Overview

We are a late-stage medical dermatology company focused on identifying, developing, and commercializing innovative pharmaceutical product candidates for the treatment of medical skin diseases and aesthetic applications. Dermatological diseases such as acne, psoriasis, hyperhidrosis, and various aesthetic indications affect millions of people worldwide each year, negatively impacting their quality of life and emotional well-being. While there are multiple current treatment options, most have significant drawbacks including underwhelming efficacy, cumbersome application regimens, and negative side effects, leading to decreased patient compliance.

Our two product candidates, XYNGARI™ and DMT410, both incorporate our proprietary Spongilla technology to topically treat a variety of dermatological conditions. Spongilla is a unique freshwater sponge with anti-microbial, anti-inflammatory, and mechanical properties that we believe can effectively target the underlying causes of skin diseases.

XYNGARI™ is intended to utilize the Spongilla technology for the once weekly treatment of acne, which has a U.S. market size of approximately 30 million patients. We recently completed patient enrollment in the first of two Phase 3 clinical trials for XYNGARI™ in moderate-to-severe acne, with top-line results expected in March 2025. Previously, XYNGARI™ has shown the ability to treat the multiple causes of acne, achieving statistically significant improvements in key endpoints in a Phase 2b study.

Our second product candidate, DMT410, is intended to topically deliver botulinum toxin into the dermis, potentially replacing the need for painful intradermal injections. In a Phase 1 proof-of-concept trial, DMT410 saw 80% of patients with axillary hyperhidrosis achieve a significant reduction in sweat production. We have also conducted a Phase 1 trial evaluating DMT410 for the treatment of various aesthetic skin conditions.

Since our inception, we have focused on developing XYNGARI™ and DMT410, organizing our company, raising capital, establishing our supply chain and manufacturing processes, and conducting non-clinical and clinical trials. We have not generated any revenue to date and have incurred significant operating losses, with a net loss of $12.3 million in 2024 and an accumulated deficit of $65.7 million as of December 31, 2024. We expect to continue incurring significant expenses as we advance our product candidates through clinical development and prepare for potential commercialization.

Our primary sources of capital have been the sale of equity and debt securities. As of December 31, 2024, we had $3.2 million in cash and cash equivalents, which we believe will be sufficient to fund our operations into the third quarter of 2025. However, we will require additional capital to complete the Phase 3 studies for XYNGARI™ in acne and to pursue further development of our product candidates. We may seek to raise funds through public or private equity or debt financings, collaborations, or other strategic transactions, but there can be no assurance that additional financing will be available on acceptable terms, or at all.

Table 1: Summary of Results of Operations

The increase in research and development expenses in 2024 was primarily due to increased clinical trial costs for the XYNGARI™ Phase 3 STAR-1 study. General and administrative expenses increased slightly due to higher audit-related fees. The net loss grew as a result of the increased operating expenses.

Table 2: Summary of Cash Flows

Cash used in operations increased in 2024 due to the higher net loss, partially offset by non-cash adjustments. Financing activities provided cash through equity offerings, including a PIPE financing, an ATM agreement, and a warrant inducement offering.

In summary, we are a late-stage dermatology company developing innovative topical treatments for skin diseases and aesthetic conditions. Our lead candidate, XYNGARI™, has shown promising results in acne and is advancing through Phase 3 trials. Our second candidate, DMT410, utilizes our Spongilla technology to enable topical delivery of botulinum toxin. While we have not yet generated revenue, we have raised significant capital to fund our research and development efforts. However, we will require additional financing to complete the development of our product candidates and potentially commercialize them.