Pelthos Therapeutics to go public via merger with Channel

Business Journals

22-04-2025

The drug company is preparing to launch a product that has its roots at Novan, the Durham company that went bankrupt in 2023.
Story Highlights Pelthos Therapeutics merges with Channel Therapeutics, becoming publicly listed company.
Zelsuvmi, FDA-approved home treatment for molluscum contagiosum, nears commercial launch.
Combined company raises $50 million, plans to expand workforce.
A biopharmaceutical firm in Durham has reached a deal to become a publicly listed company as it nears a commercial launch of its lead product.
Pelthos Therapeutics is merging with Channel Therapeutics (NYSE American: CHRO), with the combined entity operating under the Pelthos name and focused on advancing its lead product, Zelsuvmi. The deal gives Pelthos a public listing and additional capital.
Channel will acquire 100 percent of the issued and outside equity interests of Pelthos. The deal is backed by a $50 million capital raise, with Ligand Pharmaceuticals (Nasdaq: LGND) investing $18 million in the combined company and an investor group led by Murchinson investing another $32 million.
Pelthos is a subsidiary of Ligand, which in 2023 acquired some of Novan's assets as part of the Durham company's bankruptcy process. The assets included Novan's lead candidate, a topical gel that treats the viral skin infection molluscum contagiosum. The U.S. Food and Drug Administration approved the treatment in January 2024 under the brand name Zelsuvmi.
Ligand formed Pelthos to advance the commercialization of Zelsuvmi. Aside from the product itself, Pelthos is also occupying Novan's former facility on Stirrup Creek Drive where the active ingredient for Zelsuvmi is manufactured.
Over the past year, the company has taken steps to prepare its product launch, said Pelthos CEO Scott Plesha. "We've been spending the bulk of our time making sure that we're ready for for launch when we got to a point of funding it," Plesha said. "Obviously, this deal announcement is kind of a catalyst for the launch process."
The transaction is expected to close this summer. Plesha will remain as CEO, while Channel's chief executive, Frank Knuettel II, will become the company's chief financial officer. The board will include Plesha, two independent directors, two members appointed by Ligand and another two independent directors "who are reasonably acceptable to Murchinson," according to a statement announcing the deal. The latter two are current Channel board members.
The combined company's top priority is the launch of Zelsuvmi, but Channel also has early-stage programs in its pipeline that Plesha said the company will fully evaluate. This includes non-opioid pain programs, with one focused on eye pain and the other on post operative pain.
Pelthos will ramp up hiring as it gets closer to a launch. The company has 31 employees and expects to have about 90 by mid-summer. Many of these will be sales jobs spread throughout the country to support the launch. The company expects to add employees at its Durham office, where it makes the active ingredient for the product.
The company ships the ingredient to Finland where the drug product is manufactured and packaged. Zelsuvmi is the first FDA-approved prescription product that can be used at home to treat molluscum contagiosum. Other existing options require treatments and procedures done in a physician's office.
"There is a high demand for ... a product that can be used at home and applied by either patients or caregivers in the home for this disease state," Plesha said.