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Data Presented at SLEEP 2007 Shows VEC-162 Improves Sleep Onset and,Maintenance vs. Placebo

Demonstrates Positive Effect on Objective and Subjective Sleep Measures

MINNEAPOLIS, June 13, 2007 /PRNewswire-FirstCall/ -- According to study results presented today at SLEEP 2007, the 21st annual meeting of the Associated Professional Sleep Societies (APSS), VEC-162, a balanced melatonin (MT1/MT2) receptor agonist being developed by Vanda Pharmaceuticals Inc. , demonstrated improvements in objective and subjective measures of sleep onset and maintenance in a Phase III trial of transient insomnia.

VEC-162 was assessed in a randomized, double-blind, placebo-controlled, multi-center clinical trial that enrolled 412 adults in a sleep laboratory setting using a phase-advance, first-night assessment model of transient insomnia. The trial examined VEC-162 dosed 30 minutes before bedtime at 20, 50 and 100 mg versus placebo.

"Study patients reported they were falling asleep faster and staying asleep longer," said Tom Roth, Ph.D., Director of the Henry Ford Sleep Disorders and Research Center in Detroit, MI, presenter at today's APSS session. "These subjective measures support data collected in the sleep lab and provide an important dimension for assessing the efficacy of VEC-162."

VEC-162 demonstrated statistically significant improvements at all three tested doses compared to placebo (p<0.001) in the primary endpoint of the trial, Latency to Persistent Sleep (LPS), a measure of sleep onset. VEC-162 also produced statistically significant improvements relative to placebo in Latency to Non-Awake (LNA), another measure of sleep onset, Wake After Sleep Onset (WASO), a measure of sleep maintenance, and Total Sleep Time (TST). VEC-162 was also demonstrated to be safe and well tolerated.

VEC-162 also demonstrated improvements relative to placebo on subjective sleep measures. For LPS, all VEC-162 doses showed a trend toward improvement and 50 mg (p<0.001) and 100 mg (p=0.018) achieved statistical significance. For TST, the 50 mg dose achieved significance (p=0.024) and the 20 and 100 mg doses showed a trend toward significance.

"VEC-162 induces and maintains sleep by modulating the sleep/wake cycle," said Paolo Baroldi, M.D., Ph.D., Chief Medical Officer, Vanda Pharmaceuticals Inc. "The subjective findings suggest the compound's unique mechanism of action provides a noticeable improvement in overall sleep quality."

About Insomnia

Approximately 70 million American adults experience insomnia of all types, characterized by difficulty falling asleep, waking frequently during the night, waking too early and not being able to return to sleep, or waking up not feeling refreshed. Circadian Rhythm Sleep Disorders (CRSD), one type of insomnia, affect millions of Americans in a number of forms. Shift Worker Sleep Disorder is a CRSD affecting the 14% of Americans who are shift workers. Another CRSD type is Delayed Sleep Phase Syndrome, which affects 5-10% of patients in sleep disorder clinics and accounts for 40% of disorders involving sleep-wake schedules.

About Vanda Pharmaceuticals Inc.

Vanda Pharmaceuticals Inc., headquartered in Rockville, Maryland, is a biopharmaceutical company working to advance the science of personalized medicine to improve the lives of patients with various CNS disorders, including insomnia and schizophrenia. The company has three product candidates in clinical development. Vanda's lead product candidate, iloperidone, is a compound for the treatment of schizophrenia and has completed its Phase III program. Vanda's second product candidate, VEC-162, is a compound for the treatment of sleep and mood disorders which is currently in Phase III for insomnia. Vanda's third product candidate, VSF-173, is a compound in Phase II for the treatment of excessive sleepiness. For more on Vanda Pharmaceuticals Inc., please visit http://www.vandapharma.com .

N ote Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Words such as, but not limited to, "suggest," "look forward to," "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "may," "would," "should," and "could," and similar expressions or words identify forward-looking statements. Such 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, a failure of iloperidone or Vanda's other product candidates to be demonstrably safe and effective, a failure to obtain regulatory approval for iloperidone or the company's other product candidates, a lack of acceptance of iloperidone or Vanda's other product candidates in the marketplace, a failure of the company to become or remain profitable, Vanda's inability to obtain the capital necessary to fund its research and development activities, a loss of any of the company's key scientists or management personnel, and other factors that are described in the "Risk Factors" section (Part II, Item 1A) of Vanda's report on Form 10-Q for the quarter ended March 31, 2007 (File No. 000-51863). No forward-looking statements can be guaranteed and actual results may differ materially from such statements. The information in this release is provided only as of the date of this release, and Vanda undertakes no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.

CONTACT: Chip Clark of Vanda Pharmaceuticals Inc., +1-240-599-4500, chip.clark@vandapharma.com

We b site: http://www.vandapharma.com/

Ticker Symbol: (NASDAQ-NMS:VNDA)

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