Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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

☐ 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 August 7, 2023, there were 3,279,971 shares of the registrant’s Common Stock, par value $0.0001 per share, outstanding.

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TABLE OF CONTENTS


		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	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

Part II	Other Information	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	34
Item 6.	Exhibits	35
SIGNATURES		37

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are statements that could be deemed forward-looking statements reflecting the current beliefs and expectations of management with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These statements are often identified by the use of words such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “if,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “until,” “will,” “would,” and similar expressions or variations.

The following factors, among others, including any described in the section titled “Risk Factors” included in this Quarterly Report on Form 10-Q, could cause our future results to differ materially from those expressed in the forward-looking information:

•our ability to raise substantial additional financing to fund our operations and continue as a going concern;

•our ability to successfully execute our business strategy, including our ability to successfully develop our bromodomain and extra-terminal domain (“BET”) inhibitor platform for immuno-inflammatory conditions;

•our ability to enroll patients and successfully complete, and receive favorable results in, clinical trials for our product candidates;

•the timing of commencement of future preclinical studies and clinical trials;

•our pursuit of, and ability to successfully identify and execute, strategic transactions;

•estimates of our expenses, capital requirements, our needs for additional financing and our ability to obtain additional capital on acceptable terms or at all;

•the potential market size of treatments for any diseases and market adoption of our products, if approved or cleared for commercial use, by physicians and patients;

• risks and uncertainties arising out of the completed divestiture of our commercial business;

•disruptions related to macroeconomic conditions on our ability to initiate and retain patients in our clinical trials and progress preclinical studies and the ability of our suppliers to manufacture and provide materials for our product candidates;

•our ability to create or in-license intellectual property and the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and programs, including the projected terms of patent protection;

•the regulatory approval process for our product candidates, including any delay or failure in obtaining requisite approvals;

•developments and projections relating to our competitors and the markets in which we compete, including competing drugs and therapies, particularly if we are unable to receive exclusivity;

•our ability to comply with various regulations applicable to our business;

•our ability to successfully challenge intellectual property claimed by others or otherwise protect our intellectual property;

•our intentions and our ability to establish collaborations or obtain additional funding;

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•our ability to attract and retain key scientific or management personnel;

•our defense of any future litigation that may be initiated against us;

•our expectations regarding licensing, business transactions and strategic operations; and

•our future financial performance and liquidity.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in “Risk Factors” and elsewhere in our Annual Report on Form 10-K as well as our other filings made with the Securities and Exchange Commission ("SEC"). Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

SPECIAL NOTE REGARDING COMPANY REFERENCES

Throughout this Quarterly Report on Form 10-Q, "VYNE," the "Company," "we," "us" and "our" refer to VYNE Therapeutics Inc. and its subsidiaries.

SPECIAL NOTE REGARDING TRADEMARKS

The trademarks and registered trademarks of VYNE Therapeutics Inc. and our subsidiaries referred to in this Quarterly Report on Form 10-Q include VYNE Therapeutics, InhiBET, our logo and our name and logo used together. Third-party product and company names mentioned herein may be the trademarks of their respective owners.

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PART I – FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

VYNE THERAPEUTICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share data)

(Unaudited)


	June 30		December 31
	2023		2022
Assets
Current Assets:
Cash and cash equivalents	$	20,634	$	30,908
Restricted cash	67		67



Trade receivables, net of allowances	234		173
Amount due from sale of MST Franchise	—		5,000

Prepaid and other expenses	2,024		2,127


Total Current Assets	22,959		38,275


Non-current prepaid expenses and other assets	2,000		2,483

Total Assets	$	24,959	$	40,758

Liabilities, Mezzanine Equity and Stockholders’ Equity
Current Liabilities:
Trade payables	$	1,159	$	2,386
Accrued expenses	4,379		4,381

Employee related obligations	836		2,372
Liability for employee severance benefits	—		206



Total Current Liabilities	6,374		9,345


Other liabilities	1,313		—
Total Liabilities	7,687		9,345

Commitments and Contingencies

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

Stockholders' Equity:

Common stock: $0.0001 par value; 150,000,000 shares authorized at June 30, 2023 and December 31, 2022; 3,282,479 and 3,229,704 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital	695,836		693,937
Accumulated deficit	(678,564)		(662,735)

Total Stockholders' Equity	17,272		31,202
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$	24,959	$	40,758

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VYNE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended June 30				Six Months Ended June 30
	2023		2022		2023		2022
Revenues


Royalty revenues	$	135	$	126	$	234	$	304
Total revenues	135		126		234		304



Operating expenses:
Research and development	7,233		4,108		9,967		8,560
Selling, general and administrative	3,220		4,305		6,460		8,722


Total operating expenses	10,453		8,413		16,427		17,282
Operating loss	(10,318)		(8,287)		(16,193)		(16,978)

Other income, net	280		52		543		49
Loss from continuing operations before income taxes	(10,038)		(8,235)		(15,650)		(16,929)
Income tax expense	—		—		—		—
Loss from continuing operations	(10,038)		(8,235)		(15,650)		(16,929)
(Loss) income from discontinued operations, net of income taxes	(20)		(241)		(30)		13,123
Net loss	$	(10,058)	$	(8,476)	$	(15,680)	$	(3,806)

Loss per share from continuing operations, basic and diluted	$	(3.08)	$	(2.56)	$	(4.81)	$	(5.38)
(Loss) income per share from discontinued operations, basic and diluted	$	(0.01)	$	(0.07)	$	(0.01)	$	4.17
Loss per share, basic and diluted	$	(3.09)	$	(2.63)	$	(4.82)	$	(1.21)

Weighted average shares outstanding - basic and diluted	3,274		3,218		3,265		3,148

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VYNE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

(U.S. dollars in thousands, except share data)

(Unaudited)


	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	—	—		—	—		—		(3,806)		(3,806)
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	—	—		9,579	—		—		—		—
Stock-based compensation	—	—		—	—		2,056		—		2,056


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 JUNE 30, 2022	—	$	—	3,222,534	$	—	$	691,688	$	(643,331)	$	48,357

BALANCE AT JANUARY 1, 2023	3,000	$	211	3,229,704	$	—	$	693,937	$	(662,735)	$	31,202
CHANGES DURING THE PERIOD:
Net loss	—	—		—	—		—		(15,680)		(15,680)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	—	—		18,186	—		11		—		11
Stock-based compensation	—	—		—	—		1,732		—		1,732
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 JUNE 30, 2023	—	$	—	3,282,479	$	—	$	695,836	$	(678,564)	$	17,272

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VYNE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

(U.S. dollars in thousands, except share data)

(Unaudited)


	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 APRIL 1, 2022	—	$	—	3,217,138	$	—	$	690,586	$	(634,855)	$	55,731
CHANGES DURING THE PERIOD:
Net loss	—	—		—	—		—		(8,476)		(8,476)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	—	—		5,396	—		25		—		25
Stock-based compensation	—	—		—	—		1,163		—		1,163


Issuance of common stock under at-the-market offering, net of $184 issuance costs	—	—		—	—		(86)		—		(86)

BALANCE AT JUNE 30, 2022	—	$	—	3,222,534	$	—	$	691,688	$	(643,331)	$	48,357

BALANCE AT APRIL 1, 2023	—	$	—	3,271,282	$	—	$	694,937	$	(668,506)	$	26,431
CHANGES DURING THE PERIOD:
Net loss	—	—		—	—		—		(10,058)		(10,058)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	—	—		11,197	—		23		—		23
Stock-based compensation	—	—		—	—		876		—		876


BALANCE AT JUNE 30, 2023	—	$	—	3,282,479	$	—	$	695,836	$	(678,564)	$	17,272

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VYNE THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

(Unaudited)


	Six Months Ended June 30
	2023		2022
Cash Flows From Operating Activities:
Net loss	$	(15,680)	$	(3,806)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	—		56
Changes in accrued liability for employee severance benefits, net of retirement fund profit	—		50
Stock-based compensation	1,732		2,056


Gain on the sale of the MST Franchise	—		(13,005)
Changes in operating assets and liabilities:
(Increase) decrease in trade receivables	(61)		8,215
Decrease in inventory	—		97
Decrease in prepaid expenses and other assets	586		697

Decrease in trade payables, accrued expenses, employee related obligations, liability for employee severance benefits and other long term liabilities	(1,629)		(11,306)
Decrease in operating lease liabilities	—		(318)
Net cash used in operating activities	(15,052)		(17,264)
Cash Flows From Investing Activities:
Net proceeds from the sale of the MST Franchise	5,000		15,752

Net cash provided by investing activities	5,000		15,752
Cash Flows From Financing Activities:
Proceeds related to issuance of common stock through offerings, net of issuance costs	156		1,471
Redemption of convertible preferred stock	(360)		—
Withholdings related to issuance of stock for stock-based compensation arrangements, net	(18)		—
Net cash (used in) provided by financing activities	(222)		1,471
Decrease in cash, cash equivalents and restricted cash	(10,274)		(41)

Cash, cash equivalents and restricted cash at beginning of the period	30,975		42,855
Cash, cash equivalents and restricted cash at end of the period	$	20,701	$	42,814

Cash and cash equivalents	20,634		42,814
Restricted cash	67		—
Total cash, cash equivalents and restricted cash shown in statement of cash flows	$	20,701	$	42,814

Supplementary information on investing and financing activities not involving cash flows:

Issuance of vested shares under employee stock purchase plan	$	29	$	23
Amount due from sale of MST Franchise	$	—	$	5,000
Accretion of preferred stock	$	149	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VYNE Therapeutics Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

NOTE 1 - NATURE OF OPERATIONS

VYNE Therapeutics Inc. (the "Company") is a clinical-stage biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno-inflammatory conditions.

In August 2021, the Company entered into a transaction with Tay Therapeutics Limited (formerly known as In4Derm Limited, "Tay") providing the Company with exclusive worldwide rights to research, develop and commercialize products containing bromodomain and extra-terminal (“BET”) inhibitors for the treatment of any disease, disorder or condition in humans. Through the Company's access to this library of new chemical BET inhibitor compounds, the Company plans to develop product candidates for a diverse set of indications. Based on preclinical data generated to date, the Company has chosen to focus its initial efforts for this platform on select therapeutic areas in immuno-inflammatory disease.

The Company's lead program is VYN201, a locally administered pan-BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure. To date, VYN201 has produced consistent reductions in pro-inflammatory and disease-related biomarkers, improvements in disease severity and a demonstrated local activity through several preclinical models. The Company believes that these data suggest potential broad utility for VYN201 across multiple routes of administration. In November 2022, the Company initiated a Phase 1a/b clinical trial evaluating a topical formulation of VYN201 for the treatment of nonsegmental vitiligo. In February 2023, the Company announced positive preliminary safety and tolerability data from the Phase 1a portion of the trial. In addition, in March 2023, the Company announced positive pharmacokinetic and hematology data from the Phase 1a trial. The first nonsegmental vitiligo patient was dosed in the Phase 1b portion of the trial in January 2023. The Company expects to announce preliminary Phase 1b safety and efficacy data in the third quarter of 2023, followed by final results in October 2023.

The Company's second program is VYN202, an oral small molecule BD2-selective BET inhibitor. VYN202 is in preclinical development for the treatment of immuno-inflammatory indications, and has been designed to achieve class-leading selectivity (BD2 vs. BD1), maximum potency versus BD2 and optimal oral bioavailability. By maximizing BD2 selectivity, the Company believes VYN202 has the potential to be a more conveniently-administered non-biologic treatment option for both acute control and chronic management of immuno-inflammatory indications, where the damaging effects of unrestricted inflammatory signaling activity are common. IND-enabling studies for VYN202 are ongoing, and the Company anticipates filing an IND by year-end 2023.

The Company intends to actively evaluate and enter into strategic partnerships to advance its product candidates through the clinic toward commercialization, and may also partner with leading pharmaceutical companies to advance the Company's molecules in therapeutic areas outside of its core focus in immunology. The Company believes selectively entering into collaborations has the potential to expand and accelerate the development of its programs and maximize the value of its pipeline.

In August 2021, the Company determined to dispose of its legacy commercial business and focus its strategy on the development of BET inhibitor product candidates through its licensing arrangements with Tay. For additional information regarding the sale of the Molecule Stabilizing Technology franchise, including AMZEEQ, ZILXI, and FCD105 (the “MST Franchise”) to Journey Medical Corporation ("Journey") in January 2022 and the Company's licensing arrangements with Tay, see "—Note 3 - Strategic Agreements."

The Company is a Delaware corporation, has its principal executive offices in Bridgewater, New Jersey and operates as one business segment.

Reverse stock split and recasting of per-share amounts

On February 8, 2023, the Company's board of directors approved a 1-for-18 reverse stock split of its outstanding shares of common stock. The reverse stock split was effected on February 10, 2023 at 5:01 p.m. Eastern time. At the effective time, every 18 issued and outstanding shares of the Company's common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each stockholder holding fractional shares was entitled to receive a cash payment (without interest or deduction) from the Company’s transfer agent in an amount equal to such stockholder’s respective pro rata shares of the total net proceeds from the Company’s transfer agent sale of all fractional shares at the then-prevailing prices on the open market. A proportionate adjustment was also made to the maximum number of shares issuable under the Company’s 2019 Equity Incentive Plan, 2018 Omnibus Incentive Plan and 2019 Employee

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Share Purchase Plan. The number of authorized shares of the Company's common stock and the par value of each share of common stock remained unchanged.

Unless noted, all common stock and per share amounts contained in the unaudited condensed consolidated financial statements have been retroactively adjusted to reflect a 1-for-18 reverse stock split.

Liquidity and Capital Resources

Since inception, the Company has funded operations primarily through private and public placements of its equity, debt and warrants and through fees, cost reimbursements and payments received from its licensees. The Company commenced generating product revenues related to sales of AMZEEQ and ZILXI in January 2020 and October 2020, respectively. AMZEEQ and ZILXI were sold as part of the sale of the MST Franchise on January 12, 2022 and, as such, the Company no longer generates revenue from the sale of these products. The Company has incurred losses and experienced negative operating cash flows since its inception and anticipates that it will continue to incur losses until such a time when its product candidates, if approved, are commercially successful, if at all. The Company will not generate any revenue from any current or future product candidates unless and until it obtains regulatory approval and commercializes such products. For the six months ended June 30, 2023, the Company incurred a net loss of $15.7 million and used $15.1 million of cash in operations.

As of June 30, 2023, the Company had cash and cash equivalents, and restricted cash of $20.7 million and an accumulated deficit of $678.6 million. The Company received a $5.0 million deferred payment from Journey on January 12, 2023, the one-year anniversary of the sale of the MST Franchise. The Company had no outstanding debt as of June 30, 2023.

In March 2022, the Company entered into an equity purchase agreement (the “Equity Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $30.0 million of shares of its common stock over the 36-month term of the Equity Purchase Agreement. The Company has not made any sales pursuant to the Equity Purchase Agreement to date.

As described above, the Company refocused its limited resources on its immuno-inflammatory pipeline. Continued research and development activities for these programs, including preclinical and clinical testing of the Company's product candidates, will require significant additional financing. The future viability of the Company and its ability to continue as a going concern is dependent on its ability to raise sufficient working capital through either debt or equity financings to fund its operations and successfully develop commercially viable product candidates. There is no assurance the Company will be able to achieve these objectives under acceptable terms or at all.

In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that its unaudited interim condensed consolidated financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's ability to continue as a going concern is expected to be impacted by the outcome of the plans outlined above, including the Company's ability to raise additional capital to fund its operations and the development and results from clinical trials for the BET inhibitor programs. Based on its current plans and assumptions, the Company believes that absent sufficient proceeds received from financing transactions or business development transactions, the Company will not have sufficient cash and cash equivalents to fund its operations beyond one year from the issuance of these unaudited interim condensed consolidated financial statements. This assumption does not include proceeds that can be drawn from Lincoln Park. Accordingly, the Company will, over the course of the next twelve months, require significant additional financing to continue its operations and meaningfully advance the development of its product candidates, including potentially selling a significant amount of shares pursuant to the Equity Purchase Agreement. The Company may also employ strategies to further extend its ability to fund its operations including: (1) identification of third-party partners to further develop, obtain marketing approval for and/or commercialize its product candidates, which may generate revenue and/or milestone payments and/or (2) refocusing its resources on research and development programs it chooses to prioritize and reducing spending on other programs by delaying or discontinuing development. In addition, the amount of proceeds the Company may be able to raise pursuant to its existing shelf registration statement on Form S-3 may be limited. As of the filing of this Quarterly Report on Form 10-Q, the Company is subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these instructions, the amount of funds the Company can raise through primary public offerings of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of its common stock held by non-affiliates of the Company. Therefore, the Company will be limited in the amount of proceeds it is able to raise by selling shares of its common stock using its Form S-3 until such time as its public float exceeds $75.0 million. These factors raise substantial doubt about the Company's ability to continue as a going concern. Failure to successfully receive additional financing will require the Company to delay,

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scale back or otherwise modify its business and its research and development activities and other operations. The accompanying unaudited interim condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

a.Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial statements. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair statement of the Company’s unaudited condensed consolidated financial position, results of operations, cash flow and statement of stockholders' equity for the interim periods presented. Certain information and disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current year presentation.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 14, 2023.

The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results expected for the year ending December 31, 2023.

b.Principles of Consolidation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.

c.Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and reported amounts of income and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue recognition, product return and research and development accruals. Actual results could differ from the Company’s estimates.

d.Cash and cash equivalents

The Company considers cash equivalents to be all short-term, highly liquid investments, which include short-term bank deposits and money market funds with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash. As of June 30, 2023 and December 31, 2022, the Company had approximately $14.4 million and $28.0 million, respectively, of cash equivalents classified as Level 1 financial instruments.

e.Revenue Recognition

The Company accounts for its revenue transactions under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. In accordance with ASC Topic 606, the Company recognizes revenues when its customers obtain control of its product for an amount that reflects the consideration it expects to receive from its customers in exchange for that product. To determine revenue recognition for contracts that are determined to be in scope of ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when such performance obligation is satisfied.

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As a result of the disposition of the MST Franchise in January 2022, the Company no longer has any revenue generating products; however, it still receives certain royalty revenues (see Note 4 — Discontinued Operations).

Royalty Revenues and Collaboration Agreements

The Company is entitled to royalty payments with respect to sales of a product developed by a customer in collaboration with the Company. Royalties are recognized as the products are sold by the customer.

For collaboration agreements under ASC 606, the Company identifies the contract, identifies the performance obligations, determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when (or as) the performance obligation is satisfied.

The Company identifies the performance obligations included within the agreement and evaluates which performance obligations are distinct. Upfront payments for licenses are evaluated to determine if the license is capable of being distinct from the obligations to participate on certain development and/or commercialization committees with the collaboration partners and supply manufactured drug product for clinical trials. For performance obligations that are satisfied over time, the Company utilizes the input method and revenue is recognized by consistently applying a method of measuring progress toward complete satisfaction of that performance obligation. The Company periodically reviews estimated periods of performance based on the progress under each arrangement and account for the impact of any changes in estimated periods of performance on a prospective basis.

Milestone payments are a form of variable consideration as the payments are contingent upon achievement of a substantive

event. Milestone payments are estimated and are included in the transaction price when the Company determines that it is probable that there will not be a significant reversal of cumulative revenue recognized in future periods.

Product Revenues, net

The Company’s net product revenues were generated through sales of AMZEEQ, which was approved by the FDA in October 2019 and was commercially launched in the United States in January 2020, and ZILXI, which was approved by the FDA in May 2020 and was commercially launched in the United States in October 2020. The Company sold the MST Franchise on January 12, 2022 and, as such, the Company no longer generates revenue from the sale of these products. The following is a description of the Company's accounting policies related to the sales of AMZEEQ and ZILXI.

Product sales

The Company’s customers were a limited number of national and select regional wholesalers (the “distributors”) and certain independent and specialty pharmacies (together, the “customers”). These distributors would subsequently resell the product, primarily to retail pharmacies that dispense the product to patients. Net product revenue was typically recognized when customers obtained control of the Company’s products, which occurred at a point in time, typically upon delivery of product to the customers. The Company evaluated the creditworthiness of its customers to determine whether it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur. The Company did not assess whether a contract had a significant financing component if the expectation was such that the period between the transfer of the promised goods to the customer and the receipt of payment would be less than one year. Standard credit terms did not exceed 75 days. The Company expensed incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that would have been recognized is one year or less or the amount is immaterial. Shipping and handling costs related to the Company’s product sales were included in selling, general and administrative expenses.

Product revenue is recorded net of distribution fees, trade discounts, allowances, rebates, copay program coupons, chargebacks, estimated returns and other incentives. These reserves are classified as either reductions of accounts receivable or as current liabilities. The estimates of reserves established for variable consideration reflect contractual and statutory requirements, known market events and trends, industry data and forecasted customer mix. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net product revenues only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from these estimates. If actual results vary, estimates may be adjusted in the period such change in estimate becomes known, which could have an impact on earnings in the period of adjustment.

Product Sales Provisions

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Provisions for distribution fees, trade discounts and chargebacks are reflected as a reduction to trade receivables, net on the unaudited condensed consolidated balance sheet. All other provisions, including rebates, other discounts and return provisions are reflected as a liability within accrued expenses on the unaudited condensed consolidated balance sheet. The revenue reserve accrual was $1.9 million and $2.7 million as of June 30, 2023 and December 31, 2022, respectively and was reflected in accrued expenses in the unaudited condensed consolidated balance sheet. Actual amounts may ultimately differ from these estimates. If actual results vary, estimates may be adjusted in the period such change in estimate becomes known, which could have an impact on earnings in the period of adjustment.

Distribution Fees and Trade Discounts and Allowances

The Company paid fees for distribution services and for certain data that distributors provide to the Company and generally provided discounts on sales to its distributors for prompt payment. These fees and discounts are contractual in nature and the Company expects its distributors to earn these fees and discounts, and accordingly deducts the full amount of these fees and discounts from its gross product revenues at the time such revenues are recognized.

Rebates, Chargebacks and Other Discounts

Product sales made under managed-care and governmental pricing programs in the U.S. are subject to rebates. Managed Care rebates relate to contractual agreements to sell products to managed care organizations and pharmacy benefit managers at contractual rebate percentages in exchange for volume and/or market share. Chargebacks relate to contractual agreements to sell products to government agencies and other indirect customers at contractual prices that are lower than the list prices the Company charges wholesalers. When these government agencies or other indirect customers purchase products through wholesalers at these reduced prices, the wholesaler charges the Company for the difference between the prices they paid the Company and the prices at which they sold the products to the indirect customers. The Company estimates the rebates and chargebacks it expects to be obligated to provide and deducts these estimated amounts from its gross product revenue at the time the revenue is recognized. The Company estimates the rebates and chargebacks that it expects to be obligated to provide based upon (i) the Company's current contracts and negotiations, (ii) estimates regarding the payer mix based on third-party data and utilization, (iii) inventory held by distributors and (iv) estimates of inventory held at the retail channel. Other discounts include the Company’s co-pay assistance coupon programs for commercially-insured patients meeting certain eligibility requirements. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to pay associated with product that has been recognized as revenue.

Product Returns

Consistent with industry practice, customers are generally allowed to return products within a specified period of time before and after the expiration date. The Company estimates the amount of product that will be returned and deducts these estimated amounts from its gross revenue at the time the revenue is recognized. The information utilized to estimate the returns provision includes: (i) actual return history (ii) historical return industry information regarding rates for comparable pharmaceutical products and product portfolios, (iii) external data with respect to inventory levels in the wholesale distribution channel, (iv) external data with respect to prescription demand for products and (v) remaining shelf lives of products at the date of sale.

Contract Assets and Contract Liabilities

The Company did not have any contract assets (unbilled receivables) related to product sales as of June 30, 2023 or December 31, 2022, as customer invoicing generally occurs before or at the time of revenue recognition. The Company did not have any contract assets (unbilled receivables) related to its license revenues as of June 30, 2023 or December 31, 2022.

The Company did not have any contract liabilities as of June 30, 2023 or December 31, 2022, as the Company did not receive payments in advance of fulfilling its performance obligations to its customers.

Sales Commissions

Sales commissions are generally attributed to periods shorter than one year and therefore are expensed when incurred. Sales commissions are included in discontinued operations.

f.Collaboration arrangements

The Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808), to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the

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commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, the Company will assess whether aspects of the arrangement between it and their collaboration partner are within the scope of other accounting literature.

g.Research and development costs

Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of clinical trials, clinical trial supplies, salaries, stock-based compensation expenses, payroll taxes and other employee benefits, lab expenses, consumable equipment and consulting fees. All costs associated with research and developments are expensed as incurred.

h.Allowance for doubtful accounts

An allowance for doubtful accounts is maintained for potential credit losses based on the aging of trade receivables, historical bad debts experience and changes in customer payment patterns. Trade receivable balances are written off against the allowance when it is deemed probable that the receivable will not be collected. Trade receivables, net are stated net of reserves for certain sales allowances and provisions for doubtful accounts. Provisions for doubtful accounts were not material as of June 30, 2023 or December 31, 2022.

i.Fair value measurement

Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.

j.Net loss per share

Net loss per share, basic and diluted, is computed on the basis of the net loss from continuing operations for the period divided by the weighted average number of common stock outstanding during the period. Diluted net loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options and warrants which are included under the treasury share method when dilutive.

The following stock options, restricted stock units (“RSUs”) and warrants were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (share data):


	June 30
	2023	2022
Outstanding stock options and RSUs	280,134	325,937
Warrants	27,509	27,509

k.Discontinued operations

The Company accounted for the sale of the MST Franchise in accordance with ASC 205, Discontinued Operations, and ASU No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity. The Company followed the held-for-sale criteria as defined in ASC 360 Property, Plant and Equipment and ASC 205. ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are

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reclassified into separate line items in the unaudited condensed consolidated statements of operations. Assets and liabilities are also reclassified into separate line items on the related unaudited condensed consolidated balance sheets for the periods presented. Non-cash items presented in the statement of cash flows and related to discontinued operations are presented in Note 4 - Discontinued Operations. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations.

Due to the sale of the MST Franchise during the first quarter of 2022, in accordance with ASC 205, the Company has classified the results of the MST Franchise as discontinued operations in its unaudited condensed consolidated statements of operations and cash flows for all periods presented, see Note 4, Discontinued Operations. All disposed assets and liabilities associated with the MST Franchise were therefore classified as assets and liabilities of discontinued operations in the Company's unaudited condensed consolidated balance sheets for the periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted.

l.Concentration of credit risks

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash and accounts receivables. The Company deposits cash and cash equivalents with highly rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments.

The Company received the $5.0 million deferred payment from Journey in January 2023. Existing royalty receivables relate to one customer, but do not present a credit risk due to immaterial nature. Restricted cash as of June 30, 2023 was $0.1 million which does not present a credit risk due to immaterial nature.

m.Comprehensive loss

For the three and six months ended June 30, 2023 and 2022, comprehensive loss was equal to the net loss as presented in the accompanying unaudited condensed consolidated statements of operations.

n.Newly issued and recently adopted accounting pronouncements

Recent Accounting Guidance Issued:

In June 2016, the FASB issued Accounting Standard Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. As a smaller reporting company, the Company adopted ASU 2016-13 as of January 1, 2023 and there was no material impact on the unaudited condensed consolidated financial statements upon adoption.

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (ASU 2020-04), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contracts, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU 2020-04 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2022.

In December 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" (ASU 2022-06), which provides extension of the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company is currently evaluating the impact of ASU 2020-04 and ASU 2022-06 on its unaudited condensed consolidated financial statements. Currently, the Company does not expect the adoption of the new standard to have a material impact to the unaudited condensed consolidated financial statements.

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In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for convertible instruments by eliminating the requirement to separately account for embedded conversion features as an equity component in certain circumstances. A convertible debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model. The ASU simplifies the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU requires enhanced disclosures about convertible instruments. The Company adopted ASU 2020-06 as of January 1, 2022 and there was no material impact on the unaudited condensed consolidated financial statements upon adoption.

o.Employee Retention Tax Credit

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law, providing numerous tax provisions and other stimulus measures, including employee retention tax credits (“ERTC”). The ERTC is a refundable tax credit against certain employment taxes for qualifying businesses retaining employees on their payroll during the COVID-19 pandemic and allows eligible employers to claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees, initially from March 27, 2020 until June 30, 2021, and extended through September 30, 2021. During 2022, the Company filed with the Internal Revenue Service (IRS) credits totaling $1.3 million. During the first quarter of 2023, the Company received the full $1.3 million. As there is no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities, the Company accounts for the ERTC by analogy to International Accounting Standard, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”). The ERTC filings remain open to examination by the IRS until April 2025, and as such the Company has recorded the $1.3 million received within other liabilities on the unaudited condensed consolidated balance sheet as of June 30, 2023 until such a time that the Company has reasonable assurance that the conditions associated with the grants have been met.

NOTE 3 - STRATEGIC AGREEMENTS

BET Inhibitor License Agreements

On August 12, 2021, the Company announced a transaction with Tay Therapeutics Limited (formerly known as In4Derm Limited), a company incorporated and registered in Scotland (“Tay”). Tay is a spin-out of the University of Dundee’s School of Life Sciences which has discovered and is developing proprietary BET inhibitors for the treatment of immunology and oncology conditions. On April 30, 2021, the parties entered into an Evaluation and Option Agreement (the “Option Agreement”) pursuant to which Tay granted the Company an exclusive option to obtain exclusive worldwide rights to research, develop and commercialize products containing Tay’s BET inhibitor compounds, which are new chemical entities for treatments in all fields for any disease, disorder or condition in humans. On August 6, 2021, the Company exercised its option with respect to certain of Tay's pan-BD Inhibitor Compounds ("Topical Option"). On August 9, 2021, the parties entered into a License Agreement (the "VYN201 License Agreement") granting the Company a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s pan-BD BET inhibitor compounds in all fields. The Company paid a $1.0 million cash payment to Tay upon the execution of the Option Agreement and $0.5 million in connection with entering into the VYN201 License Agreement. These payments were recorded as a research and development expense in the period paid. Pursuant to the VYN201 License Agreement, the Company has agreed to make cash payments to Tay upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the United States of up to $15.75 million for all indications. Tay is entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. The VYN201 License Agreement provides for tiered royalty payments of up to 10% of annual net sales on the licensed product.

Under the terms of the Option Agreement, the Company's option with respect to selective BET inhibitor compounds ("Oral Option") was to expire upon the earlier of (i) 14 days following the delivery of an agreed data package and selection of a lead new chemical entity candidate by Tay or (ii) June 30, 2022 (the "Option Term"). On June 15, 2022, the parties entered into a Letter Agreement (the “Letter Agreement”) to extend the Option Term to February 28, 2023. Pursuant to the terms of the Letter Agreement, the Company paid $386,366 (£300,000) on June 28, 2022 to Tay to extend the Option Term. In addition, a second payment of $997,407 (£850,000) was paid to Tay pursuant to the terms of the Letter Agreement on August 29, 2022 following the discovery of potential preclinical candidates. Both payments were recorded as research and development expense. On February 27, 2023, the parties entered into a Letter Agreement (the "Second Letter Agreement") pursuant to which the Option Term was extended to April 30, 2023. As consideration for the extension of the Option Term, the Company paid Tay $250,000

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upon the execution of the Second Letter Agreement. Per the terms of the Second Letter Agreement, this fee was deducted from the upfront fee paid by the Company to Tay following the Company's exercise of the Oral Option, as described below.

On April 28, 2023, the Company exercised the Oral Option and the parties entered into a license agreement (the "VYN202 License Agreement") granting the Company a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s selective BET inhibitor compounds in all fields. The Company made a cash payment of $3.75 million to Tay in connection with entering into the VYN202 License Agreement. This payment was recorded as a research and development expense in the period paid. Pursuant to the terms of the VYN202 License Agreement, the Company has agreed to make cash payments to Tay of up to $43.75 million upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed oral product in the United States for all indications. Tay is also entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. The VYN202 License Agreement provides for tiered royalty payments of up to 10% of annual net sales on the licensed product.

Sale of the MST Franchise

Beginning in the second quarter of 2021, the Company conducted a review of its commercial and research and development portfolio to determine how to optimally deploy capital and drive stockholder value. During the course of this review, the Company carefully considered the revenues received from the commercialization of AMZEEQ and ZILXI and the associated costs to drive those revenues, the protracted negative impact of the COVID-19 pandemic during the commercial launches of both AMZEEQ and ZILXI, the payor landscape, as well as the costs to develop each of its pipeline products. During this process, the Company evaluated several strategic options including the acquisition of marketed assets, out-licensing its approved products outside of the United States, and possible partnering or co-development relationships with interested parties. Following its review, the Company determined to initiate a process to explore a possible sale or license of its topical minocycline franchise, including AMZEEQ, ZILXI, FCD105 (the Company’s former Phase 3 proprietary novel topical combination foam formulation of minocycline and adapalene for the treatment of moderate-to-severe acne vulgaris) and the underlying Molecule Stabilizing Technology platform.

On January 12, 2022, VYNE entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Journey pursuant to which the Company sold its MST Franchise to Journey. The assets include certain contracts, including the license agreement with Cutia Therapeutics (HK) Limited (“Cutia”), inventory and intellectual property related to the MST Franchise (together, the “Assets”). Pursuant to the Agreement, Journey assumed certain liabilities of the MST Franchise including, among others, those arising from VYNE’s patent infringement suit initiated against Padagis Israel Pharmaceuticals Ltd. There were no current or long-term liabilities recorded by the Company which were transferred to Journey.

Pursuant to the Purchase Agreement, the Company received an upfront payment of $20.0 million at the closing of the sale of the MST franchise and received an additional $5.0 million deferred payment from Journey in January 2023. The Company is also eligible to receive sales milestone payments of up to $450.0 million in the aggregate upon the achievement of specified levels of net sales on a product-by-product basis, beginning with annual net sales exceeding $100.0 million (with products covered in three categories (1) AMZEEQ (and certain modifications), (2) ZILXI (and certain modifications), and (3) FCD105 and other products covered by the patents being transferred, including certain modifications). In addition, the Company is entitled to receive certain payments from any licensing or sublicensing of the assets by Journey outside of the United States.

NOTE 4 – DISCONTINUED OPERATIONS

On January 12, 2022, the Company entered into the Purchase Agreement with Journey pursuant to which the Company sold its MST Franchise to Journey. The Company has determined that the sale of the MST Franchise represents a strategic shift that had a major effect on the business and therefore the MST Franchise met the criteria for classification as discontinued operations at March 31, 2022. Accordingly the MST Franchise is reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations. Amounts applicable to prior years have been recast to conform to the discontinued operations presentation. The Company recognized a gain on the sale of the MST Franchise upon closing.

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The following table presents the combined results of discontinued operations of the MST Franchise:


	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2023		2022		2023		2022
Product sales, net	$	—	$	—	$	—	$	106

Cost of goods sold	—		—		—		80

Operating expenses:
Research and development	—		—		—		—
Selling, general and administrative	20		241		30		(92)
Total operating expenses	20		241		30		(92)
(Loss) income from discontinued operations	(20)		(241)		(30)		118
Gain on the sale of the MST Franchise	—		—		—		13,005
(Loss) income from discontinued operations, before income taxes	(20)		(241)		(30)		13,123
Income tax expense	—		—		—		—
Net (loss) income from discontinued operations	$	(20)	$	(241)	$	(30)	$	13,123

The following table presents non-cash items related to discontinued operations, which are included in the Company's unaudited condensed consolidated statement of cash flows for the six months ended June 30, 2022. There were no non-cash items related to discontinued operations as of June 30, 2023.


(in thousands)	Six Months Ended June 30, 2022
Cash Flows From Operating Activities:
Stock-based compensation (income) expense*	$	(352)
Gain on the sale of the MST Franchise	(13,005)
Total non-cash items of discontinued operations	$	(13,357)

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

*Income from stock-based compensation is related to forfeitures.

The following table presents the gain on the sale of the MST Franchise:


(in thousands)	Six Months Ended June 30, 2022
Cash proceeds	$	20,000
Proceeds paid in January 2023	5,000
	25,000
Less transaction costs	(4,247)
Less carrying value of assets sold	(7,748)
Gain on sale, before income taxes	13,005
Income tax expense	—
Gain on sale net of tax	$	13,005

In accordance with ASC 205-20, only expenses specifically identifiable and related to a business to be disposed may be presented in discontinued operations. As such, the research and development, marketing, selling and general and administrative expenses in discontinued operations include corporate costs incurred directly to solely support the MST Franchise.

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The milestone payments for sales of ZILXI, AMZEEQ and FCD105 represent contingent consideration. Contingent consideration has been accounted for as a gain contingency in accordance with ASC 450, Contingencies, and will be recognized in earnings in the period when realizable.

NOTE 5 – MEZZANINE EQUITY AND STOCKHOLDER CAPITAL

Preferred stock

As of June 30, 2023, the Company's Amended and Restated Certificate of Incorporation (as amended, the "Certificate of Incorporation") authorized the Company to issue 20,000,000 shares of preferred stock, par value $0.0001 per share. There were zero and 3,000 shares of Series A Convertible Preferred Stock issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

Shares of preferred stock may be issued from time to time in one or more series. The voting powers (if any), preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions of any series of preferred stock will be set forth in a Certificate of Designation filed pursuant to the Delaware General Corporation Law, as determined by the Company's Board of Directors.

On November 11, 2022, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Mutual Fund Series Trust, on behalf of AlphaCentric LifeSci Healthcare Fund (the “Purchaser”), pursuant to which the Company issued on November 14, 2022, in a private placement transaction, an aggregate of 3,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred”), for an aggregate subscription amount equal to $300,000. This transaction resulted in $89,000 of issuance costs and a net subscription of $211,000 as of December 31, 2022.

The Company determined that the Series A Preferred should be classified as Mezzanine Equity (temporary equity outside of permanent equity) and that the Series A Preferred more closely aligned with debt as the intent was for redemption by either the holder or issuer, most likely the issuer (the Company), due to the more favorable redemption terms.

The Purchase Agreement required that the Company convene, no later than January 31, 2023, an annual meeting or special meeting of stockholders for the purpose of presenting to the Company’s stockholders a proposal (the “Proposal”) to approve a reverse stock split of its outstanding common stock (the “Reverse Stock Split”), with the recommendation of the board of directors that the Proposal be approved, and that the Company use reasonable best efforts to obtain approval of the Proposal.

Additionally, the Purchase Agreement contained customary representations, warranties and agreements of the Company and the Purchaser, and customary indemnification rights and obligations of the parties. Pursuant to the Purchase Agreement, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Delaware on November 14, 2022 designating 3,000 shares out of the authorized but unissued shares of its preferred stock as Series A Preferred with a par value of $0.0001 per share and establishing the rights, preferences and limitations of the Series A Preferred. The Certificate of Designation provided, among other things, that except as otherwise provided in the Certificate of Designation or as otherwise required by law, the Series A Preferred would have no voting rights (other than the right to vote as a class on certain matters as provided in the Certificate of Designation). However, pursuant to the Certificate of Designation, each share of Series A Preferred entitled the holder thereof (i) to vote on the Proposal and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Proposal, and (ii) to 1,000,000 votes per share of Series A Preferred on the Proposal and any such adjournment proposal. The Series A Preferred should, except as required by law, vote together with the common stock (and other issued and outstanding shares of preferred stock entitled to vote), as a single class; provided, however, that such shares of Series A Preferred should, to the extent cast on the Proposal or any such adjournment proposal, be automatically and without further action of the holders thereof voted in the same proportion as the shares of common stock (excluding abstentions and any shares of common stock that are not voted) and any other issued and outstanding shares of preferred stock of the Company entitled to vote (other than the Series A Preferred or shares of such other preferred stock, if any, not voted) are voted on the Proposal. In addition, the Series A Preferred were entitled to customary dividends and distributions when and if paid on shares of the common stock and were entitled to the voting rights discussed above. The Series A Preferred had preference over the common stock with respect to distribution of assets or available proceeds, as applicable, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or any other deemed liquidation event.

The shares of Series A Preferred were convertible at the option of the holder, at a conversion price of $4.68 per share (as adjusted for the Reverse Stock Split), into shares of the Company’s common stock, at any time and from time to time from and after 15 business days following the earlier of (i) the date of the approval of the Proposal or (ii) the date the Company otherwise satisfies the Nasdaq listing requirements.

The Company had the right to redeem the Series A Preferred at any time during the 15 business days following the approval of the Proposal (the "Company Redemption Period") at 120% of the stated value. Each holder of Series A Preferred had the right

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to require the Company to redeem all or a portion of the Series A Preferred held by such holder following the expiration of the Company Redemption Period at 130% of the stated value. In addition, the Company would automatically redeem all of the Series A Preferred within five business days following a delisting event as specified in the Certificate of Designation at 130% of the stated value.

On January 17, 2023, the Company redeemed all outstanding shares of its Series A Preferred, for an aggregate of $360,000 paid to the Purchaser. The redemption payment represents 120% of the stated value of the Series A Preferred Stock pursuant to the Certificate of Designation.

On January 17, 2023, the Company filed a Certificate of Elimination (the “Certificate”) with the Secretary of State of the State of Delaware with respect to the Series A Preferred Stock. The Certificate (i) eliminated the previous designation of 3,000 shares of Series A Preferred Stock from the Company’s Amended and Restated Certificate of Incorporation, none of which were outstanding at the time of filing, and (ii) caused such shares of Series A Preferred Stock to resume their status as authorized but unissued and non-designated shares of preferred stock.

Common stock

Pursuant to the Certificate of Incorporation, the Company is authorized to issue 150,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of preferred stock outstanding. The Company has never declared any dividends on common stock.

On February 8, 2023, the Company's Board of Directors approved a 1-for-18 reverse stock split of the Company's outstanding shares of common stock. The reverse stock split was effected on February 10, 2023 at 5:01 p.m. Eastern time. At the effective time, every 18 issued and outstanding shares of the Company's common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each stockholder holding fractional shares was entitled to receive a cash payment (without interest or deduction) from the Company’s transfer agent in an amount equal to such stockholder’s respective pro rata shares of the total net proceeds from the Company’s transfer agent sale of all fractional shares at the then-prevailing prices on the open market. The number of authorized shares of the Company's common stock and the par value of each share of common stock remained unchanged.

Unless noted, all common stock and per share amounts contained in the unaudited condensed consolidated financial statements have been retroactively adjusted to reflect a 1-for-18 reverse stock split.

Issuance of common stock

On August 12, 2021, the Company entered into a Sales Agreement (the "2021 Sales Agreement") with Cantor Fitzgerald to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $50.0 million through an at-the-market equity offering program under which Cantor Fitzgerald will act as the Company's sales agent. Cantor Fitzgerald is entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold under the 2021 Sales Agreement. During the six months ended June 30, 2022, the Company issued and sold 143,770 shares of common stock at a weighted average per share price of $11.16 pursuant to the 2021 Sales Agreement for $1.5 million in net proceeds. During the six months ended June 30, 2023, the Company issued and sold 34,589 shares of common stock at a weighted average per share price of $4.52 pursuant to the 2021 Sales Agreement for $0.2 million in net proceeds.

On March 15, 2022, the Company entered into the Equity Purchase Agreement with Lincoln Park which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park, at the Company's discretion, up to $30.0 million of shares of its common stock over the 36-month term of the Equity Purchase Agreement. Upon execution of the Equity Purchase Agreement, the Company issued 92,644 shares of its common stock to Lincoln Park as commitment shares in accordance with the closing conditions contained within the Equity Purchase Agreement. The issuance of these shares were specific incremental costs directly attributable to the proposed offering. The commitment shares were valued at $0.9 million and recorded as an addition to equity for the issuance of common stock and treated as a reduction to equity as a cost of capital to be raised under the Equity Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock. The Equity Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any additional cost or penalty. As of June 30, 2023, the Company has not sold any shares of its common stock to Lincoln Park under the Equity Purchase Agreement.

Warrants

As of June 30, 2023, the Company had equity-classified warrants to purchase an aggregate of 27,509 shares of the Company’s common stock outstanding, with an exercise price of $76.08. The exercise price will be adjusted in the event of issuances of

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common stock at a price lower than the exercise price of the warrants then in effect (the “Down Round Feature”). During the six months ended June 30, 2023 and 2022, the Down Round Feature was triggered due to the price per share received from the issuance of common stock. The Company calculated the value of the effect of Down Round Feature measured as the difference between the warrants’ fair value, using the Black-Scholes-Merton option-pricing model, before and after the Down Round Feature was triggered using the original exercise price and the new exercise price. The difference in fair value of the effect of the Down Round Feature was immaterial and had no impact on net loss (income) per share in the periods presented. The exercise price will continue to be adjusted in the event the Company issues additional shares of common stock below the current exercise price, in accordance with the terms of the warrants.

NOTE 6 – STOCK-BASED COMPENSATION

Equity incentive plans:

The Company maintains the 2019 Equity Incentive Plan (the “2019 Plan”) and 2018 Omnibus Incentive Plan (the "2018 Plan"). As of June 30, 2023, 67,920 shares remain issuable under the 2019 Plan and 63,833 shares remain issuable under the 2018 Plan. In January 2023, the number of shares reserved under the 2018 Plan automatically increased by 41,666 shares of common stock pursuant to the terms of the 2018 Plan.

Employee Share Purchase Plan:

The Company adopted Foamix's Employee Share Purchase Plan ("ESPP") pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”). Employees are permitted to purchase the number of shares purchasable with up to 15% of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S. Internal Revenue Code.

As of June 30, 2023, 108,124 shares remain available for grant under the ESPP.

There were 8,339 shares of common stock purchased by employees pursuant to the ESPP during the six months ended June 30, 2023, and 3,704 shares of common stock purchased by employees during the six months ended June 30, 2022.

Options and RSUs granted to employees and directors:

There were no options or RSUs granted to employees and directors for the six months ended June 30, 2023.

During the six months ended June 30, 2022, the fair value of options and RSUs granted to employees and directors was $0.8 million.

The fair value of RSUs granted is based on the share price on the grant date.

The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry, by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The Company’s management uses the expected term of each option as its expected life. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding.

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Stock-based compensation expenses:

The following table illustrates the effect of stock-based compensation on the unaudited condensed consolidated statements of operations:


	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2023		2022		2023		2022
Research and development expenses	$	138	$	393	$	182	$	622
Selling, general and administrative	738		770		1,550		1,786
Discontinued operations*	—		—		—		(352)
Total	$	876	$	1,163	$	1,732	$	2,056

*Income from stock-based compensation is related to forfeitures.

NOTE 7 – OPERATING LEASES

Operating lease agreements

As of June 30, 2023, the Company had operating leases for its principal executive office in Bridgewater, New Jersey.

On March 13, 2019, the Company signed an amendment to the original lease agreement for its principal executive office in Bridgewater, New Jersey (the “Lease Amendment”). The Lease Amendment included an extension of the lease period of the 10,000 square feet previously leased under the original agreement (the “Original Space”) and an addition of 4,639 square feet (the “Additional Space”). The Company entered the Additional Space following a period of preparation by the lessor completed during September 2019 (the “Commencement Date”). The term included in the Lease Amendment expired on September 30, 2022.

Pursuant to the Lease Amendment, the Company recognized an additional right of use asset and liability in the amount of $0.7 million. The Additional Space was considered a new lease agreement and was recognized as a right of use asset and liability, in the amount of $0.3 million, on the Commencement Date. The lease liability matured on September 30, 2022.

In November 2022, the Company transitioned to a smaller corporate headquarters and signed a Sublease Agreement (the “Sublease”) to sublease approximately 5,755 square feet of office space (the “Leased Premises”) in Bridgewater, New Jersey through September 30, 2023. In addition, the Company signed a Lease Agreement (the “Master Lease”) to lease the Leased Premises following the termination of the Sublease through September 30, 2025. The Company will record a right of use asset and liability at the commencement date of the Master Lease. The Master Lease is expected to result in total lease payments of approximately $0.3 million.

The lease agreement for the office space in Israel was a one year lease that expired in December 2022. Given the short-term nature of the lease term, the Company did not recognize a right-of-use asset and liability.

As of June 30, 2022, the lease liabilities reflect a weighted average discount rate of 13.10% and a remaining weighted average lease term of 0.25 years as of June 30, 2022. There were no lease liabilities as of June 30, 2023.

The Company had a lien in the amount of $0.6 million related to a letter of credit on the Company’s cash in respect of bank guarantees granted in order to secure the lease agreements. In April 2022, the lien was released and the Company received the $0.6 million back due to the release.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Litigation and contingencies

The Company may periodically become subject to legal proceedings and claims arising in connection with its business. As of June 30, 2023, there are no claims or actions pending against the Company that, in the opinion of management, are likely to have a material adverse effect on the Company.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2023 and our Annual Report on Form 10-K for the year ended December 31, 2022. In this Quarterly Report on Form 10-Q, unless otherwise indicated, all references to the “Company,” “we,” “us” and “our” or similar terms refer to VYNE Therapeutics Inc. The disclosure set forth in this section reflects our 1-for-18 reverse stock split, which was effected on February 10, 2023. Accordingly, all share amounts and per share amounts have been adjusted.

Company Overview

We are a clinical-stage biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno-inflammatory conditions.

In August 2021, we entered into a transaction with Tay Therapeutics Limited (formerly known as In4Derm Limited, “Tay”) providing us with exclusive worldwide rights to research, develop and commercialize products containing BET inhibitors for the treatment of any disease, disorder or condition in humans. Through our access to this library of new chemical BET inhibitor compounds, we plan to develop product candidates for a diverse set of indications. Based on preclinical data generated to date, we have chosen to focus our initial efforts for this platform on select therapeutic areas in immuno-inflammatory disease.

Our lead program is VYN201, a locally administered pan-BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure. To date, VYN201 has produced consistent reductions in pro-inflammatory and disease-related biomarkers, improvements in disease severity and a demonstrated local activity through several preclinical models. We believe that these data suggest potential broad utility for VYN201 across multiple routes of administration. In November 2022, we initiated a Phase 1a/b clinical trial evaluating a topical formulation of VYN201 for the treatment of nonsegmental vitiligo. In February 2023, we announced positive preliminary safety and tolerability data from the Phase 1a portion of the trial. In addition, in March 2023, we announced positive pharmacokinetic and hematology data from the Phase 1a trial. The first nonsegmental vitiligo patient was dosed in the Phase 1b portion of the trial in January 2023. We expect to announce preliminary Phase 1b safety and efficacy data in the third quarter of 2023, followed by final results in October 2023.

Our second program is VYN202, an oral small molecule BD2-selective BET inhibitor. VYN202 is in preclinical development for the treatment of immuno-inflammatory indications, and has been designed to achieve class-leading selectivity (BD2 vs. BD1), maximum potency versus BD2 and optimal oral bioavailability. By maximizing BD2 selectivity, we believe VYN202 has the potential to be a more conveniently-administered non-biologic treatment option for both acute control and chronic management of immuno-inflammatory indications, where the damaging effects of unrestricted inflammatory signaling activity is common. IND-enabling studies for VYN202 are ongoing, and we anticipate filing an IND by year-end 2023.

We intend to actively evaluate and enter into strategic partnerships to advance our product candidates through the clinic toward commercialization, and may also partner with leading pharmaceutical companies to advance our molecules in therapeutic areas outside of our core focus in immunology. We believe selectively entering into collaborations has the potential to expand and accelerate the development of our programs and maximize the value of our pipeline.

Key Developments

Below is a summary of selected key developments affecting our business that have occurred since March 31, 2023:

•On April 19, 2023, we announced positive preclinical data for an inhaled formulation of VYN201 in an in vivo model of idiopathic pulmonary fibrosis.

•On April 28, 2023, we entered into a License Agreement (the “VYN202 License Agreement”) with Tay granting us a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s BD2-selective BET inhibitors in all fields.

•On May 1, 2023, we announced the selection of a development candidate for our oral BD2-selective BET inhibitor program, VYN202, for the treatment of immuno-inflammatory conditions.

Financial Overview

We have incurred net losses since our inception. Except from the first quarter of 2020 until January 2022, when we conducted commercial operations, our business activities have been primarily limited to developing product candidates, raising capital and

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performing research and development activities. As of June 30, 2023, we had an accumulated deficit of $678.6 million. We recorded a net loss of $15.7 million and net loss of $3.8 million for the six months ended June 30, 2023 and 2022, respectively.

Currently, our resources are focused on our immuno-inflammatory pipeline. Research and development activities for these programs, including preclinical and clinical testing of our product candidates, will require significant additional financing. Our future viability is dependent on our ability to successfully execute our business strategy and develop our product candidates and raise additional capital to finance operations. Our failure to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies.

Components of Operating Results

Revenues

Revenue generated during the periods presented is comprised of AMZEEQ and ZILXI product sales and royalty revenue.

AMZEEQ and ZILXI were commercially launched in January and October of 2020, respectively. We have not generated revenue from the sales of these products following January 12, 2022, the date we sold the MST Franchise to Journey. As a result of the disposition of these assets, product sales have been reclassified to discontinued operations for the three months ended March 31, 2022. We will not commercially launch our other product candidates in the United States or generate any revenues from sales of any of our product candidates unless and until we obtain marketing approval.

Historically, we have generated revenues under development and license agreements including royalty payments in relation to Finacea, the prescription foam product that we developed in collaboration with Bayer, which later assigned it to Leo Pharma A/S. Our rights to royalty payments from the sale of Finacea were not transferred in the sale of the MST Franchise.

Cost of Goods Sold

Cost of goods sold consists of direct and indirect costs to procure and manufacture AMZEEQ and ZILXI and primarily consist of:

•third party expenses incurred in manufacturing product for sale;

•transportation costs incurred in shipping manufacturing materials between third parties; and

•other costs associated with delivery and manufacturing of product.

Prior to receiving FDA approval, these costs for AMZEEQ and ZILXI were expensed as research and development expenses. We began capitalizing inventory costs for AMZEEQ and ZILXI after receipt of FDA approval. As a result of the sale of the MST Franchise, cost of goods sold have been reclassified to discontinued operations for the three months ended March 31, 2022. See "Note 4—Discontinued Operations" in the unaudited condensed consolidated financial statements for cost of goods sold.

Operating Expenses

Research and Development Expenses

Our research and development expenses have primarily related to the development of FMX114, VYN201 and VYN202. We charge all research and development expenses to operations as they are incurred. Following the sale of the MST Franchise in January 2022, our research and development has been focused on our immuno-inflammatory pipeline, including VYN201, VYN202 and FMX114. As a result of the sale of the MST Franchise in January 2022, research and development expenses related to the MST Franchise have been reclassified to discontinued operations for all periods presented.

Research and development expenses consist primarily of:

•employee-related expenses, including salaries, benefits and related expenses, including stock-based compensation expenses, for researched and development personnel;

•expenses incurred under agreements with third parties, including subcontractors, suppliers and consultants that conduct regulatory activities, clinical trials and preclinical studies;

•expenses incurred to acquire, develop and manufacture clinical trial materials;

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•facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other operating costs;

•costs associated with the creation, development and protection of intellectual property;

•other costs associated with preclinical and clinical activities and regulatory operations; and

•materials and manufacturing costs related to commercial production prior to FDA approval.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist principally of:

•employee-related expenses, including salaries, benefits and related expenses, including stock-based compensation expenses;

•legal and professional fees for auditors and other consulting expenses; and

•facility, information technology and depreciation expenses.

As a result of the sale of the MST Franchise in January 2022, selling, general and administrative expenses related to the MST Franchise have been reclassified to discontinued operations for the three months ended March 31, 2022.

Other Income (Expense), net

Other income (expense), net primarily consists of interest earned on our cash and cash equivalents and foreign exchange rate gains and losses.

Income Taxes and Net Operating Loss Carryforwards

We have incurred significant net operating losses (“NOLs”) since our inception. We expect to continue to incur NOLs until such a time when we generate adequate revenues for us to reach profitability. As of December 31, 2022, we had federal and state net operating loss carryforwards of $318.3 million and $90.4 million, respectively, of which $44.3 million and $89.0 million of these carryforwards will begin to expire starting in 2031 through 2040 for federal and state purposes, respectively. As of December 31, 2022, we had federal and state research and development tax credit carryforwards of $6.6 million and $1.2 million, respectively. The federal credits begin to expire in 2031 and the California research credits have no expiration dates. As of December 31, 2022, we had $274.0 million in federal and state NOLs with no limited period of use. There are no significant updates through June 30, 2023.

NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of our company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. State NOLs and tax credit carryforwards may be subject to similar limitations under state laws. We have not determined if we have experienced Section 382 ownership changes in the past and if a portion of our net operating loss and tax credit carryforwards are subject to an annual limitation under Sections 382 or 383. We may have experienced ownership changes in the past, including in connection to our initial public offering, and as a result of the merger with Foamix Pharmaceuticals Ltd. and/or subsequent shifts in our stock ownership, some of which may be outside of our control. As a result, even if we earn net taxable income, our ability to use the NOL and tax credit carryforwards may be materially limited, which could harm our future operating results by effectively increasing our future tax obligations.

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Results of Operations

Comparison of the Three-Month Periods Ended June 30, 2023 and 2022

Summary of Operations


	Three Months Ended June 30				Increase/(Decrease)		Increase/(Decrease)
(in thousands, except %)	2023		2022		$		%
Revenues
Royalty revenues	$	135	$	126	$	9	7.1	%
Total revenues	135		126		9		7.1	%

Operating expenses:
Research and development	7,233		4,108		3,125		76.1	%
Selling, general and administrative	3,220		4,305		(1,085)		(25.2)	%
Total operating expenses	10,453		8,413		2,040		24.2	%
Operating loss	(10,318)		(8,287)		2,031		24.5	%

Other income, net	280		52		228		*
Loss from continuing operations before income taxes	(10,038)		(8,235)		1,803		21.9	%
Income tax expense	—		—		—		—	%
Loss from continuing operations	(10,038)		(8,235)		1,803		21.9	%
Loss from discontinued operations	(20)		(241)		(221)		(91.7)	%
Net loss	$	(10,058)	$	(8,476)	$	1,582	18.7	%

* Percentage not meaningful.

Revenue

Revenues totaled $0.1 million for each of the three months ended June 30, 2023 and 2022, consisting of royalty revenue.

We divested our MST Franchise on January 12, 2022. As a result of the sale, we will not generate revenue from the sales of AMZEEQ or ZILXI following such date. Product revenues have been reclassified to discontinued operations for the three months ended June 30, 2022.

Research and Development Expenses

Our research and development expenses for the three months ended June 30, 2023 were $7.2 million, representing an increase of $3.1 million, or 76.1%, compared to $4.1 million for the three months ended June 30, 2022. The increase was primarily driven by increased expenses for VYN202 of $4.9 million, including a $3.8 million payment made in connection with entering into the VYN202 License Agreement. This increase was partially offset by lower employee-related expenses of $0.9 million and decreased spending for FMX114 of $0.8 million.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three months ended June 30, 2023 were $3.2 million, representing a decrease of $1.1 million, or 25.2%, compared to $4.3 million for the three months ended June 30, 2022. The decrease was primarily driven by lower consulting and professional fees of $0.6 million and lower rent and corporate insurance costs of $0.5 million.

Other Income, net

Other income, net for the three months ended June 30, 2023 and June 30, 2022 was $0.3 million and 0.1 million, respectively, and related to interest income earned on cash and cash equivalents.

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Comparison of the Six-Month Periods Ended June 30, 2023 and 2022

Summary of Operations


	Six Months Ended June 30,				Increase/(Decrease)		Increase/(Decrease)
(in thousands, except %)	2023		2022		$		%
Revenues
Royalty revenues	$	234	$	304	$	(70)	(23.0)	%
Total revenues	234		304		(70)		(23.0)	%

Operating expenses:
Research and development	9,967		8,560		1,407		16.4	%
Selling, general and administrative	6,460		8,722		(2,262)		(25.9)	%
Total operating expenses	16,427		17,282		(855)		(4.9)	%
Operating loss	(16,193)		(16,978)		(785)		(4.6)	%

Other income, net	543		49		494		*
Loss from continuing operations before income taxes	(15,650)		(16,929)		(1,279)		(7.6)	%
Income tax expense	—		—		—		—	%
Loss from continuing operations	$	(15,650)	$	(16,929)	(1,279)		(7.6)	%
(Loss) income from discontinued operations	(30)		13,123		(13,153)		(100.2)	%
Net loss	$	(15,680)	$	(3,806)	$	(11,874)	*

* Percentage not meaningful.

Revenue

Revenues totaled $0.2 million and $0.3 million for the six months ended June 30, 2023 and 2022, respectively, consisting of royalty revenue.

Research and Development Expenses

Our research and development expenses for the six months ended June 30, 2023 were $10.0 million, representing an increase of $1.4 million, or 16.4%, compared to $8.6 million for the six months ended June 30, 2022. The increase was primarily driven by increased expenses for VYN202 of $5.4 million, including $4.0 million paid in connection with entering into the VYN202 License Agreement. This increase was partially offset by lower employee-related expenses of $2.3 million and decreased spending for FMX114 of $1.5 million.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the six months ended June 30, 2023 were $6.5 million, representing a decrease of $2.3 million, or 25.9%, compared to $8.7 million for the six months ended June 30, 2022. The decrease was primarily driven by lower rent and corporate insurance costs of $0.8 million, decreased employee-related expenses of $0.7 million and lower consulting and professional fees of $0.5 million.

Other Income, net

Other income, net for the six months ended June 30, 2023 and June 30, 2022 was $0.5 million and $49 thousand, respectively. The other income was mainly related to interest income received.

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Liquidity and Capital Resources

Since inception, we have funded operations primarily through private and public placements of our equity, debt and warrants and through fees, cost reimbursements and payments received from our licensees. We commenced generating product revenues related to sales of AMZEEQ and ZILXI in January 2020 and October 2020, respectively. AMZEEQ and ZILXI were sold as part of the sale of the MST Franchise on January 12, 2022 and, as such, we no longer generate revenue from the sale of these products. We have incurred losses and experienced negative operating cash flows since our inception and anticipate that we will continue to incur losses until such a time when our product candidates, if approved, are commercially successful, if at all. We will not generate any revenue from any current or future product candidates unless and until we obtain regulatory approval and commercializes such products. For the six months ended June 30, 2023, we generated a net loss of $15.7 million and used $15.1 million of cash in operations.

As of June 30, 2023, we had cash and cash equivalents, and restricted cash of $20.7 million and an accumulated deficit of $678.6 million. We received the $5.0 million deferred payment from Journey on January 12, 2023, the one-year anniversary of the sale of the MST Franchise. We had no outstanding debt as of June 30, 2023. In addition, in March 2022, we entered into the Equity Purchase Agreement with Lincoln Park Capital which provides that, upon the terms and subject to the conditions and limitations set forth therein, we may sell to Lincoln Park up to $30.0 million of shares of our common stock over the 36-month term of the Equity Purchase Agreement. As of June 30, 2023, no shares have been sold under the Equity Purchase Agreement.

As described above, following the sale of the MST Franchise, we refocused our limited resources on our immuno-inflammatory pipeline. Continued research and development activities for these programs, including preclinical and clinical testing of our product candidates, will require significant additional financing. Our future viability and our ability to continue as a going concern is dependent on our ability to raise sufficient working capital through either debt or equity financings to fund our operations and successfully develop commercially viable product candidates. There is no assurance that we will be able to achieve these objectives under acceptable terms or at all.

In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that our unaudited condensed consolidated financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is expected to be impacted by the outcome of the plans outlined above, including our ability to raise additional capital to fund our operations and the development and results from clinical trials for the BET inhibitor programs. Based on our current plans and assumptions, we believe that absent sufficient proceeds received from equity transactions, financing transactions or business development transactions, we will not have sufficient cash and cash equivalents to fund our operations beyond one year from the issuance of the accompanying unaudited condensed consolidated financial statements. This assumption does not include proceeds that can be drawn from Lincoln Park under the Equity Purchase Agreement. Accordingly, we will, over the course of the next twelve months, require significant additional financing to continue our operations and meaningfully advance the development of our product candidates, including potentially selling a significant amount of shares pursuant to the Equity Purchase Agreement. We may also employ strategies to further extend our ability to fund our operations including: (1) identification of third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates, which may generate revenue and/or milestone payments and/or (2) refocusing our resources on research and development programs we choose to prioritize and reducing spending on other programs by delaying or discontinuing development. In addition, the amount of proceeds we may be able to raise pursuant to our existing shelf registration statement on Form S-3 may be limited. As of the filing of this Quarterly Report on Form 10-Q, we are subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these instructions, the amount of funds we can raise through primary public offerings of securities in any 12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of our common stock held by our non-affiliates. Therefore, we will be limited in the amount of proceeds we are able to raise by selling shares of our common stock using our Form S-3 until such time as our public float exceeds $75.0 million. These factors raise substantial doubt about our ability to continue as a going concern. Failure to successfully receive additional financing will require us to delay, scale back or otherwise modify our business and our research and development activities and other operations. The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern.

Summary Statement of Cash Flows

The following table summarizes our statement of cash flows for the six months ended June 30, 2023 and 2022:

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	Six Months Ended June 30
(in thousands)	2023		2022
Net cash (used in) / provided by:
Operating activities	$	(15,052)	$	(17,264)
Investing activities	$	5,000	$	15,752
Financing activities	$	(222)	$	1,471

Net Cash Used in Operating Activities

During the six months ended June 30, 2023, net cash used in operating activities was $15.1 million and primarily reflected our net loss of $15.7 million adjusted for the non-cash item of $1.7 million related to stock-based compensation expense. The remainder of the cash used in operations is driven by net change in assets and liabilities.

During the six months ended June 30, 2022, net cash used in operating activities was $17.3 million and primarily reflected our net loss of $3.8 million adjusted for the gain on the sale of the MST Franchise of $13.0 million and stock-based compensation of $2.1 million. The remainder of the cash used in operations is driven by net change in operating assets and liabilities.

Net Cash Provided by Investing Activities

During the six months ended June 30, 2023, net cash provided by investing activities was $5.0 million which represents the deferred payment received from Journey in January 2023.

During the six months ended June 30, 2022, net cash provided by investing activities was $15.8 million and was the result of net proceeds from the sale of the MST Franchise.

Net Cash (Used in) Provided by Financing Activities

During the six months ended June 30, 2023, net cash used in financing activities was $0.2 million and consisted primarily of $0.4 million paid for the redemption of convertible preferred stock, partially offset by $0.2 million of proceeds received related to the issuance of common stock in our at-the-market equity offering program.

During the six months ended June 30, 2022, net cash provided by financing activities was $1.5 million and was primarily attributable to the issuance of common stock.

Cash and Funding Sources

Our sources of funding in the six months ended June 30, 2023 totaled $5.2 million and consisted primarily of $5.0 million of net proceeds from the sale of the MST Franchise and $0.2 million of net proceeds from the issuance of common stock pursuant to our at-the-market offering facility.

Our sources of funding in the six months ended June 30, 2022 totaled $17.2 million and consisted primarily of $15.8 million of net proceeds from the sale of the MST Franchise and $1.5 million of net proceeds from the issuance of common stock pursuant to our at-the-market offering facility.

We have no ongoing material financial commitments (such as lines of credit) that may affect our liquidity over the next five years.

Funding Requirements

Our present and future funding requirements will depend on many factors, including the following:

•costs associated with the research and development of product candidates;

•the time and costs involved in obtaining regulatory approval for our other pipeline product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these product candidates;

•terms and timing of any acquisitions, collaborations or other arrangements;

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•the number of potential new products we identify and decide to develop; and

•the costs involved in filing and prosecuting patent applications and obtaining, maintaining and enforcing patents or defending against claims or infringements raised by third parties, and license royalties or other amounts we may be required to pay to obtain rights to third party intellectual property rights.

Our operating plan may change as a result of many factors currently unknown to us, and any such change may affect our funding requirements. We may therefore need to seek additional capital sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations or additional license arrangements. Such financings may result in dilution to stockholders, imposition of debt covenants and repayment obligations or other restrictions that may affect our business.

For more information as to the risks associated with our future funding needs, see “Item 1A—Risk Factors” included herein and in our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies, Significant Judgments and Use of Estimates

Our unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 14, 2023. There have been no material changes to these policies for the six months ended June 30, 2023.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

JOBS Act Accounting Election

The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.

Recently Issued and Adopted Accounting Pronouncements

See “Newly Issued and Recently Adopted Accounting Pronouncements” in Note 2, “Significant Accounting Policies” in the Notes to Unaudited Interim Condensed Consolidated Financial Statements for a discussion of recently adopted accounting pronouncements and accounting pronouncements not yet adopted, and their expected impact on our financial position and results of operations.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and Item 10 of Regulation S-K. As such, we are not required to provide the information set forth in this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to an issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during the six months ended June 30, 2023 identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings.

We may periodically become subject to legal proceedings and claims arising in connection with its business. As of June 30, 2023, no claims or actions are pending against us that, in the opinion in management, are likely to have a material adverse effect on us.

1A. Risk Factors.

Information about our risk factors is contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 14, 2023. As of June 30, 2023, there have been no material changes in our risk factors from those disclosed in Item 1A of our Annual Report on Form 10-K and subsequent reports, except as set forth below.

Risks Related to our Liquidity

We will need substantial additional funding to fund our operations, and we may not be able to continue as a going concern if we are unable to do so. We could also be forced to delay, reduce or terminate our research and development activities which would have a material adverse effect on our financial condition.

Developing and commercializing biopharmaceutical products and conducting preclinical studies and clinical trials is an expensive and highly uncertain process that takes years to complete. As of June 30, 2023, we had approximately $20.7 million in cash, cash equivalents and restricted cash, as well as negative cash flows from operating activities. Based on our current operating plan, we do not have sufficient cash and cash equivalents to fund our anticipated level of operations as they become due during the twelve months following the date of issuance of the unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2023. Our estimates may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. The aforementioned factors raise substantial doubt about our ability to continue as a going concern. See “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for further discussion regarding our liquidity. We may not be able to raise adequate proceeds from financing or business development transactions, and additional capital might not be available to us when we need it. We are unable to predict the impact of global economic market trends, and if economic conditions deteriorate, our business, results of operations and ability to raise needed capital could be materially and adversely affected. If we are unable to raise additional capital when needed due to the reasons listed above and/or lack of creditworthiness, bank failures (such as recent and potential future disruptions in access to bank deposits or lending commitments), or price decline in market investments, our long-term business plans may not be accomplished, and we may be forced to scale back our operations to conserve cash, cease, reduce, or delay operations, including our product candidate programs.

If we raise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted and the terms of any new debt securities or equity securities may have a preference over our common stock. In addition, if we issue warrants or preferred stock in connection with our financing activities, such securities may include terms that are unfavorable to our stockholders, including anti-dilution provisions and other preferences. In addition, any holders of preferred stock may receive preferential voting rights that are superior to the voting rights of holders of our common stock. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures or specified financial ratios, any of which could restrict our ability to operate our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

None.

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Item 6. Exhibits.

The following documents are filed, or furnished as applicable, as part of this Quarterly Report on Form 10-Q:

Exhibit Index

Exhibit Number

Incorporated by Reference

Filed

Exhibit Description

Form

Date

Number

Herewith

3.1(a)

Amended and Restated Certificate of Incorporation.

10-K

3/17/2022

3.1

3.1(b)

Certificate of Designation of Preferences, Rights, and Limitations of Series A Convertible Preferred Stock.

10-Q

11/14/2022

3.1(b)

3.1(c)

Certificate of Elimination

8-K

1/17/2023

3.1

3.1(d)

Certificate of Amendment to the Amended and Restated Certificate of Incorporation.

8-K

2/10/2023

3.1

3.2

Amended and Restated Bylaws.

10-Q

11/14/2022

3.2

10.1†

License Agreement, dated as of April 28, 2023, by and between VYNE Therapeutics Inc. and Tay Therapeutics Limited.

31.1

Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).

31.2

Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).

32.1*

Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350).

32.2*

Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350).

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

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101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

104

The cover page of VYNE Therapeutics Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL (included within Exhibit 101 attachments).

_______________________________________________________

* The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of VYNE Therapeutics Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

† Exhibits and schedules omitted pursuant to Item 601(a)(5) of Regulation S-K and portions of this exhibit have been omitted in accordance with Item 601(b)(10)(iv) of Regulation S-K.

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 14, 2023



			VYNE Therapeutics Inc.

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

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

Exhibit 10.1

CERTAIN IDENTIFIED INFORMATION HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED, AND HAS BEEN MARKED WITH “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE

LICENSE AGREEMENT (ORAL)

This LICENSE AGREEMENT (the “Agreement”) is made and entered into effective as of April 28, 2023 (the “Effective Date”) by and between, on the one hand, TAY THERAPEUTICS LIMITED (formerly known as In4Derm Limited), a company incorporated and registered in Scotland with company number SC651132 with a place of business at Dundee University Incubator, 3 James, Lindsay Place, Dundee, DD1 5JJ (“Tay”), and, on the other hand, VYNE THERAPEUTICS INC., a Delaware corporation with a principal place of business at 685 Route 202/206, Suite 301A, Bridgewater, NJ 08807 (“VYNE”). Tay and VYNE may be referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, Tay has discovered and is developing proprietary Bromodomain & Extra- Terminal Domain Inhibitors (“BETi”) for treatment of immunology and oncology conditions;

Whereas, VYNE is a biopharmaceutical company focused on developing innovative therapies for immuno-inflammatory conditions;

WHEREAS, Tay and VYNE entered into that certain Evaluation and Option Agreement dated as of April 30, 2021 (the “Option Agreement”) pursuant to which Tay granted to VYNE an exclusive option to obtain an exclusive license under certain of Tay’s technology to research, develop, manufacture, and commercialize products incorporating such technology; and

WHEREAS, VYNE exercised its option to exclusively license the Topical BETi Compounds (defined below) and entered into a License Agreement (Topical) on August 9, 2021 (the “Topical License Agreement”); and

Whereas, VYNE has exercised its option to the Oral BETi Compounds (defined below) in accordance with the terms of the Option Agreement and wishes to enter into a license agreement for the Oral BETi Compounds; and

Whereas, Tay wishes to grant, and VYNE wishes to accept, an exclusive license under certain of Tay’s technology to research, develop, manufacture, and commercialize products incorporating such technology, all on the terms and conditions set forth herein.

Now Therefore, in consideration of the foregoing premises and the mutual promises, covenants, and conditions set forth herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1 DEFINITIONS

Unless otherwise specifically provided herein, the following terms have the following meanings:

1.1“Accounting Standards” means, with respect to a Party and its Affiliates, either

(a) International Financial Reporting Standards or (b) United States generally accepted accounting principles, in either case ((a) or (b)) that are used at the applicable time, and as consistently applied, by such Party or any of its Affiliates.

1.2“Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party, for so long as such control exists. For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (a) the possession, directly or indirectly, of the power to direct the management or policies of such entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of such entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).

1.3“Agreement” has the meaning set forth in the preamble.

1.4“Applicable Law” means federal, state, local, national, and supra-national laws, statutes, rules, and regulations, including any rules, regulations, guidelines, or other requirements enacted by a government authority, including Regulatory Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to the performance by a Party of its obligations, or exercise of its rights, under this Agreement.

1.5“Bankruptcy Code” has the meaning set forth in Section 13.5.1.

1.6“BETi” has the meaning set forth in the recitals.

1.7“Business Day” means a day other than a Saturday, Sunday, or bank or other public holiday in New York, New York or London, England.

1.8“Calendar Quarter” means each successive period of three calendar months commencing on January 1, April 1, July 1, and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter shall end on the last day of the Term.

1.9“Calendar Year” means each successive period of twelve (12) calendar months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term.

1.10“Change of Control” means, with respect to a Party: (a) any transaction or series of related transactions pursuant to which a Third Party that does not, itself or together with its Affiliates, prior thereto, beneficially own at least fifty percent (50%) of the voting power of the


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outstanding securities of such Party, acquires or otherwise becomes the beneficial owner of securities of such Party representing at least fifty percent (50%) of the voting power of the then outstanding securities of such Party with respect to the election of directors; or (b) a merger (including a reverse triangular merger), reorganization, consolidation, share exchange or similar transaction involving such Party, in which the holders of voting securities of such Party outstanding immediately prior thereto and their Affiliates, cease to hold voting securities that represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, reorganization, consolidation, share exchange or similar transaction.

1.11“Clinical Trial” means a Phase 1 Clinical Trial, Phase 2 Clinical Trial, Phase 3 Clinical Trial, Phase 4 Clinical Trial, or Pivotal Clinical Trial, or any combination thereof.

1.12“Combination Product” means (a) a single pharmaceutical formulation containing as its active ingredients both (i) a Compound and (ii) one or more other therapeutically or prophylactically active ingredients that are not Compounds (each such other therapeutically or prophylactically active ingredient, a “Non-Compound Active Agent”) or (b) a combination therapy comprised of (i) a Compound and (ii) one or more other therapeutically or prophylactically active products containing at least one Non-Compound Active Agent, whether priced and sold together in a single package containing such multiple products or packaged separately but sold together for a single price, in each case (a) and (b), including all dosage forms, formulations, presentations, line extensions, and package configurations.

1.13“Commercialization” means any and all activities directed to the preparation for sale of, offering for sale of, or sale of a pharmaceutical product, including activities related to marketing, promoting, selling, distributing, importing, and exporting such product, and interacting with Regulatory Authorities regarding any of the foregoing. When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization, and “Commercialized” has a corresponding meaning.

1.14“Commercially Reasonable Efforts” means, with respect to the performance of Development, Commercialization, or Manufacturing activities with respect to a Compound or a Product, the carrying out of such activities using efforts and resources comparable to the efforts and resources that a similarly situated biotechnology company would typically devote to a product of similar market potential at a similar stage of its product life, when utilizing sound and reasonable scientific, medical and business practice and judgment in order to develop the product in a timely manner and maximize the economic return to the Parties from its commercialization. Commercially reasonable efforts will be determined on a market-by-market basis without regard to any other product opportunities of VYNE or its Affiliates (including any competitive or potentially competitive programs of VYNE or its Affiliates).

1.15“Competing BETi Product” means any pharmaceutical product (other than a Product) containing a BETi compound as an active pharmaceutical ingredient.

1.16“Competing Program” has the meaning set forth in Section 2.5.2.


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1.17“Compound” means all Oral BETi Compounds and any modifications, substitutions, group replacements or derivatives thereof, and all prodrugs, metabolites, salts, esters, hydrates, solvates, isomers, regioisomers, enantiomers, free acid forms, free base forms, crystalline forms, co-crystalline forms, amorphous forms, racemates, polymorphs, chelates, stereoisomers, atropisomers, tautomers or optically active forms thereof.

1.18“Confidential Information” means any non-public information provided orally, visually, in writing or other form by or on behalf of one (1) Party (or an Affiliate or representative of such Party) to the other Party (or to an Affiliate or representative of such other Party) in connection with this Agreement, whether prior to, on, or after the Effective Date, including information relating to the terms of this Agreement, any Exploitation of any Product, any Know- How with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory, or business affairs or other activities of either Party. Notwithstanding anything to the contrary, the Results and Inventions (both as defined in the Option Agreement) related to the Compounds under the Option Agreement are the Confidential Information of Tay. In addition, all information disclosed by a Party to the other under the Option Agreement is deemed to be such Party’s Confidential Information disclosed under this Agreement.

1.19“Control” means, with respect to any Know-How, Patents, or other proprietary technology, the possession of the right, whether by ownership, license, or otherwise (other than by operation of the rights granted in Section 2.1) to grant a license or sublicense under such Know- How, Patents, or other proprietary technology as provided for herein without violating the terms of any agreement with any Third Party.

1.20“Country” means any generally recognized sovereign entity.

1.21“Cover” means, with respect to a particular subject matter at issue and a relevant Patent, that, in the absence of a license under or ownership of such Patent, the developing, making, using, offering for sale, promoting, selling, exporting, or importing of such subject matter would infringe one or more Valid Claims of such Patent (considering any pending claim included in such Patent as if such pending claim were to issue in an issued Patent).

1.22“Development” means all activities related to human clinical lead optimization, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, IND- enabling toxicology studies, Clinical Trials, including Manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of Drug Approval Applications, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval. When used as a verb, “Develop” means to engage in Development. For purposes of clarity, Development includes any submissions and activities required in support thereof required by Applicable Laws or a Regulatory Authority as a condition or in support of obtaining a pricing or reimbursement approval for an approved Product.

1.23“Development Plan” has the meaning set forth in Section 4.2.


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1.24“Dollars” or “$” means United States Dollars.

1.25“Drug Approval Application” means an NDA and any corresponding foreign application in the Territory, including, with respect to the European Union, a Marketing Authorization Application (a “MAA”) filed with the EMA or with the applicable Regulatory Authority of a Country in Europe with respect to the mutual recognition or any other national approval procedure.

1.26“Dundee License” means that certain license agreement between Tay and the University of Dundee dated 24 July 2020 (as amended).

1.27“Dundee Licensed Rights” means any Patents, Know-How and other intellectual property rights under which Dundee has granted a license to Tay pursuant to the Dundee License.

1.28“Effective Date” means the effective date as set forth in the preamble.

1.29“EMA” means the European Medicines Agency and any successor agency(ies) or authority having substantially the same function.

1.30“Existing Patents” has the meaning set forth in Section 11.2.1.

1.31“Exploit” or “Exploitation” means to research, identify, evaluate, Develop, use, make, have made, Manufacture, have Manufactured, sell, have sold, offer for sale, distribute, import, export and Commercialize.

1.32“FDA” means the United States Food and Drug Administration and any successor agency(ies) or authority having substantially the same function.

1.33“FFDCA” means the United States Federal Food, Drug, and Cosmetic Act, 21

U.S.C. § 301 et seq., as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto).

1.34“Field” means any and all uses, including the treatment, palliation, diagnosis or prevention of any disease, disorder or condition in humans.

1.35“First Commercial Sale” means, with respect to a Product and a Country, the first sale for monetary value for use or consumption by the end user of such Product in such Country after Regulatory Approval for such Product has been obtained in such Country.

1.36“Generic Product” means, with respect to a particular Product that has received Regulatory Approval in a regulatory jurisdiction in the Territory and is being marketed and sold by VYNE or any of its Affiliates or Sublicensees in such jurisdiction, a pharmaceutical product that (a) is sold in such jurisdiction by a Third Party that is not an Affiliate or Sublicensee of VYNE, and did not purchase or acquire such product in a chain of distribution that included VYNE or any of its Affiliates or Sublicensees, and (b) has received Regulatory Approval in such jurisdiction for


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at least one of the same indications as such Product as a “generic drug”, “generic medicinal product”, “bioequivalent”, or similar designation of interchangeability by the applicable Regulatory Authority in such jurisdiction pursuant to an expedited, abbreviated, or bibliographic approval process in accordance with the then-current rules and regulations in such jurisdiction, where such approval referred to or relied on (i) an approved Drug Approval Application for such Product held by VYNE, its Affiliate, or a Sublicensee in such jurisdiction or (ii) the data contained or incorporated by reference in such approved Drug Approval Application for such Product in such jurisdiction.

1.37“GLP” means current good laboratory practice standards promulgated or endorsed by the FDA, as defined in U.S. 21 C.F.R. Part 58 (or such other comparable regulatory standards in jurisdictions outside the U.S.), as updated from time to time.

1.38“IND” means an application filed with a Regulatory Authority for authorization to commence Clinical Trials, including (a) an Investigational New Drug Application as defined in the FFDCA or any successor application or procedure filed with the FDA, (b) any equivalent thereof in other Countries or regulatory jurisdictions, (e.g., a Clinical Trial Application (CTA) in the European Union), and (c) all supplements, amendments, variations, extensions, and renewals thereof that may be filed with respect to the foregoing.

1.39“Indemnification Claim Notice” has the meaning set forth in Section 12.3.

1.40“Indemnified Party” has the meaning set forth in Section 12.3.

1.41“Indemnitee” has the meaning set forth in Section 12.3.

1.42“Indication” means a separately defined, well-categorized class of human disease or condition for which a separate MAA (including any extensions or supplements) is required to be filed with a Regulatory Authority. For clarity, if an MAA is approved for a Product in a particular Indication and patient population, a label expansion for such Product to include such Indication in a different patient population is not considered a separate Indication.

1.43“Initiation” means, with respect to a Product and a Clinical Trial in human subjects (whether healthy volunteers or patients), the first dosing of the first subject with such Product in such Clinical Trial.

1.44“Intellectual Property” has the meaning set forth in Section 13.5.1.

1.45“Invention” means any invention, process, method, utility, formulation, composition of matter, article of manufacture, material, creation, discovery, development, or finding, or any improvement thereto, whether or not patentable, including all intellectual property rights therein.

1.46“JDC” has the meaning set forth in Section 3.1.1.

1.47“Joint Inventions” has the meaning set forth in Section 9.1.2(b).


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1.48“Joint Patents” means all Patents that Cover Joint Inventions.

1.49“Know-How” means inventions, technical information, know-how and materials, including technology, data, compositions, formulae, biological materials, assays, reagents, constructs, compounds, discoveries, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience, in each case whether or not the subject of a patent application, patentable, or copyrightable.

1.50“Losses” has the meaning set forth in Section 12.1.

1.51“MAA” has the meaning set forth in Section 1.25.

1.52“Manufacture”, “Manufactured”, and “Manufacturing” means all activities related to the synthesis, making, production, processing, analysis, purifying, formulating, filling, finishing, packaging, labeling, shipping, and holding of a pharmaceutical product, or any raw materials, intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial production and analytic development, product characterization, stability testing, quality assurance, and quality control, whether by a Party itself or through a Third Party.

1.53“MHRA” means the United Kingdom’s Medicines and Healthcare products Regulatory Agency and any successor agency(ies) or authority having substantially the same function.

1.54“NDA” means a New Drug Application, as defined in the FFDCA, as amended, and applicable regulations promulgated thereunder by the FDA and all amendments and supplements thereto filed with the FDA, or the equivalent application filed with any Regulatory Authority, including all documents, data, and other information concerning a pharmaceutical product, which are necessary for gaining Regulatory Approval to market and sell such pharmaceutical product in the relevant jurisdiction.

1.55“Net Sales” means, with respect to any Product, the gross amounts invoiced for sales or other dispositions of such Product by or on behalf of VYNE or its Affiliates or Sublicensees (each a “Selling Entity”) to Third Parties, less the following deductions to the extent included in the gross invoiced sales price for such Product and determined in accordance with Accounting Standards or otherwise directly paid or incurred by the applicable Selling Entity with respect to the sale or other disposition of such Product:

1.55.1normal and customary trade and quantity discounts actually allowed and properly taken directly with respect to sales of such Product;

1.55.2credits or allowances given or made for rejection, recall, wastage, replacement of or return of previously sold Products or for uncollectible amounts, retroactive price reductions and billing errors;


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1.55.3rebates, retroactive price adjustments and chargeback payments granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), national, state/provincial, local, and other governments, their agencies and purchasers and reimbursers, or to trade customers;

1.55.4costs of freight, carrier insurance, custom fees and other transportation charges directly related to the distribution of such Product; and

1.55.5taxes, duties, or other governmental charges (including any tax such as a value added or similar tax, other than any taxes based on income) directly levied on or measured by the billing amount for such Product, as adjusted for rebates and refunds.

In no event will any particular amount identified above be deducted more than once in calculating Net Sales. Sales of a Product between VYNE and its Affiliates or Sublicensees for resale shall be excluded from the computation of Net Sales unless the transferee is the end-user, but the subsequent resale of such Product to a Third Party shall be included within the computation of Net Sales.

The supply of Product for no charge or at cost as samples for charitable or promotional purposes, for named patient use, for use in non-clinical or clinical trials or any test or other studies reasonably necessary to comply with Applicable Laws shall not be included in the computation of Net Sales.

If a Product is sold as part of a Combination Product in a Country, the Net Sales with respect to the Product in such Country shall be calculated and determined as follows:

(a)If the Selling Entity separately sells in such Country or other jurisdiction, (A) a product containing as its sole active ingredient a Compound contained in such Combination Product (the “Mono Product”) and (B) products containing as their sole active ingredients the Non-Compound Active Agents in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B) where: “A” is the applicable Selling Entity’s average Net Sales price during the period to which the Net Sales calculation applies for the Mono Product in such Country or other jurisdiction and “B” is the applicable Selling Entity’s average Net Sales price during the period to which the Net Sales calculation applies in such Country or other jurisdiction, for products that contain as their sole active ingredients the Non-Compound Active Agents in such Combination Product.

(b)If the Selling Entity separately sells in such Country or other jurisdiction the Mono Product but does not separately sell in such Country or other jurisdiction products containing as their sole active ingredients the Non-Compound Active Agents in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction A/C where: “A” is the applicable Selling Entity’s average Net Sales price during the period to which the Net Sales calculation applies for the Mono Product in such Country or other jurisdiction, and “C” is the


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applicable Selling Entity’s average Net Sales price in such Country or other jurisdiction during the period to which the Net Sales calculation applies for such Combination Product.

(c)If Selling Entity does not separately sell in such Country or other jurisdiction the Mono Product but does separately sell products containing as their sole active ingredients the Non-Compound Active Agents contained in such Combination Product, the Net Sales attributable to such Combination Product shall be calculated by multiplying the Net Sales of such Combination Product by the fraction (D-E)/D where: “D” is the average Net Sales price during the period to which the Net Sales calculation applies for such Combination Product in such Country or other jurisdiction and “E” is the average Net Sales price in such Country or other jurisdiction during the period to which the Net Sales calculation applies for products that contain as their sole active ingredients the Non-Compound Active Agents in such Combination Product.

(d)If the Selling Entity does not separately sell in such Country or other jurisdiction both the Mono Product and the Non-Compound Active Agents in such Combination Product, the Net Sales attributable to such Combination Product shall be determined by the Parties in good faith based on the relative fair market value of such Mono Product and such Non- Compound Active Agents; provided, that if the Parties cannot agree on such value after ninety (90) days despite having used good faith efforts to do so, then the Parties shall resolve such dispute using the terms set forth in Exhibit 1.55.

1.56“Non-Compound Active Agent” has the meaning set forth in Section 1.12.

1.57“Option Agreement” has the meaning set forth in the recitals.

1.58“Oral BETi Compounds” means the BETi compounds listed in Exhibit 1.58.

1.59“Party” and “Parties” has the meaning set forth in the preamble.

1.60“Patent” means (a) patents, patent applications and similar government-issued rights protecting inventions in any Country or jurisdiction however denominated, (b) all priority applications, divisionals, continuations, substitutions, continuations-in-part of and similar applications claiming priority to any of the foregoing, and (c) all patents and similar government- issued rights protecting inventions issuing on any of the foregoing applications, together with all registrations, reissues, renewals, re-examinations, confirmations, validations, supplementary protection certificates, and extensions of (a), (b) or (c).

1.61“Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department, or agency of a government.

1.62“Phase 1 Clinical Trial” means any human clinical trial of a Product conducted mainly to evaluate the safety of chemical or biologic agents or other types of interventions (e.g., a new radiation therapy technique) in humans that would satisfy the requirements of 21 C.F.R.

§ 312.21(a) or its non-United States equivalents.


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1.63“Phase 2 Clinical Trial” means any human clinical trial of a Product, including a separate clinical trial or portion of a clinical trial that combines more than one phase (e.g., Phase 1b/2a), that is conducted in a target patient population mainly to explore dosing, duration of effect, and/or generate initial evidence of clinical safety and effectiveness, that would satisfy the requirements of 21 CFR § 312.21(b) or its non-United States equivalents.

1.64“Phase 3 Clinical Trial” means any human clinical trial of a Product designed to:

(a) establish that such Product is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the Product in the dosage range to be prescribed; and (c) support regulatory approval of such Product, that would satisfy the requirements of 21 CFR § 312.21(c) or its non-United States equivalents.

1.65“Phase 4 Clinical Trial” means any human clinical trial of a Product that is:

(a) designed to satisfy a requirement of a Regulatory Authority in order to maintain a Regulatory Approval for such Product or (b) conducted after the first Regulatory Approval of a Product in the same Indication for which a Product received Regulatory Approval.

1.66“Pivotal Clinical Trial” means a pivotal clinical trial of a Product in human patients (whether or not designated a Phase 3 Clinical Trial) in any Country with a defined dose or a set of defined doses of a Product designed to ascertain efficacy and safety of such Product for the purpose of submitting applications for MAA approval to the competent Regulatory Authorities.

1.67“PMDA” means Japan’s Pharmaceuticals and Medical Devices Agency and any successor agency(ies) or authority having substantially the same function.

1.68“Product” means a product that contains or incorporates a specific Compound, whether alone or in combination with other active ingredients, in any form, formulation, presentation, or dosage, and for any mode of administration. For clarity, Products include Combination Products.

1.69“Publishing Notice” has the meaning set forth in Section 10.6.

1.70“Publishing Party” has the meaning set forth in Section 10.6.

1.71“Redacted Agreement” has the meaning set forth in Section 10.3.2.

1.72“Regulatory Approval” means, with respect to a Country or other jurisdiction in the Territory, all approvals (including Drug Approval Applications), licenses, registrations, or authorizations of any Regulatory Authority necessary to Commercialize a Product in such Country or other jurisdiction, and including pricing or reimbursement approval in such Country or other jurisdiction where such pricing and reimbursement approval is legally required for the sale of such Product.

1.73“Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., the FDA, EMA, MHRA, and PMDA)


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regulating or otherwise exercising authority with respect to activities contemplated in this Agreement, including the Exploitation of the Products in the Territory.

1.74“Regulatory Documentation” means all (a) applications (including all INDs and Drug Approval Applications), registrations, licenses, authorizations, and approvals (including Regulatory Approvals), (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all regulatory drug lists, advertising and promotion documents, adverse event files, and complaint files, and (c) data contained or relied upon in any of the foregoing, in each case ((a), (b), and (c)) to the extent relating to a Compound or Product.

1.75“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to a Product other than Patents, such as reference product exclusivity for biological products, new chemical entity exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug exclusivity, non-patent related pediatric exclusivity or any other applicable marketing or data exclusivity, including rights conferred in the U.S. under the Hatch-Waxman Act or the FDA Modernization Act of 1997 (including pediatric exclusivity), or rights similar thereto outside the U.S., such as Directive 2001/83/EC (as amended) in the EU.

1.76“Retained Compounds” has the meaning set forth in Section 2.7.

1.77“Royalty Term” means, with respect to each Product and each Country in the Territory, the period beginning on the date of the First Commercial Sale of such Product in such Country and ending on the latest to occur of (a) the tenth (10th) anniversary of the First Commercial Sale of such Product in such Country, (b) the expiration date of the last-to-expire Valid Claim of any Tay Patent that Covers such Product in such Country, and (c) the expiration of all Regulatory Exclusivity for such Product in such Country.

1.78“Sublicensee” means a Person, other than an Affiliate, that is granted a sublicense by VYNE under the license grant in Section 2.1 as provided in Section 2.2.

1.79“Tay” has the meaning set forth in the preamble.

1.80“Tay Indemnitees” has the meaning set forth in Section 12.1.

1.81“Tay Know-How” means all Know-How that (a) is Controlled by Tay or any of its Affiliates on the Effective Date and (b) is necessary or reasonably useful for the Exploitation of Products in the Field, including the Know-How set forth in Exhibit 1.81. For clarity, Tay Know- How does not include any Know-How that comprises part of the Dundee Licensed Rights.

1.82“Tay Technology” means the Tay Know-How, Tay Patents, and Tay’s interest in any Joint Inventions and Joint Patents.


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1.83“Tay Patents” means all Patents that (a) are Controlled by Tay or any of its Affiliates on the Effective Date and Cover the Compounds or (b) are Controlled by Tay or any of its Affiliates during the Term and Cover the Compounds. The Tay Patents existing as of the Effective Date are set forth on Exhibit 1.83. Notwithstanding the foregoing, if any Third Party becomes an Affiliate of Tay after the Effective Date other than by direct or indirect acquisition of such Third Party by Tay or any of its Affiliates, Tay Patents shall exclude any Patent Controlled by such Third Party before such Third Party becomes Tay’s Affiliate except to the extent the relevant Patent was also Controlled by Tay or any of its Affiliates prior to the date such Third Party became an Affiliate of Tay. For clarity, Tay Patents do not include any Patents that comprise part of the Dundee Licensed Rights.

1.84“Term” has the meaning set forth in Section 13.1.

1.85“Territory” means worldwide.

1.86“Third Party” means any Person other than Tay, VYNE, and their respective Affiliates.

1.87“Third Party Claims” has the meaning set forth in Section 12.1.

1.88“Topical BETi Compounds” has the meaning given to it in the Topical License Agreement.

1.89“Topical License Agreement” has the meaning set forth in the recitals.

1.90“United States” or “U.S.” means the United States of America and its territories and possessions (including the District of Columbia and Puerto Rico).

1.91“University of Dundee” or “Dundee” means The University of Dundee, established by Royal Charter dated 20 July 1967 and a registered Scottish charity (charity number SC015096) and having its principal office at 149 Nethergate, Dundee DD1 4HN.

1.92“Valid Claim” means (a) a claim of any issued and unexpired Patent that has not been revoked or held unenforceable, unpatentable, or invalid by a decision of a court or other governmental agency of competent jurisdiction that is not appealable or has not been appealed within the time allowed for appeal, and that has not been expressly abandoned, disclaimed, denied, or admitted to be invalid or unenforceable through reissue, re-examination, or disclaimer or otherwise and (b) a claim of a pending patent application that has not been cancelled, withdrawn, or abandoned or finally rejected by an administrative agency action from which no appeal can be taken and that has not been pending for more than seven (7) years.

1.93“VYNE” has the meaning set forth in the preamble.

1.94“VYNE Indemnitees” has the meaning set forth in Section 12.2.


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ARTICLE 2 GRANT OF RIGHTS

2.1Grant to VYNE. Tay (on behalf of itself and its Affiliates) hereby grants to VYNE an exclusive (including with regard to Tay and its Affiliates, except as provided in Section 2.3), sublicensable (through multiple tiers, subject to Section 2.2), royalty-bearing license under the Tay Technology to Exploit Products in the Field in the Territory. For clarity, VYNE may, subject to the terms of this Agreement, develop Compounds for any route of administration.

2.2Sublicenses. VYNE may grant sublicenses, through multiple tiers, under the license granted in Section 2.1 to its Affiliates and to Third Parties; provided that (a) each such sublicense is consistent with the terms and conditions of this Agreement, including undertakings by the sublicensee to observe and perform terms of confidentiality and non-use, keeping records and reports, and termination rights substantially similar to and no less restrictive than those set forth in this Agreement, so far as the same are capable of observance and performance by the sublicensee, (b) the sublicensees must ensure that the terms of any further sublicenses are substantially similar to and no less restrictive than those set forth in this Agreement, and (c) VYNE remains directly liable to Tay with respect to its obligations under this Agreement and for the performance and acts and omissions of all sublicensees. As soon as reasonably practicable (but in any case, within thirty (30) days) after the execution of any such sublicense agreement with a Third Party, VYNE shall provide Tay with written notice thereof, including the identity of the Sublicensee and the scope of the license granted, and, in the case of any sublicense granting to a Third Party the right to conduct clinical Development or Commercialize Products (or any amendment to such a sublicense), a copy of such sublicense agreement or amendment, which copy may be redacted as appropriate to remove any confidential information of VYNE or the sublicensee that is not necessary for Tay to determine compliance with this Agreement, subject to the terms of ARTICLE 10.

2.3Retained Rights. [***].

2.4No Implied Licenses. Except as expressly provided herein, Tay grants no other right or license to VYNE hereunder, including any rights or licenses to the Tay Technology not expressly granted herein. Except as expressly provided herein, VYNE grants no right or license to Tay hereunder.

2.5Exclusivity.


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2.5.1Obligations on VYNE. During the Term, VYNE hereby covenants that it shall not, directly or indirectly, either by itself or with or through any of its Affiliates or any Third Party, Develop, Manufacture, or Commercialize any Competing BETi Product in the Field in the Territory.

2.5.2Acquisition of Competing Product. If a Third Party becomes an Affiliate of VYNE after the Effective Date through merger, acquisition, consolidation or other similar transaction, and as of the closing date of such transaction, such Third Party is engaged in the Development, Manufacture or Commercialization of any product containing or comprising a BETi that, if conducted by VYNE, would cause VYNE to be in breach of its exclusivity obligations set forth in Section 2.5 (a “Competing Program”), then:

(a)if such transaction results in a Change of Control of VYNE or any Affiliate that controls VYNE, then such new Affiliate may continue such Competing Program and such continuation will not constitute a breach of VYNE’s exclusivity obligations set forth above; provided that (i) such new Affiliate conducts such Competing Program independently of the activities of this Agreement, does not use any Tay Technology in the conduct of such Competing Program and does not have access to any non-public Tay Technology or Confidential Information of Tay; (ii) VYNE shall implement and maintain reasonable measures to segregate the Tay Technology in order to comply with this clause (including firewalls and screens (whether technical or physical) between VYNE and the Affiliate), and (iii) at Tay’s request, VYNE shall promptly provide Tay with reasonable details of such measures; and

(b)if such transaction does not result in a Change of Control of VYNE, then VYNE and its new Affiliate will have nine (9) months from the closing date of such transaction to either wind down and terminate such Competing Program or complete the Divestiture of such Competing Program, and VYNE’s new Affiliate’s conduct of such Competing Program during such nine (9)-month period will not be deemed to be a breach of VYNE’s exclusivity obligations set forth above; provided that (i) such new Affiliate conducts such Competing Program during such nine (9)-month period independently of the activities of this Agreement, does not use any Tay Technology in the conduct of such Competing Program and does not have access to any non-public Tay Technology or Confidential Information of Tay; (ii) VYNE shall implement and maintain reasonable measures to segregate the Tay Technology in order to comply with this clause (including firewalls and screens (whether technical or physical) between VYNE and the Affiliate) and (iii) at Tay’s request, VYNE shall promptly provide Tay with reasonable details of such measures. For the purposes of this Section 2.5.2, “Divestiture” means the sale and transfer of the Competing Program to a Third Party without VYNE (or its Affiliate) receiving a continuing share of profit, royalty payment, or other economic interest in the success of such Competing Program or being actively involved in, or having any decision-making authority with respect to, the development, manufacture or commercialization of products under such Competing Program.

2.6Technology Transfer and Assistance. As soon as reasonably practicable following the Effective Date, Tay shall, and shall cause its Affiliates to, without additional compensation, disclose and make available to VYNE (which obligation may include granting


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personnel designated by VYNE controlled access to an electronic data room), in such form as maintained by Tay in the ordinary course of business, a copy of the Tay Know-How listed at Exhibit 1.81. The Parties shall reasonably cooperate to provide a smooth and prompt provision of all such Know-How. At VYNE’s request, Tay shall reasonably assist VYNE and its designees in the use and understanding of the Tay Know-How and shall promptly provide reasonable assistance and cooperation, and make its personnel reasonably available to VYNE and its designees, as necessary or reasonably useful for VYNE to Exploit the Compounds and Products; provided that, unless otherwise agreed, VYNE shall reimburse Tay for all documented (a) external costs on a pass-through basis and (b) internal expenses at an hourly rate per FTE based on the relevant FTE’s standard, then-current industry standard rate per annum, in each case of (a) and (b), that are reasonably incurred by Tay in providing such assistance. As used herein, “FTE” means a full-time equivalent person year (consisting of a total of one thousand eight hundred twenty (1,820) hours per year) of activities undertaken by Tay.

2.7Non-Compete. During the Term, Tay hereby covenants that it shall not, directly or indirectly, either by itself or with or through any of its Affiliates or any Third Party, Develop, Manufacture, or Commercialize any of the BETi compounds listed in Exhibit 2.7 (the “Retained Compounds”) in the Field in the Territory.

ARTICLE 3 COLLABORATION MANAGEMENT

3.1Joint Development Committee.

3.1.1Formation. Within thirty (30) days after the Effective Date, the Parties shall establish a joint development committee (the “JDC”). The JDC shall consist of two (2) representatives from each of the Parties. Each representative must have the requisite experience and seniority to enable such person to review and advise on behalf of the applicable Party with respect to the issues falling within the scope of review and advice of the JDC. From time to time, each Party may substitute one or more of its representatives to the JDC on written notice to the other Party. Each Party shall select from its representatives a representative who will chair the JDC jointly with the selected representative from the other Party. Each Party may replace its co- chairperson from time to time by informing the other Party in writing. For clarity, the Parties agree that the JDC may be composed of the same members as the members of the joint development committee established under the Topical License Agreement.

3.1.2Specific Responsibilities. The JDC shall oversee the performance of the Development Plan and serve as a consultative and information-exchange body for the Development of Compounds and Products. In particular, the JDC shall:

(a)review and discuss the Development Plan, and review any

amendments thereto;

(b)oversee the conduct and progress of the Development Plan and serve

as a forum for discussion of results generated under the Development Plan;


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(c)serve as a forum for discussion of Development activities with respect to Compounds and Products, including results arising from such activities;

(d)establish secure access methods (such as secure databases) for the exchange of Know-How and other information as contemplated under this Agreement;

(e)monitor and implement the technology transfer to VYNE pursuant

to Section 4.4; and

(f)perform such other functions as are set forth herein or as the Parties

may mutually agree in writing, except where in conflict with any provision of this Agreement.

3.2General Provisions Applicable to the JDC.

3.2.1Meetings and Minutes. The JDC shall meet quarterly, or at such frequency as otherwise agreed to by the Parties, either in person or by tele-/videoconference with the venue of the in-person meetings alternating between locations designated by Tay and locations designated by VYNE. The chairperson of the JDC shall be responsible for calling meetings on no less than thirty (30) days’ notice. Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least ten (10) days in advance of the applicable meeting; provided that under exigent circumstances requiring input by the JDC, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting. The JDC may adopt such standing rules as necessary for its work, so long as such rules are not inconsistent with this Agreement. A quorum of the JDC exists whenever there is present at a meeting at least one (1) representative appointed by each Party. The chairpersons of the JDC (or their designee) shall prepare and circulate minutes of each meeting within thirty (30) days after the meeting for the Parties’ review and approval. The Parties shall agree on the minutes of each meeting promptly, but in no event later than within ten (10) days following circulation of the draft minutes. All JDC meetings, documents, and minutes are the Confidential Information of both Parties.

3.2.2Non-Member Attendance. Each Party may invite a reasonable number of participants, in addition to its representatives, to attend JDC meetings; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party shall provide reasonable prior written notice to the other Party and obtain the other Party’s written approval for such Third Party to attend such meeting, which approval shall not be unreasonably withheld, conditioned, or delayed. Such Party shall ensure that such Third Party is bound by written confidentiality and non-use obligations consistent with the terms of ARTICLE 10.

3.3Limitations on Authority. The JDC is a consultative and information-exchange body for the Development of Compounds and Products and does not have the authority to make any decisions with respect to the Development of Compounds or Products or any other matter within the scope of this Agreement. Each Party retains the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion are delegated to or vested in


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the JDC unless the Parties expressly so agree in writing. The JDC does not have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 14.4 or compliance with which may only be waived as provided in Section 14.6.

3.4Discontinuation of the JDC. The activities to be performed by the JDC shall solely relate to governance under this Agreement and are not intended to be or involve the delivery of services. Upon the date of First Commercial Sale of a Product in the Field in the Territory, or such earlier date agreed by the Parties in writing, the JDC will have no further responsibilities under this Agreement and, unless otherwise agreed by the Parties in writing, will be considered fully dissolved by the Parties. Thereafter, each Party shall designate, to the extent necessary, a contact person for the exchange of information under this Agreement or such exchange of information shall be made through the Parties.

3.5Expenses. Each Party is responsible for all travel and related costs and expenses of its members and other representatives to attend meetings of, and otherwise participate on, the JDC.

ARTICLE 4 DEVELOPMENT

4.1Overview. Subject to the terms and conditions of this Agreement, VYNE is solely responsible for the Development of Compounds and Products in the Field in the Territory, at its own cost and expense, including all non-clinical and clinical studies, as necessary to obtain Regulatory Approval for Products in the Territory.

4.2Development Plan. VYNE shall conduct its Development activities under and in accordance with the Development Plan and is solely responsible for all decisions regarding the day-to-day conduct of Development of Compounds and Products. Promptly after the Effective Date, VYNE shall provide Tay with a written plan for Development of Compounds and Products in the Field in the Territory (the “Development Plan”). The Development Plan will describe the critical activities VYNE plans to undertake in the Development of Compounds and Products in the Field in the Territory, inducing all clinical studies, CMC information collection activities, and regulatory activities with respect to the Products to be conducted by or on behalf of VYNE or its Affiliates or their respective Sublicensees. Until the First Commercial Sale of a Product, VYNE shall prepare an update to the Development Plan on an annual basis and shall provide such updated Development Plan to Tay. Such Development Plan and the contents therein are Confidential Information of VYNE.

4.3Diligence. VYNE shall use Commercially Reasonable Efforts to Develop Products in the Field in the Territory. VYNE may satisfy its diligence obligations under this Section 4.3 through its Affiliates and Sublicensees.

4.4Records. VYNE shall, and shall ensure that its Affiliates and subcontractors, maintain records in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, and in compliance with Applicable Law, which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of its


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Development activities hereunder, which shall record only such activities and shall not include or be commingled with records of activities outside the scope of this Agreement. Such records shall be retained by VYNE for at least three (3) years after the termination of this Agreement, or for such longer period as may be required by Applicable Law.

4.5Development Reports. VYNE shall update Tay on an annual basis regarding its significant Development activities with respect to Products in the Territory. Each such update shall summarize VYNE and its Affiliates’ and Sublicensees’ significant Development activities with respect to each such Product in the Territory and shall contain information at a level of detail reasonably required by Tay to determine VYNE’s compliance with its diligence obligations set forth herein, provided however that such updates and reports need not be specifically generated in compliance with this section and VYNE may rely on existing reports and internal communications to its executive management.

4.6Subcontractors. VYNE may engage subcontractors to conduct any activities necessary for Development of Compounds and Products, including non-clinical studies, clinical studies, CMC activities, and regulatory services for Compounds and Products, under this Agreement, provided that such subcontractors are bound by written obligations of confidentiality consistent with this Agreement and have agreed in writing to assign to VYNE all data, information, inventions or other intellectual property generated by such subcontractor in the course of performing such subcontracted work. VYNE remains responsible for any obligations that have been delegated or subcontracted to any subcontractor.

REGULATORY MATTERS

5.1Regulatory Activities. As between the Parties, VYNE, at its sole expense, has the sole right to prepare, obtain, and maintain the Drug Approval Applications (including the setting of the overall regulatory strategy therefor), Regulatory Approvals, and other Regulatory Documentation, and to conduct communications with Regulatory Authorities, for Compounds and Products in the Territory. Upon VYNE’s request and without additional compensation, Tay shall provide VYNE with information within Tay’s control and reasonably required to obtain Regulatory Approvals for the Products, including providing necessary documents or other materials required by Applicable Law to obtain such Regulatory Approvals. VYNE will keep Tay reasonably informed with regard to any Regulatory Approvals proceedings for the Products.

5.2Recalls. VYNE shall notify Tay promptly following its determination that any event, incident, or circumstance has occurred that may result in the need for a recall, market suspension, or market withdrawal of a Product in the Territory, and shall include in such notice the reasoning behind such determination and any supporting facts. VYNE (or its Sublicensee) may make the final determination whether to voluntarily implement any such recall, market suspension, or market withdrawal in the Territory. If a recall, market suspension, or market withdrawal is mandated by a Regulatory Authority in the Territory, VYNE (or its Sublicensee) shall initiate such a recall, market suspension, or market withdrawal in compliance with Applicable Law. For all recalls, market suspensions, or market withdrawals undertaken pursuant to this Section 5.2, VYNE


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(or its Affiliate or Sublicensee) shall be solely responsible for the execution thereof, and Tay shall reasonably cooperate in all such recall efforts, at VYNE’s request and expense.

5.3Regulatory or Third Party Action or Inspection. Tay shall immediately notify VYNE as soon as Tay becomes aware of any Regulatory Authority inspections relating to any Product. Tay shall permit VYNE to be present at any such inspections and provide VYNE the opportunity to provide, review and comment on any responses that may be required. If Tay does not receive prior notice of any such inspection, Tay shall notify VYNE as soon as practicable after such inspection and shall provide VYNE with copies of all materials, correspondence, statements, forms and records received or generated pursuant to any such inspection. In addition to such obligations with respect to Regulatory Authority inspections, Tay shall immediately notify VYNE of any information it receives regarding any threatened or pending action or communication by or from any Third Party, including a Regulatory Authority, that may materially affect the Exploitation or regulatory status of a Product. Tay shall only be required to comply with its obligations under this Section 5.3 to the extent that it is lawfully able to do so.

ARTICLE 6 COMMERCIALIZATION

6.1In General. VYNE (itself or through its Affiliates or Sublicensees) has the sole right and responsibility to Commercialize Products in the Field in the Territory, at its own expense.

6.2Commercialization Diligence. VYNE shall use Commercially Reasonable Efforts to Commercialize each Product for which it has obtained Regulatory Approval. VYNE may satisfy its diligence obligations under this Section 6.2 through its Affiliates and Sublicensees.

6.3Commercial Updates. VYNE shall update Tay on an annual basis regarding its significant Commercialization activities with respect to Products in the Territory. Each such update shall summarize VYNE and its Affiliates’ and Sublicensees’ significant Commercialization activities with respect to each such Product in the Territory and shall contain information at a level of detail reasonably required by Tay to determine VYNE’s compliance with its diligence obligations set forth herein. Subject to the foregoing, Tay agrees that such updates and reports need not be specifically generated and VYNE may satisfy the requirements of this Section 6.3 through updates which comprise appropriate existing reports and internal communications to its executive management.

ARTICLE 7 MANUFACTURE AND SUPPLY

7.1Supply of Compounds and Products. As between the Parties, VYNE has the sole right and responsibility, at its expense, to Manufacture (or have Manufactured) and supply Compounds and Products for clinical purposes and commercial sale in the Territory by VYNE and its Affiliates and Sublicensees. VYNE (itself or through its Affiliates or Sublicensees) shall use Commercially Reasonable Efforts to make available all necessary manufacturing and selling facilities (in such location or locations as VYNE and/or its Affiliates and/or Sublicensees shall


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determine in their sole discretion from time to time) to meet all reasonable demands for Products throughout the Territory.

7.2General Obligations. VYNE shall:

7.2.1procure that all Products manufactured and/or supplied by VYNE or its Affiliates or Sublicensees are of a satisfactory quality in accordance with best industry practice or other analogous guidelines;

7.2.2not sell or dispose of Products for non-monetary consideration (other than when issuing demonstration/evaluation/loan units of the Products to third parties, which includes use as samples for charitable or promotional purposes, for named patient use, for use in non- clinical or clinical trials or any test or other studies reasonably necessary to comply with Applicable Laws);

7.2.3not act as agent of Tay and specifically not give any indication that it is acting otherwise than as principal and in advertising or selling Products nor make any representation or give any warranty on behalf of Tay; and

7.2.4comply with all statutes and regulatory requirements of any government or other competent authority which relate to the Manufacture, Development and Commercialization (including markings) in relation to the Products.

ARTICLE 8 PAYMENTS AND RECORDS

8.1Upfront Payment. Within five (5) Business Days after the Effective Date, VYNE shall pay to Tay a one-time, non-refundable, non-creditable payment in the amount of Three Million Seven Hundred and Fifty Thousand Dollars ($3,750,000).

8.2Development and Regulatory Milestones.

8.2.1Development and Regulatory Milestone Payments. In partial consideration of the rights granted by Tay to VYNE under this Agreement and subject to the terms and conditions set forth in the remainder of this Section 8.2, on a Product-by-Product basis, VYNE shall pay to Tay the non-refundable, non-creditable milestone payment set forth in the table below within [***] following the first achievement of the corresponding milestone event by a Product by or on behalf of VYNE or its Affiliates or Sublicensees:


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1	[***]	[***]
2	[***]	[***]
3	[***]	[***]
4	[***]	[***]
5	[***]	[***]
6	[***]	[***]
7	[***]	[***]
8	[***]	[***]
9	[***]	[***]
10	[***]	[***]
11	[***]	[***]

For clarity: (i) there is no limit on the number of Products for which the above Milestone Payments Amounts may become due; (ii) because the final formulation and dosage strength of a Product is not determined until Phase 3, milestones 1, 2 and 3 will not be due more than once in respect of different formulations and dosages of a Product that is being Developed for the same indication and route of administration; (iii) milestones 9, 10 and 11 above will be due in respect of both a second Indication and a third Indication of a Product; and (iv) in respect of any particular Product, the same milestone event may occur (and the corresponding Milestone Payment Amount become due) for such Product as both for topical administration and for oral administration (and for any other administration), as more particularly set forth in Section 8.2.2.

8.2.2New Administration. [***].

8.2.3Skipped Milestones. [***].

8.3Royalties.


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8.3.1Royalty Rates. As further consideration for the rights granted to VYNE under this Agreement, subject to the remainder of this Section 8.3, during the Royalty Term, VYNE shall make quarterly, non-refundable, except as set forth in Section 8.8, non-creditable royalty payments to Tay on the annual Net Sales of all Products sold by or on behalf of VYNE, its Affiliates or Sublicensees in the Territory at the applicable rate set forth in the table below. Solely for the purpose of calculating the applicable royalty rate set forth in the table below, “Products” shall be deemed to include both Products as defined herein and “Products” as defined in the Topical License Agreement, which are subject to royalties thereunder at the same tiered royalty rates. By way of example only, if in a given Calendar Year, there are aggregate Net Sales of Products (as defined hereunder) of [***] and aggregate Net Sales of Products (as defined in the Topical License Agreement) of [***], then the royalty rate of [***] shall attach to the portion of such combined Net Sales under [***] and the royalty rate of [***] shall attach to the portion of such combined Net Sales greater than [***]. For clarity, no royalties shall be payable by VYNE hereunder on Net Sales of Products (as defined in the Topical License Agreement), and payment of such royalties is governed solely by the Topical License Agreement.


Annual Net Sales in the Territory of Products in a Calendar Year			Royalty Rate
[***]			[***]
[***]			[***]
[***]			10%

In the event that a permitted reduction under Section 8.3.3(a) and/or Section 8.3.3(b) applies, then the applicable royalty rate(s) for the portion of the Net Sales subject to the reduction shall be determined based on the overall proportion of combined Net Sales of Products in each royalty tier above during the applicable Calendar Year.

[***]

8.3.2Royalty Term. Royalties shall be paid on a Product-by-Product and Country-by-Country basis in the Territory from the First Commercial Sale of such Product in a Country by or on behalf of VYNE, its Affiliates, or Sublicensees, until the expiration of the Royalty Term for such Product in such Country.

8.3.3Permitted Reductions.

(a)Generic Competition. If, in a Country within the Territory during the Royalty Term for a Product, sales of all Generic Products to such Product in such Country in


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a Calendar Quarter have a market share of [***] in such country, then the royalty rate payable by VYNE to Tay with respect to Net Sales of the Product in such Country for such Calendar Quarter shall be reduced by [***] of the otherwise applicable rate. If, in a Country within the Territory during the Royalty Term for a Product, sales of all Generic Products to such Product in such Country in a Calendar Quarter exceed [***] of the unit volume of all sales of such Product plus the unit volume of all sales of such Generic Products to such Product in such country (such percentage being the “Relevant Calendar Quarter Percentage”), then the royalty rate payable by VYNE to Tay with respect to Net Sales of the Product in such Country for such Calendar Quarter shall be reduced by a percentage equal to the Relevant Calendar Quarter Percentage, subject always to a maximum reduction of [***] of the otherwise applicable rate. All such determinations of the unit volume of sales shall be based upon a mutually acceptable calculation method using market share data provided by a reputable and mutually agreed upon provider, such as IQVIA.

(b)Third Party License. To the extent VYNE or its Affiliate obtains a right or license under Patents owned by a Third Party and such right or license is necessary to practice the rights purported to be granted to VYNE by Tay under issued Tay Patents in such Country (a “Third Party License”), the royalties payable by VYNE to Tay shall be [***].

(c)Floor. Notwithstanding the foregoing provisions of this Section 8.3.3, in no circumstances will the royalties payable to Tay under this Section 8.3 in any Calendar Quarter be reduced, as a result of this Section 8.3.3, below [***]. VYNE may carry forward to subsequent Calendar Quarters any deductions that it was not able to deduct as a result of the foregoing provision.

8.4Royalty Payments and Reports. VYNE shall calculate all amounts payable to Tay pursuant to Section 8.3 at the end of each Calendar Quarter, which amounts shall be converted to Dollars, in accordance with Section 8.5. VYNE shall pay to Tay the royalty amounts due with respect to a given Calendar Quarter within sixty (60) days after the end of each Calendar Quarter. Each payment of royalties due to Tay shall be accompanied by a report setting forth the Net Sales of the Products by VYNE and its Affiliates and Sublicensees in the Territory in sufficient detail to permit confirmation of the accuracy of the royalty payment made.

8.5Mode of Payment. All payments to Tay under this Agreement shall be made by deposit of Dollars in the requisite amount to such bank account as Tay may from time to time designate by written notice to VYNE. For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), a Party shall convert any amount expressed in a foreign currency into Dollar equivalents using its, its Affiliate’s, or Sublicensee’s standard conversion methodology consistent with Accounting Standards.

8.6Taxes.


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8.6.1Taxes on Income. Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the activities of the Parties under this Agreement.

8.6.2Withholding Amounts. If any sum due to be paid to Tay under this Agreement is subject to any withholding or similar tax, the Parties shall use their commercially reasonable efforts to do all such acts and to sign all such documents as will enable them to take advantage of any applicable double taxation agreement or treaty. Any tax paid or required to be withheld by VYNE for the benefit of Tay on account of any payments to Tay under this Agreement will be deducted from the amount of royalties or other payments otherwise due. VYNE will secure and send to Tay proof of any such taxes withheld and paid by VYNE for the benefit of Tay. If withholding or similar taxes are paid to a government authority, each Party shall provide the other such assistance as is reasonably required to obtain a refund of the withheld or similar taxes, or to obtain a credit with respect to such taxes paid.

8.6.3Tax Changing Decision. Notwithstanding the foregoing, to the extent VYNE or its Affiliates (a) assigns or otherwise transfers this Agreement or its obligations hereunder to an Affiliate or Third Party, (b) changes its location of incorporation from the United States to another location, (c) makes payments from an entity, or payments are deemed to be made from an entity, other than the United States entity originally entering into this Agreement, or

(d) fails to comply with Applicable Laws or filing or record retention requirements to enjoy the benefit regarding withholding taxes under the Applicable Laws, in each case that results in a tax being required to be withheld under Applicable Laws that would not have been required to be withheld if such action had not been taken (each, a “Tax Changing Decision”) such that as a result of a Tax Changing Decision, VYNE is required by Applicable Laws to deduct or withhold taxes directly from any amount paid to Tay, then (i) notwithstanding anything to the contrary in this Agreement, VYNE shall increase the amount paid to Tay by the required amount such that the net amount actually received by Tay after such deduction or withholding equals the full amount originally invoiced or stated by Tay to be payable and (ii) VYNE shall timely pay the applicable taxes to the relevant governmental authority in accordance with Applicable Laws.

8.7Interest on Late Payments. If any undisputed payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment, but excluding the period during which termination is tolled pursuant to Section 13.3) at an annual rate (but with interest accruing on a daily basis) equal to LIBOR (or other such short term inter-bank interest rate as deemed suitable by the Parties), such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest.

8.8Audit. VYNE shall keep, and shall require its Affiliates and Sublicensees to keep, complete and accurate records and books of account (in an electronic format) pertaining to the sale or other disposition of Products in sufficient detail and containing all data necessary to permit Tay to confirm the accuracy of any payments due hereunder. VYNE shall keep such books and records necessary to permit Tay to conduct an audit under this section for a minimum of six (6) years following the Calendar Year to which they pertain, or such longer period of time as may be


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required by Applicable Law. Upon reasonable prior notice and during regular business hours at such place or places where such records are customarily kept, such records may be inspected on Tay’s behalf by an independent certified public accountant (the “Auditor”) selected by Tay and reasonably acceptable to VYNE for the sole purpose of verifying for Tay the accuracy of any payments made, or required to be made, to Tay pursuant to this Agreement. Before beginning its audit, the Auditor shall execute an undertaking acceptable to each Party by which the Auditor agrees to keep confidential all information reviewed during the audit. Such audits shall be limited to once each Calendar Year and once with respect to records covering any specific period of time. Such auditor shall not disclose VYNE’s Confidential Information to Tay except to the extent necessary to confirm the accuracy of the financial reports and payments furnished by VYNE under this Agreement and the amount of any discrepancies. If the final result of the inspection reveals an undisputed underpayment, the underpaid amount shall be paid within thirty (30) days after the Auditor’s report. If that the final result of the inspection reveals an undisputed overpayment, the overpaid amount shall be applied as a credit against future royalty payments by VYNE. Tay shall bear the full cost of such audit unless such audit reveals an underpayment owed by VYNE of more than five percent (5%) from the reported amounts, in which case VYNE shall reimburse Tay for the Auditor’s services. From time to time Tay shall also have the right to request of VYNE and VYNE shall in receipt of such request provide to Tay such information as may reasonably be required for Tay to assess the conduct and performance of VYNE in carrying out its obligations under this Agreement.

ARTICLE 9 INTELLECTUAL PROPERTY

9.1Ownership of Intellectual Property.

9.1.1United States Law. The determination of whether an Invention is discovered, made, conceived, or reduced to practice by a Party for the purpose of allocating proprietary rights (including Patent, copyright, or other intellectual property rights) therein, shall, for purposes of this Agreement, be made in accordance with Applicable Law in the United States.

9.1.2Inventions.

(a)Sole Ownership. As between the Parties, each Party solely owns any Inventions made solely by its and its Affiliates’ employees, agents, or independent contractors in the conduct of activities under this Agreement.

(b)Joint Inventions. VYNE shall own any Inventions that are made jointly by employees, agents, or independent contractors of VYNE and its Affiliates together with employees, agents, or independent contractors of Tay and its Affiliates related to the development of the Compound under this Agreement (“Joint Inventions”). Tay hereby assigns (and agrees to and shall assign if the present assignment of future rights is prohibited by Applicable Law) all right and interest in the Joint Inventions to VYNE.

9.1.3Assignment Obligation.


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(a)Each Party shall cause all Persons who perform activities for such Party under this Agreement to be under an obligation to assign (or, if such Party is unable to cause such Person to agree to such assignment obligation despite such Party’s using commercially reasonable efforts to negotiate such assignment obligation, provide a license under) their rights in any Inventions resulting therefrom to such Party, except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit, and public institutions which have standard policies against such an assignment (in which case a suitable license, or right to obtain such a license, shall be obtained).

(b)Each Party shall promptly disclose to the other Party, in writing, the conception, discovery, development, generation, making or creation of (i) any Invention related to the composition of matter of a Compound or Product and (ii) any Joint Inventions, in each case, made by Persons who perform activities for it under this Agreement. Each Party shall execute and record assignments and other necessary documents consistent with such ownership promptly upon such other Party’s request.

9.2Patent Prosecution and Maintenance.

9.2.1Tay Patents and Joint Patents. VYNE has the first right, but not the obligation, through the use of internal counsel, or outside counsel reasonably acceptable to Tay, to prepare, file, prosecute, and maintain the Tay Patents (on behalf of and in the name of Tay) and the Joint Patents worldwide, at VYNE’s expense. To the extent, if any, there are one or more Compounds not Covered by an Tay or Joint Patent at the Effective Date, Tay shall promptly cooperate and assist VYNE in preparing and filing one or more patent applications claiming such Compounds and shall disclose the Compounds and related information in at least sufficient detail to permit an understanding of the nature of the inventions in relation to the Compounds by a practitioner reasonably skilled in the relevant technical or scientific area and to enable preparation and filing of said applications. VYNE shall keep Tay reasonably informed of all material steps with regard to the preparation, filing, prosecution, and maintenance of the Tay Patents and the Joint Patents, including by providing Tay with a copy of material communications to and from any patent authority regarding such Patents, and by providing Tay drafts of any material filings or responses to be made to such patent authorities sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for Tay to review and comment thereon. VYNE shall consider in good faith the requests and suggestions of Tay with respect to such VYNE drafts and with respect to strategies for filing and prosecuting such Patents. If VYNE decides not to prepare, file, prosecute, or maintain any Tay Patent or Joint Patent in a Country and there are no other Tay Patents or Joint Patents in such Country, VYNE shall provide reasonable prior written notice to Tay of such intention (which notice shall, in any event, be given no later than sixty (60) days prior to the next deadline for any action that may be taken with respect to such Joint Patent in such Country), and Tay shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Patent at its sole cost and expense in such Country. Upon Tay’s written acceptance of such option, Tay shall assume the responsibility and control for the preparation, filing, prosecution, and maintenance of such Tay Patent or Joint Patent, as applicable. In such event, VYNE shall reasonably cooperate with Tay with respect to such Patent in such Country as provided under Section 9.2.3.


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9.2.2VYNE Patents. VYNE has the sole right, but not the obligation, through the use of internal or outside counsel, to prepare, file, prosecute, and maintain the Patents claiming Inventions made solely by VYNE and its Affiliates’ employees, agents, or independent contractors (the “VYNE Patents”) worldwide, at VYNE’s expense.

9.2.3Cooperation. The Parties agree to cooperate fully in the preparation, filing, prosecution, and maintenance of the Tay Patents and the Joint Patents under this Agreement. Cooperation shall include:

(a)without limiting any other rights and obligations of the Parties under this Agreement, cooperating with respect to the timing, scope, and filing of such Patents to preserve and enhance the patent protection for Compounds and Products, including the manufacture and use thereof;

(b)executing all papers and instruments, or requiring its employees or contractors to execute such papers and instruments, so as to (i) effectuate the ownership of intellectual property set forth in Section 9.1.2; (ii) enable the other Party to apply for and to prosecute Patent applications; and (iii) obtain and maintain any Patent extensions, supplementary protection certificates, and the like with respect to the Tay Patents and the Joint Patents, in each case ((i), (ii), and (iii)) to the extent provided for in this Agreement;

(c)consistent with this Agreement, assisting in any license registration processes with applicable governmental authorities that may be available for the protection of a Party’s interests in this Agreement; and

(d)promptly informing the other Party of any matters coming to such Party’s attention that may materially affect the preparation, filing, prosecution, or maintenance of any such Patents.

9.2.4Patent Term Extension and Supplementary Protection Certificate. VYNE has authority and sole discretion for making decisions regarding patent term extensions, including supplementary protection certificates and any other extensions that are now or become available in the future, wherever applicable, for VYNE Patents, Tay Patents, and Joint Patents in any Country and for applying for any extension or supplementary protection certificate with respect to such Patents in the Territory. Tay shall provide prompt and reasonable assistance, as requested by VYNE, including by taking such action as patent holder as is required under any Applicable Law to obtain such patent extension or supplementary protection certificate. VYNE shall pay all expenses with respect to obtaining the extension or supplementary protection certificate in the Territory. If VYNE desires that a patent term extension should be applied for a Tay Patent, Tay and VYNE shall discuss in good faith such patent term extension, provided that such decision shall be at VYNE’s sole discretion.

9.2.5Patent Listings. VYNE will have the sole right to make all filings with Regulatory Authorities in the Territory with respect to VYNE Patents, and Joint Patents, including as required or allowed under Applicable Law, provided that with respect to Joint Patents such right shall be solely with respect to Products. VYNE shall notify Tay in writing of any Tay Patents that


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it intends to list with Regulatory Authorities related to the Products and, prior to filing any such listing, consult with and consider in good faith the requests and suggestions of Tay regarding the same.

9.3Patent Enforcement.

9.3.1Notice. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of an Tay Patent, Joint Patent or VYNE Patent by a Third Party in the Territory of which such Party becomes aware (including alleged or threatened infringement based on the development or commercialization of, or an application to market a product containing, a Compound or Product in the Territory).

9.3.2Tay Patents and Joint Patents. VYNE has the first right, but not the obligation, to prosecute any such infringement of Tay Patents and Joint Patents at its sole expense. If VYNE prosecutes any such infringement, Tay has the right to join as a party to such claim, suit, or proceeding and participate with its own counsel at its own expense; provided that VYNE retains control of the prosecution of such claim, suit, or proceeding. If VYNE does not take commercially reasonable steps to prosecute the alleged or threatened infringement with respect to any such Tay Patent or Joint Patent (a) within six (6) months following the first notice provided above with respect to such alleged infringement, or (b) ten (10) Business Days before the time limit, if any, set forth in appropriate laws and regulations for filing of such actions, whichever comes first, then Tay may prosecute the alleged or threatened infringement at its own expense.

9.3.3VYNE Patents. VYNE has the sole right, but not the obligation, to prosecute any such infringement of VYNE Patents at its sole expense, and VYNE shall retain control of the prosecution of such claim, suit, or proceeding.

9.3.4Cooperation. The Parties shall cooperate in any infringement action pursuant to this Section 9.3. To the extent necessary for a Party to bring such an action, the other Party shall, where necessary, furnish a power of attorney solely for such purpose and shall join in, or be named as a necessary party to, such action. Unless otherwise set forth herein, the Party entitled to bring any patent infringement litigation in accordance with this Section 9.3 may settle such claim; provided that neither Party may settle any patent infringement litigation under this Section 9.3 in a manner that materially diminishes or has a material adverse effect on the rights or interest of the other Party, or in a manner that imposes any costs or liability on, or involves any admission by, the other Party, without the express written consent of such other Party. The Party commencing the litigation shall provide the other Party with copies of all pleadings and other documents filed with the court and shall consider reasonable input from the other Party during the course of the proceedings.

9.3.5Recovery. Any recovery realized as a result of such litigation described in Section 9.3.1 or Section 9.3.2 (whether by way of settlement or otherwise) shall be first allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses). Any remainder after such reimbursement is made shall be retained by the Party that has exercised its right to bring the enforcement action; provided, that to the extent that any award or settlement (whether by judgment


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or otherwise) is attributable to loss of sales with respect to a Product and retained by VYNE, such amounts shall be included as Net Sales hereunder with respect to such Product for the purposes of calculating amounts payable to Tay under Section 8.3.

9.4Infringement Claims by Third Parties. If the manufacture, sale, or use of a Product in the Territory pursuant to this Agreement results in, or may result in, any claim, suit, or proceeding by a Third Party alleging patent infringement by VYNE (or its Affiliates or Sublicensees), VYNE shall promptly notify Tay thereof in writing. VYNE has the first right, but not the obligation, to defend and control the defense of any such claim, suit, or proceeding at its own expense, using counsel of its own choice. Tay may participate in any such claim, suit, or proceeding with counsel of its choice at its own expense. Without limitation of the foregoing, if VYNE finds it necessary or desirable to join Tay as a party to any such action, Tay shall, at VYNE’s expense, execute all papers and perform such acts as reasonably required. If VYNE elects (in a written communication submitted to Tay within a reasonable amount of time after notice of the alleged patent infringement) not to defend or control the defense of, or otherwise fails to initiate and maintain the defense of, any such claim, suit, or proceeding, within such time periods so that Tay is not prejudiced by any delays, Tay may conduct and control the defense of any such claim, suit, or proceeding at its own expense. Each Party shall keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding. Any recoveries by VYNE of any sanctions awarded to VYNE and against a party asserting a claim being defended under this Section 9.4 shall be applied first to reimburse each Party for its reasonable out-of-pocket costs of defending or participating in such claim, suit, or proceedings, on a pro rata basis. The balance of any such recoveries shall be retained by, or provided to, VYNE and included in the calculation of Net Sales for the relevant Product for the purposes of calculating amounts payable to Tay under Section 8.3.

9.5Invalidity or Unenforceability Defenses or Actions.

9.5.1Notice. Each Party shall promptly notify the other Party in writing of any alleged or threatened assertion of invalidity or unenforceability of any of the Tay Patents that Cover a Compound or Product, Joint Patents, or VYNE Patents by a Third Party, in each case in the Territory and of which such Party becomes aware.

9.5.2Tay Patents and Joint Patents. VYNE has the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Tay Patents and the Joint Patents at its own expense. Tay may participate in any such claim, suit, or proceeding related to the Tay Patents and the Joint Patents with counsel of its choice at its own expense; provided that VYNE shall retain control of the defense in such claim, suit, or proceeding. If VYNE elects not to defend or control the defense of the Tay Patents or the Joint Patents, or otherwise fails to initiate and maintain the defense of any such claim, suit, or proceeding, then Tay may conduct and control the defense of any such claim, suit, or proceeding, at its own expense; provided, that Tay shall obtain the written consent of VYNE prior to settling or compromising such defense, such consent not to be unreasonably withheld, conditioned, or delayed.

9.5.3VYNE Patents. VYNE has the sole right, but not the obligation, to defend and control the defense of the validity and enforceability of the VYNE Patents at its own expense.


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9.5.4Cooperation. Each Party shall assist and cooperate with the other Party as such other Party may reasonably request from time to time in connection with its activities set forth in this Section 9.5, including by being joined as a party plaintiff in such action or proceeding, providing access to relevant documents and other evidence, and making its employees available at reasonable business hours. In connection with any such defense or claim or counterclaim, the controlling Party shall consider in good faith any comments from the other Party, shall keep the other Party reasonably informed of any steps taken, and shall provide copies of all documents filed, in connection with such defense, claim, or counterclaim. In connection with the activities set forth in this Section 9.5, each Party shall consult with the other as to the strategy for the defense of the Tay Patents, VYNE Patents, and Joint Patents.

9.6Inventor’s Remuneration. Each Party shall be solely responsible for any remuneration that may be due such Party’s inventors under any applicable inventor remuneration laws.

9.7Common Interest. All information exchanged between the Parties regarding the prosecution, maintenance, enforcement and defense of Patents under this ARTICLE 9 will be deemed to be Confidential Information of the disclosing Party. In addition, the Parties acknowledge and agree that, with regard to such prosecution, maintenance, enforcement, and defense, the interests of the Parties as collaborators are to, for their mutual benefit, obtain patent protection and plan patent defense against potential infringement activities by Third Parties, and as such, are aligned and are legal in nature. The Parties agree and acknowledge that they have not waived, and nothing in this Agreement constitutes a waiver of, any legal privilege concerning Patents under this ARTICLE 9, including privilege under the common interest doctrine and similar or related doctrines. Notwithstanding anything to the contrary in this Agreement, to the extent a Party has a good faith belief that any information required to be disclosed by such Party to the other Party under this ARTICLE 9 is protected by attorney-client privilege or any other applicable legal privilege or immunity, such Party shall not be required to disclose such information and the Parties shall in good faith cooperate to agree upon a procedure (including entering into a specific common interest agreement or disclosing such information on a “for counsel eyes only” basis or similar procedure) under which such information may be disclosed without waiving or breaching such privilege or immunity.

ARTICLE 10 CONFIDENTIALITY AND NON-DISCLOSURE

10.1Confidentiality Obligations. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, during the Term and for ten (10) years thereafter, the receiving Party shall keep confidential and shall not publish or otherwise disclose, and shall not use for any purpose other than as expressly provided for in this Agreement, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, and each Party shall keep confidential and shall not publish or otherwise disclose the terms of this Agreement except as permitted herein. Each Party may use the other Party’s Confidential Information only to the extent required to accomplish the purposes of this Agreement, including exercising its rights and performing its obligations under this Agreement. Each Party


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shall use at least the same standard of care as it uses to protect its own proprietary or confidential information (but no less than reasonable care) to ensure that its employees, agents, consultants, contractors, and other representatives do not disclose or make any unauthorized use of the other Party’s Confidential Information. Each Party shall promptly notify the other upon discovery of any loss or unauthorized use or disclosure of the other Party’s Confidential Information.

10.2Exceptions. The obligations of confidentiality and non-use set forth in Section 10.1 above do not apply to any information that the receiving Party can demonstrate by written evidence:

10.2.1is already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the disclosing Party;

10.2.2is now, or hereafter becomes, generally available to the public or otherwise part of the public domain through no fault of the receiving Party;

10.2.3is disclosed to the receiving Party by a Third Party who had no obligation to the disclosing Party not to disclose such information to others; or

10.2.4was independently discovered or developed by the receiving Party without the use of Confidential Information belonging to the disclosing Party.

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party.

10.3Permitted Disclosures.

10.3.1Pursuant to Applicable Law. Each Party may disclose Confidential Information to the extent that such disclosure is, in the reasonable opinion of the receiving Party’s legal counsel, required to be disclosed pursuant to law, regulation, or a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial, or local governmental body of competent jurisdiction, provided that the receiving Party shall first have given prompt written notice (and to the extent possible, at least five (5) Business Days’ notice) to the disclosing Party and given the disclosing Party a reasonable opportunity to take whatever action it deems necessary to protect its Confidential Information. If no protective order or other remedy is obtained, or the disclosing Party waives compliance with the terms of this Agreement, the receiving Party shall furnish only that portion of Confidential Information which the receiving Party is advised by counsel is legally required to be disclosed; for clarity, disclosures required in the reasonable opinion of the receiving Party’s legal counsel to the U.S. Securities and Exchange Commission (or equivalent foreign agency) shall be subject to the following Section 10.3.2.


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10.3.2Securities Exchange Filings. The Parties acknowledge that either or both Parties (or its Affiliates) may be obligated to make one or more filings (including to file a copy of this Agreement) with the U.S. Securities and Exchange Commission (or equivalent foreign agency) or a governmental authority. Each Party may make such a required filing, provided that if such filing includes a copy of this Agreement it will (a) submit in connection with such filing a copy of this Agreement in a form mutually agreed by the Parties in advance or, if, despite the reasonable efforts of the filing Party a form mutually agreed by the Parties cannot be agreed in advance, redacted to the extent permitted by Applicable Law, based on advice of filing Party’s counsel (the “Redacted Agreement”), (b) request, and use reasonable efforts consistent with Applicable Laws to obtain, confidential treatment of all terms redacted in the Redacted Agreement, for the Term of the Agreement and ten (10) years thereafter, and (c) unless otherwise agreed in writing by the other Party, request an appropriate extension of the term of the confidential treatment period if legally justifiable. For clarity, following a request from a governmental authority to change the redactions requested by a Party in the Redacted Agreement, a Party will not be in breach of this Section 10.3.2 for unredacting those redactions rejected by the applicable governmental authority, provided that such Party shall provide the other Party with a notice of the required changes and a copy of the revised redactions. Each Party is responsible for its own legal and other external costs in connection with any such filing, registration, or notification.

10.3.3Additional Permitted Disclosures. In addition to disclosures pursuant to Sections 10.3.1 and 10.3.2 and as otherwise expressly permitted by this Agreement, each Party may disclose Confidential Information belonging to the other Party if and to the extent such disclosure is reasonably necessary in the following instances:

(a)under appropriate conditions of confidentiality and on a need-to- know basis to its legal and financial advisors;

(b)under appropriate conditions of confidentiality in connection with an actual or potential (i) permitted license or sublicense of its rights hereunder, (ii) debt, lease, or equity financing of such Party, (iii) merger, acquisition, consolidation, share exchange, or other similar transaction involving such Party and a Third Party, and (iv) co-funding or financing arrangement, provided that in each case ((i) to (iv)) the receiving Party takes reasonable and lawful actions to minimize the degree of such disclosure;

(c)under appropriate conditions of confidentiality to any Third Party that is or may be engaged to perform services in connection with the Development, Manufacturing, or Commercialization of the Products as necessary to enable such Third Party to perform such services;

(d)to any government agency or authority in connection with seeking government funding, support, or grants;

(e)filing, prosecuting, and maintaining Patents, and prosecuting and defending litigation, in each case as permitted by this Agreement; and


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(f)obtaining and maintaining Regulatory Approvals for, and conducting preclinical studies or Clinical Trials of, Products that such Party has a license or right to Develop or Commercialize under this Agreement in a given Country or jurisdiction.

10.4Use of Name. Except as expressly provided herein, neither Party shall mention or otherwise use the name, logo, or trademark of the other Party or any of its Affiliates (or any abbreviation or adaptation thereof) in any publication, press release, marketing and promotional material, or other form of publicity without the prior written approval of such other Party in each instance. The restrictions imposed by this Section 10.4 shall not prohibit either Party from making any disclosure identifying the other Party that, in the opinion of the disclosing Party’s counsel, is required by Applicable Law; provided that such Party shall submit the proposed disclosure identifying the other Party in writing to the other Party as far in advance as reasonably practicable (and in no event less than five (5) Business Days prior to the anticipated date of disclosure) so as to provide a reasonable opportunity to comment thereon.

10.5Press Releases. The Parties agree to issue a joint press release substantially in a form agreed by the Parties and attached to this Agreement as Schedule 10.5 announcing the signature of this Agreement at or shortly after the Effective Date within the time-period as required by relevant securities laws. It is understood that each Party may desire or be required to issue subsequent press releases relating to this Agreement or activities hereunder. The Parties agree to consult with each other reasonably and in good faith with respect to the text and timing of such press releases prior to the issuance thereof. Notwithstanding the foregoing, neither Party may unreasonably withhold, condition, or delay consent to such releases by more than five (5) Business Days, and either Party may issue such press releases or make such disclosures to the U.S. Securities and Exchange Commission (or equivalent foreign agency) as it determines, based on advice of counsel, is reasonably necessary to comply with Applicable Laws or for appropriate market disclosure. Each Party shall provide the other Party with advance notice of legally required disclosures to the extent practicable, and to the extent possible, at least five (5) Business Days prior to such disclosure. Following the initial joint press release announcing this Agreement, either Party shall be free to disclose, without the other Party’s prior written consent, the existence of this Agreement, the identity of the other Party, and those terms of the Agreement which have already been publicly disclosed in accordance with this Section 10.5.

10.6Publications. During the Term, the disclosure by either Party relating to any Compound or Product in any publication or presentation shall be in accordance with the procedure set forth in this Section 10.6. A Party (“Publishing Party”) shall provide the other Party with a copy of any proposed publication or presentation at least thirty (30) days prior to submission for publication so as to provide such other Party with an opportunity to recommend any changes to the Publishing Party that it reasonably believes are necessary to continue to maintain such Party’s Confidential Information in accordance with the requirements of this Agreement. The incorporation of such recommended changes shall not be unreasonably refused; and if such other Party notifies (“Publishing Notice”) the Publishing Party in writing, within thirty (30) days after receipt of the copy of the proposed publication or presentation, that such publication or presentation in its reasonable judgment (a) contains an Invention, solely or jointly conceived or reduced to practice by the other Party, for which the other Party reasonably desires to obtain patent


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protection or (b) could be expected to have a material adverse effect on the commercial value of any Confidential Information disclosed by the other Party to the Publishing Party, the Publishing Party shall prevent such publication or delay such publication for a mutually agreed period of time and at the other Party’s request shall remove the other Party’s Confidential Information from the proposed publication or presentation. In the case of Inventions, a delay shall be for a period reasonably sufficient to permit the timely preparation and filing of a patent applications on such Invention, and in no event less than ninety (90) days from the date of the Publishing Notice.

10.7Destruction of Confidential Information. Upon the effective date of the expiration or termination of this Agreement for any reason, the Parties shall, with respect to Confidential Information to which such other Party does not retain rights under the surviving provisions of this Agreement, as soon as reasonably practicable, return (at the written request of the disclosing Party) or destroy all copies of such Confidential Information in the possession of the other Party and confirm such destruction in writing to the other Party, provided that such other Party shall be permitted to retain one copy of such Confidential Information for the sole purpose of performing any continuing obligations hereunder, as required by Applicable Law, or for archival purposes. Notwithstanding the foregoing, such other Party also shall be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by such Party’s automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such other Party’s standard archiving and back- up procedures, but not for any other use or purpose.

ARTICLE 11 REPRESENTATIONS AND WARRANTIES

11.1Mutual Representations and Warranties. Tay and VYNE each represents and warrants to the other, as of the Effective Date, as follows:

11.1.1Organization. It is a corporation duly incorporated, validly existing, and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power and authority, to execute, deliver, and perform this Agreement.

11.1.2Authorization. The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action and do not violate (a) such Party’s charter documents, bylaws, or other organizational documents, (b) in any material respect, any agreement, instrument, or contractual obligation to which such Party is bound, (c) any requirement of any Applicable Law, or (d) any order, writ, judgment, injunction, decree, determination, or award of any court or governmental agency presently in effect applicable to such Party.

11.1.3Binding Agreement. This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance, and general principles of equity (whether enforceability is considered a proceeding at law or equity).


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11.1.4No Inconsistent Obligation. It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect with the terms of this Agreement or that would impede the diligent and complete fulfillment of its obligations hereunder.

11.2Additional Warranties and Covenants of Tay. Subject to the exclusions set out in Exhibit 1.83, Tay further warrants to VYNE (or, in relation to 11.2.10 only, Tay covenants), as of the Effective Date, as follows:

11.2.1All existing Tay Patents that Cover a Compound as of the Effective Date are listed on Exhibit 1.83 (the “Existing Patents”). This Exhibit shall be updated and agreed by Tay from time to time as required to include other Tay Patents that Cover a Compound as they are identified.

11.2.2There are no judgments, or settlements against, or amounts with respect thereto, owed by Tay or any of its Affiliates relating to the Existing Patents. No claim or litigation has been brought or threatened in writing or, to Tay’s knowledge, in any other form by any Person alleging, and Tay has no knowledge of any claim (or facts that would give rise to such a claim), whether or not asserted, that the Existing Patents are invalid or unenforceable.

11.2.3To Tay’s knowledge (without having made any additional searches or enquiries), no Person is infringing or threatening to infringe or misappropriating or threatening to misappropriate the Existing Patents.

11.2.4Tay has not received an infringement allegation or Third Party Claim of infringement against any Compound, and to Tay’s knowledge, no prior art or other information exists that would materially and adversely affect the validity, enforceability, term or scope of any licensed Invention or Patent.

11.2.5Tay is the sole and exclusive legal and beneficial owner of the entire right, title, and interest in the Existing Patents, and is the record owner thereof and Tay is entitled to grant the license granted to VYNE herein and has, and will retain the unconditional and irrevocable right, power and authority to grant the license hereunder.

11.2.6The Tay Technology and Existing Patents as of the Effective Date constitute all of the Intellectual Property, patent rights and Know-How Controlled by Tay as of the Effective Date that are necessary to Exploit Products in the Field. Tay has not previously assigned, transferred, conveyed, subjected to a lien or security interest or otherwise encumbered its right, title and interest in the Tay Technology in a manner that conflicts with any rights granted to VYNE hereunder with respect to Compounds and Products, and Tay shall not do so.

11.2.7To Tay’s knowledge (without having made any additional searches or enquiries), there are no Patents or any claims of a published patent application that, if issued in their current form (whether owned by Tay or a Third Party) that are necessary to Exploit Compounds and Products, except for the Patents that are licensed to VYNE under Section 2.1 of this Agreement.


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11.2.8That (a) there is no fact or circumstance known by Tay that would cause Tay to reasonably conclude that any Tay Patent is invalid or un-enforceable, (b) there is no fact or circumstance known by Tay that would cause Tay to reasonably conclude the inventorship of each Tay Patent is not properly identified on each patent, and (c) all official fees, maintenance fees and annuities for the Tay Patents have been paid and all administrative procedures with governmental agencies with respect to the filing and maintenance of the Existing Patents have been completed.

11.2.9All employees and contractors of Tay performing activities under the Option Agreement or this Agreement on behalf of Tay (including for any Affiliate) will be obligated (or was obligated as the case may be) to assign all rights, title and interests in and to any inventions developed by them, whether or not patentable, to Tay or such Affiliate, respectively, as the sole owner thereof, prior to performing any such activities.

11.2.10During the Term, Tay covenants that it will not enter into or amend any agreement, whether written or oral, that would conflict with or otherwise diminish the rights granted to VYNE hereunder.

11.2.11Tay’s grant and its obligations, under this License Agreement does not and, to Tay’s knowledge, will not: (i) conflict with or violate any Applicable Law; (ii) require the consent, approval or authorization of any governmental or regulatory authority or other third party; or (iii) require the provision of any payment or other consideration to any third party.

11.2.12Tay has not granted and will not grant any licenses or other contingent or non-contingent right, title or interest under or relating to the Compounds, Tay Technology, or Products, and is not or will not be under any obligation, that does or will conflict with this Agreement, including any of Tay’s representations, warranties or obligations or VYNE’s rights or licenses hereunder.

11.2.13The Topical BETi Compounds, the Oral BETi Compounds set forth on Exhibit 1.58, and the Retained Compounds listed in Exhibit 2.7 constitute all of the BETi compounds owned or Controlled by Tay or its Affiliates as of the Effective Date.

11.3DISCLAIMER OF WARRANTIES. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH HEREIN, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

ARTICLE 12 INDEMNIFICATION; INSURANCE


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12.1Indemnification of Tay. VYNE shall indemnify, defend, and hold harmless Tay, its Affiliates and its and their respective directors, officers, employees, and agents (the “Tay Indemnitees”) from and against any and all losses, damages, liabilities, penalties, settlements, costs, taxes (including penalties and interest) and expenses (including reasonable attorneys’ fees and other expenses of litigation) (collectively, “Losses”) in connection with any and all suits, investigations, claims, or demands of Third Parties (collectively, “Third Party Claims”) incurred by or rendered against the Tay Indemnitees arising from or occurring as a result of: (a) the breach by VYNE or its Affiliates of this Agreement; (b) the negligence, recklessness, or willful misconduct on the part of VYNE or its Affiliates or their respective directors, officers, employees, and agents in performing any of its or their obligations under this Agreement; or (c) the Exploitation of any Compounds or Products by VYNE or its Affiliates or Sublicensees; except in each case ((a)–(c)) to the extent that Tay has an obligation to indemnify VYNE pursuant to Section 12.2.

12.2Indemnification of VYNE. Tay shall indemnify, defend, and hold harmless VYNE, its Affiliates and its and their respective directors, officers, employees, and agents (the “VYNE Indemnitees”) from and against any and all Losses in connection with any and all Third Party Claims incurred by or rendered against the VYNE Indemnitees arising from or occurring as a result of: (a) the breach by Tay or its Affiliates of this Agreement; or (b) the negligence, recklessness, or willful misconduct on the part of Tay or its Affiliates or its or their respective directors, officers, employees, and agents in performing its obligations under this Agreement; except in each case ((a)–(b)) to the extent that VYNE has an obligation to indemnify Tay pursuant to Section 12.1.

12.3Notice of Claim. All indemnification claims in respect of a Party, its Affiliates, or its or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the “Indemnified Party”). The Indemnified Party shall give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses or discovery of fact upon which such Indemnified Party intends to base a request for indemnification under this ARTICLE 12, but in no event shall the Indemnifying Party be liable for any Losses that result from any delay by the Indemnified Party in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the Indemnitee copies of all papers and official documents received in respect of any Losses and Third Party Claims.

12.4Control of Defense. The Indemnifying Party may conduct and control, through counsel of its choosing, any action for which indemnification is sought, and if the Indemnifying Party elects to assume the defense thereof, the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses of other legal counsel or any other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof. The Indemnifying Party may settle any action, claim, or suit for which the Indemnified Party is seeking indemnification; provided that the Indemnifying Party shall first give the Indemnified Party advance written notice of any proposed compromise or settlement and such Indemnified Party provides prior written approval, such approval not to be unreasonably conditioned, withheld or


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delayed. The Parties and their employees shall cooperate fully with each other and their legal representatives in the investigation, defense, prosecution, negotiation, or settlement of any such claim or suit. Each Party’s indemnification obligations under this ARTICLE 12 shall not apply to amounts paid by an Indemnified Party in settlement of any action with respect to a Third Party claim, if such settlement is effected without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned, or delayed. In no event shall the Indemnifying Party settle or abate any Third Party Claim in a manner that would diminish the rights or interests of the Indemnified Party, admit any liability, fault, or guilt by the Indemnified Party, or obligate the Indemnified Party to make any payment, take any action, or refrain from taking any action, without the prior written approval of the Indemnified Party.

12.5Limitation of Liability. EXCEPT FOR DAMAGES PAYABLE FOR A PARTY’S BREACH OF ITS OBLIGATIONS UNDER ARTICLE 10 OR REQUIRED TO BE PAID PURSUANT TO A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS ARTICLE 12, NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS OR BUSINESS INTERRUPTION, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF ANY LICENSE GRANTED HEREUNDER, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS AGREEMENT SHALL EXCLUDE OR LIMIT A PARTY’S LIABILITY TO THE EXTENT THAT IT MAY NOT BE SO EXCLUDED OR LIMITED UNDER APPLICABLE LAW, INCLUDING ANY SUCH LIABILITY FOR DEATH OR PERSONAL INJURY CAUSED BY THAT PARTY’S NEGLIGENCE OR LABILITY FOR FRAUD OR FRAUDULENT MISREPRESENTATION.

12.6Insurance. Each Party shall procure and maintain insurance, including product liability insurance, adequate to cover its obligations hereunder and consistent with normal business practices of prudent companies similarly situated. Such insurance shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under this ARTICLE 12. Each Party shall provide the other Party with written evidence of such insurance upon request. Each Party shall provide the other Party with written notice at least thirty (30) days prior to the cancellation, non-renewal or material change in such insurance.

ARTICLE 13

TERM AND TERMINATION

13.1Term. This Agreement shall commence on the Effective Date and, unless earlier terminated in accordance herewith, shall continue in force and effect on a Product-by-Product and Country-by-Country basis, until the expiration of the Royalty Term for such Product in such Country (such period, the “Term”). Upon the expiration (but not early termination) of this Agreement for all Products in a Country, the licenses granted by Tay to VYNE under Section 2.1 become non-exclusive, fully paid-up, royalty-free, and perpetual for such Country.


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13.2Termination for Convenience. VYNE may terminate this Agreement in its entirety or on a Product-by-Product and Country-by-Country basis, for any or no reason, upon ninety (90) days’ prior written notice to Tay.

13.3Termination for Uncured Material Breach. Each Party may terminate this Agreement immediately upon written notice to the other Party if the other Party materially breaches its obligations under this Agreement and, after receiving written notice identifying such material breach in reasonable detail, fails to cure such material breach within sixty (60) days from the date of such notice (thirty (30) days for payment-related breaches); provided, that if any alleged breach by VYNE relates solely to a Product, then Tay may exercise its rights under this Section 13.3 solely with respect to such Product, as applicable; provided, further, that, such cure period shall be extended for up to an additional sixty (60) days upon the breaching Party providing a written plan that reasonably demonstrates the need for such additional time and continuing to use Commercially Reasonable Efforts to cure such breach. If either Party disputes (a) whether such material breach has occurred, or (b) whether the defaulting Party has cured such material breach, the Parties shall promptly resolve the dispute under Section 14.2. During the pendency of such a dispute, all of the terms and conditions of this Agreement remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

13.4Termination for Insolvency. If either Party (a) files for protection under bankruptcy or insolvency laws, (b) makes an assignment for the benefit of creditors, (c) appoints or suffers appointment of a receiver or trustee over substantially all of its property that is not discharged within ninety (90) days after such filing, (d) is a party to any dissolution or liquidation,

(e) files a petition under any bankruptcy or insolvency act or has any such petition filed against it that is not discharged within ninety (90) days of the filing thereof, or (f) admits in writing its inability generally to meet its obligations as they fall due in the general course, then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party.

13.5Rights in Bankruptcy.

13.5.1Applicability of 11 U.S.C. § 365(n). All rights and licenses (collectively, the “Intellectual Property”) granted under or pursuant to this Agreement, including all rights and licenses to use improvements or enhancements developed during the Term, are intended to be, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”) or any analogous provisions in any other Country or jurisdiction, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that the licensee of such Intellectual Property under this Agreement shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, including Section 365(n) of the Bankruptcy Code, or any analogous provisions in any other Country or jurisdiction. All of the rights granted to either Party under this Agreement shall be deemed to exist immediately before the occurrence of any bankruptcy case in which the other Party is the debtor.

13.5.2Rights of non-Debtor Party in Bankruptcy. If a bankruptcy proceeding is commenced by or against either Party under the Bankruptcy Code or any analogous provisions in any other Country or jurisdiction, the non-debtor Party shall be entitled to a complete duplicate


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of (or complete access to, as appropriate) any Intellectual Property and all embodiments of such Intellectual Property, which, if not already in the non-debtor Party’s possession, shall be delivered to the non-debtor Party within five Business Days of such request; provided, that the debtor Party is excused from its obligation to deliver the Intellectual Property to the extent the debtor Party continues to perform all of its obligations under this Agreement and the Agreement has not been rejected pursuant to the Bankruptcy Code or any analogous provision in any other Country or jurisdiction.

13.6Effects of Termination. Upon any termination of this Agreement with respect to a Product in a Country (the “Terminated Product”), the following terms will apply.

13.6.1Licenses. All licenses granted by Tay with respect to the Terminated Product will automatically terminate.

13.6.2Sublicenses. All sublicenses granted pursuant to this Agreement shall terminate, except that at the request of any Sublicensee with respect to the Terminated Product Tay will, from the effective date of such termination, enter into a direct license with such Sublicensee, provided that such Sublicensee is not then in default of its sublicense agreement. Such direct license shall not obligate such Sublicensee to perform contractual obligations greater than those set forth in the applicable sublicense or Tay to perform contractual obligations greater than those set forth herein, the scope of such direct license shall be of the scope of the license sublicensed to such Sublicensee, and the amounts payable to Tay by such Sublicensee under such direct license shall be equivalent to the amounts Tay would have received from VYNE under this Agreement as a result of such Sublicensee’s activities had this Agreement remained in effect and such Sublicensee performed such activity under the sublicense agreement with VYNE.

13.6.3Wind-Down. VYNE shall (a) responsibly wind-down, in accordance with accepted pharmaceutical industry norms and ethical practices, any on-going clinical studies with respect to the Terminated Product in which patient dosing has commenced and (b) at Tay’s written election, (i) transfer to Tay or its designee any such clinical studies to the extent permitted under Applicable Laws and accepted pharmaceutical industry norms and ethical practices, or (ii) if reasonably practicable and not adverse to patient safety, complete such trials and Tay shall reimburse VYNE its internal costs and external expenses associated therewith.

13.6.4Confidential Information. Each Party shall immediately return or cause to be returned to the other Party or destroy if the other Party requests (and certify such destruction to such other Party) all Confidential Information with respect to the Terminated Product and all substances or compositions of the other Party or its Affiliates delivered or provided by or on behalf of such other Party in accordance with Section 10.7.

13.6.5Regulatory Documentation. Unless this Agreement is terminated by VYNE pursuant to Section 13.3, VYNE shall provide and assign to Tay or its designee all Regulatory Documentation, including Regulatory Approvals, for the Terminated Products to the extent possible under Applicable Law in the Territory.


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13.6.6Transition Assistance. Upon Tay’s reasonable request, (a) VYNE shall provide such assistance as may be reasonably necessary or useful for Tay to continue the Exploitation of Terminated Products in the Territory, to the extent VYNE or its Affiliate is then performing or having performed such activities, and (b) VYNE shall provide Tay with copies of any promotional and marketing materials generated by or on behalf of VYNE with respect to Terminated Products prior to the effective date of termination. Tay shall reimburse VYNE’s internal costs and external expenses in connection with such transition assistance.

13.6.7Inventory. Tay may purchase any and all of the inventory of Terminated Products held by VYNE or its Affiliates or sublicensees as of the date of termination, at a price equal to the transfer price paid by VYNE to Tay for such inventory.

13.6.8Data. Unless this Agreement is terminated by VYNE pursuant to Section 13.3, VYNE shall (a) promptly provide to Tay all data, including clinical and pharmacovigilance data, generated by or on behalf of VYNE with respect to the Terminated Product (the “Terminated Product Data”), and (b) and hereby does grant to Tay as of the effective date of the termination, a worldwide, non-exclusive, perpetual, royalty-free license, with the right to sublicense through multiple tiers, under the Terminated Product Data to Exploit the Terminated Product.

13.6.9Intellectual Property. Unless this Agreement is terminated by VYNE pursuant to Section 13.3, VYNE hereby grants to Tay, effective upon the effective date of termination:

(a)a worldwide, exclusive, perpetual, license, with the right to sublicense through multiple tiers, under Know-How and Patents Controlled by VYNE that comprise or claim (i) Inventions made solely by VYNE and its Affiliates’ employees, agents, or independent contractors in the conduct of activities under this Agreement or (ii) any Joint Invention, in each case of (i) and (ii) to Exploit the Terminated Products;

(b)a worldwide, non-exclusive, perpetual, license, with the right to sublicense through multiple tiers, under all Know-How and Patents Controlled by VYNE that are necessary for the Exploitation of Terminated Products (other than Know-How relating to and Patents claiming the Manufacture of Terminated Products or those Patents set forth Section 13.6.9(a)) to Exploit the Terminated Products; and

(c)a right to negotiate in good faith for a license under Know-How and Patents Controlled by VYNE that are necessary or reasonably useful for the Manufacture of the Terminated Products on terms and conditions, and for economics value, to be negotiated in good faith by the Parties; provided, that if the Parties cannot agree on such terms, conditions, and economics after ninety (90) days despite having used good faith efforts to do so, then the Parties shall resolve such dispute using the same terms set forth in Exhibit 3.2 of the Option Agreement, applied mutatis mutandis.

13.6.10Royalties. Unless this Agreement is terminated by Tay pursuant to Section 13.3 (Termination for Uncured Material Breach), in consideration for the rights granted to


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Tay under Section 13.6.9, during the remainder of the Royalty Term for the applicable Terminated Product, Tay shall make quarterly, non-refundable, non-creditable royalty payments to VYNE on the annual Net Sales of all Terminated Products Covered by Patents Controlled by VYNE that are sold by or on behalf of Tay, its Affiliates or sublicensees in the Territory at the same rate and on the same terms that would have been payable to Tay under Section 8.3; provided, however, that for the purposes of this Section 13.6.10 the applicable royalty rates set forth in Section 8.3.1 shall be deemed to be reduced by: (a) [***] of the otherwise applicable rate if the effective date of termination of the Agreement is prior to Initiation of a Phase 1 Clinical Trial of a Product, (b) [***] of the otherwise applicable rate if the effective date of termination of the Agreement is prior to Initiation of a Phase 2 Clinical Trial of a Product, or (c) [***] of the otherwise applicable rate if the effective date of termination of the Agreement is prior to Initiation of a Phase 3 Clinical Trial of a Product. For clarity, in the case of termination by Tay pursuant to Section 13.3 (Termination for Uncured Material Breach), Tay shall not be required to pay any additional consideration for the rights granted to Tay under Section 13.6.9.

13.7Accrued Rights; Surviving Obligations. Termination or expiration of this Agreement for any reason shall be without prejudice to any rights that have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement. Without limiting the foregoing, the following Articles and Sections of this Agreement shall survive the termination or expiration of this Agreement for any reason: Article 1 (to the extent such defined terms are used in other surviving sections), Section 4.4, Section 8.7, Section 8.8, Section 9.1, Article 10, Section 11.3, Section 12.1 (with respect to causes of action for which the cause of action arose prior to the effect of termination), Section 12.2 (with respect to causes of action for which the cause of action arose prior to the effect of termination), Section 12.3, Section 12.4, Section 12.5, Section 13.6, this Section 13.7, and Article 14.

ARTICLE 14 MISCELLANEOUS

14.1Governing Law. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof shall be governed by and construed under the laws of the England and Wales, without giving effect to any choice of law principles that would require the application of the laws of a different province or territory.

14.2Dispute Resolution. The Parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales; provided, however, that each Party may institute judicial proceedings in any other jurisdiction against the other party or anyone acting by, through or under such other party, in order to enforce the instituting party’s rights hereunder through reformation of contract, specific performance, injunction or similar equitable relief.

14.3Equitable Relief; Court Actions. Notwithstanding anything to the contrary in this Agreement, given the unique nature of the rights granted under the Option Agreement and this Agreement and the competitive damage that a Party may suffer upon a breach of ARTICLE 10 by the other Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach by a Party of ARTICLE 10. In addition to all other remedies, a Party shall be entitled to


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seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of ARTICLE 10 by the other Party.

14.4Entire Agreement; Amendments. This Agreement, including its exhibits, and the agreements entered into by the Parties pursuant to this Agreement, constitute the entire, final, and complete agreement and understanding between the Parties with respect to its subject matter and replaces and supersede all prior discussions and agreements between them with respect to the subject matter hereof. No modification of any terms or conditions hereof shall be effective unless made in writing and signed by a duly authorized representative of each Party.

14.5Severability. If any provision of this Agreement is, becomes, or is deemed invalid or unenforceable by any court or other competent authority having jurisdiction, the remainder of this Agreement shall remain unimpaired and the Parties shall promptly negotiate in good faith to amend such invalid or unenforceable provision to conform to applicable laws so as to be valid and enforceable and best accomplish the original intent of the Parties.

14.6Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless it is in writing and signed by the Party waiving such term or condition. The waiver by either Party hereto of any right hereunder or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach by such other Party whether of a similar nature or otherwise.

14.7Force Majeure. Each Party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such Party’s reasonable control and which is not reasonably foreseeable, including acts of God, fire, flood, explosion, earthquake, pandemic, or other natural forces, war, civil unrest, acts of terrorism, accident, destruction, or other casualty, any lack or failure of transportation facilities, any lack or failure of supply of raw materials or supplies, or any other event similar to those enumerated above. Such excuse from liability shall be effective to the extent and duration of the events causing the failure or delay in performance and provided that the Party has not caused such events to occur. Notice of a Party’s failure or delay in performance due to force majeure must be given to the other Party as soon as reasonably practicable after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure.

14.8Independent Contractors. The relationship of the Parties is that of independent contractors, and nothing in this Agreement shall be construed to create a partnership, joint venture, franchise, employment, or agency relationship between the Parties. Neither Party shall be considered the agent of the other Party for any purpose whatsoever and neither Party has any authority to enter into any contract or assume any obligation for the other Party or to make any warranty or representation on behalf of the other Party.

14.9Assignment. This Agreement is binding upon and inure to the benefit of the respective successors and assigns of the Parties. Neither Party may assign its rights and obligations under this Agreement, in whole or in part, without the prior written consent of the other Party (such


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consent not to be unreasonably withheld, conditioned, or delayed), except that either Party may assign this Agreement without such consent to an Affiliate or to a successor in interest by way of merger, consolidation, or sale of all or substantially all of its business to which this Agreement relates; provided that, notwithstanding the foregoing, neither Party shall assign its rights and obligations under this Agreement to a Third Party that is a tobacco company or weapons manufacturer. Any purported assignment in violation of this Section 14.9 is null and void.

14.10Notices. Any notice required or permitted pursuant to this Agreement shall be in writing and delivered by personal delivery, overnight express courier service, electronic mail, or by certified or registered mail, return receipt requested, and shall be deemed given upon personal delivery, upon acknowledgement of receipt of electronic transmission, on the next Business Day after deposit if sent by overnight express courier service, or five days after deposit in the mail. Notices will be sent to the following addresses or such other address as either Party may specify in writing pursuant to this Section 14.10:

If to Tay, to:

Tay Therapeutics Limited Dundee University Incubator

3 James, Lindsay Place, Dundee, DD1 5JJ Attention: [***]

with a copy (which shall not constitute notice) to:

[***]

If to VYNE, to:

VYNE Therapeutics Inc. 685 Route 202/206 Suite 301A Bridgewater, NJ 08807

Attention: Chief Scientific Officer

Iain Stuart [***]

with a copy (which shall not constitute notice) to:

Attention: General Counsel

Mutya Harsch [***]

14.11Performance by Affiliates. Each Party may use one (1) or more of its Affiliates to perform its obligations and duties hereunder and such Affiliates are expressly granted certain rights herein to perform such obligations and duties; provided that each such Affiliate shall be bound by the corresponding obligations of such Party; and provided further that such Party, subject to an


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assignment to such Affiliate pursuant to Section 14.9, shall remain liable hereunder for the prompt payment and performance of its obligations hereunder.

14.12Construction. The terms of this Agreement represent the results of negotiations between the Parties and their representatives, each of which has been represented by counsel of its own choosing, and neither of which has acted under duress or compulsion, whether legal, economic or otherwise. Accordingly, the terms of this Agreement will be interpreted and construed in accordance with their usual and customary meanings, and each Party hereby waives the application in connection with the interpretation and construction of this Agreement of any rule of law to the effect that ambiguous or conflicting terms contained in this Agreement will be interpreted or construed against the Party whose attorney prepared the executed draft or any earlier draft of this Agreement. Except as otherwise explicitly specified to the contrary, (a) references to a Section, exhibit, appendix or schedule means a Section of, or exhibit, appendix or schedule to this Agreement, unless another agreement is specified, (b) the word “including” (in its various forms) means “including without limitation,” (c) the words “will” and “shall” have the same meaning, (d) references to a particular statute or regulation include all rules and regulations thereunder and any predecessor or successor statute, rules or regulation, in each case as amended or otherwise modified from time to time, (e) words in the singular or plural form include the plural and singular form, respectively, (f) references to a particular person include such person’s successors and assigns to the extent not prohibited by this Agreement, (g) unless otherwise specified, “$” is in reference to United States dollars, and “£” is in reference to British pounds sterling, (h) the headings contained in this Agreement, in any exhibit, appendix or schedule to this Agreement are for convenience only and will not in any way affect the construction of or be taken into consideration in interpreting this Agreement, (i) the word “or” is disjunctive but not necessarily exclusive, (j) he words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision, and (k) all references to days mean calendar days, unless otherwise specified.

14.13Further Actions; Expenses. Each Party agrees to execute, acknowledge, and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. Each Party shall bear its own expenses in connection with the negotiation and execution of this Agreement.

14.14No Benefit to Third Parties. Except as provided in ARTICLE 12, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they shall not be construed as conferring any rights on any other Persons.

14.15Counterparts. This Agreement may be executed in one or more counterparts in original, facsimile, PDF, or other electronic format, each of which shall be an original, and all of which together shall constitute one instrument.

[SIGNATURE PAGE FOLLOWS]


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THIS LICENSE AGREEMENT is executed by the authorized representatives of the Parties as of the Effective Date.

Tay Therapeutics Limited VYNE Therapeutics Inc.

By: /s/ Andrew Woodland By: /s/ David Domzalski

Name: Andrew Woodland Name: David Domzalski

Title: CEO Title: CEO

VYNE Therapeutics Inc.

By:/s/ Iain Stuart

Name: Iain Stuart

Title: CSO


- 46 -


- 47 -

Exhibit 1.81

Tay Know-How


- 48 -

Exhibit 1.83

Tay Patents


- 49 -

Exhibit 1.55

Expert Procedure


- 50 -

Exhibit 1.58

Oral BETi Compounds


- 51 -

Exhibit 2.7 Retained Compounds


- 52 -

Exhibit 8.2.3

Example of Skipped Milestones for New Administration Products


- 53 -

Schedule 10.5 Press Release


- 54 -

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, David Domzalski, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of VYNE Therapeutics Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 14, 2023	By:	/s/ David Domzalski
		David Domzalski Principal Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Tyler Zeronda, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of VYNE Therapeutics Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 14, 2023	By:	/s/ Tyler Zeronda
		Tyler Zeronda Principal Financial Officer

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of VYNE Therapeutics Inc. (the “Company”), for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, David Domzalski, President and Chief Executive Officer and principal executive officer, hereby certify as of the date hereof, solely for purposes of 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 14, 2023	By:	/s/ David Domzalski
		David Domzalski Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company.

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of VYNE Therapeutics Inc. (the “Company”), for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission (the “Report”), I, Tyler Zeronda, Chief Financial Officer, Treasurer and principal financial officer, hereby certify as of the date hereof, solely for purposes of 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 14, 2023	By:	/s/ Tyler Zeronda
		Tyler Zeronda Principal Financial Officer

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 07, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-38356
Entity Registrant Name	VYNE THERAPEUTICS INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-3757789
Entity Address, Address Line One	685 Route 202/206 N, Suite 301
Entity Address, City or Town	Bridgewater
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08807
City Area Code	800
Local Phone Number	775-7936
Title of 12(b) Security	Common Stock, par value $0.0001
Trading Symbol	VYNE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		3,279,971
Entity Central Index Key	0001566044
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 20,634	$ 30,908
Restricted cash	67	67
Trade receivables, net of allowances	234	173
Amount due from sale of MST Franchise	0	5,000
Prepaid and other expenses	2,024	2,127
Total Current Assets	22,959	38,275
Non-current prepaid expenses and other assets	2,000	2,483
Total Assets	24,959	40,758
Current Liabilities:
Trade payables	1,159	2,386
Accrued expenses	4,379	4,381
Employee related obligations	836	2,372
Liability for employee severance benefits	0	206
Total Current Liabilities	6,374	9,345
Other liabilities	1,313	0
Total Liabilities	7,687	9,345
Commitments and Contingencies
Mezzanine Equity:
Temporary equity, carrying amount, including portion attributable to noncontrolling interests	0	211
Stockholders' Equity:
Common stock: $0.0001 par value; 150,000,000 shares authorized at June 30, 2023 and December 31, 2022; 3,282,479 and 3,229,704 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	0	0
Additional paid-in capital	695,836	693,937
Accumulated deficit	(678,564)	(662,735)
Total Stockholders' Equity	17,272	31,202
Total Liabilities, Mezzanine Equity and Stockholders’ Equity	$ 24,959	$ 40,758

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares outstanding (in shares)	0	3,000
Common stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock shares authorized (in shares)	150,000,000	150,000,000
Common stock shares issued (in shares)	3,282,479	3,229,704
Common stock shares outstanding (in shares)	3,282,479	3,229,704
Series A Preferred Stock
Preferred stock, shares issued (in shares)	0	3,000
Preferred stock, shares outstanding (in shares)	0	3,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues	$ 135	$ 126	$ 234	$ 304
Operating expenses:
Research and development	7,233	4,108	9,967	8,560
Selling, general and administrative	3,220	4,305	6,460	8,722
Total operating expenses	10,453	8,413	16,427	17,282
Operating loss	(10,318)	(8,287)	(16,193)	(16,978)
Other income, net	280	52	543	49
Loss from continuing operations before income taxes	(10,038)	(8,235)	(15,650)	(16,929)
Income tax expense	0	0	0	0
Loss from continuing operations	(10,038)	(8,235)	(15,650)	(16,929)
(Loss) income from discontinued operations, net of income taxes	(20)	(241)	(30)	13,123
Net loss	$ (10,058)	$ (8,476)	$ (15,680)	$ (3,806)
Loss per share from continuing operations, basic (in dollars per share)	$ (3.08)	$ (2.56)	$ (4.81)	$ (5.38)
Loss per share from continuing operations, diluted (in dollars per share)	(3.08)	(2.56)	(4.81)	(5.38)
(Loss) income per share from discontinued operations, basic (in dollars per share)	(0.01)	(0.07)	(0.01)	4.17
(Loss) income per share from discontinued operations, diluted (in dollars per share)	(0.01)	(0.07)	(0.01)	4.17
Loss per share, basic (in dollars per share)	(3.09)	(2.63)	(4.82)	(1.21)
Loss per share, diluted (in dollars per share)	$ (3.09)	$ (2.63)	$ (4.82)	$ (1.21)
Weighted average shares outstanding - basic (in shares)	3,274	3,218	3,265	3,148
Weighted average shares outstanding - diluted (in shares)	3,274	3,218	3,265	3,148

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	At-the-market Offering	Common stock	Common stock At-the-market Offering	Additional paid-in capital	Additional paid-in capital At-the-market Offering	Accumulated deficit
Beginning balance (in shares) at Dec. 31, 2021	0
Beginning balance at Dec. 31, 2021	$ 0
Ending balance (in shares) at Jun. 30, 2022	0
Ending balance at Jun. 30, 2022	$ 0
Beginning balance (shares) at Dec. 31, 2021			2,976,541
Beginning balance at Dec. 31, 2021	48,636		$ 5		$ 688,156		$ (639,525)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(3,806)						(3,806)
Reclassification due to reverse stock split	0		$ (5)		5
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan (in shares)			9,579
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	0
Stock-based compensation	2,056				2,056
Issuance of commitment shares (in shares)				92,644
Issuance of commitment shares		$ 0
Issuance of common stock, net of issuance costs (in shares)			143,770
Issuance of common stock, net of issuance costs	1,471				1,471
Ending balance (shares) at Jun. 30, 2022			3,222,534
Ending balance at Jun. 30, 2022	$ 48,357		$ 0		691,688		(643,331)
Ending balance (in shares) at Jun. 30, 2022	0
Ending balance at Jun. 30, 2022	$ 0
Beginning balance (shares) at Mar. 31, 2022			3,217,138
Beginning balance at Mar. 31, 2022	55,731		$ 0		690,586		(634,855)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(8,476)						(8,476)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan (in shares)			5,396
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	25				25
Stock-based compensation	1,163				1,163
Issuance of common stock, net of issuance costs		(86)				$ (86)
Ending balance (shares) at Jun. 30, 2022			3,222,534
Ending balance at Jun. 30, 2022	$ 48,357		$ 0		691,688		(643,331)
Beginning balance (in shares) at Dec. 31, 2022	3,000
Beginning balance at Dec. 31, 2022	$ 211
Increase (Decrease) in Temporary Equity [Roll Forward]
Redemption of convertible preferred stock ( in shares)	(3,000)
Redemption of convertible preferred stock	$ (211)
Ending balance (in shares) at Jun. 30, 2023	0
Ending balance at Jun. 30, 2023	$ 0
Beginning balance (shares) at Dec. 31, 2022	3,229,704		3,229,704
Beginning balance at Dec. 31, 2022	$ 31,202		$ 0		693,937		(662,735)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(15,680)						(15,680)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan (in shares)			18,186
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	11				11
Stock-based compensation	1,732				1,732
Redemption of convertible preferred stock	$ (149)						(149)
Issuance of common stock, net of issuance costs (in shares)				34,589
Issuance of common stock, net of issuance costs		$ 156				$ 156
Ending balance (shares) at Jun. 30, 2023	3,282,479		3,282,479
Ending balance at Jun. 30, 2023	$ 17,272		$ 0		695,836		(678,564)
Ending balance (in shares) at Jun. 30, 2023	0
Ending balance at Jun. 30, 2023	$ 0
Beginning balance (shares) at Mar. 31, 2023			3,271,282
Beginning balance at Mar. 31, 2023	26,431		$ 0		694,937		(668,506)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,058)						(10,058)
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan (in shares)			11,197
Vesting of restricted stock units, net of withholding tax and shares issued under employee stock purchase plan	23				23
Stock-based compensation	$ 876				876
Ending balance (shares) at Jun. 30, 2023	3,282,479		3,282,479
Ending balance at Jun. 30, 2023	$ 17,272		$ 0		$ 695,836		$ (678,564)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
At-the-market Offering
Payments of stock issuance costs	$ 184	$ 5	$ 135

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows From Operating Activities:
Net loss	$ (15,680)	$ (3,806)
Adjustments required to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	0	56
Changes in accrued liability for employee severance benefits, net of retirement fund profit	0	50
Stock-based compensation	1,732	2,056
Gain on the sale of the MST Franchise	0	(13,005)
Changes in operating assets and liabilities:
(Increase) decrease in trade receivables	(61)	8,215
Decrease in inventory	0	97
Decrease in prepaid expenses and other assets	586	697
Decrease in trade payables, accrued expenses, employee related obligations, liability for employee severance benefits and other long term liabilities	(1,629)	(11,306)
Decrease in operating lease liabilities	0	(318)
Net cash used in operating activities	(15,052)	(17,264)
Cash Flows From Investing Activities:
Net proceeds from the sale of the MST Franchise	5,000	15,752
Net cash provided by investing activities	5,000	15,752
Cash Flows From Financing Activities:
Proceeds related to issuance of common stock through offerings, net of issuance costs	156	1,471
Redemption of convertible preferred stock	(360)	0
Withholdings related to issuance of stock for stock-based compensation arrangements, net	(18)	0
Net cash (used in) provided by financing activities	(222)	1,471
Decrease in cash, cash equivalents and restricted cash	(10,274)	(41)
Cash, cash equivalents and restricted cash at beginning of the period	30,975	42,855
Cash, cash equivalents and restricted cash at end of the period	20,701	42,814
Cash and cash equivalents	20,634	42,814
Restricted cash	67	0
Total cash, cash equivalents and restricted cash shown in statement of cash flows	20,701	42,814
Supplementary information on investing and financing activities not involving cash flows:
Issuance of vested shares under employee stock purchase plan	29	23
Amount due from sale of MST Franchise	0	5,000
Accretion of preferred stock	$ 149	$ 0

NATURE OF OPERATIONS	6 Months Ended
NATURE OF OPERATIONS	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	NATURE OF OPERATIONS VYNE Therapeutics Inc. (the "Company") is a clinical-stage biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno-inflammatory conditions. In August 2021, the Company entered into a transaction with Tay Therapeutics Limited (formerly known as In4Derm Limited, "Tay") providing the Company with exclusive worldwide rights to research, develop and commercialize products containing bromodomain and extra-terminal (“BET”) inhibitors for the treatment of any disease, disorder or condition in humans. Through the Company's access to this library of new chemical BET inhibitor compounds, the Company plans to develop product candidates for a diverse set of indications. Based on preclinical data generated to date, the Company has chosen to focus its initial efforts for this platform on select therapeutic areas in immuno-inflammatory disease. The Company's lead program is VYN201, a locally administered pan-BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure. To date, VYN201 has produced consistent reductions in pro-inflammatory and disease-related biomarkers, improvements in disease severity and a demonstrated local activity through several preclinical models. The Company believes that these data suggest potential broad utility for VYN201 across multiple routes of administration. In November 2022, the Company initiated a Phase 1a/b clinical trial evaluating a topical formulation of VYN201 for the treatment of nonsegmental vitiligo. In February 2023, the Company announced positive preliminary safety and tolerability data from the Phase 1a portion of the trial. In addition, in March 2023, the Company announced positive pharmacokinetic and hematology data from the Phase 1a trial. The first nonsegmental vitiligo patient was dosed in the Phase 1b portion of the trial in January 2023. The Company expects to announce preliminary Phase 1b safety and efficacy data in the third quarter of 2023, followed by final results in October 2023. The Company's second program is VYN202, an oral small molecule BD2-selective BET inhibitor. VYN202 is in preclinical development for the treatment of immuno-inflammatory indications, and has been designed to achieve class-leading selectivity (BD2 vs. BD1), maximum potency versus BD2 and optimal oral bioavailability. By maximizing BD2 selectivity, the Company believes VYN202 has the potential to be a more conveniently-administered non-biologic treatment option for both acute control and chronic management of immuno-inflammatory indications, where the damaging effects of unrestricted inflammatory signaling activity are common. IND-enabling studies for VYN202 are ongoing, and the Company anticipates filing an IND by year-end 2023. The Company intends to actively evaluate and enter into strategic partnerships to advance its product candidates through the clinic toward commercialization, and may also partner with leading pharmaceutical companies to advance the Company's molecules in therapeutic areas outside of its core focus in immunology. The Company believes selectively entering into collaborations has the potential to expand and accelerate the development of its programs and maximize the value of its pipeline. In August 2021, the Company determined to dispose of its legacy commercial business and focus its strategy on the development of BET inhibitor product candidates through its licensing arrangements with Tay. For additional information regarding the sale of the Molecule Stabilizing Technology franchise, including AMZEEQ, ZILXI, and FCD105 (the “MST Franchise”) to Journey Medical Corporation ("Journey") in January 2022 and the Company's licensing arrangements with Tay, see "—Note 3 - Strategic Agreements." The Company is a Delaware corporation, has its principal executive offices in Bridgewater, New Jersey and operates as one business segment. Reverse stock split and recasting of per-share amounts On February 8, 2023, the Company's board of directors approved a 1-for-18 reverse stock split of its outstanding shares of common stock. The reverse stock split was effected on February 10, 2023 at 5:01 p.m. Eastern time. At the effective time, every 18 issued and outstanding shares of the Company's common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each stockholder holding fractional shares was entitled to receive a cash payment (without interest or deduction) from the Company’s transfer agent in an amount equal to such stockholder’s respective pro rata shares of the total net proceeds from the Company’s transfer agent sale of all fractional shares at the then-prevailing prices on the open market. A proportionate adjustment was also made to the maximum number of shares issuable under the Company’s 2019 Equity Incentive Plan, 2018 Omnibus Incentive Plan and 2019 Employee Share Purchase Plan. The number of authorized shares of the Company's common stock and the par value of each share of common stock remained unchanged. Unless noted, all common stock and per share amounts contained in the unaudited condensed consolidated financial statements have been retroactively adjusted to reflect a 1-for-18 reverse stock split. Liquidity and Capital Resources Since inception, the Company has funded operations primarily through private and public placements of its equity, debt and warrants and through fees, cost reimbursements and payments received from its licensees. The Company commenced generating product revenues related to sales of AMZEEQ and ZILXI in January 2020 and October 2020, respectively. AMZEEQ and ZILXI were sold as part of the sale of the MST Franchise on January 12, 2022 and, as such, the Company no longer generates revenue from the sale of these products. The Company has incurred losses and experienced negative operating cash flows since its inception and anticipates that it will continue to incur losses until such a time when its product candidates, if approved, are commercially successful, if at all. The Company will not generate any revenue from any current or future product candidates unless and until it obtains regulatory approval and commercializes such products. For the six months ended June 30, 2023, the Company incurred a net loss of $15.7 million and used $15.1 million of cash in operations. As of June 30, 2023, the Company had cash and cash equivalents, and restricted cash of $20.7 million and an accumulated deficit of $678.6 million. The Company received a $5.0 million deferred payment from Journey on January 12, 2023, the one-year anniversary of the sale of the MST Franchise. The Company had no outstanding debt as of June 30, 2023. In March 2022, the Company entered into an equity purchase agreement (the “Equity Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $30.0 million of shares of its common stock over the 36-month term of the Equity Purchase Agreement. The Company has not made any sales pursuant to the Equity Purchase Agreement to date. As described above, the Company refocused its limited resources on its immuno-inflammatory pipeline. Continued research and development activities for these programs, including preclinical and clinical testing of the Company's product candidates, will require significant additional financing. The future viability of the Company and its ability to continue as a going concern is dependent on its ability to raise sufficient working capital through either debt or equity financings to fund its operations and successfully develop commercially viable product candidates. There is no assurance the Company will be able to achieve these objectives under acceptable terms or at all. In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that its unaudited interim condensed consolidated financial statements are issued. The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's ability to continue as a going concern is expected to be impacted by the outcome of the plans outlined above, including the Company's ability to raise additional capital to fund its operations and the development and results from clinical trials for the BET inhibitor programs. Based on its current plans and assumptions, the Company believes that absent sufficient proceeds received from financing transactions or business development transactions, the Company will not have sufficient cash and cash equivalents to fund its operations beyond one year from the issuance of these unaudited interim condensed consolidated financial statements. This assumption does not include proceeds that can be drawn from Lincoln Park. Accordingly, the Company will, over the course of the next twelve months, require significant additional financing to continue its operations and meaningfully advance the development of its product candidates, including potentially selling a significant amount of shares pursuant to the Equity Purchase Agreement. The Company may also employ strategies to further extend its ability to fund its operations including: (1) identification of third-party partners to further develop, obtain marketing approval for and/or commercialize its product candidates, which may generate revenue and/or milestone payments and/or (2) refocusing its resources on research and development programs it chooses to prioritize and reducing spending on other programs by delaying or discontinuing development. In addition, the amount of proceeds the Company may be able to raise pursuant to its existing shelf registration statement on Form S-3 may be limited. As of the filing of this Quarterly Report on Form 10-Q, the Company is subject to the general instructions of Form S-3 known as the "baby shelf rules." Under these instructions, the amount of funds the Company can raise through primary public offerings of securities in any 12-month period using its registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of its common stock held by non-affiliates of the Company. Therefore, the Company will be limited in the amount of proceeds it is able to raise by selling shares of its common stock using its Form S-3 until such time as its public float exceeds $75.0 million. These factors raise substantial doubt about the Company's ability to continue as a going concern. Failure to successfully receive additional financing will require the Company to delay, scale back or otherwise modify its business and its research and development activities and other operations. The accompanying unaudited interim condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

a.Basis of Presentation

The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results expected for the year ending December 31, 2023.

b.Principles of Consolidation

c.Use of Estimates

d.Cash and cash equivalents

e.Revenue Recognition

Royalty Revenues and Collaboration Agreements

Milestone payments are a form of variable consideration as the payments are contingent upon achievement of a substantive

Product Revenues, net

Product sales

Product Sales Provisions

Distribution Fees and Trade Discounts and Allowances

Rebates, Chargebacks and Other Discounts

Product Returns

Contract Assets and Contract Liabilities

Sales Commissions

Sales commissions are generally attributed to periods shorter than one year and therefore are expensed when incurred. Sales commissions are included in discontinued operations.

f.Collaboration arrangements

g.Research and development costs

h.Allowance for doubtful accounts

i.Fair value measurement

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

j.Net loss per share


	June 30
	2023	2022
Outstanding stock options and RSUs	280,134	325,937
Warrants	27,509	27,509

k.Discontinued operations

l.Concentration of credit risks

m.Comprehensive loss

For the three and six months ended June 30, 2023 and 2022, comprehensive loss was equal to the net loss as presented in the accompanying unaudited condensed consolidated statements of operations.

n.Newly issued and recently adopted accounting pronouncements

Recent Accounting Guidance Issued:

o.Employee Retention Tax Credit

STRATEGIC AGREEMENTS	6 Months Ended
STRATEGIC AGREEMENTS	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
STRATEGIC AGREEMENTS	STRATEGIC AGREEMENTS BET Inhibitor License Agreements On August 12, 2021, the Company announced a transaction with Tay Therapeutics Limited (formerly known as In4Derm Limited), a company incorporated and registered in Scotland (“Tay”). Tay is a spin-out of the University of Dundee’s School of Life Sciences which has discovered and is developing proprietary BET inhibitors for the treatment of immunology and oncology conditions. On April 30, 2021, the parties entered into an Evaluation and Option Agreement (the “Option Agreement”) pursuant to which Tay granted the Company an exclusive option to obtain exclusive worldwide rights to research, develop and commercialize products containing Tay’s BET inhibitor compounds, which are new chemical entities for treatments in all fields for any disease, disorder or condition in humans. On August 6, 2021, the Company exercised its option with respect to certain of Tay's pan-BD Inhibitor Compounds ("Topical Option"). On August 9, 2021, the parties entered into a License Agreement (the "VYN201 License Agreement") granting the Company a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s pan-BD BET inhibitor compounds in all fields. The Company paid a $1.0 million cash payment to Tay upon the execution of the Option Agreement and $0.5 million in connection with entering into the VYN201 License Agreement. These payments were recorded as a research and development expense in the period paid. Pursuant to the VYN201 License Agreement, the Company has agreed to make cash payments to Tay upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the United States of up to $15.75 million for all indications. Tay is entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. The VYN201 License Agreement provides for tiered royalty payments of up to 10% of annual net sales on the licensed product. Under the terms of the Option Agreement, the Company's option with respect to selective BET inhibitor compounds ("Oral Option") was to expire upon the earlier of (i) 14 days following the delivery of an agreed data package and selection of a lead new chemical entity candidate by Tay or (ii) June 30, 2022 (the "Option Term"). On June 15, 2022, the parties entered into a Letter Agreement (the “Letter Agreement”) to extend the Option Term to February 28, 2023. Pursuant to the terms of the Letter Agreement, the Company paid $386,366 (£300,000) on June 28, 2022 to Tay to extend the Option Term. In addition, a second payment of $997,407 (£850,000) was paid to Tay pursuant to the terms of the Letter Agreement on August 29, 2022 following the discovery of potential preclinical candidates. Both payments were recorded as research and development expense. On February 27, 2023, the parties entered into a Letter Agreement (the "Second Letter Agreement") pursuant to which the Option Term was extended to April 30, 2023. As consideration for the extension of the Option Term, the Company paid Tay $250,000 upon the execution of the Second Letter Agreement. Per the terms of the Second Letter Agreement, this fee was deducted from the upfront fee paid by the Company to Tay following the Company's exercise of the Oral Option, as described below. On April 28, 2023, the Company exercised the Oral Option and the parties entered into a license agreement (the "VYN202 License Agreement") granting the Company a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s selective BET inhibitor compounds in all fields. The Company made a cash payment of $3.75 million to Tay in connection with entering into the VYN202 License Agreement. This payment was recorded as a research and development expense in the period paid. Pursuant to the terms of the VYN202 License Agreement, the Company has agreed to make cash payments to Tay of up to $43.75 million upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed oral product in the United States for all indications. Tay is also entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. The VYN202 License Agreement provides for tiered royalty payments of up to 10% of annual net sales on the licensed product. Sale of the MST Franchise Beginning in the second quarter of 2021, the Company conducted a review of its commercial and research and development portfolio to determine how to optimally deploy capital and drive stockholder value. During the course of this review, the Company carefully considered the revenues received from the commercialization of AMZEEQ and ZILXI and the associated costs to drive those revenues, the protracted negative impact of the COVID-19 pandemic during the commercial launches of both AMZEEQ and ZILXI, the payor landscape, as well as the costs to develop each of its pipeline products. During this process, the Company evaluated several strategic options including the acquisition of marketed assets, out-licensing its approved products outside of the United States, and possible partnering or co-development relationships with interested parties. Following its review, the Company determined to initiate a process to explore a possible sale or license of its topical minocycline franchise, including AMZEEQ, ZILXI, FCD105 (the Company’s former Phase 3 proprietary novel topical combination foam formulation of minocycline and adapalene for the treatment of moderate-to-severe acne vulgaris) and the underlying Molecule Stabilizing Technology platform. On January 12, 2022, VYNE entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Journey pursuant to which the Company sold its MST Franchise to Journey. The assets include certain contracts, including the license agreement with Cutia Therapeutics (HK) Limited (“Cutia”), inventory and intellectual property related to the MST Franchise (together, the “Assets”). Pursuant to the Agreement, Journey assumed certain liabilities of the MST Franchise including, among others, those arising from VYNE’s patent infringement suit initiated against Padagis Israel Pharmaceuticals Ltd. There were no current or long-term liabilities recorded by the Company which were transferred to Journey. Pursuant to the Purchase Agreement, the Company received an upfront payment of $20.0 million at the closing of the sale of the MST franchise and received an additional $5.0 million deferred payment from Journey in January 2023. The Company is also eligible to receive sales milestone payments of up to $450.0 million in the aggregate upon the achievement of specified levels of net sales on a product-by-product basis, beginning with annual net sales exceeding $100.0 million (with products covered in three categories (1) AMZEEQ (and certain modifications), (2) ZILXI (and certain modifications), and (3) FCD105 and other products covered by the patents being transferred, including certain modifications). In addition, the Company is entitled to receive certain payments from any licensing or sublicensing of the assets by Journey outside of the United States.

DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONSOn January 12, 2022, the Company entered into the Purchase Agreement with Journey pursuant to which the Company sold its MST Franchise to Journey. The Company has determined that the sale of the MST Franchise represents a strategic shift that had a major effect on the business and therefore the MST Franchise met the criteria for classification as discontinued operations at March 31, 2022. Accordingly the MST Franchise is reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations. Amounts applicable to prior years have been recast to conform to the discontinued operations presentation. The Company recognized a gain on the sale of the MST Franchise upon closing.

The following table presents the combined results of discontinued operations of the MST Franchise:


	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2023		2022		2023		2022
Product sales, net	$	—	$	—	$	—	$	106

Cost of goods sold	—		—		—		80

Operating expenses:
Research and development	—		—		—		—
Selling, general and administrative	20		241		30		(92)
Total operating expenses	20		241		30		(92)
(Loss) income from discontinued operations	(20)		(241)		(30)		118
Gain on the sale of the MST Franchise	—		—		—		13,005
(Loss) income from discontinued operations, before income taxes	(20)		(241)		(30)		13,123
Income tax expense	—		—		—		—
Net (loss) income from discontinued operations	$	(20)	$	(241)	$	(30)	$	13,123


(in thousands)	Six Months Ended June 30, 2022
Cash Flows From Operating Activities:
Stock-based compensation (income) expense*	$	(352)
Gain on the sale of the MST Franchise	(13,005)
Total non-cash items of discontinued operations	$	(13,357)

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

*Income from stock-based compensation is related to forfeitures.

The following table presents the gain on the sale of the MST Franchise:


(in thousands)	Six Months Ended June 30, 2022
Cash proceeds	$	20,000
Proceeds paid in January 2023	5,000
	25,000
Less transaction costs	(4,247)
Less carrying value of assets sold	(7,748)
Gain on sale, before income taxes	13,005
Income tax expense	—
Gain on sale net of tax	$	13,005

MEZZANINE EQUITY AND STOCKHOLDER CAPITAL	6 Months Ended
MEZZANINE EQUITY AND STOCKHOLDER CAPITAL	Jun. 30, 2023
Equity [Abstract]
MEZZANINE EQUITY AND STOCKHOLDER CAPITAL	MEZZANINE EQUITY AND STOCKHOLDER CAPITAL Preferred stock As of June 30, 2023, the Company's Amended and Restated Certificate of Incorporation (as amended, the "Certificate of Incorporation") authorized the Company to issue 20,000,000 shares of preferred stock, par value $0.0001 per share. There were zero and 3,000 shares of Series A Convertible Preferred Stock issued and outstanding as of June 30, 2023 and December 31, 2022, respectively. Shares of preferred stock may be issued from time to time in one or more series. The voting powers (if any), preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions of any series of preferred stock will be set forth in a Certificate of Designation filed pursuant to the Delaware General Corporation Law, as determined by the Company's Board of Directors. On November 11, 2022, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Mutual Fund Series Trust, on behalf of AlphaCentric LifeSci Healthcare Fund (the “Purchaser”), pursuant to which the Company issued on November 14, 2022, in a private placement transaction, an aggregate of 3,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred”), for an aggregate subscription amount equal to $300,000. This transaction resulted in $89,000 of issuance costs and a net subscription of $211,000 as of December 31, 2022. The Company determined that the Series A Preferred should be classified as Mezzanine Equity (temporary equity outside of permanent equity) and that the Series A Preferred more closely aligned with debt as the intent was for redemption by either the holder or issuer, most likely the issuer (the Company), due to the more favorable redemption terms. The Purchase Agreement required that the Company convene, no later than January 31, 2023, an annual meeting or special meeting of stockholders for the purpose of presenting to the Company’s stockholders a proposal (the “Proposal”) to approve a reverse stock split of its outstanding common stock (the “Reverse Stock Split”), with the recommendation of the board of directors that the Proposal be approved, and that the Company use reasonable best efforts to obtain approval of the Proposal. Additionally, the Purchase Agreement contained customary representations, warranties and agreements of the Company and the Purchaser, and customary indemnification rights and obligations of the parties. Pursuant to the Purchase Agreement, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of Delaware on November 14, 2022 designating 3,000 shares out of the authorized but unissued shares of its preferred stock as Series A Preferred with a par value of $0.0001 per share and establishing the rights, preferences and limitations of the Series A Preferred. The Certificate of Designation provided, among other things, that except as otherwise provided in the Certificate of Designation or as otherwise required by law, the Series A Preferred would have no voting rights (other than the right to vote as a class on certain matters as provided in the Certificate of Designation). However, pursuant to the Certificate of Designation, each share of Series A Preferred entitled the holder thereof (i) to vote on the Proposal and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Proposal, and (ii) to 1,000,000 votes per share of Series A Preferred on the Proposal and any such adjournment proposal. The Series A Preferred should, except as required by law, vote together with the common stock (and other issued and outstanding shares of preferred stock entitled to vote), as a single class; provided, however, that such shares of Series A Preferred should, to the extent cast on the Proposal or any such adjournment proposal, be automatically and without further action of the holders thereof voted in the same proportion as the shares of common stock (excluding abstentions and any shares of common stock that are not voted) and any other issued and outstanding shares of preferred stock of the Company entitled to vote (other than the Series A Preferred or shares of such other preferred stock, if any, not voted) are voted on the Proposal. In addition, the Series A Preferred were entitled to customary dividends and distributions when and if paid on shares of the common stock and were entitled to the voting rights discussed above. The Series A Preferred had preference over the common stock with respect to distribution of assets or available proceeds, as applicable, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or any other deemed liquidation event. The shares of Series A Preferred were convertible at the option of the holder, at a conversion price of $4.68 per share (as adjusted for the Reverse Stock Split), into shares of the Company’s common stock, at any time and from time to time from and after 15 business days following the earlier of (i) the date of the approval of the Proposal or (ii) the date the Company otherwise satisfies the Nasdaq listing requirements. The Company had the right to redeem the Series A Preferred at any time during the 15 business days following the approval of the Proposal (the "Company Redemption Period") at 120% of the stated value. Each holder of Series A Preferred had the right to require the Company to redeem all or a portion of the Series A Preferred held by such holder following the expiration of the Company Redemption Period at 130% of the stated value. In addition, the Company would automatically redeem all of the Series A Preferred within five business days following a delisting event as specified in the Certificate of Designation at 130% of the stated value. On January 17, 2023, the Company redeemed all outstanding shares of its Series A Preferred, for an aggregate of $360,000 paid to the Purchaser. The redemption payment represents 120% of the stated value of the Series A Preferred Stock pursuant to the Certificate of Designation. On January 17, 2023, the Company filed a Certificate of Elimination (the “Certificate”) with the Secretary of State of the State of Delaware with respect to the Series A Preferred Stock. The Certificate (i) eliminated the previous designation of 3,000 shares of Series A Preferred Stock from the Company’s Amended and Restated Certificate of Incorporation, none of which were outstanding at the time of filing, and (ii) caused such shares of Series A Preferred Stock to resume their status as authorized but unissued and non-designated shares of preferred stock. Common stock Pursuant to the Certificate of Incorporation, the Company is authorized to issue 150,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of preferred stock outstanding. The Company has never declared any dividends on common stock. On February 8, 2023, the Company's Board of Directors approved a 1-for-18 reverse stock split of the Company's outstanding shares of common stock. The reverse stock split was effected on February 10, 2023 at 5:01 p.m. Eastern time. At the effective time, every 18 issued and outstanding shares of the Company's common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each stockholder holding fractional shares was entitled to receive a cash payment (without interest or deduction) from the Company’s transfer agent in an amount equal to such stockholder’s respective pro rata shares of the total net proceeds from the Company’s transfer agent sale of all fractional shares at the then-prevailing prices on the open market. The number of authorized shares of the Company's common stock and the par value of each share of common stock remained unchanged. Unless noted, all common stock and per share amounts contained in the unaudited condensed consolidated financial statements have been retroactively adjusted to reflect a 1-for-18 reverse stock split. Issuance of common stock On August 12, 2021, the Company entered into a Sales Agreement (the "2021 Sales Agreement") with Cantor Fitzgerald to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $50.0 million through an at-the-market equity offering program under which Cantor Fitzgerald will act as the Company's sales agent. Cantor Fitzgerald is entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold under the 2021 Sales Agreement. During the six months ended June 30, 2022, the Company issued and sold 143,770 shares of common stock at a weighted average per share price of $11.16 pursuant to the 2021 Sales Agreement for $1.5 million in net proceeds. During the six months ended June 30, 2023, the Company issued and sold 34,589 shares of common stock at a weighted average per share price of $4.52 pursuant to the 2021 Sales Agreement for $0.2 million in net proceeds. On March 15, 2022, the Company entered into the Equity Purchase Agreement with Lincoln Park which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park, at the Company's discretion, up to $30.0 million of shares of its common stock over the 36-month term of the Equity Purchase Agreement. Upon execution of the Equity Purchase Agreement, the Company issued 92,644 shares of its common stock to Lincoln Park as commitment shares in accordance with the closing conditions contained within the Equity Purchase Agreement. The issuance of these shares were specific incremental costs directly attributable to the proposed offering. The commitment shares were valued at $0.9 million and recorded as an addition to equity for the issuance of common stock and treated as a reduction to equity as a cost of capital to be raised under the Equity Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Company’s common stock. The Equity Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any additional cost or penalty. As of June 30, 2023, the Company has not sold any shares of its common stock to Lincoln Park under the Equity Purchase Agreement. Warrants As of June 30, 2023, the Company had equity-classified warrants to purchase an aggregate of 27,509 shares of the Company’s common stock outstanding, with an exercise price of $76.08. The exercise price will be adjusted in the event of issuances of common stock at a price lower than the exercise price of the warrants then in effect (the “Down Round Feature”). During the six months ended June 30, 2023 and 2022, the Down Round Feature was triggered due to the price per share received from the issuance of common stock. The Company calculated the value of the effect of Down Round Feature measured as the difference between the warrants’ fair value, using the Black-Scholes-Merton option-pricing model, before and after the Down Round Feature was triggered using the original exercise price and the new exercise price. The difference in fair value of the effect of the Down Round Feature was immaterial and had no impact on net loss (income) per share in the periods presented. The exercise price will continue to be adjusted in the event the Company issues additional shares of common stock below the current exercise price, in accordance with the terms of the warrants.

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

Equity incentive plans:

Employee Share Purchase Plan:

As of June 30, 2023, 108,124 shares remain available for grant under the ESPP.

Options and RSUs granted to employees and directors:

There were no options or RSUs granted to employees and directors for the six months ended June 30, 2023.

During the six months ended June 30, 2022, the fair value of options and RSUs granted to employees and directors was $0.8 million.

The fair value of RSUs granted is based on the share price on the grant date.

Stock-based compensation expenses:

The following table illustrates the effect of stock-based compensation on the unaudited condensed consolidated statements of operations:


	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2023		2022		2023		2022
Research and development expenses	$	138	$	393	$	182	$	622
Selling, general and administrative	738		770		1,550		1,786
Discontinued operations*	—		—		—		(352)
Total	$	876	$	1,163	$	1,732	$	2,056

*Income from stock-based compensation is related to forfeitures.

OPERATING LEASES	6 Months Ended
OPERATING LEASES	Jun. 30, 2023
Leases [Abstract]
OPERATING LEASES	OPERATING LEASES Operating lease agreements As of June 30, 2023, the Company had operating leases for its principal executive office in Bridgewater, New Jersey. On March 13, 2019, the Company signed an amendment to the original lease agreement for its principal executive office in Bridgewater, New Jersey (the “Lease Amendment”). The Lease Amendment included an extension of the lease period of the 10,000 square feet previously leased under the original agreement (the “Original Space”) and an addition of 4,639 square feet (the “Additional Space”). The Company entered the Additional Space following a period of preparation by the lessor completed during September 2019 (the “Commencement Date”). The term included in the Lease Amendment expired on September 30, 2022. Pursuant to the Lease Amendment, the Company recognized an additional right of use asset and liability in the amount of $0.7 million. The Additional Space was considered a new lease agreement and was recognized as a right of use asset and liability, in the amount of $0.3 million, on the Commencement Date. The lease liability matured on September 30, 2022. In November 2022, the Company transitioned to a smaller corporate headquarters and signed a Sublease Agreement (the “Sublease”) to sublease approximately 5,755 square feet of office space (the “Leased Premises”) in Bridgewater, New Jersey through September 30, 2023. In addition, the Company signed a Lease Agreement (the “Master Lease”) to lease the Leased Premises following the termination of the Sublease through September 30, 2025. The Company will record a right of use asset and liability at the commencement date of the Master Lease. The Master Lease is expected to result in total lease payments of approximately $0.3 million. The lease agreement for the office space in Israel was a one year lease that expired in December 2022. Given the short-term nature of the lease term, the Company did not recognize a right-of-use asset and liability. As of June 30, 2022, the lease liabilities reflect a weighted average discount rate of 13.10% and a remaining weighted average lease term of 0.25 years as of June 30, 2022. There were no lease liabilities as of June 30, 2023. The Company had a lien in the amount of $0.6 million related to a letter of credit on the Company’s cash in respect of bank guarantees granted in order to secure the lease agreements. In April 2022, the lien was released and the Company received the $0.6 million back due to the release.

COMMITMENTS AND CONTINGENCIES	6 Months Ended
COMMITMENTS AND CONTINGENCIES	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Litigation and contingencies The Company may periodically become subject to legal proceedings and claims arising in connection with its business. As of June 30, 2023, there are no claims or actions pending against the Company that, in the opinion of management, are likely to have a material adverse effect on the Company.

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial statements. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair statement of the Company’s unaudited condensed consolidated financial position, results of operations, cash flow and statement of stockholders' equity for the interim periods presented. Certain information and disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Certain prior period amounts have been reclassified to conform to current year presentation. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 14, 2023. The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results expected for the year ending December 31, 2023.
Principles of Consolidation	Principles of ConsolidationThe unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.
Use of Estimates	Use of EstimatesThe preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and reported amounts of income and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue recognition, product return and research and development accruals. Actual results could differ from the Company’s estimates.
Cash and cash equivalents	Cash and cash equivalentsThe Company considers cash equivalents to be all short-term, highly liquid investments, which include short-term bank deposits and money market funds with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash.
Revenue Recognition	Revenue RecognitionThe Company accounts for its revenue transactions under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. In accordance with ASC Topic 606, the Company recognizes revenues when its customers obtain control of its product for an amount that reflects the consideration it expects to receive from its customers in exchange for that product. To determine revenue recognition for contracts that are determined to be in scope of ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when such performance obligation is satisfied. As a result of the disposition of the MST Franchise in January 2022, the Company no longer has any revenue generating products; however, it still receives certain royalty revenues (see Note 4 — Discontinued Operations). Royalty Revenues and Collaboration Agreements The Company is entitled to royalty payments with respect to sales of a product developed by a customer in collaboration with the Company. Royalties are recognized as the products are sold by the customer. For collaboration agreements under ASC 606, the Company identifies the contract, identifies the performance obligations, determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when (or as) the performance obligation is satisfied. The Company identifies the performance obligations included within the agreement and evaluates which performance obligations are distinct. Upfront payments for licenses are evaluated to determine if the license is capable of being distinct from the obligations to participate on certain development and/or commercialization committees with the collaboration partners and supply manufactured drug product for clinical trials. For performance obligations that are satisfied over time, the Company utilizes the input method and revenue is recognized by consistently applying a method of measuring progress toward complete satisfaction of that performance obligation. The Company periodically reviews estimated periods of performance based on the progress under each arrangement and account for the impact of any changes in estimated periods of performance on a prospective basis. Milestone payments are a form of variable consideration as the payments are contingent upon achievement of a substantive event. Milestone payments are estimated and are included in the transaction price when the Company determines that it is probable that there will not be a significant reversal of cumulative revenue recognized in future periods. Product Revenues, net The Company’s net product revenues were generated through sales of AMZEEQ, which was approved by the FDA in October 2019 and was commercially launched in the United States in January 2020, and ZILXI, which was approved by the FDA in May 2020 and was commercially launched in the United States in October 2020. The Company sold the MST Franchise on January 12, 2022 and, as such, the Company no longer generates revenue from the sale of these products. The following is a description of the Company's accounting policies related to the sales of AMZEEQ and ZILXI. Product sales The Company’s customers were a limited number of national and select regional wholesalers (the “distributors”) and certain independent and specialty pharmacies (together, the “customers”). These distributors would subsequently resell the product, primarily to retail pharmacies that dispense the product to patients. Net product revenue was typically recognized when customers obtained control of the Company’s products, which occurred at a point in time, typically upon delivery of product to the customers. The Company evaluated the creditworthiness of its customers to determine whether it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur. The Company did not assess whether a contract had a significant financing component if the expectation was such that the period between the transfer of the promised goods to the customer and the receipt of payment would be less than one year. Standard credit terms did not exceed 75 days. The Company expensed incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that would have been recognized is one year or less or the amount is immaterial. Shipping and handling costs related to the Company’s product sales were included in selling, general and administrative expenses. Product revenue is recorded net of distribution fees, trade discounts, allowances, rebates, copay program coupons, chargebacks, estimated returns and other incentives. These reserves are classified as either reductions of accounts receivable or as current liabilities. The estimates of reserves established for variable consideration reflect contractual and statutory requirements, known market events and trends, industry data and forecasted customer mix. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net product revenues only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from these estimates. If actual results vary, estimates may be adjusted in the period such change in estimate becomes known, which could have an impact on earnings in the period of adjustment. Product Sales Provisions Provisions for distribution fees, trade discounts and chargebacks are reflected as a reduction to trade receivables, net on the unaudited condensed consolidated balance sheet. All other provisions, including rebates, other discounts and return provisions are reflected as a liability within accrued expenses on the unaudited condensed consolidated balance sheet. The revenue reserve accrual was $1.9 million and $2.7 million as of June 30, 2023 and December 31, 2022, respectively and was reflected in accrued expenses in the unaudited condensed consolidated balance sheet. Actual amounts may ultimately differ from these estimates. If actual results vary, estimates may be adjusted in the period such change in estimate becomes known, which could have an impact on earnings in the period of adjustment. Distribution Fees and Trade Discounts and Allowances The Company paid fees for distribution services and for certain data that distributors provide to the Company and generally provided discounts on sales to its distributors for prompt payment. These fees and discounts are contractual in nature and the Company expects its distributors to earn these fees and discounts, and accordingly deducts the full amount of these fees and discounts from its gross product revenues at the time such revenues are recognized. Rebates, Chargebacks and Other Discounts Product sales made under managed-care and governmental pricing programs in the U.S. are subject to rebates. Managed Care rebates relate to contractual agreements to sell products to managed care organizations and pharmacy benefit managers at contractual rebate percentages in exchange for volume and/or market share. Chargebacks relate to contractual agreements to sell products to government agencies and other indirect customers at contractual prices that are lower than the list prices the Company charges wholesalers. When these government agencies or other indirect customers purchase products through wholesalers at these reduced prices, the wholesaler charges the Company for the difference between the prices they paid the Company and the prices at which they sold the products to the indirect customers. The Company estimates the rebates and chargebacks it expects to be obligated to provide and deducts these estimated amounts from its gross product revenue at the time the revenue is recognized. The Company estimates the rebates and chargebacks that it expects to be obligated to provide based upon (i) the Company's current contracts and negotiations, (ii) estimates regarding the payer mix based on third-party data and utilization, (iii) inventory held by distributors and (iv) estimates of inventory held at the retail channel. Other discounts include the Company’s co-pay assistance coupon programs for commercially-insured patients meeting certain eligibility requirements. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to pay associated with product that has been recognized as revenue. Product Returns Consistent with industry practice, customers are generally allowed to return products within a specified period of time before and after the expiration date. The Company estimates the amount of product that will be returned and deducts these estimated amounts from its gross revenue at the time the revenue is recognized. The information utilized to estimate the returns provision includes: (i) actual return history (ii) historical return industry information regarding rates for comparable pharmaceutical products and product portfolios, (iii) external data with respect to inventory levels in the wholesale distribution channel, (iv) external data with respect to prescription demand for products and (v) remaining shelf lives of products at the date of sale. Contract Assets and Contract Liabilities The Company did not have any contract assets (unbilled receivables) related to product sales as of June 30, 2023 or December 31, 2022, as customer invoicing generally occurs before or at the time of revenue recognition. The Company did not have any contract assets (unbilled receivables) related to its license revenues as of June 30, 2023 or December 31, 2022. The Company did not have any contract liabilities as of June 30, 2023 or December 31, 2022, as the Company did not receive payments in advance of fulfilling its performance obligations to its customers. Sales Commissions Sales commissions are generally attributed to periods shorter than one year and therefore are expensed when incurred. Sales commissions are included in discontinued operations.
Collaboration agreements	Collaboration arrangementsThe Company analyzes its collaboration arrangements to assess whether they are within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808), to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, the Company will assess whether aspects of the arrangement between it and their collaboration partner are within the scope of other accounting literature.
Research and development costs	Research and development costsResearch and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of clinical trials, clinical trial supplies, salaries, stock-based compensation expenses, payroll taxes and other employee benefits, lab expenses, consumable equipment and consulting fees. All costs associated with research and developments are expensed as incurred.
Allowance for doubtful accounts	Allowance for doubtful accountsAn allowance for doubtful accounts is maintained for potential credit losses based on the aging of trade receivables, historical bad debts experience and changes in customer payment patterns. Trade receivable balances are written off against the allowance when it is deemed probable that the receivable will not be collected. Trade receivables, net are stated net of reserves for certain sales allowances and provisions for doubtful accounts.
Fair value measurement	Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
Net loss per share	Net loss per shareNet loss per share, basic and diluted, is computed on the basis of the net loss from continuing operations for the period divided by the weighted average number of common stock outstanding during the period. Diluted net loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options and warrants which are included under the treasury share method when dilutive.
Discontinued operations	Discontinued operationsThe Company accounted for the sale of the MST Franchise in accordance with ASC 205, Discontinued Operations, and ASU No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity. The Company followed the held-for-sale criteria as defined in ASC 360 Property, Plant and Equipment and ASC 205. ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items in the unaudited condensed consolidated statements of operations. Assets and liabilities are also reclassified into separate line items on the related unaudited condensed consolidated balance sheets for the periods presented. Non-cash items presented in the statement of cash flows and related to discontinued operations are presented in Note 4 - Discontinued Operations. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations. Due to the sale of the MST Franchise during the first quarter of 2022, in accordance with ASC 205, the Company has classified the results of the MST Franchise as discontinued operations in its unaudited condensed consolidated statements of operations and cash flows for all periods presented, see Note 4, Discontinued Operations. All disposed assets and liabilities associated with the MST Franchise were therefore classified as assets and liabilities of discontinued operations in the Company's unaudited condensed consolidated balance sheets for the periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted.
Concentration of credit risks	Concentration of credit risksFinancial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash and accounts receivables. The Company deposits cash and cash equivalents with highly rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments.
Comprehensive loss	Comprehensive lossFor the three and six months ended June 30, 2023 and 2022, comprehensive loss was equal to the net loss as presented in the accompanying unaudited condensed consolidated statements of operations.
Newly issued and recently adopted accounting pronouncements	Newly issued and recently adopted accounting pronouncements Recent Accounting Guidance Issued: In June 2016, the FASB issued Accounting Standard Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. As a smaller reporting company, the Company adopted ASU 2016-13 as of January 1, 2023 and there was no material impact on the unaudited condensed consolidated financial statements upon adoption. In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (ASU 2020-04), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contracts, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU 2020-04 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2022. In December 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848" (ASU 2022-06), which provides extension of the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company is currently evaluating the impact of ASU 2020-04 and ASU 2022-06 on its unaudited condensed consolidated financial statements. Currently, the Company does not expect the adoption of the new standard to have a material impact to the unaudited condensed consolidated financial statements. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for convertible instruments by eliminating the requirement to separately account for embedded conversion features as an equity component in certain circumstances. A convertible debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model. The ASU simplifies the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU requires enhanced disclosures about convertible instruments. The Company adopted ASU 2020-06 as of January 1, 2022 and there was no material impact on the unaudited condensed consolidated financial statements upon adoption.

SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share


	June 30
	2023	2022
Outstanding stock options and RSUs	280,134	325,937
Warrants	27,509	27,509

DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Discontinued Operations of the MST Franchise

The following table presents the combined results of discontinued operations of the MST Franchise:


	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2023		2022		2023		2022
Product sales, net	$	—	$	—	$	—	$	106

Cost of goods sold	—		—		—		80

Operating expenses:
Research and development	—		—		—		—
Selling, general and administrative	20		241		30		(92)
Total operating expenses	20		241		30		(92)
(Loss) income from discontinued operations	(20)		(241)		(30)		118
Gain on the sale of the MST Franchise	—		—		—		13,005
(Loss) income from discontinued operations, before income taxes	(20)		(241)		(30)		13,123
Income tax expense	—		—		—		—
Net (loss) income from discontinued operations	$	(20)	$	(241)	$	(30)	$	13,123


(in thousands)	Six Months Ended June 30, 2022
Cash Flows From Operating Activities:
Stock-based compensation (income) expense*	$	(352)
Gain on the sale of the MST Franchise	(13,005)
Total non-cash items of discontinued operations	$	(13,357)

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

*Income from stock-based compensation is related to forfeitures.

The following table presents the gain on the sale of the MST Franchise:


(in thousands)	Six Months Ended June 30, 2022
Cash proceeds	$	20,000
Proceeds paid in January 2023	5,000
	25,000
Less transaction costs	(4,247)
Less carrying value of assets sold	(7,748)
Gain on sale, before income taxes	13,005
Income tax expense	—
Gain on sale net of tax	$	13,005

STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-based Payment Arrangement, Expensed and Capitalized, Amount

The following table illustrates the effect of stock-based compensation on the unaudited condensed consolidated statements of operations:


	Three Months Ended June 30				Six Months Ended June 30
(in thousands)	2023		2022		2023		2022
Research and development expenses	$	138	$	393	$	182	$	622
Selling, general and administrative	738		770		1,550		1,786
Discontinued operations*	—		—		—		(352)
Total	$	876	$	1,163	$	1,732	$	2,056

*Income from stock-based compensation is related to forfeitures.

NATURE OF OPERATIONS (Details)				3 Months Ended		6 Months Ended
NATURE OF OPERATIONS (Details)	Feb. 10, 2023	Mar. 31, 2022 USD ($)	Mar. 15, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) segment	Jun. 30, 2022 USD ($)	Jan. 12, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of reportable segments \| segment						1
Reverse stock split ratio	0.0556
Net loss				$ (10,058,000)	$ (8,476,000)	$ (15,680,000)	$ (3,806,000)
Cash used in operations						(15,052,000)	(17,264,000)
Cash and investments				20,701,000	$ 42,814,000	20,701,000	$ 42,814,000		$ 30,975,000	$ 42,855,000
Accumulated deficit				(678,564,000)		(678,564,000)			(662,735,000)
Additional paid-in capital				695,836,000		695,836,000			$ 693,937,000
Debt outstanding				0		0
Sale of stock, public float threshold				$ 75,000,000		$ 75,000,000
Lincoln Park Equity Purchase Agreement
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Consideration receivable on transaction		$ 30,000,000	$ 30,000,000
Term of equity purchase agreement		36 months	36 months
MST Franchise \| Discontinued Operations, Disposed of by Sale
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Additional paid-in capital								$ 5,000,000

SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jan. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Revenue reserve accrual	$ 1,900,000	$ 2,700,000
Provisions for doubtful accounts	0	0
Additional consideration receivable			$ 5,000,000
Restricted cash	100,000
Fair Value, Inputs, Level 1
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Cash equivalents	$ 14,400,000	$ 28,000,000

SIGNIFICANT ACCOUNTING POLICIES - Schedule of AntiDilutive Equity Awards Not Included in the Calculation of EPS (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Outstanding stock options and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	280,134	325,937
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	27,509	27,509

SIGNIFICANT ACCOUNTING POLICIES - Employee Retention Tax Credit (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2023
Accounting Policies [Abstract]
Employee retention tax credit		$ 1,300
Proceeds from employee retention tax credit	$ 1,300
Other liabilities		$ 0	$ 1,313

STRATEGIC AGREEMENTS (Details) £ in Thousands				6 Months Ended
STRATEGIC AGREEMENTS (Details) £ in Thousands	Apr. 28, 2023 USD ($)	Feb. 27, 2023 USD ($)	Aug. 09, 2021 USD ($)	Jun. 30, 2023 USD ($)	Jan. 31, 2023 USD ($)	Aug. 29, 2022 USD ($)	Aug. 29, 2022 GBP (£)	Jun. 30, 2022 USD ($)	Jun. 28, 2022 USD ($)	Jun. 28, 2022 GBP (£)	Jan. 12, 2022 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Additional consideration receivable					$ 5,000,000
Milestone payments receivable upon achievement of net sales				$ 450,000,000
Milestone payments upon achieving certain criteria, exceeding annual net sales				$ 100,000,000
Discontinued Operations, Disposed of by Sale \| MST Franchise
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds								$ 20,000,000			$ 20,000,000
Additional consideration receivable					$ 5,000,000
Licensing Agreements
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Payments for licensing agreements	$ 3,750,000		$ 1,000,000
Topical BETi Option Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Payments for licensing agreements			500,000
Milestone payments upon achieving certain criteria, maximum			$ 15,750,000
Royalty payments, percentage	10.00%		10.00%
Oral BETi Option Agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Payments for licensing agreements		$ 250,000
Milestone payments upon achieving certain criteria, maximum	$ 43,750,000
First payments for licensing agreements									$ 386,366	£ 300
Second payment for licensing agreements						$ 997,407	£ 850

DISCONTINUED OPERATIONS - Schedule of Discontinued Operations of the MST Franchise (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration]			(Loss) income from discontinued operations, net of income taxes
Discontinued Operations, Disposed of by Sale \| MST Franchise
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cost of goods sold	$ 0	$ 0	$ 0	$ 80
Research and development	0	0	0	0
Selling, general and administrative	20	241	30	(92)
Total operating expenses	20	241	30	(92)
(Loss) income from discontinued operations	(20)	(241)	(30)	118
Gain on the sale of the MST Franchise	0	0	0	13,005
(Loss) income from discontinued operations, before income taxes	(20)	(241)	(30)	13,123
Income tax expense	0	0	0	0
Net (loss) income from discontinued operations	(20)	(241)	(30)	13,123
Product sales, net \| Discontinued Operations, Disposed of by Sale \| MST Franchise
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total revenues	$ 0	$ 0	$ 0	$ 106

DISCONTINUED OPERATIONS - Schedule of Non-Cash Items Related to Discontinued Operations (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows From Operating Activities:
Stock-based compensation (income) expense	$ 1,732	$ 2,056
Gain on the sale of the MST Franchise	0	(13,005)
Supplemental disclosure of cash flow information:
Amount due from sale of MST Franchise	$ 0	5,000
Discontinued Operations, Disposed of by Sale \| MST Franchise
Cash Flows From Operating Activities:
Stock-based compensation (income) expense		(352)
Gain on the sale of the MST Franchise		(13,005)
Total non-cash items of discontinued operations		$ (13,357)

DISCONTINUED OPERATIONS - Schedule of Gain on the Sale of the MST Franchise (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jan. 12, 2023	Dec. 31, 2022	Jan. 12, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds paid in January 2023	$ 695,836		$ 695,836			$ 693,937
Discontinued Operations, Disposed of by Sale \| MST Franchise
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds		$ 20,000		$ 20,000			$ 20,000
Proceeds paid in January 2023					$ 5,000
Total cash proceeds net				25,000
Less transaction costs				(4,247)
Less carrying value of assets sold		(7,748)		(7,748)
Gain on sale, before income taxes	$ 0	$ 0	$ 0	13,005
Income tax expense				0
Gain on sale net of tax				$ 13,005

MEZZANINE EQUITY AND STOCKHOLDER CAPITAL (Details)							6 Months Ended		12 Months Ended
MEZZANINE EQUITY AND STOCKHOLDER CAPITAL (Details)	Feb. 10, 2023	Jan. 17, 2023 USD ($) shares	Nov. 14, 2022 USD ($) d vote $ / shares shares	Mar. 31, 2022 USD ($)	Mar. 15, 2022 USD ($) shares	Aug. 12, 2021 USD ($)	Jun. 30, 2023 USD ($) vote $ / shares shares	Jun. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 shares
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)							20,000,000		20,000,000
Preferred stock, par value (in dollars per share) \| $ / shares							$ 0.0001
Preferred stock, shares outstanding (in shares)							0	0	3,000	0
Preferred stock, par value (in dollars per share) \| $ / shares							$ 0.0001		$ 0.0001
Redemption price (percent)		120.00%
Common stock shares authorized (in shares)							150,000,000		150,000,000
Common stock par value (in dollars per share) \| $ / shares							$ 0.0001		$ 0.0001
Reverse stock split ratio	0.0556
Proceeds from issuance from secondary offering \| $							$ 156,000	$ 1,471,000
Outstanding warrants to purchase common stock (in shares)							27,509
Warrant exercise price (in dollars per share) \| $ / shares							$ 76.08
Cantor Sales Agreement
Class of Stock [Line Items]
Number of shares issued in transaction (in shares)							34,589	143,770
Outstanding warrants to purchase common stock (in shares) \| $						$ 50,000,000
Commission from gross proceeds from issuance of common stock						3.00%
Price per share (in dollars per share) \| $ / shares							$ 4.52	$ 11.16
Proceeds from issuance from secondary offering \| $							$ 200,000	$ 1,500,000
Lincoln Park Equity Purchase Agreement
Class of Stock [Line Items]
Number of shares issued in transaction (in shares)					92,644		0
Consideration receivable on transaction \| $				$ 30,000,000	$ 30,000,000
Term of equity purchase agreement				36 months	36 months
Consideration receivable on additional transaction \| $					$ 900,000
Common stock
Class of Stock [Line Items]
Number of votes entitled to each ordinary share \| vote							1
Series A Preferred Stock
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)		3,000	3,000
Preferred stock, par value (in dollars per share) \| $ / shares			$ 0.0001
Preferred stock, shares issued (in shares)							0		3,000
Preferred stock, shares outstanding (in shares)							0		3,000
Number of shares issued in transaction (in shares)			3,000
Preferred stock, value, subscriptions \| $			$ 300,000						$ 211,000
Preferred stock, par value (in dollars per share) \| $ / shares			$ 0.0001
Number of votes \| vote			1,000,000
Preferred stock, conversion price (in dollars per share) \| $ / shares			$ 4.68
Number of business days for conversion at option of holder after proposal approval or satisfaction of Nasdaq listing requirements \| d			15
Redemption price (percent)			120.00%
Stock right of redemption by holder following expiration of company redemption period, percent of stated value (percent)			130.00%
Number of business days in automatic redemption period following delisting event \| d			5
Redemption price of shares after delisting, percent of stated value (Percent)			130.00%
Preferred stock, redemption amount \| $		$ 360,000
Convertible Preferred Stock
Class of Stock [Line Items]
Payments of stock issuance costs \| $									$ 89,000

STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jan. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued during the period (in shares)	8,339	3,704
Fair value of options and RSUs granted	$ 0	$ 800,000
2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (in shares)	67,920
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (in shares)	63,833
Increase in shares reserved for future issuance (in shares)			41,666
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance (in shares)	108,124
Percentage of fair market value used as purchase price	85.00%
Percent of annual earnings that may be used to purchase shares	15.00%

STOCK-BASED COMPENSATION - Schedule of Share-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Expense
Share-based compensation	$ 876	$ 1,163	$ 1,732	$ 2,056
Research and development expenses
Expense
Share-based compensation	138	393	182	622
Selling, general and administrative
Expense
Share-based compensation	738	770	1,550	1,786
Discontinued operations
Expense
Share-based compensation	$ 0	$ 0	$ 0	$ (352)

OPERATING LEASES (Details)		1 Months Ended
OPERATING LEASES (Details)	Mar. 13, 2019 USD ($) ft²	Nov. 30, 2022 ft²	Apr. 30, 2022 USD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2022	Jun. 30, 2022
Operating Lease
Operating lease, right-of-use asset				$ 0
Lease payments				300,000
Operating lease liability				$ 0
Operating lease, weighted average discount rate, (in percent)						13.10%
Weighted average remaining lease term (in years)						3 months
Lien on marketable securities to secure lease agreements			$ 600,000
Proceeds received from release of lien			$ 600,000
ISRAEL
Operating Lease
Operating lease terms					1 year
Original Space \| Bridgewater, New Jersey
Operating Lease
Facility space leased \| ft²	10,000	5,755
Operating lease, right-of-use asset	$ 700,000
Additional Space \| Bridgewater, New Jersey
Operating Lease
Facility space leased \| ft²	4,639
Operating lease, right-of-use asset	$ 300,000