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Item 1. Business

2024-03-01 compared with 2023-03-14 · 216 added, 163 removed, 320 unchanged (54% of the section changed)

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

In August 2021, we entered into a transaction with Tay Therapeutics Ltd.

(formerly known as In4Derm Ltd., "Tay") providing us with exclusive worldwide rights to research, develop and commercialize products containing bromodomain and extra-terminal (“BET”) inhibitors for the treatment of any disease, disorder or condition in humans.

In August 2021, we entered into a transaction with Tay Therapeutics Ltd., formerly known as In4Derm Ltd.

("Tay"), providing us with exclusive worldwide rights to research, develop and commercialize products containing bromodomain and extra-terminal domain (“BET”) inhibitors for the treatment of any disease, disorder or condition in humans.

Through our access to this library of new chemical BET inhibitor compounds, we plan to develop product candidates for a diverse set of indications.

Based on preclinical data generated to date, we have chosen to focus our initial efforts for this platform on select therapeutic areas in immuno-inflammatory disease.

Our lead program is VYN201, a locally administered pan-BET inhibitor designed as a “soft” drug to address diseases involving multiple, diverse inflammatory cell signaling pathways while providing low systemic exposure.

To date, VYN201 has produced consistent reductions in pro-inflammatory and disease-related biomarkers, improvements in disease severity and a demonstrated local activity through several preclinical models.

We believe that these data suggest potential broad utility for VYN201 across multiple routes of administration.

In November 2022, we initiated a Phase 1a/b clinical trial evaluating a topical formulation of VYN201 for the treatment of nonsegmental vitiligo.

In February 2023, we announced positive preliminary safety 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 we expect topline results from this trial in mid-2023.

Our second program is VYN202, a BD2-selective oral small molecule BET inhibitor.

VYN202 is in preclinical development for the treatment of immuno-inflammatory indications, and is being designed to achieve class-leading selectivity (BD2 vs.

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.

Our lead program is VYN201, a locally administered pan-bromodomain ("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 1a/b clinical trial evaluating a VYN201 ointment 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 facial vitiligo area scoring index ("F-VASI") was observed in the 1% and 2% dose cohorts after 16 weeks of treatment.

We have initiated Phase 2b preparatory activities and expect to advance a gel formulation of VYN201 into a longer duration Phase 2b trial to evaluate optimal dosing and peak efficacy in patients with active or stable nonsegmental vitiligo in the second quarter of 2024 with top line results from the 24-week double-blind portion of the trial anticipated in mid-2025.

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, where the damaging effects of unrestricted inflammatory signaling activity is common.

We intend to actively evaluate and enter into strategic partnerships to advance our product candidates through the clinic toward commercialization, and may also partner with leading pharmaceutical companies to advance our molecules in therapeutic areas outside of our core focus in immunology.

We believe selectively entering into collaborations has the potential to expand and accelerate the development of our programs and maximize the value of our pipeline.

We submitted an Investigational New Drug application (“IND”) for VYN202 to the U.S.

Food & Drug Administration (the "FDA") in December 2023.

We recently received correspondence from the FDA informing us that our Phase 1a clinical trial is on hold and requesting that we submit data from an additional nonclinical study.

We recently completed the additional nonclinical study which achieved preliminary results consistent with our expectations at the outset of the study.

We plan to submit the requested nonclinical information to the FDA by the end of the first quarter of 2024 and, if cleared by the FDA, we expect to initiate our Phase 1a single ascending dose/multiple ascending dose trial in healthy volunteers in the second quarter of 2024, with top line results from the trial anticipated in the second half of 2024.

If the Phase 1a portion of the 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.

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.

BET Inhibition and Immuno-Inflammatory Disease

BET proteins are epigenetic enablers of transcription and regulate the expression of specific genes.

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 domain.

BD1 and BD2 enable chromatin remodeling and recruit transcription factors to facilitate gene transcriptions.

In certain cases, BET proteins activate oncogenes leading to increased cell proliferation and survival and an increase in solid tumors and hematologic malignancies.

In some cases, BET proteins can activate oncogenes, thereby leading to increased cell proliferation and survival and an increase in solid tumors and hematologic malignancies.

BET inhibitors have the potential to downregulate the expression of such oncogenes.

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In addition to impacting oncogenetics, BET proteins regulate the expression of many immunity-associated genes and pathways by directing the transcription of a wide range of pro-inflammatory and immunoregulatory genes, leading to increased cytokine expression that activate B cells and T cells and subsequent inflammatory processes.

Inhibiting BET proteins prevents the formation of complexes required to facilitate transcription, thereby inhibiting the subsequent translation of the corresponding protein.

Inhibiting BET proteins prevents the formation of complexes required to facilitate transcription, thereby suppressing the subsequent translation of the corresponding protein.

As such, BET inhibitors could present as an attractive, non-steroidal, therapeutic option for the treatment of immuno-inflammatory diseases.

Our Portfolio of Product Candidates

The following graphic depicts the inhibition of BET proteins and the subsequent disruption of inflammatory gene transcription and cytokine expression.

Our Platform and Product Candidates

InhiBET BET Inhibitor Platform

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See "—Development and License Agreements—Tay License Agreements." Utilizing our InhiBET platform and through our preclinical and clinical activities, we are evaluating the impact that BET inhibitor compounds have on regulating pro-inflammatory cytokines.

Based on this evaluation, we are targeting indications whose pathogenesis is linked to the proliferation of these specific cytokines, and we are developing formulations designed to maximize the anti-inflammatory effect of the drug while minimizing safety concerns.

We are targeting indications whose pathogenesis is linked to the proliferation of these specific cytokines.

We have selected development candidates and are developing formulations that are designed to maximize the anti-inflammatory effect of the drug while minimizing safety concerns.

Through our InhiBET development platform, we believe we can demonstrate the potential utility of these BET inhibitor compounds and develop therapies for a variety of immuno-inflammatory conditions.

The following chart provides an overview of our current pipeline of product candidates being developed using our InhiBET platform:

VYN201 - Locally Administered Pan-BD BET Inhibitor

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It is a first-in-class “soft” pan-BD BET inhibitor that is being developed to address diseases involving multiple, diverse inflammatory cell signaling pathways.

Our goal with the VYN201 program is to develop a therapy that delivers a potent, localized anti-inflammatory effect and is rapidly cleared through metabolic processes so as to avoid systemic absorption.

To date, we have conducted several preclinical studies which have demonstrated VYN201's anti-fibrotic and anti-inflammatory activity and the ability to significantly reduce the expression of certain cytokines relevant to certain autoimmune diseases.

Based on such data, we believe VYN201 has the potential to be highly versatile by serving as a locally acting therapy with low systemic exposure.

Phase 1a/b Clinical Trial in Nonsegmental Vitiligo

Our goal with the VYN201 program is to develop a therapy that delivers a potent, localized anti-inflammatory effect and can be rapidly cleared through the body's metabolic processes to avoid systemic absorption.

We have conducted several preclinical studies which have demonstrated VYN201's anti-fibrotic and anti-inflammatory activity and the ability to significantly reduce the expression of key cytokines relevant to certain autoimmune diseases, including in psoriasis, idiopathic pulmonary fibrosis and rheumatoid arthritis.

In October 2023, we announced positive data from our Phase 1b trial of VYN201 in subjects with nonsegmental vitiligo, which demonstrated clinical proof-of-concept for the use of this BET inhibitor to treat immuno-inflammatory disease.

Based on data generated to date, we believe VYN201 has the potential to be highly versatile by serving as a locally acting therapy with low systemic exposure.

Nonsegmental Vitiligo

Vitiligo is a chronic autoimmune depigmenting disorder of the skin, characterized by the loss of pigment-producing cells known as melanocytes.

Vitiligo is the most common depigmenting skin condition, with a prevalence estimated at 0.5-2% of the world population.

It is estimated that there are at least 1.9 million patients diagnosed with vitiligo in the United States, with the majority of patients (approximately 90%) suffering from nonsegmental vitiligo.

There is currently only one FDA-approved product for the treatment of nonsegmental vitiligo which includes a black box safety warning.

Based on preclinical data generated to date, we believe that VYN201 has the potential to offer a targeted, safe and more efficacious treatment option that lowers the disease recurrence rate and is effective for all skin tones and scar types.

In November 2022, we announced the commencement of a Phase 1a/b clinical trial evaluating VYN201 for the treatment of nonsegmental vitiligo.

The Phase 1a/b clinical trial is being conducted in U.S.-based clinical centers.

In the Phase 1a portion of the clinical trial, single ascending and multiple ascending doses of VYN201 were applied topically once daily to 30 healthy volunteers in five dose cohorts for two weeks with a one-week safety follow-up visit to evaluate the safety, tolerability and pharmacokinetics of VYN201.

Evaluated doses included VYN201 0.025%, 0.1%, 0.5%, 1.0% and 2.0% ointment strengths.

An article published in the scientific journal JAMA Dermatology in 2021 estimated that there were between 1.9 million and 2.8 million cases of vitiligo in the United States.

Approximately 90% of vitiligo cases are characterized as nonsegmental, in which white patches appear symmetrically on both sides of the body.

There is currently only one drug, OPZELURA (ruxolitinib) cream, approved by the FDA for the treatment of nonsegmental vitiligo, and that product includes a black box safety warning on its label.

Based on preclinical and clinical data generated to date, we believe that VYN201 has the potential to offer a targeted and efficacious treatment option that lowers the disease recurrence rate and can be effective for all skin tones with fewer side effects.

Phase 1 Clinical Trial

Based in part on the data we observed from the preclinical vitiligo model described below, we commenced a Phase 1 clinical trial evaluating VYN201 topical ointment for the treatment of nonsegmental vitiligo in November 2022.

The trial was conducted at U.S.-based clinical centers.

In the Phase 1a portion of the trial, single ascending and multiple ascending doses of VYN201 were applied topically once daily to 30 healthy volunteers in five dose cohorts for two weeks with a one-week safety follow-up visit to evaluate the safety, tolerability and pharmacokinetics of VYN201.

Evaluated doses included 0.025%, 0.1%, 0.5%, 1.0% and 2.0% concentrations.

There were no serious adverse events and no dose adjustments were required.

There were no clinically relevant treatment

emergent adverse events, abnormal clinical laboratory results or electrocardiogram findings.

There were no clinically relevant treatment emergent adverse events, abnormal clinical laboratory results or electrocardiogram findings.

No healthy volunteers withdrew from the trial for any reason.

Based on these results, we selected 0.5%, 1.0% and 2.0% ointment strengths for evaluation in the ongoing Phase 1b trial evaluating VYN201 in nonsegmental vitiligo patients.

In January 2023, we dosed the first vitiligo patient in the Phase 1b portion of the Phase 1 trial.

In the Phase 1b portion, up to 30 patients with a clinical diagnosis of nonsegmental vitiligo will receive VYN201 once daily for up to 16 weeks in three dose cohorts.

Exploratory efficacy of VYN201 in nonsegmental vitiligo patients will be assessed, including pharmacodynamic biomarkers and photography.

We expect topline results for the Phase 1b portion of the trial in mid-2023.

Vitiligo Preclinical Model

In March 2022, we announced positive preclinical data in an ex vivo skin model of vitiligo.

The objectives of this study were to evaluate the potential of VYN201 to (i) reduce Matrix Metalloproteinase-9 (“MMP-9”) secretion (reducing the secretion of MMP-9 allows for melanocyte stabilization and limits loss of melanocytes/depigmentation in vitiligo);

(ii) reduce soluble adhesion molecule, E-cadherin (soluble E-cadherin is a biomarker of melanocyte loss due to degradation of matrix-bound E-cadherin by MMP-9);

(iii) minimize the loss of melanocytes by assessing melanin pigment content and (iv) affect the expression of genes commonly associated with melanogenesis (melanin synthesis, melanosome maturation and transport).

In the preclinical model, VYN201 reduced the expression of key pro-inflammatory biomarkers relevant to the pathogenesis of vitiligo, and demonstrated marked reduction in melanocyte loss.

Specifically, VYN201 produced a dose dependent reduction in MMP-9 and soluble E-cadherin and substantially reduced the loss of melanin pigment in the basal layers of skin at the 0.1% and 1% concentrations.

We selected the 0.5%, 1.0% and 2.0% doses for further evaluation in the Phase 1b portion of the trial.

The Phase 1b portion was a 16-week open-label trial assessing the safety, tolerability and pharmacokinetics of once-daily VYN201 in 29 patients across the three dose cohorts.

Exploratory efficacy of VYN201 was also evaluated, including its ability to arrest the progression of skin depigmentation and support skin repigmentation in patients with active disease, through changes in F-VASI.

On October 30, 2023, we announced positive results from the Phase 1b portion of the trial.

Significant clinical improvement was observed in the 1.0% and 2.0% cohorts with rapid onset of action and a dose-dependent response.

Mean percentage reduction in F-VASI score from baseline after 16 weeks of treatment was 7.5%, 30.2% and 39.0% for the 0.5%, 1.0% and 2.0% cohorts, respectively.

VYN201 was generally well tolerated with no clinically relevant treatment emergent adverse events across all dose cohorts.

Following extensive testing, we plan to evaluate a once-daily gel formulation of VYN201 for our upcoming Phase 2b trial in patients with nonsegmental vitiligo, which we expect to initiate in the second quarter of 2024.

We believe the gel formulation may provide additional clinical benefits based on improved dermal penetration properties compared to the ointment that was evaluated in the Phase 1b trial.

The Phase 2b trial is anticipated to be a 24-week randomized, double-blinded, vehicle-controlled trial with a separate active treatment extension phase to 52 weeks.

Pending FDA acceptance of the protocol, the trial will evaluate three or four arms (including vehicle) of once-daily treatment with VYN201 gel, with each arm enrolling between 40 and 50 patients with active or stable nonsegmental vitiligo.

The primary efficacy endpoint of the trial will be an evaluation of the proportion of subjects achieving FVASI50 at week 24 compared to vehicle.

Based on our expected timing for initiating the trial, we anticipate top line results from the 24-week double-blind portion of the trial to be available in mid-2025.

Preclinical Studies for Multiple Indications

We conducted a preclinical study using an ex vivo skin model of vitiligo.

The objectives of this study were to evaluate the potential of VYN201 to:

• reduce Matrix Metalloproteinase-9 (“MMP-9”) secretion, which allows for melanocyte stabilization and limits loss of melanocytes/depigmentation in vitiligo;

• reduce the soluble adhesion molecule, E-cadherin, which is a biomarker of melanocyte loss due to degradation of matrix-bound E-cadherin by MMP-9;

• minimize the loss of melanocytes by assessing melanin pigment content;

• affect the expression of genes commonly associated with melanogenesis (melanin synthesis, melanosome maturation and transport).

In the preclinical study, VYN201 reduced the expression of key pro-inflammatory biomarkers relevant to the pathogenesis of vitiligo and resulted in marked reduction in melanocyte loss.

VYN201 produced a dose-dependent reduction in MMP-9 and soluble E-cadherin and substantially reduced the loss of melanin pigment in the basal layers of skin at the 0.1% and 1% concentrations.

In addition, VYN201 significantly upregulated WNT16, a member of the WNT family of genes.

The WNT signaling pathway is known to be dysregulated in vitiligo and is believed to play a key role in melanocyte regeneration.

Th17 Inflammation Preclinical Model

Data suggests that T helper 17 (Th17) cells play an important role in the pathogenesis of a diverse group of immune-mediated diseases, including psoriasis, rheumatoid arthritis, multiple sclerosis, inflammatory bowel disease, and asthma, among others.

In October 2021, we evaluated the impact of VYN201 on Th17 mediated inflammation in a well-established preclinical animal model and an ex vivo human tissue study.

In the animal model, depilated mice were topically dosed with imiquimod cream to induce a Th17 inflammation pathology over a 7-day induction phase.

A further 7-day treatment phase evaluated three doses of VYN201 (0.001%, 0.01% and 0.1% concentrations) compared to a class 1 super-potent glucocorticosteroid product positive control (clobetasol propionate 0.05% cream) and vehicle control.

Further, an imiquimod-naive control group (healthy control group) was included for VYN201 vehicle treatment.

VYN201 significantly reduced the expression of several key pro-inflammatory cytokines relevant to Th17-mediated autoimmune diseases in the animal model and the ex vivo human tissue study.

A dose-dependent improvement in the signs and symptoms of inflammation was observed for VYN201 treatment groups and treatment with VYN201 at all concentrations was well-tolerated.

Fibrotic Tissue Preclinical Model

In November 2021, we announced results from a preclinical animal model in which we evaluated VYN201's ability to reduce fibrosis.

In the preclinical study, duplicate identical skin incisions were induced on the flanks of hairless mice under anesthesia.

The animals were topically dosed once daily with either 100mg VYN201 vehicle, VYN201 1%, or a hydroalcoholic gel (a negative control known to delay healing) until each lesion had completely healed.

VYN201 demonstrated improvements in reducing fibrotic tissue mass and overall skin repair outcomes with no negative impact on healing time.

Animals treated with VYN201 1% had a statistically significant decrease (improvement) in global external lesion severity score, a comprehensive evaluation of length, width, swelling and visibility of lesions, compared to those treated with hydroalcoholic gel, consistent with the vehicle control.

In addition, animals treated with VYN201 1% had a significantly lower global internal lesion severity score than those treated with VYN201 vehicle or hydroalcoholic gel, indicative of an improved internal lesion outcome and a positive effect on reducing the formation of fibrotic tissue mass in the lesion bed.

Rheumatoid Arthritis Preclinical Model

In March 2022, we announced preclinical data showing that intra-articular injections of VYN201 resulted in significant inhibition of inflammation in a validated animal model of rheumatoid arthritis.

In the preclinical study, inflammatory arthritis was induced in BALB/c mice by systemically injecting a mixture of four arthritogenic monoclonal antibodies against collagen II at day 1.

In addition, the mice received a lipopolysaccharide injection systemically at day 4 to stimulate an acute systemic inflammatory response.

Each treatment group (n=7 per group) was injected with either (i) an intra-articular dose of VYN201 vehicle, (ii) an intra-articular dose of VYN201, (iii) an intra-articular dose of dexamethasone (1 mg/kg) or (iv) a systemic dose of dexamethasone (1 mg/kg, via intraperitoneal injection).

The WNT/β-catenin signaling pathway is known to be dysregulated in vitiligo and is believed to play a key role in melanocyte regeneration.

We evaluated the impact of VYN201 on Th17-mediated inflammation in an established preclinical animal model of psoriasis and an ex vivo human tissue study.

T-helper 17, or Th17, cells are a CD4+ T-cell subset characterized by production of interleukin-17, or IL-17, a highly inflammatory cytokine that plays an important role in the pathogenesis of a diverse group of immune-mediated diseases, including psoriasis, rheumatoid arthritis, multiple sclerosis, inflammatory bowel disease, and asthma.

In the animal model, depilated mice were topically dosed with imiquimod cream to induce a psoriasis phenotype over a 7-day induction phase.

A further 7-day treatment phase evaluated three doses of VYN201 (0.001%, 0.01% and 0.1% concentrations) compared to a highly potent glucocorticosteroid product positive control (clobetasol propionate 0.05% cream) and vehicle control.

An imiquimod-naive control group (healthy control group) was also included for VYN201 vehicle treatment.

In these studies, treatment with VYN201 significantly reduced the expression of several key pro-inflammatory cytokines relevant to Th17-mediated autoimmune diseases.

A dose-dependent improvement in the signs and symptoms of inflammation was observed in VYN201 treatment groups, and treatment with VYN201 at all concentrations was well tolerated in the studies.

Idiopathic Pulmonary Fibrosis

We evaluated an inhaled formulation of VYN201 in an established mouse model of idiopathic pulmonary fibrosis.

Lung fibrosis was induced in mice using a single intratracheal dose of bleomycin.

Fibrosis was left to develop for seven days, and thoracic tomography images were obtained to stage fibrotic development.

Animals were assigned to six treatment groups:

untreated and unstimulated control, placebo, and one of four doses of VYN201 (0.1, 0.2, 0.5, and 1.0 mg/ml), with six mice in

Each treatment group was dosed intratracheally every other day for 14 days.

Changes in blood oxygen saturation, Ashcroft scoring (a standardized numerical scale used to quantify the extent of lung fibrosis in histological samples), lung hydroxyproline (a tissue biomarker for fibrosis), and volumetric lung function were assessed.

Treatment with VYN201 at 0.5 mg/ml and 1 mg/ml resulted in statistically significant reductions in Ashcroft scores and levels of hydroxyproline compared to the placebo control group at day 21.

In addition, mean blood oxygen saturation for the VYN201 1 mg/ml group was 92.4% at day 21, an 8.8% improvement compared to the placebo group (83.6%).

Mean blood oxygen saturation for the untreated and unstimulated control group was 95.2%.

Thoracic tomography revealed that VYN201 treatment groups experienced a dose-dependent improvement in functional lung volume compared to the placebo control group.

Rheumatoid Arthritis

We conducted a preclinical study showing that intra-articular injections of VYN201 resulted in significant inhibition of inflammation in a validated animal model of rheumatoid arthritis.

In the preclinical study, inflammatory arthritis was induced in BALB/c mice.

Each treatment group of seven mice was injected with either (i) an intra-articular dose of VYN201 vehicle, (ii) an intra-articular dose of VYN201 (with one of four concentrations ranging from 0.01 to 10 mg/kg), (iii) an intra-articular dose of dexamethasone (1 mg/kg) or (iv) a systemic dose of dexamethasone (1 mg/kg, via intraperitoneal injection).

The intra-articular doses were administered on days 0, 3, 6 and 9 while the dexamethasone systemic injections were given daily beginning at day 0 through 11.

For the VYN201 treatment groups, four doses of VYN201 were evaluated (at concentrations ranging from 0.01 to 10 mg/kg).

Each animal treated with the

intra-articular injections received the injection in the ankle of one rear paw.

Each animal treated with the intra-articular injections received the injection in the ankle of one rear paw.

The untreated rear paw was assessed to evaluate any potential anti-inflammatory systemic effect.

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Scoring in this model ranges from 0 (normal) to 4 (extensive signs and symptoms of arthritis).

VYN201 demonstrated marked inhibition of paw thickening at the 1 and 10 mg/kg doses.

Treatment with VYN201 resulted in marked inhibition of paw thickening at the 1 and 10 mg/kg doses.

At both doses, the inhibition of paw thickening was statistically significant in the treated paw relative to the untreated rear paw on day 12 (p<0.01).

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The arthritis score was significantly lower in the treated paw at both doses relative to the non-treated paws on day 12 (p<0.05).

VYN202 - Selective BET Inhibitor

We are currently evaluating several BD2-selective oral small molecule BET inhibitors for our VYN202 program.

Systemic BET inhibitors have historically targeted both BD1 and BD2 less selectively, causing gastrointestinal and hematologic toxicities, such as thrombocytopenia.

The compounds that we are currently evaluating for our VYN202 program are being designed to potentially reduce the therapeutic limiting toxicities of BRD4 BET inhibitors currently in development by optimizing BD2 versus BD1 selectivity.

By maximizing BD2 selectivity, we believe VYN202 has the potential to present a more conveniently-administered non-biologic treatment option for both acute control and chronic management of immuno-inflammatory indications, where the damaging effects of unrestricted inflammatory signaling activity is common.

Following the receipt of positive results from our preclinical activities evaluating these compounds, we intend to exercise our option with respect to the oral molecules.

See "—Development and License Agreements—Agreements with Tay Therapeutics" for additional information.

FMX114 is our proprietary investigational combination gel formulation of tofacitinib and fingolimod that is designed to address both the source and cause of inflammation in atopic dermatitis ("AD").

On August 10, 2022, we announced that our Phase 2a clinical trial evaluating the safety and efficacy of FMX114 for mild-to-moderate AD did not meet its primary endpoint, which was based on assessments of the absolute and percent change relative to baseline in the atopic dermatitis severity index (“ADSI”) scoring assessment at week 4.

In the weeks that followed, we performed additional analyses which showed that while efficacy results for FMX114 were not statistically significant at week 4, FMX114 was statistically superior to vehicle at weeks 1, 2 and 3 in the Phase 2a trial.

Additionally, data received from the two-week open label extension during which both AD lesions of participating patients were treated with FMX114 showed that efficacy results continued to develop beyond week 4 of the trial and that the separation of treatment effect for lesions treated with FMX114 as compared to lesions treated with vehicle increased for lesions that had a higher ADSI score at baseline.

Accordingly, we believe that FMX114 may have an improved overall treatment effect on patients with more severe disease at baseline and that FMX114 may have increased potential to effectively treat patients with more moderate-to-severe AD.

We are evaluating partnering opportunities for this program and intend to focus our resources on the BET inhibitor development programs.

Divestiture of Minocycline Business

On January 12, 2022, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Journey Medical Corporation (“Journey”) pursuant to which we divested our Molecule Stabilizing Technology franchise ("MST Franchise"), including AMZEEQ, ZILXI, and FCD105, to Journey (the “Sale”).

Pursuant to the Purchase Agreement, we received an upfront payment of $20.0 million and an additional $5.0 million on January 12, 2023, the one-year anniversary of the closing of the transaction.

We are also eligible to receive sales milestone payments of up to $450.0 million in the aggregate upon the achievement of specified levels of net sales on a product-by-product basis, beginning with annual net sales exceeding $100,000,000 (with products covered in three categories (1) AMZEEQ (and certain modifications), (2) ZILXI (and certain modifications), and (3) FCD105 and other products covered by the patents being transferred, including certain modifications).

In addition, we are entitled to receive certain payments from any licensing or sublicensing of the assets by Journey outside of the United States.

The Purchase Agreement includes customary representations and warranties, as well as indemnification rights for breaches of representations, warranties, and covenants, as well as certain other matters, subject to customary deductibles, caps, and other limitations.

VYN202 - Oral BD2-Selective BET Inhibitor

VYN202 is an oral small molecule BD2-selective BET inhibitor that has been designed to achieve potential class-leading selectivity (BD2 vs.

BD1), maximum potency versus BD2 and optimal oral bioavailability.

Systemic BET inhibitors have historically targeted both BD1 and BD2 less selectively, causing gastrointestinal toxicity and bone marrow suppressive effects like thrombocytopenia.

By maximizing BD2 selectivity, we believe VYN202 may alleviate the therapeutic limiting toxicities observed by other less BD2-selective BET inhibitors in development for oncology and have the potential to be a more conveniently-administered non-biologic treatment option for both acute control and chronic management of immuno-inflammatory indications, where the damaging effects of unrestricted inflammatory signaling activity are common.

Planned Phase 1 Clinical Trial

We submitted an IND for VYN202 to the FDA in December 2023.

We recently received correspondence from the FDA informing us that our Phase 1a clinical trial is on hold and requesting that we submit data from an additional nonclinical study.

We recently completed the additional nonclinical study which achieved preliminary results consistent with our expectations at the outset of the study.

We plan to submit the requested nonclinical information to the FDA by the end of the first quarter of 2024 and, if cleared by the FDA, expect to initiate a Phase 1a single ascending dose/multiple ascending dose trial in healthy volunteers in the second quarter of 2024, with top line results anticipated in the second half of 2024.

If the Phase 1a portion of the trial is successfully completed, we plan to initiate Phase 1b trials of VYN202 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.

Preclinical Data in Multiple Indications

We evaluated VYN202 in an established mouse model of psoriasis.

After inducing a psoriasis phenotype in BALB-C mice, treatment was administered intraperitoneally with one of VYN202, deucravacitinib (an allosteric TYK2 inhibitor), or placebo.

VYN202 and deucravacitinib at equivalent dosing resulted in comparable onset of action and efficacy.

Mice receiving VYN202 3 mg/kg had approximately 95% mean reduction in psoriasis area and severity index ("PASI") score from baseline by day 7 of treatment, which was consistent with the results in the deucravacitinib 3 mg/kg group.

Treatment with VYN202 3 mg/kg reduced the expression of IL-17A, a major effector cytokine involved in the pathogenesis of psoriasis, by 93% compared to

Treatment with VYN202 at all doses also resulted in a marked reduction of other disease-related cytokines (IL-1β, IL-6, IL-22, IL-23, and TNF-α) compared to the placebo group.

Rheumatoid Arthritis

We evaluated VYN202 in a preclinical model of rheumatoid arthritis.

In a 21-day collagen-induced arthritis model, signs and symptoms of inflammatory arthritis were induced in Lewis rats.

Each treatment group orally received one of placebo, GSK620 (an early generation BD2-selective BET inhibitor) at 10 mg/kg, or VYN202 at one of three different dose strengths (1, 3, or 10 mg/kg).

Daily treatment with VYN202 10 mg/kg resulted in a 71% reduction in the overall signs and symptoms of rheumatoid arthritis at day 21 and a 79% lower paw volume (a measure of swelling) compared to mice receiving placebo.

Of the animals treated with the highest dose of VYN202, 75% presented with normal joint histopathology at the end of the study, whereas animals treated with placebo experienced marked inflammatory cell infiltrate, granulation tissue, bone erosion and cartilagenous ulceration.

Treatment with VYN202 10 mg/kg also achieved a 98% lower expression of Immunoglobin G1, a biomarker associated with rheumatoid arthritis, compared to treatment with placebo.

Manufacturing

We currently contract with third party manufacturers for all of our required raw materials, active ingredients and finished products for our preclinical research and clinical trials for our product candidates.

We currently contract with third party manufacturers for all of our required raw materials, active ingredients and finished products for our preclinical studies and clinical trials for our product candidates.

We currently have no plans to establish our own manufacturing capabilities and plan to continue to rely on third-party manufacturers for any future trials of our product candidates.

We, together with our contract manufacturing organizations ("CMOs") have developed the validation processes, methods, tests and/or controls suitable for the manufacturing of our product candidates and for defining their properties.

Together with contract manufacturing organizations ("CMOs"), we have developed the validation processes, methods, tests and/or controls that we believe are suitable for the manufacturing of our product candidates and for defining their properties.

Development stage quantities of any products that we develop need to be manufactured in facilities, and by processes, that comply with the requirements of the FDA and the regulatory agencies of other jurisdictions in which we may seek approval.

We require all of our CMOs to comply with these requirements and currently employ internal and external resources to manage our manufacturing contractors.

The relevant manufacturers of our product candidates for our current preclinical and clinical trials have advised us that they are compliant with both the FDA’s Good Laboratory Practices ("GLP") and cGMP.

Development and License Agreements

Agreements with Tay Therapeutics

On April 30, 2021, we entered into an Evaluation and Option Agreement (the “Option Agreement”) with Tay.

Tay is a spin-out of the University of Dundee’s School of Life Sciences and has discovered and is developing proprietary BET inhibitors for the treatment of immunology and oncology conditions.

Agreements with Tay

Evaluation and Option Agreement

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 stabilize, 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 an NCE development candidate from its highly selective BET inhibitor compounds (the "Oral BETi Compounds").

Pursuant to the Option Agreement, we agreed to use commercially reasonable efforts to stabilize, 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, 50% of which was to be used by Tay in the development of the Oral BETi Compounds.

Locally Administered Pan-BD BET Inhibitor Program (VYN201)

On August 6, 2021, we exercised our option with respect to the VYN201 program and, on August 9, 2021, the parties entered into a License Agreement (the “VYN201 License Agreement”) granting VYNE a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of Tay’s pan-BD BET inhibitor compounds.

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 as described below.

See "Part II—Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations—Collaboration Arrangements—Agreements with Tay Therapeutics—Evaluation and Option Agreement" for a discussion regarding payments made to Tay in connection with the extension of the term for the Oral Option.

License for Locally Administered Pan-BD BET Inhibitor Program (VYN201)

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.

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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.

We made a $0.5 million cash payment to Tay in connection with entering into the VYN201 License Agreement.

Pursuant to the VYN201 License Agreement, we have agreed to make cash payments to Tay upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the United States of up to $15.75 million for all indications.

Tay is entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S.

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 later 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.

Selective BET Inhibitor Program (VYN202)

Under the Option Agreement, we have an exclusive option (the “Option”) to obtain certain exclusive worldwide rights to research, develop and commercialize products containing Tay’s Oral BETi Compounds.

Under the original terms of the Option Agreement, the Option was to expire upon the earlier of (i) 14 days following the delivery of an agreed data package and selection of a lead candidate by In4Derm and (ii) June 30, 2022 (the “Option Term”).

On June 15, 2022, the parties entered into a letter agreement to extend the Option Term to February 28, 2023.

We recently informed Tay that we require additional preclinical data in order to complete our assessment of the Oral BETi Compounds.

In consideration of the significant progress made by the parties and our desire to maintain optionality with respect to our right to exercise the Option for the Oral BETi Compounds, the parties entered into a Letter Agreement on February 27, 2023 (the “Letter Agreement”) to extend the Option Term to April 30, 2023.

Pursuant to the terms of the Letter Agreement, we agreed to pay Tay a non-refundable fee in the

amount of $250,000 to extend the Option Term.

This fee will be deducted from the $4.0 million payable to Tay in the event that we exercise the Option pursuant to the Option Agreement.

In the event that we exercise the Option, the parties will sign a license agreement (the “Oral License Agreement”) and we will pay Tay a $4.0 million upfront cash payment, less the amount paid pursuant to the Letter Agreement.

The Oral License Agreement will include cash payments of up to $43.75 million payable to Tay 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 will be entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S.

In addition, with respect to any products we commercialize under the Oral 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.

LEO Pharma A/S for Finacea® Foam

In September 2015, Bayer HealthCare AG ("Bayer") began selling in the United States a product branded Finacea® Foam, based on our legacy foam technology.

Finacea is a prescription topical drug which was developed through a collaboration between Foamix (our predecessor) and Bayer.

Bayer sold the product to LEO Pharma A/S ("LEO") in 2018.

Pursuant to the license agreement with LEO for Finacea, we are entitled to receive royalties on net sales of Finacea.

In 2022, we received (or became entitled to receive) a total of $0.5 million in royalties from sales of Finacea from LEO.

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.

License for Selective BET Inhibitor Program (VYN202)

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.

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.

Intellectual Property

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We are committed to protecting our intellectual property rights, core technologies and other know-how through a combination of patents, trademarks, domain names, trade dress, trade secrets, copyrights, non-disclosure and confidentiality agreements, common interest agreements to protect privileged confidential information, licenses, assignments of invention and other contractual arrangements with our employees, scientific advisors, consultants, partners, suppliers, customers and others.

Such agreements and rights may however be breached, and we may not have adequate remedies for any breach.

These agreements and rights may, however, be breached, and we may not have adequate remedies for any such breach.

In addition, our trade secrets and other proprietary and confidential information may otherwise become known or be independently discovered by competitors.

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It is uncertain whether the issuance of any third party patent would require us to alter our development strategies, alter our processes, obtain licenses or cease certain activities.

Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop our current and future product candidates may have a material adverse impact on us.

Our breach of any license agreements or failure to obtain a license to proprietary rights that we may

require to develop our current and future product candidates may have a material adverse impact on us.

If third parties prepare and file patent applications in the United States that also claim technology to which we have rights, we may have to participate in derivation, interference or other proceedings in the United States Patent and Trademark Office ("USPTO") to determine derivation or priority of invention.

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Risk Factors—Risks Related to Our Intellectual Property."

Our patent portfolio in relation to our VYN201 BET inhibitor program includes a granted patent in the UK and pending compound and composition patent applications in various jurisdictions worldwide that are licensed by us.

In addition, we have filed a PCT application directed to various uses thereof.

We have various non-provisional and nationally filed PCT patent applications pending in relation to FMX114 including applications filed in Australia, Brazil, Canada, Europe, Japan and the US.

Subject to filing a non-provisional, the PCT's being filed nationally, and the pending patent applications being granted (without terminal disclaimers) and payments of the appropriate maintenance fees, the patent applications in relation to VYN201 will expire in 2040 and 2042 and the patent applications related to FMX114 will expire in 2040, 2041 and 2043.

In addition, in connection with our legacy business, we have various granted patents worldwide owned or licensed by us related to pharmaceutical compositions and their uses, including various foam-based platforms, various gel-based platforms, and other technology.

Our BET inhibitor patent portfolio is licensed in and/or is being developed by us and comprises or is derived from several PCT applications, various national applications and certain provisional applications.

Our patent portfolio in relation to our VYN201 program includes a granted patent in the United Kingdom and pending compound and composition patent applications licensed by us from Tay and the University of Dundee.

A PCT application covering the compound, which published as WO 2020/216779, was filed nationally in more than 15 jurisdictions, including the U.S., China, Europe, Eurasia and Japan.

Subject to being granted (without terminal disclaimers) and payments of the appropriate maintenance fees, each will expire in 2040.

In addition, a PCT application, which published as WO 2023/081720, and several provisional applications directed to various uses thereof have been filed.

Subject to the PCT being filed nationally, filing a non-provisional, and these patent applications being granted (without terminal disclaimers) and payments of the appropriate maintenance fees, each will expire in 2042 and 2044, respectively.

Our patent portfolio in relation to our VYN202 program includes pending compound and composition patent applications licensed by us from Tay.

A PCT application covering the compound, which published as WO 2023/275542, was filed nationally in more than 15 jurisdictions, including the U.S., China, Europe, Eurasia and Japan.

Subject to being granted (without terminal disclaimers) and payments of the appropriate maintenance fees, each will expire in 2042.

Two additional compound and composition PCT applications were also filed in relation to VYN202 and our oral BD2-selective BET inhibitor program exclusively licensed by us from Tay.

Subject to these PCT applications being filed nationally, one of which published as WO 2024/018423, and the patent applications being granted (without terminal disclaimers) and payments of the appropriate maintenance fees, they will expire in 2043.

Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in various countries where patent protection is obtained.

The actual protection afforded by a patent, which can vary from country to

country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country.

The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country.

In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application.

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The European Union does have a compensation program similar to patent term extension called supplementary patent certificate that would effectively extend the duration of protection of the product for up to five years.

Obtaining a patent term extension in the US or a supplementary patent certificate in the European Union is uncertain and will depend on eligibility and satisfying rigorous criteria in each jurisdiction.

Obtaining a patent term extension in the United States or a supplementary patent certificate in the European Union is uncertain and will depend on eligibility and satisfying rigorous criteria in each jurisdiction.

Our drug development activities face, and will continue to face, intense competition from organizations such as pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies.

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For vitiligo, our primary competitors include topical therapies such as generic and branded versions of calcineurin inhibitors, including ELIDEL, marketed by Bausch Health;

Opzelura, marketed by Incyte Corporation;

OPZELURA, a topical JAK inhibitor marketed by Incyte Corporation;

branded and generic versions of high potency steroids, including CLOBEX, marketed by Galderma Laboratories, LP;

and other treatments including various lasers and ultraviolet light-based therapies.

In addition, there are several prescription product candidates under development that could potentially be used to treat vitiligo and compete with VYN201, including but not limited to:

topical cerdulatinib, under development by Dermavant Sciences, Inc., and both oral PF-06651600 and oral PF-06700841 under development by Pfizer Inc.

While we have not yet identified an initial indication for VYN202, there is intense competition for the treatment of immuno-inflammatory conditions.

VYN202, if approved, will compete with existing treatments and new treatments that may become available in the future.

In addition, there are several prescription product

candidates under development that could potentially be used to treat vitiligo and compete with VYN201, if approved, including but not limited to oral JAK inhibitors being developed by Incyte, Pfizer and AbbVie.

We intend to develop VYN202 for the treatment of moderate-to-severe plaque psoriasis and moderate-to-severe adult-onset rheumatoid arthritis, each of which is a competitive market.

The psoriasis market includes several approved antibody therapies, including COSENTYX, marketed by Novartis;

TALTZ, marketed by Eli Lilly;

SILIQ, marketed by Bausch Health;

and BIMZELX, marketed by UCB SA.

Other classes of injectable biologics approved for use in indications for which IL-17 therapeutics are also approved include anti-IL-12/23 and anti TNFα monoclonal antibodies marketed by AbbVie, Sun Pharmaceutical Industries and Janssen Pharmaceuticals, among others.

Furthermore, the oral PDE4 inhibitor, OTEZLA, marketed by Amgen, and oral TYK2 inhibitor, SOTYKTU, marketed by Bristol Myers Squibb, are approved for the treatment of psoriasis.

In addition, we are aware of other oral therapeutic candidates including TYK2 inhibitors, oral IL-17 inhibitors, and oral IL-23 inhibitors being developed by Janssen Pharmaceuticals, Takeda Pharmaceutical Company, Ventyx Biosciences, and LEO Pharma, among others.

Medications for the treatment of rheumatoid arthritis include corticosteroids and disease-modifying anti-rheumatic drugs ("DMARDs").

DMARDs include (i) methotrexate, sulfasalazine, leflunomide and hydroxychloroquine, (ii) biologic DMARDs, and (iii) targeted synthetic DMARDs such as JAK inhibitors.

These drugs are produced and sold, or are approved for marketing, by large pharmaceutical companies, including AbbVie, Amgen, Bristol Myers Squibb, Eli Lilly, Johnson & Johnson, Pfizer, Novartis, UCB, Regeneron Pharmaceuticals, and Roche.

In addition, several other companies are developing drugs for the treatment of rheumatoid arthritis that, if approved, would compete with VYN202, if approved.

The commercial opportunity for our product candidates, if approved, could be reduced or eliminated if our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any drug we may develop.

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In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act ("FDCA") and implementing regulations.

In general, new drug products require the submission of a NDA and approval thereof by the FDA prior to being marketed in the United States.

In general, new drug products require the submission of a New Drug Application ("NDA") and approval thereof by the FDA prior to being marketed in the United States.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

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requirements at any time during the product development process, approval process or after approval may subject an applicant to a variety of administrative or judicial sanctions and enforcement actions brought by the FDA, the Department of Justice or other governmental entities.

Possible sanctions may include the FDA’s refusal to

approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and civil or criminal penalties.

Possible sanctions may include the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement and civil or criminal penalties.

The process required by the FDA prior to marketing and distributing a new drug product in the United States generally involves the following:

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In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.

W e recently received correspondence from the FDA informing us that our Phase 1a clinical trial for VYN202 is on hold and requesting that we submit data from an additional nonclinical study in support of our IND.

We expect to submit the requested information by the end of the first quarter of 2024.

In addition, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the trial at least annually.

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FDA approval of any application may include many delays or may never be granted.

If a product is approved, the approval will specify the indicated uses for which the product may be marketed in the United States pursuant to that NDA, may require that warning statements be included in the product labeling, may require that additional studies or trials be conducted following approval as a condition of the approval, may impose restrictions and conditions on product distribution, prescribing or dispensing in the form of risk evaluation and mitigation strategies ("REMS"), or may impose other limitations.

After evaluating the NDA and all related information, including any advisory committee recommendation, if applicable, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA will issue an approval letter or a complete response letter.

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Certain requirements include, inter alia, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information on an annual basis or more frequently for specific events, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements.

These promotion and advertising requirements include, among others, standards for direct-to-consumer advertising, prohibitions against promoting drugs for uses or patient populations that are not described in the drug’s approved labeling, known as “off-label use,” and other promotional activities, such as those considered to be false or misleading.

drug’s approved labeling, known as “off-label use,” and other promotional activities, such as those considered to be false or misleading.

Failure to comply with FDA requirements can have negative consequences, including the immediate discontinuation of noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties.

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Even when not pursuing a pediatric indication, under the Pediatric Research Equity Act of 2003, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

With enactment of the Food and Drug Administration Safety and Innovation Act (the "FDASIA") in 2012, sponsors must also submit pediatric trial plans prior to the assessment data.

Sponsors must also submit pediatric trial plans prior to the assessment data.

Those plans must contain an outline of the proposed pediatric trials the applicant plans to conduct, including trial objectives and design, any deferral or waiver requests, and other information required by regulation.

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The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in the FDASIA.

Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in the Food and Drug Administration Safety and Innovation Act.

Separately, in the event the FDA makes a written request for pediatric data relating to a drug product, an NDA sponsor who submits such data may be entitled to pediatric exclusivity.

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Patent term extension cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date.

In other words, the total maximum patent life for the product with the patent extension cannot exceed 14 years from the products approval date, which amounts to 14 years of potential marketing time.

Only one patent applicable to an approved drug product may be extended, and the application for the extension must be submitted prior to the expiration of the patent in question and within 60 days of FDA approval.

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An additional rebate for products marketed under NDAs is payable if the average manufacturer price increases at a rate higher than inflation, and other methodologies apply to new formulations of existing drugs.

In addition, the Affordable Care Act (the "ACA") revised certain definitions used for purposes of calculating the rebates, including the definition of “average manufacturer price.” Various state Medicaid programs have implemented voluntary supplemental drug rebate programs that may provide states with additional manufacturer rebates in exchange for preferred status on a state’s formulary or for patient populations that are not included in the traditional Medicaid drug benefit coverage.

In addition, the Patient Protection and Affordable Care Act (the "ACA") revised certain definitions used for purposes of calculating the rebates, including the definition of “average manufacturer price.” Various state Medicaid programs have implemented voluntary supplemental drug rebate programs that may provide states with additional manufacturer rebates in exchange for preferred status on a state’s formulary or for patient populations that are not included in the traditional Medicaid drug benefit coverage.

In the European Union, pricing and reimbursement schemes vary widely from country to country.

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For example, the ACA's individual mandate was repealed by Congress in The Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law in December 2017 and became effective January 1, 2019.

On December 14, 2018, a U.S.

District Court Judge in the Northern District of Texas ruled that the individual mandate is a critical and inseverable feature of the ACA, and because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well.

Ultimately, on June 17, 2021, the U.S.

On June 17, 2021, the U.S.

Supreme Court held that state and individual plaintiffs did not have standing to challenge the individual mandate provision of the ACA;

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In addition, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

These provisions take effect progressively starting in fiscal year 2023.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.

In addition, the Biden administration released an additional executive order on October 14, 2022, directing HHS to report on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models for lowering drug costs for Medicare and Medicaid beneficiaries.

In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.

It is unclear whether the models will be utilized in any health reform measures in the future.

Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act, allowing an agency to grant a compulsory license on a privately owned patent to third parties, if the invention was developed with federal funding and the agency finds that certain statutory criteria apply.

On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.

While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.

At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (“SIP”) proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.

Other states have also submitted SIP proposals that are pending review by the FDA.

Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.

We anticipate that these and other healthcare reform efforts will continue to result in additional downward pressure on drug pricing.

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Such restrictions under applicable federal and state healthcare laws and regulations include the following:

• the federal healthcare Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare or Medicaid.

either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare or Medicaid.

The term “remuneration” has been broadly interpreted to include anything of value, including cash, improper discounts, and free or reduced price items and services.

The intent standard under the federal Anti-Kickback Statute was amended by ACA to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or

specific intent to violate it in order to have committed a violation.

The intent standard under the federal Anti-Kickback Statute was amended by ACA to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

Moreover, under the ACA, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil FCA.

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Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH") and their implementing regulations, which imposes privacy, security, transmission and breach reporting obligations, including mandatory contractual terms, with respect to individually identifiable health information including PHI, upon “covered entities” subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, and their respective business associates that perform services on their behalf that involve individually identifiable health information, including PHI.

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH") and their implementing regulations, which imposes privacy, security, transmission and breach reporting obligations, including mandatory contractual terms, with respect to individually identifiable health information including Protected Heath Information ("PHI"), upon “covered entities” subject to the law, such as health plans, healthcare clearinghouses and certain healthcare providers, and their respective business associates and covered subcontractors that perform services on their behalf that involve individually identifiable health information, including PHI.

HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.

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federal analogues, such as to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers;

state laws that require drug companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

that require drug companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

state and local laws that require the licensure of sales representatives;

state laws that require drug manufacturers to report information related to drug pricing or payments and other transfers of value to healthcare providers or marketing expenditures and pricing information;

data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States

(such as the European Union, which adopted the General Data Protection Regulation ("GDPR") which became effective in May 2018);

data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation ("GDPR") which became effective in May 2018);

state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

and state laws related to insurance fraud in the case of claims involving private insurers.

If our operations are found to be in violation of any of the healthcare laws or regulations described above or any other healthcare regulations that apply to us, we may be subject to penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, imprisonment, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or consent decree, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy.

If our operations are found to be in violation of any of the healthcare laws or regulations described above or any other healthcare regulations that apply to us, we may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, imprisonment, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or consent decree, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy.

Environmental, Health and Safety Matters

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The operations of our subcontractors and suppliers are also subject to various laws and regulations relating to environmental, health and safety matters, and their failure to comply with such laws and regulations could have a material adverse effect on our business and reputation, result in an interruption or delay in the development or manufacture of our product candidates, or increase the costs for the development or manufacture of our product candidates.

Human Capital

Human Capital Resources

As of December 31, 2023, we had a total of 10 full-time employees.

All of our employees are located in the United States.

We intend to add a limited number of employees to support our pipeline development programs.

From time to time, we also retain independent contractors and consultants to support our organization.

We believe our internal R&D capabilities coupled with our third-party R&D consultants are well positioned to execute our pipeline strategy in a cost effective manner.

We believe our internal R&D capabilities coupled with our third-party R&D consultants are sufficient to execute our clinical development strategy in a cost-effective manner.

None of our employees are represented by a labor union, and we consider our employee relations to be good.

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We changed our name to VYNE Therapeutics Inc.

in September 2020, following the merger (the "Merger") between Foamix Pharmaceuticals Ltd.

("Foamix") and Menlo Therapeutics Inc.

("Menlo") in March 2020.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act") and as modified by the JOBS Act and a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

As such, we are eligible to take advantage of certain exemptions from various reporting requirements, such as the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and certain reduced or scaled disclosure requirements available to smaller reporting companies.

in September 2020, following the merger between Foamix Pharmaceuticals Ltd.

and Menlo Therapeutics Inc.

(our predecessor company) in March 2020.

We are a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

As such, we are eligible to take advantage of certain reduced or scaled disclosure requirements available to smaller reporting companies.

See the risk factor captioned “We are eligible to report as a ‘smaller reporting company,’ and as a result of the reduced reporting requirements applicable to such companies, our securities may be less attractive to investors” for more information.

Our principal executive offices are located at 685 Route 202/206 N., Suite 301, Bridgewater, NJ 08807.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business