Bankrupt drugmaker Sorrento Therapeutics Inc.’s subsidiary Scilex Holding Co. is exploring a sale of new stock to take advantage of a share-price rally as Sorrento charts a path out of chapter 11, WSJ Pro Bankruptcy reported. Shares in publicly traded Scilex, Sorrento’s largest asset, have more than doubled in value since its parent company filed for chapter 11 in February, closing at $14.80 on Wednesday to give Scilex a market capitalization of more than $2 billion. The run-up in Scilex shares came after it became a popular pick in some online investing forums geared toward small, nonprofessional traders. If the fundraising is successful, the new money could boost Sorrento’s value as it seeks to end its chapter 11 case and resolve the yearslong licensing dispute that drove the company into bankruptcy. A stock issuance could also dilute San Diego-based Sorrento’s roughly 51% stake in Scilex, which makes nonopioid painkillers and isn’t in bankruptcy itself. Sorrento and other Scilex shareholders can’t sell their holdings until a lockup period stemming from a recent merger deal runs out on May 11, according to court filings.
