Horizon Technology Finance Corporation (HRZN) has extended a $50 million secured venture debt facility to Pelthos Therapeutics Inc., a publicly traded biopharmaceutical company focused on dermatology. The facility consists of an initial $30 million disbursement, with an additional $20 million available for future growth initiatives. The loan is intended to fund the commercialization of ZELSUVMI® (berdazimer) topical gel, the first FDA‑approved at‑home treatment for molluscum contagiosum, and to support Pelthos’s expansion of its product portfolio, which now includes Xepi Cream and Xeglyze.
The loan carries a Prime‑plus 3.75% interest rate, which is 10.50% at the time of the announcement, and has a 60‑month term with amortization beginning in month 36. Pelthos also issued Horizon warrants to purchase 65,488 shares of its common stock at an exercise price of $27.49 per share, providing HRZN with potential upside if Pelthos’s share price rises above the warrant strike.
Pelthos reported $7.1 million in net revenues from ZELSUVMI® in its first quarter of commercial operations, a strong start that underscores the product’s market traction. The company’s recent acquisition of Xepi Cream and Xeglyze expands its pipeline into impetigo and head‑lice indications, positioning Pelthos to capture additional revenue streams. The venture debt will help the company scale manufacturing, strengthen its balance sheet, and accelerate marketing and distribution efforts without diluting existing shareholders.
HRZN’s strategy has long focused on originating larger venture loans in high‑growth sectors, and this transaction aligns with that focus. The company’s Q3 2025 earnings showed a net investment income of $26 million and an EPS of $0.31, beating analyst expectations of $0.28. HRZN is also in the final stages of a merger with Monroe Capital, a deal announced in August 2025 that is expected to close in the fourth quarter of 2025. The merger will create a larger, more diversified business development company with an estimated net asset value of $446 million, enhancing HRZN’s capital base and lending capacity.
Management emphasized the strategic fit of the loan. Horizon’s Chief Investment Officer Paul Seitz highlighted that the financing “provides Pelthos with a new at‑home option for molluscum contagiosum and expands HRZN’s life‑science portfolio.” Pelthos CEO Scott Plesha noted that the facility “will be instrumental in promoting ZELSUVMI® and Xepi Cream, scaling the business, and launching Xeglyze,” underscoring the importance of non‑dilutive capital for rapid commercialization.
The transaction reflects broader market dynamics in the specialty lending space, where investors are increasingly targeting high‑yield, high‑quality debt in the life‑science sector. By combining a sizable loan with warrant upside, HRZN positions itself to benefit from Pelthos’s growth trajectory while maintaining a disciplined risk profile.
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