Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 80

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 80
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 the third party CMO; and

●Shipment
                                         of finished product from CMO to a third-party logistics provider for distribution.

47

The
Company uses various qualified vendors to source raw materials. The conversion of the API and manufacture occurs at its primary
operating facility in North Carolina. The API is then shipped to a third-party fill/finish CMO who converts the API into the finished
product, including ancillary/supportive manufacturing, filling and packaging. The finished product is then shipped back to the
U.S. domiciled third-party logistics provider for distribution.

The
ZELSUVMI manufacturing process is effectively comprised of four key components: raw materials, supply chain, drug substance (API),
and drug product (finished product).

Raw
Materials

The
Company currently relies on third-party suppliers to provide the raw materials that are used by it and its third-party manufacturers
in the manufacture of ZELSUVMI. There are a limited number of suppliers for raw materials, including nitric oxide, that are used
to manufacture the product candidates and commercial products.

Supply
Chain

The
Company also relies on third-party logistics vendors to transport raw materials, API, and drug products through our supply chain.
Certain materials, including the API, have designated hazard classifications that limit available transportation modes or quantities.
Third-party logistics vendors may choose to delay or defer transportation of materials from time to time, which could adversely
impact the timing or cost of our manufacturing supply chain activities.

Drug
Substance (Active Pharmaceutical Ingredient)

Due
to the complexity of the proprietary manufacturing technology related to the NITRICIL platform, including intellectual property,
know-how, trade secrets, production techniques, and the related physical manufacturing requirements and characteristics, the Company
previously determined that constructing its custom manufacturing facility was the most effective way to mitigate risk associated
with API production. To date, the facility and production process has been fully validated and qualified. Currently, the facility
has an operational and integrated QMS (Quality Management System) and ERP governing the operations of the facility.

The
Company has manufactured numerous API batches in its facility since becoming operative, including site registration batches, project
validation batches, and commercial batches. In preparing for the commercial launch of ZELSUVMI, the Company stockpiled numerous
batches of commercial API. The operational API manufacturing strategy incorporates redundancy planning, including maintaining
a certain API MOH (months-on-hand) quantity to mitigate potential risk, both “upside” and “downside”,
related