Full Press Release Details
Unaudited Pro Forma Condensed Consolidated Financial
On January 12, 2022 (the "Effective Date"),
VYNE Therapeutics Inc. (the "Company" or "VYNE") entered into an Asset Purchase Agreement (the "Agreement")
with Journey Medical Corporation ("Journey" or "Buyer") pursuant to which the Company sold its Molecule Stabilizing
Technology (MSTTM) franchise, including AMZEEQ , ZILXI , and FCD105 (the "MST Franchise"),
to Journey. The assets include certain contracts, including the license agreement with Cutia Therapeutics (HK) Limited
("Cutia"), inventory and intellectual property related to the MST Franchise (together, the "Assets").
Pursuant to the Agreement, the Buyer assumed certain liabilities of the MST Franchise including, among
others, those arising from VYNE's patent infringement suit initiated against Padagis Israel Pharmaceuticals Ltd. There were no current or long-term liabilities recorded by the Company
which were transferred to the Buyer. The sale was consummated
concurrently with the execution of the Purchase Agreement.
unaudited pro forma condensed consolidated financial statements are intended to show how the transaction might have affected the historical
financial statements of VYNE if the transaction had been completed at an earlier time as indicated therein. The unaudited
pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X, and were derived
from the Company's historical consolidated financial statements and are being presented to give effect to the sale of the Assets,
presented on a discontinued operations basis in accordance with ASC 205, Discontinued Operations. The unaudited pro forma condensed
consolidated financial statements should be read in conjunction with:
| i. | The accompanying notes to the unaudited pro forma condensed consolidated financial statements; | |
| ii. | The audited consolidated financial statements of the Company and its subsidiaries and the accompanying notes included in the Company's Current Report on Form 8-K filed with the SEC on August 12, 2021 ; and | |
| iii. | The unaudited interim historical financial statements of the Company and its subsidiaries, the accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Quarterly Report on Form 10-Q for the nine months ended September 30, 2021 filed with the SEC on November 10, 2021. |
The unaudited pro forma condensed consolidated
financial statements of the Company are based on available information and assumptions that the Company's management believes are
reasonable as of the date of this filing. The unaudited pro forma condensed consolidated statements of operations for the years ended
December 31, 2020, 2019 and 2018, and the nine months ended September 30, 2021 present the Company's results as if the transaction
had occurred on January 1, 2018, the beginning of the earliest period presented. The unaudited pro forma condensed consolidated balance
sheet as of September 30, 2021 reflects the Company's assets, liabilities, and equity as if the transaction had occurred on September
The unaudited pro forma condensed consolidated
financial statements do not purport to represent the Company's actual consolidated results of operations or financial condition
had the transaction occurred on the dates assumed, nor are they indicative of the Company's future consolidated results of operations
or financial condition.
The unaudited pro forma
condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X. Article 11 of Regulation S-X requires
that pro forma financial information include the following pro forma adjustments to the historical financial statements of the registrant
| Transaction Accounting Adjustments - Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction. | ||
| Autonomous Entity Adjustments - Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity. There are no autonomous entity adjustments included in the pro forma financial information because VYNE currently operates, and after the completion of the transaction will continue to operate, as an independent, standalone entity . |
In addition, Regulation S-X permits
registrants to reflect adjustments that depict synergies and dis-synergies of the acquisitions and dispositions for which pro
forma effect is being given in our disclosures as management adjustments. The unaudited pro forma condensed consolidated financial statements
do not include management adjustments to reflect any potential synergies that may be achievable, or dis-synergy costs that may
occur, in connection with the sale of the Assets. We have determined not to reflect such adjustments because we do not believe to present
such adjustments would enhance an understanding of the pro forma effects of the transaction.
The transaction accounting
adjustments to reflect the sale of the Assets in the unaudited pro forma condensed consolidated financial statements include:
The unaudited pro forma
condensed consolidated financial statements are presented for informational purposes only and are based upon estimates by VYNE's
management, which are based upon available information and certain assumptions that VYNE's management believes are reasonable as
of the date of this filing. The unaudited pro forma condensed consolidated financial statements are not intended to be indicative of the
actual financial position or results of operations that would have been achieved had the transaction been consummated as of the periods
indicated above, nor does it purport to indicate results which may be attained in the future. Actual amounts could differ materially from
VYNE THERAPEUTICS INC.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2021
| Transaction Accounting Adjustments | |||||||||||||||||||
| Historical VYNE (a) | Discontinued Operations (b) | Additional Adjustments (c) | Notes | Pro Forma | |||||||||||||||
| Assets | |||||||||||||||||||
| Current Assets: | |||||||||||||||||||
| Cash and cash equivalents | $ | 52,306 | $ | - | $ | 15,570 | i | $ | 67,876 | ||||||||||
| Restricted cash | 605 | - | - | 605 | |||||||||||||||
| Trade receivables, net of allowances | 10,084 | - | - | 10,084 | |||||||||||||||
| Prepaid and other assets | 5,064 | (739 | ) | 5,000 | i | 9,325 | |||||||||||||
| Inventory | 8,070 | (8,070 | ) | - | - | ||||||||||||||
| Total Current Assets | 76,129 | (8,809 | ) | 20,570 | 87,890 | ||||||||||||||
| Property and equipment, net | 472 | - | - | 472 | |||||||||||||||
| Operating lease right-of-use assets | 1,036 | - | - | 1,036 | |||||||||||||||
| Prepaid and other assets | 3,678 | - | - | 3,678 | |||||||||||||||
| Total Assets | $ | 81,315 | $ | (8,809 | ) | $ | 20,570 | $ | 93,076 |
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
VYNE THERAPEUTICS INC.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2021
| Transaction Accounting Adjustments | |||||||||||||||||||
| Historical VYNE (a) | Discontinued Operations (b) | Additional Adjustments (c) | Notes | Pro Forma | |||||||||||||||
| Liabilities and shareholders' equity | |||||||||||||||||||
| Current Liabilities: | |||||||||||||||||||
| Trade payables | $ | 7,621 | $ | - | $ | - | $ | 7,621 | |||||||||||
| Accrued expenses | 9,613 | - | - | 9,613 | |||||||||||||||
| Employee related obligations | 3,382 | - | - | 3,382 | |||||||||||||||
| Operating lease liabilities | 277 | - | - | 277 | |||||||||||||||
| Other | 104 | - | - | 104 | |||||||||||||||
| Total Current Liabilities | 20,997 | - | - | 20,997 | |||||||||||||||
| Liability for employee severance benefits | 206 | - | - | 206 | |||||||||||||||
| Operating lease liabilities | 775 | - | - | 775 | |||||||||||||||
| Other liabilities | 451 | - | - | 451 | |||||||||||||||
| Total Liabilities | 22,429 | - | - | 22,429 | |||||||||||||||
| Shareholders' Equity: | |||||||||||||||||||
| Preferred stock: $0.0001 par value; 20,000,000 shares authorized at September 30, 2021; no shares issued and outstanding at September 30, 2021 | - | - | - | - | |||||||||||||||
| Common stock: $0.0001 par value; 150,000,000 shares at September 30, 2021; 53,510,599 shares issued and outstanding at September 30, 2021 | 5 | - | - | 5 | |||||||||||||||
| Additional paid-in capital | 686,836 | - | - | 686,836 | |||||||||||||||
| Accumulated deficit | (627,955 | ) | (8,809 | ) | 20,570 | (616,194 | ) | ||||||||||||
| Total Shareholders' Equity | 58,886 | (8,809 | ) | 20,570 | 70,647 | ||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 81,315 | $ | (8,809 | ) | $ | 20,570 | $ | 93,076 |
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
VYNE THERAPEUTICS INC.
Pro Forma Condensed Consolidated Statement of
For the nine months ended September 30, 2021
(in thousands, except per share data)
| Transaction Accounting Adjustments | |||||||||||||||||||
| Historical VYNE (a) | Discontinued Operations (b) | Additional Adjustments (c) | Notes | Pro Forma | |||||||||||||||
| Revenues | |||||||||||||||||||
| Product sales, net | $ | 11,805 | $ | (11,805 | ) | $ | - | $ | - | ||||||||||
| Royalty revenues | 658 | - | - | 658 | |||||||||||||||
| Total Revenues | 12,463 | (11,805 | ) | - | 658 | ||||||||||||||
| Cost of goods sold | 2,445 | (2,445 | ) | - | - | ||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| Research and development | 19,723 | (4,512 | ) | - | 15,211 | ||||||||||||||
| Selling, general and administrative | 46,283 | (29,527 | ) | - | 16,756 | ||||||||||||||
| Total Operating Expenses | 66,006 | (34,039 | ) | - | 31,967 | ||||||||||||||
| Operating Loss | 55,988 | (24,679 | ) | - | 31,309 | ||||||||||||||
| Interest Expense | 5,610 | - | - | 5,610 | |||||||||||||||
| Other Income, net | 161 | - | - | 161 | |||||||||||||||
| Loss Before Income Tax | 61,759 | (24,679 | ) | - | 37,080 | ||||||||||||||
| Income Tax (Benefit) Expense | - | - | - | - | |||||||||||||||
| Net Loss | 61,759 | $ | (24,679 | ) | $ | - | $ | 37,080 | |||||||||||
| Loss per share basic and diluted | $ | 1.22 | $ | 0.73 | |||||||||||||||
| Weighted average shares outstanding - basic and diluted | 50,776 | 50,776 |
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
VYNE THERAPEUTICS INC.
Pro Forma Condensed Consolidated Statement of
For the year ended December 31, 2020
(thousands, except per share data)
| Transaction Accounting Adjustments | |||||||||||||||||||
| Historical VYNE (a) | Discontinued Operations (b) | Additional Adjustments (c) | Notes | Pro Forma | |||||||||||||||
| Revenues | |||||||||||||||||||
| Product sales, net | $ | 10,202 | $ | (10,202 | ) | $ | - | $ | - | ||||||||||
| License revenues | 10,000 | (10,000 | ) | - | - | ||||||||||||||
| Royalty revenues | 791 | - | - | 791 | |||||||||||||||
| Total Revenues | 20,993 | (20,202 | ) | - | 791 | ||||||||||||||
| Cost of goods sold | 1,392 | (1,392 | ) | - | - | ||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| Research and development | 43,533 | (10,272 | ) | - | 33,261 | ||||||||||||||
| Selling, general and administrative | 89,543 | (42,485 | ) | - | 47,058 | ||||||||||||||
| Goodwill and in-process research & development impairments | 54,345 | - | - | 54,345 | |||||||||||||||
| Contingent Stock Remeasurement | 84,726 | - | - | 84,726 | |||||||||||||||
| Total Operating Expenses | 272,147 | (52,757 | ) | - | 219,390 | ||||||||||||||
| Operating Loss | 252,546 | (33,947 | ) | - | 218,599 | ||||||||||||||
| Interest Expense | 4,390 | - | - | 4,390 | |||||||||||||||
| Other Income, net | (1,110 | ) | - | - | (1,110 | ) | |||||||||||||
| Loss Before Income Tax | 255,826 | (33,947 | ) | - | 221,879 | ||||||||||||||
| Income Tax (Benefit) Expense | (258 | ) | - | - | (258 | ) | |||||||||||||
| Net Loss | $ | 255,568 | $ | (33,947 | ) | $ | - | $ | 221,621 | ||||||||||
| Loss per share basic and diluted | $ | 7.88 | $ | 6.84 | |||||||||||||||
| Weighted average shares outstanding - basic and diluted | 32,418 | 32,418 |
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
VYNE THERAPEUTICS INC.
Pro Forma Condensed Consolidated Statement of
For the year ended December 31, 2019
(thousands, except per share data)
| Transaction Accounting Adjustments | |||||||||||||||||||
| Historical VYNE (a) | Discontinued Operations (b) | Additional Adjustments (c) | Notes | Pro Forma | |||||||||||||||
| Revenues | |||||||||||||||||||
| Royalty revenues | $ | 443 | - | - | $ | 443 | |||||||||||||
| Total Revenues | 443 | - | - | 443 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| Research and development | 51,202 | (36,421 | ) | - | 14,781 | ||||||||||||||
| Selling, general and administrative | 45,114 | (23,926 | ) | - | 21,188 | ||||||||||||||
| Total Operating Expenses | 96,316 | (60,347 | ) | - | 35,969 | ||||||||||||||
| Operating Loss | 95,873 | (60,347 | ) | - | 35,526 | ||||||||||||||
| Interest Expense | 921 | - | - | 921 | |||||||||||||||
| Other Income, net | (1,440 | ) | - | - | (1,440 | ) | |||||||||||||
| Loss Before Income Tax | 95,354 | (60,347 | ) | - | 35,007 | ||||||||||||||
| Income Tax (Benefit) Expense | (176 | ) | - | - | (176 | ) | |||||||||||||
| Net Loss | $ | 95,178 | $ | (60,347 | ) | $ | - | $ | 34,831 | ||||||||||
| Loss per share basic and diluted | $ | 11.22 | $ | 4.11 | |||||||||||||||
| Weighted average shares outstanding - basic and diluted | 8,485 | 8,485 |
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
VYNE THERAPEUTICS INC.
Pro Forma Condensed Consolidated Statement of
For the year ended December 31, 2018
(thousands, except per share data)
| Transaction Accounting Adjustments | |||||||||||||||||||
| Historical VYNE (a) | Discontinued Operations (b) | Additional Adjustments (c) | Notes | Pro Forma | |||||||||||||||
| Revenues | |||||||||||||||||||
| Royalty revenues | $ | 3,533 | - | - | $ | 3,533 | |||||||||||||
| Other revenues | 62 | - | - | 62 | |||||||||||||||
| Total Revenues | 3,595 | - | - | 3,595 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| Research and development | 64,474 | (53,090 | ) | - | 11,384 | ||||||||||||||
| Selling, general and administrative | 14,013 | - | - | 14,013 | |||||||||||||||
| Total Operating Expenses | 78,487 | (53,090 | ) | - | 25,397 | ||||||||||||||
| Operating Loss | 74,892 | (53,090 | ) | - | 21,802 | ||||||||||||||
| Other Income, net | (941 | ) | - | - | (941 | ) | |||||||||||||
| Loss Before Income Tax | 73,951 | (53,090 | ) | - | 20,861 | ||||||||||||||
| Income Tax (Benefit) Expense | 212 | - | - | 212 | |||||||||||||||
| Net Loss | $ | 74,163 | $ | (53,090 | ) | $ | - | $ | 21,073 | ||||||||||
| Loss per share basic and diluted | $ | 11.47 | $ | 3.26 | |||||||||||||||
| Weighted average shares outstanding - basic and diluted | 6,466 | 6,466 |
See accompanying notes to unaudited pro forma
condensed consolidated financial statements.
Notes to the Unaudited Pro Forma Condensed Consolidated
Financial Statements
On January 12, 2022 the "Effective Date"),
VYNE Therapeutics Inc. (the "Company" or "VYNE") entered into an Asset Purchase Agreement (the "Agreement")
with Journey Medical Corporation ("Journey" or "Buyer") pursuant to which the Company sold its Molecule Stabilizing
Technology (MSTTM) franchise, including AMZEEQ , ZILXI , and FCD105 (the "MST Franchise"),
to Journey. The assets include certain contracts, including the license agreement with Cutia Therapeutics (HK) Limited ("Cutia"),
inventory and intellectual property related to the MST Franchise (together, the "Assets"). Pursuant to the Agreement, the
Buyer assumed certain liabilities of the MST Franchise including, among others, those arising from VYNE's
patent infringement suit initiated against Padagis Israel Pharmaceuticals Ltd. There were no current or long-term liabilities recorded by the Company
which were transferred to the Buyer. The sale was consummated concurrently with the execution
of the Purchase Agreement.
The Agreement provides that the consideration
payable by the Buyer to the Company for the Assets sold and transferred will consist of the following amounts: (i) a payment of $20.0