In a significant move in the biopharmaceutical landscape, Ligand Pharmaceuticals Incorporated (Nasdaq: LGND) and Channel Therapeutics Corporation (NYSE American: CHRO) have entered into a merger agreement that aims to combine Ligands wholly owned subsidiaries, Pelthos Therapeutics Inc. and LNHC, Inc. (collectively referred to as Pelthos), with Channels wholly owned subsidiary, CHRO Merger Sub Inc. This merger, officially announced on April 17, 2025, is set to raise $50 million in equity capital from a group of strategic investors led by Murchinson, positioning the newly formed entity to focus on the commercialization of Pelthos groundbreaking product ZELSUVMI.

ZELSUVMI is a novel drug that has been designated by the U.S. Food and Drug Administration (FDA) as the first and only prescription medication specifically approved for at-home treatment of Molluscum contagiosum infections, which typically affect both children and adults. The anticipated closing date for this transaction is planned for the summer of 2025, subject to customary closing conditions.

The merger is strategic, aiming to capitalize on the combined strengths of both companies. The new entity will operate under the name Pelthos Therapeutics Inc. and will be traded on the NYSE American under the ticker symbol PTHS. With this merger, Ligand will receive a 13% royalty on worldwide sales of ZELSUVMI, helping to create a lucrative revenue stream.

Todd Davis, CEO of Ligand, expressed enthusiasm about the merger, stating, This transaction presents a compelling opportunity to launch a commercial-ready product with significant financial backing from Murchinson. Our rigorous efforts in restructuring to acquire Pelthos assets and our success in achieving FDA approval for ZELSUVMI highlight our commitment to bringing innovative therapies to market.

Frank Knuettel II, CEO of Channel Therapeutics, echoed this sentiment, emphasizing the extensive due diligence they conducted on the ZELSUVMI market opportunity. We believe this merger presents an extraordinary chance for Channel shareholders, facilitating immediate revenue potential from an FDA-approved drug while advancing our existing NaV 1.7 programs, he stated.

Molluscum contagiosum is a common viral skin infection caused by a poxvirus, affecting approximately 16.7 million people in the United States alone. It is particularly prevalent among children and can also affect adults with compromised immune systems. The infection is characterized by raised, flesh-colored bumps that can appear anywhere on the body, causing not only physical discomfort but also social stigma due to their visibility.

Scott Plesha, CEO of Pelthos, highlighted the urgent need for effective treatment options for molluscum. ZELSUVMI is designed to be an easy-to-use, safe, and effective topical treatment that can be applied at home, thereby reducing the reliance on invasive office procedures, he mentioned. This aligns with the companys mission to provide innovative solutions for patients with significant unmet medical needs.

Under the terms of the merger agreement, Channel will acquire 100% of the issued and outstanding equity interests of Pelthos. Ligand has committed to investing $18 million into the combined company, while Murchinson will contribute a total of $32 million. Post-merger, Scott Plesha will lead as CEO, with Frank Knuettel as CFO, and a diverse Board of Directors will oversee the companys strategic direction.

The merger is supported by a prominent group of advisors, including Latham & Watkins LLP serving as lead counsel for Ligand and Raymond James & Associates, Inc. as the financial advisor. This collaboration underscores the complexity and ambition behind the transaction, which is expected to significantly enhance both companies market positions.

As the biopharmaceutical field evolves, this merger not only represents a pivotal moment for Ligand and Channel but also for patients struggling with molluscum contagiosum, as it potentially paves the way for more accessible and effective treatment options.

For more information about ZELSUVMI and its prescribing information, visit