Pelthos Therapeutics Inc. Q2 FY2026 earnings call

• Zelsudme Commercial Launch Performance

  • Zelsudme prescription units grew 48% quarter-over-quarter, from 8,084 in Q1 2026 to 11,925 in Q2 2026, with over 30,000 total units dispensed and 25,000 total patients treated since launch.
  • Unique healthcare provider (HCP) prescribers increased from 3,288 at the end of Q1 to 4,571 at the end of Q2 2026, reaching over 8,000 total unique prescribers as of Q2 2026, with 150-200 new prescribers added weekly.
  • The product has 59% commercial insurance coverage and 100% Medicaid coverage. Gross-to-net (GTN) adjustments were 29.6% in Q2 2026, in line with management expectations.
  • Three new sales territories were added in Q2 2026, expanding the field sales force to 67 total territories. Digital marketing campaigns for Zelsudme have accumulated over 9.2 million total views for the core brand commercial and over 400,000 views for patient testimonial videos.
  • An August 2026 expert consensus guideline published in the Journal of Drugs and Dermatology lists Zelsudme as the only recommended at-home treatment option for molluscum contagiosum (MC), which management views as a major validation of the product's first-line status.

• Pipeline and Upcoming Launch Progress

  • Zepi, an FDA-approved topical treatment for pediatric impetigo, is completing manufacturing and testing. Management expects a full commercial launch in Q1 2027, following required FDA approval for the manufacturing site change.
  • Zeglize, an FDA-approved treatment for head lice, is in early stages of API manufacturing. Commercial launch is targeted for Q3 2027.
  • Both pipeline products will leverage Peltos' existing commercial infrastructure and sales force, requiring minimal incremental overhead and creating operational and financial leverage.

• Financial and Accounting Update

  • Peltos filed an amended Q1 2026 10-Q to correct a misapplication of U.S. GAAP fair value accounting for subordinated convertible related-party notes. The restatement is limited to fair value estimates and does not impact cash balances, net revenue, operating expenses, operating cash flow, or adjusted EBITDA.
  • Q2 2026 cost of goods sold (COGS) was $3.6 million, up from $1.7 million in Q1 2026. This increase includes a $0.9 million write-off of out-of-spec API, which management notes has been resolved with successful subsequent manufacturing runs. All stepped-up fair value finished goods inventory from the July 2025 merger has been sold through; remaining stepped-up API will be consumed over the next 12-15 months, after which normalized per-unit COGS is expected to be a mid-single-digit percentage of WAC price.
  • Q2 2026 SG&A expense was $27.7 million, up 31% from $21.1 million in Q1 2026, driven primarily by a one-time $5.3 million sales-based milestone payment for the Zelsudme license, increased royalty and personnel costs. Cash SG&A excluding one-time items was $16.2 million in Q2 2026, down from $16.7 million in Q1 2026.
  • Net loss for Q2 2026 was $23.4 million, down from an amended $25.1 million net loss in Q1 2026. Adjusted EBITDA was -$5.7 million in Q2 2026, improved from -$8.0 million in Q1 2026.
  • As of June 30, 2026, Peltos had $24.2 million in cash, and achieved the trailing 12-month net revenue threshold to access an additional $10 million under its existing Horizon Technology Finance term loan facility, subject to lender approval. Management believes current cash is sufficient to execute its current business plan.

Peltos Therapeutics has only one commercially launched product segment: Zelsudme (for molluscum contagiosum), which contributes 100% of the firm's current net product revenue. For Q2 2026, Zelsudme generated $15.4 million in net product revenue, a 45% increase from $10.7 million in Q1 2026. Aggregate net product revenue for the four quarters since launch (July 2025 to June 2026) totals $42.3 million, comprising $7.1 million (Q3 FY2025), $9.1 million (Q4 FY2025), $10.7 million (Q1 2026), and $15.4 million (Q2 2026). Zepi (for impetigo) and Zeglize (for head lice) are not yet commercially launched and have no current revenue contribution.

• Management has not yet provided discrete full-year revenue or earnings guidance, but reaffirmed confidence in Zelsudme's strong revenue growth trajectory.
• GTN adjustments are expected to rise to the low 30% range by the end of 2026, and could reach the mid-to-high 30% range if the company successfully completes an outstanding contract with a major remaining uninsured payer.
• Quarterly cash SG&A (excluding one-time milestones, royalties, and severance) is expected to fluctuate through 2026 as the company continues to invest in Zelsudme growth and prepares Zepi and Zeglize for launch.
• Launch timelines for pipeline products are maintained: Zepi in Q1 2027, Zeglize in Q3 2027.

• Weekly prescription volatility is currently tied to seasonal summer vacation schedules and holiday impacts, which may persist through the back-to-school transition, though management expects volatility to normalize in the coming weeks.
• A $0.9 million out-of-spec API inventory write-off occurred in Q2 2026; while the root cause was addressed and subsequent production meets specifications, manufacturing quality issues could cause future delays or cost increases for pipeline products.
• Forward-looking statements related to growth, launch timelines, and market adoption are inherently uncertain, and actual results could differ materially from management expectations due to unknown risks related to payer contracting, HCP adoption, and manufacturing execution.
• Peltos requires additional contracting to expand insurance coverage beyond the current 59% commercial rate, and failure to secure this contract could limit access and growth.

Q: What will Q3 2026 seasonality look like for prescriptions, and what is Peltos' current strategy for business development (BD)? / A: Early Q3 data indicates prescription volume will be stable to slightly up versus Q2, defying historical seasonal dips, in line with management expectations. Management is focused on the existing Zelsudme launch and upcoming Zepi/Zeglize launches, but will evaluate accretive BD opportunities. The company prioritizes novel unmet-need assets that align with its existing pediatric dermatology portfolio, and avoids me-too products; it will consider opportunities in either pediatric or dermatology with overlap preferred.

Q: When will GTN adjustments reach the targeted mid-30s range, and what is driving weekly prescription volatility? / A: GTN is currently 29.6%, up 0.5 points from Q1. It is expected to reach the low 30% by end of 2026 without the outstanding large payer contract; reaching mid-to-high 30% is contingent on securing that contract. Recent volatility is driven by summer vacation schedules, holiday impacts, and variable back-to-school timing across regions. Volatility is expected to normalize in the coming weeks, and management still expects Q3 growth, with July prescription volume already higher than June.

Q: What is the current level of pediatrician awareness and adoption of Zelsudme? / A: Peltos' sales force calls equally on pediatricians and dermatologists, and 25-27% of current Zelsudme prescriptions come from pediatricians, with steady growth across all specialties. 150-200 new prescribers are added weekly, and repeat prescribing is also growing. The new expert consensus guidelines, led by top MC KOLs, are expected to further increase awareness and adoption among pediatricians, who have historically under-treated MC.

Q: What investments are required ahead of the Zepi and Zeglize launches, and how will seasonality trend in H2 2026? / A: H2 2026 prescription trends are expected to meet management expectations, with back-to-school wellness checks expected to drive increased MC diagnoses and prescriptions. The launches will leverage Peltos' existing commercial infrastructure, so incremental investment is primarily focused on manufacturing, with minimal incremental marketing spend. Zepi is on track for a March 2027 launch, with manufacturing testing complete and FDA approval pending for the manufacturing site change. Zeglize remains on track for Q3 2027 launch, with early API manufacturing currently underway, and commercial investment will not ramp until mid-2027.