VYNE Therapeutics Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
YARW$15.60+14.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001628280-24-022183
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001628280-24-037176
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 104 current paragraphs.
55 unchanged; 32 reworded; 11 added; 9 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Development and License Agreements
Current report
•expenses incurred under licensing agreements;
Current report
Our research and development expenses for the three months ended June 30, 2024 were $7.3 million, representing an increase of $0.1 million, or 1.0%, compared to $7.2 million for the three months ended June 30, 2023. The increase was primarily driven by expenses related to preparatory and clinical trial activities for a Phase 2b trial of VYN201 in subjects with nonsegmental vitiligo, which was initiated in June 2024, of $3.2 million, including a $1.0 million development milestone payment due to Tay upon the initiation of the Phase 2b trial. In addition, employee-related expenses increased by $0.3 million following the hiring of additional research and development personnel. These increases were partially offset by a decrease in expenses associated with VYN202 of $3.5 million, primarily driven by lower amounts owed to Tay under the VYN202 License Agreement. In April 2023, we made a one-time cash payment of $3.75 million to Tay in connection with entering into the VYN202 License Agreement. In the second quarter of 2024, we incurred a$1.0 million development milestone payment due to Tay following the initiation of a Phase 1a single ascending dose/multiple ascending dose trial of VYN202.
Current report
Comparison of the Six Months Ended June 30, 2024 and 2023
Current report
Our research and development expenses for the six months ended June 30, 2024 were $11.0 million, representing an increase of $1.0 million, or 10.5%, compared to $10.0 million for the six months ended June 30, 2023. The increase was primarily driven by expenses associated with preparatory and clinical trial activities for a Phase 2b trial of VYN201 in subjects with nonsegmental vitiligo, which was initiated in June 2024, of $3.5 million, which included a $1.0 million milestone payment due to Tay. Additionally, employee-related expenses increased by $0.4 million following the hiring of additional research and development personnel. These increases were partially offset by a decrease in expenses associated with VYN202 of $2.8 million, primarily driven by lower amounts owed to Tay under the VYN202 License Agreement. During the six months ended June 30, 2023, we made cash payments to Tay totaling $4.0 million in connection with entering into the VYN202 License Agreement. We incurred a$1.0 million development milestone payment due to Tay following the initiation of a Phase 1a single ascending dose/multiple ascending dose trial of VYN202 in June 2024.
Current report
Our general and administrative expenses for the six months ended June 30, 2024 were $7.1 million, representing an increase of $0.6 million, or 9.3%, compared to $6.5 million for the six months ended June 30, 2023. The increase was primarily related to $0.4 million of consulting and professional fees and $0.2 million of employee-related expenses.
Current report
Other Income, Net
Current report
As of June 30, 2024, product revenue, net, product returns, and discontinued operations were no longer deemed critical accounting policies and research and development expenses was newly identified as a critical accounting policy.
Current report
All expenses associated with research and development are expensed as incurred. Research and development expenses include expenses directly attributable to the conduct of our research and development programs, including expenses incurred under arrangements with third parties, such as contract research organizations, contract development and manufacturing organizations and consultants as well as salaries, stock-based compensation expenses, payroll taxes and other employee benefits.
Current report
Expenses are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided by the service providers and vendors or our estimate of the level of service that has been performed at each reporting date, whereas payments are dictated by the terms of each agreement, such as the successful enrollment of a certain number of patients, site initiation, and the completion of clinical trial milestones. As such, depending on the timing of payment relative to the receipt of goods or services, management may record either prepaid expenses or accrued services.
Current report
We make estimates of our accrued research and development expenses as of each balance sheet date in our unaudited condensed consolidated financial statements based on facts and circumstances known to us at that time. There may also be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing expenses, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting higher or lower amounts in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.
Removed paragraphs (9)
Previous report
Developments and License Agreements
Previous report
Revenues
Previous report
Research and Development Expenses
Previous report
General and Administrative Expenses
Previous report
Revenues
Previous report
Research and Development Expenses
Previous report
Our research and development expenses for the three months ended March 31, 2024 were $3.7 million, representing an increase of $1.0 million, or 35.6%, compared to $2.7 million for the three months ended March 31, 2023. The increase was primarily driven by preparatory activities for the Phase 1 trials for VYN202 and Phase 2b trial for VYN201 of $0.7 million and $0.3 million, respectively.
Previous report
General and Administrative Expenses
Previous report
Net Cash (Used In) Provided by Investing Activities
Reworded paragraphs (32)
Previous wording
We are a clinical-stage biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno-inflammatory conditions.
Current wording
We are a clinical-stage biopharmaceutical company focused on developing differentiated therapies to treat chronic inflammatory and immune-mediated conditions with high unmet need. Our unique and proprietary BET inhibitors, which comprise our InhiBET™ platform, are designed to overcome limitations of early generation BET inhibitors by leveraging alternative routes of administration and enhanced selectivity.
Previous wording
Our lead program is VYN201, a locally administered pan-BD BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure. In preclinical testing, VYN201 produced consistent reductions in pro-inflammatory and disease-related biomarkers and improvements in disease severity across a variety of inflammatory and fibrotic models. In November 2022, we initiated a Phase 1 clinical trial evaluating a topical formulation of VYN201 for the treatment of nonsegmental vitiligo. In the first quarter of 2023, we announced positive preliminary safety and tolerability, pharmacokinetic and hematology data from the Phase 1a portion of the trial. The first nonsegmental vitiligo patient was dosed in the Phase 1b portion of the trial in January 2023, and on October 30, 2023, we announced positive data from the Phase 1b trial, in which significant clinical improvement in F-VASI was observed in the 1% and 2% dose cohorts after 16 weeks of treatment. We expect to enroll the first subject in the Phase 2b trial for VYN201 in the second quarter of 2024. The Phase 2b trial for VYN201 in nonsegmental vitiligo will be a randomized, double-blind, vehicle-controlled trial evaluating the efficacy, safety and pharmacokinetics of once-daily VYN201 gel in three dose cohorts (1%, 2% and 3% concentrations) compared to vehicle for 24 weeks, followed by a 28-week active treatment extension. We expect to enroll approximately 40 patients in each arm and to report top-line results from the 24-week double-blind portion of the trial in mid-2025.
Current wording
Our lead program is VYN201, a locally administered pan-BD BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure. In preclinical testing, VYN201 produced consistent reductions in pro-inflammatory and disease-related biomarkers and improvements in disease severity across a variety of inflammatory and fibrotic models. In November 2022, we initiated a Phase 1 clinical trial evaluating a topical formulation of VYN201 for the treatment of nonsegmental vitiligo. In the first quarter of 2023, we announced positive preliminary safety and tolerability, pharmacokinetic and hematology data from the Phase 1a portion of the trial. The first nonsegmental vitiligo patient was dosed in the Phase 1b portion of the trial in January 2023, and on October 30, 2023, we announced positive data from the Phase 1b trial, in which significant clinical improvement in F-VASI was observed in the 1% and 2% dose cohorts after 16 weeks of treatment. We initiated a Phase 2b trial of VYN201 in June 2024. The Phase 2b trial in subjects with nonsegmental vitiligo is a randomized, double-blind, vehicle-controlled trial evaluating the efficacy, safety and pharmacokinetics of once-daily VYN201 gel in three dose cohorts (1%, 2% and 3% concentrations) compared to vehicle for 24 weeks, followed by a 28-week active treatment extension. We expect to enroll approximately 40 patients in each arm and to report top-line results from the 24-week double-blind portion of the trial in mid-2025.
Previous wording
Our second program is VYN202, an oral small molecule BD2-selective BET inhibitor. VYN202 has been designed to achieve potential 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, in which the damaging effects of unrestricted inflammatory signaling activity are common. We received a notification from the U.S. Food and Drug Administration in May 2024 that our clinical trial for VYN202 may proceed. We expect to dose the first healthy volunteers in a Phase 1a single ascending dose/multiple ascending dose trial in the second quarter of 2024, with top-line results anticipated in the second half of 2024. If the Phase 1a trial is successfully completed, we plan to initiate Phase 1b trials in subjects with moderate-to-severe plaque psoriasis and moderate-to-severe adult-onset rheumatoid arthritis, with top-line results anticipated in the second half of 2025.
Current wording
Our second program is VYN202, an oral small molecule BD2-selective BET inhibitor. VYN202 has been designed to achieve potential class-leading selectivity and potency (BD2 vs. BD1). 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, in which the damaging effects of unrestricted inflammatory signaling activity are common. We initiated a Phase 1a single ascending dose/multiple ascending dose ("SAD/MAD") trial of VYN202 in June 2024 and expect top-line results from the SAD and MAD portions in the third quarter and fourth quarter of 2024, respectively. If the Phase 1a trial is successfully completed, we plan to initiate Phase 1b trials in adult subjects with moderate-to-severe plaque psoriasis and moderate-to-severe adult-onset rheumatoid arthritis, with top-line results anticipated in the second half of 2025.
Previous wording
We have incurred net losses since our inception. Except from the period from 2020 to 2022, when we conducted commercial operations, our business activities have been primarily limited to developing product candidates, raising capital and performing research and development activities. As of March 31, 2024, we had an accumulated deficit of $697.6 million. We recorded net losses of $6.2 million and $5.6 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
We have incurred net losses since our inception. Except from the period from 2020 to 2022, when we conducted commercial operations, our business activities have been primarily limited to developing product candidates, raising capital and performing research and development activities. As of June 30, 2024, we had an accumulated deficit of $707.0 million. We recorded net losses of $15.7 million for each of the six months ended June 30, 2024 and 2023.
Previous wording
Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including inflation, interest rates, financial market volatility and uncertainty, the impact of war or military conflict, including the wars in Ukraine and the Middle East, rising tensions between China and Taiwan and the response thereto, public health pandemics, and supply chain disruptions. Adverse effects of these large macroeconomic conditions have been prevalent in many of the areas where we, our contract research organizations, suppliers or third-party business partners conduct business and as a result, we have experienced disruptions and may continue to experience more pronounced disruptions in our operations. In addition, financial markets have experienced a period of high volatility due to these macroeconomic factors. The persistence of this volatility may impact our ability to engage in capital market activities and adequately fund our operations. As of the filing date of this Quarterly Report on Form 10-Q, the extent to which these macroeconomic events and conditions may impact our financial condition, results of operations or liquidity is uncertain. The effect of these macroeconomic events and conditions may not be fully reflected in our results of operations and overall financial performance until future periods. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section of our most recent Annual Report on Form 10-K captioned “Risk Factors.”
Current wording
Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including inflation, interest rates, financial market volatility and uncertainty, the impact of war or military conflict, including the wars in Ukraine and the Middle East, rising tensions between China and Taiwan and the response thereto, the potential impact of the proposed BIOSECURE Act, public health pandemics and supply chain disruptions. Adverse effects of these large macroeconomic conditions have been prevalent in many of the areas where we, our contract research organizations, suppliers or third-party business partners conduct business and as a result, we have experienced disruptions and may continue to experience more pronounced disruptions in our operations. In addition, financial markets have experienced a period of high volatility due to these macroeconomic factors. The persistence of this volatility may impact our ability to engage in capital market activities and adequately fund our operations. As of the filing date of this Quarterly Report on Form 10-Q, the extent to which these macroeconomic events and conditions may impact our financial condition, results of operations or liquidity is uncertain. The effect of these macroeconomic events and conditions may not be fully reflected in our results of operations and overall financial performance until future periods. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section of our most recent Annual Report on Form 10-K captioned “Risk Factors.”
Previous wording
We made a $0.5 million cash payment to Tay in 2021 in connection with entering into the VYN201 License Agreement. Pursuant to the VYN201 License Agreement, we 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 milestone payments upon the achievement of regulatory approvals in certain non-U.S. jurisdictions. In addition, with respect to any products we commercialize under the VYN201 License Agreement, we will pay tiered royalties to Tay on net sales of such licensed products by us, our affiliates, or sublicensees, of 5%, 7.5% and 10% based on tiered annual net sales bands subject to specified reductions. We are obligated to pay royalties until the latest of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis.
Current wording
We made a $0.5 million cash payment to Tay in 2021 in connection with entering into the VYN201 License Agreement. Pursuant to the VYN201 License Agreement, we agreed to make cash payments to Tay of up to $15.75 million upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the United States for all indications, of which $1.8 million has been paid or accrued through June 30, 2024. Tay is entitled to additional milestone payments upon the achievement of regulatory approvals in certain non-U.S. jurisdictions. In addition, with respect to any products we commercialize under the VYN201 License Agreement, we will pay tiered royalties to Tay on net sales of such licensed products by us, our affiliates, or sublicensees, of 5%, 7.5% and 10% based on tiered annual net sales bands subject to specified reductions. We are obligated to pay royalties until the latest of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis.
Previous wording
On April 28, 2023, we exercised the Oral Option and 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 Oral BETi Compounds in all fields. We have the sole responsibility for development, regulatory, marketing and commercialization activities to be conducted for the licensed products at our sole cost and discretion, and shall use commercially reasonable efforts to develop and, if approved, commercialize such products. We may sublicense our rights to a third party without Tay’s consent. Pursuant to the VYN202 License Agreement, a joint development committee consisting of one representative from each party reviews the progress of the development plan for the licensed products.
Current wording
On April 28, 2023, we exercised the Oral Option and entered into a license agreement (the "VYN202 License Agreement" and together with the VYN201 License Agreement, the "Tay License Agreements") with Tay granting us a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s Oral BETi Compounds in all fields. We have the sole responsibility for development, regulatory, marketing and commercialization activities to be conducted for the licensed products at our sole cost and discretion, and shall use commercially reasonable efforts to develop and, if approved, commercialize such products. We may sublicense our rights to a third party without Tay’s consent. Pursuant to the VYN202 License Agreement, a joint development committee consisting of one representative from each party reviews the progress of the development plan for the licensed products.
Previous wording
We made a cash payment of $3.75 million to Tay in connection with entering into the VYN202 License Agreement. Pursuant to the terms of the VYN202 License Agreement, we 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 entitled to additional milestone payments upon the achievement of regulatory approvals in certain non-U.S. jurisdictions. In addition, with respect to any products we commercialize under the VYN202 License Agreement, we will pay tiered royalties to Tay on net sales of such licensed products by us, our affiliates, or sublicensees, of 5%, 7.5% and 10% based on tiered annual net sales bands subject to specified reductions. We are obligated to pay royalties until the latest of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis.
Current wording
We made a cash payment of $3.75 million to Tay in connection with entering into the VYN202 License Agreement. Pursuant to the terms of the VYN202 License Agreement, we 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, of which $1.3 million has been paid or accrued through June 30, 2024. Tay is entitled to additional milestone payments upon the achievement of regulatory approvals in certain non-U.S. jurisdictions. In addition, with respect to any products we commercialize under the VYN202 License Agreement, we will pay tiered royalties to Tay on net sales of such licensed products by us, our affiliates, or sublicensees, of 5%, 7.5% and 10% based on tiered annual net sales bands subject to specified reductions. We are obligated to pay royalties until the latest of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant country, on a licensed product-by-licensed product and country-by-country basis.
Previous wording
Historically, we have generated revenues under development and license agreements, including royalty payments from sales of Finacea foam. We previously licensed the rights to Finacea to LEO Pharma A/S ("LEO Pharma"). This license was not part of the sale of our commercial business to Journey. Royalty revenues for both the three months ended March 31, 2024 and 2023 were $0.1 million from LEO Pharma in connection with sales of Finacea.
Current wording
Historically, we have generated revenues under development and license agreements, including royalty payments from sales of Finacea foam. We previously licensed the rights to Finacea to LEO Pharma A/S ("LEO Pharma"). This license was not part of the sale of our commercial business to Journey. For the three months ended June 30, 2024 and 2023, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.2 million and $0.1 million, respectively. For the six months ended June 30, 2024 and 2023, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.3 million and $0.2 million, respectively.
Previous wording
Our total research and development expenses for the three months ended March 31, 2024 and 2023 were $3.7 million and $2.7 million, respectively.
Current wording
Our total research and development expenses for the three months ended June 30, 2024 and 2023 were $7.3 million and $7.2 million, respectively. Total research and development expenses for the six months ended June 30, 2024 and 2023 were $11.0 million and $10.0 million, respectively.
Previous wording
•employee-related expenses, including salaries, benefits and related expenses, including stock-based compensation expenses, for researched and development personnel;
Current wording
•employee-related expenses, including salaries, benefits and related expenses, including stock-based compensation expenses, for research and development personnel;
Previous wording
•expenses incurred under agreements with third parties, including subcontractors, suppliers and consultants that conduct regulatory activities, clinical trials and preclinical studies;
Current wording
•expenses incurred under agreements with third parties, including contract research organizations, subcontractors, suppliers and consultants that conduct regulatory activities, clinical trials and preclinical studies;
Previous wording
Our general and administrative expenses for the three months ended March 31, 2024 and 2023 were $3.8 million and $3.2 million, respectively.
Current wording
Our general and administrative expenses for the three months ended June 30, 2024 and 2023 were $3.3 million and $3.2 million, respectively. Total general and administrative expenses for the six months ended June 30, 2024 and 2023 were $7.1 million and $6.5 million, respectively.
Previous wording
Comparison of the Three-Month Periods Ended March 31, 2024 and 2023
Current wording
Comparison of the Three Months Ended June 30, 2024 and 2023
Previous wording
Revenues totaled $0.1 million for each of the three months ended March 31, 2024 and 2023, consisting of royalty revenue from our royalty agreement with LEO Pharma.
Current wording
Revenues totaled $0.2 million and $0.1 million for the three months ended June 30, 2024 and 2023, respectively, consisting of royalty revenue from our royalty agreement with LEO Pharma.
Previous wording
Our general and administrative expenses for the three months ended March 31, 2024 were $3.8 million, representing an increase of $0.5 million, or 16.4%, compared to $3.2 million for the three months ended March 31, 2023. The increase was primarily driven by $0.3 million of consulting and professional fees and $0.2 million of employee-related expenses.
Current wording
Our general and administrative expenses for the three months ended June 30, 2024 were $3.3 million, representing an increase of $0.1 million, or 2.1%, compared to $3.2 million for the three months ended June 30, 2023. The increase was primarily driven by consulting and professional fees.
Previous wording
Other income, net for the three months ended March 31, 2024 and March 31, 2023 was $1.1 million and $0.3 million, respectively, and related to interest income earned on cash, cash equivalents, and marketable securities.
Current wording
Other income, net for the three months ended June 30, 2024 and 2023 was $1.0 million and $0.3 million, respectively, and was related to interest income earned on cash, cash equivalents and marketable securities.
Previous wording
Due to the sale of the MST Franchise during the first quarter of 2022, in accordance with ASC 205, Discontinued Operations, we have classified the results of the MST Franchise as discontinued operations in our consolidated statements of operations for all periods presented. See "Note 4 - Discontinued Operations" in the unaudited interim condensed consolidated financial statements.
Current wording
Due to the sale of the MST Franchise during the first quarter of 2022, in accordance with ASC 205, Discontinued Operations, we have classified the results of the MST Franchise as discontinued operations in our consolidated statements of operations for all periods presented. See "Note 4 - Discontinued Operations" in the accompanying unaudited interim condensed consolidated financial statements.
Previous wording
Since the sale of the MST Franchise, we have not generated any revenue from product sales. In addition, 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 commercialize such products. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. See the section titled “Risk Factors” in our most recent Annual Report on Form 10-K, as may be updated by this Quarterly Report on Form 10-Q, for additional risks associated with our substantial capital requirements.
Current wording
Since the sale of the MST Franchise in January 2022, we have not generated any revenue from product sales. In addition, 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 commercialize such products. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. See the section titled “Risk Factors” in our most recent Annual Report on Form 10-K for additional risks associated with our substantial capital requirements.
Previous wording
As of March 31, 2024, we had cash, cash equivalents, restricted cash and marketable securities of $86.0 million and an accumulated deficit of $697.6 million. We had no outstanding debt as of March 31, 2024. For the three months ended March 31, 2024, we incurred a net loss of $6.2 million and used $8.0 million of cash in operations. Based on our current operating plan, we believe our existing cash, cash equivalents, restricted cash and marketable securities are sufficient to fund our operating and capital expenditure requirements for a period of at least 12 months from the date of issuance of the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
As of June 30, 2024, we had cash, cash equivalents, restricted cash and marketable securities of $78.1 million and an accumulated deficit of $707.0 million. We had no outstanding debt as of June 30, 2024. For the six months ended June 30, 2024, we incurred a net loss of $15.7 million and used $16.5 million of cash in operations. Based on our current operating plan, we believe our existing cash, cash equivalents, restricted cash and marketable securities are sufficient to fund our operating and capital expenditure requirements for a period of at least 12 months from the date of issuance of the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
Our sources of funding for both the three months ended March 31, 2024 and 2023 are further evaluated in the cash flow section below. We have no current indebtedness and no ongoing material financial commitments that may affect our liquidity over the next five years.
Current wording
Our sources of funding for both the six months ended June 30, 2024 and 2023 are further evaluated in the cash flow section below. Other than our obligations pursuant to the Tay License Agreements, we have no ongoing material financial commitments that may affect our liquidity over the next five years. See the section titled “—Development and License Agreements—Agreements with Tay” for additional discussion of our financial obligations under the Tay License Agreements.
Previous wording
In order to complete the development of VYN201 and VYN202, or any future product candidates, we will require substantial additional capital. Accordingly, we expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation, voting or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our common stock, make certain investments or engage in merger, consolidation, licensing, or asset sale transactions. If we raise capital through collaborations, partnerships, and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all.
Current wording
In order to complete the development of VYN201 and VYN202 (including making milestone payments pursuant to the VYN201 License Agreement and VYN202 License Agreement), or any future product candidates, we will require substantial additional capital. Accordingly, we expect to seek to raise any necessary additional capital through private or public equity or debt financings, loans or other capital sources, which could include income from collaborations, partnerships or other marketing, distribution, licensing or other strategic arrangements with third parties, or from grants. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation, voting or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our common stock, make certain investments or engage in merger, consolidation, licensing, or asset sale transactions. If we raise capital through collaborations, partnerships, and other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all.
Previous wording
In addition, the amount of proceeds we may be able to raise pursuant to our shelf registration statement on Form S-3 is 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 rules, 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 common stock using our Form S-3 until such time as our public float exceeds $75.0 million. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from recent bank failures, other general macroeconomic conditions and otherwise. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research or product development efforts. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Current wording
In addition, the amount of proceeds we may be able to raise pursuant to our currently effective shelf registration statement on Form S-3 is 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 rules, 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 common stock using our Form S-3 until such time as our public float exceeds $75.0 million.
Previous wording
The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:
Previous wording
During the three months ended March 31, 2024, net cash used in operating activities was $8.0 million and primarily reflected our net loss of$6.2 million adjusted for non-cash stock-based compensation expense of $1.0 million, partially offset by the amortization of premium or discount on marketable securities of $0.8 million. The remainder of the cash used in operations was driven by the net changes in operating assets and liabilities.
Current wording
During the six months ended June 30, 2024, net cash used in operating activities was $16.5 million and primarily reflected our net loss of$15.7 million adjusted for non-cash stock-based compensation expense of $1.9 million, partially offset by the amortization of premium on marketable securities of $1.4 million. The remainder of the cash used in operations was driven by changes in operating assets and liabilities.
Previous wording
During the three months ended March 31, 2023, net cash used in operating activities was$5.5 million and primarily reflected our net loss of $5.6 million adjusted for the $0.9 million of non-cash stock-based compensation. The remainder of the cash used in operations was driven by the net change in operating assets and liabilities.
Current wording
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 $1.7 million of non-cash stock-based compensation expense. The remainder of the cash used in operations was driven by changes in operating assets and liabilities.
Previous wording
During the three months ended March 31, 2024, net cash used in investing activities was $3.6 million and consisted of $15.2 million paid for the purchase of marketable securities, partially offset by $11.6 million of proceeds received from the sale and maturity of marketable securities.
Current wording
During the six months ended June 30, 2024, net cash provided by investing activities was $15.5 million and consisted of $37.5 million of proceeds received from the sale and maturity of marketable securities, partially offset by $22.0 million paid for the purchase of marketable securities.
Previous wording
During the three months ended March 31, 2023, net cash provided by investing activities was $5.0 million which represented the deferred payment received from Journey in January 2023.
Current wording
During the six months ended June 30, 2023, net cash provided by investing activities of $5.0 million consisted of deferred payment received from Journey in January 2023.
Previous wording
During the three months ended March 31, 2024, net cash used in financing activities was immaterial.
Current wording
During the six months ended June 30, 2024, net cash used in financing activities was immaterial.
Previous wording
During the three months ended March 31, 2023, net cash used in financing activities was $0.2 million and consisted 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.
Current wording
During the six months ended June 30, 2023, net cash used in financing activities was $0.2 million and consisted of $0.4 million paid for the redemption of convertible preferred stock, partially offset by $0.2 million of proceeds received from the issuance of common stock under our at-the-market equity facility.
Previous wording
Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 1, 2024. There have been no material changes to these policies for the three months ended March 31, 2024.
Current wording
Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 1, 2024. There have been no material changes to these policies for the six months ended June 30, 2024, except as set forth below.
Previous wording
See “Newly issued and recently adopted accounting pronouncements (q)” 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.
Current wording
See “Newly issued and recently adopted accounting pronouncements (p)” 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.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Revenues totaled $0.3 million and $0.2 million for the six months ended June 30, 2024 and 2023, respectively, consisting of royalty revenue from our royalty agreement with LEO Pharma.
Current report — wording carried from elsewhere
Other income, net for the six months ended June 30, 2024 and 2023 was $2.1 million and $0.5 million, respectively, and was related to interest income earned on cash, cash equivalents and marketable securities.
Current report — wording carried from elsewhere
Loss from Discontinued Operations, Net of Income Taxes
Current report — wording carried from elsewhere
Due to the sale of the MST Franchise during the first quarter of 2022, in accordance with ASC 205, Discontinued Operations, we have classified the results of the MST Franchise as discontinued operations in our consolidated statements of operations for all periods presented. See "Note 4 - Discontinued Operations" in the accompanying unaudited interim condensed consolidated financial statements.
Current report — wording carried from elsewhere
Our ability to raise additional capital may also be adversely impacted by global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from bank failures, other general macroeconomic conditions and otherwise. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations or financial condition, including requiring us to delay, reduce or curtail our research or product development efforts. We cannot provide assurance that we will ever generate positive cash flow from operating activities.
Current report — wording carried from elsewhere
Net Cash Provided by Investing Activities