Pelthos Therapeutics Q2 Earnings Call Highlights

Pelthos Therapeutics (NYSEAMERICAN:PTHS) reported second-quarter revenue growth as prescriptions for its lead product, ZELSUVMI, increased following the treatment’s July 2025 commercial launch. The company also discussed an accounting restatement related to the fair-value measurement of convertible debt and outlined expected 2027 launches for its complementary products XEPI and XEGLYZE.

Net product revenue rose 45% sequentially to $15.4 million in the second quarter, compared with $10.7 million in the first quarter. Chief Executive Officer Scott Plesha said the increase was driven by a 48% rise in prescription units reported by Symphony Health, to 11,925 from 8,084 in the prior quarter.

ZELSUVMI is an FDA-approved topical nitric oxide-releasing treatment for molluscum contagiosum in patients ages one and older. The company said it is the first and only FDA-approved treatment for the condition that can be applied at home by patients, parents or caregivers.

ZELSUVMI Prescriptions and Coverage Expand

Chief Commercial Officer Sai Rangarao said Pelthos had more than 8,000 unique healthcare-provider prescribers in its latest data and that more than 25,000 patients had received ZELSUVMI prescriptions in the product’s first full year on the market. Plesha said more than 30,000 units have been dispensed since the launch.

The number of unique prescribers increased to 4,571 in the second quarter from 3,288 in the first quarter, according to Symphony data. Within a pharmacy benefit manager contract established late last year, dispensed units increased 81.3% during the quarter and prescriber count increased 68%, Plesha said.

Pelthos reported commercial insurance coverage of 59% and Medicaid coverage of 100% for ZELSUVMI. Rangarao said the company’s gross-to-net adjustment was 29.6% in the second quarter, compared with 29.1% in the first quarter. Management expects gross-to-net to move into the low- to mid-30% range over time, with potential additional payer contracts affecting that outlook.

The company added sales territories in Pittsburgh; Albany, New York; and Shreveport, Louisiana, bringing its field force to 67 territories. Rangarao said pediatricians account for roughly 25% to 27% of ZELSUVMI prescribing and that the company expects that share to rise as awareness grows.

Management said July prescription units totaled 4,299, compared with 4,208 in June, despite summer schedules and the July 4 holiday. Rangarao said early third-quarter indicators suggested claims could remain relatively stable with the second quarter, although the company continues to expect seasonal effects in the market.

Costs, Losses and Inventory

Second-quarter cost of goods sold was $3.6 million, up from $1.7 million in the first quarter. Chief Financial Officer John Gay said the figure included a $900,000 write-off of active pharmaceutical ingredient inventory after out-of-specification testing results. He said the underlying procedural cause was addressed and subsequent manufacturing has met specifications.

Cost of goods sold also includes fair-value adjustments to finished goods and active pharmaceutical ingredient inventory recorded in connection with Pelthos’ July 2025 merger. Gay said the company has sold through the stepped-up finished-goods inventory and expects to consume the remaining stepped-up API inventory over the next 12 to 15 months. After that inventory is used, Pelthos expects normalized per-unit cost of goods to be approximately a mid-single-digit percentage of the current wholesale acquisition cost price.

Selling, general and administrative expenses rose 31% sequentially to $27.7 million. The increase was primarily attributed to a $5.3 million increase in a one-time sales-based milestone related to the ZELSUVMI license, higher royalties, personnel costs and corporate expenses. Cash-basis SG excluding milestones, royalties and severance was about $16.2 million, down from $16.7 million in the first quarter.

• Net loss was $23.4 million, compared with a restated net loss of $25.1 million in the first quarter.
• Adjusted EBITDA was negative $5.7 million, compared with negative $8 million in the prior quarter.
• Cash totaled $24.2 million as of June 30, while accounts receivable were $14.5 million.
• Working capital was $31.4 million, down from $44.8 million at the end of the first quarter.

Convertible-Debt Accounting Restatement

Gay said Pelthos filed an amended first-quarter Form 10-Q and a Form 8-K addressing a misapplication of ASC 820 fair-value measurement guidance related to the company’s convertible notes.

The issue involved the impact of a January subordination agreement associated with Pelthos’ Horizon Technology Finance term loan facility. Under that agreement, payment obligations under the convertible notes, including principal and accrued interest, became subordinated to the Horizon term loans.

Gay said the restatement revises fair-value measurements and related accounts for the convertible debt but does not affect cash balances, product revenue, product sales, operating expenses, operating loss, operating cash flows or adjusted EBITDA. He said it also does not change the underlying economics of the convertible debt arrangements.

Pipeline Commercialization Plans

Pelthos expects to launch XEPI, an FDA-approved topical treatment for impetigo, in the first quarter of 2027. Plesha said the company is establishing manufacturing and building launch inventory, with a potential March launch timing aligned with its national sales meeting. XEPI will be marketed largely through the company’s existing commercial organization, according to management.

The company expects to bring XEGLYZE, an FDA-approved head-lice treatment for patients six months and older, to market in the third quarter of 2027. Management said manufacturing work is underway and that more substantial commercial investment is not expected until closer to the middle of next year.

Pelthos drew $30 million at closing under a $50 million senior secured term loan facility with Horizon in January. Gay said the company believes it has achieved access to an additional $10 million under the facility based on trailing 12-month product revenue of $42.3 million as of June 30, subject to lender discretion.

Plesha said the company has not provided discrete revenue or earnings guidance because it remains early in the ZELSUVMI launch, but said management remains confident in its revenue growth trajectory and believes available capital supports execution of its business plan.

About Pelthos Therapeutics (NYSEAMERICAN:PTHS)

We are a clinical-stage biotech company focused on developing and commercializing new therapeutics to alleviate pain. Our clinical focus is to selectively target the sodium ion-channel known as “NaV1.7”, as well as other receptors in the NaV family. NaV1.7 has been genetically validated as a pain receptor in human physiology. Genetic studies have shown that families with a certain inherited NaV1.7 modulation consistently show a pathology of not feeling pain. A NaV1.7 blocker is a chemical entity that modulates the structure of the sodium-channel in a way to prevent the transmission of pain perception to the central nervous system (“CNS”).

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