Full Press Release Details
Acting Chief Financial Officer
Vanda Pharmaceuticals Inc.
Vanda Pharmaceuticals Reports Second Quarter 2009 Results
FDA GRANTS U.S. MARKETING APPROVAL OF FANAPT (ILOPERIDONE)
ROCKVILLE, MD. August 10, 2009 Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA), a
biopharmaceutical company focused on the development and commercialization of clinical-stage
products for central nervous system disorders, today announced financial and operational results
for the second quarter ended June 30, 2009.
Vanda reported a net loss of $12.4 million for the second quarter of 2009, compared to $6.5 million
for the first quarter of 2009 and $13.5 million for the second quarter of 2008. Total expenses for
the second quarter of 2009 were $12.4 million, compared to $6.6 million for the first quarter of
2009 and $13.9 million for the second quarter of 2008. Research and development (R D) expenses for
the second quarter of 2009 were $7.2 million, compared to $2.3 million for the first quarter of
2009 and $5.5 million for the second quarter of 2008. The increase in R D expenses in the second
quarter of 2009 relative to the first quarter of 2009 and second quarter of 2008 is primarily due
to the regulatory consulting fees paid and/or accrued as a result of the approval of Fanapt
(iloperidone) by the U.S. Food and Drug Administration (FDA). In addition, the Company recorded a
$12.0 million milestone payment due to Novartis as an intangible asset. Of the $12.0 million
milestone payment, $7.0 million was paid in May 2009 and the remaining $5.0 million is due in
November 2009; however, Novartis has the right to accelerate the due date in its sole discretion.
As of June 30, 2009, Vanda s cash, cash equivalents, and marketable securities totaled
approximately $29.0 million. As of June 30, 2009, a total of approximately 27.1 million shares of
Vanda common stock were outstanding. Net loss per common share for the second quarter of 2009 was
$0.46, compared to $0.24 for the first quarter of 2009 and $0.51 for the second quarter of 2008.
OPERATIONAL HIGHLIGHTS
On May 6, 2009, the FDA granted U.S. marketing approval of Fanapt for the acute treatment of
schizophrenia in adults. Vanda expects to make Fanapt available in U.S. pharmacies later this
year. Holders of a New Drug Application (NDA) have 60 days after approval to file for
patent term restoration under the Hatch-Waxman Act. Vanda submitted its application for patent
term restoration with respect to Fanapt on June 9, 2009.
Vanda also continues to pursue its clinical development plan for tasimelteon for the treatment of
circadian rhythm sleep disorders. On June 26, 2009, Vanda met with the FDA to discuss the clinical
development plan in an End of Phase II Meeting. Vanda will continue to work with the FDA to
characterize the path to an NDA for tasimelteon.
| General and administrative (G A) expenses of $5.0 million for the second quarter of 2009 consisted primarily of $0.5 million of salaries and benefits and $2.2 million of non-cash stock based compensation costs for G A personnel, as well as $0.6 million of legal fees, $0.7 million of commercial costs and $0.2 million of insurance costs. This compares to $4.2 million for the first quarter of 2009 and $8.5 million for the second quarter of 2008. The increase in G A expenses in the second quarter of 2009 relative to the first quarter of 2009 is primarily due to an increase in professional fees and commercial costs related to Vanda s participation at the American Psychiatric Association s Annual Meeting in May . The decrease in G A expenses in the second quarter of 2009 relative to the second quarter of 2008 is primarily due to lower stock-based compensation and commercial expenses. | ||
| Employee stock-based compensation expense recorded in the second quarter of 2009 totaled $2.8 million. Of these non-cash charges, $0.6 million was recorded as R D expense and $2.2 million was recorded as G A expense. For the first quarter of 2009 and the second quarter of 2008, total stock-based compensation expense was $2.3 million and $4.0 million, respectively. The increase in stock-based compensation expense in the second quarter of 2009 relative to the first quarter of 2009 is the result of the issuance of additional non-qualified stock options in the second quarter, as well as the expense related to the vesting of restricted stock units upon the approval of Fanapt by the FDA. The decrease in stock-based compensation expense in the second quarter of 2009 relative to the second quarter of 2008 is primarily due to a lower stock-based compensation expense resulting from the workforce reduction in the fourth quarter of 2008. |
Based on its current operating plans, Vanda believes that its existing cash, cash equivalents and
marketable securities, will be sufficient to meet its anticipated operating needs through 2009.
However, given the recent approval by the FDA of the NDA for Fanapt , Vanda is currently evaluating
alternative commercial strategies for the product. These strategies include, in addition to Vanda
launching Fanapt on its own, entering into one or more partnerships, other collaboration
agreements or strategic transactions that may provide capital to support Vanda s operations.
Vanda has scheduled a conference call for today, Monday, August 10, 2009, at 10:00 AM ET. During
the call, Mihael H. Polymeropoulos, M.D., President and CEO, and Stephanie Irish, Acting CFO, will
discuss quarterly results and other corporate activities. Investors can call 1-800-599-9829
(domestic) and 1-617-847-8703 (international) prior to the 10:00 AM start time and ask for the
Vanda Pharmaceuticals conference call hosted by Dr. Polymeropoulos (participant passcode 93125446).
A replay of the call will be available Monday, August 10, 2009, at 1:00 PM ET and will be
accessible until Monday, August 17, 2009, 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
The conference call will be broadcast simultaneously on the company s Web site,
http://www.vandapharma.com. Investors should click on the Investor Relations tab and are advised
to go to the Web site at least 15 minutes early to register, download, and install any necessary
software. The call will also be archived on the Vanda Web site for a period of 30 days, through
ABOUT VANDA PHARMACEUTICALS INC.:
Vanda Pharmaceuticals Inc. is a biopharmaceutical company focused on the development and
commercialization of clinical-stage 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. Vanda Pharmaceuticals Inc.
is at an early stage of development and may not ever have any products that generate significant
revenue. Important factors that could cause actual results to differ materially from those
reflected in the company s forward-looking statements include, among others: 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
with respect to its costs and expenses; Vanda s inability to obtain the capital
necessary to fund its commercial and 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 section (Part II,
Item 1A) of Vanda s quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2009 (File
No. 001-34186). In addition to the risks described above and in Part II, Item 1A of Vanda s
quarterly report on Form 10-Q, other unknown or unpredictable factors also could affect Vanda s
results. There can be no assurance that the actual results or developments anticipated by Vanda
will be realized or, even if substantially realized, that they will have the expected consequences
to, or effects on, Vanda. Therefore, no assurance can be given that the outcomes stated in such
forward-looking statements and estimates will be achieved.
All written and verbal forward-looking statements attributable to Vanda or any person acting on its
behalf are expressly qualified in their entirety by the cautionary statements contained or referred
to herein. Vanda cautions investors not to rely too heavily on the forward-looking statements Vanda
makes or that are made on its behalf. The information in this release is provided only as of the
date of this release, and Vanda undertakes no obligation, and specifically declines any obligation,
to update or revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
VANDA PHARMACEUTICALS INC.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of Sales | 229,352 | 229,352 | ||||||||||||||
| Research and development | 7,195,595 | 5,480,909 | 9,528,934 | 16,583,574 | ||||||||||||
| General and administrative | 4,988,317 | 8,454,985 | 9,212,351 | 17,414,199 | ||||||||||||
| Total operating expenses | 12,413,264 | 13,935,894 | 18,970,637 | 33,997,773 | ||||||||||||
| Loss from operations | (12,413,264 | ) | (13,935,894 | ) | (18,970,637 | ) | (33,997,773 | ) | ||||||||
| Interest income | 21,163 | 441,012 | 74,549 | 1,306,762 | ||||||||||||
| Net loss | $ | (12,392,101 | ) | $ | (13,494,882 | ) | $ | (18,896,088 | ) | $ | (32,691,011 | ) | ||||
| Basic and diluted net loss per share attributable to common stockholders | $ | (0.46 | ) | $ | (0.51 | ) | $ | (0.71 | ) | $ | (1.23 | ) | ||||
| Shares used in calculation of basic and diluted net loss per share attributable to common stockholders | 26,900,841 | 26,649,439 | 26,777,159 | 26,648,892 |
VANDA PHARMACEUTICALS INC.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
| June 30, 2009 | December 31, 2008 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 24,014,203 | $ | 39,079,304 | ||||
| Marketable securities | 5,008,623 | 7,378,798 | ||||||
| Prepaid expenses, deposits and other current assets | 1,129,194 | 1,287,400 | ||||||
| Inventory | 1,272,240 | |||||||
| Total current assets | 31,424,260 | 47,745,502 | ||||||
| Property and equipment, net | 1,518,442 | 1,758,111 | ||||||
| Restricted cash | 430,230 | 430,230 | ||||||
| Intangible asset, net | 11,770,648 | |||||||
| Total assets | $ | 45,143,580 | $ | 49,933,843 | ||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,916,901 | $ | 512,382 | ||||
| Accrued expenses | 4,415,231 | 2,898,417 | ||||||
| Total current liabilities | 11,332,132 | 3,410,799 | ||||||
| Long-term liabilities: | ||||||||
| Deferred rent | 504,811 | 502,770 | ||||||
| Total liabilities | 11,836,943 | 3,913,569 | ||||||
| Stockholders equity: | ||||||||
| Common stock | 27,140 | 26,653 | ||||||
| Additional paid-in capital | 277,149,879 | 270,988,157 | ||||||
| Accumulated other comprehensive income (loss) | 213 | (20,029 | ) | |||||
| Deficit accumulated during the development stage | (243,870,595 | ) | (224,974,507 | ) | ||||
| Total stockholders equity | 33,306,637 | 46,020,274 | ||||||
| Total liabilities and stockholders equity | $ | 45,143,580 | $ | 49,933,843 |