Full Press Release Details
Communications Manager
Vanda Pharmaceuticals Inc.
Vanda Pharmaceuticals Reports Fourth Quarter and Full Year 2010 Results
ROCKVILLE, MD. February 10, 2011 Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ:
VNDA), a biopharmaceutical company focused on the development and commercialization of
products for central nervous system disorders, today announced financial and operational results
for the fourth quarter and full year ended December 31, 2010.
2010 has been an exceptional milestone year in the history of our company. Our first product,
Fanapt , reached the U.S. market for the treatment of schizophrenia, we had our first profitable
year and we have advanced our second asset, tasimelteon, in Phase 3 studies, said Mihael
Polymeropoulos, M.D., President and Chief Executive Officer. 2011 will be a foundation year for
Vanda, as we begin to execute upon our vision of building a world class neuroscience pharmaceutical
| Vanda recorded 2010 revenue of $35.2 million including royalties and product sales of $8.4 million. | |||
| Cash and cash equivalents plus marketable securities at year end 2010 were $198.0 million as compared to $205.3 million at year end 2009. | |||
| Monthly prescriptions of Fanapt , as reported by IMS, increased from over 6,000 in September of 2010 to over 8,000 in December of 2010. For the full year 2010, more than 55,000 prescriptions were written. | |||
| Tasimelteon efficacy and safety studies are ongoing in both the U.S. and Europe. | |||
| On November 15, 2010, Vanda received a private letter ruling (PLR) from the Internal Revenue Service (IRS) clarifying the company s ability to utilize net operating loss carryforwards for tax purposes. |
Full Year 2010 Reported Results
Total revenues for the full year 2010 were $35.2 million, compared to $4.5 million for the same
period in 2009. 2010 revenues included $26.8 million recognized from the $200.0 million upfront
payment previously received from Novartis for
Fanapt U.S. and Canadian rights. Total operating
expenses for 2010 were $26.9 million, compared to $40.5 million for 2009. The lower 2010 spend is
primarily related to decreased business development consulting fees and lower non-cash stock based
compensation for the period.
Net income was $7.2 million for 2010, compared to a net loss of $35.9 million for 2009. Diluted
earnings per share for 2010 was $0.25, compared to a net loss per share of $1.33 for 2009. Vanda s
cash, cash equivalents, and marketable securities as of December 31, 2010 totaled $198.0 million.
Fourth Quarter 2010 Reported Results
Total revenues for the fourth quarter of 2010 were $7.3 million, compared to $4.5 million for the
same period in 2009. Fourth quarter 2010 revenues include $0.5 million related to Fanapt
royalties received from Novartis. Total operating expenses for the fourth quarter of 2010 were
$7.0 million, compared $13.8 million for the fourth quarter of 2009. The primary drivers of the
lower 2010 spend were the one time nature of Fanapt product cost of goods sold in 2009 and the
previously mentioned decrease in business development expenses.
Net income was $2.2 million for the fourth quarter of 2010, compared to a net loss of $9.2 million
for the fourth quarter of 2009. Diluted earnings per share for the fourth quarter of 2010 was
$0.08, compared a net loss per share of $0.34 for the fourth quarter of 2009.
Full Year December 31, 2010 Key Financial Figures1
| Twelve Months Ended | ||||||||||||||||
| December 31 | December 31 | |||||||||||||||
| (in thousands, except per share amounts) | 2010 | 2009 | Change ($) | Change (%) | ||||||||||||
| Total revenues | $ | 35,220 | $ | 4,548 | $ | 30,672 | 674 | % | ||||||||
| Research development expenses | 12,338 | 13,874 | (1,536 | ) | -11 | % | ||||||||||
| General administrative expenses | 10,147 | 23,724 | (13,577 | ) | -57 | % | ||||||||||
| Non-cash stock-based compensation | 4,981 | 11,230 | (6,249 | ) | -56 | % | ||||||||||
| Net income (loss) before tax provision | 9,269 | (35,859 | ) | 45,128 | 126 | % | ||||||||||
| Tax provision | 2,077 | 2,077 | NA | |||||||||||||
| Net income (loss) | 7,192 | (35,859 | ) | 43,051 | 120 | % | ||||||||||
| Diluted net income (loss) per share | $ | 0.25 | $ | (1.33 | ) | $ | 1.58 | 119 | % |
Fourth Quarter 2010 Key Financial Figures1
| Three Months Ended | ||||||||||||||||
| December 31 | September 30 | |||||||||||||||
| (in thousands, except per share amounts) | 2010 | 2010 | Change ($) | Change (%) | ||||||||||||
| Total revenues | $ | 7,263 | $ | 7,246 | $ | 17 | 0 | % | ||||||||
| Research development expenses | 3,822 | 4,072 | (250 | ) | -6 | % | ||||||||||
| General administrative expenses | 2,762 | 2,054 | 708 | 34 | % | |||||||||||
| Non-cash stock-based compensation | 1,335 | 887 | 448 | 51 | % | |||||||||||
| Net income before tax provision | 933 | 899 | 34 | 4 | % | |||||||||||
| Tax benefit | (1,266 | ) | (2,285 | ) | 1,019 | 45 | % | |||||||||
| Net income | 2,199 | 3,184 | (985 | ) | -31 | % | ||||||||||
| Diluted net income per share | $ | 0.08 | $ | 0.11 | $ | (0.03 | ) | -27 | % |
Select Balance Sheet Data1
| December 31 | September 30 | December 31 | ||||||||||
| (in thousands, except per share amounts) | 2010 | 2010 | 2009 | |||||||||
| Total cash and marketable securities | $ | 198,037 | $ | 202,060 | $ | 205,295 |
OPERATIONAL HIGHLIGHTS
Full year 2010 sales of Fanapt were reported by Novartis to be $31.4 million which included $5.1
million in the fourth quarter of 2010. Vanda is encouraged by the continuing growth in the total
number of monthly prescriptions, as reported by IMS. Fanapt prescriptions continued to increase
month-over-month during the fourth quarter of 2010. Monthly prescriptions of Fanapt , as reported
by IMS, increased from over 6,000 in September of 2010 to over 8,000 in December of 2010. For the
full year 2010, more than 55,000 prescriptions were written.
We have been informed by our partner, Novartis, that a clinical study will be initiated in early
2011 for the once a month injectable depot formulation of iloperidone. On October 28, 2010, the
U.S. Patent and Trademark Office (USPTO) informed Vanda that it had granted an additional patent
term adjustment for the depot formulation, making the patent expiration date August 25, 2023.
Vanda continues to explore the regulatory path and commercial opportunity for the Fanapt oral
formulation outside of the U.S. and Canada. On November 1, 2010, Australia s Department of Health
and Ageing Therapeutic Goods Administration, accepted for evaluation Vanda s application for
Enrollment is ongoing in the tasimelteon Study VP-VEC-162-3201, a 160-patient randomized controlled
trial of tasimelteon versus placebo in the treatment of Non-24-Hour Sleep/Wake Disorder (N24HSWD)
in blind individuals with no light perception. The trial has a 6-month treatment period and
includes measures of both nighttime and daytime sleep, as well as laboratory measures of the
synchronization between the internal body clock and the 24-hour environmental light/dark cycle.
Vanda has also initiated a one-year safety study of tasimelteon for the treatment of N24HSWD. This
is an open-label safety study that will enroll approximately 140 patients with N24HSWD. Vanda
plans to conduct additional clinical trials over the next one to two years to support U.S. and
European regulatory submissions. Tasimelteon was granted orphan drug designation by the FDA on
January 19, 2010. On November 12, 2010, the Committee for Orphan Medicinal Products (COMP) of the
European Medicines Agency (EMA) issued a positive opinion on the application for orphan drug
designation for tasimelteon. A final decision on the application for orphan designation from the
On November 15, 2010, Vanda received a private letter ruling (PLR) from the Internal Revenue
Service (IRS) regarding certain income tax issues associated with the availability of Vanda s net
operating loss carryforwards for tax purposes. The PLR is generally consistent with Vanda s stated
tax position that it is able to offset a portion of its 2010 taxable income with the company s full
net operating loss carryforwards. Total net operating loss carryforwards were $123 million as of
December 31, 2008. As of December 31, 2009, total net operating loss carryforwards were $156
million. Vanda believes that the PLR received from the IRS clarifies certain tax rules regarding
the use of these net operating loss carryforwards and will support Vanda s position
that its December 31, 2009 net operating loss carryforwards can be fully utilized
2011 FINANCIAL GUIDANCE
| General and administrative expenses are expected to be between $10.0 and $12.0 million. This is consistent with the 2010 general and administrative expense of $10.1 million. | ||
| Research and development expenses are expected to be between $26.0 and $29.0 million. This represents a $14.0 to $17.0 million increase over 2010 and reflects our investment in the Phase 3 development of tasimelteon in N24HSWD. This is consistent with our prior guidance that we expect to spend between $30.0 and $35.0 million in total to file an NDA. | ||
| Total GAAP operating expenses are expected to be between $37.0 and $42.0 million. This includes Fanapt cost of sales of $1.5 million related to amortization of an intangible asset and $5.0 to $6.0 million of stock-based compensation. |
Vanda has scheduled a conference call for today, Thursday, February 10, 2011, at 10:00 AM ET.
During the call, Mihael H. Polymeropoulos, M.D., President and CEO, and James Kelly, Senior Vice
President and Chief Financial Officer, will discuss quarterly results and other corporate
activities. Investors can call 1-800-591-6942 (domestic) and 1-617-614-4909 (international) prior
to the 10:00 AM start time and ask for the Vanda Pharmaceuticals conference call hosted by Dr.
Polymeropoulos (participant passcode 43128562). A replay of the call will be available Thursday,
February 10, 2011 at 1:00 PM ET and will be accessible until Thursday, February 17, 2010, at 5:00
PM ET. The replay call-in number is 1-888-286-8010 for domestic callers and 1-617-801-6888 for
international callers. The access number is 66575807.
The conference call will be broadcast simultaneously on Vanda s website,
http://www.vandapharma.com. Investors should click on the Investor Relations tab and are advised
to go to the website at least 15 minutes early to register, download, and install any necessary
software or presentations. The call will also be archived on Vanda s website for a period of 30
days, through March 12, 2011.
ABOUT VANDA PHARMACEUTICALS INC.:
Vanda Pharmaceuticals Inc. is a biopharmaceutical company focused on the development and
commercialization of products for central nervous system disorders. For more on Vanda, please
visit http://www.vandapharma.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Various statements in this release are forward-looking statements under the securities laws.
Words such as, but not limited to, believe, expect, anticipate, estimate, intend, plan,
targets, likely, will, would, and could, and similar expressions or words, identify