S-1/A: Turn Therapeutics to Direct List on Nasdaq Amid Losses

Turn Therapeutics, a biopharmaceutical company, plans a direct listing on Nasdaq for the resale of up to 17.87 million shares, despite significant net losses and a 'going concern' warning.

Summary

• Turn Therapeutics, formerly Global Health Solutions, Inc., is pursuing a direct listing on Nasdaq for the resale of up to 17,868,760 shares of common stock by existing stockholders.
• The company will not receive any proceeds from the sale of shares by the Registered Stockholders in this direct listing.
• Turn Therapeutics is a pharmaceutical and medical device development company focused on its proprietary PermaFusion platform, designed to enhance drug performance by enabling stable suspension of active pharmaceutical ingredients (APIs) in oil-based carriers.
• Key development programs include dermatological diseases (moderate to severe eczema and onychomycosis) and a thermostable intranasal vaccine delivery platform, including a Marburg virus vaccine candidate.
• The company has three FDA-cleared medical devices (Hexagen, AtopX, XEAL) based on its Hexagen formula, but is not currently generating revenue from these devices as it focuses on drug development.
• A licensing agreement with MiMedx Group, Inc. for the FleX Product could yield up to $69.55 million in milestone payments, plus royalties, though milestones were not considered probable at inception.
• Turn Therapeutics reported a net loss of $1.57 million for the six months ended June 30, 2025, an increase from $0.78 million in the same period of 2024.
• The accumulated deficit reached $20.76 million as of June 30, 2025, and $19.20 million as of December 31, 2024.
• The company's consolidated financial statements express substantial doubt about its ability to continue as a going concern due to insufficient capital to fund its drug development plans.
• Turn Therapeutics has entered into a Share Purchase Agreement with GEM Global Yield LLC SCS and GEM Yield Bahamas Limited (GEM) for up to $85.0 million in common stock purchases, contingent on a public listing.
• The founder and CEO, Bradley Burnam, will control over 50% of the outstanding common stock on a fully diluted basis, making the company a 'controlled company' under Nasdaq rules.

Sentiment

Score: 4

Explanation: While the company possesses innovative technology and a promising pipeline with positive preclinical and early clinical data, significant ongoing losses, a 'going concern' warning, and the inherent risks of a direct listing without traditional underwriting temper the positive outlook. The reliance on future capital raises and the early stage of drug development present substantial uncertainties.

Positives

• Proprietary PermaFusion platform technology enables stable suspension of APIs in oil-based carriers, improving bioavailability and reducing API load, with broad potential applications.
• Multiple FDA-cleared medical devices (Hexagen, AtopX, XEAL) validate the core technology and demonstrate technical proof of concept and meaningful therapeutic effects.
• Positive preclinical and Phase 2-equivalent human trial data for GX-03 in eczema, showing a 67% reduction in Investigators Global Assessment (IGA) scores within 7 days and significant inhibition of key inflammatory cytokines (IL-36, IL-31, IL-4) with no reported adverse events.
• In-vivo studies for onychomycosis demonstrate effective nail penetration and significant reduction in fungal DNA expression (p = 0.0005) with GX-03, addressing a key limitation of current topical therapies.
• The thermostable intranasal vaccine platform achieved 100% recovery of a live VSV-based vaccine vector after 72 hours at room temperature and 14 days at ambient temperature for the Marburg candidate, addressing cold-chain limitations.
• Potential for significant milestone payments of up to $69.55 million from the MiMedx licensing agreement for the FleX Product, plus mid-single digit royalties on net sales.
• The company operates with a capital-efficient model, leveraging contractors and vendors to minimize cash burn and focus capital on clinical development.
• Strong intellectual property portfolio with 13 issued U.S. patents and multiple pending applications, expected to provide coverage for lead product candidates into the 2040s.
• The Marburg vaccine candidate may qualify for multiple FDA expedited programs, including Fast Track designation, Priority Review, and a Tropical Disease Priority Review Voucher (PRV), potentially valued at $80 million to $120 million.
• Targeting large and underserved markets: global advanced wound care ($18.72 billion in 2024), atopic dermatitis ($12.0-$18.0 billion), and onychomycosis ($3.81 billion in 2024).

Negatives

• Incurred significant net losses of $1.57 million for the six months ended June 30, 2025, and $1.77 million for the year ended December 31, 2024.
• Accumulated deficit of $20.76 million as of June 30, 2025, and $19.20 million as of December 31, 2024.
• Auditors express substantial doubt about the company's ability to continue as a going concern due to insufficient capital to fund drug development plans.
• No current revenue generation from products, as the company focuses on drug development.
• Reliance on third parties for manufacturing and clinical trials introduces risks of delays, non-compliance, and increased costs.
• The direct listing process lacks traditional underwriting, potentially leading to higher stock price volatility and uncertain trading volume due to the absence of price stabilization mechanisms and immediate sales by non-locked-up shareholders.
• Identified a material weakness in internal control over financial reporting related to accounting for stock-based compensation.
• The founder and CEO, Bradley Burnam, controls approximately 62.9% of the voting power, which could lead to interests differing from other shareholders and allows the company to qualify as a 'controlled company' with exemptions from certain Nasdaq corporate governance rules.
• A patent dispute with Marc Selner could result in Selner seeking royalties or attempting to prevent commercialization of Hexagen products if his patent application ultimately issues.
• MiMedx agreement milestones were not considered probable at inception, and revenue recognition is deferred due to unpredictable FDA approval timelines.

Risks

• Expect to incur additional losses for the foreseeable future and may never achieve or maintain profitability.
• Consolidated financial statements express substantial doubt about the ability to continue as a going concern.
• Limited operating history and inherent uncertainties and risks in pharmaceutical and medical device product development and commercialization.
• Failure to obtain or generate the capital necessary to fund operations will prevent product development and likely result in loss of entire investment.
• Future financing agreements may lead to increased dilution and sales of common stock in the open market, adversely impacting the trading price.
• Material weakness identified in internal control over the accuracy of financial reporting, potentially leading to material misstatements.
• Expect to increase the size of the organization, which may lead to difficulties in managing growth and harm future revenue and operating results.
• Reliance on third parties to manufacture medical devices and drug candidates, risking delays, non-compliance, or increased costs.
• Business is dependent on the successful development, regulatory approval, and commercialization of products and product candidates.
• Clinical trials and preclinical studies are expensive, time-consuming, difficult to design and implement, and involve uncertain outcomes.
• Failure to comply with government regulations could adversely affect the business.
• Failure to comply with healthcare regulations could lead to substantial enforcement actions, including civil and criminal penalties.
• Obtaining approval of a new device or drug is lengthy, expensive, and inherently uncertain.
• Issued patents covering current or future products could be found invalid or unenforceable if challenged.
• Inability to protect the confidentiality of trade secrets would harm business and competitive position.
• May become subject to claims or legal proceedings alleging infringement, misappropriation, or violation of others' intellectual property rights.
• Obtaining and maintaining patent protection depends on compliance with various procedural requirements, and noncompliance could reduce or eliminate protection.
• Cybersecurity breaches, attacks, and other disruptions could compromise confidential information and expose the company to liability and regulatory fines.
• The direct listing differs significantly from an underwritten initial public offering, lacking price stabilization and potentially leading to higher volatility.
• The public price of common stock upon Nasdaq listing may have little or no relationship to historical private sales prices.
• An active trading market may not develop or continue to be liquid, and the market price may be volatile.
• Sales of substantial amounts of common stock by the founder, affiliates, or non-affiliates could reduce the stock price.
• Expected 'controlled company' status allows reliance on exemptions from Nasdaq corporate governance rules, potentially reducing shareholder protections.
• Founder's significant ownership provides substantial control, and his interests may differ from other shareholders.
• Amended and restated certificate of incorporation renounces interest and expectancy in certain corporate opportunities.
• If securities or industry analysts do not publish research or publish inaccurate/unfavorable research, share price and trading volume could decline.
• Requirements of being a public company may strain resources, divert management's attention, and affect ability to attract/retain qualified board members.
• Failure to maintain proper and effective internal controls over financial reporting could impair ability to produce accurate and timely financial statements.
• Amended and restated bylaws require exclusive forum in certain Delaware courts or federal district courts for certain lawsuits, potentially discouraging litigation.
• May not be able to maintain a listing of common stock on Nasdaq.

Future Outlook

The company expects to incur additional losses for the foreseeable future as it invests in later-stage clinical trials for its drug candidates. It anticipates needing substantial additional funding, which it plans to secure through equity and debt financing, as well as collaborations. The current cash and cash equivalents are estimated to fund operations into the fourth quarter of 2025. The company aims to advance to Phase 3 trials for moderate-to-severe eczema and onychomycosis following the completion of its current Phase 2-equivalent trial. For its Marburg vaccine program, it plans a preclinical immunogenicity study before the end of 2025 and expects eligibility for the FDA's Animal Rule pathway, potentially leading to Phase 1/2 clinical trials and a Biologics License Application (BLA). The company also intends to deepen strategic partnerships, expand technology platform indications, and pursue regulatory milestones for broader commercialization. Operating as a public company is expected to increase general and administrative expenses and equity-based compensation.

Management Comments

• "We believe this initiative highlights our platforms versatility and its potential to unlock new therapeutic categories beyond dermatology."
• "We believe these preclinical in-vivo studies suggest meaningful potential in these indications, which we may continue to explore at the conclusion of our lead drug programs."
• "We believe such exploratory results further underscore the potential breadth of opportunity enabled by our platform."
• "We believe this reduces the amount of cash needed for internal operations, reduces waste and results in a larger proportion of available capital that can be spent toward furthering clinical development."
• "We believe such signals, along with PHMBs well-documented antimicrobial and anti-inflammatory properties, which have been validated by scientific literature and in-vivo studies, form a sound scientific basis for cross-indication effectiveness across these two dermatologic conditions."
• "We believe this favorable track record in real-world uses supports higher likelihoods of success for future regulatory submissions and provides a strong foundation for physician and patient confidence as we advance our therapeutic programs."
• "We believe this hybrid model of licensing and internal drug development positions us to grow while minimizing capital risk."
• "Our ability to generate non-dilutive cash flow from commercial device agreements is designed to support our pharmaceutical programs and extend our operational runway."
• "At the same time, successful advancement of one or more drug candidates could unlock significant long-term value through regulatory milestones, product approvals, and eventual market entry."
• "We believe these early findings support our view that the underlying antimicrobial and anti-inflammatory properties of our formulation may have broad therapeutic potential across multiple forms of dermatitis, including atopic, irritant, and contact subtypes."
• "Based upon Dr. Davis findings, we believe that Hexagen may be an effective topical option for polymicrobial nail infections, offering a potential alternative to existing oral or topical antifungal treatments."

Industry Context

The company operates in the biopharmaceutical and medical device industries, targeting significant unmet needs in advanced wound care (estimated $18.72 billion in 2024, projected to grow to $30.76 billion by 2034), atopic dermatitis (estimated $12.0-$18.0 billion), and onychomycosis (valued at $3.81 billion in 2024). Its PermaFusion platform aims to differentiate products by offering non-steroidal, non-injectable, and non-systemic topical therapies, addressing patient preferences and limitations of existing high-cost biologics (e.g., Dupixent for eczema) and oral treatments with systemic risks (e.g., terbinafine for onychomycosis). The vaccine delivery platform addresses critical cold-chain logistics challenges, particularly relevant for global health and biodefense, positioning the Marburg vaccine candidate for potential multi-year government procurement contracts, similar to Emergent BioSolutions' anthrax vaccine ($100M-$300M annual revenues benchmark). The company also seeks to capitalize on market disruption and patent expirations of incumbent therapies.

Comparison to Industry Standards

• For onychomycosis, current topical therapies like Jublia (efinaconazole) typically show low complete cure rates (below 20%). The company's GX-03 formulation demonstrates effective nail plate penetration and antifungal activity, aiming to overcome this limitation.
• In eczema treatment, biologics such as Dupixent (dupilumab) are effective but are injectable, high-cost, and involve systemic immunosuppression. Newer topical JAK inhibitors like Vtama also carry high costs and black-box warnings. GX-03 offers a non-steroidal, non-biologic, non-systemic topical alternative with demonstrated cytokine modulation and a favorable tolerability profile, with no adverse events reported in over 200,000 real-world applications.
• For vaccine delivery, traditional live virus vaccines often require deep-frozen storage, hindering distribution in low-resource settings. The PermaFusion platform has shown 100% recovery of a VSV-based vaccine vector after 72 hours at room temperature and 14 days for the Marburg candidate at ambient temperature, offering a significant advantage in thermostability.
• The intranasal Marburg virus vaccine candidate is expected to be eligible for approval under the FDA's Animal Rule pathway (21 CFR 601.90-95), similar to Merck's Ervebo (Ebola Zaire vaccine), which was the first FDA-approved vaccine for Ebola Zaire virus. This pathway allows efficacy demonstration in animal models when human trials are unethical, aligning with biodefense and outbreak response needs.

Management Changes

Corporate Governance

Legal Proceedings

• Involved in legal proceedings from time to time in the ordinary course of business, with inherently uncertain outcomes and potential for substantial costs and diversion of management attention.
• Filed a derivation proceeding in 2017 before the U.S. Patent and Trademark Office (USPTO) against Marc Selner, alleging improper patent application for an invention conceived by Bradley Burnam. The USPTO and U.S. Court of Appeals for the Federal Circuit affirmed Selner's application.
• If Selner's patent application ultimately issues, he may attempt to seek royalties or try to prevent the development and commercialization of Hexagen and products containing Hexagen, or otherwise seek damages.
• May be subject to product liability claims due to defective design, material, workmanship, or misuse of products, potentially resulting in expensive litigation and substantial damage awards.
• Products could be subject to government-mandated or voluntary recalls due to undesirable side effects, misuse, manufacturing errors, design defects, or labeling inadequacies.
• Exposed to the risk of misconduct by employees, independent contractors, service providers, and other vendors, including noncompliance with regulatory standards (FDA, healthcare fraud and abuse laws, data privacy), which could lead to substantial enforcement actions and reputational harm.

Related Party Transactions

• Certain investors granted a voting proxy to CEO Bradley Burnam in connection with a Regulation A offering, which will terminate upon the effectiveness of this registration statement.
• The company expects to enter into indemnification agreements with each of its directors and executive officers.
• A registration rights agreement will be entered into with Bradley Burnam, granting him rights to request registration of his shares and participate in certain registered offerings.
• A stockholders agreement will be entered into with Bradley Burnam and his affiliated entity, BEB Holdings LLC, granting them certain consent rights over corporate affairs (e.g., mergers, asset sales, equity issuances over $50 million, amendments to organizational documents, debt over 20% of total assets, dividends, poison pills, senior management decisions) as long as Mr. Burnam beneficially owns at least 10% of outstanding common stock.
• Bradley Burnam is the sole member of BEB Holdings, LLC, and beneficially owned or controlled approximately 62.9% of the combined voting power of outstanding voting securities as of August 31, 2025.

Stakeholder Impact

• Shareholders face potential for significant dilution from future capital raises (e.g., GEM agreement, warrants), high stock price volatility due to the direct listing, and the founder's substantial control over corporate actions. However, successful drug development could unlock significant long-term value.
• Employees may benefit from increased equity-based compensation as a public company, but the anticipated growth of the organization could also lead to increased responsibilities and management challenges.
• Customers and patients could benefit from the development of new, effective, and potentially safer treatments for conditions like eczema, onychomycosis, and infectious diseases (Marburg virus vaccine), with improved delivery methods.
• Suppliers and creditors face ongoing reliance on the company's ability to secure additional funding, given the 'going concern' warning and the capital-intensive nature of drug development.
• Regulatory bodies will continue to oversee the company's compliance with FDA and other healthcare regulations, with increased scrutiny as a publicly traded entity.

Next Steps

• Listing common stock on Nasdaq under the symbol TTRX, expected on or about September 24, 2025.
• Completing the current 114-patient double-blind, randomized, vehicle-controlled Phase 2-equivalent trial for moderate-to-severe eczema (patient dosing commenced mid-July 2025).
• Submitting an Investigational New Drug (IND) program to open pivotal Phase 3 trials for moderate-to-severe eczema and onychomycosis.
• Conducting additional nonclinical and clinical studies, such as PK max-use and healthy volunteer exposure trials, potentially in parallel with Phase 3 trials.
• Publishing the results of the Marburg live vaccine candidate stability study.
• Attempting an animal model study of the intranasal Marburg candidate to achieve an antibody response.
• Starting an additional 90-day stability test for the Marburg candidate at both ambient and 4C temperatures.
• Pursuing remaining preclinical, clinical, and regulatory steps with the international non-profit organization to bring the stabilized intranasal Marburg vaccine to market.
• Conducting a preclinical immunogenicity study of the intranasal Marburg vaccine candidate in a live animal model before the end of 2025.
• Anticipating conducting GLP toxicology studies and non-human primate challenge studies for the Marburg vaccine candidate.
• Initiating Phase 1 and Phase 2 clinical trials for the Marburg vaccine candidate (expected to enroll 300-500 subjects) if the IND filing is successful.
• Submitting a Biologics License Application (BLA) to the FDA for the Marburg vaccine candidate if clinical development is successful.
• Securing an exclusive partner to market XEAL (K183681) in the United States and globally.
• Actively identifying potential partners for distribution of AtopX (K171191) outside the United States.
• Deepening the network of strategic partners, expanding the indications addressed by the technology platform, and pursuing regulatory milestones for broader commercialization.
• MiMedx is expected to submit data for the FleX Product's De Novo submission by the end of 2025.
• Implementing a remediation plan for the material weakness in internal controls over financial reporting, including hiring personnel or engaging experts and designing formal control environments.
• Entering into a new employment agreement with CEO Bradley Burnam, effective upon the listing.
• Adopting the 2025 Omnibus Incentive Plan, effective upon the listing.
• Adopting a non-employee director compensation program, effective upon the listing.
• Entering into indemnification agreements with each current director and executive officer.
• Entering into a registration rights agreement with Bradley Burnam.
• Entering into a stockholders agreement with Bradley Burnam and BEB Holdings LLC.
• Filing one or more registration statements on Form S-8 to register shares issued or issuable under stock-based compensation plans.

Key Dates

Recommendation

The company presents an innovative platform and a promising pipeline in large, underserved markets, supported by positive preclinical and early clinical data. However, the significant accumulated losses, the 'going concern' warning, and the inherent volatility and dilution risks associated with a direct listing and future capital raises warrant a cautious approach. A 'Hold' recommendation allows investors to monitor the progress of clinical trials, regulatory approvals, and the company's ability to secure necessary funding and achieve profitability, without taking on immediate high risk. The long-term potential is notable, but the near-term financial and operational uncertainties are substantial.

Keywords

Biopharmaceutical, Medical Device, Dermatology, Eczema, Onychomycosis, Vaccine Delivery, Thermostable Vaccines, PermaFusion, Hexagen, PHMB, FDA Clearance, Drug Development, Clinical Trials, Direct Listing, Nasdaq, Intellectual Property, Going Concern, Capital Raise, Controlled Company, MiMedx, Marburg Virus