VYNE Therapeutics Inc. Q1 FY2020 earnings call

• Launched AMZEEQ in January 2020; PDUFA date for FMX103 is June 2, 2020; Phase II study for FCD105 in acne expected soon.
• Closed merger with Foamix in early March, with Foamix shareholders owning 82% of the combined entity, higher cash balance, and becoming U.S. domiciled.
• AMZEEQ launch was promising initially but slowed due to COVID-19, though prescription numbers through mid-March were strong.
• FMX103 NDA has strong clinical package with Phase III trials meeting co-primary endpoints.
• License agreement with Cutia Therapeutics for AMZEEQ in China, providing $10M upfront and mid-single-digit royalties.
• Commercial activities: AMZEEQ launch interrupted by COVID-19, but virtual sales calls continued; FMX103 plan to launch in Q4 2020 if approved.
• Financials: Q1 2020 revenue $1.8M vs $0.3M in 2019; net loss $40.2M vs $15.2M in 2019; cash and equivalents $82.7M as of March 30, 2020.

Revenues for Menlo Therapeutics in the first quarter of 2020 totaled $1.8 million, generated from product sales of AMZEEQ, which was launched in January. This is in contrast to Q1 2019 where revenues were $0.3 million from royalties of Finacea Foam. Cost of goods sold in Q1 2020 was $0.3 million. The gross margin percentage was 85%, but if inventory sold in Q1 2020 was valued at cost, the gross margin would have been 79%. Revenue contribution was solely from AMZEEQ product sales in 2020, whereas in 2019 it was from Finacea Foam royalties.

• Anticipate FMX103 launch in Q4 2020 if approved.
• Implemented cost-savings initiative to extend cash runway, including moving to external product development model, eliminating legacy Menlo expenses, and reducing clinical support while maintaining capability.
• Expect cash runway into Q2 2021 with the $10M upfront from the Cutia license.

• Impact of COVID-19 on AMZEEQ launch and business operations.
• Uncertainty around future clinical trial outcomes for products like FCD105 and FMX103.
• Dependence on successful commercialization of AMZEEQ and FMX103 for financial performance.

Q: Louise Chen from Cantor Fitzgerald asked about AMZEEQ Rxs stabilization, cost-saving initiative impact on expenses, margin expectations, and FMX103 go-to-market strategy.

A: Matt Wiley noted AMZEEQ Rxs stabilization with slight uptick due to live calls and physicians seeing patients; Andrew Saik mentioned cost savings gradual decrease in Q2, gross margin variable; Dave Domzalski and Matt Wiley discussed FMX103 go-to-market strategy targeting unmet need in rosacea.

Q: Zachary Sachar from Piper Sandler asked about telemedicine impact on derm space and AMZEEQ patient out-of-pocket support.

A: Dave Domzalski said telemedicine could benefit acne and rosacea diagnosis; Matt Wiley mentioned co-pay relief program with $40 cap and denial conversion program.

Q: Stacy Ku from Cowen and Company asked about AMZEEQ managed care contracts cadence and net pricing, and FMX103 launch strategy.

A: Dave Domzalski and Matt Wiley discussed ongoing managed care contract efforts targeting broad access by Q3; Andrew Saik said net pricing to be determined later; Matt Wiley talked about FMX103 targeting based on patient concentration.

Q: Chi Meng Fong from Bank of America asked about FCD105 Phase II data comparison to AMZEEQ and OpEx breakdown post-merger.

A: Dave Domzalski discussed potential Phase III structure for FCD105; Andrew Saik explained $11.7M onetime expenses post-merger.

Q: Valentyna Chebanova from LifeSci Capital asked about FCD105 Phase III program details and commercial prospects.

A: Dave Domzalski talked about potential Phase III study structure; Matt Wiley mentioned optimistic commercial opportunity for FCD105.

Q: Oren Livnat from H.C. Wainwright asked about AMZEEQ net price bookends and COVID-19 impact on physician feedback.

A: Dave Domzalski and Matt Wiley discussed net price expectation range of $200-$400; Matt Wiley talked about physician feedback improvement due to virtual calls and increased call duration.