Pelthos Therapeutics Inc. Q3 FY2025 earnings call

• In the third quarter, Pelthos successfully closed an acquisition and a $50 million PIPE, then launched ZELSUVMI in mid-July. ZELSUVMI is the first FDA-approved at-home treatment for molluscum contagiosum.
• The company has strong initial launch performance with the cost of the sales force covered within nine weeks. They plan to expand the sales force by adding 14 additional sales representatives in large metropolitan areas, with these to be in the field by mid-January.
• Pelthos owns and operates a purpose-built manufacturing facility for ZELSUVMI's API, with patent protection running to mid-2035 and a patent term extension on file.
• Recently announced an $18 million convertible notes financing to acquire and relaunch Xepi, accelerate ZELSUVMI's commercialization, and for general working capital. Xepi is a topical treatment for Impetigo.
• Q4 performance has been strong with continued growth trajectory, and projecting a significant increase in net revenue for Q4 2025 over Q3 2025.

For the three months ended September 30, 2025, Pelthos generated $7.1 million in net product revenue, driven by the strong initial demand for ZELSUVMI, the company's first commercial product. ZELSUVMI is a novel topical nitric oxide releasing product indicated for the treatment of molluscum contagiosum. The revenue contribution of ZELSUVMI was the key driver for the quarter's top line results.

• Expect to achieve cash flow breakeven from operations before the end of 2026.
• Current growth trajectory during Q4 is strong, with a projected annual gross revenue run rate of approximately $52 million based on Q4 performance.
• Base case peak revenue expectation of $175 million in 2028, with no detailed annual guidance provided yet as still early in the launch.

• Uncertainty around payer contracts and reimbursement, though ZELSUVMI has seen favorable prior authorization approvals.
• Inventory management risks, with expectation of de minimis variability in net revenue related to changes in inventory channel, but currently managing channel load to ensure product availability.
• Potential impact of price changes on commercial contracts and Medicaid, requiring thoughtful consideration.

Q: Congrats on a fantastic start to your launch. And congrats on your first call as a public company as well. First question, you mentioned 1,169 unique prescribers at this stage. Can you comment on how many are writing multiple prescriptions? And then what portion of your target accounts does that cover? So with your current sales force, how many target accounts do you have and sort of what penetration are you looking at?

A: Thanks, Jeff. I appreciate the compliments to begin with. And just, I guess, first starting out our coverage right now. We're covering about 8,000 targets with our current sales structure. We mentioned an expansion that will get us up to about 10,000 or so when all is said and done. And then as far as repeat prescribing, we gave you the unique numbers for the quarter. When we look at kind of where we are right now, probably a little bit more than half, 60% have written one script, but we've seen almost just under 500 write two or three. We have some as high as 22 to 27 range, actually three doctors in that range. So there's a wide range of prescriptions written by the HCPs.

Q: Congratulations on an excellent launch. Could you just walk through -- I know you mentioned the overall -- the reps overall are profitable. Could you walk through how many the reps of the 50 are currently profitable and sort of the expectations for the additional 14, how quickly for them to cover their own costs? And clearly, it seems like the product is priced correctly. Do you think there's opportunity for taking price going forward?

A: So I'll answer the price one first, Jim, and then I'll let Sai weigh in on the sales force and productivity. So right now, we mentioned this in our script, but we don't have any active commercial contracts. So we haven't been paying rebates. So typically, those plans, you'll have price protection clauses in there, and so we haven't. I think our goal is to be responsible on price going forward. I think we're priced at the right point right now, and we'll take responsible price increases going forward. At this point, we're not disclosing what that might look like, but it is something we can do. And without having the commercial contracts, if we do take price, and if you go above those commercial contracts, it impacts Medicaid. So that's what's good about not having the commercial contracts is it doesn't really impact the rebates at the Medicaid level. So anyways, we're going to be thoughtful about price going forward. And more to come on that, I guess. I'll pass it over to Sai. Yes. Thanks, Scott. Thanks for the question. So when we think about our field force and the productivity analysis that we look at really on a daily to weekly basis, we're seeing some strong growth trajectory across the multitude of quarters that we have divided up around the country and the regions in specific. When we look back on the analysis week-over-week, obviously, there's performance metrics that we work towards to ensure that we're getting higher growth, higher trajectory at each territory level. As Scott mentioned in his prepared remarks, we are moving towards an expansion, which really tells us that the field force activity and the productivity at the territory level has been profitable for us going forward. So that's where we see our growth trajectory and our growth trends increasing over time based on our current footprint and the one that we intend to expand into.

Q: Can you walk through, is there seasonality? I know you mentioned that you expect it to be a little softer when people aren't taking the office visits over the holidays. Is this sort of a back-to-school did you guys launch at a perfect time? And then would you look to sort of any thoughts on peak sales guidance? And then I have one last follow-up.

A: I'll take the question on seasonality. So when we look at the ICD-10 data, as Scott mentioned, that really tells us about the overall diagnosis of molluscum, there is no real kind of peak season or sort of valley that you might see over any of the quarters and in particular, any of the months. In pediatric sort of conditions, you might see a little bit more of an influx of prescription activity, like you mentioned, during back-to-school only because there's an influx right before that time frame of pediatric visits, et cetera. But from a seasonality perspective, the data does look pretty, I would say, standard and static from what we've seen as we built out our overall approach to commercialization. Yes. And I'll add a little bit and then answer your peak revenue question, Jim. But the other thing to think about is when patients contract this disease, it could take months for them to go into the office. So somebody could have really started 4 or 5 lesions could have popped up on a child back in July, but they didn't seek care at the time. So it may not be going into now. So our thought leaders are kind of split on whether there's seasonality or even regional differences. So we think it's pretty steady throughout the year. Absent when offices are closed, again, patients are not being seen and we're an acute medication. Regarding peak revenue, we've stated publicly in the past that we're looking at a base case of $175 million peak revenue in 2028. And we're not prepared to change that at this time. We, again, while we're happy with where we are and how we've gotten out of the gate, we want to get more data before we make any adjustments. I think that's the wise thing to do.

Q: The Xepi acquisition, I think that makes a ton of sense. Can you walk -- are there any additional compounds you guys are seeing for potential acquisitions to bring in over the next 2 to 3 quarters to slip into the bag like Xepi?

A: No, I appreciate that. Xepi is a highly complementary product to ZELSUVMI in that we don't have to change our sales force. It's calling on the same targets. Our targets see a lot of Impetigo. And even some of the KOLs did our studies for ZELSUVMI that did them for Xepi. So a lot of overlap and synergy there. We'll continue to look for the right opportunities. I'll also point to the fact that we do have the rights after post-merger, we have the rights, if we'd like to pursue external general words using our NitroCil platform. It's actually a like formulation to ZELSUVMI. So that's something we're evaluating. And the rest of the NitroCil platform still sits within Ligand. So we're evaluating it. There's a lot of work done by our predecessor company around NitroCil and different indications, and those are things we're evaluating as we speak here basically.