Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 35

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 financial statements.

NOTE
5 – SATO AGREEMENT

As
described in Note 1 — “Organization and Description of Business”, the Company’s wholly owned subsidiary, LNHC,
was formed in September 2023 to execute the Ligand acquisition of certain assets and liabilities from Novan in a 363 transaction.
Per the 363 transaction, certain Novan agreements were assumed by LNHC and as of the Merger as of July 1, 2025, LNHC had certain
rights and obligations related to agreements with Sato.

Background

On
January 12, 2017, Novan entered into a license agreement, and related first amendment with Sato, relating to SB204, its drug candidate
for the treatment of acne vulgaris in Japan (the “Sato Agreement”). Pursuant to the Sato Agreement, Novan granted
to Sato an exclusive, royalty-bearing, non-transferable right and license under certain of Novan’s intellectual property
rights, with the right to sublicense with Novan’s prior written consent, to develop, use and sell products in Japan that incorporate
SB204 in certain topical dosage forms for the treatment of acne vulgaris, and to make the finished form of such products.

On
October 5, 2018, Novan and Sato entered into the second amendment (the “Sato Amendment”) to the Sato Agreement (collectively,
the “Amended Sato Agreement”). The Sato Amendment expanded the Sato Agreement to include SB206, Novan’s drug candidate
for the treatment of viral skin infections. Pursuant to the Amended Sato Agreement, Novan granted to Sato an exclusive, royalty-bearing,
non-transferable license under certain of its intellectual property rights, with the right to sublicense with Novan’s prior
written consent, to develop, use and sell products in Japan that incorporate SB204 or SB206 in certain topical dosage forms for
the treatment of acne vulgaris or viral skin infections, respectively, and to make the finished form of such products.

Novan
or its designated contract manufacturer was to supply study materials to Sato for use in the development of SB204 and SB206 in
the licensed territory. The rights granted to Sato did not include the right to manufacture the API of SB204 or SB206; rather,
the parties agreed to negotiate a commercial supply agreement pursuant to which the Novan or its designated contract manufacturer
would be the exclusive supplier to Sato of the API for the commercial manufacture of