Critical Review: Scilex (SCLX) versus The Competition

Scilex (NASDAQ:SCLX) is one of 288 public companies in the “Biological products, except diagnostic” industry, but how does it compare to its peers? We will compare Scilex to related businesses based on the strength of its profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Profitability

This table compares Scilex and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scilex	-244.60%	N/A	-112.17%
Scilex Competitors	-4,499.84%	-207.31%	-45.28%

Valuation and Earnings

This table compares Scilex and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Scilex	$46.74 million	-$114.33 million	-1.05
Scilex Competitors	$568.47 million	-$31.80 million	7.03

Scilex’s peers have higher revenue and earnings than Scilex. Scilex is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Scilex has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Scilex’s peers have a beta of 1.04, meaning that their average share price is 4% more volatile than the S&P 500.

Insider and Institutional Ownership

69.7% of Scilex shares are held by institutional investors. Comparatively, 50.7% of shares of all “Biological products, except diagnostic” companies are held by institutional investors. 8.7% of Scilex shares are held by insiders. Comparatively, 16.3% of shares of all “Biological products, except diagnostic” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Scilex and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scilex	0	0	2	0	3.00
Scilex Competitors	1447	4536	11870	205	2.60

Scilex currently has a consensus target price of $8.00, suggesting a potential upside of 488.24%. As a group, “Biological products, except diagnostic” companies have a potential upside of 105.11%. Given Scilex’s stronger consensus rating and higher possible upside, research analysts clearly believe Scilex is more favorable than its peers.

Summary

Scilex peers beat Scilex on 7 of the 13 factors compared.

Scilex Company Profile

Scilex Holding Company focuses on acquiring, developing, and commercializing non-opioid pain management products for the treatment of acute and chronic pain. Its commercial products include ZTlido (lidocaine topical system) 1.8% (ZTlido), a prescription lidocaine topical product for the relief of neuropathic pain associated with postherpetic neuralgia (PHN), which is a form of post-shingles nerve pain; ELYXYB, a ready-to-use oral solution for the acute treatment of migraine with or without aura in adults; and GLOPERBA, a liquid oral version of the anti-gout medicine colchicine indicated for the prophylaxis of painful gout flares in adults. The company is also developing three product candidates, including SP-102 (10 mg dexamethasone sodium phosphate viscous gel) (SEMDEXA), a novel viscous gel formulation of a used corticosteroid for epidural injections, which has completed a Phase 3 study to treat lumbosacral radicular pain or sciatica; SP-103 (lidocaine topical system) 5.4% (SP-103), a formulation of ZTlido for the treatment of chronic neck pain and low back pain (LBP) that has completed a Phase 2 trial; and SP-104 (4.5 mg low-dose naltrexone hydrochloride delayed-release capsules) (SP-104), a novel low-dose delayed-release naltrexone hydrochloride, which has completed Phase 1 trials for the treatment of fibromyalgia. The company is headquartered in Palo Alto, California.