Cristina Murphy Communications Manager Vanda Pharmaceuticals Inc. (240) 599-4500 cristina.murphy@vandapharma.com Vanda Pharmaceuticals Reports First Quarter 2011 Results ROCKVILLE, MD.

Communications Manager

Vanda Pharmaceuticals Inc.

Vanda Pharmaceuticals Reports First Quarter 2011 Results

ROCKVILLE, MD. May 5, 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 first quarter

ended March 31, 2011.

We are very excited about the significant progress we have made to date in 2011 said Mihael H.

Polymeropoulos, M.D., President and Chief Executive Officer. Our first product, Fanapt , which is

marketed in the U.S. for the treatment of schizophrenia has now entered a Phase I study to evaluate

the safety and pharmacokinetic profiles of two different long-acting formulations in patients with

schizophrenia. In addition, we have expanded the tasimelteon clinical program with a Phase IIb/III

Study in Major Depression that will begin in the second half of 2011.

FIRST QUARTER 2011 REPORTED RESULTS

Total revenues for the first quarter of 2011 were $7.5 million, compared to $12.4 million for the

same period in 2010. First quarter 2011 revenues included $0.9 million related to Fanapt

royalties received from Novartis as compared to $2.1 million for the first quarter of 2010. The

higher first quarter 2010 royalty revenue was the result of initial wholesaler stocking at launch.

First quarter 2010 revenues also included one-time product sales to Novartis of $3.7 million.

Total operating expenses for the first quarter of 2011 were $7.5 million, compared to $6.3 million

for the first quarter of 2010. The primary driver of the higher expenses in the first quarter of

2011 was the ongoing support of the tasimelteon N24HSWD clinical studies.

Net income was $0.1 million for the first quarter of 2011, compared to $0.5 million for the first

quarter of 2010. Basic and diluted earnings per share for the first quarter of 2011 were $0.00,

compared to $0.02 per share for the first quarter of 2010.

First Quarter 2011 Key Financial Figures1

Select Cash Flow Data1

Select Balance Sheet Data1

OPERATIONAL HIGHLIGHTS

First quarter 2011 sales of Fanapt were reported by Novartis to be $9.0 million. Fanapt

prescriptions, as reported by IMS, reached 25,000 in the first quarter of 2011.

Novartis initiated a clinical study for the once a month injectable depot formulation of Fanapt in

April 2011. This is a Phase I study that will evaluate the safety and pharmacokinetic profiles of

two different long-acting formulations of Fanapt in patients with schizophrenia. A long-acting

injectable formulation could offer a potential new option for patients with schizophrenia who might

benefit from less frequent dosing compared to an oral medication.

Vanda expects to file for European regulatory approval of oral Fanapt in the second half of 2011.

This continues the effort to expand the availability of Fanapt to markets outside the U.S. and

On March 31, 2011, Vanda announced plans to evaluate tasimelteon in Major Depressive Disorder.

There is considerable evidence that suggests circadian rhythm disturbances are important in the

pathophysiology of mood disorders. Treatment with tasimelteon would represent a novel and

differentiated approach to assisting the millions of patients who suffer from the symptoms of major

depression. A Phase IIb/III clinical trial will examine safety and efficacy of tasimelteon versus

placebo and is expected to begin during the second half of 2011. The study will include an 8-week

treatment period and an optional open-label extension.

Enrollment is ongoing in tasimelteon studies VP-VEC-162-3201 (efficacy) and VP-VEC-162-3202

(safety) in the treatment of N24HSWD in totally blind individuals. Top line efficacy results are

expected in mid 2012 and an NDA submission is planned for the first half of 2013.

On March 8, 2011, tasimelteon was granted orphan drug designation by the European Commission (EC)

for the treatment of N24HSWD in totally blind individuals. Orphan designation for a medicinal

product by the EC provides benefits that can take a variety of forms including tax incentives,

protocol assistance, eligibility for grants and initiatives supporting research and development

related to this orphan indication, reduction of marketing application fees and annual fees for

qualifying companies, and potential marketing exclusivity for up to 10 years in the European Union.

REVISED FULL YEAR 2011 FINANCIAL GUIDANCE

Vanda has scheduled a conference call for today, Thursday, May 5, 2011, at 10:00 AM ET. During the

call, Mihael H. Polymeropoulos, M.D., President and CEO, and James P. Kelly, Senior Vice President

and Chief Financial Officer, will discuss the first quarter 2011 results and other corporate

activities. Investors can call 1-866-383-7998 (domestic) and 1-617-597-5329 (international) prior

to the 10:00 AM start time and ask for the Vanda Pharmaceuticals conference call hosted by Dr.

Polymeropoulos (participant passcode 44118664). A replay of the call will be available beginning

Thursday, May 5, 2011 at 1:00 PM ET and will be accessible until Thursday, May 12, 2011, 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 73214212.

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 June 3, 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, or the negative of these terms and similar

expressions or words, identify forward-looking statements. Forward-looking statements are based

upon current expectations that involve risks, changes in circumstances, assumptions and

uncertainties. Important factors that could cause actual results to differ materially from those

reflected in the company s forward-looking statements include, among others: the extent and

effectiveness of the development, sales and marketing and distribution support Fanapt receives;

Vanda s ability to successfully commercialize Fanapt outside of the U.S. and Canada; delays in the

completion of Vanda s clinical trials; a failure of Vanda s products, product candidates or

partnered products to be demonstrably safe and effective; Vanda s failure to obtain regulatory

approval for its products, product candidates or partnered products or to comply with ongoing

regulatory requirements; a lack of acceptance of Vanda s products, product candidates or partnered

products in the marketplace, or a failure to become or remain profitable; Vanda s expectations

regarding trends with respect to its costs and expenses; Vanda s inability to obtain the capital

necessary to fund additional research and development activities; Vanda s failure to identify or

obtain rights to new products or product candidates; Vanda s failure to develop or obtain sales,

marketing and distribution resources and expertise or to otherwise manage its growth; limitations

on Vanda s ability to utilize some or all of its prior net operating losses and research and

development credits; a loss of any of Vanda s key scientists or management personnel; losses