Core Insights - Pelthos Therapeutics Inc. reported strong commercial performance for ZELSUVMI, generating $7.1 million in net revenues during its first quarter of operations [1][5] - The company has successfully launched ZELSUVMI, the first FDA-approved at-home treatment for molluscum contagiosum, with 2,716 units prescribed by 1,169 unique prescribers in Q3 2025 [1][5] - The acquisition of XEPI adds a complementary product to Pelthos' portfolio, targeting the same pediatric market as ZELSUVMI, enhancing revenue potential [3][5] Financial Performance - For the three months ended September 30, 2025, Pelthos reported total revenue of $7.4 million, with net product revenues from ZELSUVMI at $7.1 million [10] - The company incurred a net loss of $16.2 million, translating to a loss of $5.30 per share [9][10] - Cash and cash equivalents as of September 30, 2025, stood at $14.2 million, reflecting a significant increase from $513,000 in December 2024 [7] Operational Highlights - The commercial launch of ZELSUVMI exceeded expectations, with strong market uptake and continued growth anticipated in Q4 2025 [3][5] - The company completed a merger to form Pelthos Therapeutics and raised $50.1 million in an equity private placement to support ZELSUVMI's launch [5] - An additional $18 million in private convertible notes financing was closed in November 2025 to facilitate the purchase and relaunch of XEPI and expedite ZELSUVMI's commercial rollout [5] Market Context - ZELSUVMI addresses a significant unmet need in treating molluscum contagiosum, primarily affecting children, while XEPI targets antibiotic-resistant skin infections, further solidifying Pelthos' position in the pediatric dermatology market [3][5] - The combined addressable markets for ZELSUVMI and XEPI present substantial revenue opportunities for Pelthos, leveraging existing commercial relationships and infrastructure [3][5]

Financial Data and Key Metrics Changes - Total revenue and other income for Q3 2025 on a GAAP basis was $115.5 million, up from $51.8 million in the same quarter last year, with core revenue growing 68% year over year to $86.9 million [26][34] - Royalty revenue rose 47% year over year to $46.6 million, and adjusted EPS increased 68% to $3.09 [26][34] - The company raised its full-year 2025 guidance, now expecting core revenue of $225-$235 million and adjusted EPS of $7.40-$7.65 [35][36] Business Line Data and Key Metrics Changes - Royalty revenue growth was driven by strong performances from products like Travere's Filspari, Merck's Ohtuvayre, and Capvaxive, with Filspari becoming the largest royalty-generating asset [30][31] - Filspari reported Q3 sales of $90.9 million, a 155% year-over-year increase, while O2VARE sales reached $136 million, a 32% sequential increase [30][31] - Capvaxive generated $244 million in sales, an 89% sequential increase, reinforcing its market position [31] Market Data and Key Metrics Changes - The company noted strong uptake of Zelsuvmi in its early launch phase, with expectations for continued momentum [7] - Ohtuvayre is tracking ahead of initial forecasts, with Q3 sales growing 32% sequentially, and projected sales of $2 billion by 2029 [10][11] - The FDA has assigned a PDUFA date of January 13, 2026, for Filspari's second indication, FSGS, which could significantly expand its market opportunity [18] Company Strategy and Development Direction - The company has focused on building a diversified portfolio of high-margin royalties and has successfully executed a convertible debt financing to support growth initiatives [5][6] - The strategic direction set in 2022 has led to significant growth across core revenue and adjusted EPS, with a long-term royalty growth outlook of 22% CAGR [9][10] - The company is actively pursuing high-quality investment opportunities and expanding its business development team to capitalize on its robust pipeline [27][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the commercial royalty portfolio and the potential for indication and geographic expansion of key products [36][37] - The company highlighted the positive developments in the FDA's approach to accelerating timelines for innovative treatments, which aligns with its investment strategy [16][49] - Management remains optimistic about the ongoing progress of the Pelthos team and the launch momentum of Zelsuvmi [37] Other Important Information - The company ended the quarter with approximately $1 billion in deployable capital, including cash and investments [7][27] - The Pelthos transaction resulted in a $53 million gain recognized in Q3, reflecting the strategic value of the spin-out [24][25] - The company has seen record-setting origination activity, reviewing over 130 investment opportunities in the first three quarters of the year [13] Q&A Session Summary Question: Opportunities and special situations related to Pelthos and Palvella - Management indicated a robust opportunity set in special situations, focusing on companies needing more than just capital [38][39] Question: Changes in investment opportunities and capital demands - Management noted that while the deal flow may shift with market conditions, the demand for royalty capital remains high, particularly for development-stage assets [44][45] Question: Insights on the ZELSUVMI launch and future expectations - Management provided limited additional information but indicated that more specifics would be available during the upcoming earnings call [50][51] Question: Competitive landscape for royalty assets - Management acknowledged potential future competition but noted that they have not yet seen significant changes in the competitive landscape [53][54] Question: Thoughts on the recent approval of Furoscix - Management expressed optimism about Furoscix's potential to provide a differentiated treatment option in the market [56]

Core Insights - Pelthos Therapeutics Inc. is set to launch ZELSUVMI™ for treating Molluscum contagiosum infections in July 2025, following the completion of a merger with Channel Therapeutics Corporation [1][2] - Ligand Pharmaceuticals has invested $18 million in Pelthos and will receive a 13% royalty on worldwide sales of ZELSUVMI [1][2] - Pelthos will begin trading on the NYSE American exchange under the ticker symbol "PTHS" on July 2, 2025 [1] Company Developments - The merger between Ligand's subsidiary LNHC, Inc. and Channel Merger Sub Inc. has been completed, forming Pelthos Therapeutics Inc. [1][2] - Pelthos raised $50.1 million in equity capital, with $32 million from a group of strategic investors and $18 million from Ligand [2] - The capital raised will support the commercial launch of ZELSUVMI and includes the cancellation of approximately $18.8 million in bridge capital previously advanced to Pelthos [2] Product Information - ZELSUVMI (berdazimer) is a topical gel approved for treating Molluscum contagiosum, a common skin infection affecting an estimated 16.7 million people in the U.S. [3] - It is the first and only prescription medication for this condition that can be administered at home by patients or caregivers [3] - Pelthos is also evaluating the development of Channel's existing NaV 1.7 programs for various types of chronic pain and post-surgical nerve blocks [3]