Full Press Release Details
Not For Immediate Release
Communications Manager
Vanda Pharmaceuticals Inc.
Vanda Pharmaceuticals Reports Third Quarter 2010 Results
ROCKVILLE, MD. November 3, 2010 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 third quarter and nine months ended September 30, 2010.
| Vanda records year-to-date revenue of $28.0 million including year-to-date royalties of $2.6 million. | |||
| Fanapt prescriptions continued to increase month-over-month during the third quarter of 2010. Monthly prescriptions of Fanapt , as reported by IMS, increased from over 4,000 in June of 2010 to over 6,000 in September of 2010. | |||
| Enrollment began in tasimelteon Study VP-VEC-162-3201, in the treatment of Non-24-Hour Sleep/Wake Disorder in blind individuals with no light perception. Top-line results are expected in late 2011. | |||
| On October 29, 2010, Vanda received certification for qualified research and development investments under the Internal Revenue Service s Therapeutic Discovery Project Credit Program and will receive a cash payment of approximately $0.5 million. |
Total revenue for the third quarter of 2010 was $7.2 million, compared to $8.3 million for the
second quarter of 2010 and $0 for the third quarter of 2009. Total operating expenses for the third
quarter of 2010 were $6.5 million, compared to $7.1 million for the second quarter of 2010 and $7.7
million for the third quarter of 2009. Net income was $3.2 million for the third quarter of 2010,
compared to net income of $1.3 million for the second quarter of 2010 and a net loss of $7.7
million for the third quarter of 2009.
Vanda s cash, cash equivalents, and marketable securities as of September 30, 2010 totaled
approximately $202.1 million. Approximately 28.0 million shares of Vanda common stock were
outstanding as of September 30, 2010. Basic and diluted net income per common share for the third
quarter of 2010 was $0.11, compared to basic and diluted net income per common share of $0.05 and
$0.04, respectively, for the second quarter of 2010 and basic and diluted net loss per common share
of $0.28 for the third quarter of 2009.
Year-to-date September 30, 2010 Key Financial Figures1
| YTD 9/30/10($) | YTD 9/30/09($) | Change ($) | Change (%) | |||||||||||||
| Total revenues | 27,957,000 | 27,957,000 | N/A | |||||||||||||
| R D expenses | 8,516,000 | 11,621,000 | (3,105,000 | ) | -27 | % | ||||||||||
| G A expenses | 7,385,000 | 14,479,000 | (7,094,000 | ) | -49 | % | ||||||||||
| Employee non-cash stock-based compensation | 3,530,000 | 8,320,000 | (4,790,000 | ) | -58 | % | ||||||||||
| Net income (loss) before tax provision | 8,336,000 | (26,621,000 | ) | 34,957,000 | -131 | % | ||||||||||
| Tax provision | 3,343,000 | 3,343,000 | N/A | |||||||||||||
| Net income (loss) | 4,993,000 | (26,621,000 | ) | 31,614,000 | -119 | % | ||||||||||
| Basic and diluted net income per share attributable to common stockholders | 0.18 | (0.99 | ) | 1.17 | -118 | % |
Third Quarter 2010 Key Financial Figures1
| Q3 2010 ($) | Q2 2010 ($) | Change ($) | Change (%) | |||||||||||||
| Total revenues | 7,246,000 | 8,290,000 | (1,044,000 | ) | -13 | % | ||||||||||
| R D expenses | 4,072,000 | 2,404,000 | 1,668,000 | 69 | % | |||||||||||
| G A expenses | 2,054,000 | 2,842,000 | (788,000 | ) | -28 | % | ||||||||||
| Employee non-cash stock-based compensation | 797,000 | 1,644,000 | (847,000 | ) | -52 | % | ||||||||||
| Net income before tax provision | 899,000 | 1,242,000 | (343,000 | ) | -28 | % | ||||||||||
| Tax benefit | (2,285,000 | ) | (38,000 | ) | (2,247,000 | ) | N/A | |||||||||
| Net income | 3,184,000 | 1,279,000 | 1,905,000 | 149 | % | |||||||||||
| Basic net income per share attributable to common stockholders | 0.11 | 0.05 | 0.06 | 120 | % | |||||||||||
| Diluted net income per share attributable to common stockholders | 0.11 | 0.04 | 0.07 | 175 | % | |||||||||||
| Total cash and marketable securities | 202,060,000 | 207,117,000 | (5,057,000 | ) | -2 | % |
OPERATIONAL HIGHLIGHTS
Year-to-date net sales of Fanapt were reported by Novartis to be approximately $26.3 million,
comprised of $20.7 million in the first quarter of 2010, $0.7 million in the second quarter of 2010
and $4.9 million in the third quarter of 2010. Vanda is encouraged by the continuing growth in the
total number of monthly prescriptions, as reported by IMS. According to IMS, monthly prescriptions
of Fanapt increased from over 4,000 in June of 2010 to over 6,000 in September of 2010.
The development of the iloperidone depot formulation is ongoing with Vanda retaining the rights for
commercialization outside the U.S. and Canada. On October 28, 2010, the U.S. Patent and Trademark
Office (USPTO) informed Vanda that it has granted an additional patent term
adjustment of 59 days, making the total extension 664 days and making the patent expiration date
Vanda continues to explore the regulatory path and commercial opportunity for Fanapt oral
formulation outside of the U.S. and Canada. On November 1, 2010, Australia s Department of
and Ageing Therapeutic Goods Administration, accepted for evaluation Vanda s application for
Enrollment has begun in 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. Top-line results are expected in late 2011. 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. The application for orphan designation from the European Medicines Agency is
On October 29, 2010, Vanda received certification for qualified research and development
investments under the Internal Revenue Service s Therapeutic Discovery Project Credit Program and
will receive a cash payment of approximately $0.5 million.
| Revenues decreased by $1.1 million from $8.3 million for the third quarter of 2010 due to an increase of $0.4 million in royalty revenue offset by a decrease of $1.5 million in product revenue. During the second quarter of 2010, the company sold the remaining Fanapt inventory to Novartis. | ||
| Cost of sales for the third quarter of 2010 was $0.4 million resulting from the amortization of the capitalized intangible asset related to the milestone payment to Novartis, compared to cost of sales for the second quarter of 2010 of $1.9 million, consisting of $0.4 million resulting from the amortization of the capitalized intangible asset related to the milestone payment to Novartis and $1.5 million for inventory sold to Novartis. | ||
| Research and development (R D) expenses were $4.1 million for the third quarter of 2010, compared to $2.4 million for the second quarter of 2010 and $2.1 million for the third quarter of 2009. The increase in R D expenses in the third quarter of 2010 relative to the second quarter of 2010 is primarily due to costs incurred in connection with the preparation of the Phase III trials for tasimelteon in N24HSWD. | ||
| General and administrative (G A) expenses were $2.1 million for the third quarter of 2010, compared to $2.8 million for the second quarter of 2010 and $5.3 million for the third quarter of 2009. The decrease in G A expenses in the third quarter of 2010 relative to the second quarter of 2010 is primarily due to lower non-cash stock-based compensation costs in the third quarter of 2010. | ||
| Employee stock-based compensation expense recorded in the third quarter of 2010 totaled $0.8 million, compared to $1.6 million for the second quarter of 2010 and $3.3 million for the third quarter of 2009. The decrease in employee stock-based compensation expense in the third quarter of 2010 relative to the second quarter of 2010 is the result of the cancellation of unvested options in the third quarter of 2010, which reduced the third quarter 2010 expense. | ||
| Tax provision: Vanda recorded a tax benefit of $2.3 million in the third quarter of 2010. The tax provision is based on a projected effective tax rate for 2010 applied to the year-to-date |
| Our private letter ruling request to the Internal Revenue Service from March of 2010 remains pending. | ||
| Net income for the third quarter of 2010 was $3.2 million, compared to net income of $1.3 million for the second quarter of 2010 and a net loss of $7.7 million for the third quarter of 2009. | ||
| Basic and diluted net income per common share for the third quarter of 2010 was $0.11, compared to basic and diluted net income per common share of $0.05 and $0.04, respectively, for the second quarter of 2010 and a basic and diluted net loss of $0.28 for the third quarter of 2009. |
Vanda has scheduled a conference call for today, Wednesday, November 3, 2010, at 10:00 AM ET.
During the call, Mihael H. Polymeropoulos, M.D., President and CEO will discuss quarterly results
and other corporate activities. Investors can call 1-866-730-5768 (domestic) and 1-857-350-1592
(international) prior to the 10:00 AM start time and ask for the Vanda Pharmaceuticals conference
call hosted by Dr. Polymeropoulos (participant passcode 11659354). A replay of the call will be
available Wednesday, November 3, 2010 at 1:00 PM ET and will be accessible until Wednesday,
November 10, 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 14475834.
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 December 3, 2010.
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
Pharmaceuticals Inc., 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
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 inability to utilize a
substantial portion of its prior net operating losses and research and development credits; 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 to be demonstrably safe and
effective; Vanda s failure to obtain regulatory approval for its products or to comply with ongoing
regulatory requirements for its products; a lack of acceptance of Vanda s 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; Vanda s failure to develop or obtain sales, marketing and distribution resources and
expertise or to otherwise manage its growth; a loss of any of Vanda s key scientists or management
personnel; losses incurred from product liability claims made against Vanda; a loss of rights to
develop and commercialize Vanda s products under its license and sublicense agreements and other
factors that are described in the Risk Factors and Management s Discussion and Analysis of
Financial Condition and Results of Operations sections of Vanda s annual report on Form 10-K for
the fiscal year ended December 31, 2009 and quarterly report on Form 10-Q for the fiscal quarter
ended June 30, 2010, which are on file with the SEC and available on the SEC s website at
www.sec.gov. Additional information will also be set forth in those sections of Vanda s quarterly
report on Form 10-Q for the fiscal quarter ended September 30, 2010, which will be filed with the
SEC in the fourth quarter of 2010. In addition to the risks described above and in Vanda s annual