Pelthos Therapeutics to Merge With Castle Creek, Adding Cell and Gene Therapy Pipeline; PTHS Falls 39%

Pelthos Therapeutics (PTHS) on Friday announced a definitive agreement to merge with Castle Creek Biosciences, creating a biotechnology company focused on treatments for serious skin diseases. The combined company will operate as Pelthos Therapeutics and remain listed on the NYSE American under the ticker PTHS. Shares were trading at $10.08, down 39.09%. Under the terms, Castle Creek stockholders will receive 5.2 million Pelthos shares at closing, or about 32.5% of fully diluted shares, plus up to 5.8 million additional shares upon FDA approval of lead candidate D-Fi and up to $300 million in milestone payments. That includes $50 million on specified Phase 3 endpoints and up to $250 million tied to first commercial sale and net sales milestones. Castle Creek holders will also receive 80% of net proceeds from any priority review voucher. D-Fi (dabocemagene autoficel; FCX-007) is an injectable, gene-modified cell therapy in Phase 3 development for dystrophic epidermolysis bullosa, a rare inherited skin disorder. It holds Orphan Drug, Fast Track and RMAT designations. The transaction, approved by both boards, is expected to close by the end of the first quarter of 2027, subject to Castle Creek stockholder approval. Scott Plesha will remain CEO and Peter Greenleaf will serve as Executive Chair.