With SPAC merger looming, Scilex sues Apotex to block generic copy of key pain patch

Scilex has moved to neutralize a threat to a product that is central to its upcoming SPAC merger, starting a legal case against Apotex to protect its lidocaine patch from a potential competitor. 

When the blank-check company Vickers Vantage Corp agreed to merge with Scilex, it identified the pain patch ZTlido as a key motivator for the deal. Vickers’ board put a “particular focus” on an assessment of the market potential of ZTlido as it weighed up whether to sign off on the merger, ultimately giving the deal its backing in the belief the product’s 5% share of a $1.8 billion market represents an opportunity.

Apotex wants to muscle in on that opportunity. Working through its majority-owned subsidiary Aveva Drug Delivery Systems, Apotex filed an abbreviated new drug application for a generic copy of ZTlido on May 10, around six months after Scilex and Vickers disclosed their proposed merger.

According to Scilex, Apotex’s approval filing infringes three valid ZTlido patents. The patents describe a non-aqueous patch comprising lidocaine and other ingredients. As a non-aqueous patch, the technology is designed to work with thinner plasters than other devices—because of the lack of moisture—and have a higher level of adhesion that makes them suitable for attaching to the skin for prolonged periods. 

Some generic competition is baked into Scilex’s outlook. The company expects to compete with generic lidocaine patches manufactured by Mylan, Teva Pharmaceutical Industries and Par Pharmaceutical as well as with the branded Lidoderm. But those patches use aqueous bases, giving Scilex the chance to differentiate its product. 

In its projections, Scilex assumes competition will be limited to generic Lidoderm patches. Under that scenario, sales are forecast to grow from $50 million in 2022 to $92.1 million in 2031. Other products are forecast to render ZTlido a small part of Scilex’s sales mix, but for now it is the key product. Apotex’s filing threatens Scilex’s ability to hit its sales targets, as the company explained in a financial filing. 

“If we are unable to maintain patent protection for ZTlido and our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets,” Scilex wrote.