vyne-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___ TO ___.

Commission file number 001-38356

VYNE THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)


Delaware						45-3757789
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

520 U.S. Highway 22, Suite 204

Bridgewater, New Jersey 08807

(Address of principal executive offices including zip code)

(800) 775-7936

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange
on which registered

Common Stock, par value $0.0001

VYNE

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 5, 2022, there were 57,908,489 shares of the registrant’s Common Stock, par value $0.0001 per share, outstanding.


		Page
Part I	Financial Information	5
Item 1.	Unaudited Financial Statements	5
	Unaudited Condensed Consolidated Balance Sheets	5
	Unaudited Condensed Consolidated Statements Of Operations	6

	Unaudited Condensed Consolidated Statements Of Changes In Stockholders' Equity	7
	Unaudited Condensed Consolidated Statements Of Cash Flows	8
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

Part II	Other Information	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
SIGNATURES		33


	March 31		December 31
	2022		2021
Assets
Current Assets:
Cash and cash equivalents	$	50,495	$	42,250
Restricted cash	605		605



Trade receivables, net of allowances	535		7,583
Amount due from sale of MST Franchise	5,000		—

Prepaid expenses and other assets	3,895		4,565
Operating lease right of use assets	124		338
Discontinued operations - current assets	—		7,845
Total Current Assets	60,654		63,186
Property and equipment, net	310		354

Non-current prepaid expenses and other assets	3,355		3,506

Total Assets	$	64,319	$	67,046

Liabilities and Stockholders’ Equity
Current Liabilities:
Trade payables	$	3,612	$	6,510
Accrued expenses	3,312		8,593

Employee related obligations	1,331		2,752
Liability for employee severance benefits	216		206
Operating lease liabilities	117		349








Total Liabilities	8,588		18,410
Commitments and Contingencies (Note 7)
Stockholders' Equity:
Preferred stock: $0.0001 par value; 20,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock: $0.0001 par value; 150,000,000 shares authorized at March 31, 2022 and December 31, 2021; 57,908,489 and 53,577,744 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	6		5
Additional paid-in capital	690,580		688,156
Accumulated deficit	(634,855)		(639,525)

Total Stockholders' Equity	55,731		48,636
Total Liabilities and Stockholders’ Equity	$	64,319	$	67,046


	Three months ended March 31
	2022		2021
Revenues


Royalty revenues	$	178	$	230
Total Revenues	178		230



Operating expenses:
Research and development	4,452		4,255
Selling, general and administrative	4,417		5,732


Total operating expenses	8,869		9,987
Operating loss	(8,691)		(9,757)
Interest expense	—		(1,062)
Other expense	(3)		(57)
Loss from continuing operations before income taxes	(8,694)		(10,876)
Income tax expense	—		—
Loss from continuing operations	$	(8,694)	$	(10,876)
Income (loss) from discontinued operations, net of income taxes	13,364		(9,674)
Net income (loss)	$	4,670	$	(20,550)

Loss per share from continuing operations, basic and diluted	$	(0.16)	$	(0.22)
Income (loss) per share from discontinued operations, basic and diluted	$	0.24	$	(0.20)
Income (loss) per share basic and diluted	$	0.08	$	(0.42)

Weighted average shares outstanding - basic and diluted	55,386		48,868


	Common stock			Additional paid-in capital		Accumulated deficit		Total
	Number of Shares	Amounts		Amounts
BALANCE AT JANUARY 1, 2021	43,205,221	$	4	$	603,685	$	(566,196)	$	37,493
CHANGES DURING THE PERIOD:
Net loss	—	—		—		(20,550)		(20,550)
Exercise of options, vesting of restricted stock units and shares issued under employee stock purchase plan	129,102	—		388		—		388
Stock-based compensation	—	—		2,442		—		2,442


Issuance of common stock, net of $3,991 in issuance costs	8,052,273	1		73,127		—		73,128

BALANCE AT MARCH 31, 2021	51,386,596	$	5	$	679,642	$	(586,746)	$	92,901

BALANCE AT JANUARY 1, 2022	53,577,744	$	5	$	688,156	$	(639,525)	$	48,636
CHANGES DURING THE PERIOD:
Net income	—	—		—		4,670		4,670
Vesting of restricted stock units, net of withholding tax	75,297	—		(25)		—		(25)
Stock-based compensation	—	—		893		—		893
Issuance of commitment shares in March 2022	1,667,593	—		—		—		—
Issuance of common stock, net of $48 in issuance costs	2,587,855	1		1,556		—		1,557

BALANCE AT MARCH 31, 2022	57,908,489	$	6	$	690,580	$	(634,855)	$	55,731


(in thousands)	Three months ended March 31, 2022		Three months ended March 31, 2021
Product sales	$	106	$	3,889

Cost of goods sold	80		601

Operating expenses:
Research and development	—		2,078
Selling, general and administrative	(333)		10,884
Total operating expenses	(333)		12,962
Income (loss) from discontinued operations	359		(9,674)
Gain on the sale of the MST Franchise	13,005		—
Income (loss) from discontinued operations, before income taxes	13,364		(9,674)
Income tax expense	—		—
Net income (loss) from discontinued operations	$	13,364	$	(9,674)


(in thousands)	March 31, 2022		December 31, 2021
Current assets:
Inventory	$	—	$	7,291
Prepaid expenses and other assets	—		554
Total current assets of discontinued operations	$	—	$	7,845


(in thousands)	March 31, 2022
Cash proceeds	$	20,000
Proceeds to be paid in January 2023	5,000
	25,000
Less transaction costs:	(4,247)
Less book value of sold assets	(7,748)
Gain on sale, before income taxes	13,005
Income tax expense	—
Gain on sale net of tax	$	13,005


	Three months ended March 31
	2022		2021
Dividend yield	0	%	0	%
Expected volatility	74.40	%	68.38% - 69.12%
Risk-free interest rate	2.2%		0.50% - 1.05%
Expected term	6 years		6 years


	Three months ended March 31,
	2022		2021		Variance
Revenues
Royalty revenues	$	178	$	230	$	(52)	(22.6)	%
Total revenues	178		230		(52)		(22.6)	%

Operating expenses:
Research and development	4,452		4,255		197		4.6	%
Selling, general and administrative	4,417		5,732		(1,315)		(22.9)	%
Total operating expenses	8,869		9,987		(1,118)		(11.2)	%
Operating loss	(8,691)		(9,757)		1,066		(10.9)	%
Interest expense	—		(1,062)		1,062		(100.0)	%
Other expense	(3)		(57)		54		(94.7)	%
Loss from continuing operations before income taxes	(8,694)		(10,876)		2,182		(20.1)	%
Income tax expense	—		—		—		—	%
Loss from continuing operations	(8,694)		(10,876)		2,182		(20.1)	%
Income (loss) from discontinued operations	13,364		(9,674)		23,038		(238.1)	%
Net income (loss)	$	4,670	$	(20,550)	$	25,220	(122.7)	%



			VYNE Therapeutics Inc.

			By:			/s/ David Domzalski
						David Domzalski President and Chief Executive Officer
						(Principal Executive Officer)

			By:			/s/ Tyler Zeronda
						Tyler Zeronda Chief Financial Officer and Treasurer
						(Principal Financial Officer and Principal Accounting Officer)


	Three months ended March 31
	2022		2021
	(in thousands of U.S. dollars)
Net cash (used in) / provided by:
Operating activities	$	(9,975)	$	(12,551)
Investing activities	16,688		—
Financing activities	$	1,532	$	73,503

SEC Form 10-Q filed by VYNE Therapeutics Inc.