Menlo Therapeutics Inc., or the Company is a late‑stage biopharmaceutical company focused on the development and commercialization of serlopitant for the treatment of pruritus, or itch, associated with various conditions such as prurigo nodularis, or PN and psoriasis. The Company believes that serlopitant, a highly selective small molecule inhibitor of the neurokinin 1 receptor, or NK 1-R, given as a once-daily, oral tablet, has the potential to significantly alleviate pruritus.

The Company was incorporated in Delaware in October 2011. Since commencing operations, the Company has devoted substantially all of its resources to developing its product candidate, serlopitant, including conducting clinical trials and providing general and administrative support for these operations.

On November 10, 2019, the Company signed a definitive Merger Agreement with Foamix Pharmaceuticals Ltd., or Foamix, to create a combined biopharmaceutical company, or the Combined Company, focused on the commercialization and development of therapeutics to serve patients in the dermatology space. The transaction contemplated by the Merger Agreement will result in a change in control of the Company as described below. On February 6, 2020, the Merger was approved by both the Company stockholders and Foamix’s shareholders. The Merger is expected to close on March 9, 2020.

The Combined Company will have a diversified portfolio including an approved product and three late-stage product candidates focused on dermatologic indications:

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Foamix recently received FDA approval for AMZEEQ^TM (minocycline) topical foam, 4%, for the treatment of inflammatory lesions of non-nodular moderate-to-severe acne vulgaris in adults and pediatric patients 9 years of age and older. AMZEEQ^TM is the first topical formulation of minocycline. Foamix commercially launched AMZEEQ^TM in the United States in January 2020.

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Foamix has submitted a New Drug Application, or NDA to the U.S. Food and Drug Administration (FDA) for FMX103 (minocycline) topical foam, 1.5% for the treatment of moderate-to-severe papulopustular rosacea. The FDA set a Prescription Drug User Fee Act, or PDUFA, action date of June 2, 2020. If approved, FMX103 would be the first minocycline product available for rosacea patients. Foamix is also conducting a Phase II trial for FCD105, a topical combination foam of minocycline and adapalene, currently being evaluated in a phase 2 clinical trial for the treatment of moderate-to-severe acne vulgaris.

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The Company’s lead late stage product candidate, serlopitant, is being developed as a novel treatment for pruritus. Two Phase 3 clinical trials of serlopitant for the treatment of pruritus associated with prurigo nodularis are fully enrolled, with results expected in March or April 2020.

The transaction is structured as a stock-for-stock exchange, enabling the Foamix and the Company shareholders to share in the upside advantages of combining the companies. Under the terms of the Merger Agreement, at closing, each ordinary share of Foamix will be exchanged for 0.5924 of a share of the Company’s common stock and a non-transferrable contingent stock right, or CSR. The number of shares of the Company common stock to be received by Foamix shareholders will be subject to upwards adjustment via a CSR to 1.2739 or 1.8006 shares of the Company’s common stock for each ordinary share of Foamix if (a) on or prior to May 31, 2020, proof of statistically significant superiority of serlopitant treatment over placebo treatment on the primary endpoint, as set out in the Merger Agreement (“Serlopitant Significance”), was achieved in one Phase III PN trial but was not achieved (or has not been determined) in the other Phase III PN trial or (b) on or prior to May 31, 2020, Serlopitant Significant was not achieved in either Phase III PN trial or if the Efficacy Determination has not been delivered on or before May 31, 2020, respectively.

After the completion of the Merger, the Company will continue as a public company, with its common stock continuing to be listed and traded on Nasdaq, and will serve as the parent company of Foamix. The Company’s headquarters will be moved to Bridgewater, New Jersey (the location of Foamix’s current U.S. headquarters). The Company will continue as a Delaware corporation and will continue to be governed by its existing Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and the Delaware General Corporation Law (DGCL). The Combined Company will be led by David Domzalski, CEO of Foamix, and the other members of the Foamix management team. The board of the Combined Company will consist of five members designated by Foamix (including Mr. Domzalski) and two members designated by the Company (including Steve Basta, the Company’s current CEO).

In January 2018, the Company completed its initial public offering (“IPO”) of shares of its common stock, pursuant to which the Company issued 8,050,000 shares of common stock, which includes 1,050,000 shares issued pursuant to the over-allotment option granted to its underwriters and received net proceeds of approximately $125.4 million, after deducting underwriting discounts, commissions and offering expenses. In connection with the completion of the Company's IPO, all shares of convertible preferred stock converted into 9,629,405 shares of common stock.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. Since inception, the Company has incurred losses and negative cash flows from operations. For the year ended December 31, 2019, the Company incurred a net loss of $73.7 million and used $65.1 million of cash in operations. As of December 31, 2019, the Company had cash, cash equivalents and investments of $76.9 million and an accumulated deficit of $184.3 million.

The Company is focused on managing its operating expenses and maintaining adequate capital to run its business through consummation of the proposed merger with Foamix. The Company believes that its existing cash, cash equivalents and investments as of December 31, 2019 will provide sufficient funds to enable it to meet its obligations for at least the next 12 months from the issuance of the Company’s financial statements as of and for the year ended December 31, 2019.