Good morning and welcome to the VYNE Therapeutics conference call to discuss the Third Quarter 2021 financial results and corporate update. At this time, all participants are on listen-only mode. And following the Company's formal remarks, we will open the call for your questions. Please be advised that this call is being recorded at the Company's request. I will now turn the call over to John Fraunces of LifeSci Advisors. Please go ahead.

Good morning, everyone and thank you for joining us. Participating in this morning's call are Dave Domzalski, VYNE's President and Chief Executive Officer, Tyler Zeronda, VYNE's Chief Financial Officer, and Dr. Iain Stuart, the Company's Chief Scientific Officer. Please note that there are slides to accompany Dr. Stuart's discussion. For those of you dialed into the phone lines, in order to access these slides, you will need to log on to the live webcast. The link can be found on the Investors and Media section of VYNE 's corporate website under Events and Presentation. Slide presentation and a replay of this conference call will be archived on the Company's website. Before we begin formal remarks, let me remind you that some of the information in the press release issued this morning and, on this conference, call contain forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict, including statements regarding volumes development programs, and future plans and prospects, as well as observations regarding ongoing operating expenses. These statements will include plans and expectations regarding strategic transactions and the success, timing and cost of clinical trials. Words that express and reflect optimism, satisfaction with current progress, prospects or projections, as well as words such as belief, intend, expect, plan, anticipate, and similar variations identify forward-looking statements. But their absence does not mean that the statement is not forward-looking. Such forward-looking statements are not a guarantee of performance, and the Company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in VYNE's Therapeutics filings with the SEC. These forward-looking statements speak only as of the date of today's press release and conference call. And the Company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this call. In addition, the financial portion of this call will include certain non-GAAP financial information. For additional disclosures relating to these non-GAAP financial measures, including a reconciliation to the most directly comparable GAAP measures. Please see today's press release, which is posted on the Investor Relations section of our website. At this time, I would like to turn the call over to Dave Domzalski. Dave, please go ahead.

Thank you, John and good morning to everyone. On our previous earnings call, we announced our transformational decision to refocus our efforts toward developing new and innovative therapies for the treatment of immuno -inflammatory diseases. Today, 1 quarter later, I'm pleased to report that we've achieved a number of important milestones as we continue to advance our proprietary pipeline through a series of near-term early-stage clinical catalysts over the next 12 to 18 months. Without question, the catalytic event driving this transformation has been the licensing of our Bromodomain and Extra-Terminal or BET Inhibitor Platform which we announced in August. As a reminder, the BETi inhibitor platform provides VYNE worldwide rights to a library of small molecule NCEs, and a unique platform to develop both topical and oral BETi inhibitor therapeutics for any indication. Because BETi inhibitors have the ability to target multiple pro-inflammatory pathways, we believe that's exciting new drug class could offer the opportunity for highly potent therapies. These therapies have the potential to address serious unmet medical needs with immuno -inflammatory diseases. We're now poised to generate a series of exciting, data-driven milestones that we believe will unveiled a significant therapeutic potential of these assets. Our focus will be to advance our lead topical BETi inhibitor product candidates, VYN201 into the clinic in 2022. VYN201 is a first-in-class pan-BD BET inhibitor that is designed to reduce inflammation while mitigating systemic drug exposure. VYN201 is being developed for topical applications, potentially including rare dermatosis, where there is significant unmet need due to a lack of indicated treatment options. As many of you know, we recently announced positive data showing that VYN201 was able to significantly reduce several key pro-inflammatory cytokines. in both a preclinical model and in a human skin tissue model. Additionally, VYN201 demonstrated improvements in reducing…

Thanks, Dave. And good morning, everyone. Revenues in the third quarter of 2021 totaled $4.1 million and consisted of $4 million of product sales from AMZEEQ and ZILXI and $21 million of royalty revenue. Our third quarter 2021 GAAP net loss was $21.3 million or $0.41 per share. When excluding $2.4 million of stock-based compensation expense. our third quarter 2021 adjusted net loss was $18.9 million or $0.36 per share. For the third quarter 2021, adjusted operating expenses were $18.4 million, including adjusted SG&A expenses of $11.9 million and adjusted R&D expenses of $6.5 million. The third-quarter adjusted operating expenses of $18.4 million or $1.9 million lower than the second quarter of 2021. Reflecting our focus on cost control and resource prioritization. As we continue to transition our focus in spend toward developing our pipeline, we expect to further reduce our adjusted operating expenses to a range of $10 to $15 million in the fourth quarter of 2021, excluding the one-time $4 million milestone payment related to the exercise of the license agreement for the oral BET Inhibitor, VYN202. Based on our current plans to conduct a Phase 2b trial for FMX114, assuming positive results in the Phase 2a trial, and to progress both VYN201 and VYN202 into the clinic in 2022, we anticipate that our adjusted operating expenses will be approximately $10 million per quarter next year. Now turning to our Balance sheet. Our cash position as of September 30th was approximately $53 million. We believe that this cash will be sufficient to fund our operations through the second quarter of 2022. This projection does not take into account any potential proceeds from the sale of a topical minocycline franchise, new business development transactions, or additional financing activities. Finally, our shares outstanding at September 30th, 2021 totaled $53.5 million shares. For additional information regarding our third quarter results and prior period comparison. Please refer to today's earnings release and our Form 10-Q filed with the SEC. With that, I will turn the call over to Ian, who will go through the progress we've made with our BETi Inhibitor Program.

Thanks, Tyler. I'd like to start by providing a brief progress update on our BETi Inhibitor Program, which includes VYN201, and VYN202 that we are introducing today as the Inhibit platform. I will then present a few slides covering recently announced pre -clinical data for VYN201, our topical Pan-Bromodomain BETi Inhibitor project. As a reminder, today's slide presentation is being presented via our live webcast and these slides can also be found in our corporate presentation available on our website under the Investor Relations section. Beginning with VYN201. We have selected our topical formulation for this pan-BET inhibitor and have already generated significant stage-appropriate product characterization and stability information to support this development. In this past quarter, we have initiated the prerequisite preclinical safety program to support the product's regulatory submissions. I'm pleased to report that both formulation development and preclinical safety programs are progressing well to date. Moving now to VYN202, our bromodomain 2 selective oral BET inhibitor project. The lead optimization work is progressing well with our partner In4Derm to identify potential development candidates for this program. In4Derm hub produced several drug-related NCE candidates with potential class leading potency and BD2 cell activity. Work is continuing to further characterize these molecules and adding new molecules to the platform of several hundred BET Inhibitor examples. As Dave outlined earlier, we recently announced the formation of a Scientific Advisory Board and we convened our first meeting last month with this esteemed group of advisors. In brief, there was broad agreement and interest from the Scientific Advisory Board members, on the utility of the BET inhibitor platform across the respective specialties and enthusiasm for this first-in-class potential. Turn it back to -- what VYN201, we've recently announced new dealer from 2 preclinical studies demonstrating the potential of VYN201 has a highly…

Thanks Iain. We're very excited about the future direction of the Company and we are quickly building momentum across our pipeline of novel and highly differentiated candidates. Each with the opportunity to address significant unmet medical need in immuno inflammatory diseases. As I previously mentioned, we intend to leverage our existing development capabilities and strong network up discovery and preclinical science partners to develop products and advance a series of truly innovative new medicines through the clinic. Our key priorities are to complete the divestiture of the minocycline franchise and advance the pipeline. Over the next 12 to 18 months, we anticipate multiple milestones in early-stage development catalyst for our programs. As we move toward 2022, creating shareholder value remains front and center for our Company, and we look forward to providing further updates on our progress. This concludes our prepared remarks. I will now turn the call back to the operator and open the call for questions. Thanks.

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. We will pause for a moment as callers join the queue. The first question comes from David Amsellem with Piper Sandler. Please go ahead.

Hey, thanks. Just had a few -- starting with 201 and 202. And this is a high-level question, but I thought that it's important to ask. Given the underlying mechanism of these compounds, do you have a sense for what specific indications you think would be most appropriate for both 201 and 202. I know that's early but wanted to just hear your thoughts on this sort of white space area. And to the extent that you move forward with both should we think about the topical being used in a more mild to moderate disease setting and the oral being used in a more moderate to severe disease setting as we see with other classes like, for instance, the JAK Inhibitors. Just help us understand your thought process there. And then for 114 just understanding what -- knowing what we know about the JAK inhibitors, I guess the question here is from a safety tolerability perspective, not just that, but also from an efficacy perspective, given the nature of the market. What do you have to really see to make a go, no-go decision after you get your data next year? Thanks.

Hey, David. David, you were breaking up a bit. If I can summarize and you tell me if this is what you're looking for. I think it was for 201 and 202 for our BET platform where the initial indications with -- could potentially be -- it's obviously early. We have some thoughts on that. The second 2nd question I believe was whether or not we would take the topical into more mild-to-moderate disease states versus much severe. And the third question I believe you were looking for clarity on perhaps 114 relative to what's going on in JAK class but -- if you could confirm or let me know if there was something else.

Yes, that's exactly right. Sorry for the bad connection.

I will start with the JAK program and how we do our product. So, I don't know if you want to provide some color on how we see the benefits and the advantages of FMX114.

Sure. Hey, hi, David. In relation to 114 and how we see it, obviously different in relative to others in the space, and obviously, the recently approved topical JAK inhibitor from Incyte. Dave cover all in the prepared remarks. We do see this as the key benefits here being a multimodal impact on the disease state itself. The top set of the JAK inhibitor itself, we know, obviously, can have exquisite impact on down-regulating key cytokines that drive Inflammation in the skin in atopic dermatitis. But also, we see a great utility and -- actually preventing some of these [Indiscernible] of lymphocytes, these key immune cells from moving into the skin in the first place, where they, obviously, unload the majority of these pro-inflammatory cytokines that drive the disease. So, this is where fingolimod comes in. Fingolimod itself has the potential to inhibit and retain these auto like of lymphocytes in the lymph nodes and therefore prevent was those cells moving into the skin in the first place. This is the extra cellular mechanism that Dave talked about in the prepared remarks, what we've also find -- and also have find in fingolimod itself, has the potential to up regulate that key skin structure protein called filaggrin. That actually is a really important in maintaining the epithelium skin, the epidermis. Now we know that atopic dermatitis is really a skin -- a disease state where the epidermises effectively missing. The ability to prospectively support recovery of the epidermis as the anti-inflammatory effects of the treatments are working is a key component. That's how we see it being quite differentiated away from any of the other topical portals to be a JAK inhibitor or others who certainly don't have that potential. I hope that answers your question on that.

Yeah, I'll just add to obviously, we're in a middle of our 1B component of this Phase 1b/2a study for 114. The 1B component will provide meaningful PK data which obviously would be helpful especially in light of the recent class labeling around JAK inhibitors. It certainly appears that even though it's class labelled for all JAK s that this is really focusing on the view from the update is focusing primarily on systemic JAK s. Dermatologists who are prescribers of these products. They are used to seeing these types of labels. And we feel obviously very good about the prospects of this product. Somebody gets always through the clinic and we hope to have absolute topline results in the early part of the first quarter of next year. The PK data we should have before the end of the year, so we're quite bullish on the prospects of this program. I think on the 201, 202 BETi Inhibitor programs, as we outlined, we're very early in the development of both of these programs, the preclinical data we've seen so far for work 201, we're quite enthusiastic, quite pleased with. We're going to continue to take this [Indiscernible] battery of additional animal models of biomarker studies that are ongoing. We're doing the prerequisite tox work for 201 now. There seems to be a significant level of enthusiasm from our scientific app board and the general scientific community. We think that this program gives us a lot of utility, it's a lot of flexibility for where this product can go. We've talked about some of the more rare skin disease arena, as we mentioned, some pyoderma gangrenosum and others. We're going to hold off on putting up a line or stand on where we're exactly going to take it. We're really…

Yes, that does. Thank you.

Got it.

The next question comes from Louise Chen, with Cantor Fitzgerald. Please go ahead.

Hi, good morning, everyone. This is actually Carvey into Louise. We have a few questions here. first, what is the breakdown of product sales? How much of it was coming from AMZEEQ, How much was from ZILXI? We're interested in tracking the progress of these products. Second, I had out the base when the 2-way data for 114. Can you remind us how we should interpret the data once they come out? And honestly on 201. On the Presentation, there's a lot of promising image of the mouse model compared to vehicles,[Indiscernible],alcohol gel, and you also include a ex vivo analysis against a JAK inhibitor. Just wanted to see if you have done the same mouse model testing against the JAK and see the comparison? If so, what are the takeaways there? Thank you so much.

Yeah, sure. Good morning, Carvey. This is Tyler. I'll take the first question on the breakdown of sales. So, for the quarter, we had $4 million of product sales for AMZEEQ and ZILXI. We have not historically disclosed the breakdown and haven't provided guidance on what the split between products is. What I can point you to is if you take a look at the script data just from a relative proportion that can give you a general direction. But at this point in time, we're not going to break the products down.

Anyone talk about the 1b2a, FMX114 and [Indiscernible]

Hey, Carvey. Yes, the primary endpoint will be change in atopic dermatitis Severity Index. Just back up to the design itself, so the Phase 1B patients will be -- 6 patients will be treated for 2 weeks. There as Dave said earlier, we're primarily evaluating obviously, safety and pharmacokinetic information. The phase 2 portion of the study is 4 weeks, but an additional 2 weeks open-label study. Some same endpoints there. We're looking to report the data early part of Q1 and next year. And then I think, Carvey, your question was on a comparative information in the animal models for the BET inhibitor -- topical BET inhibitor. We haven't done that yet, although that is certainly something we will be focusing on. We traditionally use glucocorticosteroids as a control but it's certainly something that we'll start to grow as we start to hone in on indications later.

Next one. Okay, great. Thank you so much.

Thanks, Carvey.

Once again, [Operator Instructions]. The next question comes from Patrick Dolezal with LifeSci Capital. Please go ahead.

Hi. Thanks for taking the questions. For the BET inhibitors as a class, just curious what safety effects have emerged clinically and what gives you confidence that these may be averted by a topical approach in the case of 201, and the selective BD2 approach in the case of 202? And then just perhaps if you could detail the items outstanding to IND submission for each of those. That would be helpful. Thanks.

Hey, Patrick -- I see him. As you know, the majority of BET Inhibitors in development are pan-BD, so they bind to BD-1 and BD-2. They are orally available. They are primarily for oncology indications. Although there's 1 in the cardiovascular space. So why do we think ours are differentiated from there? I think we'll start with what the types of adverse events you can typically see for an orally available pan-BD inhibitor, It tend to be things like thrombocytopenia’s, gastrointestinal toxicities, emesis, vomiting, that kind of thing, flushing. Revert to 201, so topical by inherently. we have assumed about reduced systemic exposure there. But I think primarily we actually a factor then a metabolic liability into the molecule itself was part of the design principles from medicinal chemistry. So, what that effectively means is that any 201 systemically exposed by the topical rub will be rapidly cleared by the liver and inactivated. So that's a way where we are -- it's like a 1-2 punch there, one got topical on one induced this soft drug approach where we're specifically in consciously introducing a metabolic liability. On 202, the way we are addressing the pan-BD toxicity question is that certainly evolving information from others with our own data that if you selectively bind to BD-2, you tend to have an improved safety profile in general terms. Second, [Indiscernible] appears that majority of poor inflammatory signaling, or genes are activated -- [Indiscernible] pharmacy genes are activated tend to be driven mostly through BD2, while on BD1. BD1 has been implicated in driving the activation of genes and a lot of housekeeping genes. The work for In4Derm I've done today, I covered off in the prepared remarks. We have exquisitely potent and highly, highly selective BD2 select components already. Of course, we're developing additional work as grows on there. So, I think that we're really addressing out from 2 components to the 2 projects. One is about a metabolic liability and going topical with 201 and 202 going for a very selective BD2 inhibitor.

That's helpful. And just one follow-up, the preclinical data on composite inflammation severity and the [Indiscernible] inflammation model looks solid, very comparable to steroids. Just curious, should we be thinking about the magnitude of effect observed here? Or more so just that it's directionally favorable. And then as it relates to the biomarker data, are there any biomarkers in particular that are known to be pathogenic in a given disease state or are you giving excitement about future clinical development?

Yeah. Just on your last point there, the fact that we have significant impact and pretty much all cytokines that drive T-17 immunology is as particularly exciting. You saw from the slide there, obviously we have significantly been ranked in isle 17, isle 6, and others. Again, this speaks to the broad applicability as an anti-inflammatory agent. Secondarily, we were effectively equipotent to a Class 1 super potent steroids, which is quite rare for a certainly newer-generation of anti-inflammatory agents. So, I think to your earlier question you should think about the potential of having that super potent anti-inflammatory effect but without the specific liabilities you would tend to see with long-term use of glucocorticosteroids.

Yeah, just about to take you back on this Patrick, clobetasol is outlined are super potent steroid that's at a far cry from the over-the-counter hydrocortisone steroids that are out there and it's been a class 1 and there's a reason why it's called a super potent steroid because it's just that. And the fact that we -- again obviously this is early data -- preclinical data. But the fact we solved that level of response in line with what you see from Clobetasol super potent steroid, Yet initial tolerant -- tolerability data being very positive and encouraging just gives us a lot of enthusiasm about the prospects of obviously this molecule, and this program, but for the entire platform.

Great. Thanks so much. [Indiscernible]

This concludes the question-and-answer session. I would now like to turn the conference back over to management for any closing remarks.

Well, thank you, operator, and thanks to everyone that took time out of your schedules to join this call. We look forward to continuing to provide an update on the progress of our business and we wish everyone an enjoyable holiday season that's coming up over the course of the next few weeks. We look forward to speaking with everyone soon. Thanks, and have a great rest of the week.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.