Pelthos Therapeutics to Merge with Channel Therapeutics

Ligand Pharmaceuticals Incorporated and Channel Therapeutics Corporation have unveiled a planned merger that aims to propel the commercialization of a groundbreaking treatment for Molluscum contagiosum, an infectious skin condition. The merger, which is anticipated to close in the summer of 2025, involves combining Ligand’s subsidiaries, Pelthos Therapeutics Inc. and LNHC, Inc., with Channel’s subsidiary CHRO Merger Sub Inc. The deal will be backed by $50 million in equity raised from strategic investors led by Murchinson. Upon completion, the merged entity will operate as Pelthos Therapeutics Inc. and will be listed on the NYSE American exchange under the ticker PTHS.

The primary focus of the newly formed company will be the commercialization of Pelthos’ flagship product, ZELSUVMI™ (berdazimer) topical gel, 10.3%. This medication, which utilizes a patented nitric oxide-based technology platform known as NITRICIL™, is the first and only FDA-approved prescription treatment for Molluscum contagiosum that can be administered at home. The treatment is suitable for both adults and children aged one and older.

ZELSUVMI™ represents a significant advancement in the treatment of Molluscum contagiosum, a common viral skin infection that affects approximately 16.7 million individuals in the U.S. The condition is spread through direct contact with infected individuals or contaminated objects and is particularly prevalent among children. It manifests as raised, flesh-colored or red bumps on various parts of the body and can cause discomfort, itching, and social stigma due to its visible symptoms. With this innovative treatment, it is expected that the reliance on invasive in-office procedures will diminish, and access to care will improve for those affected by this contagious infection.

Beyond the immediate benefits offered by ZELSUVMI™, the merger presents a strategic opportunity for growth and expansion. The combined company will retain Channel Therapeutics’ existing NaV 1.7 development programs, which focus on non-opioid pain treatments targeting chronic pain, acute and chronic eye pain, and post-surgical nerve blocks. This strategic retention of Channel’s pain management initiatives underscores the company’s commitment to addressing diverse medical needs through innovative therapeutics.

The transaction is not only a strategic business move but also a reflection of the confidence investors have in the potential of ZELSUVMI™ and the broader therapeutic pipeline. Ligand’s CEO, Todd Davis, highlighted the merger as a complex restructuring aimed at maximizing the value of Pelthos’ assets while leveraging financial backing from strategic investors. Meanwhile, Channel's CEO, Frank Knuettel II, expressed optimism about the merger’s potential to generate immediate revenue from an FDA-approved product and strengthen Channel’s existing programs.

Scott Plesha, CEO of Pelthos, emphasized the unmet medical need for accessible, safe, and effective treatments for Molluscum contagiosum that can be easily applied at home. With his experience in commercializing dermatology and pain management products, Plesha is poised to lead the merged company into its next phase of growth.

Under the merger terms, Channel Therapeutics will acquire all equity interests in Pelthos and rebrand as Pelthos Therapeutics Inc. The Board of Directors will include key figures such as Plesha as CEO and Knuettel as CFO, alongside independent directors and representatives from Ligand and Murchinson.

This merger represents a significant step forward in the fight against Molluscum contagiosum and the broader field of non-opioid pain management, promising enhanced patient care and shareholder value.