Pelthos Therapeutics Q4 2025 Earnings Call - ZELSUVMI prescriptions surge 129%, acquisitions and financing back push to profitability

Mike, Conference Call Host/Moderator, Pelthos Therapeutics: Good morning everyone, and welcome to Pelthos Therapeutics’ 2025 fourth quarter and fiscal year financial results conference call. Pelthos issued a press release today announcing its financial results for the year ended December 31, 2025. A copy can be found in the investor relations tab on the corporate website at www.pelthos.com. Before we begin, I’d like to remind you that during today’s call, statements about the company’s future expectations, plans, and prospects are forward-looking statements. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from our current expectations expressed or implied by the forward-looking statements. Any such forward-looking statements represent management’s estimates as of the date of this conference call.

While the company may elect to update such forward-looking statements at some point in the future, it disclaims any obligation to do so, even if subsequent events cause its views to change. As a reminder, this conference call is being recorded and will remain available for 90 days. I’d now like to turn the floor over to Scott Plescia, Chief Executive Officer. Sir, you may begin.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Thank you, Mike. Good morning and welcome everyone to today’s call. We’re delighted to be with you today and to share with you our fourth quarter and annual operating results and highlights. Joining me today are Frank Knuettel II, our CFO, and Sai Rangarao, our Chief Commercial Officer. The fourth quarter of 2025 was an exciting and busy one for Pelthos, with great progress made in three key areas that I’ll share at a high level with you. First, we had a substantial demand-generated revenue growth for our lead product, ZELSUVMI, following its launch in the third quarter of 2025. Second, we acquired two highly complementary FDA-approved products. Third, we substantially bolstered our balance sheet and dramatically reduced our quarterly operating and non-GAAP net losses.

Frank and Sy will provide a more detailed look at the quarter ZELSUVMI launch metrics and reported financial results, but I’d like to share a brief overview of our results of operations. Our top-line results are driven by a 129% increase in prescriptions as reported by Symphony Health, which increased from 2,716 units in the third quarter to 6,232 units in the fourth quarter. This drove an increase in net product revenue from $7.1 million during the third quarter of 2025 to $9.1 million in the fourth quarter of 2025. It’s important to note that just under $3 million of the third quarter revenue was a result of units being shipped to our distribution partners as part of our stocking for launch.

Importantly, we ended the year with slightly less days on hand of inventory in the channel than at the end of Q3. Turning to product and operational details, I’d like to start with an update on our lead product, ZELSUVMI. As a reminder, ZELSUVMI is a novel topical nitric oxide-releasing product indicated for the treatment of molluscum contagiosum, or MC, in patients one year of age or older for up to 12 weeks. ZELSUVMI is an important advancement in the treatment of MC, as it’s the first and only FDA-approved therapy that can be applied by parents, patients, or caregivers in the home or on the go. Prior to the launch of ZELSUVMI, other topical treatments or destructive modalities would require patients to make multiple visits to a healthcare practitioner.

These in-office treatment alternatives include curettage, cryotherapy, and blistering agents that can sometimes be uncomfortable and painful, especially in the sensitive areas of the body that MC often presents. MC is a highly infectious condition caused by a poxvirus that primarily affects children one year of age or older, with ICD-10 claims indicating that 75%-80% of MC patients are 10 years of age or younger. Roughly 16 million people in the United States are affected by molluscum, and on average, there are up to 6 million new cases annually. The literature also reports that in a multi-child household, if one child contracts MC, 41% of the time the other child or children will as well. While the disease is self-resolving, the mean time to resolution is approximately 13 months and cases can last up to 5 years.

During that time, children are often ostracized and may be forced to miss school or sporting events and cover their lesions with bandages or clothing. This leads to considerable child and parental anxiety, which is the primary driver for patients being seen by healthcare providers. These factors led to significant patient demand during the fourth quarter. As opposed to the third quarter during which we launched ZELSUVMI, virtually all the revenue in Q4 was a result of units dispensed to patients. In Q3, we had 2,716 prescribed units representing approximately $4 million in net revenue, with the balance of the $7.1 million in net revenue during the third quarter comprised of channel stocking with the launch of the product.

Conversely, almost all of the revenue in Q4 was generated by units dispensed to customers, with 6,232 prescribed units in Q4 and $9.1 million in net product revenue. Importantly, while total inventory in the channel rose slightly, inventory days on hand declined by just over a day during the fourth quarter. As a reference, the balance of the $0.3 million in non-product revenue in each of the third and fourth quarters of 2025 was revenue recognized associated with the Sato license in Japan. We have strong patent protection on ZELSUVMI with a composition of matter patent that runs to early 2035 and have a patent term extension on file that may extend the patent life to Q3 2037.

Finally, there is significant know-how in trade secrets associated with our manufacturing process which complement our patent protection, providing us a broad IP moat around our technology. We believe this provides a long runway to grow ZELSUVMI’s revenue. Regarding our product acquisitions, our first acquisition was of Xepi. Xepi is a novel FDA-approved topical treatment for impetigo that addresses a critical unmet need in antibiotic-resistant skin infections caused by staph and strep infections, most commonly affecting children. Impetigo is the most common skin infection in children seen by pediatricians, with approximately 3 million patients diagnosed with this bacterial infection each year. We believe Xepi is a highly complementary product as it mostly treats children that are treated by the same healthcare providers as ZELSUVMI. Importantly, this allows us to leverage our commercial infrastructure, including our sales force.

We acquired the U.S. rights to Xepi in November and are currently working to establish the manufacturing process and building launch inventory. We expect to stock this product by the end of the fourth quarter of 2026, with a launch in January of 2027. Importantly, at several recent DERM meetings, we have received very positive feedback from some of the major KOLs with respect to the relaunch of the product, as resistance to current treatments has been rising dramatically. With respect to our most recent product addition, we acquired Xeglyze in December for the treatment of head lice. Xeglyze is also a novel FDA-approved product that is also highly complementary with both of ZELSUVMI and Xepi and will require minimal additional overhead costs to bring to market.

While this indication is largely treated by non-prescription drugs, resistance to current treatment options is growing, and unlike other products on the market, Xeglyze requires only one application. We believe that this will support the growth of Xeglyze becoming the standard of care when prescription medications are required and that the return on investment for Pelthos will be substantial. At the operational level, we are standing up manufacturing for Xeglyze and expect to bring it to market in late Q2 2027. Both Xepi and Xeglyze will have tremendous call overlap for existing sales force, providing the company with greater operational and financial leverage from our existing team and infrastructure.

Supporting the continued rollout of ZELSUVMI and the acquisition and launch of Xepi and Xeglyze, we closed an $18 million convertible note in November and a $15 million term debt loan in January, of which we drew $30 million. Frank will provide more details on both, but I wanted to note that the additional cash from these two transactions strengthens our cash balance and, combined with our revenue growth and current business plan, strongly support our path to cash flow generation. In summary, we are extraordinarily pleased with the receptivity of ZELSUVMI since its launch in July 2025, the acquisition of two novel, highly complementary FDA products to our portfolio, and the additional capital supporting our drive to profitability.

We remain fully committed to maintaining strict financial discipline, as evidenced by the decrease in our operating and non-GAAP, GAAP EBITDA losses, and will continue to evaluate and optimize our commercial strategy as we want to seize every opportunity to deliver sustainable long-term shareholder value for Pelthos shareholders. I’ll now turn it over to Sy to provide more specifics on the results of the ZELSUVMI launch and key performance indicators.

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Thank you, Scott. Good morning, everyone. I’m pleased to provide an update on our Q4 2025 performance following the Q3 2025 launch of ZELSUVMI. While we are still early in the launch, our progress to date has gone better than expected. For 2025, shipments and prescriptions were ahead of expectations, leading to an increase in internal expectations for 2026. On the qualitative side, we continue to receive very positive feedback from HCPs, patients, and caregivers on the ease of use and efficacy of ZELSUVMI.

Digging into the prescription details, the number of prescriptions rose a very strong 129% to 6,232 prescribed units, and the number of unique prescribers rose from 1,169 unique prescribers in the third quarter to 2,712 unique prescribers by the end of the fourth quarter, with both sets of data reported in Symphony Health data. We generated this significant increase in prescriptions despite the fact that the fourth quarter is historically the weakest annual quarter for MC claims. The average monthly MC claims in the fourth quarter, driven by lower November through December patient visits, averaged approximately 33,700 claims per month. Whereas for March through October in 2025, there was an average of approximately 45,100 claims per month.

The fact that we were able to grow this much during the fourth quarter shows the strong value ZELSUVMI provides in the market and portrays the significant growth we expect going forward. Our belief remains strong that ZELSUVMI is revolutionizing the treatment of MC and becoming the first-line treatment of choice. From January 1, 2026, through the week ending March 6, 2026, we recorded 5,297 prescribed units for ZELSUVMI written by HCPs and recently hit an all-time high of 695 prescribed units in one week. On top of that, since early February, we are regularly seeing new weekly highs in new prescriptions, total prescriptions, repeat prescribers, and continue to add new HCP writers.

Relatedly, we are closely and steadily managing our channel inventory to make certain there is ZELSUVMI available for patients and to minimize stock-outs at the wholesaler level, led by our stellar market access and trade team. We ended the fourth quarter with just over one day fewer units of inventory on hand throughout the distribution system. While we expect that days on hand might gradually decline over time, we are currently managing to an estimated 3-4-week inventory level. We launched ZELSUVMI without any commercial contracts following a selective contracting approach, but entered into a commercial contract with a PBM during the fourth quarter. With approximately 20 million covered lives from this PBM, we executed a contract with this PBM to increase access to patients.

Importantly, the contract removed friction on access to ZELSUVMI almost immediately and helped numerous patients gain the clinical benefits of ZELSUVMI quickly at a contract rate that does not impinge on our Medicaid rate and provides for annual price increases. The effect of this contract, which kicked off in early December, along with improved Medicaid coverage, is an expansion of our covered lives and access to patients. As of today, we have a 59% coverage rate for commercial insurance plans and an incredible 99% coverage rate of Medicaid. This is a testament to the fact that ZELSUVMI, as the first FDA-approved at-home treatment for MC, is being adopted as the first-line treatment option and is being well-received by HCPs and coverage providers.

For Medicaid coverage, a number of larger states, including New York, do not require a prior authorization, and in most other states, Medicaid only requires a prior authorization written to label, meaning that a patient over one year of age presenting with MC qualifies for coverage. Overall, this is very healthy for a drug at our stage of launch, which is supported by the fact that our drug largely treats children, is the first and only at-home treatment option, and is acute. Due to ZELSUVMI being an acute treatment, payers have a limit on their overall cost exposure, and therapeutic programs largely aimed at children have a better approval profile in general. We continue to have very good gross-to-nets, or GTNs. Our current GTNs largely revolve around distribution costs, Medicaid discounts, payer contracts, and our co-pay voucher program.

With the latter, it is our goal to pay down with the co-pay card program so that prescription costs are zero or close to zero in almost all instances for the patient. For the fourth quarter of 2025, we had favorable GTNs at 28.7%, in line with our expectations. Going forward, we are expecting our GTNs to move to the mid- to upper-30% range. Next, I would like to provide an update on our sales team. We commenced our launch with 50 territory managers, placing them in locations based on the ICD-10 data of most prevalent MC cases. With that said, it’s important to note that MC is an underreported indication, largely because there has been no at-home FDA-approved product until ZELSUVMI.

With the success of our launch, as we previously announced, we made the decision to add 14 territory managers in metropolitan areas not previously supported, including Seattle, Minneapolis, San Francisco, Salt Lake, and elsewhere. We have added those additional team members who have been trained and now active in the field. Early data suggests that it was a very advantageous expansion, as prescriptions in some of those territories have jumped markedly to the point where, in a very short time, they are already covering the cost of their sales efforts. We continue to grow awareness for ZELSUVMI as the first and only at-home prescription treatment option for MC through various channels and venues.

On top of the efforts we launched in Q3, which includes our Moms Against Molluscum movement, strong HCP engagement in offices and conferences, including our broad social media campaigns, we launched our first ever YouTube commercial in Q4. This commercial has been very successful, with more than 4.5 million total views. This unique and informative short-form video has prompted parents and caregivers, along with adult patients, to ask their HCPs about ZELSUVMI. Finally, we will be attending the largest dermatology congress in the U.S. at the end of the month with full promotional and medical engagement activities. The American Academy of Dermatology meeting brings thousands of HCPs together and is an ideal opportunity for us to further engage with HCPs and inform them about the featured benefits of ZELSUVMI for their appropriate patients.

We will continue to build off the great success of these tactics and will be adding more to keep the momentum going. I am very pleased with our performance and strong launch success to date alongside our highly passionate, dedicated, and hardworking commercial team. With that, I now turn the call over to Frank to discuss our financials. Frank?

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Thank you, Sai. Good morning, and thank you all for joining us on today’s call. Overall, we had a very good fourth quarter and are delighted to report that net product revenue rose approximately 28% from $7.1 million in the third quarter of 2025, which was our first quarter of launch, to $9.1 million in the fourth quarter of 2025. For the year and quarter ended December 31, 2025, our cost of goods sold was $4.0 million and $1.7 million, respectively. The quarter-over-quarter decline from the third quarter of 2025 to the fourth quarter of 2025 in cost of goods on an absolute basis as well as a percentage of revenue is due to the write off of one out-of-specification API batch in the third quarter.

A key reminder is that our cost of goods also includes the fair value step-up of the inventory, both API and finished goods on hand at the time the merger was closed. We expect to run through the stepped-up fair valued finished goods inventory by late summer of 2026 and approximately a year to 15 months later to run through the stepped-up fair valued API inventory. After that, we will be at our true cost of goods value, which is mid-single digit % of our WAC price. Similarly, we’re also in the process of moving towards the expected long-term costs associated with our GTNs. Our GTNs for the fourth quarter were 28.7%.

To make sure we’re looking at this the same way, it means that 28.7% of our gross revenue is allocated to third-party distribution, Medicaid, commercial PBM contract, co-pay cards, and similar fees. With the PBM contract and a meaningful percentage of our business coming from Medicaid thus far, we are expecting GTNs going forward to move towards the mid- to high-30% range. The bulk of our expenses during the quarter were for SG&A, with low levels of expenses associated with R&D. We provided a table in the 10-K that provides a detailed breakdown of our SG&A expenses. At a high level, the bulk of the cash expenses can be attributed to personnel, marketing, professional services, and royalties.

Of the $18.5 million in SG&A for the fourth quarter of 2025, approximately $2.1 million are non-cash charges associated with equity compensation expenses and depreciation. A further amount of approximately $1.2 million are one-time items associated with a convertible note and term debt that we’re unable to capitalize, and we booked a royalty obligation of $1.6 million. This resulted in a steady-state cash amount for SG&A of $13.5 million for the fourth quarter of 2025. The continuing cash SG&A expenses in the fourth quarter are down approximately 5% from the third quarter, demonstrating our intent to manage our expenses tightly. Notwithstanding that, the quarterly SG&A will rise in 2026 with the increase in the size of the sales team we have discussed and getting Xepi and Xeglyze ready to launch.

In all instances, we expect to closely manage our expenses. The quarterly cost of the additional sales team and other support personnel will be approximately $1 million per quarter, and the cost for the Xepi and Xeglyze launch prep are both in the low single digit millions each for the entirety of 2026. Of course, the royalty amount will grow in direct proportion to the growth in net revenues. Netting this out, our quarterly net operating loss improved from a loss of $15.4 million during the third quarter to $12.0 million in the fourth quarter. On an adjusted EBITDA basis, our EBITDA loss improved from a loss of $11.5 million in the third quarter to a loss of $9.0 million in the fourth quarter.

Our balance sheet as of December 31st is strong, with $18.0 million in cash and $8.9 million in accounts receivable, up from $14.2 million in cash and $8.0 million, respectively, at the end of the third quarter. We added to our $18 million cash balance at December 31st with the issuance of $30 million in term debt in January 2026. I will discuss the terms of the debt issuance in more detail shortly, but I wanted in the meantime to note that the additional capital from the term debt gives us comfort going forward with our cash balance and hitting our goals and cash flow generation. I would also like to provide some insight into some of the specific line items on the balance sheet and income statement.

On the balance sheet, the $3.8 million in other short-term liabilities and the $30.1 million in other long-term liabilities are largely the result of the fair value assessment of the future royalty obligations. These are not general obligations, and the amounts related thereto will be recognized with the payment of actual royalties resulting from actual net sales. On the income statement, we booked a non-cash expense in the amount of $15.0 million attributable to the fair value assessment of the convertible notes issued in November. The full breakdown is available in the 10-K, but the expense is largely attributable to a fair value valuation of the future royalty streams and a beneficial conversion feature associated with the convertible notes. The note holders are entitled to royalties on the future sales of Xepi and revenues from the Japanese license for ZELSUVMI.

The beneficial conversion feature is associated with a conversion price relative to our market price, and as our stock is fairly variable, the quarter-over-quarter valuation could potentially swing considerably. As Scott referenced earlier, we entered into a $50 million term debt with Horizon in January, of which we drew $30 million. The debt has a 5-year term with 3 years of interest only and has an interest rate of prime plus 3.75%, currently at 10.5% in total. We can draw upon additional capital upon reaching certain milestones, but based on our current business plan, have no expectations of needing to or actually doing so. Regarding our capitalization, as of 12/31/2025, excluding the convertible notes, we had 8.9 million shares of stock outstanding on an as-converted basis.

This is comprised of approximately 3.2 million shares of common stock outstanding and 5.7 million shares of common stock underlying our Series A and Series C convertible preferred stock. Both of the Series A and Series C have fixed conversion prices with no down round protection, no special voting rights, and no paying or accruing dividends. Other than the warrant for 65,488 shares of common stock issued to Horizon as part of the term debt, there has been no change in our capitalization since the end of the year.

Were the convertible notes to convert to common stock at the conversion price, we would issue approximately 605,000 shares, leaving us with approximately 9.5 million total shares of common stock outstanding on an as-converted basis. Summing it up, we believe we have made excellent progress and continue to maintain good fiscal discipline and act as wise stewards of our investors’ capital. With growing revenue, tight controls on expenses, and revenue from new product introductions, we believe we’re in a strong position for solid future growth and ultimately positive cash flow and profitability. I will now turn the call back to Scott to discuss some key points regarding our future progress and thoughts.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Thank you, Frank. In closing, I would now like to highlight a few key points regarding our strategy and path forward for Pelthos. To begin, we are extremely pleased with the success of the ZELSUVMI launch and the financial results to date. The rapid increase in prescriptions during our Q3 2025 launch paid for our initial sales force in slightly over two months, justifying the expansion of the sales force this quarter and our drive to cash flow. As we remain early in our launch, we have not yet provided discrete revenue and EPS guidance. Overall, we remain extremely confident about our revenue growth trajectory and believe that our current cash balance provides the runway to execute on our business plan. Furthermore, we are extremely happy to have acquired two new novel FDA-approved products that are near perfect supplements to ZELSUVMI.

While we expect ZELSUVMI to remain the main driver of revenue growth, we believe that with the acquisition of Xepi and Xeglyze, we now have a portfolio of products that will add to our revenue growth margins and profit. I want to thank you for joining us today to learn more about the Pelthos story. We’ll now turn the call over to the operator for any questions.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We do ask that you please limit yourself to one question and one follow-up. Again, that’s star one to register a question at this time. Our first question today is coming from Thomas Flaten of Lake Street Capital Markets. Please go ahead.

Thomas Flaten, Analyst, Lake Street Capital Markets: Hey, good morning, guys. I appreciate you taking the questions. Maybe for Frank, the step-up in the gross to net discount from, you know, where you were 29% up to the mid to upper. I understand the first quarter you might get, you know, hit with a lot more copay assistance, etc. Can you maybe factor out for us what the other components of that increase are gonna look like? I’m assuming it’s contracting, but if you could help with that’d be great.

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Sure. Thank you, Thomas. There’s a couple of components to it, one of which is the contract that we signed in December. That’ll start impacting GTN from December, and obviously, we’ll have a full quarter’s effect in this quarter. Additionally, as we pointed out, the co-pay cards, and we have had slightly higher utilization on our Medicaid business than we had originally forecasted. I think those three are the primary drivers to the increased GTNs.

Thomas Flaten, Analyst, Lake Street Capital Markets: Great. Then, for my follow-up, anything you can share on the competitive dynamics between yourselves and Ycanth counter-detailing. What are you hearing from physicians, maybe even from patients?

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Yeah. Hey, Thomas, it’s Scott. I’ll provide a little bit of background then Sai will also fill in the gaps for me. Anyways, we still believe this is a large market that both of us can do quite well in. Obviously, our uptake’s been exceeding our expectations and a lot of positive feedback from offices, HCPs, and patients about the efficacy, the ability to treat at home for the first time. Parents even saying they just like to be able to have control and do something versus sitting back and waiting. We view them as, you know, very different products.

One’s in an office treatment, kind of, you know, multiple visits to the office versus, you know, being able to treat it in the privacy of your own home and probably more convenient, not having absenteeism going in. I’ll let Sai maybe add a little bit more to those comments.

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Sure. Thanks, Scott. Good morning, Thomas. Thanks for the question. Just to add on to Scott’s commentary, we firmly believe our positioning for ZELSUVMI is as a first-line monotherapeutic option. How we detail with practitioners and how it’s positioned for patients is that it can and should be used first line. Now, as an HCP, within their current practice dynamics, choose to potentially use us in combination or use other procedures that are out there beyond the traditional competitor. That’s why, you know, that’s their decision as a HCP practitioner. But we don’t perform any sort of counter-detailing strategy. This is truly where we’re positioned as a first-line monotherapeutic option for HCPs and patients.

Thomas Flaten, Analyst, Lake Street Capital Markets: Great. Thanks, guys.

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Thank you.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Thanks, Thomas.

Operator: Thank you. Our next question is coming from Brandon Folkes of H.C. Wainwright & Co. Please go ahead.

Brandon Folkes, Analyst, H.C. Wainwright & Co: All right. Thanks for taking my questions and congrats on all the progress. Two from me. Yeah, a few multi-parts, but I’ll keep it to two. So, you know, as we look out to 2026, can you just talk about the growth drivers in terms of breadth versus depth of prescribing? You know, with adding the additional 14 reps, should we think about breadth still being perhaps the biggest growth driver in 2026 for ZELSUVMI? And, you know, where do you think you could get the high prescribers to write in terms of number of prescriptions? Or maybe asked another way, how concentrated is the high decile molluscum prescriber?

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Thanks, Brandon. This is Scott. I’ll give you a very quick overview, and then maybe Sai dig a little deeper on the prescribers. For me, when we look at it, the key drivers, first off, the PBM contract, we’re seeing a really nice impact there. To give you some metrics, we look at Q4, the total number of prescriptions, we already surpassed that after February, so we still have another month and it’s gaining momentum. We anticipate that to have nice impact. Sai mentioned in his prepared comments that, you know, we added 14 reps, and really probably 5 or 6 have only been in the field a few weeks.

The ones that are there are, if you looked at their body of work, they’re already paying for themselves just literally four or five weeks into the world. They’re definitely having an impact. There was some business there, but it’s been nice to see the quick uptake there. You know, the other thing that we see, we had in our comments that typical drop-off in unique patients seeking treatment November, December, and that’s due to typically offices not being open. This is an acute drug. The weather, we think it reduces the numbers. It typically starts bouncing back in January.

Didn’t this January as much as it usually does, but we anticipate the rest of the year, March through really October, being very strong as far as the increase of in-patients being seen. Anyways, those are drivers for us, just even more patients in the funnel. Then I’ll pass over to Sai a little bit more detail on the prescriber base.

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Yeah. Thanks. Yeah. Hi, Brandon. Just to add on, I think the perspective we have for the first part of your question as it pertains to breadth versus depth, yes, we’re still very much in gathering more prescribers as a big part of our strategy. Breadth being eight months into our launch still is a big component of ours, and we are growing new prescribers week over week, as I shared. We’re seeing that, though, as a really high marker for us and a key performance indicator as we move forward, especially with the newly expanded sales force. From a concentration standpoint, we definitely have a cohort of, you know, larger prescribers. It is spread geographically, so it’s not concentrated to one particular state or particular region.

That continues to be our main focus for the entire field force, and for that matter, the entire promotional mix that we have, you know, growing that depth among top prescribers and growing the cohort of early prescribers to get to that next point of depth is a bigger part of our strategy.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Yeah. The one other data point I’ll share is we’re approaching 4,000 unique prescribers through March sixth. So we’re just about 70 or 80 underneath that. So we’ve seen really nice growth in that. Importantly, the repeat prescribers is trending quite well also every week. It’s been growing week over week.

Brandon Folkes, Analyst, H.C. Wainwright & Co: Thanks very much. Very helpful. My second question again, can you just maybe talk about unaided awareness of ZELSUVMI? In particular in terms of sort of where you think that could get to by the time you launch Xepi later this year, you know, should we think about ZELSUVMI?

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: I’m sorry.

Brandon Folkes, Analyst, H.C. Wainwright & Co: Oh, can you hear me?

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Brandon, you broke up on the first part of your question. We didn’t really catch that.

Brandon Folkes, Analyst, H.C. Wainwright & Co: Can you hear me?

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Yeah, we can hear you.

Brandon Folkes, Analyst, H.C. Wainwright & Co: All right. Can you talk about unaided awareness of ZELSUVMI? How are you thinking about where you can get that to when you launch Xepi later this year? With this growth in prescribers, should we think about ZELSUVMI remaining as the number one in the bag across all the prescribers that you’re calling on? Could we see Xepi in the number one position to some prescribers versus ZELSUVMI?

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Thanks, Brandon. This is Sai. From an unaided awareness perspective, the bigger part of our executional strategy, as we’ve shared, in addition to the great work that’s happening with the field force, is a lot of digital promotions. As we shared, we have a plethora of digital media that’s out there from an awareness standpoint, but we’ve also done a tremendous amount of work with some, let’s call it forced media with our YouTube commercial. Those elements continue to drive a tremendous amount of awareness as we go forward. As I shared in the prepared remarks, those efforts are actually prompting patients and caregivers and even adult patients to go in and ask for the product, which is very DTC-like of some bigger brands that are out there.

You know, from a perspective of then moving, you know, into the view of our proverbial commercial bag, we do intend to have ZELSUVMI as the first position as we go forward, you know, towards the Xepi launch and beyond. Truly, our promotional synergies there really come to fruition and as a big benefit for our entire commercial approach going forward.

Brandon Folkes, Analyst, H.C. Wainwright & Co: Great. Thank you very much, and congrats on all the progress.

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Thank you.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Thanks again, Brandon.

Operator: Thank you. Our next question is coming from David Amsellem of Piper Sandler. Please go ahead.

David Amsellem, Analyst, Piper Sandler: Thanks. Just a couple from me. I know you addressed seasonality to some extent, but help us better understand how pronounced the seasonality is, I guess, in a good way, during the warmer weather months. In other words, thinking about cadence of volumes this year, should we think about 2Q and 3Q essentially being the high watermark for volumes? That would be helpful color. That’s number 1. And then number 2, just stepping back regarding the overall business. You have Xepi, you have Xeglyze. There are obviously launches that are coming. How do you think philosophically about the optimal number of products in the sales force bag.

Are you continuing to prioritize the addition of other assets where you can leverage the commercial infrastructure, particularly given that you’ve got two launches coming up and obviously you have the recent launch of ZELSUVMI? Thanks.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Yeah. Thanks, David. I’ll jump into that and if anybody else wants to comment, they can also. Yeah, seasonality is important with this. We’ve learned as we’ve spent our first eight months now in the market. Looking at claims that you can get from Veeva on a monthly basis, you know, I’ll give the exact numbers that we have at this point. They backfill a little bit still, but like November and December, you’re looking at like 34,000, 33,000 unique patients. Then last year in like March, April, May, 43,000, 47,500, 46,000. It’s pretty pronounced difference. You know, January did not bounce back, at least it hasn’t as much.

It’s still probably somewhere between 10%-15% less than what we had seen in previous years as far as unique patients. I think that was the extreme weather that came about. Important though is we’ve really started to see a nice trend since after the holidays, and, you know, putting us in a great position for growth for this year. And you know, I think part of it also is we were early in launch and we’re still building prescriber base, and as we have a wider prescriber base, we’ll be able to endure and grow through the down months, I think, ’cause we have more shots on goal. Now, philosophically, obviously we have three highly complementary products that we were really opportunistic on those.

They became available to us, and we got them for I think you know a really favorable. We can get a nice ROI on long term. You know, we’re staggering those launches, so we can always focus on ZELSUVMI. The thing we gotta no matter what we’re doing here, we gotta make sure we execute there. You know, if we did have something that presents that made sense, we would look at it. There’s no doubt. You know, we’d be opportunistic there. The other thing we’re still evaluating also, as a reminder, our NITRICIL platform, which ZELSUVMI is built around. There’s a lot of work that’s been done there previously.

The rights to many of those different indications and the IP there sits within Ligand, so we would have to in-license that, but we are evaluating that. That’s more long-term. Those would, you know, be programs that would take time and, you know, if and when we were to commit to something, obviously we’d make everybody aware of that. That, again, that’s more a long-term thing that we’re looking at right now, so.

David Amsellem, Analyst, Piper Sandler: Okay. Helpful. Thanks.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Okay. Thanks, David.

Operator: Thank you. Our next question is coming from Jeff Jones of Oppenheimer. Please go ahead.

Jeff Jones, Analyst, Oppenheimer: Good morning, guys, and thanks for taking the question. I guess, as you look to your experience from your first six months in the market, with pediatricians, dermatologists, can you speak to sort of where you’re seeing uptake? Is it among pediatricians who haven’t had an option? What are you seeing from dermatologists? Maybe what kind of pushback do you get when you get it? Maybe comment on how your strategy adapts now that you’re six months in. Thank you.

Sai Rangarao, Chief Commercial Officer, Pelthos Therapeutics: Thanks. Good morning, Jeff. This is Cy. I’ll take that question first. From an adoption perspective, as expected, being a cutaneous condition, we do see fast adoption amongst the dermatology community and then concentrated within there are pediatric dermatologists and then the NP/PA community that serves that dermatology specialty. We are seeing better than expected uptake within the pediatrician community. It’s definitely where they see it first line, and they’re the first to truly diagnose it, either before referral or the decision to actually treat. I think to date, they have not really had that, you know, first and only at-home prescription treatment option till ZELSUVMI launched. I think the uptake is very much in line with a need for a tool within the toolkit to serve the disease state.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: We are seeing, again, better than expected, traditional uptake there. As it pertains to your second question with pushback, as with any launch, you know, within this therapeutic category or adjacent or others for that matter, it’s typically, you know, going to be market access related or access to medication. To date, outside of the typical friction that you might see from a launch, there have been no, you know, really truly major hurdles.

From an enablement standpoint within our field force, within everything else that we conduct and execute upon within our market access team broadly and patient services team broadly, we’re really able to get over those hurdles by offering strong copay assistance, as we mentioned, other support mechanisms, as it pertains to the PA process or medical necessity process should it get to those steps. We are surely and truly seeing the uptake occur because we are getting over those hurdles literally every day. Jeff, I’ll add that our approval rates early in launch are quite good based on past experiences and, you know, we went in with this strategic plan to contract where we had friction. We’ve done that with one plan.

There may be, you know, a plan or two still that we would like to address going forward, but, you know, we gotta make sure they make sense, from rebates and whatnot. Going back to like the pediatricians, I think

The only thing there is really getting them to take action. If you think about it, they, you know, looking at claims data, they really haven’t really treated a lot in the past with the destructive modalities, maybe 10%-15% of the time. A lot of times they’re wait and see or prescribing things like topical steroids or antibiotics that really don’t treat the virus. Now that there’s something available, it’s getting them to feel comfortable. Fortunately, we have not only an efficacious product, but I think a very safe product as well, based on the AE profile that fits really well in their practice. What enables them to actually go and treat now, which, you know, is kind of a first time for them.

James Molloy, Analyst, Alliance Global Partners: Greatly appreciate it. Thanks, guys.

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Thanks, Jeff Jones.

Operator: Thank you. Once again, that’s star one if you’d like to register a question at this time. Our next question is coming from James Molloy of Alliance Global Partners. Please go ahead.

James Molloy, Analyst, Alliance Global Partners: Hey, guys. Thank you very much for taking the questions. I had a question on, can you talk a little bit about the gross-to-net discount in the quarter? And then I see, you know, SG&A up pretty sharply, even taking out the non-cash and the one-timers. Is this kind of the jump we should be expecting the SG&A to do as sales ramp or at some point, does SG&A kind of level off and sales ramp, sales ramps exponentially, you know, off that base?

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Good morning. Thanks, James. This is Frank. I’ll take the second item first. With respect to the SG&A, there’s the non-cash and non-operating components to it. With respect to the fourth quarter, actually cash SG&A went down, and that strips out the non-cash equity compensation component. It also excludes one-time items that we were unable to capitalize for both of the convertible note and the term debt. Most importantly, with respect to looking at it going forward, there are two aspects of it of note. One, included in there is the royalty obligation. To the extent that revenues continue to rise, the royalty obligation and payment will rise with it. That will rise.

The other thing is, as we chatted about, there will be additional expenses that are layered in Q1 associated with the increase in the sales team. A couple of headcount associated with the launch of Xepi and Xeglyze. Throughout the course of the year, there’ll be low single-digit $ million in total for prep costs associated with the launch for Xepi and Xeglyze, primarily outsourced manufacturing consultants, et cetera. That sort of is the baseline we expect going forward. With respect to the operating cash component, I think we’ll, you’ll see a rise in Q1 associated with those items, and then we’ll remain largely flat throughout the year. It’ll move up a bit towards the end of the year as the launches get closer. The variable component will be the royalty payment.

With respect to the GTN, I’ll stop. Do you have any questions on that, Jim?

James Molloy, Analyst, Alliance Global Partners: No, that’s covered. Thank you.

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Okay. With respect to the GTNs, the GTNs moved up in Q4 as we had expected, and that’s really attributable to slightly higher Medicaid usage than we had originally forecast and the execution of the PBM contract that launched on December first. We do expect that over time, that number will continue to increase to the mid- to upper-mid-30% range with additional co-pay card usage, the PBM contract and potentially just some other expenses in our go-to-market campaign.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Yeah. The only thing I’ll add, Jim, is that, you know, from my experience, you know, 28.7% GTN, you know, our second quarter in the market is quite good, especially when you look at the space we’re in. You know, we’re really excited about the fact that we’ve been able to meet that type of GTN. There’ll be things we’re trying to pull down as we do more volume. DSA fees, the fees to the wholesalers could come down. I think that 35% to that kinda mid-to-high 30% GTN range gives us room even to do other contract if we, you know, chose to do so. Okay, maybe a quick follow-up, if I could. When do you guys-

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Sure.

James Molloy, Analyst, Alliance Global Partners: I know you haven’t given any guidance yet given second quarter of launch, but do you have any internal expectations on when so ZELSUVMI on an all-in basis becomes profitable? I know you got a couple new launches too coming up here in the next year, next over the next couple years. When does Pelthos itself overall turn profitable, do you think?

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: With respect to your first question, ZELSUVMI, frankly, as you know, we are off to a very strong start and on an absolute basis, for both it and the company, to the extent there are no changes to our business plan or our outlook, we do expect that toward the end of the year we will cross over the line. That does, you know, it does not contemplate any change to the business plan. As Scott referenced earlier, there might be a NITRICIL platform opportunity, or any other changes we make to the business plan or changes in the outlook. Clearly, we have a very strong feeling for the path forward and think at the end of the year we’ll probably cross over that line with what we know now in our current business plan.

James Molloy, Analyst, Alliance Global Partners: Thank you for taking the questions.

Frank Knuettel II, Chief Financial Officer, Pelthos Therapeutics: Thanks, Jim.

Operator: Thank you. At this time, I’d like to turn the floor back over to Mr. Plesha for closing comments.

Scott Plescia, Chief Executive Officer, Pelthos Therapeutics: Thank you, operator. I want to reiterate that even though it’s early days, Pelthos is uniquely positioned to capitalize on a large addressable market with the first FDA-approved at-home prescription product for MC. We’ve built a strong foundation for the growth of ZELSUVMI, and with Xepi and Xeglyze, two highly synergistic products launching by the end of 2026 and mid-2027 respectively, we believe that there are strong growth opportunities before us. Finally, I’d like to thank the employees at Pelthos for all their hard work and dedication in supporting patients, caregivers, and healthcare providers. Thank you again for joining our call and we look forward to updating you on our continuing progress in the future. Have a great day.

Operator: Ladies and gentlemen, thank you for your participation. This concludes today’s event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.