Pelthos Therapeutics Inc. filed a Rule 425 communication on October 30, 2026, disclosing that it entered into an Agreement and Plan of Merger with Castle Creek Biosciences, Inc., a biosciences company developing the drug candidate D-Fi, on that same date.

Key Highlights

  • Merger structure: Merger Sub will merge with and into Castle Creek in a First Merger, followed immediately by Castle Creek merging with and into Merger Sub II, making Merger Sub II a wholly owned subsidiary of Pelthos.
  • Upfront share consideration: Castle Creek stockholders will receive an aggregate of 5,200,000 shares of Pelthos Common Stock at the closing of the First Merger, with 10% of those shares deposited in escrow.
  • Contingent shares: An additional 5,800,000 shares of Pelthos Common Stock will be issued if FDA approval of D-Fi is received on or before March 31, 2036, subject to reduction for each complete calendar quarter elapsed after March 31, 2031.
  • Milestone payments: Up to $300.0 million in cash milestones tied to specified clinical progress and net sales thresholds for D-Fi, ranging from $50.0 million to $75.0 million per milestone.
  • PRV Interest: Castle Creek securityholders retain the right to 80% of net proceeds from any FDA priority review voucher granted in connection with D-Fi approval.
  • Post-closing ownership: Castle Creek stockholders are expected to own approximately 32.5%, and existing Pelthos securityholders approximately 67.5%, on a fully-diluted basis, excluding Contingent Shares and before any PIPE Financing.
  • Emerging growth company: Pelthos is classified as an emerging growth company and its common stock trades on NYSE American under the symbol PTHS.

Pelthos and Castle Creek Structure a Two-Step Merger Around D-Fi Drug Candidate

According to the filing, Pelthos Therapeutics Inc. (NYSE American:PTHS), a Nevada corporation headquartered in Durham, NC, entered into an Agreement and Plan of Merger on October 30, 2026, with Castle Creek Biosciences, Inc., a Delaware corporation focused on the drug candidate D-Fi, along with two wholly owned merger subsidiaries and Paragon Biosciences, LLC, acting as securityholder representative. The transaction is structured as a two-step merger intended to qualify as a tax-free "reorganization" under Section 368(a) of the Internal Revenue Code of 1986, as amended, the filing disclosed.

The filing details that Castle Creek stockholders will receive their allocable share of 5,200,000 shares of Pelthos Common Stock at the Initial Effective Time, with fractional shares rounded up to the nearest whole share. Ten percent of those merger shares will be held in escrow to secure indemnification obligations and, subject to pending claims, will be released on the fifth business day following the second anniversary of the closing date. The representations and warranties of Castle Creek survive closing until the same second-anniversary date, the filing states.

In addition to the upfront shares, the filing describes milestone payments linked entirely to the commercial progress of D-Fi: $50.0 million upon a specified clinical milestone achieved on or before June 30, 2029; $50.0 million upon the first U.S. commercial sale; and three additional sales-based thresholds of $50.0 million, $75.0 million, and $75.0 million tied to D-Fi net sales reaching $100.0 million, $250.0 million, and $500.0 million, respectively, in any trailing twelve-month period. Each milestone payment is expressed as net of certain contingent expenses, according to the filing. Pelthos also committed to using commercially reasonable efforts to maintain its NYSE American listing and to seek approval for listing the newly issued shares prior to closing.

What Was Disclosed

Pelthos Therapeutics filed a Rule 425 communication disclosing a signed merger agreement with Castle Creek Biosciences dated October 30, 2026. The filing outlines the share consideration, escrow terms, contingent milestones tied to D-Fi, and expected post-closing ownership percentages for each stockholder group.