Company: PTHS
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001753926-25-001764
Chunk: 105

Company: Pelthos Therapeutics Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 105
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UVMI License, Ligand is entitled to (i) a 13% royalty on worldwide sales, excluding, Japan, of ZELSUVMI prior
to the expiration of the initial royalty term, defined as on a country-by-country basis, the period of time commencing on the
effective date and continuing until the expiration or termination of the last to expire valid claim of the patent rights that
are included in the specified intellectual property and that cover the licensed product; (ii) a 10.4% royalty on worldwide sales,
excluding, Japan, of ZELSUVMI after the expiration of the initial royalty term; (iii) upon the first commercial sale of the Zelsuvmi,
a $5.0 million milestone; (iv) upon the occurrence obtaining a threshold of $35 million in aggregate net sales during four consecutive
calendar quarters, a $5.0 million milestone; and (vi) 30% of all non-royalty sublicense income received by the Company or its
affiliates from any sublicensee. The first commercial sale milestone has been accrued within accrued expenses on the condensed
consolidated balance sheets as of September 30, 2025.

61

Ligand
may terminate the ZELSUVMI License on 30 days’ prior notice to the Company if (i) the Company fails to launch ZELSUVMI in
the U.S. by December 31, 2025; (ii) the Company fails to use commercially reasonable efforts to enter into an agreement with a
third-party to commercialize ZELSUVMI in France, Germany, Italy, Spain and the United Kingdom by September 30, 2026; or (iii)
the Company or its affiliates or potential sublicensee fails to receive regulatory approval for ZELSUVMI in France, Germany, Italy,
Spain and the United Kingdom by March 31, 2027.

Under
the ZELSUVMI License agreement, the Company is also obligated to satisfy certain contractual obligations pursuant to the license
agreements with the University of North Carolina at Chapel Hill (“UNC”), entered into in July 2007 and October 2009
by Novan, which were subsequently amended, restated and consolidated in June 2012 (the “UNC License Agreement”), were
assumed during the Novan 363 transactions and assigned to Ligand on March 24, 2025 by LNHC.

The
UNC License Agreement is described below. The Company obligations regarding the UNC License Agreement include satisfying