Pelthos Therapeutics (NYSEAMERICAN:PTHS) reported third-quarter net product revenue of $15.2 million from its molluscum treatment Zelsuvmi, up 114% from a year earlier but slightly below the $15.4 million recorded in the second quarter.
Management said prescription growth and expanded insurance coverage support its outlook for Zelsuvmi, while the company prepares two more dermatology product launches and pursues its announced acquisition of Castle Creek Biosciences.
Chief Financial Officer John Gay said the company’s third-quarter net loss narrowed to $7.9 million from $23.4 million in the second quarter. Adjusted EBITDA was negative $5.6 million, compared with negative $5.7 million in the prior quarter.
Zelsuvmi Prescriptions Rise as Coverage Expands
Chief Commercial Officer Sai Rangarao said Zelsuvmi prescriptions rose 4% sequentially to 12,384 in the third quarter, an increase of 365% from a year earlier. The number of unique prescribers during the quarter increased to 4,942 from 4,571 in the second quarter, based on Symphony Metys data.
Since the product’s July 2025 launch, more than 34,000 patients have received Zelsuvmi, Rangarao said. Gay said the product has generated $57.5 million in net revenue over its first five reported quarters of commercialization.
An agreement with a major pharmacy benefit manager took effect October 1, providing access to approximately 24 million commercially covered lives without prior authorization. A regional health plan covering approximately 3 million lives also updated its formulary to enhance access, management said.
As of October, Zelsuvmi had formulary coverage for 127 million commercially covered lives, or approximately 70% of that market, and Medicaid coverage for more than 70 million lives, according to the company.
Gross-to-net adjustments increased to 31.5% in the third quarter from 29.6% in the second quarter. Gay said the increase reflected the formulary agreement, while Chief Executive Officer Scott Plesha described the agreement as a long-term investment in growth. Rangarao said the company expects gross-to-net adjustments to move into the mid-30% range as coverage expands.
Plesha said the benefits of the new coverage can take multiple quarters to materialize. He also pointed to seasonal disruptions from physician and patient vacations, while saying management expects strong growth in the first half of 2027.
Two Product Launches Planned for 2027
Pelthos is building launch inventory for XEPI, a treatment for impetigo, and plans to begin promoting it by the end of the first quarter of 2027. Rangarao said commercial planning is underway for a March launch.
The company also has begun manufacturing the active pharmaceutical ingredient for XEGLYZE, a head lice treatment, and expects to launch it by the end of the third quarter of 2027.
Management expects the products to reach many of the same healthcare providers already served by its sales force. Gay said the company’s current selling, general and administrative spending includes preparations for XEPI and is not expected to change materially specifically because of that launch.
Rangarao said Pelthos may add a single-digit number of sales territories ahead of XEPI’s launch and will evaluate its needs for XEGLYZE closer to that launch.
Castle Creek Deal Adds Gene Therapy Candidate
Pelthos announced its agreement to acquire Castle Creek Biosciences on October 30 and expects the deal to close in the first quarter of 2027. Plesha said the company is limited in what it can discuss before filing a Form S-4 related to the transaction.
Castle Creek’s lead candidate, D-Fi, is an investigational gene-modified cell therapy for dystrophic epidermolysis bullosa, a rare disease that causes fragile skin and chronic wounds. Plesha said Pelthos expects to continue development of the candidate’s Phase 3 clinical trials after the transaction closes.
Executive Chairman Peter Greenleaf said the transaction would broaden Pelthos beyond its commercial dermatology business and into rare-disease drug development. He said early D-Fi data were encouraging but cautioned that the company still needs to complete the Phase 3 study. Any potential benefits in dosing and administration would need to be demonstrated in that trial, he said.
Responding to an analyst’s question about dilution, Greenleaf said the transaction involved upfront equity consideration and milestone payments tied to data and approval. He argued that future cash flows from the commercial business could help fund pipeline development.
Cash and Operating Costs
Third-quarter cost of goods sold fell to $1.7 million from $3.6 million in the second quarter, which included a $900,000 inventory write-off. Gay said there was no comparable write-off in the third quarter. Selling, general and administrative expenses declined to $18.8 million from $25 million; the prior quarter included $5.3 million in one-time sales-based milestones.
Pelthos ended September with $17.7 million in cash and $13.4 million in accounts receivable. On October 30, it amended its senior secured term loan facility and borrowed an additional $10 million. Another $10 million is available before the end of 2027 at the lender’s discretion and subject to conditions, including at least $70 million in trailing 12-month net revenue.
About Pelthos Therapeutics (NYSEAMERICAN:PTHS)
We are a clinical-stage biotech company focused on developing and commercializing new therapeutics to alleviate pain. Our clinical focus is to selectively target the sodium ion-channel known as “NaV1.7”, as well as other receptors in the NaV family. NaV1.7 has been genetically validated as a pain receptor in human physiology. Genetic studies have shown that families with a certain inherited NaV1.7 modulation consistently show a pathology of not feeling pain. A NaV1.7 blocker is a chemical entity that modulates the structure of the sodium-channel in a way to prevent the transmission of pain perception to the central nervous system (“CNS”).
