Greetings, and welcome to the VYNE Therapeutics second quarter 2021 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference, you need to reach an operator, please press star zero. As a reminder, this conference is being recorded, Thursday, August 12th, 2021. I would now like to turn the conference over to Chase Oswald from LifeSci Advisors. Please go ahead. Good morning, everyone, and thank you for joining us. 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, forecasts, and financial and operating performance, impacts of the COVID-19 pandemic on VYNE, and observations regarding ongoing operating expenses and net revenue. These statements will include observations associated with the commercialization of AMZEEQ and ZILXI in the U.S. They will also 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 believe, intend, expect, plan, anticipate, and similar variations identify forward-looking statements, but their absence does not mean that statement is not forward-looking. Such forward-looking statements are not a guarantee of performance, and the company's actual results may 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 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. Participating in this morning's call are Dave Domzalski, VYNE's President and Chief Executive Officer, and Tyler Zeronda, VYNE's Chief Financial Officer. Dr. Iain Stuart, the company's Chief Scientific Officer, and Mutya Harsch, the company's General Counsel and Chief Legal Officer, will also be online and will be available during the Q&A session. At this time, I would like to turn the call over to Dave Domzalski. Dave, please go ahead. Thank you, Chase, and good morning to everyone. Hopefully, you'll have had a chance to read the two press releases that we issued this morning related to our second quarter earnings and announcing our new license agreement with In4Derm. On today's call, we will be going through our second-quarter financials. However, I want to spend the majority of my time this morning talking about the change to our corporate strategy and our focus on R&D and advancing our proprietary pipeline. This morning, we released our earnings. Revenue for the quarter was flat compared to last quarter as we continued to face headwinds commercializing our products in this environment. We have been evaluating our commercial and R&D assets for some time in order to determine how to optimally deploy capital and drive shareholder value. During the course of this process, we carefully consider the revenues received from the commercialization of AMZEEQ and ZILXI and the associated costs to drive those revenues. The protracted negative impact of the COVID-19 pandemic over the past 18 months during the commercial launches of both AMZEEQ and ZILXI and the current payer landscape has made this an incredibly challenging environment. Throughout this process, we explored several strategic options, including the acquisition of marketed assets, out-licensing our approved products outside of the United States, and possible partnering or co-development relationships with interested parties. As you all are aware, we've had to make considerable cuts to our operating expenses over the past 18 months in light of COVID-19 in order to preserve our commercial operation. We have kept our sales force intact throughout this time and our efforts to educate healthcare providers and increase awareness of both AMZEEQ and ZILXI. While we have had to balance our cash expenditures for commercial operations throughout these periods of unpredictability and customer access restrictions since the COVID-19 pandemic began last March, important consumer, digital, and e-commerce initiatives that we would have sequenced during a normal launch cycle have unfortunately needed to be sidelined. Launching new products bring a variety of challenges in any environment, particularly for a company of our size. There is a roadmap to maximize the potential of our minocycline franchise. We know we have excellent products, and responses from patients and the healthcare providers continues to be very positive. The issue for us is ultimately one of time and money. Though we remain optimistic about the potential of our launch brands, the factors I have discussed, coupled with our current operating costs, significantly impact our ability to become a profitable enterprise within an acceptable timeframe. We believe that our existing minocycline franchise, including our phase III-ready combination product, FCD105, has significant value. As we assessed our current minocycline franchise and the costs associated with commercialization alongside our ambitions for our pipeline, including the transaction announced this morning with In4Derm, which provides us with exclusive access to a novel BETi platform. We came to the conclusion that we cannot appropriately support both a commercial enterprise and R&D operations. After careful consideration, we have made the strategic decision to explore a sale or license of our minocycline franchise, including the underlying molecule stabilizing technology platform specific to our minocycline portfolio. We are working with a prominent investment bank to lead us through this process. We believe that the potential of this franchise could be maximized by a partner that can deploy the necessary resources to unlock its true value. Recognizing the continued pressure on our share price, we believe the best way to create value for our shareholders is to focus our resources on our existing R&D capabilities and strong partner network to advance our proprietary pipeline. As we transition our focus and spend toward developing our pipeline, we will continue to selectively fund certain aspects of the commercial business, including our sales force, for a finite period of time while we actively work to identify a partner for our minocycline franchise. This will reduce our overall burn rates and allow us to make appropriate investments in our pipeline, which we believe will create significant value for our shareholders. Separately, in light of the strategic change, we've had a number of discussions with our lenders regarding our outstanding debt. They were very helpful in working through potential options and were willing to provide us runway to keep the debt outstanding for a period of time during the process of identifying a partner for the minocycline franchise. When considering the carrying costs and fees, however, associated with doing so, we believe it was more prudent to prepay the loan and use the cash that would have otherwise funded those carrying costs to invest in our pipeline projects. Tyler, our CFO, will discuss our cash and cash runway when we get to the financial discussion. Going forward, we will invest in developing therapies for the treatment of immunology and inflammatory conditions with high unmet needs. Drug development is a core competency of VYNE. We have a track record of successfully developing complex molecules and advancing therapeutics through the clinic and regulatory approval process. We intend to leverage those core capabilities in building an enhanced pipeline of innovative NCEs alongside our current development program for FMX114 for the potential treatment of mild to moderate atopic dermatitis. We believe this is the right direction for the company and have the unanimous support of our board of directors. This leads me now to the licensing agreement we announced this morning with In4Derm Limited, a spinout of the University of Dundee's School of Life Sciences. Dundee is one of the foremost integrated university-hospital and biotechnology research institutes in Europe. We have been following the work of this group and have been impressed with their progress in developing multiple, novel, and differentiated drug discovery platforms relevant to autoimmunity and immuno-oncology disciplines. We are particularly impressed with the potential and broad applicability of their work in identifying highly potent and selective bromodomain and extra-terminal domain inhibitors, also referred to as BET inhibitors or BETi for short. As outlined in our press release, this partnership with In4Derm provides us exclusive worldwide rights to a novel class of BETi compounds. The BET family of proteins are epigenetic regulators that control the transcription of genes. Inhibiting BET proteins stalls the transcriptional process and therefore reduces the extent of inflammation in tissues. There's a lot of interest in BETi as therapeutic targets for a wide range of diseases. To date, much of the clinical research, particularly by large pharma, has been focused on oncology. There is also compelling science to show that BET inhibition can play an important role in effectively treating immunoinflammatory diseases. We believe this partnership with In4Derm is transformational for VYNE as it exponentially expands our pipeline, providing us with a library of small molecule NCEs and a unique platform to develop both topical and oral BETi therapeutics. The initial candidates that we plan to develop we refer to as VYN201 and VYN202. The first of these, VYN201, is a pan-bromodomain or pan-BD BET inhibitor. It is a first-in-class soft pan-BD BET inhibitor that is designed to mitigate systemic drug exposure and will be developed for topical applications. We intend to progress VYN201 into rare neutrophilic dermatological indications such as pyoderma gangrenosum, palmoplantar pustulosis, and generalized pustular psoriasis, where there is significant unmet need due to a lack of indicated treatment options. We plan to enter this program into the clinic next year after the prerequisite non-clinical safety assessments have been completed. The second candidate, VYN202, is an orally delivered, first-in-class BET inhibitor that's highly selective for BD2. Recent research suggests that the majority of pro-inflammatory signaling from BET protein action is through the interactions with bromodomain 2. By selectively inhibiting BD2, we believe VYN202 could have a more targeted anti-inflammatory effect with an improved benefit-risk profile. We view VYN202 as having significant potential as a novel oral treatment for major immunoinflammatory indications such as rheumatoid arthritis, ulcerative colitis, and multiple sclerosis. Upon final candidate selection and exercise of our option, we intend to commence an IND-enabling non-clinical safety program and enter the clinic next year as well. BET inhibition is good science, and we are enthusiastic about the potential broad utility of the BETi platform. Over the coming months, as we prepare to take these NCEs into the clinic, we will provide further details on the initial indication that we intend to pursue for each of these programs. With respect to the economics of our partnership with In4Derm, we structured the transaction to provide us the exclusive right to develop any and all of their BETi compounds for any indication worldwide. Additionally, we have the ability to sublicense to a third party the development of any BETi program in any jurisdiction. This gives us significant optionality in how we deploy our resources and maximize the potential of the platform. In essence, this is a pay-as-you-go or à la carte model, which provides us the ability to control costs at our discretion. For perspective, the total milestone payments to progress one topical product through approval in the U.S. is approximately $16 million for all indications. Similarly, the total milestone payments to progress one oral product through approval in the U.S. is approximately $44 million for all indications. This obviously excludes R&D costs and any royalties payable upon commercialization. In summary, we are very excited about the possibilities of the BETi platform and our collaboration with In4Derm as we prioritize the growth of our pipeline. By coupling In4Derm's deep expertise in rational drug design and leading-edge pharmacologies with VYNE's drug development capabilities, we see a strong foundation to build real value for patients and shareholders alike, and we look forward to providing further progress through our updates. Moving to FMX114, we remain on target to enroll the first patient in our phase IIa proof of concept study in mild to moderate atopic dermatitis later this quarter. Clinical trial supplies are at our third-party distributor in Australia for subsequent shipment to investigator sites, pending approval of the protocol by the local ethics committee. Again, we anticipate having top-line results from this study by the end of the year. Turning to commercial. For the second quarter, the minocycline franchise exceeded 57,000 prescriptions. This represents an approximate 10% increase over the first quarter of this year and is the highest quarterly prescription count since the launch of both AMZEEQ and ZILXI. Individually, AMZEEQ had over 47,000 prescriptions, and ZILXI, 10,000 prescriptions, which both represent quarterly highs. To date, roughly 9,000 unique healthcare providers have prescribed AMZEEQ. We have penetrated 74% of our target universe so far this year, including over 87% of our highest decile targets. Similarly, ZILXI has over 3,300 total unique prescribers since launch in October, with a 42% penetration rate of our target universe. Additionally, year- to- date, our sales team has executed educational speaker programs for over 1,600 healthcare practitioners on both AMZEEQ and ZILXI. Market access for AMZEEQ has remained stable as the brand continues to have coverage for approximately 72% of commercially covered lives. Market access for ZILXI has improved to approximately 68% of commercial lives, an increase of 7% from last quarter due to successful pull-through efforts by our team with downstream custom plans. We view these as positive metrics for the franchise, despite our brands continuing to face pandemic-related headwinds. You may recall that the sales team began the year with approximately 35%-40% access to target positions in a live setting. This has progressed to approximately 60%-65% recently, but it's clear that the COVID-19 pandemic continues to have an impact on the launch of both products. On the IP front, we announced on Monday that we have initiated a patent infringement lawsuit against Perrigo Israel Pharmaceuticals. We filed this lawsuit in response to Perrigo's ANDA filing, seeking FDA approval to manufacture and sell a generic version of AMZEEQ in the U.S. prior 12 patents listed in the Orange Book. We are seeking an order that the effective date of any FDA approval of Perrigo's ANDA be no earlier than the expiration of our listed patents, the latest of which expires on September 8th, 2037. We are confident in the strength of our patents. We intend to vigorously defend our intellectual property rights in the U.S. and globally. I'll now turn the call over to Tyler to cover the financials. Tyler? Thanks, Dave. Good morning, everyone. Revenues in the second quarter 2021 totaled $4.3 million and consisted of $4 million of product sales from AMZEEQ and ZILXI, and $0.3 million of royalty revenues. Our second quarter 2021 GAAP net loss was $19.9 million, or $0.39 per share. When excluding $1.9 million of stock-based compensation expense, our second quarter 2021 adjusted net loss was $18 million, or $0.35 per share. For the second quarter of 2021, adjusted operating expenses were $20.3 million, including adjusted SG&A expenses of $14.4 million and adjusted R&D expenses of $6 million. We've historically guided to adjusted operating expenses of approximately $20 million-$25 million per quarter, which is where we have been landing over the last three quarters from Q4 2020 through Q2 2021. As we transition our focus and spend toward developing our pipeline, we anticipate that Q3 adjusted operating expenses should be in the low end of that range while we continue to selectively fund certain aspects of our commercial business, including our sales force, while we seek a potential partner for our minocycline franchise. This amount also includes $1.5 million-$2 million of severance and related benefits associated with our restructuring plan that Dave described earlier, but excludes any non-cash charges. We expect to substantially complete our transition to an R&D-focused biopharmaceutical company by the end of this year. Beginning in the fourth quarter, we expect to further reduce our adjusted operating expenses to a range of $15 million-$20 million, including the anticipated $4 million milestone payment related to the exercise of the license agreement for the oral BETI, VYN202. Based on our current plans to conduct a phase IIb trial for FMX114, assuming positive results in the phase IIa trial later this year, 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 the balance sheet. Our cash position as of June 30th was $104 million. As Dave outlined in his prepared remarks, subsequent to June 30th, we prepaid our outstanding debt of $35 million in addition to a 4% prepayment fee. As a result, our pro forma cash position as of June 30th, after giving effect to the full prepayment of the loan facility, was approximately $68 million. We believe that this cash will be sufficient to fund our operations through the second quarter of 2022. I want to point out that this projection does not take into account any potential proceeds from the sale or license of the topical minocycline franchise, new business development transactions, or additional financing activities. Finally, our shares outstanding as of June 30th totaled 51.5 million shares. For additional information regarding our second quarter results and prior period comparisons, please refer to today's earnings release and our Form 10-Q filed with the SEC. Now, let me turn the call back over to Dave for closing comments. Thanks, Tyler. Well, we've covered a lot in this call. To summarize, we are refocusing the company from a commercial enterprise in therapeutic dermatology to a biopharmaceutical company with unique and proprietary assets. Our partnership with In4Derm provides us access to an exciting BETi platform for both topical and oral treatments for immuno-inflammatory diseases of high unmet medical need. We intend to leverage our existing development capabilities and strong network of discovery and preclinical science partners to develop products and advance a series of truly innovative new medicines throughout the clinic. Through our reductions in SG&A-related operating expenses and repayment of debt, we are cleaning up our balance sheets so we can focus on advancing our pipeline as I outlined earlier. We are excited about the prospects of these programs as we anticipate multiple early-stage clinical milestones over the next 12 months-24 months. Making the strategic shift was not an easy decision. However, I have complete conviction that this is the right decision and the clearest path to create value for our shareholders. Our team is already busy at work to execute on our plans, and I look forward to updating you on our progress. That concludes our prepared remarks. I will now turn the call over to the operator and open the call for questions. Thank you. Thank you. Our first question comes from the line of Louise Chen with Cantor Fitzgerald. Please proceed. Hi, good morning, everyone. This is Carvey in for Louise. Congrats on the quarter and the licensing agreement. Thank you for taking our questions. Our first question is, what are some potential competitive advantages of a BETi or a BET inhibitor versus other immuno-inflammatory treatments for rare skin diseases? Secondly, as mentioned earlier, this class of drug has been more investigated in oncology. What are some key findings from preclinical research that kind of pushed for the agreement? Lastly, there are a plethora of rare skin diseases, and you had described a few during your opening statement. Are there specific ones that you're super interested in, and what is going to be your process in narrowing down which ones to pursue? Thank you. Great, Carvey. I'll turn that over to Iain, so. Hi, good morning, Carvey. Iain. The initial indications, let's talk about the topical to start with. The challenges with some of these neutrophilic dermatoses, and Dave in the prepared remarks talked about pyoderma gangrenosum, generalized pustular psoriasis, palmoplantar pustulosis, is they all have one common theme, and that is pretty catastrophic inflammatory signaling, where a more targeted approach may not necessarily provide the best clinical outcome. There are others who have looked at specific monoclonal antibodies against specific receptors and have come up with somewhat limited clinical response. The BETi, particularly VYN201, which is a pan-bromodomain BET inhibitor, has the potential to have a much broader anti-inflammatory effect. In vitro data that we have generated and In4Derm have generated, have actually shown great utility across a number of T- helper cell groups that are relevant to these pretty catastrophic dermatoses. We're quite excited about the direct applicability of VYN201 to these diseases. Moving to VYN202, this is a BD2 or bromodomain 2 selective BET inhibitor. Why is that important? Again, referring back to Dave's remarks, BD2 appears to be driving the majority of anti-inflammatory effects through the BET protein signaling pathway. It does make sense to obviously target that one more selectively. Equally, most of the early-stage BET inhibitors that have been targeted towards oncology were pan-BD inhibitors, and binding to BD1 has been implicated in maybe a narrower benefit risk profile, which obviously lends itself to oncology indications, but maybe not necessarily to broader autoimmune diseases as the ones that Dave has referred to, such as rheumatoid arthritis, ulcerative colitis, and multiple sclerosis. Again, we want to develop a VYN202 as an orally delivered selective BD2 inhibitor of BET. Work that In4Derm have done to date have shown exquisite selectivity to BD2 versus BD1. We are working on obviously identifying a candidate for further development. That is also progressing very well as well at this stage. Anything else, Carvey? Yeah. During your opening statement, you talked about different skin diseases that this is applicable. Maybe you can talk about which specific ones are you more interested in, which ones you're more excited for, and what's going to be your process in narrowing down which one to being important at the beginning? Sure. The three diseases, as I said, were pyoderma gangrenosum, generalized pustular psoriasis, and palmoplantar pustulosis. We obviously will be conducting a great deal of non-clinical work to specifically target or prioritize that order. What they have all in common, other than this pretty catastrophic neutrophilic response to the immune system, is that they are either significantly life-threatening or certainly life quality limiting. For example, pyoderma gangrenosum, the mortality rate for an untreated pyoderma gangrenosum is 100%. These patients tend to suffer from obviously very large, very embedded ulcers in their skin that ultimately can become septic. If that sepsis becomes systemic, clearly that has significant impact on mortality. Palmoplantar pustulosis, if you can imagine large blisters on the palms and soles of the feet, tremendously debilitating. If you can't use your hands or you can't walk, clearly that is an area that we will also be looking at. Generalized pustular psoriasis similarly is almost like a broader cutaneous presentation of that. Others have looked in this space as well. Very difficult to control. Is a chronic and relapsing condition, and also has significant mortality in relation to it. It will be based on in vitro data, ex vivo data, not animal models, as we start to prioritize that sequence. Those are the three that we're kind of honing in on right now. Yeah, Carvey, this is Dave, too. I would also share that there's been some work that's been done with BETi. We know that there's one company that's looking at developing a topical BETi for psoriasis. We know that a product, a topical BET inhibitor, could also very well be applicable for diseases such as atopic dermatitis because of its potential anti-inflammatory effect. These are marketplaces that, as you know, there's been a lot of work in it. We're quite familiar with those marketplaces. We have a product for atopic dermatitis that's getting ready to go into a phase IIa study. Our combination tofacitinib fingolimod product, FMX114. Ultimately our mission is to develop products that can treat significant unmet needs. The areas that Iain outlined, there is no indicated product. If we can advance there, we believe that could be tremendous for patients. We're really excited about that and the prospects of this platform. Great. Awesome. Thank you so much, and congrats again. Thank you. Thanks, Carvey. Thanks, Carvey. The next question comes to the line of Ken Cacciatore with Cowen. Please proceed. Hey, Dave. Obviously tough year, and share your disappointment in the core assets that you're now going to seek to divest. Can you just talk about the decision process going forward? You are going to continue to spend behind the marketing. Just wondering, as you're working through the strategic options, you must feel good to continue to want to spend to preserve the franchise as is ahead of another decision, sounds like by year-end. Can you give us some context on where we may stand in terms of monetizing these assets and the again, the decision to continue to spend before it sounds like under any scenario you're going to pull back spending by Q1? Thanks so much. Yeah, sure Ken. Thanks. First of all, we believe that there indeed will be a home for this franchise. We believe there's a lot of value for this minocycline franchise, as outlined earlier. The issue is ultimately one of time and resources, and a partner that has the resources and the bandwidth to take this franchise, to certainly maximize the potential of it. Again, I want to stress this is an entire franchise. Two marketed products, AMZEEQ and ZILXI, a phase III-ready asset, and a platform with long IP. This is not a single asset sale or out license, and we think there's certainly value for that. We're getting this process initiated right away. We believe it's prudent to keep some basic support behind this franchise while we go through this process. In part, a potential partner may want the infrastructure that goes along with that. We're not at all abandoning the franchise. Quite the opposite. We're going to keep things moving along, but for a finite period of time. The sales force will continue to be engaged. We intend this to go into the fourth quarter. I think alongside of that, though, as I outlined and as Tyler commented, we will and have already significantly cut back supported A&P expenditures. We'll continue to do this ratably as we move through the balance of this year while we're going through, obviously, this process. We envision by the time we get to the end of the year, we will materially have completed this transition. By the time we get to the turn of the new year, our operating expenditures will be dropped in half. As Tyler outlined, we've been running at an OpEx rate of, we've guided $20 million-$25 million per quarter. Over the last few quarters, we've certainly been on the low end of that. That will continue to fall as we move through the next two quarters. By the time we get to the turn of the year, we anticipate that our OpEx expense will be down to around $10 million a quarter. Literally a cut in half to really only around a $40 million OpEx for the entire year for 2022. Hopefully that provides some color. I'll see if Tyler's got anything else to add or. No, I think you covered it well, Dave. Okay. Thanks, Ken. The next question comes from the line of David Amsellem with Piper Sandler. Please proceed. Hey, thanks. Just a few questions here. Regarding the assets you acquired, can you talk about the extent to which there was competition for them? I guess maybe another way of asking it is, were there other parties, as far as you know, that were looking into the assets? I just wanted to get a sense regarding the extent to which you think you were able to find something that really nobody else was looking at. That's number one. Number two, regarding your strategic thinking on the minocycline franchise. I guess my question here is, as we eventually move out of the pandemic, and let's all assume that will happen at some point, was it just your view that the challenges with payers in particular were just too great and the resource challenges were too significant even as you move out of the pandemic? I apologize, I'm losing my voice, so I'll stop there. Okay. No problem. First of all, regarding the partnership that we have with In4Derm, again, I can't stress enough how thrilled we are with it. We believe it's potentially transformational for the company. This is an outstanding group that we are partnering with. As I outlined, David, we've been following them for some time. It's a group over in Scotland. Iain has had contacts and been watching this team and talk with them for some time, and we believe we're very fortunate. We've been looking, and I've commented on this for the past year plus, that one of our key objectives is to broaden our pipeline. I've been very clear we would, and everybody should expect that we would move beyond 505(b)(2)s, beyond tetracyclines, beyond foams, beyond topicals, and move towards broader indications and NCEs that can address significant unmet needs for patients. We believe the partnership that we have with In4Derm is huge for that and is a core for our business going forward. We're fortunate. As I outlined, there's been a fair amount of work for BET inhibitors, especially with some large pharma companies. It's a real credit to the team and to the relation that we've structured with In4Derm that we were able to forge this partnership with them at this stage. We're excited, and we also believe we're fortunate and thrilled to be working with them. I think coming back to your second question, David, on the decision process, and indeed, I think we all hope and believe that at some point in time, this pandemic will be behind us. It has been 18 months, going on 20 months. Not unlike other companies, everybody out there. It's tough, as I said, commercializing and launching products in any environment, especially for smaller companies of our scale. I've said in the past, there's no playbook on how to do that within a pandemic. I'm enormously proud of the job that the team has done navigating over this time period. It has been challenging. As I outlined, we've had to make a variety of adjustments, cuts to the operation, and the organization to sustain our commercial efforts. Ultimately, as I shared, it's an issue of time and money. We do not have unlimited resources, and when we look at what's the best way for us to deploy capital and to maximize shareholder value, certainly when thinking through the uncertainties of this current environment, we believe that the franchise in the hands of a partner that doesn't have the constraints that we do will obviously maximize the potential for that business. That was what was driving the decision and that move, and then the subsequent proceeds that we anticipate we'll get from that will certainly be incredibly helpful for us as we advance our pipeline that I've outlined earlier. We're looking at multiple clinical milestones over a 12-month to 24-month period, the first of which will be coming up, we anticipate, before the end of the year for FMX114, our phase IIa study. Then as we move towards the balance of 2022, and that's when we'll start looking at potentially additional milestones for FMX114, and then we'll begin to start seeing the clinical milestones for our BETi products, VYN201 and VYN202. That's the decision behind. We believe it's clearly the right decision. We're excited moving forward. Again, it was a difficult decision. It was not an easy decision, but we believe it's the right decision, and we're moving forward. Okay, understood. If I may sneak in a follow-up, and thankfully, I have my voice back. Of course. In terms of 114, assuming you do see favorable data, how should we think about the trajectory of R&D spend? I know you said you're going to be cutting the burn, but at some point, R&D is going to ramp up, and certainly AD programs can be quite large and expensive. As we move through 2022, is it safe to say that we're going to see a real uptick in R&D and that eventually the burn will sort of re-accelerate? Obviously, a very different kind of burn, but just help us think through that. Yeah, David, this is Tyler. I'll take that question. In terms of next year from an OpEx perspective, I mentioned the $10 million per quarter. That assumes success in the phase IIa in bringing FMX114 into the phase IIb trial. As we look further in potentially success beyond the phase IIb trial, we could see expenses increase beyond 2022. We'll look at that as we get the final trial design and things of that nature. Just to reiterate, for the phase IIb that we anticipate, that's within the $10 million per quarter that we've estimated. Yeah, I think to add further context to that, David, is that includes not just a potential phase IIb, but obviously the work that we would be doing for both VYN201 and VYN202, and taking those into the clinic. We believe certainly when we move into next year, we will have obviously a significantly reduced OpEx. The majority of that will be for the R&D efforts that we'll be conducting across three programs. When you couple that or compare that versus, say, one phase III program for FCD105 that we've outlined before, that would cost $35 million+ for two pivotal phase III studies and a long-term extension. We will be able to, again, assuming success in the phase IIa study for FMX114, our plan is to have obviously a phase IIb study, a dose ranging study, and a couple of early stage phase I, phase II studies for both VYN201 and VYN202, and that's all within the $10 million per quarter that Tyler outlined. Obviously as you move out beyond two years, then things can change. As we say, I would view those as high-class items for us to deal with. We're excited about the prospects. Assuming we demonstrate proof of concept and efficacy for these programs, I think things will fall into place after that. I can't stress enough how we're excited about this platform and the prospects of it going forward. Hopefully that gives you some context over the next 18 months of spend. Yeah, that's helpful. Thanks, Dave. You got it. Feel better. Thank you. Yep. The next question comes to the line of Patrick Dolezal now with LifeSci Capital. Please proceed. Hi, thanks for taking the questions. I think I'm understanding the decision-making process behind the divestiture of the existing commercial assets. Kind of going forward, how will you plan to prioritize the pipeline to avoid such pitfalls in the future? Obviously, there's been a bit of a strategic reprioritization in terms of the targeted disease areas. Perhaps speaking more specifically to FMX114, if you could describe to us why the commercial environment is different in mild-to-moderate atopic dermatitis versus acne and rosacea, and whether there's any reason to believe that similar headwinds might be faced for that program. Maybe providing context around the BET inhibitors and the indications you're going after there would be helpful as well. Yeah, sure, Patrick. Obviously with the BET inhibitor platform, and I want to stress that, it's a platform for us to develop and work a partnership with In4Derm. Multiple programs, multiple potential shots on goal over the course of time. Obviously we're going to be disciplined and decide where we take these assets first. These are new chemical entities. The topical program that Iain outlined, our intent would be to take it into rare skin diseases. For the oral program, that'd be your larger, broader I& I type of indications, rheumatoid arthritis, ulcerative colitis, Crohn's, et cetera. Our view is that, assuming we're successful, we will have highly differentiated products in markets that have significant unmet needs, and we'll create the right profile for payers as we advance these programs. I think similarly to what you mentioned around FMX114, there obviously is significant unmet need still for atopic dermatitis. We focus specifically on the mild to moderate area with FMX114. A lot of the work that's being done is in your moderate to severe area, and we believe from a commercial perspective that it's more prudent to address the mild to moderate arena, where there's not a lot of optionality other than steroids or products that relatively have minimal effectiveness. We're encouraged certainly by our preclinical animal data that we shared earlier in this year. We're excited to get this program off the ground. It's phase IIa, it'll be our first in-human study. Assuming that the results, if they're anywhere in the range of what we showed in our preclinical data, I think that could be highly beneficial, obviously, for patients and providers and for the payer arena. That's our view on it. Hopefully that provides you some color and some context. That's helpful. Thanks. I guess just one more. Perhaps if you could just provide details around the Padagis Pharma ANDA filing. Your take as to the likelihood of marketing approval and timeframe, and any impact as it relates to the successful licensing or sale of the minocycline portfolio. Hi. Good morning. It's Mutya Harsch. With respect to the Paragraph IV litigation, we obviously expected that there would be ANDA filings to AMZEEQ. This is something that's not new to this therapeutic class. In particular, we knew that it was likely to come. We obviously can't comment on the specifics of the litigation, but we're well prepared to deal with this litigation. As you know, we've filed an infringement action earlier this week. We have 12 patents listed in the Orange Book and have had experience dealing with Perrigo in the past with regard to the Finacea Foam litigation that we worked with LEO Pharma. With respect to the sale and the Paragraph IV litigation, I don't think that any partner or potential partner would be surprised that there is a Paragraph IV litigation already outstanding. There's going to be a stay until December 2023. We'll deal with it as matters progress. Obviously, we have strong confidence in the strength of our patents and we're going to vigorously defend them. Great. Thank you. You're welcome. Thanks, Patrick. The next question comes to the line of Oren Livnat with H.C. Wainwright. Please proceed. Don't mean to beat a dead horse, I do want to follow up a little bit on David's questions regarding the decision to exit the commercial business. Can you just talk about your view of that landscape evolution in general? If the pandemic was over, do you think we're still in a new normal and that it's just not really viable with realistic resources for a small company, one molecule to launch into the space now, given the payer landscape? Is it really just a question of scale and breadth of portfolio? Is it molecule specific? Do you think topicals or the acne space particular are uniquely challenging? I do have some other pipeline questions. Thanks, Oren. I'm not one to speculate, but the reality is that we've been in a pandemic for 18 months. We've had to deal with that. I'll just reiterate again, it's challenging to launch a product for any company, especially a company of our scale. We demonstrated out of the gates the potential of AMZEEQ going all the way back to the first few months of 2020. The world changed. COVID changed, and we've been wrestling with this ever since. As you recall, we had a period of four months or so where we were basically shut down and pivoted to a digital process. That's tough for small companies. Larger companies certainly have more resources. We certainly, again, believe in the potential of the franchise. When we balance the current environment in commercialization with COVID and challenges with the payer arena, balance that with the opportunity we have to advance our pipeline, ideally, you'd like to be able to do both. For a company our scale, we don't have that ability, and we believe, again, that the opportunity to maximize shareholder value is to transition and focus our efforts on advancing our very unique and proprietary pipeline. We're obviously excited about that. Coming back again to just the overall environment. These are really good products. This is a really good franchise. Patients have spoken very well of AMZEEQ and ZILXI, as have providers. We've got a franchise. We've got a phase III-ready asset with FCD105. The results from the phase II study were potentially best in class. Ultimately, we can't predict the future. We know we've been dealing with this for over a year and a half. We all know right now what's going on in the environment. There's additional issues with the COVID-19 variant. I have no idea how long this is going to go, but we believe that it was clearly the prudent, responsible decision to make this change now, because if it doesn't change, or not ratably change, we could be in a different situation as we move into next year. That's the rationale behind it. We believe, again, a partner that's got the appropriate resources and structure can maximize the potential of this, and we look forward to having those discussions. I don't doubt the I think it's pretty obvious from an optionality perspective of, there's a lot more exciting to take your latter strategy with the pipeline. We've seen other companies transition from commercial to R&D, and it's worked out pretty well. To that effect, in the BET platform, you mentioned there's some exciting science there. It's all in vitro and preclinical or all in vitro that you're basing your decision on right now. Is there a specific topical, I guess, proof of concept in your mind with regard to this platform? I assume, the oral targeting of these inflammatory pathways is not necessarily the same as the topical. Do you have a unique technology in mind to marry with this, or is this just a spread it and forget it, so to speak, and it should hopefully mimic what you're seeing in the test tube? I like that, Oren. Spread and forget. Yeah. Yes, there is. As I said in my comments a little bit earlier to one of Louise's questions. The VYN201 is a pan-bromodomain BET inhibitor, and I also mentioned the fact that bromodomain 1 may potentially impact on the overall benefit risk of the product. We're really addressing that three ways, and this is what makes VYN201 quite unique. One is to go topical. Obviously, inherently, that's the potential to reduce overall systemic exposure to these active ingredients. Two, we've actually programmed in a specific metabolic liability so that any drug that is systemically exposed is rapidly inactivated and cleared by the liver. That obviously keeps systemic exposure low. The other one is, to Dave's earlier remarks, we're targeting dysregulative dermatoses where there is no indicated indication that these are potentially life-threatening disorders. We see great utility application for that. That's the three elements where we see the uniqueness of VYN201 as a topical. As I said, we are aware of one other bromodomain and terminal inhibitor that's been developed for topical psoriasis, we believe, and of course, ours would also be equally applicable to psoriasis and more general dermatological indications. We see the biggest need is in these pretty catastrophic dysregulative dermatoses. Okay. If I may, on the Paragraph IV situation, which I understand you can't comment on that much. Can you just remind us, is there draft guidance on that front for topical minocycline? Should we assume that any ANDA filer has to do actual clinical trials? If they filed an ANDA, should we assume they already did? That's a good question. There is no product-specific guidance yet that's out there for topical minocycline. If you look at the referenced other product-specific guidances for topical complex products like Finacea Foam, they had to do a clinical trial. Right. I guess you can file it and hope it works out, but if that guidance comes out that you have to do a trial, that end is pretty much pre-square one, right? I can't predict, but I think you're on the right track. Okay. Appreciate it. Thanks. Thanks, Oren. Cheers, Oren. The next question comes on line of Balaji Prasad with Barclays. Please proceed. Hi, good morning, and thanks for the questions. David, hi. While I can understand the commercial challenges currently, wanted to understand the rationale behind this sale further, especially with the Paragraph IV against it. Get your thoughts on how can such a commercial agreement evolve with the risk of an IP? From your own perspective, would it have been better for you to mitigate this IP risk and then explore a sale? On the same extension of that question, also want to understand the value of the tech platform which you're also planning to sell with the Paragraph IV, again, the lead asset generator from this platform. Lastly, wouldn't retaining the tech platform as you continue to build a newer derm pipeline made more sense, or do you see no synergies at all with this platform now? Yeah, thanks Balaji. I'll take the last two and then I'll turn it to Mutya for your first one. In terms of the platform itself, just to be very clear, the platform is our molecule stabilizing technology specific for minocycline. It is not specific to the rest of our portfolio of products. As we've talked about over the course of the last several years, developing a topical tetracycline or topical minocycline is very unique. We have upwards of nearly 12 different foam platforms within our library. The only one that works is specifically this MST platform for our minocycline franchise. It is, as we've talked about in the past, it's our oil-based or lipid-based foam technology, which is very specific. If you took, say, these tetracyclines, in this case minocycline, and you try to use any one of our other platforms that we have, it would not work. It would degrade. I just want to, again, be clear. Subsequently, taking other compounds and dropping it into that platform would be very difficult. When I state that it's the franchise including the platform, it's specific just to the minocycline product line that we have, AMZEEQ, ZILXI, and FCD105, which all have minocycline in it. Hopefully that helps. Yeah. Yeah. With regard to the earlier questions, and I think I'm understanding what you're asking. We're obviously open to all different forms of deal structures, whether it's a license or whether it's a sale. With regard to sale or license, while there's a Paragraph IV litigation outstanding, we know a number of deals that have occurred where there is a Paragraph IV litigation outstanding. Obviously, the parties will need to factor that in with regard to what the deal terms might look like, but there's certainly precedent for deals that have occurred with the Paragraph IV outstanding. I don't actually think that that's going to be an issue. As I mentioned before, with regard to the strength of our litigation, as folks get into due diligence on our patents, I think that they'll feel the same. Furthermore, I think that, as you know, Hatch-Waxman litigation can go on for a long period of time. To wait until the resolution of such a litigation would not be prudent for us as we want to be able to progress our strategic strategy as soon as we can. Again, I don't think that it's going to be an issue and we've certainly seen other deals where there is Paragraph IV litigation outstanding in connection with a license or sale. Thank you. Sure. There appear to be no further questions. I'll turn the call back over for any closing remarks. Okay. Thank you, operator. We covered a lot here today. It's a transformational time period for our company. We've got a lot of work to do. We look forward to providing you an update on our progress in the coming months and next quarter. Thank you again for taking time out of your days, and we look forward to speaking with you soon. Thanks and have a great rest of the week and a great weekend. Thank you. That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.