Part I - Financial Information [Item 1. Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Presents VYNE Therapeutics Inc.'s unaudited condensed consolidated financial statements and detailed explanatory notes [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | Metric | September 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Cash and cash equivalents | $15,448 | $30,908 | | Total Current Assets | $17,511 | $38,275 | | Total Assets | $19,267 | $40,758 | | Total Current Liabilities | $6,449 | $9,345 | | Total Liabilities | $7,762 | $9,345 | | Total Stockholders' Equity | $11,505 | $31,202 | - The company's cash and cash equivalents decreased by approximately **50%** from **$30.9 million** at December 31, 2022, to **$15.4 million** at September 30, 2023. Total assets decreased by over **50%** from **$40.7 million** to **$19.2 million**, while total liabilities decreased from **$9.3 million** to **$7.7 million**. Stockholders' equity also saw a significant reduction from **$31.2 million** to **$11.5 million**[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements Of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Operations) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenues | $114 | $167 | $348 | $471 | | Operating expenses | $6,348 | $9,500 | $22,774 | $26,782 | | Operating loss | $(6,234) | $(9,333) | $(22,426) | $(26,311) | | Net loss | $(6,584) | $(9,459) | $(22,264) | $(13,265) | | Loss per share (basic and diluted) | $(2.01) | $(2.94) | $(6.82) | $(4.18) | - For the three months ended September 30, 2023, total revenues decreased by **31.7%** YoY, while operating expenses decreased by **33.2%** YoY, leading to a **33.2%** reduction in operating loss. However, net loss decreased by **30.4%** YoY. For the nine months ended September 30, 2023, total revenues decreased by **26.1%** YoY, operating expenses decreased by **15.0%** YoY, and operating loss decreased by **14.8%** YoY. Net loss significantly increased by **67.8%** YoY, primarily due to a gain on the sale of the MST Franchise in the prior year's discontinued operations[25](index=25&type=chunk)[164](index=164&type=chunk)[169](index=169&type=chunk) [Unaudited Condensed Consolidated Statements Of Changes In Mezzanine Equity and Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Changes%20In%20Mezzanine%20Equity%20and%20Stockholders%27%20Equity) | Metric (in thousands) | Balance at Jan 1, 2023 | Net Loss | Stock-based Compensation | Redemption of Preferred Stock | Issuance of Common Stock | Balance at Sep 30, 2023 | | :-------------------- | :--------------------- | :------- | :----------------------- | :---------------------------- | :----------------------- | :---------------------- | | Mezzanine Equity | $211 | — | — | $(211) | — | $0 | | Additional Paid-in Capital | $693,937 | — | $2,595 | — | $156 | $696,653 | | Accumulated Deficit | $(662,735) | $(22,264) | — | $(149) | — | $(685,148) | | Total Stockholders' Equity | $31,202 | $(22,264) | $2,595 | $(149) | $156 | $11,505 | - The company's total stockholders' equity decreased significantly from **$31.2 million** at January 1, 2023, to **$11.5 million** at September 30, 2023, primarily due to a net loss of **$22.3 million** and the redemption of convertible preferred stock. Mezzanine equity was eliminated through redemption during the period[29](index=29&type=chunk) [Unaudited Condensed Consolidated Statements Of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(20,204) | $(24,389) | | Net cash provided by investing activities | $5,000 | $15,666 | | Net cash (used in) provided by financing activities | $(269) | $1,445 | | Decrease in cash, cash equivalents and restricted cash | $(15,473) | $(7,278) | | Cash, cash equivalents and restricted cash at end of period | $15,502 | $35,577 | - Net cash used in operating activities decreased from **$24.4 million** in 2022 to **$20.2 million** in 2023. Net cash provided by investing activities significantly decreased from **$15.7 million** in 2022 to **$5.0 million** in 2023, primarily due to lower proceeds from the sale of the MST Franchise. Financing activities shifted from providing **$1.4 million** in cash in 2022 to using **$(0.3) million** in 2023, mainly due to the redemption of convertible preferred stock[36](index=36&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 - Nature of Operations](index=11&type=section&id=NOTE%201%20-%20NATURE%20OF%20OPERATIONS) VYNE Therapeutics is a clinical-stage biopharmaceutical company developing immuno-inflammatory therapies via its BET inhibitor platform - VYNE Therapeutics is a clinical-stage biopharmaceutical company focused on immuno-inflammatory conditions, leveraging its BET inhibitor platform[40](index=40&type=chunk)[41](index=41&type=chunk) - VYN201, a topical pan-BD BET inhibitor for nonsegmental vitiligo, showed significant clinical improvement in F-VASI in Phase 1b (**1%** and **2%** cohorts) after **16 weeks** of treatment, with Phase 2b preparatory activities initiated for H1 2024[42](index=42&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk) - VYN202, an oral BD2-selective BET inhibitor, is in preclinical development for immuno-inflammatory indications, with an IND submission expected by year-end 2023 and Phase 1a trial commencement in Q1 2024, followed by Phase 1b trials in psoriasis and rheumatoid arthritis in H2 2024[43](index=43&type=chunk)[146](index=146&type=chunk) - The company completed a **1-for-18** reverse stock split on February 10, 2023, to adjust its outstanding common stock[46](index=46&type=chunk)[119](index=119&type=chunk) [NOTE 2 - Significant Accounting Policies](index=12&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines significant accounting policies for interim financial statements, covering presentation, revenue recognition, R&D costs, and recent accounting pronouncements - The company's financial statements are prepared in accordance with U.S. GAAP for interim periods, with certain information condensed or omitted compared to annual reports[52](index=52&type=chunk) - Revenue recognition follows ASC Topic 606, with royalty revenues recognized as products are sold by the customer. Following the MST Franchise disposition, the company no longer generates product sales revenue[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - Research and development costs are expensed as incurred, including clinical trial expenses, salaries, and consulting fees[76](index=76&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) as of January 1, 2023, with no material impact, and is evaluating ASU 2020-04/2022-06 (Reference Rate Reform), not expecting a material impact[90](index=90&type=chunk)[92](index=92&type=chunk) [NOTE 3 - Strategic Agreements](index=19&type=section&id=NOTE%203%20-%20STRATEGIC%20AGREEMENTS) Details strategic agreements, including exclusive worldwide licenses for BET inhibitor compounds (VYN201, VYN202) and the MST Franchise sale - VYNE holds exclusive worldwide rights to Tay Therapeutics' BET inhibitor compounds for immuno-inflammatory conditions, covering both pan-BD (VYN201) and selective (VYN202) inhibitors[94](index=94&type=chunk)[96](index=96&type=chunk) - The VYN201 License Agreement includes potential clinical development and regulatory approval milestones of up to **$15.75 million** and tiered royalty payments up to **10%** of annual net sales[94](index=94&type=chunk) - The VYN202 License Agreement, exercised in April 2023, involves a **$3.75 million** cash payment and potential milestones up to **$43.75 million**, plus tiered royalties up to **10%** of annual net sales[96](index=96&type=chunk)[97](index=97&type=chunk) - The MST Franchise was sold to Journey Medical Corporation in January 2022 for an upfront payment of **$20.0 million** and a **$5.0 million** deferred payment received in January 2023, with eligibility for up to **$450.0 million** in sales milestone payments[98](index=98&type=chunk)[100](index=100&type=chunk) [NOTE 4 – Discontinued Operations](index=20&type=section&id=NOTE%204%20%E2%80%93%20Discontinued%20Operations) Provides financial details of the MST Franchise, classified as discontinued operations after its January 2022 sale, including combined results - The sale of the MST Franchise in January 2022 was classified as discontinued operations due to its strategic shift and major effect on the business[101](index=101&type=chunk) | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Product sales, net | $(498) | $0 | $(498) | $106 | | (Loss) income from discontinued operations | $(513) | $(117) | $(544) | $1 | | Gain on the sale of the MST Franchise | $0 | $(87) | $0 | $12,918 | | Net (loss) income from discontinued operations | $(513) | $(204) | $(544) | $12,919 | - The company recognized a gain of **$12.9 million** on the sale of the MST Franchise for the nine months ended September 30, 2022, which significantly impacted the net income from discontinued operations in that period[103](index=103&type=chunk)[105](index=105&type=chunk) [NOTE 5 – Mezzanine Equity and Stockholder Capital](index=22&type=section&id=NOTE%205%20%E2%80%93%20MEZZANINE%20EQUITY%20AND%20STOCKHOLDER%20CAPITAL) Details preferred and common stock activities, including Series A Preferred Stock redemption, a reverse stock split, common stock issuances, and a November 2023 private placement - The company redeemed all outstanding Series A Convertible Preferred Stock on January 17, 2023, for **$360 thousand**, eliminating mezzanine equity[116](index=116&type=chunk)[117](index=117&type=chunk) - A **1-for-18** reverse stock split was effected on February 10, 2023, impacting common stock and per-share amounts retroactively[119](index=119&type=chunk)[120](index=120&type=chunk) - In the nine months ended September 30, 2023, the company issued **34,589** shares of common stock through an at-the-market offering for **$0.2 million** in net proceeds[121](index=121&type=chunk) - On November 1, 2023, the company completed a private placement of common stock and pre-funded warrants, generating **$88.2 million** in gross proceeds[123](index=123&type=chunk)[138](index=138&type=chunk) [NOTE 6 – Stock-Based Compensation](index=24&type=section&id=NOTE%206%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Outlines equity incentive plans and ESPP, detailing shares and stock-based compensation expenses across R&D and SG&A categories | Expense Category (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development | $207 | $355 | $399 | $977 | | Selling, general and administrative | $656 | $819 | $2,196 | $2,605 | | Total Stock-based Compensation | $863 | $1,174 | $2,595 | $3,230 | - Total stock-based compensation expenses decreased by **26.5%** for the three months ended September 30, 2023, and by **19.6%** for the nine months ended September 30, 2023, compared to the respective prior periods[130](index=130&type=chunk) [NOTE 7 – Operating Leases](index=25&type=section&id=NOTE%207%20%E2%80%93%20OPERATING%20LEASES) Describes operating lease agreements, including the transition to a smaller corporate headquarters and a new Master Lease - The company transitioned to a smaller corporate headquarters in November 2022 and signed a Master Lease for approximately **5,755 square feet** of office space in Bridgewater, New Jersey, through September 30, 2025[134](index=134&type=chunk) - The Master Lease is expected to result in total lease payments of approximately **$0.3 million**[134](index=134&type=chunk) [NOTE 8 – Commitments and Contingencies](index=25&type=section&id=NOTE%208%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) As of September 30, 2023, no pending legal proceedings or claims are likely to have a material adverse effect on the company - As of September 30, 2023, there are no pending legal proceedings or claims against the company that are likely to have a material adverse effect[136](index=136&type=chunk) [NOTE 9 – Subsequent Events](index=25&type=section&id=NOTE%209%20%E2%80%93%20SUBSEQUENT%20EVENTS) Details a significant subsequent event: a November 1, 2023, private placement generating **$88.2 million** in gross proceeds from common stock and pre-funded warrants - On November 1, 2023, the company completed a private placement, raising **$88.2 million** in gross proceeds from the sale of **10,652,543** shares of common stock and **28,614,437** pre-funded warrants[138](index=138&type=chunk) - The pre-funded warrants have an exercise price of **$0.0001** per share and do not expire until exercised in full, subject to beneficial ownership limitations[139](index=139&type=chunk) - A Registration Rights Agreement was entered into, requiring the company to register the resale of the common stock and underlying warrant shares with the SEC[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, highlighting the strategic shift to a clinical-stage biopharmaceutical company, key program developments, and liquidity [Company Overview](index=27&type=section&id=Company%20Overview) VYNE Therapeutics is a clinical-stage biopharmaceutical company developing innovative immuno-inflammatory therapies, with VYN201 and VYN202 as lead programs - VYNE Therapeutics is a clinical-stage biopharmaceutical company focused on developing proprietary therapies for immuno-inflammatory conditions[143](index=143&type=chunk) - The company holds exclusive worldwide rights to BET inhibitors from Tay Therapeutics, with initial focus on immuno-inflammatory diseases[144](index=144&type=chunk) - VYN201, a topical pan-BD BET inhibitor, demonstrated significant clinical improvement in facial vitiligo (F-VASI) in Phase 1b, with Phase 2b expected in H1 2024[145](index=145&type=chunk) - VYN202, an oral BD2-selective BET inhibitor, is in preclinical development, with an IND submission planned by year-end 2023 and Phase 1a trial initiation in Q1 2024[146](index=146&type=chunk) [Key Developments](index=27&type=section&id=Key%20Developments) Key developments include positive Phase 1b data for VYN201, positive preclinical data for VYN202, and an **$88.2 million** private placement - Positive Phase 1b data for topical VYN201 in nonsegmental vitiligo showed a statistically significant dose-dependent reduction in F-VASI score, with mean percentage reductions of **30.2%** (**1.0%** cohort) and **39.0%** (**2.0%** cohort) after **16 weeks**[148](index=148&type=chunk) - Positive preclinical data for oral VYN202 in psoriasis and rheumatoid arthritis models demonstrated significant inhibition of inflammatory biomarkers and resolution of disease signs/symptoms[156](index=156&type=chunk) - The company plans to submit an IND for VYN202 by year-end 2023, commence Phase 1a in Q1 2024, and initiate Phase 1b trials in moderate-to-severe plaque psoriasis and rheumatoid arthritis in H2 2024[156](index=156&type=chunk) - A private placement transaction closed on November 1, 2023, raising **$88.2 million** in gross proceeds from the sale of common stock and pre-funded warrants[156](index=156&type=chunk) [Financial Overview](index=28&type=section&id=Financial%20Overview) The company has an accumulated deficit of **$685.1 million** and a net loss of **$22.3 million** for the nine months ended September 30, 2023, with future viability dependent on strategy and financing - The company has an accumulated deficit of **$685.1 million** as of September 30, 2023[150](index=150&type=chunk) - Net loss for the nine months ended September 30, 2023, was **$22.3 million**, compared to **$13.3 million** for the same period in 2022[150](index=150&type=chunk) - Future viability is dependent on successfully executing the business strategy, developing product candidates, and raising additional capital to finance operations[151](index=151&type=chunk) [Components of Operating Results](index=28&type=section&id=Components%20of%20Operating%20Results) Breaks down operating results into revenues (royalty-based), cost of goods sold, and operating expenses, noting continued net operating losses and significant carryforwards - Revenues are primarily from royalty payments related to Finacea, as product sales from AMZEEQ and ZILXI ceased after the MST Franchise sale in January 2022[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Research and development expenses are now focused on the immuno-inflammatory pipeline, specifically VYN201 and VYN202, with all such costs expensed as incurred[158](index=158&type=chunk) - The company had federal and state net operating loss carryforwards of **$318.3 million** and **$90.4 million**, respectively, as of December 31, 2022, subject to potential Section 382 limitations[161](index=161&type=chunk)[163](index=163&type=chunk) [Revenues](index=28&type=section&id=Revenues) - Revenue is now solely comprised of royalty revenue, as product sales from AMZEEQ and ZILXI ceased after the MST Franchise sale in January 2022[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) [Cost of Goods Sold](index=28&type=section&id=Cost%20of%20Goods%20Sold) - Cost of goods sold, previously related to AMZEEQ and ZILXI, has been reclassified to discontinued operations following the MST Franchise sale[155](index=155&type=chunk) [Operating Expenses](index=28&type=section&id=Operating%20Expenses) - Operating expenses include research and development (R&D) and selling, general and administrative (SG&A) costs[156](index=156&type=chunk)[159](index=159&type=chunk) [Research and Development Expenses](index=29&type=section&id=Research%20and%20Development%20Expenses) - R&D expenses are primarily related to the development of VYN201 and VYN202, expensed as incurred, and include employee-related costs, third-party agreements, clinical trial materials, and intellectual property costs[158](index=158&type=chunk)[162](index=162&type=chunk) [Selling, General and Administrative Expenses](index=29&type=section&id=Selling%20General%20and%20Administrative%20Expenses) - SG&A expenses include employee-related costs, legal and professional fees, and facility/IT expenses[162](index=162&type=chunk) [Other Income (Expense), net](index=29&type=section&id=Other%20Income%20%28Expense%29%2C%20net) - Other income (expense), net, primarily consists of interest earned on cash and cash equivalents and foreign exchange gains/losses[160](index=160&type=chunk) [Income Taxes and Net Operating Loss Carryforwards](index=29&type=section&id=Income%20Taxes%20and%20Net%20Operating%20Loss%20Carryforwards) - The company has significant federal and state net operating loss (NOL) carryforwards of **$318.3 million** and **$90.4 million**, respectively, as of December 31, 2022, which may be subject to annual limitations under Sections 382 and 383 of the Internal Revenue Code[161](index=161&type=chunk)[163](index=163&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Compares financial performance for the three and nine months ended September 30, 2023, versus 2022, highlighting changes in revenues, operating expenses, and other income [Comparison of the Three-Month Periods Ended September 30, 2023 and 2022](index=30&type=section&id=Comparison%20of%20the%20Three-Month%20Periods%20Ended%20September%2030%2C%202023%20and%202022) | Metric (in thousands) | Sep 30, 2023 | Sep 30, 2022 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Royalty revenues | $114 | $167 | $(53) | (31.7)% | | R&D expenses | $3,318 | $5,546 | $(2,228) | (40.2)% | | SG&A expenses | $3,030 | $3,954 | $(924) | (23.4)% | | Operating loss | $(6,234) | $(9,333) | $(3,099) | (33.2)% | | Net loss | $(6,584) | $(9,459) | $(2,875) | (30.4)% | - Research and development expenses decreased by **$2.2 million** (**40.2%**) due to reduced spending on FMX114 and VYN201, and lower employee-related expenses, partially offset by increased VYN202 spend[166](index=166&type=chunk) - Selling, general and administrative expenses decreased by **$0.9 million** (**23.4%**) primarily due to lower corporate insurance costs and reduced consulting and professional fees[167](index=167&type=chunk) [Comparison of the Nine-Month Periods Ended September 30, 2023 and 2022](index=31&type=section&id=Comparison%20of%20the%20Nine-Month%20Periods%20Ended%20September%2030%2C%202023%20and%202022) | Metric (in thousands) | Sep 30, 2023 | Sep 30, 2022 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | :--------- | | Royalty revenues | $348 | $471 | $(123) | (26.1)% | | R&D expenses | $13,284 | $14,106 | $(822) | (5.8)% |\n| SG&A expenses | $9,490 | $12,676 | $(3,186) | (25.1)% | | Operating loss | $(22,426) | $(26,311) | $(3,885) | (14.8)% | | Net loss | $(22,264) | $(13,265) | $(8,999) | (67.8)% | - Research and development expenses decreased by **$0.8 million** (**5.8%**) due to lower employee-related expenses and reduced spending on FMX114 and VYN201, partially offset by a **$5.6 million** increase for VYN202, including a **$4.0 million** license payment[171](index=171&type=chunk) - Selling, general and administrative expenses decreased by **$3.2 million** (**25.1%**) driven by lower rent, corporate insurance, employee-related expenses, and consulting fees[172](index=172&type=chunk) - Other income, net, increased significantly from **$0.1 million** to **$0.7 million**, primarily due to higher interest income on cash and cash equivalents[174](index=174&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Historically funded by equity, debt, and licensee payments, the company faces continuous losses and negative cash flows, with **$15.5 million** cash and **$685.1 million** accumulated deficit - As of September 30, 2023, the company had **$15.5 million** in cash and cash equivalents and restricted cash, and an accumulated deficit of **$685.1 million**[176](index=176&type=chunk) - Net cash used in operating activities was **$20.2 million** for the nine months ended September 30, 2023[175](index=175&type=chunk)[180](index=180&type=chunk) - A private placement completed on November 1, 2023, generated **$88.2 million** in gross proceeds, which, combined with existing cash, is believed to be sufficient to fund operations for over **12 months**[176](index=176&type=chunk)[178](index=178&type=chunk) - Future funding requirements are substantial and depend on the costs of R&D, regulatory approvals, acquisitions, and intellectual property protection[187](index=187&type=chunk) [Summary Statement of Cash Flows](index=32&type=section&id=Summary%20Statement%20of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $(20,204) | $(24,389) | | Investing activities | $5,000 | $15,666 | | Financing activities | $(269) | $1,445 | [Net Cash Used in Operating Activities](index=32&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) - Net cash used in operating activities was **$20.2 million** for the nine months ended September 30, 2023, primarily reflecting the net loss of **$22.3 million**, adjusted for non-cash stock-based compensation[180](index=180&type=chunk) [Net Cash Provided by Investing Activities](index=33&type=section&id=Net%20Cash%20Provided%20by%20Investing%20Activities) - Net cash provided by investing activities was **$5.0 million** for the nine months ended September 30, 2023, representing the deferred payment received from the MST Franchise sale[182](index=182&type=chunk) [Net Cash (Used in) Provided by Financing Activities](index=33&type=section&id=Net%20Cash%20%28Used%20in%29%20Provided%20by%20Financing%20Activities) - Net cash used in financing activities was **$0.3 million** for the nine months ended September 30, 2023, mainly due to the **$0.4 million** redemption of convertible preferred stock, partially offset by **$0.2 million** from common stock issuance[183](index=183&type=chunk) [Cash and Funding Sources](index=33&type=section&id=Cash%20and%20Funding%20Sources) - Total funding sources for the nine months ended September 30, 2023, were **$5.2 million**, primarily from the MST Franchise sale proceeds (**$5.0 million**) and common stock issuance (**$0.2 million**)[185](index=185&type=chunk) [Funding Requirements](index=33&type=section&id=Funding%20Requirements) - Future funding requirements are dependent on R&D costs, regulatory approval timelines, potential acquisitions/collaborations, new product identification, and intellectual property costs[187](index=187&type=chunk) [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Use%20of%20Estimates) Reiterates that financial statements are prepared using U.S. GAAP, requiring estimates, with no material changes to critical accounting policies since the 2022 Annual Report - The preparation of financial statements requires management to make estimates and assumptions affecting reported amounts[189](index=189&type=chunk) - No material changes to critical accounting policies have occurred for the nine months ended September 30, 2023, compared to the Annual Report on Form 10-K[191](index=191&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) The company is not party to any off-balance sheet arrangements likely to have a material current or future effect on its financial condition or results - The company is not party to any off-balance sheet arrangements that are likely to have a material current or future effect on its financial condition or results[192](index=192&type=chunk) [JOBS Act Accounting Election](index=34&type=section&id=JOBS%20Act%20Accounting%20Election) As an 'emerging growth company,' the company irrevocably opted out of the JOBS Act's extended transition period for new accounting standards, complying as required when adopted - As an 'emerging growth company,' the company has irrevocably opted out of the extended transition period under the JOBS Act for new accounting standards[193](index=193&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=34&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) Refers to Note 2 for details on recently issued and adopted accounting pronouncements and their expected impact on financial position and results of operations - Refer to Note 2 for details on recently issued and adopted accounting pronouncements and their expected impact[194](index=194&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, VYNE Therapeutics Inc. is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, VYNE Therapeutics Inc. is exempt from providing quantitative and qualitative disclosures about market risk[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated as effective at a reasonable assurance level as of September 30, 2023[198](index=198&type=chunk) - No material changes in internal control over financial reporting occurred during the nine months ended September 30, 2023[199](index=199&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) As of September 30, 2023, no pending legal proceedings or claims are likely to have a material adverse effect on the company - No pending legal proceedings or claims are likely to have a material adverse effect on the company as of September 30, 2023[201](index=201&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022[202](index=202&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to disclose for the period - No unregistered sales of equity securities or use of proceeds to report[203](index=203&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to disclose for the period - No defaults upon senior securities to report[204](index=204&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[204](index=204&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No other information to disclose for the period - No other information to report[205](index=205&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed or furnished as part of this Quarterly Report on Form 10-Q, including corporate governance documents and certifications - The exhibit index includes corporate governance documents (Certificate of Incorporation, Bylaws), CEO and CFO certifications, and XBRL instance and taxonomy documents[207](index=207&type=chunk) Signatures [Signatures](index=39&type=section&id=Signatures) Contains required signatures for the Quarterly Report on Form 10-Q, affirming submission by VYNE Therapeutics Inc.'s CEO and CFO - The report is duly signed by David Domzalski, Director and Chief Executive Officer, and Tyler Zeronda, Chief Financial Officer, on November 13, 2023[213](index=213&type=chunk)

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 JUNE 30, 2023 OR ☐ 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) (State or other jurisdiction of incorporation o ...

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, 2023 OR ☐ 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) (State or other jurisdiction of incorporation ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ 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 (S ...

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section provides the standard cover page information for the Quarterly Report on Form 10-Q for the period ended September 30, 2022, including registrant details, securities registered, and filer status - The registrant, VYNE Therapeutics Inc., is filing a Quarterly Report on Form 10-Q for the period ended September 30, 2022[2](index=2&type=chunk) Registrant Filer Status | Filer Status | Indication | | :---------------------- | :--------- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of November 1, 2022, there were **58,035,827 shares of Common Stock outstanding**[7](index=7&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking statements contained in the Form 10-Q, cautioning investors about inherent risks and uncertainties that could cause actual results to differ materially from projections - The report contains forward-looking statements reflecting management's current beliefs and expectations, which involve known and unknown risks and uncertainties[12](index=12&type=chunk) - Key factors that could cause future results to differ materially include the ability to execute business strategy, identify and execute strategic transactions, raise additional financing, successfully complete clinical trials, and obtain regulatory approvals[13](index=13&type=chunk)[17](index=17&type=chunk) - The company assumes no obligation to update these forward-looking statements, except as required by law[16](index=16&type=chunk) [Part I – Financial Information](index=6&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) Part I presents VYNE Therapeutics Inc.'s unaudited condensed consolidated financial statements for the quarter ended September 30, 2022, along with management's discussion and analysis of financial condition and results of operations [Item 1. Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Metric | Sep 30, 2022 | Dec 31, 2021 | Change (2022 vs 2021) | | :-------------------------------- | :----------- | :----------- | :-------------------- | | Cash and cash equivalents | $35,510 | $42,250 | $(6,740) | | Total Current Assets | $44,046 | $63,186 | $(19,140) | | Total Assets | $46,908 | $67,046 | $(20,138) | | Total Liabilities | $6,839 | $18,410 | $(11,571) | | Total Stockholders' Equity | $40,069 | $48,636 | $(8,567) | | Accumulated Deficit | $(652,790) | $(639,525) | $(13,265) | - The decrease in total current assets is primarily due to a reduction in trade receivables and the reclassification of discontinued operations assets[19](index=19&type=chunk) - Total liabilities significantly decreased, mainly driven by reductions in trade payables and accrued expenses[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements Of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Operations) Condensed Consolidated Statements of Operations Highlights (in thousands USD, except per share data) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Royalty Revenues | $167 | $133 | $471 | $658 | | Total Operating Expenses | $9,500 | $10,900 | $26,782 | $30,723 | | Operating Loss | $(9,333) | $(10,767) | $(26,311) | $(30,065) | | Loss from continuing operations | $(9,255) | $(14,276) | $(26,184) | $(35,836) | | (Loss) income from discontinued operations | $(204) | $(7,009) | $12,919 | $(25,923) | | Net Loss | $(9,459) | $(21,285) | $(13,265) | $(61,759) | | Loss per share, basic and diluted | $(0.16) | $(0.41) | $(0.23) | $(1.22) | - Net loss significantly decreased for both the three and nine months ended September 30, 2022, primarily due to income from discontinued operations in 2022 and reduced operating expenses[21](index=21&type=chunk) - Interest expense was eliminated in 2022 due to the payment of all outstanding debt in August 2021[21](index=21&type=chunk) [Unaudited Condensed Consolidated Statements Of Changes In Stockholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Changes%20In%20Stockholders%27%20Equity) Changes in Stockholders' Equity (in thousands USD, except share data) | Metric | Balance at Jan 1, 2022 | Net Loss | Stock-based Compensation | Issuance of Common Stock (ATM) | Balance at Sep 30, 2022 | | :----------------------- | :--------------------- | :------- | :----------------------- | :----------------------------- | :---------------------- | | Common Stock (Shares) | 53,577,744 | — | 202,635 | 2,587,855 | 58,035,827 | | Common Stock (Amounts) | $5 | — | — | $1 | $6 | | Additional Paid-in Capital | $688,156 | — | $3,230 | $1,470 | $692,853 | | Accumulated Deficit | $(639,525) | $(13,265) | — | — | $(652,790) | | Total Stockholders' Equity | $48,636 | $(13,265) | $3,230 | $1,471 | $40,069 | - The increase in common stock shares and additional paid-in capital is primarily due to the issuance of shares under an at-the-market offering and stock-based compensation[23](index=23&type=chunk) - The accumulated deficit increased by **$13.3 million** for the nine months ended September 30, 2022, reflecting the net loss[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements Of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20Of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands USD) | Cash Flow Activity | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------- | :-------------------------- | :-------------------------- | | Operating Activities | $(25,325) | $(46,349) | | Investing Activities | $16,602 | $1,027 | | Financing Activities | $1,445 | $39,815 | | Decrease in cash, cash equivalents and restricted cash | $(7,278) | $(5,507) | | Cash, cash equivalents and restricted cash at end of period | $35,577 | $52,911 | - Net cash used in operating activities decreased significantly in 2022, primarily due to a lower net loss and the gain on the sale of the MST Franchise[29](index=29&type=chunk) - Investing activities provided substantial cash in 2022, driven by net proceeds from the sale of the MST Franchise[29](index=29&type=chunk) - Cash provided by financing activities decreased in 2022 compared to 2021, which included significant proceeds from common stock offerings and debt repayment[29](index=29&type=chunk) [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the unaudited interim condensed consolidated financial statements, covering the company's operations, significant accounting policies, and subsequent events [NOTE 1 - NATURE OF OPERATIONS](index=11&type=section&id=NOTE%201%20-%20NATURE%20OF%20OPERATIONS) VYNE Therapeutics Inc. is a biopharmaceutical company focused on developing BET inhibitor compounds for immuno-inflammatory conditions, having divested its MST Franchise to refocus on its pipeline - VYNE Therapeutics is a biopharmaceutical company developing BET inhibitor compounds for immuno-inflammatory conditions, with VYN201 as its initial candidate for vitiligo, expected to initiate clinical trials in November 2022[33](index=33&type=chunk)[111](index=111&type=chunk) - The Phase 2a clinical trial for FMX114 in mild-to-moderate atopic dermatitis did not meet its primary endpoint at week 4, but showed statistical superiority to vehicle at weeks 1, 2, and 3, and potential for more moderate-to-severe AD[34](index=34&type=chunk)[112](index=112&type=chunk) - On January 12, 2022, the company sold its MST Franchise (AMZEEQ, ZILXI, FCD105) to Journey Medical Corporation for an upfront payment of **$20.0 million** and an additional **$5.0 million** on the one-year anniversary, plus potential sales milestone payments up to **$450.0 million**[37](index=37&type=chunk)[38](index=38&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - The company exercised an option with Tay Therapeutics for topical BET inhibitor compounds and expects to exercise an option for oral BET inhibitor compounds by February 28, 2023, involving milestone payments and royalties[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Following the divestiture, the company streamlined operations and reduced its workforce to approximately **28 employees**[43](index=43&type=chunk)[116](index=116&type=chunk) - A one-for-four reverse stock split was effected on February 12, 2021, reducing authorized shares from 300 million to 75 million[44](index=44&type=chunk) - The company has incurred significant losses and negative operating cash flows since inception and requires substantial additional financing to continue as a going concern beyond one year from the financial statements' issuance date[47](index=47&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[146](index=146&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the significant accounting policies used in preparing the unaudited interim condensed consolidated financial statements, including basis of presentation, revenue recognition, and discontinued operations - The financial statements are prepared in accordance with U.S. GAAP for interim financial statements, with certain information condensed or omitted[54](index=54&type=chunk) - The company no longer has revenue-generating products from the MST Franchise after January 2022 but continues to receive royalty revenues[62](index=62&type=chunk) - The company accounts for revenue under ASC Topic 606, recognizing revenue when customers obtain control of products or when performance obligations are satisfied[62](index=62&type=chunk) Anti-Dilutive Securities Excluded from EPS Calculation (Shares) | Item | September 30, 2022 | September 30, 2021 | | :---------------------------------------- | :------------------- | :------------------- | | Outstanding stock options, RSUs and shares under the ESPP | 5,850,390 | 5,303,135 | | Warrants | 495,165 | 495,165 | - The sale of the MST Franchise was classified as discontinued operations in accordance with ASC 205, reflecting a strategic shift[73](index=73&type=chunk)[76](index=76&type=chunk) - As a smaller reporting company, the adoption of ASU 2016-13 (Credit Losses) is effective January 1, 2023, and is not expected to have a material impact[75](index=75&type=chunk) [NOTE 3 – DISCONTINUED OPERATIONS](index=17&type=section&id=NOTE%203%20%E2%80%93%20DISCONTINUED%20OPERATIONS) This note provides detailed financial results and carrying amounts for the MST Franchise, which was sold on January 12, 2022, and classified as discontinued operations - The MST Franchise was sold on January 12, 2022, and its results are classified as discontinued operations[76](index=76&type=chunk) Income (Loss) from Discontinued Operations (in thousands USD) | Metric | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Product sales | $— | $3,953 | $106 | $11,805 | | Total operating expenses | $117 | $9,913 | $25 | $35,283 | | Income (loss) from discontinued operations, before income taxes | $(204) | $(7,009) | $12,919 | $(25,923) | | Net income (loss) from discontinued operations | $(204) | $(7,009) | $12,919 | $(25,923) | Gain on Sale of MST Franchise (in thousands USD) | Item | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | | Cash proceeds | $20,000 | | Proceeds to be paid in January 2023 | $5,000 | | Less transaction costs | $(4,334) | | Less book value of sold assets | $(7,748) | | Gain on sale, net of tax | $12,918 | - Contingent consideration from milestone payments for sales of ZILXI, AMZEEQ, and FCD105 will be recognized when realizable[80](index=80&type=chunk) [NOTE 4 – SHARE CAPITAL](index=18&type=section&id=NOTE%204%20%E2%80%93%20SHARE%20CAPITAL) This note details the company's authorized and outstanding share capital, including common and preferred stock, and recent issuances of common stock through at-the-market offerings - As of September 30, 2022, the company is authorized to issue **150,000,000 shares of common stock** and **20,000,000 shares of preferred stock**, with **58,035,827 common shares outstanding** and no preferred shares[81](index=81&type=chunk) - During the nine months ended September 30, 2022, the company issued **2,587,855 shares of common stock** through an at-the-market offering for **$1.5 million** in net proceeds[86](index=86&type=chunk) - In March 2022, the company entered into an Equity Purchase Agreement with Lincoln Park Capital Fund, LLC, allowing it to sell up to **$30.0 million** of common stock over 36 months, and issued **1,667,593 commitment shares**[87](index=87&type=chunk) - The company had **495,165 equity-classified warrants outstanding** as of September 30, 2022, with an exercise price of **$4.27**, subject to a 'Down Round Feature' adjustment[88](index=88&type=chunk) [NOTE 5 – SHARE BASED COMPENSATION](index=20&type=section&id=NOTE%205%20%E2%80%93%20SHARE%20BASED%20COMPENSATION) This note outlines the company's equity incentive plans and Employee Share Purchase Plan, detailing shares available for grant, options, and RSUs granted, and stock-based compensation expense - As of September 30, 2022, **916,535 shares** remain issuable under the 2019 Equity Incentive Plan and **220,357 shares** under the 2018 Omnibus Incentive Plan[89](index=89&type=chunk) - The Employee Share Purchase Plan (ESPP) allows employees to purchase common stock at **85%** of the lesser of the fair market value at the beginning or end of each semi-annual period, with **2,165,534 shares** remaining available for grant[90](index=90&type=chunk)[91](index=91&type=chunk) Options and RSUs Granted to Employees and Directors (9 Months Ended Sep 30, 2022) | Award Type | Amount | Exercise Price Range | Vesting Period | Expiration | | :--------- | :-------- | :------------------- | :------------- | :--------- | | Options | 879,503 | $0.31 - $0.61 | 1 year - 4 years | 10 years | | RSUs | 726,102 | — | 4 years | — | Stock-Based Compensation Expense (in thousands USD) | Expense Category | 3 Months Ended Sep 30, 2022 | 3 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $355 | $435 | $977 | $1,335 | | Selling, general and administrative | $819 | $1,662 | $2,605 | $4,334 | | Discontinued operations | $— | $308 | $(352) | $1,079 | | Total | $1,174 | $2,405 | $3,230 | $6,748 | [NOTE 6 – OPERATING LEASES](index=21&type=section&id=NOTE%206%20%E2%80%93%20OPERATING%20LEASES) This note describes the company's operating lease agreements for its corporate offices, including the transition to a smaller headquarters and new lease agreements - The lease for the principal executive office in Bridgewater, New Jersey, expired on September 30, 2022[96](index=96&type=chunk)[97](index=97&type=chunk) - In November 2022, the company transitioned to a smaller corporate headquarters, signing a sublease through September 30, 2023, and a master lease through September 30, 2025[98](index=98&type=chunk) - A **$0.6 million** lien on cash related to bank guarantees for lease agreements was released in April 2022[100](index=100&type=chunk) [NOTE 7 – COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=NOTE%207%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note states that as of September 30, 2022, there are no pending legal proceedings or claims against the company that management believes are likely to have a material adverse effect - As of September 30, 2022, no claims or actions are pending against the company that are likely to have a material adverse effect[101](index=101&type=chunk) [NOTE 8 – SUBSEQUENT EVENTS](index=21&type=section&id=NOTE%208%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses subsequent events after September 30, 2022, including a private placement of Series A Convertible Preferred Stock and a proposal for a reverse stock split - On November 11, 2022, the company entered into a Securities Purchase Agreement for a private placement of **3,000 shares of Series A Convertible Preferred Stock** for **$300,000**[102](index=102&type=chunk)[103](index=103&type=chunk) - The Purchase Agreement requires the company to convene a stockholder meeting by January 31, 2023, to approve a reverse stock split of its common stock[103](index=103&type=chunk)[104](index=104&type=chunk) - Each share of Series A Preferred Stock carries **1,000,000 votes** on the reverse stock split proposal, which will be automatically voted in the same proportion as common stock[105](index=105&type=chunk) - Series A Preferred Stock is convertible into common stock at **$0.26 per share** (subject to adjustments) and is redeemable by the company at **120% of stated value** or by the holder at **130% of stated value** under certain conditions[106](index=106&type=chunk)[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, emphasizing the strategic shift to immuno-inflammatory conditions and the financial impact of the MST Franchise divestiture [Company Overview](index=23&type=section&id=Company%20Overview) - VYNE Therapeutics is a biopharmaceutical company focused on developing BET inhibitor compounds for immuno-inflammatory conditions, with VYN201 for vitiligo as a key candidate[111](index=111&type=chunk) - The Phase 2a trial for FMX114 in mild-to-moderate atopic dermatitis did not meet its primary endpoint at week 4 but showed statistical superiority at weeks 1, 2, and 3, leading to an evaluation of its development strategy[112](index=112&type=chunk) - The company divested its MST Franchise (AMZEEQ, ZILXI, FCD105) to Journey Medical Corporation on January 12, 2022, to refocus resources on immuno-inflammatory development programs[113](index=113&type=chunk)[114](index=114&type=chunk) - The divestiture included an upfront payment of **$20.0 million**, a **$5.0 million** payment on the one-year anniversary, and potential sales milestone payments up to **$450.0 million**[115](index=115&type=chunk) - Workforce was reduced from **106 to 28 employees** following the MST Franchise sale[116](index=116&type=chunk) [Key Developments](index=24&type=section&id=Key%20Developments) - FMX114 Phase 2a trial for atopic dermatitis did not meet its primary endpoint at week 4 but showed statistical superiority at weeks 1, 2, and 3, leading to a re-evaluation of its development strategy[117](index=117&type=chunk) - A payment of **$997,407 (£850,000)** was made to Tay Therapeutics on August 29, 2022, for Oral BETi Compounds meeting the required molecular profile, with an anticipated exercise of the exclusive option by February 28, 2023[117](index=117&type=chunk) - The company received an extension until February 27, 2023, to regain compliance with Nasdaq's minimum bid price requirement, and its common stock was transferred to the Nasdaq Capital Market[117](index=117&type=chunk) - The U.S. IND for the Phase 1a/b clinical trial evaluating VYN201 for vitiligo was filed in October 2022, with the first patient expected in November 2022 and top-line proof-of-concept data anticipated in the first half of 2023[117](index=117&type=chunk) [Components of Operating Results](index=24&type=section&id=Components%20of%20Operating%20Results) - The company incurred net losses since inception, with a net loss of **$13.3 million** for the nine months ended September 30, 2022, driven by a **$26.2 million** loss from continuing operations offset by **$12.9 million** income from discontinued operations[117](index=117&type=chunk) - Following the MST Franchise sale in January 2022, the company no longer generates revenue from AMZEEQ or ZILXI sales; product sales are reclassified to discontinued operations[120](index=120&type=chunk) - Royalty revenues from Finacea were **$0.5 million** and **$0.7 million** for the nine months ended September 30, 2022 and 2021, respectively[121](index=121&type=chunk) - Research and development expenses are primarily related to FMX114, VYN201, and VYN202, with all such expenses charged to operations as incurred[123](index=123&type=chunk) - Selling, general and administrative expenses include employee-related expenses, legal and professional fees, and facility costs[125](index=125&type=chunk)[132](index=132&type=chunk) - No interest expense was incurred in the three or nine months ended September 30, 2022, due to the payment of all outstanding debt in August 2021[127](index=127&type=chunk)[143](index=143&type=chunk) - The company has significant federal and state net operating loss (NOL) carryforwards of **$315.0 million** and **$105.6 million**, respectively, as of December 31, 2021[129](index=129&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three-month and nine-month periods ended September 30, 2022, and 2021, highlighting changes in revenues, operating expenses, and net loss [Comparison of the Three-Month Periods Ended September 30, 2022 and 2021](index=26&type=section&id=Comparison%20of%20the%20Three-Month%20Periods%20Ended%20September%2030%2C%202022%20and%202021) Three-Month Period Financial Comparison (in thousands USD) | Metric | Sep 30, 2022 | Sep 30, 2021 | Change ($) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :--------- | :--------- | | Royalty Revenues | $167 | $133 | $34 | 25.6% | | Research and development | $5,546 | $5,917 | $(371) | (6.3)% | | Selling, general and administrative | $3,954 | $4,983 | $(1,029) | (20.7)% | | Total operating expenses | $9,500 | $10,900 | $(1,400) | (12.8)% | | Operating loss | $(9,333) | $(10,767) | $(1,434) | (13.3)% | | Interest expense | $— | $(3,474) | $(3,474) | (100.0)% | | Loss from continuing operations | $(9,255) | $(14,276) | $(5,021) | (35.2)% | | Loss from discontinued operations | $(204) | $(7,009) | $(6,805) | (97.1)% | | Net loss | $(9,459) | $(21,285) | $(11,826) | (55.6)% | - Research and development expenses decreased by **$0.4 million**, primarily due to lower employee-related expenses and other R&D activities, partially offset by a **$1.0 million** option extension payment for Oral BETi[135](index=135&type=chunk) - Selling, general and administrative expenses decreased by **$1.0 million**, driven by reductions in consulting and employee-related expenses[136](index=136&type=chunk) [Comparison of the Nine-Month Periods Ended September 30, 2022 and 2021](index=28&type=section&id=Comparison%20of%20the%20Nine-Month%20Periods%20Ended%20September%2030%2C%202022%20and%202021) Nine-Month Period Financial Comparison (in thousands USD) | Metric | Sep 30, 2022 | Sep 30, 2021 | Change ($) | Change (%) | | :------------------------------------------ | :----------- | :----------- | :--------- | :--------- | | Royalty Revenues | $471 | $658 | $(187) | (28.4)% | | Research and development | $14,106 | $15,219 | $(1,113) | (7.3)% | | Selling, general and administrative | $12,676 | $15,504 | $(2,828) | (18.2)% | | Total operating expenses | $26,782 | $30,723 | $(3,941) | (12.8)% | | Operating loss | $(26,311) | $(30,065) | $(3,754) | (12.5)% | | Interest expense | $— | $(5,610) | $(5,610) | (100.0)% | | Loss from continuing operations | $(26,184) | $(35,836) | $(9,652) | (26.9)% | | Income (loss) from discontinued operations | $12,919 | $(25,923) | $38,842 | 149.8% | | Net loss | $(13,265) | $(61,759) | $(48,494) | (78.5)% | - Research and development expenses decreased by **$1.1 million**, mainly due to lower employee-related expenses and reduced FMX114 spending, partially offset by **$1.4 million** in payments for the Oral BETi Option extension[141](index=141&type=chunk) - Selling, general and administrative expenses decreased by **$2.8 million**, primarily due to lower employee-related and consulting expenses[142](index=142&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) - The company has funded operations primarily through equity, debt, warrants, and licensee payments, incurring losses and negative operating cash flows since inception[146](index=146&type=chunk) - As of September 30, 2022, cash and cash equivalents, and restricted cash totaled **$35.6 million**, with an accumulated deficit of **$652.8 million**[147](index=147&type=chunk) - The company received **$20.0 million** from the MST Franchise sale in January 2022 and expects an additional **$5.0 million** payment[147](index=147&type=chunk) - The company's ability to continue as a going concern is dependent on raising sufficient working capital through debt or equity financings, as current cash is insufficient to fund operations beyond one year[149](index=149&type=chunk)[150](index=150&type=chunk) - The company is subject to 'baby shelf rules,' limiting primary public offerings to one-third of its public float until it exceeds **$75.0 million**[150](index=150&type=chunk)[151](index=151&type=chunk) [Summary Statement of Cash Flows](index=30&type=section&id=Summary%20Statement%20of%20Cash%20Flows) Summary Statement of Cash Flows (in thousands USD) | Cash Flow Activity | 9 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2021 | | :------------------------- | :-------------------------- | :-------------------------- | | Operating activities | $(25,325) | $(46,349) | | Investing activities | $16,602 | $1,027 | | Financing activities | $1,445 | $39,815 | - Net cash used in operating activities decreased in 2022 due to a lower net loss and the gain on the MST Franchise sale[153](index=153&type=chunk) - Net cash provided by investing activities increased significantly in 2022, primarily from the net proceeds of the MST Franchise disposition[155](index=155&type=chunk) - Net cash provided by financing activities decreased in 2022, as 2021 included substantial proceeds from common stock offerings and debt repayment[156](index=156&type=chunk) [Cash and Funding Sources](index=30&type=section&id=Cash%20and%20Funding%20Sources) - In the nine months ended September 30, 2022, liquidity sources included proceeds from the MST Franchise sale and common stock issuance via an at-the-market offering[157](index=157&type=chunk) - In the nine months ended September 30, 2021, liquidity sources were primarily proceeds from common stock issuances (at-the-market and registered direct offerings) and sales of AMZEEQ and ZILXI[158](index=158&type=chunk) [Funding Requirements](index=31&type=section&id=Funding%20Requirements) - Future funding requirements depend on factors such as R&D costs for product candidates, regulatory approval timelines, terms of acquisitions/collaborations, new product identification, and intellectual property costs[160](index=160&type=chunk) - The company may need additional capital sooner than planned, potentially through equity or debt financings, or strategic collaborations, which could result in dilution or other restrictions[160](index=160&type=chunk) [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Use%20of%20Estimates) - The preparation of financial statements requires management to make estimates and assumptions, particularly for research and development accruals and share-based compensation valuation[162](index=162&type=chunk) - Critical accounting policies include revenue recognition (ASC 606) and discontinued operations (ASC 205), which involve significant judgments regarding performance obligations, transaction prices, and strategic shifts[165](index=165&type=chunk)[169](index=169&type=chunk) - The company has opted out of the extended transition period for complying with new or revised accounting standards under the JOBS Act[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, VYNE Therapeutics Inc. is not required to provide the information typically set forth in this item regarding quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2022[176](index=176&type=chunk) - There were no material changes in internal control over financial reporting during the nine months ended September 30, 2022[177](index=177&type=chunk) [Part II – Other Information](index=34&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) Part II provides additional information not covered in the financial statements, including legal proceedings, updated risk factors, details on recent equity transactions, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section states that as of September 30, 2022, there are no pending legal proceedings or claims against the company that management believes are likely to have a material adverse effect - As of September 30, 2022, no claims or actions are pending against the company that are likely to have a material adverse effect[179](index=179&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors disclosed in the company's Annual Report on Form 10-K, with an emphasis on the substantial doubt about the company's ability to continue as a going concern due to significant funding requirements - Information about risk factors is contained in the Annual Report on Form 10-K for the year ended December 31, 2021, with no material changes as of September 30, 2022, except as noted[180](index=180&type=chunk) - The company will need substantial additional funding to finance operations and may not be able to continue as a going concern, potentially leading to delays, reductions, or termination of R&D activities[181](index=181&type=chunk)[182](index=182&type=chunk) - As of September 30, 2022, the company had approximately **$35.6 million** in cash and cash equivalents and restricted cash, which is insufficient to fund anticipated operations for the next twelve months, raising substantial doubt about its going concern ability[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities and use of proceeds to report[183](index=183&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item indicates that there were no defaults upon senior securities to report for the period - There were no defaults upon senior securities to report[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[183](index=183&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section details significant agreements entered into after the reporting period, including a Securities Purchase Agreement for Series A Convertible Preferred Stock and amendments to the company's Bylaws - On November 11, 2022, the company entered into a Securities Purchase Agreement to issue **3,000 shares of Series A Convertible Preferred Stock** for **$300,000** in a private placement[184](index=184&type=chunk)[185](index=185&type=chunk) - The agreement mandates a stockholder meeting by January 31, 2023, to approve a reverse stock split, with Series A Preferred holders having **1,000,000 votes per share** on this proposal, mirroring common stock votes[186](index=186&type=chunk)[187](index=187&type=chunk) - The Series A Preferred Stock is convertible at **$0.26 per share** (subject to adjustments) and has redemption rights for the company (**120% of stated value**) and holders (**130% of stated value**)[191](index=191&type=chunk)[192](index=192&type=chunk) - A Registration Rights Agreement requires the company to file a registration statement for the Series A Preferred shares if not fully redeemed[193](index=193&type=chunk) - On November 10, 2022, the Board approved amendments to the Bylaws, modifying quorum requirements for stockholder meetings to include specific thresholds for both total voting power and common stock[195](index=195&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, material agreements, certifications, and XBRL interactive data files - The exhibit index includes corporate documents (Certificate of Incorporation, Bylaws), material agreements (Securities Purchase Agreement, Registration Rights Agreement), CEO/CFO certifications, and XBRL instance documents[197](index=197&type=chunk)[198](index=198&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its due authorization and filing - The report is duly signed by David Domzalski, President and Chief Executive Officer, and Tyler Zeronda, Chief Financial Officer and Treasurer, on November 14, 2022[202](index=202&type=chunk)[203](index=203&type=chunk)

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 JUNE 30, 2022 OR ☐ 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) (State or other jurisdiction of incorporation o ...

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 OR ☐ 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) (State or other jurisdiction of incorporation ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ 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 (S ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___ TO ___. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Commission file number 001-38356 VYNE THERAPEUTICS INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporat ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021 OR ☐ 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) (State or other jurisdiction of incorporation o ...