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Vanda Pharmaceuticals Reports First Quarter 2011 Results

ROCKVILLE, Md., May 5, 2011 /PRNewswire/ -- 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."

Key Highlights:

  • Vanda recorded first quarter 2011 revenue of $7.5 million including royalties of $0.9 million. Fanapt® prescriptions, as reported by IMS, reached 25,000 in the first quarter of 2011.
  • Fanapt® long-acting injectable (depot) formulation advanced into clinical studies.
  • European filing for oral Fanapt® is targeted for the second half of 2011.
  • Tasimelteon program expanded to include a Phase IIb/III study in patients with Major Depressive Disorder.   Study expected to begin in the second half of 2011.
  • The European Commission (EC) granted orphan drug designation for tasimelteon for Non-24-Hour Sleep/Wake Disorder (N24HSWD.)  
  • Top-line efficacy results for tasimelteon for N24HSWD are expected in mid 2012; NDA submission planned for the first half of 2013.

  • FIRST QUARTER 2011 REPORTED RESULTSTotal 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 Figures (1)Three Months EndedMarch 31December 31(in thousands, except per share amounts)

    20112010  Change ($)Change (%)Total revenues

    (251)-3%Research & development  expenses

    4,2673,82244512%General & administrative expenses

    2,8582,762963%Non-cash stock-based compensation (2)

    1,6041,33526920%Net income before tax provision

    142933(791)-85%Tax provision (benefit)

    6(1,266)1,272100%Net income

    1362,200(2,064)-94%Diluted net income per share

    (0.08)-100%Select Cash Flow Data (1)(In thousands)

    Three Months EndedMarch 31March 3120112010Net cash provided by (used in)Operating activities

    (3,264)(4,826)Investing activities

    13,225(32,457)Financing activities

    -1,933Net change in cash and cash equivalents

    (35,350)Select Balance Sheet Data (1)March 31December 31March 31(in thousands)

    201120102010Total cash and marketable securities

    202,424(1) Unaudited

    (2) Non-cash stock-based compensation is allocated to both Research & development and General & administrative expenses.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 Canada.  

    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.


  • General and administrative expenses are expected to be between $10.0 and $12.0 million.  
  • Research and development expenses are expected to be between $30.0 and $34.0 million.  
  • Total U.S. GAAP operating expenses are expected to be between $41.0 and $47.0 million.  This includes $1.5 million related to amortization of an intangible asset and $5.0 to $6.0 million of stock-based compensation.

  • CONFERENCE CALLVanda 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,  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 .

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSVarious 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 incurred from product liability claims made against Vanda; a loss of rights to develop and commercialize Vanda's products or product candidates 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, 2010 which is on file with the SEC and available on the SEC's website at  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 (Unaudited)Three Months EndedMarch 31,March 31,(In thousands, except for per share amounts)

    20112010Revenues:Licensing agreement



    6,606Royalty revenue8952,067Product sales-3,748Total revenues7,50112,421Operating expenses:Cost of sales - product-1,375Research and development4,2672,041General and administrative2,8582,489Intangible asset amortization369369Total operating expenses7,4946,274Income from operations76,147Other income:Interest income13547Total other income13547Income before income tax provision1426,194Tax provision 65,665Net income



    529Net income per share:Basic and diluted



    0.02Shares used in calculation of net income per share:Basic 28,101,41827,704,418Diluted28,936,83528,318,754VANDA PHARMACEUTICALS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(In thousands)

    March 31, 2011December 31, 2010ASSETSCurrent assets:Cash and cash equivalents



    42,559Marketable securities142,035155,478Accounts receivable895511Prepaid expenses, deposits and other current assets1,6191,843Deferred tax, current 182182Total current assets197,251200,573Property and equipment, net860937Intangible asset, net9,1539,522Deferred tax, non-current 1,6391,639Restricted cash430430Total assets



    213,101LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable



    648Accrued liabilities2,1411,324Accrued income taxes2,2722,266Deferred revenue, current 26,78926,789Total current liabilities32,03631,027Long-term liabilities:Deferred rent 482490Deferred revenue, non-current137,247143,853Total liabilities169,765175,370Stockholders' equity:Common stock2828Additional paid-in capital292,946291,342Accumulated other comprehensive income992Accumulated deficit(253,505)(253,641)Total stockholders' equity39,56837,731Total liabilities and stockholders' equity



    213,101Company Contact:
    Cristina Murphy
    Communications Manager
    Vanda Pharmaceuticals Inc.
    (240) 599-4500


    SOURCE Vanda Pharmaceuticals Inc.
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