Pelthos to Merge With Castle Creek, Expanding Skin Disease Pipeline

Durham, North Carolina and Exton, Pennsylvania — October 30, 2026

D-Fi Targets Dystrophic Epidermolysis Bullosa

D-Fi is an investigational, injectable, autologous gene-modified cell therapy designed to treat DEB by restoring production of type VII collagen (COL7), a protein essential for maintaining the structural connection between the epidermis and dermis. DEB is caused by mutations in the COL7A1 gene, which can lead to insufficient or defective COL7 and result in fragile skin, chronic wounds and progressive tissue damage. Patients may also face an increased risk of squamous cell carcinoma. D-Fi uses a patient’s own dermal fibroblasts, which are genetically modified outside the body using a self-inactivating lentiviral vector containing the COL7A1 gene. The modified cells are then administered through intradermal injections into chronic wounds, where they are intended to produce COL7 and support the formation of anchoring fibrils in the skin. The proposed treatment schedule involves injections approximately every other month. D-Fi has received Orphan Drug Designation for DEB and Rare Pediatric Disease, Fast Track and Regenerative Medicine Advanced Therapy designations from the FDA for recessive DEB. The company plans to continue its Phase 3 development program. Previous clinical studies have generally shown the candidate to be well tolerated, with commonly reported adverse reactions including injection-site skin discoloration, erythema, bleeding, pain and swelling. D-Fi remains investigational, and its safety and efficacy must be established through further clinical evaluation and regulatory review.

Combined Platforms and Dermatology Portfolio

The combination brings together two complementary technology platforms. Castle Creek contributes its fibroblast-based cell and gene therapy technology, which is being used to develop D-Fi and additional potential treatments for skin malignancies and inflammatory conditions. Pelthos contributes its existing commercial infrastructure, dermatology expertise, physician relationships and Nitricil platform. Its marketed portfolio includes ZELSUVMI, a topical prescription treatment for molluscum contagiosum; XEPI, a topical antibiotic cream for impetigo; and XEGLYZE, a topical treatment for head lice. The companies believe that Pelthos’ established commercial capabilities, particularly in pediatric dermatology, could support the future commercialization of D-Fi if approved. The expanded technology base is also intended to diversify Pelthos beyond cutaneous infectious diseases into rare genetic and other serious skin disorders. Pelthos CEO Scott Plesha said the transaction would broaden the company’s focus and provide opportunities to advance additional therapies. Castle Creek Chairman and CEO Matt Gantz highlighted the potential to use Pelthos’ commercial infrastructure to support D-Fi and expand the pipeline. The companies have not disclosed additional clinical development timelines for Castle Creek’s earlier-stage programs.

Transaction Terms, Leadership and Next Steps

Under the agreement, Castle Creek stockholders will receive 5.2 million shares of Pelthos common stock at closing, representing approximately 32.5% of Pelthos’ fully diluted shares. They may also qualify for up to 5.8 million additional shares upon FDA approval of D-Fi, subject to specified conditions. The agreement includes up to $300 million in milestone payments: a $50 million payment tied to achievement of specified Phase 3 clinical endpoints and up to $250 million in additional consideration linked to D-Fi’s first commercial sale and specified net sales milestones. Payments may be made in cash or, where required to preserve the intended tax treatment, a combination of cash and Pelthos shares. Castle Creek stockholders will also be entitled to 80% of net proceeds from the sale of any priority review voucher awarded upon FDA approval of D-Fi. Both companies’ boards have approved the transaction. Following closing, Scott Plesha will remain Chief Executive Officer, while Peter Greenleaf will serve as Executive Chair. The combined company’s board will have 10 directors, including two designated by Castle Creek. The transaction is subject to customary closing conditions, including Castle Creek stockholder approval. Pelthos is being advised by Latham & Watkins LLP, with Oppenheimer & Co. providing a fairness opinion to its board. Castle Creek’s legal advisers are Bradley Arant Boult Cummings LLP and Katten Muchin Rosenman LLP, with PHCP, LLC serving as financial adviser. The combined company will seek to advance D-Fi while developing opportunities across its expanded dermatology and cell and gene therapy platforms.

Source:Pelthos Therapeutics, Press release