Company: PTHS
Filing Date: 2025-05-27
Form Type: DEFM14C
Source: 0001140361-25-020509
Chunk: 66

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-05-27
Form: DEFM14C
Chunk 66
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 other royalty arrangements in cases in which it would have been more advantageous for Channel to retain sole development and commercialization rights to such compound. If Channel is not successful in discovering, developing and commercializing additional compounds, its ability to expand its business and achieve its strategic objectives would be impaired. Although a substantial amount of Channel’s effort initially focuses on developing CC8464, CT2000 and CT3000 towards approval in the U.S. and other countries, an additional component of its strategy is to discover, develop and potentially commercialize a portfolio of compounds to treat orphan diseases and potentially, non-orphan diseases. Identifying new compounds requires substantial technical, financial and human resources, whether any other compounds are ultimately identified. Channel may not be able to identify new molecules with the potential for clinical development and ultimate approval. Even if Channel identifies new compounds that initially show promise, it may fail to successfully develop and commercialize such new compounds for many reasons, including the following:

| • | the research methodology used may not be successful in identifying potential new compounds; |

| • | competitors may develop alternatives that render Channel’s compounds obsolete; |

| • | new compounds Channel develops may nevertheless be covered by third parties’ patents or other exclusive rights; |

| • | a new compound may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; |

| • | a new compound may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and |

| • | a new compound may not be accepted as safe and effective by patients, the medical community or third-party payors. |

If Channel is unsuccessful in identifying and developing additional new compounds, its potential for growth may be impaired.

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**Channel faces significant competition in an environment of rapid technological change and the possibility that its competitors may achieve regulatory approval before it or develop therapies that are more advanced or effective than Channel’s, which may adversely affect its financial condition and its ability to successfully market or commercialize CC8464, CT2000 and CT3000.

Many of Channel’s potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Channel’s commercial opportunity could be reduced or eliminated if competitors develop