Pelthos Therapeutics and Channel Therapeutics Merge, Set to Launch Molluscum Treatment Zelsuvmi

In a significant move within the pharmaceutical industry, Ligand Pharmaceuticals' subsidiary Pelthos Therapeutics is joining forces with Channel Therapeutics. The merger, backed by $50 million in capital, aims to support the launch of Zelsuvmi, a newly FDA-approved topical treatment for molluscum contagiosum.

Merger Details and Financial Backing

The combined entity will retain the Pelthos name and operate from Pelthos' existing North Carolina headquarters. The merger is supported by a substantial financial package, including $18 million from Ligand Pharmaceuticals and an additional $32 million from a group of outside investors.

As part of the agreement, Channel will acquire all outstanding equity interest in Pelthos. Ligand Pharmaceuticals stands to benefit from a 13% royalty on worldwide sales of Zelsuvmi, underlining the potential market value of the new treatment.

Zelsuvmi: A Breakthrough in Molluscum Treatment

Zelsuvmi represents a significant advancement in the treatment of molluscum contagiosum, a highly contagious viral skin infection. Approved by the FDA in January 2024, it is the first at-home treatment cleared for patients aged 1 and older. The gel can be applied by parents, caregivers, or patients themselves, offering a convenient solution for managing this common skin condition.

The journey of Zelsuvmi to market approval has been complex. Originally developed by Novan, the drug faced setbacks in late-stage testing, leading to Novan's bankruptcy. Ligand Pharmaceuticals acquired Novan's assets in 2023, paving the way for Zelsuvmi's eventual FDA approval.

Leadership and Future Plans

The merged company will be led by Scott Plesha, who will continue in his role as CEO of Pelthos. Frank Knuettel II, the current CEO of Channel Therapeutics, is set to transition to the position of Chief Financial Officer in the new organization.

Both leaders expressed optimism about the merger and the potential of Zelsuvmi. Knuettel stated, "We have performed extensive due diligence on the Zelsuvmi market opportunity and their team and operations, and we believe this is an extraordinary opportunity for current Channel shareholders." Meanwhile, Ligand's CEO Todd David described the transaction as "a compelling opportunity to launch a commercial-ready product."

The newly expanded Pelthos is targeting a summer 2025 launch for Zelsuvmi, slightly later than initially anticipated. In addition to focusing on the Zelsuvmi launch, the company will continue to pursue Channel's existing development programs in chronic pain, eye pain, and post-surgical nerve blocks, potentially broadening its therapeutic portfolio in the future.