Pelthos Therapeutics Inc.

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 31st, 2025. 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.

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 in annual operating results and highlights. Joining me today are Frank Nuttall, our CFO, and Cy Rangero, our Chief Commercial Officer. The fourth quarter of 2025 was an exciting and busy one for Peltos 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, Zelsudmi, following its launch in the third quarter of 2025. Second, we acquired two highly complimentary FDA-approved products. Third, we substantially bolstered our balance sheet and dramatically reduced our quarterly operating and non-GAAP net losses. Frank and Cy will provide a more detailed look at the quarter's LSUMI 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 the 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 inventorying 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, Zelsubme. As a reminder, Zelsubme 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. Zelsovimi 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 Zelsovimi, other topical treatments or destructive modalities would require patients to make multiple visits to a healthcare practitioner. These in-office treatment alternatives include curatage, 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 pox virus that primarily affects children one year of age or older, with ICD-10 claims indicating that 75% to 80% of MC patients are 10 years of age or younger. Roughly 16 million people in the United States are affected by Moleskine, 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 five 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 DelSumi. Virtually all the revenue in Q4 was the result of unit suspense 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 $.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 Zalesubi 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 are significant know-how and 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 Zestubi's revenue. Regarding our product acquisitions, our first acquisition was of Zepi. Zepi is a novel FDA-approved topical treatment for emphytego that addresses a critical unmet need in antibiotic-resistant skin infections caused by staph and strep infections most commonly affecting children. Emphytego 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 Zepi is a highly complementary product as it mostly treats children that are treated by the same healthcare providers as Zelsudny. Importantly, this allows us to leverage our commercial infrastructure, including our sales force. We acquired the U.S. rights to Zepi 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 Zeglise in December for the treatment of head lice. Zeglise is also a novel FDA-approved product that is also highly complementary with both of Zelsubi and Zepi 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, Zeglyze requires only one application. We believe that this will support the growth of Zeglyze to becoming the standard of care when prescription medications are required and that the return on investment for Pelphos will be substantial. At the operational level, we are standing up manufacturing for Zeglize and expect to bring it to market in late Q2, 2027. Both Zepi and Zeglize will have tremendous call overlap for existing Salesforce, providing the company with greater operational and financial leverage from our existing team and infrastructure. Supporting the continued rollout of Zelsumi and the acquisition and launch of Zepi and Zeglies, 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 the Zalzumi Census launch in July of 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 EBITDA losses and we'll continue to evaluate and optimize our commercial strategy as we want to seize every opportunity to deliver sustainable, long-term shareholder value for Pelto shareholders. I'll now turn it over to Sai to provide more specifics on the results of the Zelsudmi launch and key performance indicators.

Thank you, Scott. Good morning, everyone. I'm pleased to provide an update on our Q4 2025 performance following the Q3 2025 launch of Zelsudmi. 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 Zelsupinef. 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 Metis data. We generated a 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 values Zalzuvmi provides in the market and portrays the significant growth we expect going forward. Our belief remains strong that Zalzuvmi is revolutionizing the treatment of MC and becoming the first-line treatment of choice. From January 1st, 2026 through the week ending March 6th, 2026, we recorded 5,297 prescribed units for Zelsovim, 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 HCD writers. Relatedly, we are closely and steadily managing our channel inventory to make certain there is Zelsuvme available for patients and to minimize stockouts 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 three to four week inventory level. We launched SellSueveMe 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 Zelsuvme almost immediately and helped numerous patients gain the clinical benefits of Zelsuvme 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 Zelsumi, 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 Zelsovimi 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 copay voucher program. With the latter, it is our goal to pay down with the co-pay card program so the 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 and 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 Zalzudmi. 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 Zelsuvme 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 Maleska 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 Zelsuthine. 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 Zalzumib 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. And with that, I now turn the call over to Frank to discuss our financials. Frank?