2020, the Company was awarded a contract with the Defense Advanced Research Projects Agency (“DARPA Contract”) and co-funded by the Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, to develop a rapid countermeasure to COVID-19 using gene-encoded neutralizing antibodies. The contract provided funding of up to $ 34.0 million for the development through Phase II clinical studies of a gene-encoded antibody that could enable rapid protection from and/or treatment of SARS-CoV-2 infection and COVID-19. The DARPA Contract was concluded and the cumulative funding received was $ 3.1 million as of December 31, 2022. The Company recognized $ 0.1 million, $ 2.8 million and $ 0.2 million in grant revenue associated with the DARPA Contract during the years e nded December 31, 2022, 2021 and 2020, respectively, which is included within other service revenue. The SARS-CoV-2 antibody project remains a component of the Company's pipeline. The Company recorded $ 1.8 million in other service revenues associated with Celularity Inc. (“Celularity”) for the year ended December 31, 2022. The Company held an ownership interest of approximately 13.71 % of Celularity on a non-diluted basis at December 31, 2022. The Company recorded $ 3.0 million in other service r evenues associated with ImmuneOncia for the year ended December 31, 2022. The Company held an ownership interest of approximately 32.0 % of ImmuneOncia on a non-diluted basis at December 31, 2022. |
Stock-Based Compensation | Stock-Based Compensation The Company estimates the fair value of stock option awards and its Employee Stock Purchase Plan (“ESPP”) on the grant or offering date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate, expected term and expected volatility. Stock-based compensation expense is recognized on a straight-line basis, net of actual forfeitures in the period. The Company estimated the CEO Performance Award (as defined in Note 10 ) on the grant date using Monte Carlo simulations. Key assumptions for estimating the performance-based awards fair value at the date of grant included, volatility of the Company’s common stock price, post-vesting exercise behavior, and the derived service period. Recognition of stock-based compensation expense of all the tranches commenced on the date of grant, as the probability of meeting the ten market capitalization milestones is not considered in determining the timing of expense recognition. The expense will be recognized ratably over the expected vesting period of each respective tranche. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is primarily comprised of net income (loss) and foreign currency translation adjustments. The Company displays comprehensive loss and its components in its consolidated statements of comprehensive loss. |
Net Loss per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding. Diluted net loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or the exercise of outstanding warrants. The treasury stock method and the if-converted method are used to calculate the potential dilutive effect of these common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted net loss per share when their effect is anti-dilutive. In periods where a net loss is presented, all potentially dilutive securities are anti-dilutive and are excluded from the computation of diluted net loss per share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with ASC Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. The Company is evaluating the impact the standard will have on its consolidated financial statements. |
Organization and Significant _3
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Disaggregated by Product and Service Type | The following table shows revenue disaggregated by product and service type for the years ended December 31, 2022, 2021 and 2020 (in thousands): Years Ended December 31, 2022 2021 2020 Scilex Pharmaceuticals Inc. product sales, net $ 38,033 $ 28,546 $ 26,331 Sorrento Therapeutics, Inc. product revenues, net 6,963 189 297 Net total product revenues $ 44,996 $ 28,735 $ 26,628 Concortis Biosystems Corporation service revenues 8,719 15,599 7,730 Bioserv Corporation service revenues 2,971 4,672 4,976 Other service revenues 6,153 3,898 652 Total service revenues $ 17,843 $ 24,169 $ 13,358 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurements at December 31, 2022 Balance Quoted Significant Significant Assets: Marketable investments $ 26,344 $ 26,344 $ — $ — Total assets $ 26,344 $ 26,344 $ — $ — Liabilities: Derivative liabilities - non-current $ 300 $ — $ — $ 300 Current portion of contingent consideration 397 — — 397 Contingent consideration - non-current 48,949 — — 48,949 Total liabilities $ 49,646 $ — $ — $ 49,646 Fair Value Measurements at December 31, 2021 Balance Quoted Significant Significant Assets: Marketable investments $ 90,217 $ 2,560 $ — $ 87,657 Total assets $ 90,217 $ 2,560 $ — $ 87,657 Liabilities: Derivative liabilities - non-current $ 35,700 $ — $ — $ 35,700 Current portion of contingent consideration 397 — — 397 Contingent consideration, non-current 124,349 — — 124,349 Total liabilities $ 160,446 $ — $ — $ 160,446 |
Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | Changes in fair value of the Company’s investment in Celularity since December 31, 2021 are as follows (Level 3): (in thousands) Fair Value Beginning Balance at December 31, 2021 $ 87,657 Change in fair value measurement of Restricted Shares ( 26,098 ) Transfer from Level 3 to Level 1 ( 61,559 ) Ending Balance at December 31, 2022 $ — The following table includes a summary of the changes to contingent consideration liabilities, during the years ended December 31, 2022 and 2021: (in thousands) Fair Value Balance at December 31, 2020 $ 947 Change in fair value measurement 9,198 Contingent consideration related to the acquisition of ACEA Therapeutics, Inc. 114,601 Balance at December 31, 2021 124,746 Change in fair value measurement ( 75,400 ) Balance at December 31, 2022 $ 49,346 The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the years ended December 31, 2022 and 2021: (in thousands) Fair Value Balance at December 31, 2020 $ 35,400 Change in fair value measurement 300 Balance at December 31, 2021 35,700 Private Warrants 620 Change in fair value measurement ( 36,020 ) Balance at December 31, 2022 $ 300 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following as of December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Furniture and fixtures $ 1,813 $ 1,709 Office equipment 3,497 3,525 Capitalized software 98 98 Machinery and lab equipment 63,595 56,076 Leasehold improvements 16,158 15,529 Construction in progress 18,230 7,878 103,391 84,815 Less accumulated depreciation ( 51,420 ) ( 43,490 ) $ 51,971 $ 41,325 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Company's Identifiable Intangible Assets | A summary of the Company’s identifiable intangible assets as of December 31, 2022 and 2021 is as follows (in thousands): December 31, 2022 Weighted Gross Accumulated Intangibles, Customer relationships 2 $ 1,585 $ 1,479 $ 106 Acquired technology 19 3,410 1,588 1,822 Acquired in-process research and development — 94,240 — 94,240 Technology placed in service 15 21,940 6,216 15,724 Patent rights 15 32,720 13,463 19,257 Assembled workforce 5 605 465 140 Internally developed software 2 520 434 86 Acquired licenses 15 5,711 184 5,527 Total intangible assets $ 160,731 $ 23,829 $ 136,902 December 31, 2021 Weighted Gross Accumulated Intangibles, Customer relationships 2 $ 1,585 $ 1,453 $ 132 Acquired technology 19 3,410 1,412 1,998 Acquired in-process research and development — 218,430 — 218,430 Technology placed in service 15 21,940 4,754 17,186 Patent rights 15 32,720 11,283 21,437 Assembled workforce 5 605 343 262 Internally developed software 2 520 260 260 Total intangible assets $ 279,210 $ 19,505 $ 259,705 |
Schedule of Estimated Future Amortization Expense Related to Intangible Assets | Estimated future amortization expense related to intangible assets, excluding indefinite-lived intangible assets, at December 31, 2022 is as follows (in thousands): Years Ending December 31, Amount 2023 $ 4,416 2024 4,239 2025 4,214 2026 4,214 2027 4,187 Thereafter 21,393 Total $ 42,663 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Instrument [Line Items] | |
Schedule of Long-Term Debt and Unamortized Discount Balances | Borrowings of the Scilex Notes consisted of the following (in thousands): December 31, 2022 2021 Principal $ — $ 133,998 Unamortized debt discount — ( 30,601 ) Unamortized debt issuance costs — ( 2,235 ) Carrying value $ — $ 101,162 Estimated fair value $ — $ 115,400 |
Schedule of Future Repayments under the Contract | The following table provides a schedule of future repayments under the Contract (in thousands): 2023 $ — 2024 984 2025 3,257 2026 5,630 2027 10,566 2028 6,281 Total $ 26,718 |
ACEA Therapeutics, Inc | |
Debt Instrument [Line Items] | |
Schedule of Long-Term Debt and Unamortized Discount Balances | Borrowings under significant debt arrangements assumed in connection with the Company’s acquisition of ACEA consisted of the following (in thousands): December 31, December 31, Principal $ 26,718 $ 29,048 Unamortized debt discount ( 7,878 ) ( 10,642 ) Carrying value $ 18,840 $ 18,406 Estimated fair value $ 15,000 $ 17,100 |
Stock Incentive and Employee _2
Stock Incentive and Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity as of December 31, 2022 under the 2019 Plan and the 2009 Plan, and the changes for the period then ended (dollar values in thousands, other than weighted-average exercise price): Options Outstanding Weighted- Aggregate Outstanding at December 31, 2021 22,515,513 $ 6.19 — Options Granted 550,000 1.61 Options Canceled ( 2,179,421 ) 6.41 Options Exercised ( 24,332 ) 2.32 Outstanding at December 31, 2022 20,861,760 $ 6.05 $ — Vested and Expected to Vest at December 31, 2022 20,861,760 $ 6.05 $ — |
Fair Value of Employee Stock Options | The fair value of employee stock options was estimated at the grant date using the following assumptions: Years Ended December 31, 2022 2021 2020 Weighted-average grant date fair value $ 1.33 $ 7.49 $ 4.54 Dividend yield — — — Volatility 110 % 110 % 105 % Risk-free interest rate 2.90 % 0.96 % 0.46 % Expected life of options (years) 5.7 5.7 5.7 |
Summary of Restricted Stock Unit ("RSU") Activity | The following table summarizes RSU activity as of December 31, 2022 under the 2019 Plan and the changes for the period then ended: Number of Shares Weighted- Outstanding at December 31, 2021 3,433,896 $ 9.50 RSUs Granted 6,355,500 1.79 RSUs Released ( 768,531 ) 9.53 RSUs Cancelled ( 736,367 ) 7.82 Outstanding at December 31, 2022 8,284,498 $ 3.73 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supplemental Quantitative Information Related to Leases | Supplemental quantitative information related to leases includes the following (in thousands): Year ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 13,638 $ 11,225 ROU assets obtained in exchange for new and amended operating lease liabilities $ 5,592 $ 49,459 Weighted average remaining lease term in years 13.9 15.1 Weighted average discount rate 12.8 % 12.4 % |
Schedule of Operating Lease Liability Maturities | Maturities of lease liabilities are as follows (in thousands): Years ending December 31, Operating 2023 $ 15,484 2024 15,397 2025 14,373 2026 14,064 2027 14,285 Thereafter 155,323 Total lease payments 228,926 Less imputed interest ( 129,838 ) Total lease liabilities as of December 31, 2022 $ 99,088 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Tax By Location | Total loss before income taxes summarized by region for the years ended December 31, 2022, 2021 and 2020 is as follows (in thousands): 2022 2021 2020 United States $ ( 570,609 ) $ ( 466,562 ) $ ( 315,516 ) Foreign ( 9,564 ) 3,908 ( 908 ) Total $ ( 580,173 ) $ ( 462,654 ) $ ( 316,424 ) |
Schedule of Components of Provision Expense (Benefit) | The components of the provision expense (benefit) were as follows for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Current income tax expense (benefit): Federal $ — $ — $ ( 19 ) State 40 38 72 Foreign ( 620 ) 2,375 58 Total current ( 580 ) 2,413 111 Deferred income tax expense (benefit): Federal ( 127,565 ) ( 80,858 ) ( 55,321 ) State ( 28,570 ) ( 11,999 ) ( 2,730 ) Foreign ( 69 ) 178 ( 288 ) Total deferred ( 156,204 ) ( 92,679 ) ( 58,339 ) Changes in tax rate ( 910 ) ( 223 ) 507 Changes in valuation allowance 155,278 56,973 55,707 Total income tax benefit from continuing operations $ ( 2,416 ) $ ( 33,516 ) $ ( 2,014 ) |
Summary of Components of Net Deferred Tax Liabilities and Related Valuation Allowance | The components of the Company’s net deferred tax liabilities and related valuation allowance are as follows as of December 31, 2022 and 2021 (in thousands): 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 201,349 $ 181,428 Deferred revenue 1,685 25,626 Tax credit carryforwards 52,851 33,126 Intangible assets 47,115 37,627 Capitalized research and development 50,118 — Accrued expense and reserves 42,190 4,582 Operating lease liabilities 23,295 19,734 Debt related interest 29,292 26,002 Stock based compensation 9,957 10,516 Other 441 677 Total deferred tax assets 458,293 339,318 Less valuation allowance ( 416,642 ) ( 261,238 ) Total deferred tax assets 41,651 78,080 Deferred tax liabilities: Investment in common stock ( 2,646 ) ( 16,372 ) Operating lease right-of-use assets ( 20,328 ) ( 17,592 ) Intangible assets ( 18,989 ) ( 44,640 ) Other ( 279 ) ( 1,902 ) Total deferred tax liabilities ( 42,242 ) ( 80,506 ) Net deferred tax liabilities $ ( 591 ) $ ( 2,426 ) |
Summary of Reconciliation Between Federal Income Tax and Company Provision for Income Taxes | The reconciliation between U.S. federal income taxes at the statutory rate and the Company’s provision for income taxes are as follows for the years ended December 31, 2022, 2021 and 2020 (in thousands): 2022 2021 2020 Income tax benefit at federal statutory rate $ ( 121,836 ) $ ( 97,157 ) $ ( 66,449 ) Valuation allowance 155,278 56,973 55,707 State, net of federal tax benefit ( 14,371 ) ( 5,826 ) ( 3,339 ) Debt discount and interest limitation ( 9,293 ) 8,954 896 Income tax credits and incentives ( 14,684 ) ( 9,549 ) ( 3,685 ) Compensation expense 18,022 14,472 4,446 Acquisition related charges ( 13,314 ) 2,711 583 Prior year true-up and carryback ( 6,269 ) ( 3,209 ) 7,790 Other 4,051 ( 885 ) 2,037 Income tax benefit $ ( 2,416 ) $ ( 33,516 ) $ ( 2,014 ) |
Summary of Reconciliation of Unrecognized Tax Expense (Benefits) | 2022 2021 2020 Beginning balance $ 9,133 $ 6,397 $ 5,336 Increase related to prior year tax positions 1,323 258 133 Increase related to current year tax positions 5,722 2,442 928 Increase related to acquisitions 3 36 — Ending balance $ 16,181 $ 9,133 $ 6,397 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Information by Reportable Segments | The following table presents information about the Company’s reportable segments for the years ended December 31, 2022, 2021 and 2020 (in thousands): Years Ended December 31, 2022 2021 2020 (in thousands) Sorrento Scilex Total Sorrento Scilex Total Sorrento Scilex Total External revenues $ 24,805 $ 38,034 $ 62,839 $ 24,358 $ 28,546 $ 52,904 $ 13,655 $ 26,331 $ 39,986 Operating expenses 479,571 87,583 567,154 387,200 67,155 454,355 225,687 58,817 284,504 Operating (loss) income ( 454,766 ) ( 49,549 ) ( 504,315 ) ( 362,842 ) ( 38,609 ) ( 401,451 ) ( 212,032 ) ( 32,486 ) ( 244,518 ) Unrestricted cash 21,400 2,234 23,634 32,178 4,487 36,665 51,475 4,989 56,464 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Earnings Per Share | The following table sets forth the reconciliation of basic and diluted earnings per share for the years ended December 31, 2022, 2021 and 2020 (in thousands, except per share data): Years Ended December 31, 2022 2021 2020 Numerator Net loss attributable to Sorrento $ ( 572,843 ) $ ( 428,325 ) $ ( 298,461 ) Net loss attributable to Semnur holders of Scilex — — — Net loss used for basic and diluted earnings per share ( 572,843 ) ( 428,325 ) ( 298,461 ) Denominator for basic loss per share 419,315 294,774 229,823 Potentially dilutive shares of Sorrento common stock issuable upon Semnur Share Exchange — — — Denominator for loss earnings per share 419,315 294,774 229,823 Basic loss per share $ ( 1.37 ) $ ( 1.45 ) $ ( 1.30 ) Diluted loss per share $ ( 1.37 ) $ ( 1.45 ) $ ( 1.30 ) |
Components of Outstanding Securities | The potentially dilutive stock options and warrants that have been excluded because the effect would have been anti-dilutive consisted of the following (in thousands): Years Ended December 31, 2022 2021 2020 Outstanding options 20,862 22,516 18,763 Outstanding RSUs 8,284 3,434 — Outstanding warrants 16,020 16,020 18,605 |
Organization and Significant _4
Organization and Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Apr. 02, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 30, 2020 | |
Significant Accounting Policies [Line Items] | |||||
Net inventory | $ 9,976 | $ 8,106 | |||
Finished goods | 3,400 | 4,700 | |||
Raw materials and supplies | 6,600 | 3,300 | |||
External revenues | 62,839 | 52,904 | $ 39,986 | ||
Accrued rebates and fees | $ 30,900 | 7,400 | |||
Celularity | |||||
Significant Accounting Policies [Line Items] | |||||
Ownership interest of Celularity on a non-diluted basis | 13.71% | ||||
ImmuneOncia | |||||
Significant Accounting Policies [Line Items] | |||||
Ownership interest of Celularity on a non-diluted basis | 32% | ||||
Four Customers | Total revenue | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 78% | ||||
Four Customers | Accounts Receivable | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 82% | ||||
Sale And Service, Drug and Reagents | |||||
Significant Accounting Policies [Line Items] | |||||
Remaining performance obligation | 100 | ||||
Concortis Biosystems Corporation | |||||
Significant Accounting Policies [Line Items] | |||||
Remaining performance obligation | $ 700 | 200 | |||
External revenues | $ 8,719 | 15,599 | 7,730 | ||
Royalty And License | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated license contract term based on expected life of patent | 20 years | ||||
Royalty And License | ImmuneOncia Therapeutics, Inc | |||||
Significant Accounting Policies [Line Items] | |||||
Remaining performance obligation | $ 6,600 | ||||
Proceeds from customers | 9,600 | ||||
Remaining performance obligation expected to be recognized in the next twelve months | 500 | ||||
DARPA Contract | |||||
Significant Accounting Policies [Line Items] | |||||
External revenues | 100 | 2,800 | 200 | ||
Maximum amount for development through Phase II Clinical Studies of Gene-encoded antibody | 3,100 | $ 34,000 | |||
Other Service Revenue | |||||
Significant Accounting Policies [Line Items] | |||||
External revenues | 6,153 | 3,898 | 652 | ||
Other Service Revenue | Celularity | |||||
Significant Accounting Policies [Line Items] | |||||
External revenues | 1,800 | ||||
Other Service Revenue | ImmuneOncia | |||||
Significant Accounting Policies [Line Items] | |||||
External revenues | 3,000 | ||||
Scilex | |||||
Significant Accounting Policies [Line Items] | |||||
External revenues | $ 38,033 | $ 28,546 | $ 26,331 | ||
Percentage of distributor represented net revenue | 100% | ||||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life of fixed asset | 3 years | ||||
Minimum | Four Customers | Total revenue | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 19% | ||||
Minimum | Four Customers | Accounts Receivable | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 24% | ||||
Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful life of fixed asset | 5 years | ||||
Maximum | Four Customers | Total revenue | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 24% | ||||
Maximum | Four Customers | Accounts Receivable | Customer Concentration Risk | |||||
Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 36% |
Organization and Significant _5
Organization and Significant Accounting Policies - Schedule of Revenue Disaggregated by Product and Service Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 62,839 | $ 52,904 | $ 39,986 |
Scilex Pharmaceuticals Inc. Product Sales, Net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 38,033 | 28,546 | 26,331 |
Sorrento Therapeutics, Inc. Product Revenues, Net | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,963 | 189 | 297 |
Net Total Product Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 44,996 | 28,735 | 26,628 |
Concortis Biosystems Corporation Service Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 8,719 | 15,599 | 7,730 |
Bioserv Corporation Service Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,971 | 4,672 | 4,976 |
Other Service Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,153 | 3,898 | 652 |
Total Service Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 17,843 | $ 24,169 | $ 13,358 |
Liquidity and Going Concern - A
Liquidity and Going Concern - Additional Information (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Bankruptcy Court approval financing amount | $ 75 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Total assets | $ 26,344 | $ 90,217 |
Liabilities: | ||
Total liabilities | 49,646 | 160,446 |
Derivative liabilities - non-current | ||
Liabilities: | ||
Total liabilities | 300 | 35,700 |
Current portion of contingent consideration | ||
Liabilities: | ||
Total liabilities | 397 | 397 |
Contingent Consideration Noncurrent | ||
Liabilities: | ||
Total liabilities | 48,949 | 124,349 |
Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Total assets | 26,344 | 2,560 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Derivative liabilities - non-current | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Current portion of contingent consideration | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Contingent Consideration Noncurrent | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Derivative liabilities - non-current | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Current portion of contingent consideration | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Contingent Consideration Noncurrent | ||
Liabilities: | ||
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | 0 | 87,657 |
Liabilities: | ||
Total liabilities | 49,646 | 160,446 |
Significant Unobservable Inputs (Level 3) | Derivative liabilities - non-current | ||
Liabilities: | ||
Total liabilities | 300 | 35,700 |
Significant Unobservable Inputs (Level 3) | Current portion of contingent consideration | ||
Liabilities: | ||
Total liabilities | 397 | 397 |
Significant Unobservable Inputs (Level 3) | Contingent Consideration Noncurrent | ||
Liabilities: | ||
Total liabilities | 48,949 | 124,349 |
Marketable investments | ||
Assets: | ||
Total assets | 26,344 | 90,217 |
Marketable investments | Quoted Prices in Active Markets (Level 1) | ||
Assets: | ||
Total assets | 26,344 | 2,560 |
Marketable investments | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets | $ 0 | 0 |
Marketable investments | Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Total assets | $ 87,657 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Common stock, shares outstanding (in shares) | shares | 522,817,137 | 314,573,225 | |
Gain (Loss) on derivative liability | $ 7,316,000 | $ (300,000) | $ 6,600,000 |
Private Placement Warrants | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Gain (Loss) on derivative liability | $ 2,000,000 | ||
Risk Adjusted Net Sales Forecast | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Derivative liability, measurement input | 0.061 | ||
Effective Debt Yield | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Derivative liability, measurement input | 0.215 | ||
ACEA Therapeutics, Inc | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Gain (Loss) on re-measurement of fair value | $ 75,400,000 | $ (9,200,000) | |
Fair Value, Asset (Liability), Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Contingent Consideration, Liability, Noncurrent | ||
ACEA Therapeutics, Inc | Effective Debt Yield | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Derivative liability, measurement input | 0.219 | 0.150 | |
Scilex Pharmaceuticals, Inc | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Derivative liabilities | $ 0 | ||
Class A Common Stock | Celularity | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Common stock, shares outstanding (in shares) | shares | 20,422,124 | 20,422,124 | |
Common stock received | shares | 19,922,124 | ||
Senior Notes | Scilex Pharmaceuticals, Inc | Scilex Notes | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Derivative liabilities | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Company's Investment in Celularity Measured at Fair Value Using Significant Unobservable Inputs (Level3) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 124,746 | $ 947 |
Ending balance | 49,346 | 124,746 |
Celularity | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 87,657 | |
Transfer from Level 3 to Level 1 | (61,559) | |
Ending balance | 0 | $ 87,657 |
Celularity | Restricted Shares | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Change in fair value measurement | $ (26,098) |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Contingent Consideration Liabilities Excluding Acquisition Consideration are Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 124,746 | $ 947 |
Ending balance | 49,346 | 124,746 |
ACEA Therapeutics, Inc | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Change in fair value measurement | $ (75,400) | 9,198 |
Contingent consideration related to the acquisition of ACEA Therapeutics, Inc. | $ 114,601 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Derivative Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Beginning balance | $ 124,746 | $ 947 |
Ending balance | 49,346 | 124,746 |
Derivative Liabilities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Beginning balance | 35,700 | 35,400 |
Change in fair value measurement | (36,020) | 300 |
Private Warrants | 620 | |
Ending balance | $ 300 | $ 35,700 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | $ 103,391 | $ 84,815 |
Less accumulated depreciation | (51,420) | (43,490) |
Property and equipment, net | 51,971 | 41,325 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 1,813 | 1,709 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 3,497 | 3,525 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 98 | 98 |
Machinery and lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 63,595 | 56,076 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | 16,158 | 15,529 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, total | $ 18,230 | $ 7,878 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 8.9 | $ 8.3 | $ 7 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Mar. 09, 2021 | Jul. 31, 2021 | May 31, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method investment, impairment losses | $ 39,000,000 | $ 0 | $ 3,800,000 | ||||
Common stock, shares outstanding (in shares) | 522,817,137 | 314,573,225 | |||||
Proceeds from sale of marketable investments | $ 124,767,000 | ||||||
NantKwest, Inc. and ImmunityBio | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Percentage of business acquisition | 100% | 100% | |||||
ImmunityBio | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 10,000,000 | ||||||
Realized gain (loss) on marketable investments | $ 24,100,000 | ||||||
Marketable investments shares sold | 8,190,000 | ||||||
Proceeds from sale of marketable investments | $ 124,000,000 | ||||||
ImmunityBio | Common Stock | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Remaining shares | 0 | ||||||
ImmunityBio | Maximum | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Common stock received | 8,190,000 | ||||||
Aardvark | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method investment, impairment losses | $ 0 | ||||||
Aardvark | Series B Preferred Stock | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Payments to acquire equity investment | $ 5,000,000 | $ 5,000,000 | $ 10,000,000 | ||||
Shares purchased under equity investment | 3,888,932 | 3,888,932 | 7,777,864 | ||||
Deverra | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Payments to acquire equity investment | $ 4,100,000 | ||||||
Aggregate principal amount | 6,000,000 | ||||||
Unpaid accrued interest | 100,000 | ||||||
Deverra | Common Stock | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Payments to acquire equity investment | $ 10,200,000 | ||||||
Shares purchased under equity investment | 5,622,703 | ||||||
Elsie | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Impairment charge of investment | $ 10,000,000 | ||||||
Elsie | Series A Preferred Stock | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Payments to acquire equity investment | $ 10,000,000 | ||||||
Shares purchased under equity investment | 10,000,000 |
Investments - Celularity - Addi
Investments - Celularity - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Equity Method Investments [Line Items] | ||
Common stock, shares outstanding (in shares) | 522,817,137 | 314,573,225 |
Celularity | ||
Schedule Of Equity Method Investments [Line Items] | ||
Unrealized losses on marketable investments | $ (63.9) | $ (39.8) |
Class A Common Stock | Celularity | ||
Schedule Of Equity Method Investments [Line Items] | ||
Common stock, shares outstanding (in shares) | 20,422,124 | 20,422,124 |
Investments - NANTibody - Addit
Investments - NANTibody - Additional Information (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Apr. 30, 2015 | |
Schedule Of Equity Method Investments [Line Items] | |||||||
Net loss | $ (577,757,000) | $ (429,138,000) | $ (314,410,000) | ||||
Current assets of equity method investment | 96,373,000 | 172,989,000 | |||||
Current liabilities of equity method investment | 327,922,000 | 139,453,000 | |||||
NANTibody | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Net loss | $ 1,300,000 | $ 700,000 | $ 100,000 | ||||
Current assets of equity method investment | 2,400,000 | 2,400,000 | |||||
Current liabilities of equity method investment | 11,400,000 | 9,600,000 | |||||
Noncurrent assets of equity method investment | 100,000 | 100,000 | |||||
Noncurrent liabilities of equity method investment | $ 0 | $ 0 | |||||
NANTibody | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method investment ownership percentage | 40% | ||||||
Equity investments | $ 0 | $ 0 | |||||
NANTibody | Nant Cell Inc | |||||||
Schedule Of Equity Method Investments [Line Items] | |||||||
Equity method investment ownership percentage | 60% |
Investments - NantStem - Additi
Investments - NantStem - Additional Information (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Apr. 30, 2015 | |
Schedule Of Equity Method Investments [Line Items] | ||||||
Net income (loss) | $ (577,757,000) | $ (429,138,000) | $ (314,410,000) | |||
Current assets of equity method investment | 96,373,000 | 172,989,000 | ||||
Current liabilities of equity method investment | 327,922,000 | 139,453,000 | ||||
NantStem [Member] | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Net income (loss) | $ 1,900,000 | $ 100,000 | ||||
Current assets of equity method investment | 85,300,000 | 83,100,000 | ||||
Current liabilities of equity method investment | 0 | 0 | ||||
Noncurrent assets of equity method investment | 100,000 | 500,000 | ||||
Noncurrent liabilities of equity method investment | 0 | $ 0 | ||||
Notes receivable | $ 71,200,000 | |||||
NantBio | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity method investments | 10,000,000 | |||||
Other than temporary impairment losses investments | 10,000,000 | |||||
NANTibody | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity method investment ownership percentage | 40% | |||||
Equity method investments | $ 0 | 0 | ||||
NANTibody | NantBio | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity method investment ownership percentage | 80% | |||||
Nant Cancer Stem LLC | ||||||
Schedule Of Equity Method Investments [Line Items] | ||||||
Equity method investment ownership percentage | 20% | |||||
Equity method investments | $ 18,500,000 | |||||
Other than temporary impairment losses investments | $ 19,000,000 |
Investments - NantBio - Additio
Investments - NantBio - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2015 | Dec. 31, 2022 | Dec. 31, 2021 | |
NantBio | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment ownership percentage | 0.50% | ||
NantBio | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 10 | ||
Payments to acquire equity investment | $ 10 | ||
Shares purchased under equity investment | 1,000,000 | ||
Other than temporary impairment losses investments | $ 10 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 80,269 | $ 80,269 | $ 79,525 | ||
Indefinite-lived intangible assets | $ 94,200 | ||||
Intangible amortization | 4,325 | $ 4,140 | $ 4,053 | ||
In-process Research and Development | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Loss on impairment of assets | $ 90,800 | 32,000 | |||
Goodwill impairment | $ 1,400 | ||||
Weighted average | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Identifiable intangible assets, weighted average life | 13 years 8 months 12 days | ||||
Discount Rate | In-process Research and Development | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Risk adjusted projected cash flow discount rate | 0.16 | ||||
Sorrento Therapeutics | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | 73,600 | $ 73,600 | |||
Scilex Pharmaceuticals, Inc | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 6,700 | $ 6,700 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 160,731 | $ 279,210 |
Accumulated Amortization | 23,829 | 19,505 |
Intangibles, net | $ 136,902 | $ 259,705 |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 2 years | 2 years |
Gross Carrying Amount | $ 1,585 | $ 1,585 |
Accumulated Amortization | 1,479 | 1,453 |
Intangibles, net | $ 106 | $ 132 |
Acquired technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 19 years | 19 years |
Gross Carrying Amount | $ 3,410 | $ 3,410 |
Accumulated Amortization | 1,588 | 1,412 |
Intangibles, net | 1,822 | 1,998 |
Acquired in-process research and development | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 94,240 | 218,430 |
Intangibles, net | $ 94,240 | $ 218,430 |
Technology placed in service | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | 15 years |
Gross Carrying Amount | $ 21,940 | $ 21,940 |
Accumulated Amortization | 6,216 | 4,754 |
Intangibles, net | $ 15,724 | $ 17,186 |
Patent rights | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | 15 years |
Gross Carrying Amount | $ 32,720 | $ 32,720 |
Accumulated Amortization | 13,463 | 11,283 |
Intangibles, net | $ 19,257 | $ 21,437 |
Assembled workforce | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 5 years | 5 years |
Gross Carrying Amount | $ 605 | $ 605 |
Accumulated Amortization | 465 | 343 |
Intangibles, net | $ 140 | $ 262 |
Internally developed software | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 2 years | 2 years |
Gross Carrying Amount | $ 520 | $ 520 |
Accumulated Amortization | 434 | 260 |
Intangibles, net | $ 86 | $ 260 |
Acquired licenses | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (Years) | 15 years | |
Gross Carrying Amount | $ 5,711 | |
Accumulated Amortization | 184 | |
Intangibles, net | $ 5,527 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense Related to Intangible Assets (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 4,416 |
2024 | 4,239 |
2025 | 4,214 |
2026 | 4,214 |
2027 | 4,187 |
Thereafter | 21,393 |
Total | $ 42,663 |
Significant Agreements and Co_2
Significant Agreements and Contracts - Romeg License Agreement - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 14, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Patent rights | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Intangible asset useful life | 15 years | 15 years | |
RxOmeg Therapeutics, LLC | Patent rights | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Intangible asset useful life | 15 years | ||
License Agreement | RxOmeg Therapeutics, LLC | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Up-front license fee | $ 2 | ||
Payments to aggregate amount | 13 | ||
Deferred consideration | 3.7 | ||
Intangible asset | $ 5.7 |
Significant Agreements and Co_3
Significant Agreements and Contracts - Zhengzhou Fortune Bioscience Co., Ltd. - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 | May 31, 2022 | Feb. 28, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Zhengzhou Fortune Bioscience Co., Ltd. | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Business acquisition, percentage of voting interests acquired | 49% | ||||
Zhengzhou Fortune Bioscience Co., Ltd. | Joint Venture Agreement and Equity Subscription Agreement | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Business acquisition, name of acquired entity | Zhengzhou Fortune Bioscience Co., Ltd | ||||
Business acquisition, percentage of voting interests acquired | 2% | 51% | 2% | 49% | |
Business acquisition, percentage of voting remaining interests to be acquired | 49% | 51% | |||
Termination of agreement if subsequent transaction does not occur | $ 5 | $ 4.8 | |||
Business acquisition consideration paid in cash | 5 | 4.8 | |||
Business acquisition equity interest of voting remaining interests to be acquired | $ 50 | $ 50 | |||
Amendment to Zhengzhou Fortune Bioscience Co., Ltd. | Joint Venture Agreement and Equity Subscription Agreement | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Business acquisition, percentage of voting interests acquired | 49% | 49% | 49% | ||
Business acquisition equity interest transferred percentage | 2% | 2% | |||
Proceeds from transfer of equity interest | $ 0.2 | ||||
Business acquisition consideration paid in cash | 0.2 | ||||
Accounts payable | $ 3 | ||||
Fair value of non-controlling interest | $ 4.8 | $ 4.8 | |||
Percentage of retained equity interest | 49% | 49% | |||
Gain from deconsolidation | $ 0.3 | ||||
Amendment to Zhengzhou Fortune Bioscience Co., Ltd. | Repurchase Agreement [Member] | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Business acquisition, percentage of voting interests acquired | 49% | ||||
Business acquisition consideration paid in cash | $ 1.8 | ||||
Accounts payable | 3 | ||||
Fair value of non-controlling interest | $ 4.8 |
Significant Agreements and Co_4
Significant Agreements and Contracts - Acquisition of Virex Health, Inc.- Additional Information (Details) - Virex Health, Inc [Member] - USD ($) | 12 Months Ended | |
Feb. 01, 2022 | Dec. 31, 2022 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Business acquisition, effective date of acquisition | Feb. 01, 2022 | |
Business acquisition, name of acquired entity | Virex Health, Inc. | |
Consideration transferred amount | $ 11,400,000 | |
Business acquisition consideration paid in cash | 6,800,000 | |
Transaction cost paid | $ 100,000 | |
Number of common stock issued under purchase consideration | 1,281,662 | |
Business combination consideration share price | $ 4,500,000 | |
Business combination contingent consideration regulatory payments | 10,000,000 | |
Contingent consideration, liability | $ 0 | |
Consideration transferred net of short-term liabilities assumed | $ 11,700,000 |
Significant Agreements and Co_5
Significant Agreements and Contracts - Acquisition of ACEA Therapeutics, Inc. - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Goodwill | $ 80,269,000 | $ 80,269,000 | $ 79,525,000 | ||
Acquired in-process research and development | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Impairment charges | $ 90,800,000 | 32,000,000 | |||
ACEA Therapeutics, Inc | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Business acquisition, effective date of acquisition | Jun. 01, 2021 | ||||
Business acquisition, date of acquisition agreement | Apr. 02, 2021 | ||||
Business acquisition, name of acquired entity | ACEA | ||||
Stock consideration shares value | $ 38,059,326 | ||||
Stock consideration value | 5,519,469 | ||||
Stock consideration value per share (usd per share) | $ 6.8955 | ||||
Business combination current liability true up amount | $ 7,500,000 | ||||
Asset acquisition, transaction costs | $ 100,000 | ||||
Business combination additional payments | 450,000,000 | ||||
Fair value of earn out consideration | $ 48,400,000 | $ 48,400,000 | $ 123,800,000 | ||
Upfront consideration | 44,100,000 | ||||
Impairment charges | 122,800,000 | ||||
Goodwill | 36,000,000 | ||||
Fair value of debt assumed liability | 32,100,000 | ||||
Purchase price allocation resulted in net identifiable assets, other net assets | 2,900,000 | ||||
Deferred tax liabilities assumed | 31,400,000 | ||||
ACEA Therapeutics, Inc | Acquired in-process research and development | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Purchase price allocation resulted in net identifiable assets | $ 190,800,000 | ||||
ACEA Therapeutics, Inc | Minimum | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Percentage of annual net sales on royalty bearing products | 5% | ||||
ACEA Therapeutics, Inc | Maximum | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Percentage of annual net sales on royalty bearing products | 10% |
Significant Agreements and Co_6
Significant Agreements and Contracts - Asset Purchase Agreement with Aardvark Therapeutics, Inc. - Additional Information (Details) - Asset Purchase Agreement with Aadvark Therapeutics, Inc. $ in Millions | 1 Months Ended |
Apr. 30, 2021 USD ($) shares | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee | $ | $ 5 |
Stock consideration value | shares | 616,655 |
Significant Agreements and Co_7
Significant Agreements and Contracts - Acquisition of SmartPharm Therapeutics, Inc. - Additional Information (Details) - USD ($) $ in Thousands, shares in Millions | Sep. 01, 2020 | Dec. 31, 2022 | Dec. 31, 2021 |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Goodwill | $ 80,269 | $ 79,525 | |
SmartPharm | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Stock consideration | $ 19,500 | ||
Stock consideration shares | 1.8 | ||
Purchase price allocation resulted in net identifiable assets | $ 19,500 | ||
Purchase price allocation resulted in net identifiable assets, indefinite lived intangible assets | 13,900 | ||
Goodwill | 5,300 | ||
Purchase price allocation resulted in net identifiable assets, other net assets | $ 300 |
Significant Agreements and Co_8
Significant Agreements and Contracts - License Agreement with Icahn School of Medicine at Mount Sinai - Additional Information (Details) - Mount Sinai - License Agreement $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) shares | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee | $ | $ 7.5 |
Icahn School of Medicine | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Stock consideration shares | shares | 851,305 |
Significant Agreements and Co_9
Significant Agreements and Contracts - License Agreement with ACEA Therapeutics, Inc - Additional Information (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2020 USD ($) | |
License Agreement | ACEA Therapeutics, Inc | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee | $ 15 |
Significant Agreements and C_10
Significant Agreements and Contracts - License Agreement with The Trustees of Columbia University in the City of New York - Additional Information (Details) - Columbia License Agreement - License Agreement $ in Millions | 1 Months Ended |
Jul. 31, 2020 USD ($) | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee payable within ten business days | $ 5 |
Minimum annual royalty payments | $ 1 |
Significant Agreements and C_11
Significant Agreements and Contracts - License Agreement with Mayo Foundation - Additional Information (Details) - Mayo - License Agreement $ in Millions | 1 Months Ended |
Sep. 30, 2020 USD ($) shares | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee | $ 9.3 |
Cash consideration to equity holders | $ 2.3 |
Stock consideration shares | shares | 996,803 |
Preclinical and Clinical Research Expenses | Maximum | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Acquired in-process research and development | $ 3.4 |
Research and Development Asset Acquired Other than through Business Combination, Writeoff, Statement of Income or Comprehensive Income [Extensible Enumeration] | Research and Development Expense (Excluding Acquired in Process Cost) |
Development and manufacturing expenses | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Acquired in-process research and development | $ 2 |
Research and Development Asset Acquired Other than through Business Combination, Writeoff, Statement of Income or Comprehensive Income [Extensible Enumeration] | Research and Development Expense (Excluding Acquired in Process Cost) |
Significant Agreements and C_12
Significant Agreements and Contracts - License Agreement with Personalized Stem Cells, Inc - Additional Information (Details) $ in Millions | 1 Months Ended |
Oct. 31, 2020 USD ($) | |
License Agreement | Personalized Stem Cells, Inc | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |
Up-front license fee | $ 3.5 |
Significant Agreements and C_13
Significant Agreements and Contracts - License Agreement with NantCell - Additional Information (Details) - USD ($) | 1 Months Ended | |||
Mar. 09, 2021 | Mar. 31, 2021 | Apr. 30, 2015 | Dec. 31, 2022 | |
Nant Cell Inc | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Upfront payment received from customers | $ 10,000,000 | |||
Common stock received | 10,000,000 | |||
Vested equity received | $ 100,000,000 | |||
Deferred revenue | $ 0 | |||
Nant Cell Inc | Maximum | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Royalty rate percent of net sales | 5% | |||
NantKwest, Inc. and ImmunityBio | ||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||||
Percentage of business acquisition | 100% | 100% |
Debt - 2018 Purchase Agreement
Debt - 2018 Purchase Agreement and Indenture for Scilex - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jun. 03, 2022 | Sep. 07, 2018 | Sep. 30, 2022 | Aug. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 02, 2022 | Feb. 15, 2022 | Feb. 14, 2022 | Oct. 05, 2018 | |
Debt Instrument [Line Items] | |||||||||||||
Loss on debt extinguishment | $ (27,009,000) | $ 6,695,000 | $ 51,939,000 | ||||||||||
Scilex Pharmaceuticals, Inc | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Derivative liabilities | 0 | ||||||||||||
Senior Notes | Scilex Pharmaceuticals, Inc | Senior Secured Notes, Due 2026 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face value of loan | $ 224,000,000 | $ 0 | 133,998,000 | ||||||||||
Remaining principal amount | $ 41,400,000 | ||||||||||||
Debt instrument, gain recognized | $ 0 | ||||||||||||
Effective rate, description | Due to a decrease of $30.4 million in the fair value of the Scilex Notes Derivative caused by the Indenture Amendment, the carrying value of the Scilex Notes was increased by $30.4 million, totaling $74.9 million at June 30, 2022 | ||||||||||||
Decrease in fair value | 30,400,000 | ||||||||||||
Derivative liabilities | $ 0 | ||||||||||||
Increase in carrying value | 30,400,000 | ||||||||||||
Carrying value | $ 74,900,000 | 0 | 101,162,000 | ||||||||||
Discharge of aggregate principal amount | $ 28,000,000 | ||||||||||||
Aggregate unrestricted cash equivalents | $ 5,000,000 | ||||||||||||
Loss on debt extinguishment | $ (33,400,000) | (28,600,000) | (14,000,000) | ||||||||||
Proceeds from issuance of senior long-term debt | $ 140,000,000 | ||||||||||||
Redemption price as a percentage of outstanding principal | 100% | ||||||||||||
Principal amount of the Scilex Notes forgiven | $ 28,000,000 | ||||||||||||
Principal amount to be purchased | $ 20,000,000 | ||||||||||||
Purchase price, percentage of principal amount | 100% | ||||||||||||
Amount of debt discount and debt issuance included in interest expense | 3,100,000 | 7,900,000 | 10,600,000 | ||||||||||
Principal payments | $ 39,700,000 | $ 1,700,000 | $ 106,000,000 | 45,900,000 | $ 69,800,000 | ||||||||
Senior Notes | Scilex Pharmaceuticals, Inc | Senior Secured Notes, Due 2026 | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument increased to face amount | $ 25,000,000 | ||||||||||||
Senior Notes | Scilex Pharmaceuticals, Inc | Senior Secured Notes, Due 2026 | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument increased to face amount | $ 50,000,000 | ||||||||||||
Senior Notes | Scilex Pharmaceuticals, Inc | Senior Secured Notes, Due 2026 | ZTlido | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face value of loan | $ 28,000,000 | ||||||||||||
Increase to aggregate principal amount | $ 28,000,000 | ||||||||||||
Senior Notes | Scilex Pharmaceuticals, Inc | Senior Secured Notes, Due 2026 | ZTlido | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Additional principal payments, sales threshold | 95% | ||||||||||||
Subordinated Loan | Scilex Pharmaceuticals, Inc | Net Sales from Issue Date to December 31, 2021 Less than Specified Threshold | ZTlido | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face value of loan | $ 35,000,000 |
Debt - 2018 Purchase Agreemen_2
Debt - 2018 Purchase Agreement and Indenture for Scilex - Schedule of Long-Term Debt and Unamortized Discount Balances (Details) - Senior Secured Notes, Due 2026 - Scilex Pharmaceuticals, Inc - Senior Notes - USD ($) $ in Thousands | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 07, 2018 |
Debt Instrument [Line Items] | ||||
Principal | $ 0 | $ 133,998 | $ 224,000 | |
Unamortized debt discount | 0 | (30,601) | ||
Unamortized debt issuance costs | 0 | (2,235) | ||
Total | 0 | $ 74,900 | 101,162 | |
Estimated fair value | $ 0 | $ 115,400 |
Debt - Bridge Loan Agreement -
Debt - Bridge Loan Agreement - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Feb. 16, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||||||
Proceed received, net of transaction fees | $ 96,071 | $ 49,743 | $ 18,587 | |||
Gain (loss) on debt extinguishment | 27,009 | $ (6,695) | $ (51,939) | |||
B. Riley Commercial Capital, LLC | September Bridge Loan Agreement | September Bridge Loan | ||||||
Debt Instrument [Line Items] | ||||||
Short-term borrowings | $ 41,600 | |||||
Interest rate | 6% | |||||
Debt instrument maturity date | Jan. 31, 2023 | |||||
Proceed received, net of transaction fees | $ 41,200 | |||||
Transaction Fees | 400 | |||||
Advisory Fees Paid | $ 1,300 | |||||
Unamortized debt discount remained | $ 100 | 100 | ||||
Amount of debt discount and debt issuance included in interest expense | 900 | |||||
Gain (loss) on debt extinguishment | 700 | |||||
Repayment of the Loan | $ 36,000 | |||||
B. Riley Commercial Capital, LLC | Bridge Loan Agreement | Bridge Loan | ||||||
Debt Instrument [Line Items] | ||||||
Short-term borrowings | $ 45,000 | |||||
Debt instrument maturity date | Jun. 16, 2022 | |||||
Amount of debt discount and debt issuance included in interest expense | 900 | |||||
Gain (loss) on debt extinguishment | $ 900 |
Debt - ACEA Significant Debt Ar
Debt - ACEA Significant Debt Arrangements - Additional Information (Details) $ in Thousands | Aug. 15, 2018 USD ($) | Dec. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 01, 2021 USD ($) | Aug. 15, 2018 CNY (¥) |
ACEA Hangzhou | ACEA Bio | |||||
Debt Instrument [Line Items] | |||||
Face value of loan | $ 29,100 | ¥ 184,600,000 | |||
Debt instrument, term | 10 years | ||||
Debt instrument, maturity date range, start | Dec. 31, 2024 | ||||
Debt instrument, maturity date range, end | Dec. 31, 2028 | ||||
Debt instrument, interest free period | 5 years | ||||
Interest rate | 5.39% | 5.39% | |||
ACEA Therapeutics, Inc | |||||
Debt Instrument [Line Items] | |||||
Face value of loan | $ 26,718 | $ 29,048 | |||
Fair value of debt assumed liability | $ 32,100 | ||||
ACEA Therapeutics, Inc | ACEA Hangzhou and ACEA Zhejiang | ACEA Bio | |||||
Debt Instrument [Line Items] | |||||
Fair value of debt assumed liability | $ 17,100 |
Debt - Schedule of Borrowings u
Debt - Schedule of Borrowings under ACEA Significant Debt Arrangements (Details) - ACEA Therapeutics, Inc - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
Principal | $ 26,718 | $ 29,048 | |
Unamortized debt discount | (7,878) | (10,642) | |
Carrying value | $ 26,718 | 18,840 | 18,406 |
Estimated fair value | $ 15,000 | $ 17,100 |
Debt - Schedule of Future Repay
Debt - Schedule of Future Repayments under the Contract (Details) - ACEA Therapeutics, Inc - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | |||
2023 | $ 0 | ||
2024 | 984 | ||
2025 | 3,257 | ||
2026 | 5,630 | ||
2027 | 10,566 | ||
2028 | 6,281 | ||
Total | $ 26,718 | $ 18,840 | $ 18,406 |
Debt - 2018 Oaktree Term Loan A
Debt - 2018 Oaktree Term Loan Agreement (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2019 | Nov. 30, 2018 | |
Debt Instrument [Line Items] | |||||
Loss on debt extinguishment | $ (27,009,000) | $ 6,695,000 | $ 51,939,000 | ||
Oaktree Capital Management, L.P. | Oaktree Term Loan | |||||
Debt Instrument [Line Items] | |||||
Face value of loan | $ 20,000,000 | $ 100,000,000 | |||
Number of common stock shares called by warrants (in shares) | 6,288,985 | ||||
Warrant exercise price per share (USD per share) | $ 3.28 | ||||
Repayments of debt | 120,000,000 | ||||
Debt prepayment costs | 9,400,000 | ||||
Loss on debt extinguishment | (51,900,000) | ||||
Interest expense | 3,000,000 | ||||
Amount of debt discount and debt issuance included in interest expense | $ 2,200,000 |
Debt - 2020 Revolving Credit Fa
Debt - 2020 Revolving Credit Facility - Additional Information (Details) - 2020 Revolving Credit Facility - C N H Finance Fund I, L.P - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 14, 2020 |
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 10 | |
Outstanding balance | $ 8.8 |
Stockholders' Equity - At-the-M
Stockholders' Equity - At-the-Market Sales Agreement - Additional Information (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 03, 2021 | Dec. 04, 2020 | Apr. 27, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 07, 2018 | |
Senior Notes | Senior Secured Notes, Due 2026 | Scilex Pharmaceuticals, Inc | |||||||
Class of Stock [Line Items] | |||||||
Aggregate principal amount | $ 0 | $ 133,998,000 | $ 224,000,000 | ||||
Sales Agreement | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from issuance of common stock | $ 250,000,000 | ||||||
Sales Agreement | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from issuance of common stock | $ 450,000,000 | ||||||
Sale of stock proceeds, net | $ 700,000,000 | ||||||
Amended Sales Agreement | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock proceeds, net | $ 442,943,290 | ||||||
December 2021 Amendment | |||||||
Class of Stock [Line Items] | |||||||
Sale of stock proceeds, net | $ 402,300,000 | $ 175,600,000 | $ 227,700,000 | ||||
Common stock sold in registered direct offering | 205,374,865 | 21,085,014 | 30,991,918 | ||||
December 2021 Amendment | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from issuance of common stock | 5,000,000,000 | ||||||
Sale of stock proceeds, net | $ 5,442,943,290 | ||||||
Sales agent commission percentage | 3% |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock Purchase Agreement - Additional Information (Details) - Purchase Agreement - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Apr. 30, 2020 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||
Potential proceeds from issuance, public offering, maximum | $ 250 | |
Common stock sold in registered direct offering | 1,423,077 | |
Sale of stock proceeds, net | $ 8 |
Stockholders' Equity - Aspire T
Stockholders' Equity - Aspire Transaction - Additional Information (Details) - Aspire Purchase Agreement - USD ($) $ in Millions | Apr. 24, 2020 | Feb. 29, 2020 |
Class of Stock [Line Items] | ||
Potential proceeds from issuance, public offering, maximum | $ 75 | |
Stock issued as commitment fee | 897,308 | |
Common stock sold in registered direct offering | 33,825,010 | |
Value of shares available for issuance | $ 75 |
Stockholders' Equity - Equity D
Stockholders' Equity - Equity Distribution Agreement - Additional Information (Details) - Distribution Agreement | 1 Months Ended |
Apr. 30, 2020 USD ($) shares | |
Class of Stock [Line Items] | |
Common stock sold in registered direct offering | shares | 2,120,149 |
Sale of stock proceeds, net | $ 7,400,000 |
Maximum | |
Class of Stock [Line Items] | |
Proceeds from issuance of common stock | $ 75,000,000 |
Stockholders Equity - Scilex Ho
Stockholders Equity - Scilex Holding Company - Additional Information (Details) - Scilex Holding Company - USD ($) | Feb. 08, 2023 | Jan. 19, 2023 | Jan. 08, 2023 | Dec. 30, 2022 | Nov. 17, 2022 | Mar. 06, 2023 |
Class of Stock [Line Items] | ||||||
Common stock dividend, shares | 76,000,000 | |||||
Common stock dividend per share | $ 0.0001 | |||||
Record date | Jan. 09, 2023 | |||||
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Fractional shares issued | 0 | |||||
Closing price of common stock | $ 5.87 | |||||
Payment of dividend, ownership interest percentage | 42.50% | |||||
Yorkville Standby Equity Purchase Agreement | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock, net (in shares) | 250,000 | |||||
Structuring fees | $ 10,000 | |||||
Yorkville Standby Equity Purchase Agreement | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Percentage of weighted average price of common stock | 98% | |||||
Yorkville Standby Equity Purchase Agreement | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock proceeds, net | $ 500,000,000 | |||||
Riley Standby Equity Purchase Agreement | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock, net (in shares) | 250,000 | |||||
Structuring fees | $ 10,000 | |||||
Riley Standby Equity Purchase Agreement | Maximum | Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock proceeds, net | $ 500,000,000 |
Stock Incentive and Employee _3
Stock Incentive and Employee Benefit Plans - 2019 Stock Incentive Plan - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrestricted stock granted | 6,355,500 | |||
Aggregate intrinsic value of options exercised | $ 0 | $ 5.2 | $ 4.1 | |
2019 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding options exercisable period | 10 years | |||
Employee option grants vested | 25% | |||
Stock-based compensation expense | 27.9 | $ 29.7 | $ 15 | |
Unrecognized compensation cost related to unvested stock option grants and RSUs | $ 61 | |||
Period for recognized compensation cost | 2 years 1 month 6 days | |||
2019 Stock Incentive Plan | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding options vesting anniversary period | 3 years |
Stock Incentive and Employee _4
Stock Incentive and Employee Benefit Plans - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Options Outstanding | |
Options Outstanding beginning balance (in shares) | shares | 22,515,513 |
Options Granted (in shares) | shares | 550,000 |
Options Canceled (in shares) | shares | (2,179,421) |
Options Exercised (in shares) | shares | (24,332) |
Options Outstanding ending balance (in shares) | shares | 20,861,760 |
Options Outstanding, Vested and Expected to Vest | shares | 20,861,760 |
Weighted-Average Exercise Price | |
Weighted Average Exercise Price, beginning balance (USD per share) | $ / shares | $ 6.19 |
Weighted Average Exercise Price, Options Granted (USD per share) | $ / shares | 1.61 |
Weighted Average Exercise Price, Options Canceled (USD per share) | $ / shares | 6.41 |
Weighted Average Exercise Price, Options Exercised (USD per share) | $ / shares | 2.32 |
Weighted Average Exercise Price, ending balance (USD per share) | $ / shares | 6.05 |
Weighted Average Exercise Price, Vested and Expected to Vest (USD per share) | $ / shares | $ 6.05 |
Stock Incentive and Employee _5
Stock Incentive and Employee Benefit Plans - Fair Value of Employee and Director Stock Options (Details) - Employee Stock Option - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value | $ 1.33 | $ 7.49 | $ 4.54 |
Dividend yield | 0% | 0% | 0% |
Volatility | 110% | 110% | 105% |
Risk-free interest rate | 2.90% | 0.96% | 0.46% |
Expected life of options (years) | 5 years 8 months 12 days | 5 years 8 months 12 days | 5 years 8 months 12 days |
Stock Incentive and Employee _6
Stock Incentive and Employee Benefit Plans - Summary of Restricted Stock Unit ("RSU") Activity (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Shares, Outstanding beginning balance | shares | 3,433,896 |
Unrestricted stock granted | shares | 6,355,500 |
Number of Shares, RSUs Released | shares | (768,531) |
Number of Shares, RSUs Cancelled | shares | (736,367) |
Number of Shares, Outstanding ending balance | shares | 8,284,498 |
Weighted-Average Grant Date Fair Value Per Share, Outstanding beginning balance | $ / shares | $ 9.50 |
Weighted-Average Grant Date Fair Value Per Share, RSUs Granted | $ / shares | 1.79 |
Weighted-Average Grant Date Fair Value Per Share, RSUs Released | $ / shares | 9.53 |
Weighted-Average Grant Date Fair Value Per Share, RSUs Cancelled | $ / shares | 7.82 |
Weighted-Average Grant Date Fair Value Per Share, Outstanding ending balance | $ / shares | $ 3.73 |
Stock Incentive and Employee _7
Stock Incentive and Employee Benefit Plans - Scilex Holding Company - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option outstanding (in shares) | 20,861,760 | 22,515,513 | |
Common stock reserved for issuance (in shares) | 74,800,000 | ||
2019 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested stock option grants | $ 2.7 | ||
Period for recognized compensation cost | 1 year 4 months 24 days | ||
Scilex Holding Company | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5.3 | $ 5.8 | $ 5.4 |
Option outstanding (in shares) | 25,151,428 | ||
Scilex Holding Company | Scilex Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for issuance (in shares) | 16,939,436 |
Stock Incentive and Employee _8
Stock Incentive and Employee Benefit Plans - Employee Stock Purchase Plan - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Oct. 16, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation | $ 75,024,000 | $ 88,427,000 | $ 31,419,000 | |
2020 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum percentage of their annual compensation | 15% | |||
Stock-based compensation | $ 25,000 | |||
Percentage of outstanding shares of common stock sold | 85% | |||
Stock-based compensation expense | $ 200,000 | $ 1,100,000 |
Stock Incentive and Employee _9
Stock Incentive and Employee Benefit Plans - CEO Performance Award - Additional Information (Details) - C E O Performance Award $ / shares in Units, $ in Millions | 12 Months Ended | ||
Aug. 07, 2020 USD ($) Tranche $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life of options (years) | 7 years 9 months 18 days | ||
Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Option to purchase common stock period | 10 years | ||
Common stock sold in registered direct offering | shares | 24,935,882 | ||
Percentage of outstanding shares of common stock sold | 10% | ||
Number of tranches | Tranche | 10 | ||
First market capitalization milestone amount | $ 5,000 | ||
Amount of capitalization to meet next two milestones | 2,000 | ||
Amount of capitalization to meet next three milestones | 3,000 | ||
Amount of capitalization to meet next three milestones thereafter | 4,000 | ||
Amount of capitalization to meet final milestones | 5,000 | ||
Market capitalization to fully vest in award increase | $ 35,000 | ||
Exercise price per share | $ / shares | $ 17.30 | ||
Percentage of premium to closing sales price of common stock | 20% | ||
Stock-based compensation expense | $ 41.6 | $ 51.8 | |
Unrecognized compensation cost related to unvested stock option grants | $ 46.1 | ||
Volatility | 91% | ||
Dividend yield | 0% | ||
Risk-free interest rate | 0.75% | ||
Expected life of options (years) | 9 years 9 months 18 days |
Stock Incentive and Employee_10
Stock Incentive and Employee Benefit Plans - Common Stock Reserved for Future Issuance - Additional Information (Details) shares in Millions | Dec. 31, 2022 shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance (in shares) | 74.8 |
Warrant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance (in shares) | 16 |
C E O Performance Award | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance (in shares) | 24.9 |
2020 Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance (in shares) | 6.4 |
Sorrento Stock Incentive Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance (in shares) | 8.3 |
2019 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for issuance (in shares) | 39.2 |
Stock Incentive and Employee_11
Stock Incentive and Employee Benefit Plans - Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Employer matching contributions | $ 2.2 | $ 1.7 | $ 1.4 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |||||
Apr. 18, 2023 | Feb. 07, 2023 | Dec. 20, 2022 | Dec. 02, 2022 | Apr. 03, 2019 | Dec. 31, 2022 | |
Other Commitments [Line Items] | ||||||
Antibody award judgment exceeds offset | $ 50,000,000 | |||||
Total lease future payments | $ 228,926,000 | |||||
Arbitrator | ||||||
Other Commitments [Line Items] | ||||||
Exclusive of post-award prejudgment interest percentage | 9% | |||||
Scenario Forecast | Maximum | ||||||
Other Commitments [Line Items] | ||||||
Empowered to enforce judgment on antibody award | $ 50,000,000 | |||||
Nant Pharma | Arbitrator | ||||||
Other Commitments [Line Items] | ||||||
Damages sought | $ 125,000,000 | |||||
NANTibody | ||||||
Other Commitments [Line Items] | ||||||
Damages sought | $ 90,050,000 | |||||
Damages sought to restore equity method investment | $ 40,000,000 | |||||
NANTibody | Arbitrator | ||||||
Other Commitments [Line Items] | ||||||
Damages sought | $ 16,681,521 | |||||
Equity interest | 40% | |||||
Nant Cell Inc | Arbitrator | ||||||
Other Commitments [Line Items] | ||||||
Contractual damages and pre-award interest | $ 156,829,562 | |||||
Accrued legal settlement amount | $ 174,800,000 | |||||
Deferred revenue | 110,000,000 | |||||
Nant Cell Inc | Arbitrator | Legal settlements expense | ||||||
Other Commitments [Line Items] | ||||||
Net loss on legal settlements | $ 64,800,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease expense | $ 16.6 | $ 12.5 | $ 10.1 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease remaining lease terms | 7 months 6 days | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease remaining lease terms | 15 years 9 months 18 days | ||
Operating lease option to extend, period | 5 years |
Commitments and Contingencies_3
Commitments and Contingencies - Supplemental Quantitative Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating cash outflows from operating leases | $ 13,638 | $ 11,225 | |
ROU assets obtained in exchange for new and amended operating lease liabilities | $ 5,592 | $ 49,459 | $ 1,878 |
Weighted average remaining lease term in years | 13 years 10 months 24 days | 15 years 1 month 6 days | |
Weighted average discount rate | 12.80% | 12.40% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Operating Lease Liability Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 15,484 |
2024 | 15,397 |
2025 | 14,373 |
2026 | 14,064 |
2027 | 14,285 |
Thereafter | 155,323 |
Total lease payments | 228,926 |
Less imputed interest | (129,838) |
Total lease liabilities as of December 31, 2022 | $ 99,088 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Tax By Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (570,609) | $ (466,562) | $ (315,516) |
Foreign | (9,564) | 3,908 | (908) |
Loss before income tax | $ (580,173) | $ (462,654) | $ (316,424) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current income tax expense (benefit): | |||
Federal | $ 0 | $ (19) | |
State | $ 40 | 38 | 72 |
Foreign | (620) | 2,375 | 58 |
Total current | (580) | 2,413 | 111 |
Deferred income tax expense (benefit): | |||
Federal | (127,565) | (80,858) | (55,321) |
State | (28,570) | (11,999) | (2,730) |
Foreign | (69) | 178 | (288) |
Total deferred | (156,204) | (92,679) | (58,339) |
Changes in tax rate | (910) | (223) | 507 |
Changes in valuation allowance | 155,278 | 56,973 | 55,707 |
Total income tax benefit from continuing operations | $ (2,416) | $ (33,516) | $ (2,014) |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Net Deferred Tax Liabilities and Related Valuation Allowance (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 201,349 | $ 181,428 |
Deferred revenue | 1,685 | 25,626 |
Tax credit carryforwards | 52,851 | 33,126 |
Intangible assets | 47,115 | 37,627 |
Capitalized research and development | 50,118 | |
Accrued expense and reserves | 42,190 | 4,582 |
Operating lease liabilities | 23,295 | 19,734 |
Debt related interest | 29,292 | 26,002 |
Stock based compensation | 9,957 | 10,516 |
Other | 441 | 677 |
Total deferred tax assets | 458,293 | 339,318 |
Less valuation allowance | (416,642) | (261,238) |
Total deferred tax assets | 41,651 | 78,080 |
Deferred tax liabilities: | ||
Investment in common stock | (2,646) | (16,372) |
Operating lease right-of-use assets | (20,328) | (17,592) |
Intangible assets | (18,989) | (44,640) |
Other | (279) | (1,902) |
Total deferred tax liabilities | (42,242) | (80,506) |
Net deferred tax liabilities | $ (591) | $ (2,426) |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation Between Federal Income Tax and Company Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at federal statutory rate | $ (121,836) | $ (97,157) | $ (66,449) |
Valuation allowance | 155,278 | 56,973 | 55,707 |
State, net of federal tax benefit | (14,371) | (5,826) | (3,339) |
Debt discount and interest limitation | (9,293) | 8,954 | 896 |
Income tax credits and incentives | (14,684) | (9,549) | (3,685) |
Compensation expense | 18,022 | 14,472 | 4,446 |
Acquisition related charges | (13,314) | 2,711 | 583 |
Prior year true-up and carryback | (6,269) | (3,209) | 7,790 |
Other | 4,051 | (885) | 2,037 |
Total income tax benefit from continuing operations | $ (2,416) | $ (33,516) | $ (2,014) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax [Line Items] | |||
Valuation allowance | $ 416,642,000 | $ 261,238,000 | |
Change in valuation allowance | 155,278,000 | 56,973,000 | $ 55,707,000 |
Total unrecognized tax benefits, if recognized, would impact effective tax rate | 13,200,000 | 8,300,000 | 5,600,000 |
Interest recognized | 0 | 0 | $ 0 |
IRS | |||
Income Tax [Line Items] | |||
Net operating loss carryforward | 875,500,000 | ||
Net operating loss carryforwards expiration amount | $ 3,300,000 | ||
Net operating loss carryforward, expiration year | 2035 | ||
IRS | Research tax credit carryforward | |||
Income Tax [Line Items] | |||
Research and development credits | $ 43,600,000 | ||
Research and development credits expiration amount | $ 100,000 | ||
Research and development credits expiration year | 2034 | ||
Foreign | |||
Income Tax [Line Items] | |||
Net operating loss carryforward | $ 4,000,000 | ||
Net operating loss carryforwards expiration amount | $ 100,000 | ||
Net operating loss carryforward, expiration year | 2024 | ||
State | |||
Income Tax [Line Items] | |||
Net operating loss carryforward | $ 304,300,000 | ||
Net operating loss carryforwards expiration amount | $ 100,000 | ||
Net operating loss carryforward, expiration year | 2029 | ||
State | Research tax credit carryforward | |||
Income Tax [Line Items] | |||
Research and development credits | $ 28,500,000 | ||
Virex and ACEA | |||
Income Tax [Line Items] | |||
Change in valuation allowance | $ 100,000 | $ 41,600,000 |
Income Taxes - Summary of Rec_2
Income Taxes - Summary of Reconciliation of Unrecognized Tax Expense (Benefits) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 9,133 | $ 6,397 | $ 5,336 |
Increase related to prior year tax positions | 1,323 | 258 | 133 |
Increase related to current year tax positions | 5,722 | 2,442 | 928 |
Increase related to acquisitions | 3 | 36 | 0 |
Ending balance | $ 16,181 | $ 9,133 | $ 6,397 |
Related Party Agreements and _2
Related Party Agreements and Other - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||||
May 31, 2022 | Oct. 08, 2021 | Jul. 15, 2020 | May 15, 2020 | May 13, 2020 | Jul. 31, 2021 | May 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Dec. 07, 2021 | |
Related Party Transaction [Line Items] | ||||||||||||
Options Granted (in shares) | 550,000 | |||||||||||
Deverra Therapeutics Inc | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments to acquire equity investment | $ 4,100,000 | |||||||||||
Aggregate loan amount | $ 1,000,000 | |||||||||||
Pulsar | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares transferred for exchange of equity interest | 1,000,000 | |||||||||||
Equity interest | 5% | |||||||||||
Percentage of shares owned by the director and chairperson | 45% | |||||||||||
Percentage of shares owned by board member | 5% | |||||||||||
Series B Preferred Stock | Aardvark | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Equity interest | 8% | |||||||||||
Payments to acquire equity investment | $ 5,000,000 | $ 5,000,000 | $ 10,000,000 | |||||||||
Shares purchased under equity investment | 3,888,932 | 3,888,932 | 7,777,864 | |||||||||
Common Stock | Deverra Therapeutics Inc | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments to acquire equity investment | $ 10,200,000 | |||||||||||
Shares purchased under equity investment | 5,622,703 | |||||||||||
Zhengzhou Fortune Bioscience Co., Ltd. | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Business acquisition, percentage of voting interests acquired | 49% | |||||||||||
Cytimm | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Business acquisition, percentage of voting interests acquired | 50% | |||||||||||
Cash consideration to equity holders | $ 2,500,000 | |||||||||||
Consulting agreement with Kim Janda | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Advisory services one-time fee payable per annum | $ 301,091 | $ 250,000 | ||||||||||
Advisory services one-time fee payable period | 12 months | |||||||||||
Advisory services one-time fee payable date | Sep. 30, 2022 | |||||||||||
Options Granted (in shares) | 150,000 | |||||||||||
Related party, option to purchase vesting rate description | vests at a rate of 1/48th per month commencing on July 15, 2020 | |||||||||||
Joint Venture Agreement and Equity Subscription Agreement | Zhengzhou Fortune Bioscience Co., Ltd. | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Business acquisition, name of acquired entity | Zhengzhou Fortune Bioscience Co., Ltd | |||||||||||
Business acquisition, percentage of voting remaining interests to be acquired | 49% | 51% | ||||||||||
Business acquisition equity interest of voting remaining interests to be acquired | $ 50,000,000 | $ 50,000,000 | ||||||||||
Termination of agreement if subsequent transaction does not occur | $ 5,000,000 | $ 4,800,000 | ||||||||||
Business acquisition, percentage of voting interests acquired | 51% | 49% | 2% | |||||||||
Cash consideration to equity holders | $ 5,000,000 | $ 4,800,000 | ||||||||||
Scilex Pharmaceuticals, Inc | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares purchased under equity investment | 1,400,000 | |||||||||||
Outstanding Equity Securities | $ 400,000 | |||||||||||
Elsie Biotechnologies Inc | Series A Preferred Stock | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments to acquire equity investment | $ 10,000,000 | |||||||||||
Shares purchased under equity investment | 10,000,000 | |||||||||||
Itochu | Affiliated Entity | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Purchases from related party | $ 6,700,000 | $ 5,700,000 | $ 1,000,000 | |||||||||
Effective date | Oct. 02, 2028 | |||||||||||
First commercial sale period | 10 years | |||||||||||
Successive renewal periods | 1 year | |||||||||||
Termination written notice | 6 months | |||||||||||
Itochu | Affiliated Entity | Minimum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Royalty payments percent | 25% | |||||||||||
Itochu | Affiliated Entity | Maximum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Royalty payments percent | 35% | |||||||||||
Itochu | Scilex Pharmaceuticals, Inc | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Noncontrolling interest ownership percentage | 14.70% |
Segment Information - Additiona
Segment Information - Additional Information (Details) - Scilex Holding Company - Vickers Vantage Corp (Former name) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |
Business acquisition consideration paid in cash | $ 3.4 |
Business acquisition, transaction costs | 9.1 |
Stock consideration | $ 0.4 |
Ownership interest in Scilex | 96% |
Increase in noncontrolling interest | $ 2 |
Segment Information - Summary o
Segment Information - Summary of Information by Reportable Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
External revenues | $ 62,839 | $ 52,904 | $ 39,986 |
Operating expenses | 567,154 | 454,355 | 284,504 |
Loss from operations | (504,315) | (401,451) | (244,518) |
Unrestricted cash | 23,634 | 36,665 | 56,464 |
Sorrento Therapeutics | |||
Segment Reporting Information [Line Items] | |||
External revenues | 24,805 | 24,358 | 13,655 |
Operating expenses | 479,571 | 387,200 | 225,687 |
Loss from operations | (454,766) | (362,842) | (212,032) |
Unrestricted cash | 21,400 | 32,178 | 51,475 |
Scilex | |||
Segment Reporting Information [Line Items] | |||
External revenues | 38,034 | 28,546 | 26,331 |
Operating expenses | 87,583 | 67,155 | 58,817 |
Loss from operations | (49,549) | (38,609) | (32,486) |
Unrestricted cash | $ 2,234 | $ 4,487 | $ 4,989 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) - Schedule of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |||
Revenues | $ 62,839 | $ 52,904 | $ 39,986 |
Operating costs and expenses | 567,154 | 454,355 | 284,504 |
Net loss (income) attributable to Sorrento | $ (572,843) | $ (428,325) | $ (298,461) |
Net loss per share - basic | $ (1.37) | $ (1.45) | $ (1.30) |
Net loss per share - diluted | $ (1.37) | $ (1.45) | $ (1.30) |
Weighted-average shares - basic | 419,315 | 294,774 | 229,823 |
Weighted-average shares - diluted | 419,315 | 294,774 | 229,823 |
Loss Per Share - Reconciliation
Loss Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator | |||
Net loss (income) attributable to Sorrento | $ (572,843) | $ (428,325) | $ (298,461) |
Net loss used for basic earnings per share | (572,843) | (428,325) | (298,461) |
Net loss used for diluted earnings per share | $ (572,843) | $ (428,325) | $ (298,461) |
Denominator for basic loss per share | 419,315 | 294,774 | 229,823 |
Denominator for loss earnings per share | 419,315 | 294,774 | 229,823 |
Basic loss per share | $ (1.37) | $ (1.45) | $ (1.30) |
Diluted loss per share | $ (1.37) | $ (1.45) | $ (1.30) |
Loss Per Share - Outstanding Se
Loss Per Share - Outstanding Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Stock Option | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of Earnings Per Share (in shares) | 20,862 | 22,516 | 18,763 |
Restricted Stock Units | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of Earnings Per Share (in shares) | 8,284 | 3,434 | |
Warrant | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of Earnings Per Share (in shares) | 16,020 | 16,020 | 18,605 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | Feb. 22, 2023 | Feb. 21, 2023 | Feb. 12, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||
SVB | |||||
Subsequent Event [Line Items] | |||||
Cash deposited | $ 2,800,000 | ||||
Subsequent Event | Elyxyb License | Collegium Sellers | |||||
Subsequent Event [Line Items] | |||||
Payments to aggregate amount | $ 0 | ||||
Subsequent Event | DIP Facility | |||||
Subsequent Event [Line Items] | |||||
Maximum term loan commitments amount | $ 75,000,000 | ||||
Initial draw on facility amount | $ 30,000,000 | ||||
Minimum draws amount | $ 5,000,000 | ||||
Interest rate per annum | 14% | ||||
Debt instrument additional interest rate per annum | 3% | ||||
Debt instrument maturity date | Jul. 31, 2023 | ||||
Subsequent Event | Maximum | DIP Facility | |||||
Subsequent Event [Line Items] | |||||
Initial draw on facility amount | $ 30,000,000 |