EXCLUSIVE: Ligand Subsidiary Pelthos Therapeutics To Combine with Channel Therapeutics Creating Pain Medi

Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) and Channel Therapeutics Corporation (NYSE:CHRO) on Thursday signed a definitive merger agreement to combine Ligand’s wholly owned subsidiaries, Pelthos Therapeutics Inc. and LNHC, Inc. (collectively Pelthos) with CHRO Merger Sub Inc., a wholly owned subsidiary of Channel.

The merger will be supported by $50 million in capital raised from a group of strategic investors led by Murchinson.

Under the merger agreement, Channel will acquire 100% of Pelthos’ issued and outstanding equity interests, change its name to Pelthos Therapeutics, and trade on the NYSE American exchange under the ticker PTHS.

Also Read: Analyst Sees Big Upside In Ligand’s Capital-Efficient Biotech Strategy

In connection with the transaction, Ligand has agreed to invest $18 million in the combined company, and the Investor Group has agreed to invest $32 million in a total of $50 million.

Upon completing the transaction, Scott Plesha, CEO of Pelthos, will become CEO of the combined company, and Frank Knuettel II, CEO of Channel Therapeutics, will become CFO. The transaction is expected to close in the summer of 2025.

The combined company will initially focus on accelerating the commercialization of Pelthos’ Zelsuvmi (berdazimer) topical gel, 10.3%, for Molluscum contagiosum infections in adults and pediatric patients one year and older.

The U.S. Food and Drug Administration (FDA) approved Zelsuvmi in 2024. It is the first and only prescription therapy for molluscum infections approved for use at home by patients, parents, and caregivers.

Ligand is entitled to a 13% royalty on worldwide sales of Zelsuvmi.

The combined company will also retain Channel’s existing NaV 1.7 development programs for various types of chronic pain, acute and chronic eye pain, and post-surgical nerve blocks.

In December 2024, Channel Therapeutics announced that it achieved its endpoints in two pre-clinical in vivo models of the company’s nerve block formulations for acute pain, showing material improvement in efficacy and duration over the existing standard of care, bupivacaine.

An update on the Channel’s animal efficacy study for its eye pain program will be forthcoming.

“This transaction presents a compelling opportunity to launch a commercial-ready product, with significant financial backing from Murchinson, that has the potential to deliver both near and long-term value to our shareholders,” said Todd Davis, CEO of Ligand.

Frank Knuettel II, CEO of Channel Therapeutics, commented, “We have performed extensive due diligence on the Zelsuvmi market opportunity and their team and operations, and we believe this is an extraordinary opportunity for current Channel shareholders. Strategically, it provides the potential for near-term revenue generation from an FDA-approved drug, the opportunity to advance Channel’s existing NaV 1.7 programs, and expanded capitalization from strong, long-standing investors.”

Molluscum contagiosum is a poxvirus and one of the most common skin infections, afflicting an estimated 16.7 million people in the U.S.

Price Action: LGND stock is up 2.08% at $106.80 during the premarket session at the last check Thursday, and CHRO stock closed at $1.26 on Wednesday.

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EXCLUSIVE: Ligand Subsidiary Pelthos Therapeutics To Combine with Channel Therapeutics Creating Pain Medicines Focused Entity