Yarrow Bioscience, Inc.
For the period ended Mar 31, 2025. Filed May 8, 2025.
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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.
Mar 31, 2025 · Filed May 8, 2025
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 2024-09-30; filed 2024-11-07.
0001628280-24-046244
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001628280-25-023740
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 104 previous paragraphs and 104 current paragraphs.
48 unchanged; 36 reworded; 20 added; 15 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (20)
Current report
Agreements with Tay Therapeutics
Current report
Evaluation and Option Agreement
Current report
In April 2021, we entered into an Evaluation and Option Agreement (the “Option Agreement”) with Tay. Pursuant to the Option Agreement, Tay granted us an exclusive option to obtain certain exclusive worldwide rights to research, develop and commercialize products containing Tay’s BET inhibitor compounds for the treatment of any disease, disorder or condition in humans. Pursuant to the Option Agreement, we agreed to use commercially reasonable efforts to develop and manufacture a product with a pan-BD BET inhibitor as its active ingredient, and Tay agreed to provide a mutually agreed data package and select a new chemical entity development candidate from its Oral BETi Compounds. We paid a $1.0 million non-refundable cash payment to Tay upon execution of the Option Agreement.
Current report
Under the terms of the Option Agreement, our option (the “Oral Option”) with respect to the Oral BETi Compounds was to expire on June 30, 2022, but in June 2022, we and Tay entered into a letter agreement to extend the option term to February 28, 2023. In February 2023, we and Tay entered into an additional letter agreement pursuant to which the option term was further extended to April 30, 2023. We exercised the Oral Option for VYN202 on April 28, 2023.
Current report
Pursuant to the Repibresib License Agreement, we were granted a sublicense under certain intellectual property which was licensed to Tay by the University of Dundee (“Dundee”) pursuant to a certain license agreement between Tay and Dundee effective as of July 24, 2020 and amended and restated on October 8, 2021 (the “Head License”). On February 13, 2025, Tay and Dundee entered into an agreement for the termination of the Head License and assignment of such intellectual property from Dundee to Tay. Upon termination of the Head License, the Repibresib License Agreement was accordingly amended to reflect the assignment of the intellectual property to Tay upon its payment in full to Dundee. The amendment did not change any of Tay’s or our rights or obligations under the Repibresib License Agreement, except that any obligations owed by us to Dundee with respect to repibresib are now owed to Tay.
Current report
Segment Results
Current report
As of December 31, 2024, we adopted ASU 2023-07, Segment Reporting (Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company has identified and reports as one operating segment. See "Note 11—Segment Information" for further details.
Current report
Revenues
Current report
Research and Development Expenses
Current report
•expenses and milestone payments incurred under licensing agreements;
Current report
General and Administrative Expenses
Current report
Our general and administrative expenses for the three months ended March 31, 2025 and 2024 were $3.3 million and $3.8 million, respectively.
Current report
Revenues
Current report
Research and Development Expenses
Current report
General and Administrative Expenses
Current report
Our general and administrative expenses for the three months ended March 31, 2025 were $3.3 million, representing a decrease of approximately $0.5 million, or 13.1%, compared to $3.8 million for the three months ended March 31, 2024. The decrease was primarily driven by a decrease in consulting and professional fees of $0.3 million and a decrease in employee related expenses of $0.2 million.
Current report
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
Current report
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.
Current report
For more information as to the risks associated with our future funding needs, see the section of our most recent Annual Report on Form 10-K captioned “Risk Factors.”
Current report
During the three months ended March 31, 2025, net cash used in financing activities was$0.1 million and consisted of withholdings related to the exercise of options and issuance of stock for stock-based compensation arrangements.
Removed paragraphs (15)
Previous report
Agreements with Tay
Previous report
•expenses incurred under licensing agreements;
Previous report
Our general and administrative expenses for both the three months ended September 30, 2024 and 2023 were $3.0 million. Total general and administrative expenses for the nine months ended September 30, 2024 and 2023 were $10.0 million and $9.5 million, respectively.
Previous report
Percentage not meaningful.
Previous report
Our general and administrative expenses for both the three months ended September 30, 2024 and 2023 were approximately $3.0 million, representing an immaterial change year-over-year.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Previous report
Our research and development expenses for the nine months ended September 30, 2024 were $21.3 million, representing an increase of $8.0 million, or 60.1%, compared to $13.3 million for the nine months ended September 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 $8.5 million, which included a $1.0 million milestone payment due to Tay. Additionally, employee-related expenses increased by $0.7 million following the hiring of additional research and development personnel. These increases were partially offset by a decrease in expenses associated with VYN202 of $1.2 million, primarily driven by lower amounts owed to Tay under the VYN202 License Agreement, partially offset by an increase in clinical trial expenses. During the nine months ended September 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 SAD/MAD trial of VYN202 in June 2024.
Previous report
Our general and administrative expenses for the nine months ended September 30, 2024 were $10.0 million, representing an increase of $0.5 million, or 5.6%, compared to $9.5 million for the nine months ended September 30, 2023. The increase was primarily related to $0.4 million of consulting and professional fees and $0.1 million of employee-related expenses.
Previous report
Other Income, Net
Previous report
A change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. In addition, we based projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.
Previous report
During the nine months ended September 30, 2023, net cash provided by investing activities of $5.0 million consisted of the deferred payment received from Journey in January 2023.
Previous report
Effective 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.
Previous 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.
Previous 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.
Previous 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.
Reworded paragraphs (36)
Previous 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.
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.
Previous wording
In August 2021, we entered into a transaction with 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 data generated to date, we have chosen to focus our initial efforts for this platform on select therapeutic areas in immuno-inflammatory disease.
Current wording
We have exclusive worldwide rights to research, develop and commercialize products containing small molecule BET inhibitors for the treatment of any disease, disorder or condition in humans, which we licensed from Tay Therapeutics Ltd., formerly known as In4Derm Ltd ("Tay"). BET proteins are epigenetic enablers of transcription that regulate the expression of specific genes. Each BET protein consists of two bromodomains (“BD1” and “BD2”) and one end terminal (“ET”) domain. Through our transaction with Tay, we obtained access to a library of new small molecule BET inhibitor compounds including those that inhibit both BD1 and BD2 (“pan-BD” BET inhibitor) and that selectively inhibit BD2 (“BD2-selective” BET inhibitor). Through our access to this library of new BET inhibitors, which comprise our InhiBET™ portfolio, we plan to develop product candidates for a diverse set of therapeutic indications. We have chosen to initially focus our development efforts with these molecules on immune-mediated inflammatory diseases, which are not being targeted by current BET inhibitors in development.
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 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 to 50 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 repibresib gel (also known as VYN201), a topically administered, small molecule 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, repibresib produced consistent reductions in pro-inflammatory and disease-related biomarkers and improvements in disease severity across a variety of inflammatory and fibrotic preclinical models. In November 2022, we initiated a Phase 1 clinical trial evaluating a topical formulation of repibresib first in healthy volunteers (Phase 1a) and then in subjects (Phase 1b) with nonsegmental vitiligo (NSV), an immune-mediated condition that has a high unmet need and only one approved therapy. In the first quarter of 2023, we announced positive preliminary safety and tolerability, including hematology data, and predicted pharmacokinetic results (minimal systemic exposures) from the Phase 1a portion of the trial. We initiated the Phase 1b portion of the trial in NSV subjects in January 2023 and announced positive data from the Phase 1b trial in October 2023. We showed significant clinical improvements in vitiligo involving the face, which has the greatest psychosocial impact on patients, after 16 weeks of treatment which was assessed using the Facial-Vitiligo Area Scoring Index ("F-VASI"), a measure of severity of the condition on the face. We initiated a Phase 2b trial with repibresib gel in NSV subjects in June 2024. The Phase 2b trial is a randomized, double-blind, vehicle-controlled trial evaluating the efficacy, safety and pharmacokinetics of once-daily repibresib gel in NSV subjects in three dose cohorts (1%, 2% or 3% concentrations) compared to vehicle over 24 weeks, followed by a 28-week active treatment extension with subjects on vehicle crossing over to active doses. We enrolled approximately 45 patients in each arm and expect 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 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 announced positive data from the SAD portion of the trial in September 2024. We expect to report top-line results from the MAD portion of the trial in the fourth quarter of 2024. 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.
Current wording
Our second program is VYN202, an oral, small molecule BD2-selective BET inhibitor. Prior studies have shown that while BD1 modulates cell-cycling and homeostatic functions, BD2 regulates gene expression of pro-inflammatory mediators in cells. VYN202 has been designed to achieve potential class-leading selectivity and potency for BD2 vs. BD1. By maximizing BD2 selectivity, we believe VYN202 has the potential to be a potent oral immunomodulator option for both acute control and chronic management of immune-mediated inflammatory conditions, without the hematologic and gastrointestinal adverse effects associated with earlier generation systemic pan-BD BET inhibitors that were being developed in oncologic settings. We have completed a Phase 1a single ascending dose/multiple ascending dose ("SAD/MAD") trial of VYN202 in healthy volunteers and announced positive data from this trial in December 2024. We observed that VYN202 had a favorable safety and tolerability profile with no drug-related adverse events historically associated with earlier generation, less BD2-selective BET inhibitors. VYN202 also demonstrated robust pharmacodynamic activity including evidence of target engagement and inhibition of several inflammatory biomarkers relevant to immune-mediated disorders in ex vivo stimulation assays. We initiated a Phase 1b trial in February 2025 in adult subjects with moderate-to-severe plaque psoriasis. The Phase 1b trial is a randomized, double-blind, placebo-controlled trial of once daily treatment with VYN202 capsules dosed for 12 weeks, to primarily evaluate the safety of VYN202 across four cohorts (0.25 mg, 0.5 mg, 1 mg doses and placebo), with secondary objectives that include pharmacokinetics and preliminary evidence of efficacy via endpoints evaluating improvements from baseline in PASI scores. The trial also includes a 4-week safety follow-up visit after completion of the 12-week dosing period. We anticipate that the data from the Phase 1b trial in plaque psoriasis subjects will provide key insights into VYN202's potential activity across a range of immune-mediated diseases. In May 2025, the FDA informed us that it placed a clinical hold on our Phase 1b trial following a recent observation of testicular toxicity in dogs from a non-clinical toxicology study with VYN202. We have suspended all screening, enrollment and patient dosing in the Phase 1b trial of VYN202 and intend to work diligently with the FDA to expeditiously resolve the clinical hold. To date, there have been no serious adverse events observed in subjects that have been enrolled in the Phase 1b trial.
Previous wording
We intend to advance our product candidates through clinical development toward regulatory approval. As part of our strategy to maximize the value of our pipeline, we may partner with larger pharmaceutical companies to expand and accelerate the development of our programs and explore therapeutic areas outside of our core focus in immunology.
Current wording
We intend to advance our product candidates through further phases of clinical development toward regulatory approval. As part of our strategy to maximize the value of our pipeline, we may partner with larger pharmaceutical companies to expand and accelerate the development of our programs and explore other indications and therapeutic areas outside of our core focus in immune-mediated diseases.
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 September 30, 2024, we had an accumulated deficit of $719.1 million. We recorded net losses of $27.8 million and $22.3 million for the nine months ended September 30, 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 March 31, 2025, we had an accumulated deficit of $739.8 million. We recorded net losses of $8.6 million and $6.2 million for the three months ended March 31, 2025 and 2024, respectively.
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, 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.”
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, public health pandemics, global trade policy volatility 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
License for Locally Administered Pan-BD BET Inhibitor Program (VYN201)
Current wording
License for Locally Administered Pan-BD BET Inhibitor Program (Repibresib)
Previous wording
We are required to use commercially reasonable efforts to develop and, if approved, commercialize such products. Pursuant to the VYN201 License Agreement, a joint development committee consisting of one representative from each party reviews the progress of the development plan for the licensed products. Pursuant to the VYN201 License Agreement, we may develop a product that contains or incorporates a specific BET inhibitor, whether alone or in combination with other active ingredients, in any form, formulation, presentation, or dosage, and for any mode of administration.
Current wording
In August 2021, we exercised our option with respect to the repibresib program and entered into a license agreement (the "Repibresib License Agreement") granting us a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s pan-BD BET inhibitor 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. We are required to use commercially reasonable efforts to develop and, if approved, commercialize such products. Pursuant to the Repibresib License Agreement, a joint development committee consisting of one representative from each party reviews the progress of the development plan for the licensed products. Pursuant to the Repibresib License Agreement, we may develop a product that contains or incorporates a specific BET inhibitor, whether alone or in combination with other active ingredients, in any form, formulation, presentation, or dosage, and for any mode of administration.
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 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 September 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.
Current wording
We made a $0.5 million cash payment to Tay in 2021 in connection with entering into the Repibresib License Agreement. Pursuant to the Repibresib 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, of which $1.8 million has been paid or accrued through March 31, 2025. 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 Repibresib 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 of licensed products under the Repibresib License Agreement and the VYN202 License Agreement, 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" 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.
Current 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.
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, of which $1.3 million has been paid or accrued through September 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.
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 March 31, 2025. 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 of licensed products under the VYN202 License Agreement and the Repibresib License Agreement, 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. For both the three months ended September 30, 2024 and 2023, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.1 million. For the nine months ended September 30, 2024 and 2023, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.4 million and $0.3 million, respectively.
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 March 31, 2025 and 2024, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.2 million and $0.1 million, respectively.
Previous wording
Our research and development expenses primarily relate to the development of VYN201 and VYN202. We charge all research and development expenses to operations as they are incurred.
Current wording
Our research and development expenses primarily relate to the development of repibresib and VYN202. We charge all research and development expenses to operations as they are incurred.
Previous wording
Our total research and development expenses for the three months ended September 30, 2024 and 2023 were $10.2 million and $3.3 million, respectively. Total research and development expenses for the nine months ended September 30, 2024 and 2023 were $21.3 million and $13.3 million, respectively.
Current wording
Our total research and development expenses for the three months ended March 31, 2025 and 2024 were $6.1 million and $3.7 million, respectively.
Previous wording
•facility, insurance, information technology and travel expenses.
Current wording
•facility, insurance, information technology, travel and depreciation expenses.
Previous wording
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, 2023, we had federal and state net operating loss carryforwards of $331.1 million and $41.7 million, respectively, of which $44.3 million will begin to expire in 2031 for federal and $21.3 million will begin to expire in 2040 for state purposes. As of December 31, 2023, we had federal research and development tax credit carryforwards of $6.9 million, which will begin to expire in 2031. We have no state research and development tax credit carryforwards. As of December 31, 2023, we had $307.2 million in federal and state NOLs with no limited period of use. There were no significant updates through September 30, 2024.
Current wording
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, 2024, we had federal and state net operating loss carryforwards of $343.4 million and $53.6 million, respectively, of which $44.3 million will begin to expire in 2031 for federal and $53.6 million will begin to expire in 2040 for state purposes. As of December 31, 2024, we had federal research and development tax credit carryforwards of $7.2 million, which will begin to expire in 2031. We have no state research and development tax credit carryforwards. As of December 31, 2024, we had $299.1 million in federal and state NOLs with no limited period of use. There were no significant updates through March 31, 2025.
Previous wording
Revenues totaled $0.1 million for both the three months ended September 30, 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 March 31, 2025 and 2024, respectively, consisting of royalty revenue from our royalty agreement with LEO Pharma.
Previous wording
Our research and development expenses for the three months ended September 30, 2024 were $10.2 million, representing an increase of $6.9 million, or 208.9%, compared to $3.3 million for the three months ended September 30, 2023. The increase was primarily driven by increased expenses associated with our ongoing Phase 2b trial of VYN201 in subjects with nonsegmental vitiligo and our ongoing Phase 1a SAD/MAD trial of VYN202 of $5.0 million and $1.7 million, respectively. Both trials were initiated in June 2024. In addition, employee-related expenses increased by $0.3 million following the hiring of additional research and development personnel.
Current wording
Our research and development expenses for the three months ended March 31, 2025 were $6.1 million, representing an increase of $2.4 million, or 65.2%, compared to $3.7 million for the three months ended March 31, 2024. The increase was primarily driven by increased expenses of $1.5 million for VYN202, increased expenses of $0.7 million for repibresib, and an increase in employee-related expenses of $0.3 million following the hiring of additional research and development personnel. The $1.5 million increase in expenses for VYN202 was primarily associated with costs incurred in connection with our Phase 1b trial, and the $0.7 million increase in expenses for repibresib was primarily related to clinical trial costs incurred in connection with our ongoing Phase 2b trial of repibresib in subjects with NSV which was initiated in June 2024.
Previous wording
Other income, net for the three months ended September 30, 2024 and 2023 was $0.9 million and $0.2 million, respectively, and was related to interest income earned on cash, cash equivalents and marketable securities.
Current wording
Other income, net for the three months ended March 31, 2025 and 2024 was $0.6 million and $1.1 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 accompanying 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 unaudited condensed consolidated statements of operations and comprehensive loss for all periods presented. See "Note 4 - Discontinued Operations" in the accompanying unaudited condensed consolidated financial statements.
Previous wording
As of September 30, 2024, we had cash, cash equivalents, restricted cash and marketable securities of $70.2 million and an accumulated deficit of $719.1 million. We had no outstanding debt as of September 30, 2024. For the nine months ended September 30, 2024, we incurred a net loss of $27.8 million and used $25.0 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 March 31, 2025, we had cash, cash equivalents and marketable securities of $50.3 million and an accumulated deficit of $739.8 million. We had no outstanding debt as of March 31, 2025. For the three months ended March 31, 2025, we incurred a net loss of $8.6 million and used $11.5 million of cash in operations. Based on our current operating plan, we believe our existing cash, cash equivalents 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 condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
Our sources of funding for both the nine months ended September 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.
Current wording
Our sources of funding for both the three months ended March 31, 2025 and 2024 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 Therapeutics” for additional discussion of our financial obligations under the Tay License Agreements.
Previous 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.
Current wording
In order to complete the development of repibresib and VYN202 (including making milestone payments pursuant to the Repibresib 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 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.
Current 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.
Previous wording
•the scope, timing, progress, results, and costs of researching and developing VYN201 and VYN202 and conducting clinical trials, including larger and later-stage trials;
Current wording
•the scope, timing, progress, results, and costs of researching and developing repibresib and VYN202 and conducting clinical trials, including larger and later-stage trials;
Previous wording
The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:
Previous wording
During the nine months ended September 30, 2024, net cash used in operating activities was $25.0 million and primarily reflected our net loss of $27.8 million adjusted for non-cash stock-based compensation expense of $2.6 million, partially offset by the amortization of premium on marketable securities of $1.9 million. The remainder of the cash used in operations was driven by changes in operating assets and liabilities.
Current wording
During the three months ended March 31, 2025, net cash used in operating activities was $11.5 million and primarily reflected our net loss of $8.6 million adjusted for non-cash stock-based compensation expense of $0.8 million, partially offset by the amortization of premium on marketable securities of $0.3 million. The remainder of the cash used in operations was driven by changes in operating assets and liabilities.
Previous wording
During the nine months ended September 30, 2023, net cash used in operating activities was $20.2 million and primarily reflected our net loss of $22.3 million adjusted for the $2.6 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.
Current 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 changes in operating assets and liabilities.
Previous wording
Net Cash Provided by Investing Activities
Current wording
Net Cash Provided by (Used In) Investing Activities
Previous wording
During the nine months ended September 30, 2024, net cash provided by investing activities was $10.6 million and consisted of $61.1 million of proceeds received from the sale and maturity of marketable securities, partially offset by $50.5 million paid for the purchase of marketable securities.
Current wording
During the three months ended March 31, 2025, net cash provided by investing activities was $19.8 million and consisted of $33.6 million of proceeds received from the sale and maturity of marketable securities, partially offset by $13.8 million paid for the purchase of marketable securities.
Previous wording
During the nine months ended September 30, 2023, net cash used in financing activities was $0.3 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.
Current 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.
Previous wording
During the nine months ended September 30, 2024, net cash used in financing activities was immaterial.
Current wording
During the three months ended March 31, 2024, net cash used in financing activities was immaterial.
Previous wording
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.
Current wording
Our unaudited 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.
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 nine months ended September 30, 2024, except as set forth below.
Current wording
Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 6, 2025. There have been no material changes to these policies for the three months ended March 31, 2025.
Previous 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.
Current wording
See “Newly issued and recently adopted accounting pronouncements (p)” in "Note 2 - Significant Accounting Policies” in the Notes to Unaudited 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 previous paragraphs (5)
Previous report — wording carried elsewhere
In August 2021, we exercised our option with respect to the VYN201 program and entered into a license agreement (the "VYN201 License Agreement") granting us a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s pan-BD BET inhibitor 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.
Previous report — wording carried elsewhere
Revenues totaled $0.4 million and $0.3 million for the nine months ended September 30, 2024 and 2023, respectively, consisting of royalty revenue from our royalty agreement with LEO Pharma.
Previous report — wording carried elsewhere
Other income, net for the nine months ended September 30, 2024 and 2023 was $3.1 million and $0.7 million, respectively, and was related to interest income earned on cash, cash equivalents and marketable securities.
Previous report — wording carried elsewhere
Loss from Discontinued Operations, Net of Income Taxes
Previous report — wording carried 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.