Pelthos Therapeutics reports $7.1 million in Q3 revenue and plans for aggressive sales force expansion to capitalize on strong demand for Zelsudemi.

OPERATOR - (00:01:46)

You. Greetings and welcome to The Peltos Therapeutics Third Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mike Moyer. Please go ahead.

Mike Moyer - Moderator - (00:02:23)

Good morning everyone and welcome TO Peltos Therapeutics Third Quarter 2025 Financial Results Conference Call. Peltos issued a press release today announcing its financial results for the three and nine months ended September 30, 2025. A copy can be found in the investor relations tab. Investor Relations tab on the corporate website@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 may represent management's estimates and 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 obligations 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 call over to Scott Plesha, Chief Executive Officer. Scott, you may now begin. Thank you Mike Good morning and welcome everyone to Today's Call. We're delighted to be with you today and share with you our third quarter operating results and highlights. Joining me today are Frank Nettle, our Chief financial officer, and Cy Rangero, Peltos Therapeutics chief commercial officer to start the third quarter of 2025 marked a significant advancement in Peltos corporate development. In the beginning of the quarter we successfully closed both our acquisition of the Peltos business, at which time we commenced trading on the New York Stock exchange, and a $50 million pipe with ligand Pharmaceuticals, Merchants Unlimited and other investors to support the launch of zealsudeny. Shortly thereafter. That launch occurred with the introduction in mid July of Xalzudemi, the company's first commercial product. Xelsudemy is a novel topical nitric oxide releasing product indicated for the treatment of molluscum contagiosum or MC in patients 1 year of age and older for up to 12 weeks. Xelsudemy 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 are on the go. Additionally, we are pleased to follow up the launch of Zelsubme with The recently announced $18 million convertible notes financing and the acquisition of Zepi. This financing funded our acquisition of Zepi and will provide additional support the launch of zalsubmi. We entered into the convertible financing agreement with Ligand, Murchison and other investors, the same lead investors that invested our July pipe. Frank will provide more details on the convert, but I want to note that our investors continued support show their strong confidence in the successful launch and growth metrics of Xelsudemy and our strategy to build a portfolio of topical treatments for cutaneous infections. Zepi is a novel FDA approved topical treatment for Empetigo that addresses a critical unmet need in antibiotic resistant skin infections caused by staph and strep infections and most commonly affecting children. We believe that Zelsugme and Zepi are highly complementary products with the diseases they treat, mostly affecting children and they are treated by the same healthcare providers. Importantly, this allows us to leverage our commercial infrastructure including our sales force. We'll share more details on Zepi later, but for now our focus is on the continued strong growth of Zelsubme. Frank will provide a more detailed look at the quarter's reported financials. But before we get into further detail about MC and Zelsumi's commercial launch progress, I'd like to share a brief overview of our top line Results. As of September 30, 2025, we had $14.2 million in cash on the books and $8 million in accounts receivable on an operating basis. For the three months ended September 30, 202025 we generated $7.1 million in net product revenue driven by strong initial demand for Zels of ME and an operating loss of $15.4 million. Our GAAP net loss was 16.2 million representing $5.3 per basic and diluted common share on an as converted basis reflecting the conversion of our Series A and Series C shares. This is loss of $1.83 per share. In addition, Frank will break down the one time and non cash items as well as other financial metrics included herein. But importantly, we currently expect that with Zelsuvme's strong growth rate and a focus on responsible spending that we will achieve cash flow breakeven from operations before the end of 2026. Turning to the Disease state Molluscum contagiosum is a highly infectious condition caused by a pox virus that primarily affects children 1 years of age or older with ICD10 claims indicating that 75 to 80% of MC patients are 10 years of age or younger. Roughly 17 million people in the United States are affected by molluscum and on average there are 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 meantime to resolution is approximately 13 months and can last up to five years. During that time children are often ostracized and 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. Zelsuvme is a topical treatment that is applied once a day at home which represents an important shift in the treatment paradigm for MC due to the fact it is the only FDA approved molluscum treatment that can be administered at home or on the go by parents, caregivers and patients. Prior to the launch of Delsuomi, other topical treatments or destructive modalities would require patients to make multiple visits to a healthcare practitioner. These in office treatment alternatives include curettage, cryotherapy and blistering agents that can sometimes be uncomfortable and painful, especially in the sensitive areas of the body that MC often presents. In this current treatment landscape, our launch of Zelsubemi has gone very well and has exceeded our expectations in many key performance indicators. It's our continued vision that Xelsuvami will revolutionize the treatment of mc, become the first line treatment of choice resulting in it becoming the clear market leader for the treatment of mc. Based on my interaction with key opinion leaders and other practitioners, I believe this will be driven by physician and parent caregivers preference for safe and efficacious at home prescription based treatment solution. With our strong initial launch performance where the cost of the sales force was covered within nine weeks and now having an understanding of the uptake curve, we have made the strategic decision to expand our sales force. In our current sales force structure of 50 sales representatives, there are many large metropolitan areas in the country not covered. We believe that by adding 14 additional sales representatives in these markets we can further accelerate the growth of zelsu. We expect These incremental team members to be hired, fully trained and in the field by mid January. Finally, a note on manufacturing and our intellectual property portfolio. Unlike many smaller pharmaceutical companies, Peltos owns and operates a purpose built manufacturing facility for Xelsumi's active pharmaceutical ingredient known as API. Zelsumi is a nitric oxide releasing treatment based on the nitrosyl platform technology we license from Ligand and we are, we believe, the only company that has successfully reduced to practice the ability to reduce this gas to a topical gel. The know how and trade secrets associated with our manufacturing process complement our patent protection which currently runs to mid-2035. In addition, we have a patent term extension on file and may receive an extension of the patent life to Q3 2037. Based on our trade secrets and and patent protection, we have a broad IP moat around our technology which we believe provides us a lengthy Runway to build Xelsumi's revenue. In closing, we are very pleased with the receptivity to Zelsumi to date and the $7.1 million in net product revenue generated during Q3. TSAI and the Commercial team are doing an outstanding job of educating our customers on the benefits of Zalcudiny which has led to a high number of prescribers and a strong prescription growth of Zalcudeny. We remain fully committed to maintaining strict financial discipline and will 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. We feel strongly about the launch in these early days and continue mapping our strategy for the growth of Xelsumi in 2026 and beyond and the introduction of sales of Zeppe commencing in late 2026. I'll now turn it over to Sy to provide more specifics on the results of the Xelsumi launch and key performance indicators.

Sy Rangero - (00:11:31)

Thank you Scott Good morning everyone. I'm pleased to provide details on our Q3 launch and metrics while we are still underway. In the launch, our progress to date has gone better than expected. Shipments and prescriptions are running ahead of expectations with several HCPs and patients sharing their positive experiences with Zelsuvme. Digging into the shipment and prescription details, we shipped over 4,900 units to wholesalers and and close to 3,000 units to pharmacies. During the third quarter, 2,716 units were prescribed of Zelsudemy written by 1,169 unique prescribers as reported in Symphony Metis data. We carry this growth trend into Q4 with 2,189 units prescribed for the full month of October. That represents over a 41% increase in units prescribed from October over September. In fact, with seven weeks remaining in this quarter, we have already had more prescriptions written this quarter than in all of Q3. Our growth continued strongly through the month of October with an all time high of 516units dispensed during the final week. With our wholesale acquisition cost WACC for short for Zelsuvme at $1,950 per unit, we had an annual gross revenue run rate of approximately $52 million during that last week. Importantly, we are closely and steadily managing our channel load to make sure there is SELSUVME available for patients and to minimize stock outs at the wholesaler level. Led by our stellar market access and trade team, we ended the quarter with approximately four weeks of inventory on hand throughout the distribution system. We anticipate managing inventory on hand to the level of three to four weeks for future quarters. Digging into the payer landscape our Q3 activity does not include any payer contracts and we have experienced favorable prior authorization approvals. This is very healthy for a non contracted drug 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 xelsuvme being an acute treatment, payers have limit to their overall cost exposure and therapeutic programs largely aimed at children have a better approval profile. In general, while we have not initiated any commercial contracts, we have seen a number of favorable Medicaid wins with ZELSUVME being added to Medicaid formularies in the states of New York along with Texas and Alabama with no prior authorization form required. From a GTN perspective, we had very good GTNs during the third quarter. We anticipate exiting 2025 with GTNs slightly under 30%. While we expect that our GTNS will remain favorable, we do not expect to experience this level of GTNS over the long term. With that said, we still anticipate that our GTNS will still be well below other dermatological products in our experience. Specifically, our current GTNs largely revolve around distribution costs, Medicaid discounts, payer contracts and our CO pay card 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. This supports a strong patient onboarding experience through our zelsuvme GO patient onboarding program. Next, I would like to speak about our sales team and its geographical alignment. As Scott mentioned, we commenced the launch with 50 territory managers concentrating on the successful launch of Zelsuvni. We opened these locations based on the ICD10 data of most prevalent MC cases, but it's important to note that MC is an under reported indication largely because there has been no at home FDA approved product until zelsuvni. Now with the success of our launch, we are moving forward with the addition of territory managers in other prominent territories. This will result in an additional 14 territory managers joining Pelthos in opportunistic territories around the country where Zelsuvmi is already being utilized. We expect to add these positions at the beginning of January and expect that this will provide further lift to our sales and growth rate. Finally, we continue to grow awareness for zelsuvme as the first and only at home prescription treatment option for MC through various channels and venues. The awareness and stimulation to prescribe is occurring through the following tactical deployments. We launched highly engaging materials educating HCPs and patients on Zelsuvme at the field level. We also launched national level and local level speaker programs, mostly virtual, fitting into HCP schedules, providing education on zelsuvmi. We deployed strong digital marketing awareness through social media, HCP platforms and digital advertising. We recently launched the Moms Against Molluscum movement, an opportunity for moms, parents and caregivers to share their journeys, battling molescum and finally having an impactful at home treatment option like celsusme. Pelthos also had strong attendance and detailed engagement with hundreds of healthcare practitioners across the country at key congresses, exchanging scientific education and promotional communication about zelsugmi. We will continue to build off the great success of these tactics and we'll be adding more to keep the momentum going. I'm very pleased with our performance and strong launch success to date alongside a highly passionate and hard working commercial team and with that I will now turn the call over to Frank to discuss our financials.

Frank Nettle - Chief Financial Officer - (00:17:14)

Frank thank you Sai Good morning and thank you for joining us on today's call. As a precursor, we're going to focus on the Results for the third quarter of 2025 as prior periods and year to date results do not reflect the current operations of Peltos. With that said, we are delighted to report 7.1 million in net product revenues in our first full quarter of commercial operations. I'll discuss our channel inventory in a moment, but this reflects the strong initial sales of Zelsuvme following the commercial launch in mid July. For the quarter ended 9-30-2025 our cost of goods sold was 2.3 million which includes expenses associated with manufacturing, the supply chain, quality assurance and other costs related to customer order fulfillment. A key item here for your consideration is that it also includes the fair value step up of the inventory, both API and finished goods on hand at the time the merger was closed. Under the terms of the agreement, Pelthos was the acquiree which necessitated a fair value determination of the inventory resulting in a stepped up basis for the value of our cogs. The normalized cost of goods is a fraction of the reported amount as set forth in the adjusted cost of goods table in the press release we issued this morning. We expect to run through the finished goods inventory by the middle of 2026, after which point we will have a couple of quarters where there will be an impact from the fair value of the API in hand at the close of the merger. After that we will be at our normalized cost of goods value. Similarly, we're also in the process of moving towards the expected long term costs associated with our GTNs. Our Q3 GTN was 25.3% and to make sure we're looking at this the same way, it means that 25.3% of our gross revenue was allocated to third party distribution, Medicaid co pay cards and other similar fees. I want to stress however that we do not expect this to be our long term equilibrium rate. For that I expect that we'll move to a GTN in the mid to high 30% range by Q1 of 2026 with Q4 of 2025 expected to be between the two. The bulk of our expenses during the quarter were for SGA with low levels of expenses associated with R and D. We provided a table in the 10Q that provides the detailed breakdown of our SGA expenses, but at a high level the bulk of the cash expenses can be attributed to personnel, marketing, professional services and royalties. Of the 19.6 million in SGA, approximately 3.2 million are non cash charges associated with equity compensation expenses and depreciation. A Further amount of approximately 1 million are one time items associated with the merger and we booked a royalty obligation of 1.2 million resulting in a steady state cash amount for operating expenses of 14.2 million for the quarter. This will go up slightly in 2026 with getting Zeppi ready to commercialize. The increase in the size of the sales team we recently discussed and of course the royalty amount will grow in direct proportion to the growth in net revenues. This resulted in a net loss for the quarter ended September 30, 2025 in the amount of 16.2 million, equating to a net loss of $5.3 per basic and fully diluted common share. On an as converted basis, reflecting the conversion of our Series A and Series C convertible preferred stock, we had a loss of $1.83 per share. On a non GAAP basis, removing non cash and unusual items, we had a net loss of $9.6 million for the quarter. The largest adjustments are the aforementioned equity compensation expenses, non cash interest and the inventory basis. Step up. The $9.6 million loss is $3.14 per basic and fully diluted common share and on an as converted basis, reflecting the conversion of our Series A and Series C convertible preferred stock, we had a non GAAP loss of $1.08 per share. Based on our revenue forecast, we expect the net loss to decline every quarter and as Scott mentioned, expect to reach cash flow break even by the end of 2026. Our balance sheet at September 30th was strong with $14.2 million in cash and 8.0 million in accounts receivable. As of that date we had no debt, but the recently announced convertible note financing strengthened further our balance sheet. A couple of the liability items I would like to specifically highlight the 5.6 million in other short term liabilities and the 26.2 million in other long term liabilities are solely the result of the fair value assessment of the future royalty obligations. These are not general obligations and the amounts related thereto will be recognized with the payment of actual royalties resulting from actual net sales. The convertible note, in addition to cash on hand and receivables, provide substantial working capital and support for our expansion. To the extent we raise any additional capital over the short or midterm, we would endeavor to do so in a non dilutive manner. With respect to inventory and channel, our channel level at the end of the third quarter was approximately four weeks. Going forward, we expect de minimis variability in our net revenue related to changes in the inventory channel. Following up on our announcement last Friday, concurrent with the Zeppe acquisition, we closed on an $18 million convertible notes financing with our existing lead investors. As previously mentioned, the financing will be used to acquire and relaunch zeppi, accelerate the commercialization of zelsuzme and for general working capital purposes, the notes will mature on November 6, 2027 unless redemption occurs earlier or converted into shares of Peltos common stock in accordance with their terms. The notes pay interest at the rate of 8.5% per annum and and will be convertible at an initial price of $34.44 which represented the five day closing price average prior to the close on November 6th. In addition to interest, the investors will be entitled to a low single digit royalty on the net sales of ZEPPI in the United States and certain milestone payments and royalties on Zelsudemy's net sales in Japan. Ultimately, the convertible notes transaction demonstrates the ongoing confidence of our existing investors and the additional capital from this transaction allows management to add a highly complementary product to our portfolio, strengthen the balance sheet and help support the growth as LC of me Regarding our capitalization Prior to the convertible financing we had approximately 8.9 million shares of stock outstanding on an as converted basis. This is comprised of approximately 3.1 million shares of common stock outstanding and 5.8 million shares of common stock underlying our Series A and Series C convertible preferred stock. The bulk of the preferred is in the Series A which were the shares issued pursuant to the merger and pipe closed on July 1. Both of the Series A and Series C have fixed conversion prices with no down round protection, no special voting rights and no paying or accruing dividends. Were the convertible to convert to common stock at the initial price, we would issue a little over 500,000 shares leaving us with approximately 9.4 million total shares of common stock outstanding on an as converted basis. I will now turn it back over to Scott to discuss the rationale and expected synergies with respect to the DPI acquisition, the Legacy Channel programs and our thoughts on the fourth quarter.

Scott Plesha - Chief Executive Officer - (00:25:32)

Thank you Frank. I would now like to spend a little time speaking about a recent Zeppi acquisition and the Legacy Channel assets. As noted in the Zeppi acquisition press release, we announced that we acquired the US Rights to market and sell Zepi. This acquisition adds a complementary dermatology product to the Peltos portfolio anchored by Zelsugme. CEPI itself is a novel FDA approved topical treatment for Empetigo which affects approximately 3 million people in the US every year. Among the most common bacterial skin infections seen in pediatric offices. Under the terms of the acquisition agreement, Peltos paid Biofentera $3 million and Ferrer $1.2 million up front. With additional payments on the availability of commercial quantities of Zeppi and the achievement of sales based milestones, Peltos will pay royalties on US Net sales of Zeppi to Ferrer Ligand and the investors. CEPI is well positioned to address antimicrobial resistance in pediatric dermatology and we believe it will provide physicians with an important alternative to first line impetigo treatments. Offering another novel product to the pediatric and dermatology communities creates an increasingly favorable opportunity for Peltos as allows us to leverage our current commercial infrastructure to promote multiple innovative brands. Ultimately, we believe this is a fantastic acquisition and represents an excellent investment opportunity for Mark an exciting new chapter in the Peltos growth story. Finally, a short note on the Legacy Channel Therapeutics programs as background. The Legacy Channel programs are clinical stage drugs for the treatment of various types of pain through the modulation of Nav 1.7 sodium channel. Specifically, we have one program for the systemic treatment of acute and chronic pain, one program for the treatment of eye pain, and one program for the treatment of pre and post surgical pain. These programs are not our focus, but they are important and valuable and we are working on various funding options dedicated to one or more of these programs. Importantly, this means that whatever funding we obtain, it will not be from our available cash. More to Come as we continue working on this Strategy regarding our Q4 results and future expectations, I want to emphasize that we are in the early days of the launch and as such need to have more data before providing detailed annual guidance. With that said, our performance to date during Q4 has been strong and we're very pleased to report that our gross trajectory has continued. As Sy mentioned, based on the number of prescriptions during the last week of October and only 16 weeks into our launch, we're on approximately a $52 million annual gross revenue run rate. Further, we had an all time high of units shipped to pharmacies the week ending November 7th, and we expect our efforts with HCPs, parents and caregivers and the expansion of the sales team will increase the growth rate we have experienced to date. With the strong sales trends we're seeing, we are currently projecting a significant increase in net revenue for the three months ending December 31, 2025 over the three months ending September 30, 2025. I want to thank you for joining us today to learn more about the Peltos story and we'll now turn the call over to the operator for any questions.

OPERATOR - (00:28:39)

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys and again that Is star one to ask a question. And our first question comes from Jeff Jones with Oppenheimer.

Jeff Jones - Equity Analyst - (00:29:13)

Good morning guys and congrats on a fantastic start to your launch and congrats on your first call as a public company as well. First question, I guess you mentioned 1169 unique prescribers at this stage. Can you comment on how many are writing multiple prescriptions and then what portion of your target accounts does that cover? So with your current sales force, how many target accounts do you have and sort of what penetration are you looking at? Thanks, Jeff. Appreciate the compliments. To begin with and just I guess first starting out our coverage, Right now, we're covering about 8,000 targets. With our current sales structure, we mentioned an expansion that'll get us up to about 10,000 or so when all, when all is said and done. And then as far as repeat prescribing, we gave you unique numbers for the quarter. When we look at kind of where we are Right now,, probably a little bit more than half, 60% have written one script. But we, we've seen almost just under 500. Right. Two or three. We have some as high as 22 to 27 range. Actually three doctors in that range. So there's a wide range of prescriptions written by the hcps. Okay, appreciate that. With the upcoming holiday season, you know, with Thanksgiving, Christmas, how does that impact, you know, patient visits, prescriptions? How should we sort of think about that impact given obviously a really nice growth trend already in October. Yeah. So I think it varies by holiday. But one of the things like for example over like Labor Day, we did kind of grow through that a bit that week. But we do think because this is an acute medication, you have to be in office to get a prescription. We're not as dependent upon refills here. This is about know, new patients coming on therapy. So I do think, we do feel that the impact of the holidays, you know, while we're growing, could, could soften it a little bit because of that. Okay. When offices aren't open, it's really difficult. You know, we just don't see as many prescriptions. Sure, sure. Totally makes sense. Then the last question, as you just mentioned, refills, you know, the first, the first two set of tubes is for 30 day coverage. Any color on how many patients are getting a refill? So you know, is one patient typically one unit or you know, 1.5 to otherwise? Yeah, so I guess the first ground on it, you know, everything here, when you prescribe it, it's indicated for up to 12 weeks of therapy. So if you get that initial unit, that should last up to 30 days, if there are 40 lesions or less, and if they use it as directed. So if you, you know, if you look at it and somebody required to go to the full 12 weeks, we're probably looking at three units. We're seeing some prescriptions. It's a small percentage, but there are a number of prescriptions that are actually going out with more than one unit. So obviously they wouldn't have a refill if that was the case. And then on the refill side, you also have to think about when you're looking at the numbers and kind of calculating, you have to go back five to 10 weeks, really, to look at, like, where we are now to understand what's eligible. We think we're probably in about the 1.2 range right now, give or take a little bit. And we do think that could, you know, track up over time. Really appreciate it. Yeah. I'd say the other thing we're hearing that, you know, this is a good news thing is that, you know, anecdotally that the HCPs and patients have been quite happy with the efficacy they're seeing, you know, the quickness at which they're seeing resolution. Just the whole experience, I guess, has been very positive across the board pretty much of what we're hearing from hcps. So. So that could affect. That could affect our refill rate if, you know, if they're seeing really good results. But ultimately, I think that's a great thing for patients and the brand. Great. Appreciate the color, guys. Congrats on the quarter. I'll stop there. Okay, thanks, Jeff. We appreciate it.

OPERATOR - (00:34:05)

Our next question comes from James Malloy with Alliance global partners.

James Malloy - (00:34:11)

Hey, guys, thank you for taking the questions. Congratulations on an excellent launch. Could you walk through? I know you mentioned the overall reps overall are profitable. Could you walk through sort of how many of the reps of the 50 are currently profitable and sort of the expectations for the additional 14, how quickly for them to cover their own costs. And you clearly seem like the product's priced correctly. Do you think there's opportunity for taking price going forward? So I'll answer the price one first, Jim, and then I'll let Cy weigh in on the salesforce and productivity. So right now, we mentioned this in our script, but we don't have any active commercial contracts, so we haven't been paying rebates. So typically those plans, you'll have price protection clauses in there. And so we haven't. I think our goal is to be responsible on Price going forward. You know, we were, I think we're priced at the right point right now and you know, we'll take responsible price increases going forward. We're not going to, at this point. We're not, we're, we're not disclosing what that might look like, but it is something we can do. And without having the commercial contracts, if we do take price and if you go above those commercial contracts, that impacts Medicaid. So, you know, that's what's good about not having the commercial contracts is that it doesn't really impact, you know, the rebates at the Medicaid level. So anyways, we'll be, we're going to be thoughtful about price going forward and you know, more to come on that. I guess I'll pass it over to Cy. Good morning and thanks for the question.

Cy Rangero - Chief Commercial Officer - (00:35:51)

So when we think about our field force and the productivity analysis that we look at really on a daily to weekly basis, we're seeing some strong growth trajectory across the multitude of quarters that we have, you know, divided up around the country and the regions in specific. When we look back on the analysis week over week, obviously there's performance metrics that we work towards to ensure that we're getting, you know, higher growth, higher trajectory at each territory level. As Scott mentioned in his prepared remarks, we are moving towards an expansion which really tells us that the field force activity and the productivity at the territory level has been, you know, profitable for us going forward. So that's where we see our growth trajectory and our growth trends increasing over time, you know, based on our current footprint and the one that we intend to expand into.

Scott Plesha - Chief Executive Officer - (00:36:42)

Yeah, and Jim, I'll add, you know, we, when we went into the market initially we wanted to get in market, see the uptake, see the, see what the market access landscape looked like. We have had really good growth across the sales force and really it's an opportunity here to add these 14 reps. I mean there are large metropolitan areas we don't have reps in like Seattle, Portland, Las Vegas, Salt Lake, St. Louis, Kansas City, Memphis. So some pretty, pretty large cities that we don't have coverage. So this is an opportunity to now invest. And the way we look at this always is we had to earn the right to do that to have that expansion. And we feel like we have a proof of concept now that it makes sense to kind of add incrementally going forward. Outstanding, thank you. And can you walk through, is this the seasonality? I know you mentioned that you expect.

James Malloy - (00:37:37)

It'D be a Little softer when people. Aren'T taking the office visits over the holidays. This is sort of a back to school. Did you guys launch at a perfect time? And then would you be. Would you look to sort of. Any thoughts on peak. Peak sales guidance? And then I have one last follow up.

Cy Rangero - Chief Commercial Officer - (00:37:56)

I'll take the question on seasonality. So when we look at the ICD10 data Scott mentioned, that really tells us about the overall diagnosis of molluscum. There is no real kind of peak season or sort of valley that you might see over any of the quarters. And in particular, any of the months, you know, in pediatric sort of conditions, you might see a little bit more of an influx of prescription activity like you mentioned during back to school, only because there's an influx, you know, right before that time frame of pediatric visits, et cetera. But from a seasonality perspective, the data does look pretty, I would say, standard and static from what we've seen as we've built out our overall approach to commercialization.

Scott Plesha - Chief Executive Officer - (00:38:39)

Yeah, and I'll add a little bit and then answer your peak revenue question, Jim. But the other thing to think about is when patients contract this disease, it could take months for them to go into the office. So somebody could have really started, you know, four or five lesions could have popped up on a child back in July, but they didn't seek care at the time. So it may not be going into now. So our thought leaders are kind of split on whether there's seasonality or even regional differences. So, you know, we think it's pretty steady throughout the year, absent when offices are closed again, patients are not being seen, and we're in acute medication. As we're regarding peak revenue, we've stated publicly in the past that we're looking at a base case of $175 million, peak revenue in 2028. And we're not prepared to change that at this time. We again, want to. While we're happy with where we are and how we've gotten out of the gate, we want to get more data before we make any adjustments. I think that's the wise thing to do. Thank you. That makes a lot of sense as well. Last question, then. The Zeppe acquisition, I think that makes a ton of sense.

James Malloy - (00:39:52)

Could you walk? Are there any additional compounds you guys have seen for potential acquisitions to bring in over the next two to three quarters to slip into the bag like a Zeppe? No.

Scott Plesha - Chief Executive Officer - (00:40:02)

Yeah. I appreciate that Zeppi is a highly complementary product to Zelsubme in that we don't have to change our sales force. It's calling on the same targets. Our targets see a lot of lot of impetigo. And even some of the KOLs did our studies for Zelsugni that did them for Zeppi. So a lot of overlap and synergy there. We'll continue to look for the right opportunities. I'll also point to the fact that we do have the rights after post merger we have the rights if we'd like to pursue external genital warts using our Nitrosil platform. It's actually a like formulation to Zelsubme. So that's something we're evaluating. And the rest of the Nitrosil platform still sits within ligand, you know, so we're evaluating if there, you know, there was a lot of work done by our predecessor company around nitrosil and different indications and those are things we're evaluating as we, as we speak here basically. Thanks for taking the questions. Thanks, Jim.

James Malloy - (00:41:12)

Appreciate it.

OPERATOR - (00:41:15)

This now concludes our question and answer session. I would like to turn the floor back over to Scott Plesha for closing comments.

Scott Plesha - Chief Executive Officer - (00:41:23)

Great. Thank you, operator. I want to reiterate that even though it's early days, Peltos is well positioned to capitalize on a large addressable market. With the first FDA approved at home therapeutic for mc, we've built a strong foundation for the growth of zelsugme. And with zepi, a second highly synergistic product in the bag by the end of 2026, we believe there are strong growth opportunities before us. Finally, I wanted to thank the Peltos employees for all their hard work and dedication in supporting patients, caregivers and healthcare providers. Thank you again for joining the call and we look forward to updating you on our continuing progress in the future. Have a great day.

OPERATOR - (00:42:00)

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.