VYNE Therapeutics Inc.

Previous 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.

Current wording

We are developing VYN202, an oral, small molecule BD2-selective BET inhibitor. VYN202 has been designed to achieve potential class-leading potency and selectivity 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 initiated a Phase 1b trial in February 2025 in adult subjects with moderate-to-severe plaque psoriasis.

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, 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.

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, 2025, we had an accumulated deficit of $745.5 million. We recorded net losses of $14.4 million and $15.7 million for the six months ended June 30, 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, 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.”

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, such as tariffs, 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

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.

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, 2025 and 2024, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.1 million and $0.2 million, respectively. For both the six months ended June 30, 2025 and 2024, royalty revenues from LEO Pharma in connection with sales of Finacea were $0.3 million.

Previous wording

Other income, net primarily consists of interest earned on our cash, cash equivalents and marketable securities.

Current wording

Other income, net primarily consists of amounts recognized for the settlement of the ERTC and interest earned on our cash, cash equivalents, and marketable securities.

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, 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.

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. Other than the federal NOLs expected to expire unutilized as noted below, there were no significant updates through June 30, 2025.

Previous wording

NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of our company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. State NOLs and tax credit carryforwards may be subject to similar limitations under state laws. We have not completed a Section 382 study through March 31, 2025; however, we may have experienced ownership changes in the past, including in connection with the 2020 merger between Menlo Therapeutics (our predecessor company) and Foamix Pharmaceuticals Ltd. Our private placement transaction in November 2023 also likely resulted in an ownership change for purposes of Section 382. We may experience ownership changes in the futureas a result of the subsequent shifts in our stock ownership, some of which may be outside of our control. As a result, even if we earn net taxable income, our ability to use the NOL and tax credit carryforwards may be materially limited, which could harm our future operating results by effectively increasing our future tax obligations.

Current wording

NOLs and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of our company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. State NOLs and tax credit carryforwards may be subject to similar limitations under state laws. We have not completed a Section 382 study through June 30, 2025; however, we have completed a 382 study through March 31, 2025, and we noted that the Company experienced ownership changes in connection with the 2020 merger between Menlo Therapeutics (our predecessor company) and Foamix Pharmaceuticals Ltd. and with our private placement transaction in November 2023. As a result of the ownership changes, $40.2 million of federal NOLs are expected to expire unutilized. We may experience ownership changes in the future as a result of the subsequent shifts in our stock ownership, some of which may be outside of our control. As a result, even if we earn net taxable income, our ability to use the NOL and tax credit carryforwards may be materially limited, which could harm our future operating results by effectively increasing our future tax obligations.

Previous 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.

Current wording

Revenues totaled $0.1 million and $0.2 million for the three months ended June 30, 2025 and 2024, 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, 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 wording

Our general and administrative expenses for the three months ended June 30, 2025 were $2.7 million, representing a decrease of approximately $0.6 million, or 17.0%, compared to $3.3 million for the three months ended June 30, 2024. The decrease was primarily driven by a decrease in employee related expenses of $0.3 million and consulting and professional fees of $0.2 million.

Previous 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.

Current wording

Our research and development expenses for both the six months ended June 30, 2025 and 2024 were $11.0 million, representing a decrease of $10.0 thousand, or 0.1%. The decrease was primarily driven by decreased expenses of $1.4 million for repibresib, partially offset by increased expenses of $1.3 million for VYN202. The decrease in expenses for repibresib was primarily driven by the timing of expenses for the Phase 2b trial in nonsegmental vitiligo, including a $1.0 million milestone payment due to Tay under the License Agreement upon the initiation of the trial in June 2024. The $1.3 million increase in expenses for VYN202 was primarily associated with costs incurred in connection with our Phase 1b trial evaluating VYN202 in moderate-to-severe plaque psoriasis subjects.

Previous 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.

Current wording

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $39.6 million and an accumulated deficit of $745.5 million. We had no outstanding debt as of June 30, 2025. For the six months ended June 30, 2025, we incurred a net loss of $14.4 million and used $22.3 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 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.

Current wording

Our sources of funding for both the six months ended June 30, 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

We do not expect to generate any product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if, that will occur. Until we can generate significant revenue from product sales, if ever, we will continue to require substantial additional capital to develop our current and future product candidates and fund operations for the foreseeable future. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and studies and initiate clinical trials. We are subject to all the risks incident in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business.

Current wording

We do not expect to generate any product revenue unless and until we obtain regulatory approval of and commercialize any of our product candidates, and we do not know when, or if, that will occur. Until we can generate significant revenue from product sales, if ever, we will continue to require substantial additional capital to develop our current and future product candidates and fund operations for the foreseeable future. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, research and development costs to support our product candidate pipeline, legal and other regulatory expenses and general overhead costs. We are subject to all the risks incident to the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business.

Previous 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.

Current wording

In order to complete the development of VYN202 (including making milestone payments pursuant to the VYN202 License Agreement), or any future product candidates, we will require substantial additional capital. Accordingly, we expect to review our strategy and pipeline, 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

•the scope, timing, progress, results, and costs of researching and developing repibresib 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 VYN202 and conducting clinical trials, including larger and later-stage trials;

Previous wording

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 wording

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” as supplemented by the risk factors identified in Item 1A. of this Quarterly Report on Form 10-Q

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024:

Previous 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.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities was $22.3 million and primarily reflected our net loss of $14.4 million adjusted for non-cash stock-based compensation expense of $1.3 million, partially offset by the amortization of premium on marketable securities of $0.5 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, 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.

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 the changes in operating assets and liabilities.

Previous 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.

Current wording

During the six months ended June 30, 2025, net cash provided by investing activities was $24.5 million and consisted of $47.9 million of proceeds received from the sale and maturity of marketable securities, partially offset by $23.3 million paid for the purchase of marketable securities.

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, 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.

Current wording

During the six months ended June 30, 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.

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

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.

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 six months ended June 30, 2025.

Previous 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.

Current wording

See “Newly issued and recently adopted accounting pronouncements (q)” 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.