Item 1.01 Entry into a Material Definitive Agreement.
On April 30, 2021, VYNE Therapeutics Inc. (the “Company”) entered into an Evaluation and Option Agreement (the “Option Agreement”) with In4Derm Limited (“In4Derm”), a company incorporated in Scotland. In4Derm is a spin-out of the University of Dundee’s School of Life Sciences and has discovered and is developing proprietary Bromodomain and Extra-Terminal Domain inhibitors (“BETi”) for the treatment of immunology and oncology conditions. Pursuant to the Option Agreement, In4Derm granted the Company an exclusive option to obtain certain exclusive worldwide rights to research, develop and
commercialize products containing In4Derm’s BETi compounds, which are new chemical entities (“NCE”), in both topical (the “Topical BETi Option”) and oral (the “Oral BETi Option”) formulations for the treatment of any disease, disorder or condition in humans. Pursuant to the Option Agreement, the Company agreed to use commercially reasonable efforts to stabilize, develop and manufacture a topical product with a Topical BETi Compound (as defined in the Option Agreement) as its active ingredient and In4Derm agreed to provide a mutually agreed data package and select an NCE development candidate from the Oral BETi Compounds (as defined in the Option Agreement). The Company paid a $1.0 million non-refundable cash payment to In4Derm upon execution of the Option Agreement, 50% of which is to be used by In4Derm in the development of the Oral BETi Compounds.
Topical BETi Program
On August 6, 2021, the Company exercised the Topical BETi Option and, on August 9, 2021, the parties entered into a License Agreement (the “Topical License Agreement”) granting VYNE a worldwide, exclusive license that is sublicensable through multiple tiers to exploit certain of In4Derm’s BETi compounds identified to be suitable for topical administration in all fields. The Company has the sole responsibility for development, regulatory, marketing and commercialization activities to be conducted for the licensed topical products at the sole cost and discretion of the Company, and shall use commercially reasonable efforts to develop and, if approved, commercialize such topical products. Pursuant to the Topical License Agreement, a joint development committee consisting of one representative from each party reviews the progress of the development plan for the licensed topical products.
The Company made a $0.5 million cash payment to In4Derm in connection with the exercise of the Topical BETi Option. Pursuant to the Topical License Agreement, the Company has agreed to make cash payments of up to an aggregate of $15.75 million upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed topical product in the U.S. In4Derm is entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. In addition, with respect to any products the Company commercializes under the
Topical License Agreement, the Company will pay tiered royalties to In4Derm on net sales of such licensed products by the Company, its affiliates, or sublicensees, of 5%, 7.5% and 10% based on tiered annual net sales bands subject to specified reductions. The Company is obligated to pay royalties until the later of (1) the tenth anniversary of the first commercial sale of the relevant licensed product, (2) the expiration of the last valid claim of the licensed patent rights covering such licensed product in such country and (3) the expiration of regulatory exclusivity for the relevant licensed product in the relevant
country, on a licensed product-by-licensed product and country-by-country basis.
Oral BETi Program
Under the terms of the Option Agreement, the Oral BETi Option expires upon the earlier of (i) 14 days following the delivery of an agreed data package and selection of a lead NCE candidate by In4Derm and (ii) June 30, 2022. The Company 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 pay In4Derm a $4.0 million cash payment. The Oral License Agreement will include cash payments payable to In4Derm of up to an aggregate of $43.75 million upon the achievement of specified clinical development and regulatory approval milestones with respect to each licensed oral product in the U.S. In4Derm is entitled to additional milestones upon the achievement of regulatory approvals in certain jurisdictions outside the U.S. In addition, with respect to any products the Company commercializes under the Oral License Agreement, the Company will pay tiered royalties to In4Derm on net sales of such licensed products by the Company, its affiliates, or sublicensees, of 5%, 7.5% and 10% based on tiered annual net sales bands subject to specified reductions.
The foregoing descriptions of the Option Agreement and the Topical License Agreement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Option Agreement and Topical License Agreement, copies of which will be filed with the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2021. The terms of the Oral License Agreement and a copy thereof will be filed once the parties execute definitive documentation.