Pelthos Therapeutics to merge with Castle Creek Biosciences in stock-and-milestone deal

Pelthos Therapeutics Inc. (NYSE American: PTHS) and Castle Creek Biosciences, Inc. announced on October 30, 2026 that they had entered into a definitive agreement under which Castle Creek will merge with Pelthos¹. Under the terms, Castle Creek stockholders will receive 5,200,000 shares of Pelthos common stock at closing, representing approximately 32.5% of Pelthos' fully diluted shares¹.

Additional consideration is tied to development and sales milestones. Castle Creek stockholders could also receive up to 5,800,000 shares upon FDA approval of D-Fi, up to $300 million in milestone payments including a $50 million payment tied to Phase 3 clinical endpoints and up to $250 million tied to first commercial sale and net sales targets, plus 80% of net proceeds from any priority review voucher.¹

Castle Creek's lead program is D-Fi (dabocemagene autoficel; FCX-007), an injectable, redosable, gene-modified cell therapy with a continued Phase 3 study planned for dystrophic epidermolysis bullosa (DEB)¹, a disease caused by mutations in the COL7A1 gene¹. The candidate has Orphan Drug Designation for DEB and Rare Pediatric Disease, Fast Track, and Regenerative Medicine Advanced Therapy designations for recessive DEB from the FDA¹.

The deal is structured as a two-step merger in which Merger Sub will merge with and into Castle Creek, with Castle Creek continuing as a wholly owned subsidiary of Pelthos, followed immediately by a second merger in which Castle Creek merges into Merger Sub II, which continues as a wholly owned subsidiary of Pelthos¹. The companies said the transaction has been approved by the boards of directors of both companies and is expected to close by the end of the first quarter of 2027, subject to customary closing conditions including approval by Castle Creek's stockholders¹.

Separately, Pelthos entered a securities purchase agreement the same day with investors including Ligand Pharmaceuticals Incorporated, Nomis Bay Ltd and Marshman Fund Trust II, under which PIPE Investors agreed to purchase 57,500 shares of Series B Convertible Preferred Stock and warrants for 496,951 shares of Pelthos Common Stock, for an aggregate purchase price of approximately $57.5 million¹. The maximum potential size of the PIPE Financing, including the Bridge Financing, is $80.0 million.¹

Pelthos also amended its venture loan facility with Horizon Technology Finance Corporation, under which following the funding of additional Term Loans, $40.0 million in aggregate principal amount of Term Loans were outstanding, with the facility's aggregate principal amount remaining up to $50.0 million¹.