The pharmaceutical landscape is set to change with Ligand Pharmaceuticals' announcement of a strategic merger between its subsidiary Pelthos Therapeutics and Channel Therapeutics Corporation. The deal, which includes a substantial $50 million equity investment, aims to accelerate the commercial launch of Zelsuvmi (berdazimer) topical gel, 10.3%, the first FDA-approved at-home treatment for molluscum contagiosum.
Ligand will contribute $18 million to the investment, with the remaining $32 million coming from a consortium of strategic backers led by Murchinson. The merger is expected to close in summer 2025, subject to regulatory and shareholder approvals.
Revolutionary At-Home Treatment for a Common Viral Infection
Molluscum contagiosum affects an estimated 16.7 million people in the United States alone. This highly contagious poxvirus infection presents as raised, flesh-colored or red bumps that can appear anywhere on the body and typically persists for months or even years.
Zelsuvmi, approved by the FDA in 2024, represents a significant advancement in treatment options. It is the only prescription product authorized for at-home use in both pediatric and adult populations aged 1 and older.
"There is a significant unmet medical need for an easy-to-use, safe, and efficacious treatment option for molluscum that can be applied by patients, parents, or caregivers at home via prescription," said Scott Plesha, CEO of Pelthos Therapeutics, who will assume the role of CEO of the combined company.
What distinguishes Zelsuvmi from traditional treatments is its non-invasive application method, eliminating the need for in-office cryotherapy, curettage, or cantharidin treatments that are often uncomfortable and require multiple office visits.
Innovative Nitric Oxide Technology
The effectiveness of Zelsuvmi stems from Pelthos' proprietary Nitricil platform, which harnesses nitric oxide's broad-spectrum antiviral and antimicrobial properties while ensuring controlled, sustained topical delivery.
Ligand Pharmaceuticals played a crucial role in developing this technology, having acquired the Nitricil platform from Novan, Inc. in September 2023 and subsequently guiding the berdazimer program through to FDA approval.
Strategic Leadership and Future Direction
The merger will create a company with dual focus areas: commercializing Zelsuvmi while supporting the continued development of Channel's sodium channel NaV1.7-focused pain therapeutics.
Under the terms of the agreement, Channel will acquire all issued and outstanding shares of Pelthos. The leadership structure will see Scott Plesha as CEO, while Channel's current CEO, Frank Knuettel II, will transition to the role of Chief Financial Officer.
"We are very excited about the merger with Pelthos," said Knuettel. "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."
The Board of Directors will include representatives from both companies, Ligand, and independent members aligned with Murchinson.
Addressing a Significant Public Health Concern
Molluscum contagiosum disproportionately affects children, who can contract the virus through direct contact with infected individuals or contaminated objects such as towels, toys, furniture, and swimming pools. Adults with weakened immune systems or those who are sexually active with infected partners are also at higher risk.
Beyond the physical symptoms, patients often experience significant psychosocial impact due to the visible nature of the lesions and associated stigma. Secondary complications can include itching, bacterial infections from scratching, and atopic dermatitis.
The introduction of an at-home treatment option addresses these concerns while reducing the burden on healthcare systems by decreasing the need for repeated in-office procedures.
Market Potential and Industry Impact
The merger positions the combined company to capitalize on the substantial market opportunity for molluscum contagiosum treatment while advancing Channel's pain management pipeline.
Analysts view this strategic move as part of a broader trend in the pharmaceutical industry toward developing non-invasive, patient-administered treatments that improve quality of life while reducing healthcare costs.
For Ligand Pharmaceuticals, this transaction aligns with its business model of supporting the clinical development of high-value medicines through financing and licensing technologies, creating diversified revenue streams for stockholders.
As the combined entity prepares for the commercial launch of Zelsuvmi, healthcare providers specializing in dermatology and pediatrics will soon have a new option to offer patients suffering from this common but challenging viral infection.
