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Vanda Pharmaceuticals Reports First Quarter 2009 Results
Date:4/29/2009

ROCKVILLE, Md., April 29 /PRNewswire-FirstCall/ -- Vanda Pharmaceuticals Inc. (Nasdaq: VNDA), a biopharmaceutical company focused on the development and commercialization of clinical-stage product candidates for central nervous system disorders, today announced financial and operational results for the first quarter ended March 31, 2009.

Vanda reported a net loss of $6.5 million for the first quarter of 2009, compared to $7.5 million for the fourth quarter of 2008. Total expenses for the first quarter of 2009 were $6.6 million, compared to $7.7 million for the fourth quarter of 2008. Research and development (R&D) expenses for the first quarter of 2009 were $2.3 million, compared to $3.6 million for the fourth quarter of 2008. The decrease in R&D expenses in the first quarter of 2009 relative to the fourth quarter of 2008 is primarily due to the decrease in regulatory consulting and other professional fees.

As of March 31, 2009, Vanda's cash, cash equivalents, and marketable securities totaled approximately $42.6 million. As of March 31, 2009, a total of approximately 26.7 million shares of Vanda common stock were outstanding. Net loss per common share for the first quarter of 2009 was $0.24, compared to $0.28 for the fourth quarter of 2008.

OPERATIONAL HIGHLIGHTS

On November 6, 2008, Vanda submitted a Complete Response to the not approvable action letter that the Company received from the U.S. Food and Drug Administration (FDA) on July 25, 2008 regarding iloperidone. The FDA accepted the Complete Response for review and has set a new target action date of May 6, 2009. Pending a response from the FDA, Vanda is concentrating its efforts on the design and evaluation of clinical development options for tasimelteon, its compound for sleep and mood disorders, including Circadian Rhythm Sleep Disorders.

FINANCIAL DETAILS

* Operating Expenses. First quarter 2009 R&D expenses of $2.3 million,

consisted primarily of $0.5 million of salaries and benefits and

$0.2 million of non-cash stock based compensation costs for R&D

personnel, as well as $0.8 million of regulatory consultant fees,

and $0.2 million of pre-clinical work. This compares to

$3.6 million for the fourth quarter of 2008 and $11.1 million for

the first quarter of 2008. The decrease in R&D expenses in the first

quarter of 2009 relative to the fourth quarter of 2008 is primarily

due to the decrease in regulatory consulting and other professional

fees related to iloperidone. The decrease in R&D expenses in the

first quarter of 2009 relative to the first quarter of 2008 is

primarily due to the completion in the second quarter of 2008 of the

Phase III clinical trial for tasimelteon in chronic primary

insomnia.

General and administrative (G&A) expenses of $4.2 million for the

first quarter of 2009 consisted primarily of $0.5 million of

salaries and benefits and $2.1 million of non-cash stock based

compensation costs for G&A personnel, as well as $0.7 million of

legal fees, and $0.2 million of insurance costs. This compares to

$4.1 million for the fourth quarter of 2008 and $9.0 million for the

first quarter of 2008. The increase in G&A expenses in the first

quarter of 2009 relative to the fourth quarter of 2008 is primarily

due to an increase in legal and professional fees offset by a

decrease in stock-based compensation costs. The decrease in G&A

expenses in the first quarter of 2009 relative to the first quarter

of 2008 is primarily due to lower stock-based compensation and

commercial expenses.

Employee stock-based compensation expense recorded in the first

quarter of 2009 totaled $2.3 million. Of these non-cash charges,

$0.2 million was recorded as R&D expense and $2.1 million was

recorded as G&A expense. For the fourth quarter of 2008 and the

first quarter of 2008, total stock-based compensation expense was

$0.7 million and $5.1 million, respectively. The increase in stock-

based compensation expense in the first quarter of 2009 relative to

the fourth quarter of 2008 is the result of the fourth quarter

expense encompassing the net effect of stock-based compensation for

the period for existing employees, reduced by the reversal of stock-

based compensation charges resulting from the cancellation of

unvested options in connection with the workforce reduction which

occurred in the fourth quarter of 2008. The decrease in stock-based

compensation expense in the first quarter of 2009 relative to the

first quarter of 2008 is primarily due to no options being granted

in the first quarter of 2009.

* Cash and marketable securities decreased by $3.8 million during the

first quarter of 2009. Changes included $6.5 million of net losses

offset by increases in accrued expenses and accounts payable of

$0.1 million, decreases in prepaid expenses of $0.2 million and

$2.4 million in non-cash depreciation, amortization, and stock-based

compensation expense.

* Vanda's cash, cash equivalents and marketable securities as of

March 31, 2009 totaled approximately $42.6 million, compared to

approximately $46.5 million as of December 31, 2008.

* Net loss for the first quarter of 2009 was $6.5 million, compared to

a net loss of $7.5 million for the fourth quarter of 2008 and a net

loss of $19.2 million for the first quarter of 2008.

* Net loss per common share for the first quarter of 2009 was $0.24,

compared to $0.28 for the fourth quarter of 2008 and $0.72 for the

first quarter of 2008.

FINANCIAL GUIDANCE

Vanda will update its financial guidance following the decision by the FDA regarding the New Drug Application for iloperidone.

ABOUT VANDA PHARMACEUTICALS INC.:

Vanda Pharmaceuticals Inc. is a biopharmaceutical company focused on the development and commercialization of clinical-stage product candidates 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 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 product candidates to be demonstrably safe and effective; Vanda's failure to obtain regulatory approval for its products or to comply with ongoing regulatory requirements; a lack of acceptance of Vanda's product candidates in the marketplace, or a failure to become or remain profitable; Vanda's inability to obtain the capital necessary to fund its research and development activities; Vanda's failure to identify or obtain rights to new product candidates; 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 I, Item 1A) of Vanda's annual report on Form 10-K/A for the fiscal year ended December 31, 2008 (File No. 001-34186). In addition to the risks described above and in Part I, Item 1A of Vanda's annual report on Form 10-K/A, 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
                                             ------------------
                                        March 31,          March 31,
                                           2009               2008
                                           ----               ----

    Revenue                                    $-                  $-
                                            -----               -----
    Operating expenses:
      Research and development          2,333,344          11,102,665
      General and administrative        4,224,031           8,959,214
                                        ---------           ---------
         Total operating expenses       6,557,375          20,061,879
                                        ---------          ----------

    Loss from operations               (6,557,375)        (20,061,879)

    Interest income                        53,387             865,750
                                           ------             -------
         Total other income, net           53,387             865,750
                                           ------             -------

    Net loss                          $(6,503,988)       $(19,196,129)
                                      ===========        ============

    Basic and diluted net loss per
     share attributable to
     common stockholders                   $(0.24)             $(0.72)
                                           ======              ======

    Shares used in calculation of
     basic and diluted net loss
     per share attributable to
     common stockholders               26,653,478          26,648,344
                                       ==========          ==========



                           VANDA PHARMACEUTICALS INC.
                        (A Development Stage Enterprise)

                 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

                                         March 31,         December 31,
                                           2009                2008
                                        -----------        -----------
    ASSETS
        Current assets:
        Cash and cash equivalents       $33,833,465        $39,079,304
        Marketable securities             8,810,919          7,378,798
        Prepaid expenses, deposits
         and other current assets         1,118,672          1,287,400
                                          ---------          ---------
          Total current assets           43,763,056         47,745,502

      Property and equipment, net         1,635,316          1,758,111
      Restricted cash                       430,230            430,230
                                            -------            -------
          Total assets                  $45,828,602        $49,933,843
                                        ===========        ===========

    LIABILITIES AND STOCKHOLDERS' EQUITY
      Current liabilities:
        Accounts payable                 $1,415,384           $512,382
        Accrued expenses                  2,065,219          2,898,417
                                          ---------          ---------
          Total current liabilities       3,480,603          3,410,799

      Long-term liabilities:
        Deferred rent                       503,791            502,770
                                            -------            -------
          Total liabilities               3,984,394          3,913,569
                                          ---------          ---------
      Stockholders' equity:
        Common stock                         26,653             26,653
        Additional paid-in capital      273,296,804        270,988,157
        Accumulated other
         comprehensive loss                    (754)           (20,029)
        Deficit accumulated during
         the development stage         (231,478,495)      (224,974,507)
                                       ------------       ------------
          Total stockholders' equity     41,844,208         46,020,274
                                         ----------         ----------

          Total liabilities and         -----------        -----------
           stockholders' equity         $45,828,602        $49,933,843
                                        ===========        ===========



                            VANDA PHARMACEUTICALS INC.
                         (A Development Stage Enterprise)

            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                        Three Months Ended
                                                        ------------------
                                                      March 31,      March 31,
                                                        2009           2008
                                                        ----           ----
    Cash flows from operating activities:
      Net loss                                      $(6,503,988) $(19,196,129)
      Adjustments to reconcile net income
       to net cash used in operating activities:
        Depreciation and amortization                   122,795       122,629
        Stock-based compensation                      2,308,647     5,105,714
        Loss on disposal of assets                            -           610
        Amortization of net discounts on
         short-term investments                          38,263      (162,519)
        Changes in assets and liabilities:
          Prepaid expenses and other current assets     168,728       606,421
          Accounts payable                              903,002    (1,355,101)
          Accrued expenses                             (833,198)   (1,299,209)
          Other liabilities                               1,021        68,365
                                                          -----        ------
            Net cash used in operating activities    (3,794,730)  (16,109,219)
                                                     ----------   -----------

    Cash flows from investing activities:
      Purchases of property and equipment                     -      (186,442)
      Purchases of marketable securities             (5,077,656)   (1,485,150)
      Proceeds from sales of marketable securities      126,547     2,790,026
      Maturities of marketable securities             3,500,000    29,060,000
                                                      ---------    ----------
            Net cash provided by (used
             in) investing activities                (1,451,109)   30,178,434
                                                     ----------    ----------

    Cash flows from financing activities:

            Net cash provided by                          -----        ------
             financing activities                             -             -
                                                          -----        ------

      Effect of foreign currency translation                  -        16,745
                                                          -----        ------

    Net change in cash and cash equivalents          (5,245,839)   14,085,960

    Cash and cash equivalents,
     beginning of period                             39,079,304    41,929,533
                                                     ----------    ----------

    Cash and cash equivalents,
     end of period                                  $33,833,465   $56,015,493
                                                    ===========   ===========


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SOURCE Vanda Pharmaceuticals Inc.
Copyright©2009 PR Newswire.
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