Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 02, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38356 | ||
Entity Registrant Name | VYNE THERAPEUTICS INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 45-3757789 | ||
Entity Address, Address Line One | 520 U.S. Highway 22, Suite 204 | ||
Entity Address, City or Town | Bridgewater | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 08807 | ||
City Area Code | 800 | ||
Local Phone Number | 775-7936 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 | ||
Trading Symbol | VYNE | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 155.4 | ||
Entity Common Stock, Shares Outstanding | 56,165,599 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001566044 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Florham Park, NJ |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 42,250 | $ 57,563 |
Restricted cash | 605 | 855 |
Investment in marketable securities (Note 6) | 0 | 1,027 |
Trade receivable, net of allowances | 7,583 | 15,819 |
Inventory (Note 7) | 7,291 | 7,404 |
Prepaid and other expenses | 5,119 | 4,591 |
Operating lease right of use assets (Note 10) | 338 | 0 |
Total Current Assets | 63,186 | 87,259 |
Non-current Assets: | ||
Property and equipment, net (Note 8) | 354 | 555 |
Operating lease right of use assets (Note 10) | 0 | 1,583 |
Prepaid and other expenses | 3,506 | 4,345 |
Total Non-current Assets | 3,860 | 6,483 |
Total Assets | 67,046 | 93,742 |
Current Liabilities: | ||
Trade payables | 6,510 | 4,780 |
Accrued Liabilities, Current | 8,593 | 11,452 |
Employee-related obligations | 2,752 | 4,360 |
Liability for employee severance benefits | 206 | 312 |
Operating lease liabilities (Note10) | 349 | 757 |
Other | 0 | 104 |
Total Current Liabilities | 18,410 | 21,765 |
Long-term Liabilities: | ||
Operating lease liabilities (Note 10) | 0 | 853 |
Long-term debt (Note 13) | 0 | 33,174 |
Other liabilities | 0 | 457 |
Total Long-term Liabilities | 0 | 34,484 |
Total Liabilities | 18,410 | 56,249 |
Commitments and Contingencies (Note 12) | 0 | 0 |
Shareholders' Equity: | ||
Preferred stock: $0.0001 par value; 20,000,000 shares authorized at December 31, 2021 and December 31, 2020, respectively; no shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock: $0.0001 par value; 150,000,000 shares and 75,000,000 shares authorized at December 31, 2021 and December 31, 2020, respectively; 53,577,744 and 43,205,221 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 5 | 4 |
Additional paid-in capital | 688,156 | 603,685 |
Accumulated deficit | (639,525) | (566,196) |
Accumulated other comprehensive income | 0 | 0 |
Total Shareholders' Equity | 48,636 | 37,493 |
Total Liabilities and Shareholders’ Equity | $ 67,046 | $ 93,742 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 53,577,744 | 43,205,221 |
Common stock, shares outstanding (in shares) | 53,577,744 | 43,205,221 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total Revenues | $ 14,755,000 | $ 20,993,000 |
Cost of goods sold | 3,348,000 | 1,392,000 |
Operating Expenses: | ||
Research and development | 24,958,000 | 43,533,000 |
Selling, general and administrative | 54,481,000 | 89,543,000 |
Goodwill and in-process research & development impairments | 0 | 54,345,000 |
Contingent Stock Remeasurement | 0 | 84,726,000 |
Total Operating Expenses | 79,439,000 | 272,147,000 |
Operating Loss | 68,032,000 | 252,546,000 |
Interest expense | 5,610,000 | 4,390,000 |
Other expense (income), net | 135,000 | (1,110,000) |
Loss Before Income Tax | 73,777,000 | 255,826,000 |
Income Tax (Benefit) Expense (Note 16) | (448,000) | (258,000) |
Net Loss | $ 73,329,000 | $ 255,568,000 |
Loss per share basic (in dollars per share) | $ 1.42 | $ 7.88 |
Loss per share diluted (in dollars per share) | $ 1.42 | $ 7.88 |
Weighted average shares outstanding - basic (in shares) | 51,469 | 32,418 |
Weighted average shares outstanding - diluted (in shares) | 51,469 | 32,418 |
Product sales, net | ||
Total Revenues | $ 13,824,000 | $ 10,202,000 |
License revenues | ||
Total Revenues | 0 | 10,000,000 |
Royalty revenues | ||
Total Revenues | $ 931,000 | $ 791,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net Loss | $ 73,329 | $ 255,568 |
Other Comprehensive Loss: | ||
Net unrealized gains from marketable securities | 0 | (1) |
Losses on marketable securities reclassified into net loss | 0 | 6 |
Total Other Comprehensive Loss | 0 | 5 |
Total Comprehensive Loss | $ 73,329 | $ 255,573 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) |
Beginning balance (shares) at Dec. 31, 2019 | 9,120,078 | ||||
Beginning balance at Dec. 31, 2019 | $ 17,575 | $ 1 | $ 328,156 | $ (310,587) | $ 5 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss | (255,573) | (255,568) | (5) | ||
Exercise of options, vesting of restricted stock units and shares under employee stock purchase plan (in shares) | 367,269 | ||||
Exercise of options, vesting of restricted stock units and shares issued under employee stock purchase plan | 554 | 554 | |||
Stock-based compensation | 18,100 | 18,100 | |||
Deemed dividend to warrants holders due to warrant modification | 0 | 41 | (41) | ||
Classification of stock awards to derivative liability | (975) | (975) | |||
Issuance of common stock, net of issuance costs (in shares) | 8,951,875 | ||||
Issuance of common stock, net of issuance costs | 61,642 | $ 1 | 61,641 | ||
Issuance of stock related to merger (in shares) | 24,765,999 | ||||
Issuance of stock related to merger | $ 196,170 | $ 2 | 196,168 | ||
Ending balance (shares) at Dec. 31, 2020 | 43,205,221 | 43,205,221 | |||
Ending balance at Dec. 31, 2020 | $ 37,493 | $ 4 | 603,685 | (566,196) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Comprehensive loss | (73,329) | (73,329) | 0 | ||
Exercise of options, vesting of restricted stock units and shares under employee stock purchase plan (in shares) | 364,937 | ||||
Exercise of options, vesting of restricted stock units and shares issued under employee stock purchase plan | 410 | 410 | |||
Stock-based compensation | 8,080 | 8,080 | |||
Issuance of common stock, net of issuance costs (in shares) | 10,007,586 | ||||
Issuance of common stock, net of issuance costs | $ 75,982 | $ 1 | 75,981 | ||
Ending balance (shares) at Dec. 31, 2021 | 53,577,744 | 53,577,744 | |||
Ending balance at Dec. 31, 2021 | $ 48,636 | $ 5 | $ 688,156 | $ (639,525) | $ 0 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Payments of stock issuance costs | $ 4,215 | $ 4,151 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (73,329,000) | $ (255,568,000) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 109,000 | 341,000 |
Goodwill and in-process research & development impairments | 0 | 54,345,000 |
Contingent stock right remeasurement | 0 | 84,726,000 |
Loss from sale and disposal of fixed assets | 93,000 | 2,101,000 |
Changes in marketable securities and bank deposits, net | 0 | (142,000) |
Debt prepayment premium | 1,432,000 | 0 |
Share-based compensation | 8,080,000 | 18,100,000 |
Non-cash other expense (income), net | 2,472,000 | (654,000) |
Changes in operating asset and liabilities, net of effects of businesses acquired: | ||
Decrease (increase) in trade receivables, prepaid and other assets | 7,709,000 | (17,138,000) |
Decrease (increase) in other non-current assets | 841,000 | (4,171,000) |
(Decrease) in accounts payable and accruals | (2,675,000) | (12,975,000) |
(Decrease) increase in inventory | 113,000 | (6,048,000) |
Decrease (increase) in other liabilities | (1,212,000) | 1,000 |
Net cash used in operating activities | (56,367,000) | (137,082,000) |
Cash Flows From Investing Activities: | ||
Purchase of fixed assets | 0 | (113,000) |
Cash acquired through merger | 0 | 38,641,000 |
Proceeds from sale and maturity of marketable securities and bank deposits | 1,027,000 | 50,579,000 |
Net cash provided by investing activities | 1,027,000 | 89,107,000 |
Cash Flows From Financing Activities: | ||
Debt repayment (Note 13) | (36,432,000) | 0 |
Proceeds from exercise of options and issuance of shares under the employee shares purchase plan | 522,000 | 310,000 |
Withholding tax from net exercise of restricted share units | (294,000) | (141,000) |
Proceeds from issuance of common stock, net of issuance costs | 75,981,000 | 61,639,000 |
Net cash provided by financing activities | 39,777,000 | 61,808,000 |
(Decrease) Increase in cash, cash equivalents and restricted cash | (15,563,000) | 13,833,000 |
Effect of exchange rate on cash, cash equivalents and restricted cash | 0 | 1,000 |
Cash, cash equivalents and restricted cash at beginning of the year | 58,418,000 | 44,584,000 |
Cash, cash equivalents and restricted cash at end of the year | 42,855,000 | 58,418,000 |
Cash and cash equivalents | 42,250,000 | 57,563,000 |
Restricted cash | 605,000 | 855,000 |
Total cash, cash equivalents and restricted cash shown in statement of cash flows | 42,855,000 | 58,418,000 |
Supplementary information on investing and financing activities not involving cash flows: | ||
Issuance of shares under employee share purchase plan | 169,000 | 387,000 |
Additions to operating lease right of use assets | 0 | 1,350,000 |
Additions to operating lease liabilities | 0 | 1,350,000 |
Supplemental disclosure of cash flow information: | ||
Interest received | 17,000 | 102,000 |
Interest paid | 2,385,000 | 3,941,000 |
Fair value of assets acquired | 0 | 117,270,000 |
Less liabilities assumed | 0 | 5,827,000 |
Net acquired (See “Note 3- Business combination”) | 0 | 111,443,000 |
Less cash acquired | 0 | 38,641,000 |
Merger net of cash acquired | $ 0 | $ 72,802,000 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS The Company VYNE Therapeutics Inc., ("VYNE" or the "Company") is a biopharmaceutical company focused on developing proprietary, innovative and differentiated therapies for the treatment of immuno-inflammatory conditions. The Company's most advanced product candidate, FMX114, which is in Phase 2a, is being evaluated for the potential treatment of mild-to-moderate AD. The Company is also in the pre-clinical stages of developing products containing BET inhibitor compounds. Its initial BET inhibitor candidate in development is VYN201, a locally administered pan-BET inhibitor, which the Company is exploring in various immuno-inflammatory diseases, including skin diseases . In addition, the Company continues to explore opportunistic transactions that may enhance its pipeline portfolio, as well as support its current operations and fund its future growth. The Company is a Delaware corporation, has its principal executive offices in Bridgewater, New Jersey and operates as one business segment. Strategic Business Review and Sale of the MST Franchise Beginning in the second quarter of 2021, the Company conducted a review of its commercial and research and development portfolio to determine how to optimally deploy capital and drive shareholder value. During the course of this review, the Company carefully considered 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 during the commercial launches of both AMZEEQ and ZILXI, the payor landscape, as well as the costs to develop each of its pipeline products. During this process, the Company evaluated several strategic options including the acquisition of marketed assets, out-licensing its approved products outside of the United States, and possible partnering or co-development relationships with interested parties. Following its review, the Company determined to initiate a process to explore a possible sale or license of its topical minocycline franchise, including AMZEEQ, ZILXI, FCD105 (the Company’s former Phase 3 proprietary novel topical combination foam formulation of minocycline and adapalene for the treatment of moderate-to-severe acne vulgaris) and the underlying Molecule Stabilizing Technology platform. On January 12, 2022, VYNE entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Journey Medical Corporation (”Journey”) pursuant to which the Company sold its Molecule Stabilizing Technology 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. Pursuant to the Purchase Agreement, VYNE received an upfront payment of $20.0 million and will receive an additional $5.0 million on the one-year anniversary of the closing of the transaction. VYNE is also eligible to receive sales milestone payments of up to $450.0 million in the aggregate upon the achievement of specified levels of net sales on a product-by-product basis, beginning with annual net sales exceeding $100.0 million (with products covered in three categories (1) AMZEEQ (and certain modifications), (2) ZILXI (and certain modifications), and (3) FCD105 and other products covered by the patents being transferred, including certain modifications). In addition, VYNE is entitled to receive certain payments from any licensing or sublicensing of the assets by Journey outside of the United States. See Note 17 - Subsequent Events for additional discussion of the disposition. By leveraging its drug development and clinical development capabilities and strong network of discovery and preclinical science partners, the Company has transitioned its strategic focus to develop therapies for the treatment of immuno-inflammatory conditions. The Company expects to continue to invest in FMX114 for the treatment of mild to moderate atopic dermatitis and enrolled the first patient in its Phase 1b/2a proof-of-concept study in October 2021. On January 19, 2022, the Company announced findings from the Phase 1b safety portion of the Phase 1b/2a trial evaluating FMX 114. The findings support trial continuation. In addition, on August 12, 2021, the Company announced a transaction with In4Derm Limited, a company incorporated and registered in Scotland (“In4Derm”). In4Derm is a spin-out of the University of Dundee’s School of Life Sciences which has discovered and is developing proprietary Bromodomain and Extra-Terminal Domain ("BET") inhibitors for the treatment of immunology and oncology conditions. On April 30, 2021, the parties entered into an Evaluation and Option Agreement (the “Option Agreement”) pursuant to which In4Derm granted the Company an exclusive option to obtain exclusive worldwide rights to research, develop and commercialize products containing In4Derm’s BET inhibitor compounds, which are new chemical entities for treatments in all fields for any disease, disorder or condition in humans. On August 6, 2021, the parties entered into a License Agreement granting the Company a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of In4Derm’s pan-BD BET inhibitor compounds in all fields. The Company paid a $1.0 million cash payment to In4Derm upon the execution of the Option Agreement and $0.5 million in connection with entering into the License Agreement. Pursuant to the License Agreement, the Company has agreed to make cash payments to In4Derm upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the U.S. of up to $15.75 million for all indications. In addition, the Company currently expects to exercise the Oral BETi Option following the selection of a lead candidate for the program. Upon exercise of the exclusive Oral BETi Option, the parties will sign a license agreement (the “Oral License Agreement”), and the Company will be required to pay In4Derm a $4.0 million cash payment. The Oral License Agreement will include cash payments of up to $43.75 million payable to In4Derm upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed oral product in the U.S. for all indications. The license agreements also provide for tiered royalty payments of up to 10% of net annual sales across licensed BET inhibitor products by the Company. In4Derm is entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. The initial BET inhibitor candidates in development are VYN201 and VYN202. VYN201 is a pan-bromodomain or pan-BD BET inhibitor. It is a first-in-class “soft” pan-BD BET inhibitor that is being developed to address diseases involving multiple, diverse inflammatory cell signaling pathways. With the VYN201 program, the Company is attempting to develop a therapy that is locally acting and is rapidly cleared through the body's metabolic process so as to avoid systemic absorption. The Company is continuing to evaluate VYN201 in a variety of preclinical models and will announce an initial indication for VYN201 following such evaluation. With respect to the VYN202 program, the Company is exploring multiple BET inhibitor compounds that are highly selective for bromodomain 2 ("BD2"). By selectively inhibiting BD2, the Company believes VYN202 could have a more targeted anti-inflammatory effect with an improved benefit/risk profile. The Company is diligently working with In4Derm to develop a lead molecule for the VYN202 program. Once a lead candidate has been selected, the Company intends to exercise its option with respect to these BET inhibitor compounds and commence an IND-enabling preclinical safety program. As the Company transitioned from a commercial organization to one focused on research and development, the Company streamlined operations by eliminating the vast majority of planned expenditures supporting its commercial operations. Furthermore, following its decision to divest the MST franchise, the Company reduced its workforce by terminating approximately 70 employees. The Company incurred a one-time charge of $1.6 million in the year ended December 31, 2021 in connection with this restructuring plan, consisting of $1.4 million of employee termination costs, including severance and other benefits, and retention payments of $0.2 million. Additional charges of $0.2 million related to retention payments are anticipated through June 30, 2022. Reverse stock split and recasting of per-share amounts On February 10, 2021, our Board of Directors approved a one-for-four reverse stock split of our outstanding shares of common stock. The reverse stock split was effected on February 12, 2021 at 5:00 p.m. Eastern time. At the effective time, every four issued and outstanding shares of our common stock were converted into one share of common stock. No fractional shares were issued in connection with the reverse stock split, and in lieu thereof, each stockholder holding fractional shares was entitled to receive a cash payment (without interest or deduction) from the Company’s transfer agent in an amount equal to such stockholder’s respective pro rata shares of the total net proceeds from the Company’s transfer agent sale of all fractional shares at the then-prevailing prices on the open market. In connection with the reverse stock split, the number of authorized shares of our common stock was also reduced on a one-for-four basis, from 300 million shares to 75 million shares. The par value of each share of common stock remained unchanged. A proportionate adjustment was also made to the maximum number of shares issuable under the Company’s 2019 Equity Incentive Plan, 2018 Omnibus Incentive Plan and 2019 Employee Share Purchase Plan. Unless noted, all common shares and per share amounts contained in the consolidated financial statements have been retroactively adjusted to reflect a 1-for-4 reverse stock split. Reverse Merger On November 10, 2019, Menlo Therapeutics Inc. ("Menlo"), Foamix Pharmaceuticals Ltd. (“Foamix”) and Giants Merger Subsidiary Ltd. (“Merger Sub”), a wholly-owned subsidiary of Menlo, entered into an Agreement and Plan of Merger (as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of December 4, 2019, the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Foamix, with Foamix surviving as a wholly-owned subsidiary of Menlo (the “Merger”) on March 9, 2020 (the “Effective Date”). The combined Company changed its name to VYNE in September 2020. For accounting purposes, the Merger is treated as a “reverse acquisition” under generally accepted accounting principles in the United States (“U.S. GAAP”) and Foamix is considered the accounting acquirer. Accordingly, upon consummation of the Merger, the historical financial statements of Foamix became the Company’s historical financial statements, and the historical financial statements of Foamix are included in the comparative prior periods. See “Note 3 – Business Combination” for more information on the Merger. Serlopitant The Company was developing serlopitant, a small molecule inhibitor of the neurokinin 1 receptor, or NK1-R, given as a once-daily, oral tablet, for the treatment of pruritus, or itch, associated with various conditions including prurigo nodularis, or PN. On April 6, 2020, the Company announced top line results from two Phase III clinical trials evaluating the safety and efficacy of once-daily oral serlopitant for the treatment of pruritus (itch) associated with PN, studies MTI-105 and MTI-106. Neither study met their respective primary endpoint of demonstrating statistically significant reduction in pruritus in patients treated with serlopitant compared to placebo based on a 4-point improvement responder analysis. The Company does not currently intend to further pursue the development of serlopitant. As a result, in the second quarter of 2020, the Company recorded a full impairment charge related to the IPR&D and Goodwill assets in its unaudited condensed consolidated statement of operations and comprehensive loss. See "Note 3 - Business Combination" for more information. Liquidity and Capital Resources Since inception, the Company has funded operations primarily through private and public placements of its equity, debt and warrants and through fees, cost reimbursements and payments received from its licensees. The Company commenced generating product revenues related to sales of AMZEEQ and ZILXI in January 2020 and October 2020, respectively. AMZEEQ and ZILXI were sold as part of the sale of the MST Franchise on January 12, 2022 and, as such, the Company will no longer be generating revenue from the sale of these products. The Company has incurred losses and experienced negative operating cash flows since its inception and anticipates that it will continue to incur losses until such a time when its product candidates, if approved, are commercially successful, if at all. The Company will not generate any revenue from any current or future product candidates unless and until it obtains regulatory approval and commercializes such products. For the year ended December 31, 2021 the Company incurred a net loss of $73.3 million and used $56.4 million of cash in operations. As of December 31, 2021, the Company had cash and cash equivalents of $42.9 million. The Company's cash and cash equivalents are held in money market accounts. The Company also received proceeds of $20.0 million from the sale of the MST Franchise in January 2022 and will receive an additional payment of $5.0 million on the one-year anniversary of the sale. Following the sale of the MST Franchise, the Company is refocusing its limited resources on its immuno-inflammatory pipeline and intends to support the FMX114 and the BET inhibitor development programs. Research and development activities for these programs, including preclinical and clinical testing of the Company's drug candidates, will require significant additional financing. The future viability of the Company and its ability to continue as a going concern is dependent on its ability to raise sufficient working capital through either debt or equity financings to fund our operations and successfully develop commercially viable drug candidates. There is no assurance the Company will be able to achieve these objectives under acceptable terms or at all. In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that its audited consolidated financial statements are issued. The accompanying audited consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's ability to continue as a going concern is expected |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES: a. Basis of presentation The Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Certain prior period amounts have been reclassified to conform to current year presentation. b. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include accounting for business combinations, impairments of goodwill and intangible assets and revenue recognition. Actual results could differ from the Company’s estimates. The COVID-19 pandemic and government measures taken in response to the pandemic have had a negative impact on the Company's operations. Access to healthcare providers has been limited, which has negatively impacted sales and the Company's ability to execute its commercial strategy with respect to AMZEEQ and ZILXI. The length of time and extent to which the COVID-19 pandemic will directly or indirectly impact the Company's business, results of operations and financial condition and liquidity will depend on future developments that are highly uncertain, subject to change and will continue to evolve with geographical re-openings, surges in cases, the emergence of new strains and the vaccination effort. In addition, the Company further assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of December 31, 2021 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts and credit losses, inventory and related reserves, impairments of long-lived assets and revenue recognition. In 2020, the Company recorded impairments of goodwill and certain indefinite-lived intangible assets; however, these were unrelated to the impact of COVID-19 (See "Note 3 - Business Combination" for more information). The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods. c. Business Acquisition The Company’s consolidated financial statements include the operations of an acquired business after the completion of the acquisition. The Company accounts for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of In-Process Research and Development and Goodwill be recorded on the balance sheet. Transaction costs are expensed as incurred. Amounts recorded in connection with an acquisition can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. The Company is required to measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, the Company uses fair value in the initial recognition of net assets acquired in a business combination and when measuring impairment losses. The Company estimates fair value using an exit price approach, which requires, among other things, that Company determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use one or all of the following techniques: • Income approach, which is based on the present value of a future stream of net cash flows. • Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. • Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence. Our fair value methodologies depend on the following types of inputs: • Quoted prices for identical assets or liabilities in active markets (Level 1 inputs). • Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs). • Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. d. Foreign Currency Translation Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions - exchange rates at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) - historical exchange rates. Currency transaction gains and losses are presented in financial income or expenses, as appropriate. e. Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. f. Cash and cash equivalents The Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash. g. Marketable securities Marketable equity securities: The Company's marketable equity securities are recorded at fair value, with unrealized gains and losses included in other income, net in the consolidated statement of operations. h. Inventory Prior to the date the Company obtains regulatory approval for its product candidates, inventory costs related to commercial production are expensed as research and development expense. Once regulatory approval is obtained, the Company capitalizes such costs as inventory. Inventories are stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first-out (“FIFO”) method. The Company periodically reviews its inventory levels and writes down inventory that is expected to expire prior to being sold, inventory in excess of expected sales requirements and inventory that fails to meet commercial sale specifications, with a corresponding charge to cost of goods sold. i. Property and equipment 1) Property and equipment are stated at cost, net of accumulated depreciation and amortization. 2) The Company’s property and equipment are depreciated by the straight-line method on the basis of their estimated useful life. Annual rates of depreciation are as follows: Estimated Useful Life Computers 3 - 7 years Laboratory equipment 5 - 14 years Office furniture and equipment 7 - 14 years Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful life of the improvements. j. Impairment of long-lived assets The Company tests long-lived assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the present value of expected future cash flows (discounted cash flows), or some other fair value measure. For the years ended December 31, 2021 and 2020, the Company did not recognize an impairment loss for its long-lived assets. k. Goodwill and other indefinite lived intangible assets The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of the end of the fiscal year or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available including estimates of fair value which incorporate assumptions market participants would use in making their estimates of fair value. In 2020, the Company recorded full impairment charges related to its $4.5 million of goodwill and $49.8 million of IPR&D (See "Note 3 - Business Combination" for more information). No impairment was recorded in the years ended December 31, 2021. l. Allowance for doubtful accounts An allowance for doubtful accounts is maintained for potential credit losses based on the aging of trade receivables, historical bad debts experience and changes in customer payment patterns. Trade receivable balances are written off against the allowance when it is deemed probable that the receivable will not be collected. Trade receivables, net are stated net of reserves for certain sales allowances and provisions for doubtful accounts. Provisions for doubtful accounts were not material for the years ended December 31, 2021 and 2020. m. Debt Debt discounts created as a result of the allocation of proceeds received from a debt issuance to warrants issued are amortized to interest expense under the effective interest method over the life of the recognized debt liability. Debt issuance costs include the costs of debt financings undertaken by the Company, including legal fees and other direct costs of the financing. Debt issuance costs related to a recognized debt liability are presented on the consolidated balance sheet as a direct deduction from the carrying amount of the debt liability and are amortized to interest expense over the term of the related debt, using the effective interest method. n. Leases Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. o. Contingencies Certain conditions may exist as of the date of the financial statements, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material are disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantees are disclosed. p. Share-based compensation The Company accounts for employees’ and directors’ share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period using the straight-line method. Forfeitures are recognized as they occur. Share-based payments related to the employee share purchase plan (“ESPP”) are recognized based on the fair value of each award estimated on the first day of the offering period and recognized as an expense over the offering period using the straight-line method. The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the straight-line method based on the multiple-option award approach. q. Revenue recognition The Company accounts for its revenue transactions under FASB ASC Topic 606, Revenue from Contracts with Customers. In accordance with ASC Topic 606, the Company recognizes revenues when its customers obtain control of its product for an amount that reflects the consideration it expects to receive from its customers in exchange for that product. To determine revenue recognition for contracts that are determined to be in scope of ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when such performance obligation is satisfied. The Company’s customers include a limited number of national and select regional wholesalers (the “distributors”) and certain independent and specialty pharmacies, together (the "customers"). These distributors subsequently resell the product, primarily to retail pharmacies that dispense the product to patients. Net product revenue is typically recognized when customers obtain control of the Company’s products, which occurs at a point in time, typically upon delivery of product to the customers. The Company evaluates the creditworthiness of its customers to determine whether it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur. The Company does not assess whether a contract has a significant financing component if the expectation is such that the period between the transfer of the promised goods to the customer and the receipt of payment will be less than one year. Standard credit terms do not exceed 75 days. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that would have been recognized is one year or less or the amount is immaterial. Shipping and handling costs related to the Company’s product sales are included in selling, general and administrative expenses. The Company’s net product revenues through December 31, 2021 were generated through sales of AMZEEQ, which was approved by the FDA in October 2019 and was commercially launched in the United States in January 2020 and ZILXI, which was approved by the FDA in May 2020 and was commercially launched in the United States in October 2020. Product revenue is recorded net of distribution fees, trade discounts, allowances, rebates, copay program coupons, chargebacks, estimated returns and other incentives. These reserves are classified as either reductions of accounts receivable or as current liabilities. The estimates of reserves established for variable consideration reflect current contractual and statutory requirements, known market events and trends, industry data and forecasted customer mix. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net product revenues only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from these estimates. If actual results vary, estimates may be adjusted in the period such change in estimate becomes known, which could have an impact on earnings in the period of adjustment. See “Note 4 – Revenue Recognition” for more information. On April 23, 2020, the Company announced that it entered into a license agreement with Cutia for our minocycline products and product candidate, if approved, on an exclusive basis in Greater China. Under the terms of the agreement, Cutia will have an exclusive license to obtain regulatory approval of and commercialize AMZEEQ, ZILXI and, if approved in the U.S., FCD105 in the Greater China territory. The Company will supply the finished licensed products to Cutia for clinical and commercial use. The Company received an upfront cash payment of $10.0 million. The license was determined to be a distinct performance obligation of the arrangement, therefore the Company recognized the revenues from the upfront license fee when the license is transferred to the licensee and the licensee is able to use and benefit from the license. The disposition of the MST Franchise included the license agreement with Cutia including the rights to future revenues under that agreement. See "Note 4 - Revenue Recognition" for more information. r. Research and development costs Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of clinical trials, clinical trial supplies, salaries, share-based compensation expenses, payroll taxes and other employee benefits, lab expenses, consumable equipment and consulting fees. All costs associated with research and developments are expensed as incurred. s. Income taxes: • Deferred taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets. • Uncertainty in income tax The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. t. Loss per share The calculation of the weighted-average number of common stock outstanding during the period in which the reverse merger occurs was based on: •. The number of common stock outstanding from the beginning of that period to the merger date was computed on the basis of the weighted-average number of common stock of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement •. The number of common stock outstanding from the merger date to the end of that period was the actual number of common stock of the legal acquirer (the accounting acquiree) outstanding during that period. Net loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of common shares outstanding during the period. Diluted net loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options and warrants which are included under the treasury share method when dilutive. The following stock options, restricted stock units (“RSUs”), warrants and incremental shares to be issued under the employee stock purchase plan (“ESPP”) were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (share data): Year ended December 31 2021 2020 Outstanding share options, RSUs and shares under ESPP 5,306,352 4,994,333 Warrants 495,165 495,165 u. Fair value measurement Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities. Level 3 Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. v. Concentration of credit risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash, marketable securities and accounts receivables. The Company deposits cash and cash equivalents with highly rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. In addition, all marketable securities carry a high rating or are government insured. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments. For the year ended December 31, 2021, the Company's three largest customers collectively represented 41% of product revenue and 58% of accounts receivable. For the year ended December 31, 2020, the Company's largest three customers collectively represented 96% of product revenue and 90% of accounts receivable. w. Comprehensive loss Comprehensive loss includes, in addition to net loss, unrealized holding gains and losses on available-for-sale debt securities and derivative instruments designated as cash flow hedge (net of related taxes where applicable). Reclassification adjustments for gain or loss of available-for-sale securities are included in other income, net in the consolidated statement of operations. x. Newly issued and recently adopted accounting pronouncements : Recent Accounting Guidance Issued: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-4, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (ASU 2020-4), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contracts, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU 2020-4 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-4 are optional and are effective from March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of ASU 2020-4 on its consolidated financial statements. Currently, the Company does not expect the adoption of the new standard to have a material impact to the consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. As a smaller reporting company, the Company will adopt ASU 2016-13 effective January 1, 2023 or at such time where it is no longer a smaller reporting company. Currently, the Company does not expect the adoption of the new standard to have a material impact to the consolidated financial statements. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods beginning after December 15, 2020. This guidance became effective during the first quarter of 2021. The adoption of the new standard did not have a material impact to the Company's consolidated financial statements. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION: On November 10, 2019, Menlo entered into the Merger Agreement with Foamix, and Merger Sub, a direct and wholly-owned Israeli subsidiary of Menlo. On March 9, 2020, the Merger was completed and Foamix is now a wholly-owned subsidiary of the Company. The combined Company changed its name to VYNE in September 2020. On the Effective Date, each ordinary share of Foamix was exchanged for 0.5924 shares of common stock of Menlo. In addition, on the Effective Date, Foamix shareholders received one contingent stock right (a “CSR”) for each Foamix ordinary share held by them. The CSRs were issued pursuant to the Contingent Stock Rights Agreement (the “CSR Agreement”), dated as of March 9, 2020, by and between Menlo and American Stock Transfer & Trust Company, LLC, and represented the non-transferable contractual right to receive shares of common stock of Menlo depending on the results of Menlo’s phase III clinical trials evaluating the safety and efficacy of once daily oral serlopitant for the treatment of prurigo nodularis (the “Phase III PN Trials”). On April 6, 2020, the Company announced that each of Menlo’s Phase III PN Trials (study MTI-105 and study MTI-106) did not meet their respective primary endpoint of demonstrating statistically significant reduction in pruritus in patients treated with serlopitant compared to placebo based upon a 4-point improvement responder analysis. Accordingly, on April 6, 2020, pursuant to the terms of the CSR Agreement, each CSR was converted into 1.2082 additional shares of Menlo common stock, resulting in an effective Exchange Ratio in the Merger of 1.8006 shares of Menlo common stock for each Foamix ordinary share. The CSR conversion resulted in the issuance and delivery of 74,544,413 additional shares of Menlo common stock underlying the CSRs, adjusted retrospectively to 18,636,103 shares of common stock upon the reverse stock split effective February 12, 2021. Following the conversion of the CSRs, pre-Merger Foamix shareholders and pre-Merger Menlo stockholders owned approximately 82% and 18% of post-Merger Menlo, respectively, each calculated on a fully diluted basis. For accounting purposes, the Merger is treated as a “reverse acquisition” under U.S. GAAP and Foamix is considered the accounting acquirer. Accordingly, upon consummation of the Merger, the historical financial statements of Foamix became the Company’s historical financial statements, and the historical financial statements of Foamix are included in the comparative prior periods. Under reverse acquisition accounting, the U.S. dollar amount for common stock in the financial statements is based on the value and number of shares issued by Menlo (reflecting the legal structure of Menlo as the legal acquirer) on the Merger date plus subsequent shares issued by the Company. The amounts in additional paid-in capital represent that of Foamix and include the fair value of shares deemed for accounting purposes to have been issued by Foamix on the merger date and the fair value of the Menlo equity awards included in the purchase price calculation. The Foamix additional paid-in capital was also adjusted for the difference between the number of common stock and the historical number of shares of Foamix’s ordinary shares. During the year ended December 31, 2020, the Company incurred transaction costs of approximately $11.7 million, which are recorded in the consolidated statements of operations and comprehensive income. This amount includes $8.1 million of severance benefits for employees terminated after the Effective Date. Purchase Price The following is the Merger Consideration (as defined in the Merger Agreement) was transferred to effect the Merger: (in thousands) Total Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders $ 123,757 Deemed (for accounting purposes only) conversion of Menlo equity awards 7,322 Total consideration* $ 131,079 * This amount reflects total consideration prior to reduction in respect of the CSRs (which had a fair value of $19.6 million as of the Merger Date) that were issued to Foamix shareholders and that reduced the Menlo stockholders’ relative ownership in the combined company. If the effect of the CSRs is included, the total consideration deemed paid by Foamix, as the accounting acquirer, to Menlo stockholders and equity award holders in the Merger would be reduced to approximately $111.4 million, as shown in the purchase price allocation table below. Based on Foamix’s closing share price of $2.99 as of March 9, 2020, the Merger Consideration under reverse acquisition accounting was approximately $131.1 million, consisting of $123.8 million for the deemed (for accounting purposes only) issuance of 41.4 million Foamix shares assuming that no upwards adjustment was made to the Exchange Ratio relating to the CSR, and $7.3 million for the fair value of Menlo equity awards deemed (for accounting purposes only) to be converted into Foamix equity awards. The converted stock options represent the fair value of such options attributable to service prior to the Merger date using the Foamix closing share price of $2.99 as of March 9, 2020 as an input to the Black Scholes valuation model to determine the fair value of the options. Purchase Price Allocation The Company completed its analysis of the allocation of the purchase price to the fair values of assets acquired and liabilities assumed as follows: (in thousands) March 9, 2020 Cash and cash equivalents $ 38,641 Investment in marketable securities 22,703 Prepaid expenses and other current assets 1,581 In-process research and development 49,800 Goodwill 4,545 Total assets 117,270 Current liabilities (5,827) Total liabilities (5,827) Estimated purchase price* $ 111,443 * Reflects reduction in the purchase price deemed paid to Menlo stockholders in the Merger on the assumption that the CSRs, in an aggregate value of $19.6 million, convert into additional shares of the combined company for the Foamix shareholders, thereby resulting in a lower percentage of the combined company’s outstanding shares being owned by Menlo stockholders following the Merger. Goodwill Goodwill is recorded with the acquisition of a business and is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but is tested for impairment at least annually. None of the Goodwill recognized is expected to be deductible for income tax purposes . The purchase price of the transaction and the excess purchase price over the fair value of the identifiable net assets acquired, are calculated as follows: (in thousands) March 9, 2020 Purchase price $ 111,443 Less: fair value of net assets acquired, including other identifiable intangibles (106,898) Goodwill $ 4,545 On April 6, 2020, the Company announced that each of Menlo’s Phase III PN Trials (study MTI-105 and study MTI-106) did not meet their respective primary endpoint of demonstrating statistically significant reduction in pruritus in patients treated with serlopitant compared to placebo based upon a 4-point improvement responder analysis. The Company does not intend to further pursue the development of serlopitant. As such, the Company recorded a full impairment charge of $4.5 million related to goodwill in its consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. There were no impairment charges in the year ended December 31, 2021. In-Process Research and Development (“IPR&D") The IPR&D recognized relates to Menlo’s once - daily oral serlopitant for the treatment of pruritus (itch) associated with PN that has not reached technological feasibility as follows: (in thousands) Intangible asset Estimated Fair Value Acquired indefinite life intangible assets* $ 49,800 Fair value of identified intangible assets $ 49,800 * Represents acquired IPR&D assets which are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the research and development period, these assets will not be amortized into earnings; instead these assets will be subject to periodic impairment testing. The fair value of IPR&D has been estimated utilizing a multi-period excess earnings method under the income approach, which reflects the present value of the projected cash flows that are expected to be generated, less charges representing the contribution of other assets to those cash flows that use projected cash flows with and without the intangible asset in place. On April 6, 2020, the Company announced that each of Menlo’s Phase III PN Trials (study MTI-105 and study MTI-106) did not meet their respective primary endpoint of demonstrating statistically significant reduction in pruritus in patients treated with serlopitant compared to placebo based upon a 4-point improvement responder analysis. The Company does not intend to further pursue the development of serlopitant. As such, the Company recorded a full impairment charge of $49.8 million related to the IPR&D asset in its consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. There were no impairment charges in the year ended December 31, 2021. CSR The CSR was issued pursuant to the CSR Agreement, dated as of March 9, 2020, by and between Menlo and American Stock Transfer & Trust Company, LLC, and represented the non-transferable contractual right to receive shares of common stock of Menlo depending on the results of Menlo’s Phase III PN Trials. The Company recognized a liability of $19.6 million in the consolidated balance sheet as of March 9, 2020. The liability was measured at fair value and categorized as level 3 as of the acquisition date in accordance with ASC 805-31-25-5 and subsequently at each reporting date thereafter. The fair value of the CSR was estimated as the incremental value that Foamix would be able to achieve on a probability weighted basis assuming three different potential probabilities of the following scenarios: (a) serlopitant significance was achieved in both Phase III PN Trials (b) serlopitant significance was achieved in only one Phase III PN Trial and (c) serlopitant significance was not achieved or was not determined on or before May 31, 2020. On April 6, 2020, the Company announced that each of Menlo’s Phase III PN Trials (study MTI-105 and study MTI-106) did not meet their respective primary endpoint of demonstrating statistically significant reduction in pruritus in patients treated with serlopitant compared to placebo based upon a 4-point improvement responder analysis. Accordingly, on April 6, 2020, pursuant to the terms of the CSR Agreement, each CSR was converted into 1.2082 additional shares of Menlo common stock, resulting in an effective Exchange Ratio in the Merger of 1.8006 shares of Menlo common stock for each Foamix ordinary share. The CSR conversion resulted in the issuance and delivery of 74.5 million additional shares of Menlo common stock underlying the CSRs, adjusted retrospectively to 18.6 million shares of common stock upon the reverse stock split effective February 12, 2021. Following the conversion of the CSRs, pre-Merger Foamix shareholders and pre-Merger Menlo stockholders own approximately 82% and 18% of post-Merger Menlo, respectively, each calculated on a fully diluted basis. The conversion of the CSR also affected the Exchange Ratio of the pre-Merger Foamix equity awards and warrants outstanding as of March 9, 2020 and increased the awards available for grant under the Company's equity plan. The contingent consideration associated with the CSR was recognized and measured at fair value as of the acquisition date in accordance with ASC 805-30-25-5. An acquirer's obligation to pay contingent consideration should be classified as a liability or equity in accordance with ASC 480, Distinguishing Liabilities from Equity, ASC 815 Derivatives and Hedging, and other applicable U.S. GAAP. The contingent consideration associated with the CSR was initially measured at fair value and subsequently measured at fair value at each reporting date. The CSR was classified as a liability, as it was settled by issuing a variable number of the Company's common stock. On April 6, 2020, the Company recorded $84.7 million of expense in its consolidated statements of operations and comprehensive loss to remeasure the CSR liability in its consolidated balance sheet to its fair value of $104.4 million (calculated based on 74,544,413 shares issued, adjusted retrospectively to 18,636,103 shares of common stock upon the reverse stock split effective February 12, 2021, and a share price of $1.40 on April 6, 2020) and then settled in connection with the issuance of shares. Pro Forma The actual Menlo net loss included in the Company’s consolidated statements of operations and comprehensive income for the year ended December 31, 2020 (for the period from March 9, 2020, the Effective Date, through December 31, 2020, which are not indicative of the results to be expected for a full year) and the supplemental unaudited pro forma revenue and net loss of the combined entity had the acquisition been completed on January 1, 2019. Actual Menlo results of operations for the period from March 9, 2020, the Effective Date, through December 31, 2020 included in the consolidated statement of operation for the year ended December 31, 2020: (in thousands) Year ended December 31, 2020 Revenues $ — Loss attributable to Menlo $ 24,517 Pro forma Menlo results of operations for the year ended December 31, 2020. Year ended 2020 (in thousands, except per share data) (Unaudited) SUPPLEMENTAL PRO FORMA COMBINED RESULTS OF OPERATIONS: Revenues $ 20,993 Net loss $ 252,951 Loss per share - basic and diluted $ 7.53 Adjustments to the supplemental pro forma combined results of operations, included in the above, are as follows: Transaction costs $ (14,931) Acceleration of stock based compensation (7,199) Total Adjustments $ (22,130) These unaudited pro forma consolidated financial results have been prepared for illustrative purposes only and do not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred on the first day of the earliest period presented, or of future results of the consolidated entities. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the Merger. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Product Sales Product revenues for the year ended December 31, 2021 were primarily generated from sales of AMZEEQ which was commercially launched in the United States in January 2020 and ZILXI which became available in pharmacies nationwide on October 1, 2020. The Company’s customers include a limited number of national and select regional distributors and certain independent and specialty pharmacies, together (the "customers"). The distributors subsequently resell the product, primarily to retail pharmacies that dispense the product to patients. Net product revenue is typically recognized when customers obtain control of the Company’s products, which occurs at a point in time, typically upon delivery of product to the customers. For the year ended December 31, 2021, three customers accounted for 17%, 15% and 9% of product revenue, respectively. For the year ended December 31, 2020, three customers accounted for 42%, 39%, and 15% of product revenue, respectively. Product Sales Provisions Product revenue is recorded net of distribution fees, trade discounts, allowances, rebates, chargebacks, estimated returns and other incentives, described below. The Company calculates its net product revenue based on the wholesale acquisition cost that the Company charges its customers less provisions for (i) trade discounts and allowances, such as distributor fees and discounts for prompt payment, (ii) estimated rebates to third-party payers, patient co-pay assistance programs, chargebacks and other discount programs and (iii) reserves for expected product returns. Provisions for distribution fees, trade discounts and chargebacks are reflected as a reduction to trade receivables, net on the consolidated balance sheet. All other provisions, including rebates, other discounts and return provisions are reflected as a liability within accrued expenses on the consolidated balance sheet. Provisions for revenue reserves described below reduced product revenues by $62.9 million and $39.5 million for the years ended December 31, 2021 and December 31, 2020, respectively. The revenue reserve accrual was $5.5 million and $5.8 million at December 31, 2021 and December 31, 2020, respectively and was reflected in accrued expenses in the consolidated balance sheet. Distribution Fees and Trade Discounts and Allowances : The Company pays fees for distribution services and for certain data that distributors provide to the Company and generally provides discounts on sales to its distributors for prompt payment. These fees and discounts are contractual in nature and the Company expects its distributors to earn these fees and discounts, and accordingly deducts the full amount of these fees and discounts from its gross product revenues at the time such revenues are recognized. Rebates, Chargebacks and Other Discounts : Product sales made under managed-care and governmental pricing programs in the U.S. are subject to rebates. Managed Care rebates relate to contractual agreements to sell products to managed care organizations and pharmacy benefit managers at contractual rebate percentages in exchange for volume and/or market share. Chargebacks relate to contractual agreements to sell products to government agencies and other indirect customers at contractual prices that are lower than the list prices the Company charges wholesalers. When these government agencies or other indirect customers purchase products through wholesalers at these reduced prices, the wholesaler charges the Company for the difference between the prices they paid the Company and the prices at which they sold the products to the indirect customers. The Company estimates the rebates and chargebacks it expects to be obligated to provide and deducts these estimated amounts from its gross product revenue at the time the revenue is recognized. The Company estimates the rebates and chargebacks that it expects to be obligated to provide based upon (i) the Company's current contracts and negotiations, (ii) estimates regarding the payer mix based on third-party data and utilization, (iii) inventory held by distributors and (iv) estimates of inventory held at the retail channel. Other discounts include the Company’s co-pay assistance coupon programs for commercially-insured patients meeting certain eligibility requirements. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to pay associated with product that has been recognized as revenue. Product Returns : Consistent with industry practice, customers are generally allowed to return products within a specified period of time before and after its expiration date. The Company estimates the amount of product that will be returned and deducts these estimated amounts from its gross revenue at the time the revenue is recognized. T he information utilized to estimate the returns provision includes: (i) historical industry information regarding rates for comparable pharmaceutical products and product portfolios , (ii) external data with respect to inventory levels in the wholesale distribution channel, (iii) external data with respect to prescription demand for products and (iv) remaining shelf lives of products at the date of sale. The Company estimates that between 1% and 2% of product sold to wholesalers will be returned. The Company does not estimate returns for sales made to the pharmacies as they are not contractually permitted to return product and the Company did not accept any returns from pharmacies in the year ended December 31, 2021 . License Revenues On April 23, 2020, the Company announced that it entered into a license agreement with Cutia for AMZEEQ as well as certain of the Company's other topical minocycline product candidates, once approved, on an exclusive basis in Greater China. Under the terms of the agreement, Cutia will have an exclusive license to obtain regulatory approval of and commercialize AMZEEQ, ZILXI and, if approved in the U.S., FCD105 in the Greater China territory. The Company will supply the finished licensed products to Cutia for clinical and commercial use. Outside of the license transferred, the Company does not have any additional performance obligations under the arrangement. In exchange for the license, the Company received an upfront cash payment of $10.0 million. The license was considered functional IP as the licensee was able to use and benefit from the license without the continued involvement of the Company. The disposition of the MST Franchise included the license agreement with Cutia including the rights to future revenues and obligations under that agreement. The Company recorded $10.0 million of license revenue in the year ended December 31, 2020. No license revenue was earned in the year ended December 31, 2021. Contract Assets and Contract Liabilities The Company did not have any contract assets (unbilled receivables) related to product sales or as of December 31, 2021, as customer invoicing generally occurs before or at the time of revenue recognition. The Company did not have any contract assets (unbilled receivables) related to its license revenues as of December 31, 2021 or 2020. The Company did not have any contract liabilities as of December 31, 2021 or 2020, as the Company did not receive payments in advance of fulfilling its performance obligations to its customers. Sales Commissions Sales commissions are generally attributed to periods shorter than one year and therefore are expensed when incurred. Sales commissions are included in selling, general and administrative expenses. Financing Component The Company has elected not to adjust consideration for the effects of a significant financing component when the period between the transfer of a promised good or service to the customer and when the customer pays for that good or service will be one year or less. Standard credit terms do not exceed 75 days. Royalty Revenues |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company’s assets and liabilities that are measured at fair value as of December 31, 2021, and December 31, 2020, are classified in the tables below in one of the three categories described in "Note 2 - Fair value measurement" above: December 31, 2021 Level 1 Level 2 Total Marketable securities — — — December 31, 2020 Level 1 Level 2 Total Marketable securities $ 1,027 $ — $ 1,027 The Company sold its marketable securities during the year ended December 31, 2021. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | MARKETABLE SECURITIES Marketable securities as of December 31, 2020 consisted of mutual funds securities. Realized gains and losses on sales of the securities, are included in the consolidated statement of operations as other income, net. The Company did not hold any marketable securities as of December 31, 2021. Equity securities with readily determinable fair value are measured at fair value. The changes in the fair value of equity investments are recognized through other income, net in the consolidated statements of operations. The following table sets forth the Company’s marketable securities: December 31 2021 2020 Israeli mutual funds $ — $ 1,027 Total $ — $ 1,027 As of December 31, 2021 and 2020 there were no available-for-sale debt securities. The Company has considered factors regarding other than temporary impaired securities and determined that there were no securities with impairment that is other than temporary as of December 31, 2020. During the years ended December 31, 2021 and 2020, the Company received aggregate proceeds of $1.0 million and $38.5 million, respectively, upon the sale and maturity of marketable securities. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. The Company commenced capitalizing inventory for AMZEEQ and ZILXI upon FDA approval in October 2019 and May 2020, respectively. The Company periodically reviews its inventory levels and, if necessary, writes down inventory that is expected to expire prior to being sold, inventory in excess of expected sales requirements and inventory that fails to meet commercial sale specifications, with a corresponding charge to cost of goods sold. There were no material inventory write-downs during the years ended December 31, 2021 and 2020. All inventory was sold or written-off in connection with the sale of the MST Franchise. See Note 17. The following table sets forth the Company’s inventory: December 31 (in thousands) 2021 2020 Raw materials $ 3,298 $ 4,042 Work-in-process 33 662 Finished goods 3,960 2,700 Total $ 7,291 $ 7,404 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT December 31 2021 2020 Cost: Leasehold improvements $ 59 $ 59 Computers and software 374 467 Laboratory equipment 53 53 Furniture 419 419 905 998 Less: Accumulated depreciation and amortization 551 443 Property and Equipment, net $ 354 $ 555 Depreciation and amortization expense totaled $0.1 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consisted of the following: December 31 2021 2020 Product sales provisions (see Note 4) $ 5,489 $ 5,772 Professional services 1,213 696 Research and development 969 862 Marketing — 1,322 Commercialized product accruals 596 1,324 Other 326 1,476 Total Accrued Expenses $ 8,593 $ 11,452 |
OPERATING LEASE
OPERATING LEASE | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
OPERATING LEASE | OPERATING LEASE The Company has operating leases for corporate offices and vehicles. The properties primarily relate to the Company’s principal executive office in Bridgewater, New Jersey and office space in Israel. On March 13, 2019, the Company signed an amendment to the original lease agreement for its principal executive office in Bridgewater, New Jersey (the "Lease Amendment”). The Lease Amendment includes an extension of the lease period of the 10,000 square feet previously leased under the original agreement (the "Original Space") and an addition of 4,639 square feet (the "Additional Space”). The Company entered the Additional Space following a period of preparation by the lessor completed during September 2019 (the "Commencement Date"). The lease is due to expire on August 31, 2022. Pursuant to the Lease Amendment, the Company recognized an additional right of use asset and liability in the amount of $0.7 million. The Additional Space was considered a new lease agreement and was recognized as a right of use asset and liability, in the amount of $0.3 million, on the Commencement Date. The lease agreement for the office space in Israel expires in December 2022. Additionally, the Company entered into operating lease agreements in connection with the leasing of vehicles. The lease periods are generally for three years. To secure the terms of certain of the vehicle lease agreements, the Company has made prepayments to the leasing company, representing approximately three months of lease payments. These amounts have been recorded as part of the operating lease right to use assets. In connection with the strategic business review and sale of the MST Franchise certain vehicle leases were transferred to members of the commercial workforce resulting in the elimination of $0.5 million of right of use assets and $0.5 million of right of use liabilities. Operating lease costs for the year ended December 31, 2021 are as follows: (in thousands) Year Ended December 31 Year Ended December 31 Office lease expenses $ 357 $ 961 Vehicles lease expenses $ 434 $ 390 The operating lease costs include an immaterial amount of variable lease payments for the years ended December 31, 2021 and 2020, respectively. Operating cash flows, for amounts included in the measurement of lease liabilities are as follows: Year Ended December 31 Year Ended December 31 Office leases $ 373 $ 971 Vehicles leases $ 434 $ 390 Supplemental information related to leases are as follows: December 31 December 31 Operating lease right-of-use assets $ 338 $ 1,583 Operating lease liabilities $ 349 $ 1,610 Weighted average remaining lease term 0.77 1.96 Weighted average discount rate 13.10 % 13.10 % Maturities of lease liabilities are as follows: 2022 $ 334 2023 32 Total lease payments 366 Less imputed interest (17) Total lease liability $ 349 As of December 31, 2021, the Company had a lien in the amount of $0.6 million on the Company’s cash in respect of bank guarantees granted in order to secure the lease agreements. |
EMPLOYEE SAVINGS PLAN
EMPLOYEE SAVINGS PLAN | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE SAVINGS PLAN | EMPLOYEE SAVINGS PLANBeginning September 2017, the Company has retirement savings plans available to all employees of the Subsidiary, which are intended to qualify as deferred compensation plans under Section 401(k) of the Internal Revenue Code (the “401(k) Plans”). The Company made contributions to these 401(k) Plans during the years ended December 31, 2021, and 2020 of approximately $0.4 million and $0.8 million, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation and contingencies The Company may periodically become subject to legal proceedings and claims arising in connection with its business. As of December 31, 2021, there are no claims or actions pending against the Company that, in the opinion of management, are likely to have a material adverse effect on the Company. On June 30, 2021, the Company received a paragraph IV certification notice (the “Notice”) from Padagis Israel Pharmaceuticals Ltd. (f/k/a Perrigo Israel Pharmaceuticals Ltd. (“Padagis”)) advising that Padagis has submitted to the U.S. Food and Drug Administration (the “FDA”) an Abbreviated New Drug Application (“ANDA”) seeking approval to manufacture and sell a generic version of the Company’s product AMZEEQ® (minocycline) topical foam, 4% in the United States prior to the expiration of the Company’s U.S. patents Nos. 8,865,139, 8,945,516, 8,992,896, 9,675,700, 10,086,080, 10,137,200, 10,213,512, 10,265,404, 10,398,641, 10,517,882, 10,821,187, and 10,849,847 (the “Listed Patents”), which are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, otherwise known as the “Orange Book.” The Notice alleges that the Listed Patents are invalid, unenforceable, and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in Padagis’s ANDA. |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On July 29, 2019, Foamix entered into a Credit Agreement (the "Credit Agreement") to secure up to $50 million from two lenders, one of which is a significant stockholder of the Company and is considered a related party, and a Securities Purchase Agreement with one of the lenders for gross proceeds of approximately $14 million, before deducting offering expenses (see "Note 14 - Share Capital" for more information). On March 9, 2020, the Company entered into an Amended and Restated Credit Agreement and Guaranty (as further amended on August 5, 2020, the "Amended and Restated Credit Agreement"), whereby the Company has guaranteed the indebtedness obligations of the borrower and granted a first priority security interest in substantially all of our assets for the benefit of the lenders. As of December 31, 2020, $35.0 million was drawn under the Amended and Restated Credit Agreement. The Company did not incur the remaining $15.0 million under the Amended and Restated Credit Agreement. The term loans available under the Amended and Restated Credit Agreement were comprised as follows: (a) $15 million that was funded on July 29, 2019 (the “Tranche 1 Loan”), (b) $20 million that was funded on December 17, 2019 (the “Tranche 2 Loan”) and (c) up to $15 million that was available prior to September 30, 2020 (the “Tranche 3 Loan”). The Tranche 2 Loan was borrowed following the FDA’s approval of the Company’s NDA for AMZEEQ and listing of AMZEEQ in the FDA’s “Orange Book,” in addition to maintaining its arrangements with a third party for the commercial supply and manufacture of AMZEEQ. The Company did not incur the Tranche 3 Loan. Subject to any acceleration as provided in the Amended and Restated Credit Agreement, including upon an event of default (as defined in the Amended and Restated Credit Agreement), the loans will mature on July 29, 2024 and bear interest equal to the sum of (A) 8.25% (subject to increase in accordance with the terms of the Amended and Restated Credit Agreement) plus (B) the greater of (x) the one-month LIBOR as of the second business day immediately preceding the first day of the calendar month or the date of borrowing (if such loan is not outstanding as of the first day of the calendar month), as applicable, and (y) 2.75%. A fee in an amount equal to 1.0% of the aggregate principal amount of all loans made on any given borrowing date shall be payable to the lenders. The loans were scheduled to mature on July 29, 2024. However, following discussions with the Company's lenders regarding the revenue targets included in the Amended and Restated Credit Agreement, the revenue expected to be generated for the trailing twelve month period ended June 30, 2021 and the Company's strategic business review discussed in Note 1, the Company determined to prepay its outstanding indebtedness in addition to a 4% prepayment fee and accrued but unpaid interest in the total amount of approximately $36.5 million on August 11, 2021. Following the prepayment, the Amended and Restated Credit Agreement and the security interests thereunder were terminated. As of December 31, 2021 there was no debt outstanding. Perceptive Credit Holdings II, LP ("Perceptive") was one of the lenders and the administrative agent under the Amended and Restated Credit Agreement. As of August 11, 2021, the date of the prepayment, affiliates of Perceptive were holders of more than 5% of the Company's outstanding common stock. In connection with the prepayment of the Company's indebtedness, Perceptive received $18.3 million, representing their portion of the principal amount, interest and prepayment premium. As of December 31, 2021, Perceptive was no longer a related party. In addition, on July 29, 2019, the lenders under the Credit Agreement were issued warrants to purchase up to an aggregate of 1,100,000 of Foamix ordinary shares, at an exercise price of $2.09 per share (the “Warrants”), which represented the five-day volume weighted average price of the Foamix ordinary shares as of the trading day immediately prior to the issuance of the Warrants. In connection with the completion of the Merger, the exchange ratio was applied to the Warrants such that they became exercisable for 651,640 shares of the Company's common stock, and the exercise price was adjusted to $3.53. Following the Phase 3 PN Trial results, the Warrants were further adjusted for the CSR and reverse stock split and they are currently exercisable for 495,165 shares of our common stock with an exercise price of $4.64 per share. Payment of the exercise price will be made, at the option of the holder, either in cash or as a reduction of common stock issuable upon exercise of the Warrant, with an aggregate fair value equal to the aggregate exercise price ("cashless exercise"), or any combination of the foregoing. The Warrants are exercisable pursuant to the terms, and subject to the conditions, thereof and expire on July 29, 2026. Any Warrants left outstanding will be cashless exercised on the Warrants' expiration date, if in the money. The Warrants issued were classified as equity in accordance with ASC 815-40. Proceeds received under the Tranche 1 Loan were allocated to the Warrants and the Tranche 1 Loan on a relative fair value basis. During the year ended December 31, 2020 the Company incurred offering expenses of $1.1 million in connection with transactions contemplated by the Credit Agreement and the Securities Purchase Agreement, which were allocated to the Warrants, shares and debt consistently with the allocation of proceeds. The Company incurred additional expenses in the amount of $0.3 million from the borrowing of Tranche 2 Loan, allocated only to the debt. During the year ended December 31, 2021 the company recorded interest expense of $5.6 million comprised of interest on debt of $3.8 million and discount costs of $1.8 million. The interest expense includes a debt prepayment fee of $1.4 million and the write-off of discount costs of $1.6 million associated with the Company's prepayment of outstanding indebtedness resulting in a total extinguishment loss of $3.0 million During the year ended December 31, 2020 the company recorded interest expense of $3.9 million and $0.5 million relating to the interest and discount cost, respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Preferred stock As of December 31, 2021, the Company's Certificate of Incorporation, as amended, authorizes the Company to issue 20,000,000 shares of preferred stock, par value $0.0001 per share. There were no shares of preferred stock issued and outstanding as of December 31, 2021 and December 31, 2020. Shares of preferred stock may be issued from time to time in one or more series. The voting powers (if any), preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions of any series of preferred stock will be set forth in a Certificate of Designation filed pursuant to the Delaware General Corporation Law, as determined by the Company's Board of Directors. Common stock The number of shares of common stock authorized under the Company's Amended and Restated Certificate of Incorporation was proportionately reduced in connection with the Company's 1-for-4 reverse stock split in February 2021. On July 19, 2021, the Company held its meeting of Stockholders (the "Annual Meeting"). Following the approval by the holders of a majority of the outstanding shares of common stock at the Annual Meeting, the Company filed a Certificate of Amended and Restated Certificate of Incorporation to increase the number of authorized share of common stock from 75,000,000 to 150,000,000 shares of common stock, par value $0.0001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of preferred stock outstanding. The Company has never declared any dividends on common stock. Warrants In addition to entering into the Credit Agreement on July 29, 2019, Foamix issued to the lenders Warrants to purchase up to an aggregate of 1,100,000 of its ordinary shares, later exchanged to Warrants to purchase up to 1,980,660 shares of Menlo's common stock, adjusted retrospectively to 495,165 shares of common stock upon the reverse stock split effective February 12, 2021. Upon close of the Merger, each Warrant received one CSR as described in Note 3 - Business Combinations. The warrants were exercisable immediately following the closing of the Credit Agreement, subject to the terms of the warrant, and are due to expire on July 29, 2026. Any Warrants left outstanding will be cashless exercised on the Warrants' expiration date, if in the money. The exchange of Warrants from Foamix warrants to Menlo warrants and the additional CSR was accounted for as a modification, by analogy, from the modification's guidance under ASC 260-10-S99-2. The Company assessed the significance of the modification of the Warrants by comparing the fair value of the Warrants immediately before and after the amendments. In its assessment, it also considered additional qualitative factors. The Company concluded that the change of terms was not significant. Therefore, the incremental fair value, in the amount of $41 thousand, of the modified Warrants over the original ones (as of modification date) was recognized in retained earnings as a deemed dividend to the Warrant holders in the year ended December 31, 2020. No amounts were recognized in the year ended December 31, 2021. Issuance of stock On February 1, 2019, the Company entered into a Sales Agreement (the "2019 Sales Agreement") with Cantor Fitzgerald & Co., or Cantor Fitzgerald, to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $50.0 million through an at-the-market equity offering program under which Cantor Fitzgerald acted as our sales agent. The issuance and sale of shares of common stock by us pursuant to the 2019 Sales Agreement were deemed an "at-the-market" offering under the Securities Act. Cantor Fitzgerald was entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold under the 2019 Sales Agreement. During the year ended December 31, 2020, the Company issued and sold 1,175,000 shares of common stock at a weighted average price per share of $7.00 pursuant to the 2019 Sales Agreement for $8.0 million in net proceeds, all of which was sold during the three months ended December 31, 2020. In addition, from January 1, 2021 through January 25, 2021, the Company issued and sold an additional 2,778,012 shares of common stock at a weighted average price per share of $9.76 for $26.3 million in net proceeds. Effective as of January 25, 2021, the Company terminated the 2019 Sales Agreement. On August 12, 2021, the Company entered into a new sales agreement (the "Sales Agreement") with Cantor Fitzgerald to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $50.0 million through an at-the-market equity offering program under which Cantor Fitzgerald will act as the Company's sales agent. The issuance and sale of shares of common stock by us pursuant to the Sales Agreement are deemed an "at-the-market" offering under the Securities Act. Cantor Fitzgerald is entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. During the year ended December 31, 2021, the Company issued and sold 1,955,313 shares of common stock at a weighted average per share price of $1.57 pursuant to the Sales Agreement for $2.9 million in net proceeds. This agreement was in effect as of December 31, 2021. On January 28, 2021, the Company entered into a Securities Purchase Agreement with certain institutional and accredited investors for the sale of an aggregate of 5,274,261 shares of common stock of the Company, at a purchase price of $9.48 per share in a registered direct offering. The offering was completed on January 28, 2021 and the Company received approximately $46.8 million in net proceeds, after deducting placement agent fees and other offering expenses. On June 9, 2020, the Company completed an underwritten public offering of 7,776,875 shares of common stock at a price to the public of $7.40 per share. The net proceeds of the offering were approximately $53.6 million, after deducting underwriting discounts and commissions and other offering expenses. In connection with the Merger, the Company issued 36,500,335 shares to legacy Foamix shareholders. On April 6, 2020, pursuant to the terms of the CSR Agreement, the Company issued 74,544,413 shares to legacy Foamix shareholders, adjusted retrospectively to 18,636,103 shares of common stock upon the reverse stock split effective February 12, 2021 |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE BASED COMPENSATION | SHARE BASED COMPENSATION Equity incentive plans: Upon closing of the Merger, the Company adopted Foamix’s 2019 Equity incentive plan (the “2019 Plan”). As of December 31, 2021, 979,795 shares remain issuable under the 2019 Plan. In addition, the Company adopted the 2018 Omnibus Incentive Plan (the "2018 Plan") in January 2018. As of December 31, 2021, 147,550 shares remain issuable under the 2018 Plan. Employee Share Purchase Plan: Upon closing of the Merger, the Company adopted Foamix's Employee Share Purchase Plan ("ESPP") pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”). Employees are permitted to purchase the number of shares purchasable with up to 15% of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S. Internal Revenue Code. As of December 31, 2021, 2,232,207 shares remain available for grant under the ESPP. During the year ended December 31, 2021, 71,890 shares were issued to employees pursuant to the ESPP. During the year ended December 31, 2020, 61,031 Foamix ordinary shares were purchased by Foamix employee pursuant to the ESPP prior to the Merger, which were later exchanged for 36,155 shares of the Company's common stock and one CSR in the Merger, adjusted retrospectively to 9,038 shares of common stock and one CSR upon the reverse stock split effective February 12, 2021, and 38,716 shares were issued to employees after the Merger. Options and RSUs granted to employees and directors: In the years ended December 31, 2021 and 2020, the Company granted options as follows: Year ended December 31, 2021 Award amount Exercise price range Vesting period Expiration Employees and Directors: Options 1,686,405 $1.68- $11.08 1 year -4 years 10 years RSU 970,813 — 2 years -4 years — Year ended December 31, 2020 Award amount Exercise price range Vesting period Expiration Employees and Directors: Options 1,327,214 $5.84- $12.52 1 year -4 years 10 years RSU 654,427 — 1 year -4 years — The fair value of options and RSUs granted to employees and directors during 2021 and 2020 was $9.4 million and $11.9 million, respectively. The fair value of RSUs granted to employees and directors is based on the share price on grant date . The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of the Company’s historical volatility, historical volatilities of companies in comparable stages as well as companies in the industry, by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The Company’s management uses the expected term of each option as its expected life. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding. The underlying data used for computing the fair value of the options are as follows: Year ended December 31 2021 2020 Fair value of stock option $1.02-$6.75 $3.47-$7.68 Dividend yield 0 % 0 % Expected volatility 68.38%-69.38% 60.44%-69.83% Risk-free interest rate 0.50%-1.29% 0.31%-1.26% Expected term 6 years 6 years Modification of share-based compensation: Pursuant to the Merger, all outstanding options and RSUs granted by Foamix were exchanged for stock options and RSUs of Menlo’s common stock according to the Exchange Ratio. In addition, for each option and RSU the holder received a CSR as described in Note 3- Business Combination. This transaction was considered by the company to be a modification under ASC 718, Compensation - Stock Compensation. The modification did not affect the remaining requisite service period. As a result of the modification, for outstanding options and RSUs granted to Foamix employees and consultants, the Company recorded immaterial incremental compensation expense. As described in Note 3 - Business Combination, on April 6, 2020, pursuant to the terms of the CSR Agreement, each CSR was converted into 1.2082 shares of Menlo common stock, resulting in an effective Exchange Ratio in the Merger of 1.8006 shares of Menlo common stock for each Foamix ordinary share. The conversion was considered by the company to be a modification under ASC 718. As a result of the modification, for outstanding options and RSUs granted to Foamix employees and consultants, the Company recorded incremental compensation of $1.8 million and $11.8 million for the years ended December 31, 2021 and December 31, 2020, respectively. As of December 31, 2021 there is $0.9 million of unrecognized incremental compensation expense related to the modification which will primarily be amortized using a graded vesting method over the next 1 year. Awards granted to holders who are no longer employed or providing services to the Company are accounted for in accordance with ASC 815-40, Derivatives and Hedging. Under this guidance, the awards are classified as a derivative liability because the award no longer exchanges a fixed amount of cash for a fixed number of shares. Accordingly, as of March 9, 2020 the Company reclassified $1.6 million from additional paid-in capital to derivative liability on the consolidated balance sheet. Prior to the reclassification of these awards as a liability instrument, the Company recorded an incremental compensation expense of $0.6 million due to the above mentioned modification in accordance with ASC 718. Subsequent to the reclassification of these awards as a liability instrument, the Company recorded incremental compensation expense of $1.0 million for the year ended December 31, 2020. There was no incremental compensation for the year ended December 31, 2021. As described in Note 3 - Business Combination, on April 6, 2020, the Company announced that study MTI-105 and study MTI-106 did not meet their respective primary endpoint of demonstrating statistically significant reduction in pruritus in patients treated with serlopitant compared to placebo based upon a 4-point improvement responder analysis. Accordingly, on April 6, 2020, pursuant to the terms of the CSR Agreement, each CSR was converted into 1.2082 shares of Menlo common stock, resulting in an effective Exchange Ratio in the Merger of 1.8006 shares of Menlo common stock for each Foamix ordinary share. On April 6, 2020, the awards are exchangeable for a fixed amount of cash for a fixed number of shares and were remeasured to fair value and reclassified from derivative liability to additional paid-in capital. Prior to the Merger, Menlo recognized all expenses relating to awards outstanding as of the Effective Date. These awards were subject to acceleration upon the change of control per the previous Menlo stock option plan. Summary of outstanding and exercisable options and RSUs: The following table summarizes the number of options outstanding for the year ended December 31, 2021, and related information: Number of options Weighted Average Exercise Price Outstanding at December 31, 2020 4,274,649 $ 13.36 Granted 1,686,405 5.29 Exercised (70,827) 7.18 Forfeited (435,569) 8.25 Expired (1,410,706) 17.53 Outstanding at December 31, 2021 4,043,952 $ 9.20 Exercisable at December 31, 2021 1,971,922 $ 12.39 The weighted average remaining contractual term of outstanding and exercisable options as of December 31, 2021, is 7.0 years and 5.5 years, respectively. Total unrecognized share based compensation for options at December 31, 2021 is $6.4 million, which is expected to be recognized over a weighted average period of 2.3 years. There was no intrinsic value of outstanding and exercisable options as of December 31, 2021 The following table summarizes the number of RSUs outstanding for the year ended December 31, 2021: Number of RSUs Outstanding at December 31, 2020 719,443 Awarded 970,813 Vested (293,034) Forfeited (134,822) Outstanding at December 31, 2021 1,262,400 Total unrecognized compensation expense related to the unvested portion of the Company's RSUs at December 31, 2021 was $5.6 million, which is expected to be recognized over a weighted average period of 2.27 years. Share-based compensation expenses: The following table illustrates the effect of share-based compensation on the statements of operations: Year ended December 31 2021 2020 Research and development expenses 1,714 4,746 Selling, general and administrative 6,366 13,354 $ 8,080 $ 18,100 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX: Loss before income taxes and the related tax expense (benefit) is as follows: Year ended December 31 (in thousands) 2021 2020 Loss before income taxes: Domestic $ 69,196 $ 211,447 Foreign 4,581 44,379 Total loss before taxes $ 73,777 $ 255,826 Current taxes: Federal $ (456) $ (258) State 8 5 Total current taxes $ (448) $ (253) A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is as follows: Year ended December 31 2021 2020 Federal income tax provision at statutory rate 21.00 % 21.00 % State income tax provision, net of federal benefit (0.01) % — % IPR&D Impairment & CSR Remeasurement — % (11.42) % Transaction Costs — % (1.07) % IP Gain — % (14.65) % Change in valuation allowances (20.27) % 6.16 % Foreign tax rate differential — % 0.35 % Other (0.11) % (0.27) % Effective income tax rate 0.61 % 0.10 % The income tax expense for the years ended December 31, 2021 and 2020 differed from the amounts computed by applying the U.S. federal income tax rate of 21% to loss before tax expense as a result of nondeductible expenses, changes in state effective tax rates, foreign taxes, tax credits generated, true up of net operating loss carryforwards, and increase in the Company’s valuation allowance. The Company applies the elements of FASB ASC 740-10 regarding accounting for uncertainty in income taxes. This clarifies the accounting for uncertainty in income taxes recognized in financial statements and required impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. Included in Other Liabilities on the Consolidated Balance Sheets, are the total amount of unrecognized tax benefits of approximately $2.8 million and $3.1 million as of December 31, 2021 and 2020, respectively, net of the federal benefit, if recognized, would favorably affect the Company’s future effective tax rate. The Company’s policy is to recognize interest and penalties related to tax matters within the income tax provision. Tax years beginning in 2017 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. The significant components of the Company's deferred tax assets and liabilities are as follows: December 31, (in thousands) 2021 2020 Deferred tax assets: Net operating loss carry forward $ 73,259 $ 55,514 Tax credit carryforwards 7,905 7,387 Share based compensation 3,281 4,903 Accrued expenses and other 1,226 2,325 Total gross deferred tax assets 85,671 70,129 Less - valuation allowance (85,555) (69,743) Total deferred tax assets, net of valuation allowance Deferred tax liabilities: Other (40) (41) Right of use assets (76) (345) Total gross deferred tax liabilities (116) (386) Net deferred tax assets $ — $ — Realization of deferred tax assets is contingent upon sufficient future taxable income during the period that deductible temporary differences and carry forward losses are expected to be available to reduce taxable income. As the achievement of required future taxable income is not likely, the Company recorded a full valuation allowance. At December 31, 2021 and 2020, the Company recorded valuation allowance against its net deferred tax assets of approximately $85.6 million and $69.7 million, respectively. The change in the valuation allowance during the years ended December 31, 2021 and 2020 was an increase of approximately $15.8 million and a decrease of approximately $1.3 million, respectively. A valuation allowance has been recorded since, in the judgment of management, these assets are not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences and carryforwards become deductible or are utilized. As of December 31, 2021, the Company had federal and state pre-tax net operating loss carryforwards of approximately $315.0 million and $105.6 million, respectively. As of December 31, 2021, research and development credit carryforwards for federal and state purposes are approximately $6.7 million and $1.2 million, respectively. As a result of U.S. tax reform legislation, federal net operating losses generated beginning in 2018 and subsequent years carryforward indefinitely, however, the Company has federal net operating losses that pre-date U.S. tax reform legislation which begin to expire in 2031 and federal credit carryforwards that begin to expire in 2031. State net operating loss carryforwards begin to expire in 2031, and the state credit carryforwards began to expire in 2031. Sections 382 and 383 of the Internal Revenue Code of 1986 subject the future utilization of net operating losses and certain other tax attributes, such as research and development tax credits, to an annual limitation in the event of certain ownership changes, as defined. The Company may have undergone ownership changes and therefore may be materially limited in the amount of NOL and R&D tax credit available for utilization in the future. The Company generated research and development tax credits but has not conducted a study to document the qualified activities. This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed and any adjustment is known, a partial reserve has been presented as an uncertain tax position which is offset against the gross research and development deferred tax asset. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this would be offset by an adjustment to the deferred tax asset established for the research and development credit carryforwards and the valuation allowance. Uncertain tax positions: ASC No. 740, Income Taxes, requires significant judgment in determining what constitutes an individual tax position as well as assessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently, affect the operating results of the Company. The following table summarizes the activity of the Company unrecognized tax benefits (in thousands): Balance at January 1, 2020 $ 714 Additions for prior year positions (1) 2,354 Additions for current year positions 273 Reductions related to expiration of statute of limitations (258) Balance at December 31, 2020 $ 3,083 Additions for prior year positions (1) — Additions for current year positions $ 172 Reductions related to expiration of statute of limitations $ (456) Balance at December 31, 2021 $ 2,799 (1) Balance related to research and development tax credit positions acquired through the Merger. In December 2020, the Company began liquidation proceedings of its Israeli subsidiary, VYNE Pharmaceuticals Ltd., to align with its business strategy. As a result thereof, the Company's intellectual property was assigned to the U.S. parent company and we recognized a $163.0 million taxable gain in 2020 for Israeli income tax purposes. However, the taxable gain was fully offset by net operating loss carryforwards, resulting in no income tax expense to the Company. In addition, there was also no Israeli withholding tax due by the U.S. parent company. The Corporate Restructuring is subject to complex tax and transfer pricing regulations administered by taxing authorities in the U.S. and Israel. The relevant taxing authorities may disagree with the Company’s determinations as to the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and the Company’s position were not sustained, the Company could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates and reduced cash flows than otherwise would be expected. The Company has tax assessments that are considered to be final through tax year 2015. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Subsequent Events Sale of Minocycline Franchise As discussed in Note 1, On January 12, 2022, VYNE entered into a Purchase Agreement with Journey to sell its MST Franchise for $25.0 million of cash consideration which comprises an upfront payment of $20.0 million and an additional $5.0 million on the one-year anniversary of the closing of the transaction. VYNE is also eligible to receive sales milestone payments of up to $450.0 million in the aggregate upon the achievement of specified levels of net sales on a product-by-product basis, beginning with annual net sales exceeding $100.0 million (with products covered in three categories (1) AMZEEQ (and certain modifications), (2) ZILXI (and certain modifications), and (3) FCD105 and other products covered by the patents being transferred, including certain modifications). In addition, VYNE is entitled to receive certain payments from any licensing or sublicensing of the assets by Journey outside of the United States. The Company anticipates recording an estimated gain from the sale of the MST Franchise in the first quarter of 2022 ranging from $13.5 million to $14.5 million. The Company does not anticipate paying any federal or state income taxes based upon the utilization of net operating losses. The estimated gain is based on net proceeds ranging from $21.3 million to $22.3 million including estimated transaction costs ranging from $2.7 million to $3.7 million. Under the Purchase Agreement, the Company is obligated to indemnify Journey against certain potential liabilities and for breaches of representations, warranties and covenants under the agreement. Pursuant to the Agreement, Journey assumed certain liabilities of the MST Franchise including, among others, those arising from VYNE’s patent infringement suit initiated against Padagis Israel Pharmaceuticals Ltd (see Note 12). There were no current or long-term liabilities recorded by the Company which were transferred to the Buyer. The Agreement includes customary representations and warranties, as well as indemnification rights for breaches of representations, warranties, and covenants, as well as certain other matters, subject to customary deductibles, caps, and other limitations. The criteria for reporting the MST Franchise as held for sale was met after the balance sheet date, and therefore, the assets of the MST Franchise were classified as held and used as of December 31, 2021. The total carrying amounts of the MST assets a were disposed were approximately $7.8 million, as of December 31, 2021. These assets consist primarily of inventory of $7.3 million. No liabilities were transferred. Financing Activities Since December 31, 2021, the Company has sold an aggregate of 2,465,500 shares pursuant to the Sales Agreement for gross proceeds of $1.5 million. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentationThe Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Certain prior period amounts have been reclassified to conform to current year presentation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include accounting for business combinations, impairments of goodwill and intangible assets and revenue recognition. Actual results could differ from the Company’s estimates. The COVID-19 pandemic and government measures taken in response to the pandemic have had a negative impact on the Company's operations. Access to healthcare providers has been limited, which has negatively impacted sales and the Company's ability to execute its commercial strategy with respect to AMZEEQ and ZILXI. The length of time and extent to which the COVID-19 pandemic will directly or indirectly impact the Company's business, results of operations and financial condition and liquidity will depend on future developments that are highly uncertain, subject to change and will continue to evolve with geographical re-openings, surges in cases, the emergence of new strains and the vaccination effort. In addition, the Company further assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of December 31, 2021 and through the date of this report. The accounting matters assessed included, but were not limited to, the Company’s allowance for doubtful accounts and credit losses, inventory and related reserves, impairments of long-lived assets and revenue recognition. In 2020, the Company recorded impairments of goodwill and certain indefinite-lived intangible assets; however, these were unrelated to the impact of COVID-19 (See "Note 3 - Business Combination" for more information). The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods. |
Business Acquisition | Business AcquisitionThe Company’s consolidated financial statements include the operations of an acquired business after the completion of the acquisition. The Company accounts for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of In-Process Research and Development and Goodwill be recorded on the balance sheet. Transaction costs are expensed as incurred. Amounts recorded in connection with an acquisition can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. The Company is required to measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, the Company uses fair value in the initial recognition of net assets acquired in a business combination and when measuring impairment losses. The Company estimates fair value using an exit price approach, which requires, among other things, that Company determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use one or all of the following techniques: • Income approach, which is based on the present value of a future stream of net cash flows. • Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. • Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence. Our fair value methodologies depend on the following types of inputs: • Quoted prices for identical assets or liabilities in active markets (Level 1 inputs). • Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs). • Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. |
Foreign Currency Translation | Foreign Currency TranslationTransactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions - exchange rates at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) - historical exchange rates. Currency transaction gains and losses are presented in financial income or expenses, as appropriate. |
Principles of consolidation | Principles of consolidationThe consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation. |
Cash and cash equivalents | Cash and cash equivalentsThe Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash. |
Marketable securities | Marketable securities Marketable equity securities: The Company's marketable equity securities are recorded at fair value, with unrealized gains and losses included in other income, net in the consolidated statement of operations. |
Inventory | InventoryPrior to the date the Company obtains regulatory approval for its product candidates, inventory costs related to commercial production are expensed as research and development expense. Once regulatory approval is obtained, the Company capitalizes such costs as inventory. Inventories are stated at the lower of cost or net realizable value. The Company determines the cost of inventory using the first-in, first-out (“FIFO”) method. The Company periodically reviews its inventory levels and writes down inventory that is expected to expire prior to being sold, inventory in excess of expected sales requirements and inventory that fails to meet commercial sale specifications, with a corresponding charge to cost of goods sold. |
Property and equipment | Property and equipment 1) Property and equipment are stated at cost, net of accumulated depreciation and amortization. 2) The Company’s property and equipment are depreciated by the straight-line method on the basis of their estimated useful life. Annual rates of depreciation are as follows: Estimated Useful Life Computers 3 - 7 years Laboratory equipment 5 - 14 years Office furniture and equipment 7 - 14 years Leasehold improvements are amortized by the straight-line method over the expected lease term, which is shorter than the estimated useful life of the improvements. |
Impairment of long-lived assets | Impairment of long-lived assetsThe Company tests long-lived assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the assets is less than the carrying amount of such assets, an impairment loss would be recognized. The assets would be written down to their estimated fair values, calculated based on the present value of expected future cash flows (discounted cash flows), or some other fair value measure. |
Goodwill and other indefinite lived intangible assets | Goodwill and other indefinite lived intangible assetsThe Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of the end of the fiscal year or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available including estimates of fair value which incorporate assumptions market participants would use in making their estimates of fair value. In 2020, the Company recorded full impairment charges related to its $4.5 million of goodwill and $49.8 million of IPR&D (See "Note 3 - Business Combination" for more information). No impairment was recorded in the years ended December 31, 2021. |
Allowance for doubtful accounts | Allowance for doubtful accountsAn allowance for doubtful accounts is maintained for potential credit losses based on the aging of trade receivables, historical bad debts experience and changes in customer payment patterns. Trade receivable balances are written off against the allowance when it is deemed probable that the receivable will not be collected. Trade receivables, net are stated net of reserves for certain sales allowances and provisions for doubtful accounts. Provisions for doubtful accounts were not material for the years ended December 31, 2021 and 2020. |
Debt | Debt Debt discounts created as a result of the allocation of proceeds received from a debt issuance to warrants issued are amortized to interest expense under the effective interest method over the life of the recognized debt liability. Debt issuance costs include the costs of debt financings undertaken by the Company, including legal fees and other direct costs of the financing. Debt issuance costs related to a recognized debt liability are presented on the consolidated balance sheet as a direct deduction from the carrying amount of the debt liability and are amortized to interest expense over the term of the related debt, using the effective interest method. |
Leases | LeasesLeases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. |
Contingencies | Contingencies Certain conditions may exist as of the date of the financial statements, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. Management applies the guidance in ASC 450-20-25 when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material are disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantees are disclosed. |
Share-based compensation | Share-based compensation The Company accounts for employees’ and directors’ share-based payment awards classified as equity awards using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period using the straight-line method. Forfeitures are recognized as they occur. Share-based payments related to the employee share purchase plan (“ESPP”) are recognized based on the fair value of each award estimated on the first day of the offering period and recognized as an expense over the offering period using the straight-line method. |
Revenue recognition | Revenue recognition The Company accounts for its revenue transactions under FASB ASC Topic 606, Revenue from Contracts with Customers. In accordance with ASC Topic 606, the Company recognizes revenues when its customers obtain control of its product for an amount that reflects the consideration it expects to receive from its customers in exchange for that product. To determine revenue recognition for contracts that are determined to be in scope of ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once the contract is determined to be within the scope of ASC Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when such performance obligation is satisfied. The Company’s customers include a limited number of national and select regional wholesalers (the “distributors”) and certain independent and specialty pharmacies, together (the "customers"). These distributors subsequently resell the product, primarily to retail pharmacies that dispense the product to patients. Net product revenue is typically recognized when customers obtain control of the Company’s products, which occurs at a point in time, typically upon delivery of product to the customers. The Company evaluates the creditworthiness of its customers to determine whether it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur. The Company does not assess whether a contract has a significant financing component if the expectation is such that the period between the transfer of the promised goods to the customer and the receipt of payment will be less than one year. Standard credit terms do not exceed 75 days. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that would have been recognized is one year or less or the amount is immaterial. Shipping and handling costs related to the Company’s product sales are included in selling, general and administrative expenses. The Company’s net product revenues through December 31, 2021 were generated through sales of AMZEEQ, which was approved by the FDA in October 2019 and was commercially launched in the United States in January 2020 and ZILXI, which was approved by the FDA in May 2020 and was commercially launched in the United States in October 2020. Product revenue is recorded net of distribution fees, trade discounts, allowances, rebates, copay program coupons, chargebacks, estimated returns and other incentives. These reserves are classified as either reductions of accounts receivable or as current liabilities. The estimates of reserves established for variable consideration reflect current contractual and statutory requirements, known market events and trends, industry data and forecasted customer mix. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net product revenues only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from these estimates. If actual results vary, estimates may be adjusted in the period such change in estimate becomes known, which could have an impact on earnings in the period of adjustment. See “Note 4 – Revenue Recognition” for more information. On April 23, 2020, the Company announced that it entered into a license agreement with Cutia for our minocycline products and product candidate, if approved, on an exclusive basis in Greater China. Under the terms of the agreement, Cutia will have an exclusive license to obtain regulatory approval of and commercialize AMZEEQ, ZILXI and, if approved in the U.S., FCD105 in the Greater China territory. The Company will supply the finished licensed products to Cutia for clinical and commercial use. The Company received an upfront cash payment of $10.0 million. The license was determined to be a distinct performance obligation of the arrangement, therefore the Company recognized the revenues from the upfront license fee when the license is transferred to the licensee and the licensee is able to use and benefit from the license. The disposition of the MST Franchise included the license agreement with Cutia including the rights to future revenues under that agreement. See "Note 4 - Revenue Recognition" for more information. |
Research and development costs | Research and development costsResearch and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of clinical trials, clinical trial supplies, salaries, share-based compensation expenses, payroll taxes and other employee benefits, lab expenses, consumable equipment and consulting fees. All costs associated with research and developments are expensed as incurred. |
Income taxes | Income taxes: • Deferred taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. Given the Company’s losses, the Company has provided a full valuation allowance with respect to its deferred tax assets. • Uncertainty in income tax The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained based on technical merits. If this threshold is met, the second step is to measure the tax position as the largest amount that has more than a 50% likelihood of being realized upon ultimate settlement. |
Loss per share | Loss per share The calculation of the weighted-average number of common stock outstanding during the period in which the reverse merger occurs was based on: •. The number of common stock outstanding from the beginning of that period to the merger date was computed on the basis of the weighted-average number of common stock of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement •. The number of common stock outstanding from the merger date to the end of that period was the actual number of common stock of the legal acquirer (the accounting acquiree) outstanding during that period. Net loss per share, basic and diluted, is computed on the basis of the net loss for the period divided by the weighted average number of common shares outstanding during the period. Diluted net loss per share is based upon the weighted average number of common stock and of common stock equivalents outstanding when dilutive. Common stock equivalents include outstanding stock options and warrants which are included under the treasury share method when dilutive. The following stock options, restricted stock units (“RSUs”), warrants and incremental shares to be issued under the employee stock purchase plan (“ESPP”) were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (share data): Year ended December 31 2021 2020 Outstanding share options, RSUs and shares under ESPP 5,306,352 4,994,333 Warrants 495,165 495,165 |
Fair value measurement | Fair value measurementFair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data or active market data of similar or identical assets or liabilities. Level 3 Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. |
Concentration of credit risks | Concentration of credit risks Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, restricted cash, marketable securities and accounts receivables. The Company deposits cash and cash equivalents with highly rated financial institutions and, as a matter of policy, limits the amounts of credit exposure to any single financial institution. In addition, all marketable securities carry a high rating or are government insured. The Company has not experienced any material credit losses in these accounts and does not believe it is exposed to significant credit risk on these instruments. For the year ended December 31, 2021, the Company's three largest customers collectively represented 41% of product revenue and 58% of accounts receivable. For the year ended December 31, 2020, the Company's largest three customers collectively represented 96% of product revenue and 90% of accounts receivable. |
Comprehensive loss | Comprehensive loss Comprehensive loss includes, in addition to net loss, unrealized holding gains and losses on available-for-sale debt securities and derivative instruments designated as cash flow hedge (net of related taxes where applicable). Reclassification adjustments for gain or loss of available-for-sale securities are included in other income, net in the consolidated statement of operations. |
Newly issued and recently adopted accounting pronouncements | Newly issued and recently adopted accounting pronouncements : Recent Accounting Guidance Issued: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-4, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (ASU 2020-4), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contracts, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU 2020-4 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-4 are optional and are effective from March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of ASU 2020-4 on its consolidated financial statements. Currently, the Company does not expect the adoption of the new standard to have a material impact to the consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (ASU 2016-13), which requires companies to measure credit losses of financial instruments, including customer accounts receivable, utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Subsequent to the issuance of ASU 2016-13, the FASB issued several additional Accounting Standard Updates to clarify implementation guidance, provide narrow-scope improvements and provide additional disclosure guidance. As a smaller reporting company, the Company will adopt ASU 2016-13 effective January 1, 2023 or at such time where it is no longer a smaller reporting company. Currently, the Company does not expect the adoption of the new standard to have a material impact to the consolidated financial statements. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods beginning after December 15, 2020. This guidance became effective during the first quarter of 2021. The adoption of the new standard did not have a material impact to the Company's consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Useful Lives of Property, Plant, and Equipment | Annual rates of depreciation are as follows: Estimated Useful Life Computers 3 - 7 years Laboratory equipment 5 - 14 years Office furniture and equipment 7 - 14 years December 31 2021 2020 Cost: Leasehold improvements $ 59 $ 59 Computers and software 374 467 Laboratory equipment 53 53 Furniture 419 419 905 998 Less: Accumulated depreciation and amortization 551 443 Property and Equipment, net $ 354 $ 555 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following stock options, restricted stock units (“RSUs”), warrants and incremental shares to be issued under the employee stock purchase plan (“ESPP”) were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (share data): Year ended December 31 2021 2020 Outstanding share options, RSUs and shares under ESPP 5,306,352 4,994,333 Warrants 495,165 495,165 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Merger Consideration to be Transferred | The following is the Merger Consideration (as defined in the Merger Agreement) was transferred to effect the Merger: (in thousands) Total Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders $ 123,757 Deemed (for accounting purposes only) conversion of Menlo equity awards 7,322 Total consideration* $ 131,079 * This amount reflects total consideration prior to reduction in respect of the CSRs (which had a fair value of $19.6 million as of the Merger Date) that were issued to Foamix shareholders and that reduced the Menlo stockholders’ relative ownership in the combined company. If the effect of the CSRs is included, the total consideration deemed paid by Foamix, as the accounting acquirer, to Menlo stockholders and equity award holders in the Merger would be reduced to approximately $111.4 million, as shown in the purchase price allocation table below. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The Company completed its analysis of the allocation of the purchase price to the fair values of assets acquired and liabilities assumed as follows: (in thousands) March 9, 2020 Cash and cash equivalents $ 38,641 Investment in marketable securities 22,703 Prepaid expenses and other current assets 1,581 In-process research and development 49,800 Goodwill 4,545 Total assets 117,270 Current liabilities (5,827) Total liabilities (5,827) Estimated purchase price* $ 111,443 * Reflects reduction in the purchase price deemed paid to Menlo stockholders in the Merger on the assumption that the CSRs, in an aggregate value of $19.6 million, convert into additional shares of the combined company for the Foamix shareholders, thereby resulting in a lower percentage of the combined company’s outstanding shares being owned by Menlo stockholders following the Merger. |
Schedule of the Calculation of Goodwill from the Merger | The purchase price of the transaction and the excess purchase price over the fair value of the identifiable net assets acquired, are calculated as follows: (in thousands) March 9, 2020 Purchase price $ 111,443 Less: fair value of net assets acquired, including other identifiable intangibles (106,898) Goodwill $ 4,545 |
Schedule of IPR&D Assets Acquired through the Merger | The IPR&D recognized relates to Menlo’s once - daily oral serlopitant for the treatment of pruritus (itch) associated with PN that has not reached technological feasibility as follows: (in thousands) Intangible asset Estimated Fair Value Acquired indefinite life intangible assets* $ 49,800 Fair value of identified intangible assets $ 49,800 |
Schedule of Pro Forma | Actual Menlo results of operations for the period from March 9, 2020, the Effective Date, through December 31, 2020 included in the consolidated statement of operation for the year ended December 31, 2020: (in thousands) Year ended December 31, 2020 Revenues $ — Loss attributable to Menlo $ 24,517 Pro forma Menlo results of operations for the year ended December 31, 2020. Year ended 2020 (in thousands, except per share data) (Unaudited) SUPPLEMENTAL PRO FORMA COMBINED RESULTS OF OPERATIONS: Revenues $ 20,993 Net loss $ 252,951 Loss per share - basic and diluted $ 7.53 Adjustments to the supplemental pro forma combined results of operations, included in the above, are as follows: Transaction costs $ (14,931) Acceleration of stock based compensation (7,199) Total Adjustments $ (22,130) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The Company’s assets and liabilities that are measured at fair value as of December 31, 2021, and December 31, 2020, are classified in the tables below in one of the three categories described in "Note 2 - Fair value measurement" above: December 31, 2021 Level 1 Level 2 Total Marketable securities — — — December 31, 2020 Level 1 Level 2 Total Marketable securities $ 1,027 $ — $ 1,027 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Securities | The following table sets forth the Company’s marketable securities: December 31 2021 2020 Israeli mutual funds $ — $ 1,027 Total $ — $ 1,027 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | The following table sets forth the Company’s inventory: December 31 (in thousands) 2021 2020 Raw materials $ 3,298 $ 4,042 Work-in-process 33 662 Finished goods 3,960 2,700 Total $ 7,291 $ 7,404 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property And Equipment | Annual rates of depreciation are as follows: Estimated Useful Life Computers 3 - 7 years Laboratory equipment 5 - 14 years Office furniture and equipment 7 - 14 years December 31 2021 2020 Cost: Leasehold improvements $ 59 $ 59 Computers and software 374 467 Laboratory equipment 53 53 Furniture 419 419 905 998 Less: Accumulated depreciation and amortization 551 443 Property and Equipment, net $ 354 $ 555 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Components of Accrued Expenses | Accrued expenses consisted of the following: December 31 2021 2020 Product sales provisions (see Note 4) $ 5,489 $ 5,772 Professional services 1,213 696 Research and development 969 862 Marketing — 1,322 Commercialized product accruals 596 1,324 Other 326 1,476 Total Accrued Expenses $ 8,593 $ 11,452 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating lease costs | Operating lease costs for the year ended December 31, 2021 are as follows: (in thousands) Year Ended December 31 Year Ended December 31 Office lease expenses $ 357 $ 961 Vehicles lease expenses $ 434 $ 390 Operating cash flows, for amounts included in the measurement of lease liabilities are as follows: Year Ended December 31 Year Ended December 31 Office leases $ 373 $ 971 Vehicles leases $ 434 $ 390 Supplemental information related to leases are as follows: December 31 December 31 Operating lease right-of-use assets $ 338 $ 1,583 Operating lease liabilities $ 349 $ 1,610 Weighted average remaining lease term 0.77 1.96 Weighted average discount rate 13.10 % 13.10 % |
Maturities of lease liabilities | Maturities of lease liabilities are as follows: 2022 $ 334 2023 32 Total lease payments 366 Less imputed interest (17) Total lease liability $ 349 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based compensation awards granted for options and RSUs during the period | In the years ended December 31, 2021 and 2020, the Company granted options as follows: Year ended December 31, 2021 Award amount Exercise price range Vesting period Expiration Employees and Directors: Options 1,686,405 $1.68- $11.08 1 year -4 years 10 years RSU 970,813 — 2 years -4 years — Year ended December 31, 2020 Award amount Exercise price range Vesting period Expiration Employees and Directors: Options 1,327,214 $5.84- $12.52 1 year -4 years 10 years RSU 654,427 — 1 year -4 years — |
Summary of underlying data used for computing the fair value of the options | The underlying data used for computing the fair value of the options are as follows: Year ended December 31 2021 2020 Fair value of stock option $1.02-$6.75 $3.47-$7.68 Dividend yield 0 % 0 % Expected volatility 68.38%-69.38% 60.44%-69.83% Risk-free interest rate 0.50%-1.29% 0.31%-1.26% Expected term 6 years 6 years |
Summary of the number of options outstanding | The following table summarizes the number of options outstanding for the year ended December 31, 2021, and related information: Number of options Weighted Average Exercise Price Outstanding at December 31, 2020 4,274,649 $ 13.36 Granted 1,686,405 5.29 Exercised (70,827) 7.18 Forfeited (435,569) 8.25 Expired (1,410,706) 17.53 Outstanding at December 31, 2021 4,043,952 $ 9.20 Exercisable at December 31, 2021 1,971,922 $ 12.39 |
Summary of the number of RSUs outstanding | The following table summarizes the number of RSUs outstanding for the year ended December 31, 2021: Number of RSUs Outstanding at December 31, 2020 719,443 Awarded 970,813 Vested (293,034) Forfeited (134,822) Outstanding at December 31, 2021 1,262,400 |
Summary of share-based compensation expenses | The following table illustrates the effect of share-based compensation on the statements of operations: Year ended December 31 2021 2020 Research and development expenses 1,714 4,746 Selling, general and administrative 6,366 13,354 $ 8,080 $ 18,100 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Tax Taxes and Current Tax Expense (Benefit) | Loss before income taxes and the related tax expense (benefit) is as follows: Year ended December 31 (in thousands) 2021 2020 Loss before income taxes: Domestic $ 69,196 $ 211,447 Foreign 4,581 44,379 Total loss before taxes $ 73,777 $ 255,826 Current taxes: Federal $ (456) $ (258) State 8 5 Total current taxes $ (448) $ (253) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is as follows: Year ended December 31 2021 2020 Federal income tax provision at statutory rate 21.00 % 21.00 % State income tax provision, net of federal benefit (0.01) % — % IPR&D Impairment & CSR Remeasurement — % (11.42) % Transaction Costs — % (1.07) % IP Gain — % (14.65) % Change in valuation allowances (20.27) % 6.16 % Foreign tax rate differential — % 0.35 % Other (0.11) % (0.27) % Effective income tax rate 0.61 % 0.10 % |
Schedule of deferred tax assets and liabilities | The significant components of the Company's deferred tax assets and liabilities are as follows: December 31, (in thousands) 2021 2020 Deferred tax assets: Net operating loss carry forward $ 73,259 $ 55,514 Tax credit carryforwards 7,905 7,387 Share based compensation 3,281 4,903 Accrued expenses and other 1,226 2,325 Total gross deferred tax assets 85,671 70,129 Less - valuation allowance (85,555) (69,743) Total deferred tax assets, net of valuation allowance Deferred tax liabilities: Other (40) (41) Right of use assets (76) (345) Total gross deferred tax liabilities (116) (386) Net deferred tax assets $ — $ — |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity of the Company unrecognized tax benefits (in thousands): Balance at January 1, 2020 $ 714 Additions for prior year positions (1) 2,354 Additions for current year positions 273 Reductions related to expiration of statute of limitations (258) Balance at December 31, 2020 $ 3,083 Additions for prior year positions (1) — Additions for current year positions $ 172 Reductions related to expiration of statute of limitations $ (456) Balance at December 31, 2021 $ 2,799 (1) Balance related to research and development tax credit positions acquired through the Merger. |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | Jan. 12, 2022USD ($) | Aug. 06, 2021USD ($) | Feb. 12, 2021shares | Dec. 31, 2021USD ($)segmentemployeeshares | Dec. 31, 2020USD ($)shares |
Subsequent Event [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Royalty percent, maximum | 10.00% | ||||
Number of employees terminated | employee | 70 | ||||
Restructuring charges | $ 1,600,000 | ||||
Reverse stock split ratio | 0.25 | ||||
Common stock, shares authorized (in shares) | shares | 75,000,000 | 150,000,000 | 75,000,000 | ||
Net loss | $ 73,329,000 | $ 255,568,000 | |||
Cash used in operations | (56,367,000) | $ (137,082,000) | |||
Cash and investments | 42,900,000 | ||||
Licensing Agreements | |||||
Subsequent Event [Line Items] | |||||
Payments for licensing agreements | $ 1,000,000 | ||||
Topical BETi Option Agreement | |||||
Subsequent Event [Line Items] | |||||
Payments for licensing agreements | 500,000 | ||||
Milestone payments upon achieving certain criteria, maximum | 15,750,000 | ||||
Oral BETi Option Agreement | |||||
Subsequent Event [Line Items] | |||||
Payments for licensing agreements | 4,000,000 | ||||
Milestone payments upon achieving certain criteria, maximum | $ 43,750,000 | ||||
Employee benefits | |||||
Subsequent Event [Line Items] | |||||
Restructuring charges | 1,400,000 | ||||
Expected cost remaining | 200,000 | ||||
Retention Payments | |||||
Subsequent Event [Line Items] | |||||
Restructuring charges | $ 200,000 | ||||
Menlo - Premerger | |||||
Subsequent Event [Line Items] | |||||
Common stock, shares authorized (in shares) | shares | 300,000,000 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Upfront payment | $ 20,000,000 | ||||
Additional consideration receivable | $ 5,000,000 | ||||
Period of closing transaction | 1 year | ||||
Milestone payments receivable upon achievement of net sales | $ 450,000,000 | ||||
Milestone payments upon achieving certain criteria, exceeding annual net sales | $ 100,000,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | Apr. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Impairment of long-lived assets to be disposed of | $ 0 | $ 0 | |
Goodwill impairment loss | 0 | 4,500,000 | |
Provisions for doubtful accounts | 0 | 0 | |
In Process Research and Development | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
In process research and development impairment | $ 0 | $ 49,800,000 | |
Foamix | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Proceeds from royalties | $ 10,000,000 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Estimated Useful Life (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computers | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computers | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Laboratory equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Laboratory equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 14 years |
Office furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Office furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 14 years |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Antidilutive Equity Awards Not Included in the Calculation of EPS (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Outstanding share options, RSUs and shares under ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 5,306,352 | 4,994,333 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 495,165 | 495,165 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Concentrations of Credit Risks (Details) - Customers - Three Largest Customers | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Benchmark | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration risk, percentage | 41.00% | 96.00% |
Accounts Receivable | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Concentration risk, percentage | 58.00% | 90.00% |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) | Feb. 12, 2021shares | Apr. 07, 2020 | Apr. 06, 2020USD ($)$ / sharesshares | Mar. 09, 2020USD ($)contingentStockRight$ / sharesshares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | ||||||
Number of common stock issued per CSR (in shares) | 1.2082 | |||||
Effective exchange ratio of Foamix ordinary shares into Menlo common stock | 1.8006 | |||||
Share issued and delivered upon CSR conversion (in shares) | shares | 18,636,103 | 74,544,413 | ||||
Ownership percentage of parent by subsidiary stockholders | 82.00% | |||||
Ownership percentage of parent by parent stockholders | 18.00% | |||||
Closing share price (in dollars per share) | $ / shares | $ 1.40 | |||||
Consideration transferred | $ 131,079,000 | |||||
Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders | 123,757,000 | |||||
Deemed (for accounting purposes only) conversion of Menlo equity awards | 7,322,000 | |||||
Goodwill impairment loss | 0 | $ 4,500,000 | ||||
Goodwill and in-process research & development impairments | 0 | 54,345,000 | ||||
Value of CSR converted into additional shares of the combined company | $ 19,600,000 | |||||
Contingent stock right remeasurement | $ 84,700,000 | 0 | 84,726,000 | |||
Contingent consideration, fair value of liability | $ 104,400,000 | |||||
In Process Research and Development | ||||||
Business Acquisition [Line Items] | ||||||
In process research and development impairment | $ 0 | 49,800,000 | ||||
Foamix | ||||||
Business Acquisition [Line Items] | ||||||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 | |||||
Closing share price (in dollars per share) | $ / shares | $ 2.99 | |||||
Consideration transferred | $ 131,100,000 | |||||
Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders | $ 123,800,000 | |||||
Number of shares deemed (for accounting purposes only) issued (in shares) | shares | 41,400,000 | |||||
Deemed (for accounting purposes only) conversion of Menlo equity awards | $ 7,300,000 | |||||
Goodwill deductible for income tax purposes | $ 0 | |||||
Foamix | Employee benefits | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition related costs | 8,100,000 | |||||
Foamix | Selling, general and administrative | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition related costs | $ 11,700,000 | |||||
Common stock | Foamix | ||||||
Business Acquisition [Line Items] | ||||||
Exchange ratio per ordinary share for common stock (share per share) | 0.5924 | |||||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 |
BUSINESS COMBINATION - Consider
BUSINESS COMBINATION - Consideration Transferred in Merger (Details) - USD ($) $ in Thousands | Mar. 09, 2020 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders | $ 123,757 | |
Deemed (for accounting purposes only) conversion of Menlo equity awards | 7,322 | |
Total consideration | $ 131,079 | |
Value of CSR converted into additional shares of the combined company | $ 19,600 | |
Foamix | ||
Business Acquisition [Line Items] | ||
Deemed (for accounting purposes only) issuance of Foamix shares to Menlo stockholders | 123,800 | |
Deemed (for accounting purposes only) conversion of Menlo equity awards | 7,300 | |
Total consideration | 131,100 | |
Consideration net of the effect of CSRs | $ 111,400 |
BUSINESS COMBINATION - Purchase
BUSINESS COMBINATION - Purchase Price Allocation (Details) $ in Thousands | Mar. 09, 2020USD ($) |
Allocations of purchase price | |
Value of CSR converted into additional shares of the combined company | $ 19,600 |
Foamix | |
Allocations of purchase price | |
Cash and cash equivalents | 38,641 |
Investment in marketable securities | 22,703 |
Prepaid expenses and other current assets | 1,581 |
In-process research and development | 49,800 |
Goodwill | 4,545 |
Total assets | 117,270 |
Current liabilities | (5,827) |
Total liabilities | (5,827) |
Purchase price | $ 111,443 |
BUSINESS COMBINATION - Goodwill
BUSINESS COMBINATION - Goodwill (Details) - Foamix $ in Thousands | Mar. 09, 2020USD ($) |
Business Combination, Goodwill [Abstract] | |
Purchase price | $ 111,443 |
Less: fair value of net assets acquired, including other identifiable intangibles | (106,898) |
Goodwill | $ 4,545 |
BUSINESS COMBINATION - IPRD and
BUSINESS COMBINATION - IPRD and CSR (Details) - Foamix $ in Thousands | Mar. 09, 2020USD ($) |
In-Process Research and Development | |
Acquired indefinite life intangible assets | $ 49,800 |
Fair value of identified intangible assets | $ 49,800 |
BUSINESS COMBINATION - Pro Form
BUSINESS COMBINATION - Pro Forma (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / shares | |
Business Combination and Asset Acquisition [Abstract] | |
Revenues | $ 0 |
Loss attributable to Menlo | 24,517 |
SUPPLEMENTAL PRO FORMA COMBINED RESULTS OF OPERATIONS: | |
Revenues | 20,993 |
Net loss | $ 252,951 |
Loss per share - basic (in dollars per share) | $ / shares | $ 7.53 |
Loss per share - diluted (in dollars per share) | $ / shares | $ 7.53 |
Adjustments to the supplemental pro forma combined results of operations, included in the above, are as follows: | |
Transaction costs | $ (14,931) |
Acceleration of stock based compensation | (7,199) |
Total Adjustments | $ (22,130) |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | Apr. 23, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Product Sales | |||
Product sales provisions | $ 62,900,000 | $ 39,500,000 | |
Revenue reserve accrual | 5,800,000 | ||
Minimum estimated product return (as a percent) | 1.00% | ||
Maximum estimated product return (as a percent) | 2.00% | ||
Revenues | $ 14,755,000 | 20,993,000 | |
Foamix | |||
Product Sales | |||
Proceeds from royalties | $ 10,000,000 | ||
Allowance For Sales Returns | |||
Product Sales | |||
Revenue reserve accrual | 5,500,000 | ||
License revenues | |||
Product Sales | |||
Revenues | 0 | 10,000,000 | |
Royalty revenues | |||
Product Sales | |||
Revenues | $ 931,000 | $ 791,000 | |
Customers | Revenue Benchmark | Customer One | |||
Product Sales | |||
Concentration risk, percentage | 17.00% | 42.00% | |
Customers | Revenue Benchmark | Customer Two | |||
Product Sales | |||
Concentration risk, percentage | 15.00% | 39.00% | |
Customers | Revenue Benchmark | Customer Three | |||
Product Sales | |||
Concentration risk, percentage | 9.00% | 15.00% |
FAIR VALUE MEASUREMENT - Assets
FAIR VALUE MEASUREMENT - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | $ 1,027 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 1,027 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | $ 0 |
MARKETABLE SECURITIES - Marketa
MARKETABLE SECURITIES - Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities | $ 0 | $ 1,027 |
Israeli mutual funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Marketable securities | $ 0 | $ 1,027 |
MARKETABLE SECURITIES - Narrati
MARKETABLE SECURITIES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Debt securities,available-for-sale | $ 0 | $ 0 |
Permanent impairment loss, debt securities, available for sale | 0 | 0 |
Proceeds from sale and maturity of marketable securities | $ 1,000,000 | $ 38,500,000 |
INVENTORY - Narrative (Details)
INVENTORY - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventory write-down | $ 0 | $ 0 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory Components (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,298 | $ 4,042 |
Work-in-process | 33 | 662 |
Finished goods | 3,960 | 2,700 |
Total | $ 7,291 | $ 7,404 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 905 | $ 998 |
Accumulated depreciation and amortization | 551 | 443 |
Property and Equipment, net | 354 | 555 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 59 | 59 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 374 | 467 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 53 | 53 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 419 | $ 419 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 109 | $ 341 |
Disposed of fixed assets | 93 | 2,101 |
Proceeds from sale of fixed assets | $ 100 | $ 2,100 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued Sales Provisions | $ 5,489 | $ 5,772 |
Professional services | 1,213 | 696 |
Research and development | 969 | 862 |
Marketing | 0 | 1,322 |
Commercialized product accruals | 596 | 1,324 |
Other | 326 | 1,476 |
Total Accrued Expenses | $ 8,593 | $ 11,452 |
OPERATING LEASE - Narrative (De
OPERATING LEASE - Narrative (Details) $ in Thousands | Mar. 13, 2019USD ($)ft² | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Operating Lease | |||
Operating Lease, right of use assets, current | $ 338 | $ 0 | |
Operating lease right-of-use assets | 0 | 1,583 | |
Operating lease, right-of-use liability | 349 | $ 1,610 | |
Lien on marketable securities to secure lease agreements | $ 600 | ||
Original Space | Bridgewater, New Jersey | |||
Operating Lease | |||
Facility space leased | ft² | 10,000 | ||
Operating lease right-of-use assets | $ 700 | ||
Operating lease, right-of-use liability | $ 700 | ||
Additional Space | Bridgewater, New Jersey | |||
Operating Lease | |||
Facility space leased | ft² | 4,639 | ||
Operating lease right-of-use assets | $ 300 | ||
Operating lease, right-of-use liability | $ 300 | ||
Vehicles lease expenses | |||
Operating Lease | |||
Operating lease terms | 3 years | ||
Vehicles lease prepaid period | 3 months | ||
Right of use assets transferred | $ 500 | ||
Right of use liabilities transferred | $ 500 |
OPERATING LEASE - Schedule of O
OPERATING LEASE - Schedule of Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Office lease expenses | ||
Operating Lease | ||
Operating lease costs | $ 357 | $ 961 |
Vehicles lease expenses | ||
Operating Lease | ||
Operating lease costs | $ 434 | $ 390 |
OPERATING LEASE - Schedule of C
OPERATING LEASE - Schedule of Cash Paid for Lease Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Office lease expenses | ||
Operating Lease | ||
Operating lease payments | $ 373 | $ 971 |
Vehicles lease expenses | ||
Operating Lease | ||
Operating lease payments | $ 434 | $ 390 |
OPERATING LEASE - Schedule of S
OPERATING LEASE - Schedule of Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 0 | $ 1,583 |
Total lease liability | $ 349 | $ 1,610 |
Weighted average remaining lease term (in years) | 9 months 7 days | 1 year 11 months 15 days |
Weighted average discount rate | 13.10% | 13.10% |
OPERATING LEASE - Schedule of M
OPERATING LEASE - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 334 | |
2023 | 32 | |
Total lease payments | 366 | |
Less imputed interest | (17) | |
Total lease liability | $ 349 | $ 1,610 |
EMPLOYEE SAVINGS PLAN (Details)
EMPLOYEE SAVINGS PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Company contributions to 401(k) plans | $ 0.4 | $ 0.8 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) | Aug. 11, 2021USD ($) | Jul. 29, 2019USD ($)lender$ / sharesshares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Feb. 12, 2021$ / sharesshares | Sep. 30, 2020USD ($) | Mar. 09, 2020$ / sharesshares | Dec. 17, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||
Prepayment fee, percentage | 4.00% | |||||||
Debt repayment (Note 13) | $ 36,500,000 | $ 36,432,000 | $ 0 | |||||
Debt outstanding | 0 | |||||||
Principal amount, interest and prepayment premium | $ 18,300,000 | |||||||
Debt offering expenses | ||||||||
Incurred expenses related to Credit Agreement and Securities Purchase Agreement | 1,100,000 | |||||||
debt prepayment penalty | 1,400,000 | |||||||
Interest expense | 5,610,000 | 4,390,000 | ||||||
Interest expense | 3,800,000 | 3,900,000 | ||||||
Gain (loss) on extinguishment of debt | 3,000,000 | |||||||
Discount cost | $ 1,800,000 | 500,000 | ||||||
Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of lenders involved | lender | 2 | |||||||
Amended And Restated Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 35,000,000 | |||||||
Remaining borrowing capacity | $ 15,000,000 | |||||||
Base interest rate | 8.25% | |||||||
Debt instrument fee as a percent of the aggregate principal amount | 1.00% | |||||||
Amended And Restated Credit Agreement | One-month LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.75% | |||||||
Amended and Restated Credit Agreement, Trench 1 Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 15,000,000 | |||||||
Amended and Restated Credit Agreement, Trench 2 Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 20,000,000 | |||||||
Debt offering expenses | ||||||||
Incurred expenses related to Credit Agreement and Securities Purchase Agreement | $ 1,600,000 | $ 300,000 | ||||||
Amended and Restated Credit Agreement, Trench 3 Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 15,000,000 | |||||||
Shareholder Lender | Foamix | ||||||||
Warrants issued | ||||||||
Number of ordinary shares that may be purchased by exercise of warrants (in shares) | shares | 1,100,000 | 495,165 | 651,640 | |||||
Warrant exercise price (in dollars per share) | $ / shares | $ 2.09 | $ 4.64 | $ 3.53 | |||||
Shareholder Lender | Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing capacity | $ 50,000,000 | |||||||
Shareholder Lender | Registered Offering Per Securities Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of lenders involved | lender | 1 | |||||||
Gross proceeds from issuance of common stock | $ 14,000,000 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock, Preferred Stock, and Warrants Narrative (Details) | Aug. 12, 2021USD ($) | Feb. 12, 2021shares | Jan. 28, 2021USD ($)$ / sharesshares | Jun. 09, 2020USD ($)$ / sharesshares | Apr. 06, 2020shares | Mar. 09, 2020contingentStockRightshares | Feb. 01, 2019USD ($) | Jan. 25, 2021USD ($)$ / sharesshares | Jul. 29, 2019shares | Dec. 31, 2021USD ($)vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares |
Class of Stock [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||||||
Reverse stock split ratio | 0.25 | ||||||||||
Common stock, shares authorized (in shares) | 75,000,000 | 150,000,000 | 75,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Deemed dividend to warrants holders due to warrant modification | $ | $ 0 | ||||||||||
Proceeds from issuance of common stock, net of issuance costs | $ | $ 75,981,000 | 61,639,000 | |||||||||
Share issued and delivered upon CSR conversion (in shares) | 18,636,103 | 74,544,413 | |||||||||
Foamix | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 | ||||||||||
Deemed dividend to warrants holders due to warrant modification | $ | 41,000 | ||||||||||
Number of shares issued pursuant to the merger (in shares) | 74,544,413 | 36,500,335 | |||||||||
Foamix | |||||||||||
Class of Stock [Line Items] | |||||||||||
Deemed dividend to warrants holders due to warrant modification | $ | 0 | ||||||||||
Foamix | Shareholder Lender | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of ordinary shares that may be purchased by exercise of warrants (in shares) | 495,165 | 651,640 | 1,100,000 | ||||||||
Cantor Sales Agreement | |||||||||||
Class of Stock [Line Items] | |||||||||||
Consideration receivable on transaction | $ | $ 50,000,000 | ||||||||||
Consideration received in a transaction | $ | $ 50,000,000 | $ 8,000,000 | |||||||||
Proceeds from issuance of common stock, net of issuance costs | $ | $ 26,300,000 | $ 2,900,000 | |||||||||
Commission from gross proceeds from issuance of common stock | 3000.00% | 3.00% | |||||||||
Number of shares issued in transaction (in shares) | 2,778,012 | 1,955,313 | 1,175,000 | ||||||||
Price per share (in dollars per share) | $ / shares | $ 9.76 | $ 1.57 | $ 7 | ||||||||
Registered Direct Offering | |||||||||||
Class of Stock [Line Items] | |||||||||||
Consideration received in a transaction | $ | $ 46,800,000 | ||||||||||
Number of shares issued in transaction (in shares) | 5,274,261 | ||||||||||
Price per share (in dollars per share) | $ / shares | $ 9.48 | ||||||||||
Public Stock Offering | |||||||||||
Class of Stock [Line Items] | |||||||||||
Consideration received in a transaction | $ | $ 53,600,000 | ||||||||||
Number of shares issued in transaction (in shares) | 7,776,875 | ||||||||||
Price per share (in dollars per share) | $ / shares | $ 7.40 | ||||||||||
Common stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of votes entitled to each ordinary share | vote | 1 | ||||||||||
Common stock | Foamix | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 | ||||||||||
Warrants | Foamix | Maximum | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of ordinary shares that may be purchased by exercise of warrants (in shares) | 1,100,000 | ||||||||||
Warrants exercised (in shares) | 1,980,660 |
SHARE BASED COMPENSATION - Narr
SHARE BASED COMPENSATION - Narrative (Details) | Feb. 12, 2021contingentStockRightshares | Mar. 09, 2020USD ($)contingentStockRight | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)contingentStockRightshares | Apr. 06, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock issued per CSR (in shares) | 1.2082 | ||||
Effective exchange ratio of Foamix ordinary shares into Menlo common stock | 1.8006 | ||||
Additional paid in capital reclassified to derivate liabilities | $ 975,000 | ||||
Weighted average remaining contractual term of outstanding options | 7 years | ||||
Weighted average remaining contractual term of exercisable options | 5 years 6 months | ||||
Unrecognized share based compensation expense, options | $ 6,400,000 | ||||
Aggregate intrinsic value of options outstanding | 0 | ||||
Aggregate intrinsic value of exercisable options | 0 | ||||
Foamix | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 | ||||
RSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of options and RSUs granted | $ 9,400,000 | 11,900,000 | |||
Share-based payment cost not yet recognized, weighted average period of recognition (in years) | 2 years 3 months 7 days | ||||
Unrecognized share-based compensation cost | $ 5,600,000 | ||||
Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based payment cost not yet recognized, weighted average period of recognition (in years) | 2 years 3 months 18 days | ||||
Employees and consultants | Foamix | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incremental compensation costs incurred | $ 1,800,000 | $ 11,800,000 | |||
Incremental compensation costs incurred | $ 900,000 | ||||
Incremental compensation costs, recognition period | 1 year | ||||
No longer employed or providing services | Foamix | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incremental compensation costs incurred | $ 600,000 | $ 1,000,000 | |||
Additional paid in capital reclassified to derivate liabilities | $ 1,600,000 | ||||
Common stock | Foamix | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 | ||||
Common stock | Foamix | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued during the period (in shares) | shares | 71,890 | 61,031 | |||
2019 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance (in shares) | shares | 979,795 | ||||
2018 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance (in shares) | shares | 147,550 | ||||
ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance (in shares) | shares | 2,232,207 | ||||
Percentage of fair market value used as purchase price | 85.00% | ||||
Percent of annual earnings that may be used to purchase shares | 15.00% | ||||
ESPP | Common stock | Foamix | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock issued during the period, conversation units (in shares) | shares | 9,038 | 36,155 | |||
Number of contingent stock rights issued (in CSR) | contingentStockRight | 1 | 1 | |||
ESPP | Common stock | Menlo | Employees and consultants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock issued during the period, conversation units (in shares) | shares | 38,716 |
Compensation Related Costs, Sha
Compensation Related Costs, Share Based Payments - Options and RSU Grants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 1,686,405 | |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 1,686,405 | 1,327,214 |
Exercise price range, minimum (in dollars per share) | $ 1.68 | $ 5.84 |
Exercise price range, maximum (in dollars per share) | $ 11.08 | $ 12.52 |
Expiration | 10 years | 10 years |
Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | 1 year |
Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | 4 years |
RSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU, award amount (in shares) | 970,813 | 654,427 |
RSU | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 2 years | 1 year |
RSU | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | 4 years |
Compensation Related Costs, S_2
Compensation Related Costs, Share Based Payments - Schedule of Underlying Data Used for Computing the Fair Value of the Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Apr. 06, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of stock option | $ 1.40 | ||
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 0.00% | |
Expected volatility, minimum | 68.38% | 60.44% | |
Expected volatility, maximum | 69.38% | 69.83% | |
Risk-free interest rate, minimum | 0.50% | 0.31% | |
Risk-free interest rate, maximum | 1.29% | 1.26% | |
Expected term | 6 years | 6 years | |
Minimum | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of stock option | $ 1.02 | $ 3.47 | |
Maximum | Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of stock option | $ 6.75 | $ 7.68 |
Compensation Related Costs, S_3
Compensation Related Costs, Share Based Payments - Summary of the Number of Options Outstanding Under the Plan (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of options | ||
Outstanding at end of period (in shares) | 4,043,952 | 4,274,649 |
Granted (in shares) | 1,686,405 | |
Exercised (in shares) | (70,827) | |
Forfeited (in shares) | (435,569) | |
Expired (in shares) | (1,410,706) | |
Outstanding at end of period (in shares) | 4,043,952 | 4,274,649 |
Outstanding and exercisable (in shares) | 1,971,922 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 13.36 | |
Granted (in dollars per share) | 5.29 | |
Exercised (in dollars per share) | 7.18 | |
Forfeited (in dollars per share) | 8.25 | |
Expired (in dollars per share) | 17.53 | |
Outstanding at end of period (in dollars per share) | 9.20 | $ 13.36 |
Outstanding and exercisable (in dollars per share) | $ 12.39 |
Compensation Related Costs, S_4
Compensation Related Costs, Share Based Payments - Summary of Number of RSUs Outstanding (Details) - RSU - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 719,443 | |
Awarded (in shares) | 970,813 | 654,427 |
Vested (in shares) | (293,034) | |
Forfeited (in shares) | (134,822) | |
Outstanding at end of period (in shares) | 1,262,400 | 719,443 |
SHARE BASED COMPENSATION - Sche
SHARE BASED COMPENSATION - Schedule of Share-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 8,080 | $ 18,100 |
Research and development expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 1,714 | 4,746 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 6,366 | $ 13,354 |
INCOME TAX - Schedule of Income
INCOME TAX - Schedule of Income (Loss) Before Income Tax Taxes and Current Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Loss before income taxes: | ||
Total loss before taxes | $ 73,777 | $ 255,826 |
Current taxes: | ||
Federal | (456) | (258) |
State | 8 | 5 |
Total current taxes | (448) | (253) |
Domestic | ||
Loss before income taxes: | ||
Total loss before taxes | 69,196 | 211,447 |
Foreign | ||
Loss before income taxes: | ||
Total loss before taxes | $ 4,581 | $ 44,379 |
INCOME TAX - Income Tax Reconci
INCOME TAX - Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax provision at statutory rate | 21.00% | 21.00% |
State income tax provision, net of federal benefit | (0.01%) | 0.00% |
IPR&D Impairment & CSR Remeasurement | 0.00% | (11.42%) |
Transaction Costs | 0.00% | (1.07%) |
IP Gain | 0.00% | (14.65%) |
Change in valuation allowances | (20.27%) | 6.16% |
Foreign tax rate differential | 0.00% | 0.35% |
Other | (0.11%) | (0.27%) |
Effective income tax rate | 0.61% | 0.10% |
INCOME TAX - Narrative (Details
INCOME TAX - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax [Line Items] | ||||
Unrecognized Tax Benefits | $ 3,083 | $ 2,799 | $ 3,083 | $ 714 |
Deferred tax assets, valuation allowance | 69,743 | 85,555 | 69,743 | |
Increase (decrease) in valuation allowance, deferred tax assets | 15,800 | $ (1,300) | ||
Intellectual property acquired, taxable gain | $ 163,000 | |||
Domestic | ||||
Income Tax [Line Items] | ||||
Operating loss carryforwards | 315,000 | |||
Tax credit carryforward | 6,700 | |||
State and Local Jurisdiction | ||||
Income Tax [Line Items] | ||||
Operating loss carryforwards | 105,600 | |||
Tax credit carryforward | $ 1,200 |
INCOME TAX - Schedule of Deferr
INCOME TAX - Schedule of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carry forward | $ 73,259 | $ 55,514 |
Tax credit carryforwards | 7,905 | 7,387 |
Share based compensation | 3,281 | 4,903 |
Accrued expenses and other | 1,226 | 2,325 |
Total gross deferred tax assets | 85,671 | 70,129 |
Less - valuation allowance | (85,555) | (69,743) |
Deferred tax liabilities: | ||
Other | (40) | (41) |
Right of use assets | (76) | (345) |
Total gross deferred tax liabilities | (116) | (386) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAX - Schedule of Activi
INCOME TAX - Schedule of Activity of the Company Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at the beginning of the period | $ 3,083 | $ 714 |
Additions for prior year positions | 0 | 2,354 |
Additions for current year positions | 172 | 273 |
Reductions related to expiration of statute of limitations | (456) | (258) |
Balance at the end of period | $ 2,799 | $ 3,083 |
INCOME TAX- Schedule of Rollfor
INCOME TAX- Schedule of Rollforward of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | ||
Balance at the beginning of the period | $ 69,743 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (15,800) | $ 1,300 |
Balance at the end of period | $ 85,555 | $ 69,743 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Mar. 15, 2022 | Jan. 12, 2022 | Feb. 01, 2019 | Jan. 25, 2021 | Mar. 31, 2022 | Mar. 16, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 12, 2021 |
Subsequent Event [Line Items] | |||||||||
Carrying amount of assets | $ 7,800,000 | ||||||||
Cantor Sales Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued in transaction (in shares) | 2,778,012 | 1,955,313 | 1,175,000 | ||||||
Consideration received in a transaction | $ 50,000,000 | $ 8,000,000 | |||||||
Consideration receivable on transaction | $ 50,000,000 | ||||||||
Forecast | Minimum | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from sale of franchises | $ 21,300,000 | ||||||||
Forecast | Maximum | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from sale of franchises | 22,300,000 | ||||||||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Cash consideration | $ 25,000,000 | ||||||||
Contingent consideration receivable | 25,000,000 | ||||||||
Upfront payment | 20,000,000 | ||||||||
Additional consideration receivable | 5,000,000 | ||||||||
Milestone payments receivable upon achievement of net sales | 450,000,000 | ||||||||
Milestone payments upon achieving certain criteria, exceeding annual net sales | 100,000,000 | ||||||||
Inventory | 7,300,000 | ||||||||
Liabilities transferred | $ 0 | ||||||||
Subsequent Event | Cantor Sales Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued in transaction (in shares) | 2,465,500 | ||||||||
Consideration received in a transaction | $ 1,500,000 | ||||||||
Subsequent Event | Lincoln Park Equity Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued in transaction (in shares) | 1,667,593 | ||||||||
Consideration receivable on transaction | $ 30,000,000 | ||||||||
Term of equity purchase agreement | 36 months | ||||||||
Subsequent Event | Minimum | |||||||||
Subsequent Event [Line Items] | |||||||||
Estimated gain on sale of MST Franchise | 13,500,000 | ||||||||
Transaction costs | 2,700,000 | ||||||||
Subsequent Event | Maximum | |||||||||
Subsequent Event [Line Items] | |||||||||
Estimated gain on sale of MST Franchise | 14,500,000 | ||||||||
Transaction costs | $ 3,700,000 |