vyne-20230930

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 SEPTEMBER 30, 2023

☐ 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.)

685 Route 202/206 N, Suite 301

Bridgewater, New Jersey 08807

(Address of principal executive offices including zip code)

(800) 775-7936

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 November 3, 2023, there were 13,957,324 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 Mezzanine Equity and Stockholders' Equity	7
	Unaudited Condensed Consolidated Statements Of Cash Flows	9
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

Part II	Other Information	34
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
SIGNATURES		37


	September 30		December 31
	2023		2022
Assets
Current Assets:
Cash and cash equivalents	$	15,448	$	30,908
Restricted cash	54		67



Trade receivables, net of allowances	250		173
Amount due from sale of MST Franchise	—		5,000

Prepaid and other expenses	1,759		2,127


Total Current Assets	17,511		38,275


Non-current prepaid expenses and other assets	1,756		2,483

Total Assets	$	19,267	$	40,758

Liabilities, Mezzanine Equity and Stockholders’ Equity
Current Liabilities:
Trade payables	$	716	$	2,386
Accrued expenses	4,452		4,381

Employee related obligations	1,281		2,372
Liability for employee severance benefits	—		206



Total Current Liabilities	6,449		9,345


Other liabilities	1,313		—
Total Liabilities	7,762		9,345

Commitments and Contingencies

Mezzanine Equity:
Convertible Preferred Stock: $0.0001 par value; 20,000,000 shares authorized at September 30, 2023 and December 31, 2022; Series A Preferred Stock: 0 and 3,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	—		211

Stockholders' Equity:

Common stock: $0.0001 par value; 150,000,000 shares authorized at September 30, 2023 and December 31, 2022; 3,304,781 and 3,229,704 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital	696,653		693,937
Accumulated deficit	(685,148)		(662,735)

Total Stockholders' Equity	11,505		31,202
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	19,267	$	40,758


	Three Months Ended September 30				Nine Months Ended September 30
	2023		2022		2023		2022
Revenues


Royalty revenues	$	114	$	167	$	348	$	471
Total revenues	114		167		348		471



Operating expenses:
Research and development	3,318		5,546		13,284		14,106
Selling, general and administrative	3,030		3,954		9,490		12,676


Total operating expenses	6,348		9,500		22,774		26,782
Operating loss	(6,234)		(9,333)		(22,426)		(26,311)

Other income, net	163		78		706		127
Loss from continuing operations before income taxes	(6,071)		(9,255)		(21,720)		(26,184)
Income tax expense	—		—		—		—
Loss from continuing operations	(6,071)		(9,255)		(21,720)		(26,184)
(Loss) income from discontinued operations, net of income taxes	(513)		(204)		(544)		12,919
Net loss	$	(6,584)	$	(9,459)	$	(22,264)	$	(13,265)

Loss per share from continuing operations, basic and diluted	$	(1.85)	$	(2.88)	$	(6.66)	$	(8.25)
(Loss) income per share from discontinued operations, basic and diluted	$	(0.16)	$	(0.06)	$	(0.17)	$	4.07
Loss per share, basic and diluted	$	(2.01)	$	(2.94)	$	(6.82)	$	(4.18)

Weighted average shares outstanding - basic and diluted	3,282		3,218		3,271		3,173


	Mezzanine Equity (Convertible Preferred Stock)			Common stock			Additional paid-in capital		Accumulated deficit		Total Stockholders' Equity
	Number of shares	Amounts		Number of Shares	Amounts		Amounts
BALANCE AT JANUARY 1, 2022	—	$	—	2,976,541	$	5	$	688,156	$	(639,525)	$	48,636
CHANGES DURING THE PERIOD:
Net loss	—	—		—	—		—		(13,265)		(13,265)
Reclassification due to reverse stock split	—	—		—	(5)		5		—		—
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	—	—		11,258	—		(3)		—		(3)
Stock-based compensation	—	—		—	—		3,230		—		3,230


Issuance of commitment shares in March 2022	—	—		92,644	—		—		—		—
Issuance of common stock under at-the-market offering, net of $135 in issuance costs	—	—		143,770	—		1,471		—		1,471
BALANCE AT SEPTEMBER 30, 2022	—	$	—	3,224,213	$	—	$	692,859	$	(652,790)	$	40,069

BALANCE AT JANUARY 1, 2023	3,000	$	211	3,229,704	$	—	$	693,937	$	(662,735)	$	31,202
CHANGES DURING THE PERIOD:
Net loss	—	—		—	—		—		(22,264)		(22,264)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	—	—		40,488	—		(35)		—		(35)
Stock-based compensation	—	—		—	—		2,595		—		2,595
Redemption of convertible preferred stock	(3,000)	(211)		—	—		—		(149)		(149)

Issuance of common stock under at-the-market offering, net of $5 in issuance costs	—	—		34,589	—		156		—		156

BALANCE AT SEPTEMBER 30, 2023	—	$	—	3,304,781	$	—	$	696,653	$	(685,148)	$	11,505


	Three Months Ended September 30				Nine Months Ended September 30
(in thousands)	2023		2022		2023		2022
Product sales, net	$	(498)	$	—	$	(498)	$	106

Cost of goods sold	—		—		—		80

Operating expenses:
Research and development	—		—		—		—
Selling, general and administrative	15		117		46		25
Total operating expenses	15		117		46		25
(Loss) income from discontinued operations	(513)		(117)		(544)		1
Gain on the sale of the MST Franchise	—		(87)		—		12,918
(Loss) income from discontinued operations, before income taxes	(513)		(204)		(544)		12,919
Income tax expense	—		—		—		—
Net (loss) income from discontinued operations	$	(513)	$	(204)	$	(544)	$	12,919


(in thousands)	Nine Months Ended September 30, 2022
Cash Flows From Operating Activities:
Stock-based compensation (income) expense*	$	(352)
Gain on the sale of the MST Franchise	(12,918)
Total non-cash items of discontinued operations	$	(13,270)

Supplemental disclosure of cash flow information:
Amount due from sale of MST Franchise	$	5,000


(in thousands)	Nine Months Ended September 30, 2022
Cash proceeds	$	20,000
Proceeds received in January 2023	5,000
	25,000
Less transaction costs	(4,334)
Less carrying value of assets sold	(7,748)
Gain on sale, before income taxes	12,918
Income tax expense	—
Gain on sale net of tax	$	12,918


	Three Months Ended September 30				Increase/(Decrease)		Increase/(Decrease)
(in thousands, except %)	2023		2022		$		%
Revenues
Royalty revenues	$	114	$	167	$	(53)	(31.7)	%
Total revenues	114		167		(53)		(31.7)	%

Operating expenses:
Research and development	3,318		5,546		(2,228)		(40.2)	%
Selling, general and administrative	3,030		3,954		(924)		(23.4)	%
Total operating expenses	6,348		9,500		(3,152)		(33.2)	%
Operating loss	(6,234)		(9,333)		(3,099)		(33.2)	%

Other income, net	163		78		85		109.0	%
Loss from continuing operations before income taxes	(6,071)		(9,255)		(3,184)		(34.4)	%
Income tax expense	—		—		—		—	%
Loss from continuing operations	(6,071)		(9,255)		(3,184)		(34.4)	%
Loss from discontinued operations	(513)		(204)		309		151.5	%
Net loss	$	(6,584)	$	(9,459)	$	(2,875)	(30.4)	%


	September 30
	2023	2022
Outstanding stock options and RSUs	240,401	325,022
Warrants	27,509	27,509

SEC Form 10-Q filed by VYNE Therapeutics Inc.