Full Press Release Details
Vanda Pharmaceuticals Reports First Quarter 2019 Financial Results
WASHINGTON May 1, 2019 Vanda Pharmaceuticals Inc. (Vanda) (Nasdaq: VNDA) today announced financial and operational results
for the first quarter ended March 31, 2019.
During the first quarter, Vanda made significant advances towards its commercial and research
goals. Patients on treatment with Hetlioz continue to increase steadily, driven by broader awareness and recognition of Non-24. We are preparing for a possible launch later this year in jet lag disorder, an indication that has the potential to drive
significant growth for our Hetlioz franchise. Tradipitant clinical development is advancing for three indications, atopic dermatitis, gastroparesis and motion sickness, said Mihael H. Polymeropoulos, M.D., Vanda s President and CEO.
We believe that Vanda is well positioned for significant growth in the coming quarters and years given its strong commercial and clinical development pipeline and its exceptional people.
Key Financial Highlights:
Key Research and Development Highlights:
Clinical Development
HETLIOZ (tasimelteon)
Fanapt (iloperidone)
VTR-297 (histone deactetylase (HDAC) inhibitor)
Tradipitant Partial Clinical Hold and FDA Dispute
In April 2018, Vanda submitted a protocol amendment to the FDA, proposing a 52-week open-label extension (OLE) period for patients who had completed the
tradipitant Phase II clinical study (2301) in gastroparesis. In May 2018, based on feedback from the FDA, Vanda amended the protocol limiting the duration of treatment in the 2301 study to a total of three months, while continuing to seek
further dialogue with the FDA on extending the study duration to 52-weeks. As a part of this negotiation process, in September 2018, Vanda submitted a new follow-on 52-week OLE protocol to the FDA (2302) for patients who had completed the 2301
study. While waiting for further feedback, no patients were ever enrolled in any study beyond 12 weeks. In December 2018, the FDA imposed a partial clinical hold (PCH) on two of Vanda s proposed clinical studies of tradipitant, stating that
Vanda is required first to conduct additional chronic toxicity studies in canines, monkeys or minipigs before allowing patients access in any clinical protocol beyond 12 weeks. The original PCH was not based on any safety or efficacy data related to
tradipitant. Rather, the FDA informed Vanda that these additional toxicity studies are required by a guidance document.
In February 2019, Vanda filed a
lawsuit against the FDA in the United States District Court for the District of Columbia (DC District Court), challenging the FDA s legal authority to issue the PCH, and seeking an order to set it aside. On February 14, 2019, the FDA filed
a Motion for Voluntary Remand to the Agency and for a Stay of the Case. On March 14, 2019, the DC District Court granted the FDA s request for voluntary remand and returned the matter to the FDA for further consideration. On April 26,
2019, the FDA provided its remand response, in which it indicated that, after re-evaluation, it believes a partial clinical hold continues to be appropriate. After reviewing the FDA s remand response, Vanda continues to believe that additional
chronic toxicity studies are unjustified, and that Vanda has provided the FDA with sufficient information regarding the safety of tradipitant to justify the continued study of tradipitant in patients beyond 12 weeks, in accordance with applicable
law and FDA regulations. On April 29, 2019, Vanda and the FDA filed a Joint Motion for Extension of Time to Propose a Scheduling Order for this matter. On April 30, 2019, the DC District Court granted the motion, thereby extending the
deadline until May 3, 2019 for the FDA and Vanda to file proposals regarding a scheduling order. Vanda intends to continue vigorously pursuing its interests in the matter.
Vanda does not expect the PCH to have any impact on its ongoing clinical studies in atopic dermatitis and
motion sickness, each of which is under 12 weeks in duration, or its planned 12-week Phase III study in gastroparesis, none of which are subject to the PCH. Nor does Vanda expect the PCH to impact the potential timing of a New Drug Application (NDA)
filing. If the matter has not been fully resolved prior to the date on which Vanda is ready to file the first NDA for tradipitant, then Vanda may choose to file with the safety data it has available at that time. Vanda may pursue additional studies
of durations in excess of 12 weeks in countries where the conduct of such studies may be permitted (or it may choose to file for approval of a limited indication). If the FDA determines that Vanda s NDA does not contain safety data sufficient
for approval, it may not accept the NDA for filing. Vanda will continue to reassess the situation as events unfold.
Non-GAAP Financial Results
Non-GAAP net income was $3.0 million for the first quarter of 2019, or $0.06 per share, compared to a Non-GAAP net income of $6.6 million, or $0.14
per share, for the first quarter of 2018.
Vanda provides Non-GAAP financial information, which it believes can enhance an overall understanding of its
financial performance when considered together with GAAP figures. Refer to the sections of this press release entitled Non-GAAP Financial Information and Reconciliation of GAAP to Non-GAAP Financial Information for more
detailed information regarding Non-GAAP financial information.
2019 Financial Guidance
Vanda reiterates its prior 2019 financial guidance and expects to achieve the following financial objectives in 2019:
| Full Year 2019 Financial Objectives | Full Year 2019 Guidance | |
| Combined net product sales from both HETLIOZ and Fanapt | $215 to $225 million | |
| HETLIOZ net product sales | $137 to $143 million | |
| Fanapt net product sales | $78 to $82 million | |
| Year-end 2019 Cash | Greater than $260 million |
has scheduled a conference call for today, Wednesday, May 1, 2019, at 4:30 PM ET. During the call, Vanda s management will discuss the first quarter 2019 financial results and other corporate activities. Investors can call 1-866-688-9426
(domestic) or 1-409-216-0816 (international) and use passcode 6195579. A replay of the call will be available on Wednesday, May 1, 2019, beginning at 7:00 PM ET and will be accessible until Wednesday, May 8, 2019, at 11:59 PM ET. The
replay call-in number is 1-855-859-2056 for domestic callers and 1-404-537-3406 for international callers. The passcode number is 6195579.
The conference call will be broadcast simultaneously on Vanda s website, 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.
Non-GAAP Financial Information
Vanda believes that the Non-GAAP financial information provided in this press release can assist investors in understanding and assessing the ongoing economics
of Vanda s business and reflect how it manages the business internally and sets operational goals. Vanda s Non-GAAP Selling, general and administrative expenses and Non-GAAP Research and development expenses exclude
stock-based compensation. Vanda s Non-GAAP Net income (loss), Non-GAAP Net income (loss) per share and Non-GAAP Operating expenses excluding Cost of goods sold exclude stock-based compensation and intangible
Vanda believes that excluding the impact of these items better reflects the recurring economic characteristics of its business, as
well as Vanda s use of financial resources and its long-term performance.
These Non-GAAP financial measures, as presented, may not be comparable to
similarly titled measures reported by other companies since not all companies may calculate these measures in an identical manner and, therefore, they are not necessarily an accurate measure of comparison between companies.
The presentation of these Non-GAAP financial measures is not intended to be considered in isolation or as a substitute for guidance prepared in accordance
with GAAP. The principal limitation of these Non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Vanda s financial statements. In addition, they are subject to inherent limitations
as they reflect the exercise of judgments by management in determining these Non-GAAP financial measures. In order to compensate for these limitations, Vanda presents its Non-GAAP financial guidance in connection with its GAAP guidance. Investors
are encouraged to review the reconciliation of our Non-GAAP financial measures to their most directly comparable GAAP financial measure.
Pharmaceuticals Inc.
Vanda is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address
high unmet medical needs and improve the lives of patients. For more on Vanda Pharmaceuticals Inc., please visit www.vandapharma.com.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
Various statements in this release, including, but not limited to, the guidance provided under 2019 Financial Guidance above, are
forward-looking statements under the securities laws. 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 Vanda s forward-looking statements include, among others, Vanda s assumptions regarding its ability to continue to grow its business in the U.S., Vanda s ability to complete the
clinical development and obtain regulatory approval of tradipitant for the treatment of gastroparesis and/or the treatment of chronic pruritus in atopic dermatitis, the outcome of the lawsuit initiated by Vanda against the FDA relating to
tradipitant, the ability of
HETLIOZ to provide significant benefit in the treatment of the symptoms of jet lag disorder, Vanda s ability to obtain marketing
approval for the use of HETLIOZ in the treatment of jet lag disorder, Vanda s ability to complete the clinical development, submit an sNDA and obtain regulatory approval of tasimelteon
for the treatment of sleep disorders in patients with SMS 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, 2018, which is on file with the SEC and available on the SEC s website at www.sec.gov. Additional factors may be described in those sections of
Vanda s quarterly report on Form 10-Q for the quarter ended March 31, 2019, to be filed with the SEC in the second quarter of 2019. In addition to the risks described above and in Vanda s annual report on Form 10-K and quarterly
reports 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
| Three Months Ended | ||||||||
| March 31 | March 31 | |||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| HETLIOZ product sales, net | $ | 28,957 | $ | 25,423 | ||||
| Fanapt product sales, net | 18,756 | 18,169 | ||||||
| Total revenues | 47,713 | 43,592 | ||||||
| Operating expenses: | ||||||||
| Cost of goods sold excluding amortization | 5,113 | 4,560 | ||||||
| Research and development | 13,278 | 9,416 | ||||||
| Selling, general and administrative | 31,029 | 26,822 | ||||||
| Intangible asset amortization | 380 | 352 | ||||||
| Total operating expenses | 49,800 | 41,150 | ||||||
| Income (loss) from operations | (2,087 | ) | 2,442 | |||||
| Other income | 1,485 | 622 | ||||||
| Income (loss) before income taxes | (602 | ) | 3,064 | |||||
| Provision (benefit) for income taxes | 10 | (2 | ) | |||||
| Net income (loss) | $ | (612 | ) | $ | 3,066 | |||
| Net income (loss) per share, basic | $ | (0.01 | ) | $ | 0.07 | |||
| Net income (loss) per share, diluted | $ | (0.01 | ) | $ | 0.06 | |||
| Weighted average shares outstanding, basic | 52,752,774 | 46,336,430 | ||||||
| Weighted average shares outstanding, diluted | 52,752,774 | 48,225,041 |
VANDA PHARMACEUTICALS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31 | December 31 | |||||||
| 2019 (1) | 2018 (1) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 34,379 | $ | 61,005 | ||||
| Marketable securities | 233,457 | 196,355 | ||||||
| Accounts receivable, net | 26,346 | 28,780 | ||||||
| Inventory | 1,112 | 994 | ||||||
| Prepaid expenses and other current assets | 11,204 | 11,998 | ||||||
| Total current assets | 306,498 | 299,132 | ||||||
| Property and equipment, net | 4,294 | 4,417 | ||||||
| Operating lease right-of-use assets | 11,994 | |||||||
| Intangible assets, net | 24,162 | 24,542 | ||||||
| Non-current inventory and other | 4,218 | 4,039 | ||||||
| Total assets | $ | 351,166 | $ | 332,130 | ||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 27,423 | $ | 21,584 | ||||
| Product revenue allowances | 31,852 | 31,231 | ||||||
| Milestone obligations under license agreements | 200 | |||||||
| Total current liabilities | 59,275 | 53,015 | ||||||
| Operating lease non-current liabilities | 13,324 | |||||||
| Other non-current liabilities | 162 | 3,693 | ||||||
| Total liabilities | 72,761 | 56,708 | ||||||
| Stockholders equity: | ||||||||
| Common stock | 53 | 52 | ||||||
| Additional paid-in capital | 615,047 | 611,587 | ||||||
| Accumulated other comprehensive income | 135 | 1 | ||||||
| Accumulated deficit | (336,830 | ) | (336,218 | ) | ||||
| Total stockholders equity | 278,405 | 275,422 | ||||||
| Total liabilities and stockholders equity | $ | 351,166 | $ | 332,130 |
VANDA PHARMACEUTICALS INC.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands, except for share and per share amounts)
| Three Months Ended | ||||||||
| March 31 | March 31 | |||||||
| 2019 | 2018 | |||||||
| Net income (loss) | $ | (612 | ) | $ | 3,066 | |||
| Adjustments: | ||||||||
| Stock-based compensation | 3,282 | 3,151 | ||||||
| Intangible asset amortization | 380 | 352 | ||||||
| Non-GAAP Net income | $ | 3,050 | $ | 6,569 | ||||
| Non-GAAP Net income per share, basic | $ | 0.06 | $ | 0.14 | ||||
| Weighted average shares outstanding, basic | 52,752,774 | 46,336,430 | ||||||
| Operating expenses | $ | 49,800 | $ | 41,150 | ||||
| Adjustments: | ||||||||
| Cost of goods sold excluding amortization | (5,113 | ) | (4,560 | ) | ||||
| Stock-based compensation | (3,282 | ) | (3,151 | ) | ||||
| Intangible asset amortization | (380 | ) | (352 | ) | ||||
| Non-GAAP Operating expenses excluding Cost of goods sold | $ | 41,025 | $ | 33,087 | ||||
| Research and development | $ | 13,278 | $ | 9,416 | ||||
| Adjustment: | ||||||||
| Stock-based compensation | (728 | ) | (321 | ) | ||||
| Non-GAAP Research and development | $ | 12,550 | $ | 9,095 | ||||
| Selling, general and administrative | $ | 31,029 | $ | 26,822 | ||||
| Adjustment: | ||||||||
| Stock-based compensation | (2,554 | ) | (2,830 | ) | ||||
| Non-GAAP Selling, general and administrative | $ | 28,475 | $ | 23,992 |
Executive Vice President & Chief Financial Officer
Vanda Pharmaceuticals Inc.
SOURCE Vanda Pharmaceuticals