Vanda Pharmaceuticals Reports Second Quarter 2014 Results

WASHINGTON, Aug. 7, 2014 /PRNewswire/ -- Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA), a biopharmaceutical company focused on the development and commercialization of products for the treatment of central nervous system disorders, today announced financial and operational results for the second quarter ended June 30, 2014.

"We are encouraged by the early positive reception of HETLIOZ by patients, physicians and payors. We look forward to more patients benefiting from HETLIOZ in the coming months and years," said Mihael Polymeropoulos MD, President and CEO of Vanda Pharmaceuticals.

Key Highlights:

  • As of August 6, 2014, over 420 new patient prescriptions have been written for  HETLIOZ®(tasimelteon) in the U.S.
  • In June 2014, Vanda announced that the European Medicines Agency (EMA) accepted for evaluation the Marketing Authorization Application for oral HETLIOZ® capsules for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24).
  • In July 2014, the U.S. Patent and Trademark Office (USPTO) issued a new method of use patent for HETLIOZ®  in the treatment of Non-24.

SECOND QUARTER 2014 REPORTED RESULTS

Total revenues for the second quarter of 2014 were $10.9 million, compared to $9.1 million for the first quarter of 2014 and $8.3 million for the second quarter of 2013.  Net product revenues related to U.S. sales of HETLIOZ® in the second quarter of 2014 were $1.6 million.  

Total operating expenses for the second quarter of 2014 were $32.5 million, compared to $35.7 million for the first quarter of 2014 and $11.7 million for the second quarter of 2013.  Vanda recorded a net loss of $21.6 million for the second quarter of 2014, compared to a net loss of $26.5 million for the first quarter of 2014 and $3.4 million for the second quarter of 2013.   

Cash, cash equivalents and marketable securities (Cash) were $63.6 million as of June 30, 2014.

Year to Date June 30, 2014 Key Financial Figures(1) (2)

 


Six Months Ended






June 30,


June 30,





($ in thousands, except per share amounts)

2014


2013


  Change ($)


Change (%)









Total revenues

$         20,005


$         16,387


$           3,618


22%

Research & development  expenses

10,777


14,211


(3,434)


(24%)

Selling, general & administrative expenses

56,032


9,413


46,619


495%

Non-cash stock-based compensation (3)

2,836


2,432


404


17%

Net loss

(48,108)


(7,902)


(40,206)


(509%)









Diluted net loss per share

$            (1.42)


$            (0.28)


$            (1.14)


(407%)

 

Second Quarter 2014 Key Financial Figures(1) (2)

 


Three Months Ended






June 30,


March 31,





($ in thousands, except per share amounts)

2014


2014


  Change ($)


Change (%)









Total revenues

$         10,862


$           9,143


$           1,719


19%

Research & development  expenses

3,514


7,263


(3,749)


(52%)

Selling, general & administrative expenses

28,139


27,893


246


1%

Non-cash stock-based compensation (3)

1,443


1,393


50


4%

Net loss

(21,575)


(26,533)


4,958


19%









Diluted net loss per share

$            (0.64)


$            (0.79)


$             0.15


19%

 

Select Cash Flow Data(1)(2)  

 


Six Months Ended


June 30,


June 30,

($ in thousands)

2014


2013

Net cash provided by (used in)




Operating activities

$        (60,569)


$        (17,168)

Investing activities

10,756


31,428

Financing activities

2,043


601

 

Select Balance Sheet Data(1)

 


June 30,


December 31


June 30,

($ in thousands)

2014


2013


2013







Total Cash(4)

$         63,585


$       130,350


$       103,633

 

(1) Unaudited.

(2) Prior year amounts have been restated to reflect a change in accounting method for the attribution of stock-based compensation. Refer to footnote 3 in the quarterly report on Form 10Q for the quarter ending June 30, 2014.

(3) Non-cash stock-based compensation is allocated to both Research & development and Selling, general & administrative expenses.

(4) Total Cash reflects cash, cash equivalents and marketable securities

 

OPERATIONAL HIGHLIGHTS  

As of August 6, 2014, over 420 new patient prescriptions have been written for HETLIOZ® in the  U.S. This represents growth of approximately 90% in new prescriptions since the Company's June 4, 2014 commercial update.  HETLIOZ® was launched in the U.S. in April 2014 for the treatment of Non-24, a disorder which affects the majority of totally blind individuals. It is estimated that approximately 80,000 Americans have the disorder.

On July 22, 2014, a new method of use patent was issued by the USPTO for HETLIOZ® in the treatment of Non-24 (patent number 8,785,492).  The '492 patent is expected to expire in 2033, potentially further extending the exclusivity protection of HETLIOZ®. In the U.S., HETLIOZ® is also covered by a composition of matter patent (patent number 5,856,529), which including a Hatch-Waxman 5-year extension is currently expected to expire in 2022.  Both patents, '529 and '492, are now listed in the FDA's Orange Book.   

In June 2014, the EMA accepted for evaluation Vanda's Marketing Authorization Application for oral HETLIOZ® capsules for the treatment of Non-24.    HETLIOZ® was previously granted orphan drug designation by the European Commission for the treatment of Non-24. 

Vanda has initiated development activities for the use of HETLIOZ® in the pediatric population with Non-24, as well as in patients with Smith-Magenis syndrome.

The VLY-686, NK1 antagonist, Phase 2 study in chronic pruritus is ongoing and results are expected in mid-2015.  

2014 FINANCIAL GUIDANCE

Total 2014 operating expenses are expected to be between $110.0 and $120.0 million.  This includes intangible asset amortization expense of $2.3 million and $6.0 to $8.0 million of non-cash stock based compensation.

Full HETLIOZ® Prescribing Information can be found at: www.hetlioz.com. 

CONFERENCE CALL

Vanda has scheduled a conference call for today, Thursday, August 7, 2014, at 10:00 AM ET.  During the call, Vanda's management will discuss the second quarter 2014 financial results and other corporate activities.  Investors can call 1-800-708-4540 (domestic) and 1-847-619-6397 (international) and use passcode 37729521.  A replay of the call will be available beginning Thursday, August 7, 2014 at 12:30 PM ET and will be accessible until Thursday, August 14, 2014, at 11:59 PM ET.  The replay call-in number is 1-888-843-7419 for domestic callers and 1-630-652-3042 for international callers.  The access number is 37729521.

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.

ABOUT VANDA PHARMACEUTICALS INC.:

Vanda Pharmaceuticals Inc. is a biopharmaceutical company focused on the development and commercialization of products for the treatment of central nervous system disorders.  For more on Vanda, 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 "2014 FINANCIAL GUIDANCE" above, are "forward-looking statements" under the securities laws. Words such as, but not limited to, "believe," "expect," "anticipate," "estimate," "intend," "plan," "project," "target," "goal," "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: Vanda's ability to successfully commercialize HETLIOZ® for the treatment of Non-24 in the U.S., uncertainty as to the market awareness of Non-24 and the market acceptance of HETLIOZ®, Vanda's dependence on third-party manufacturers to manufacture HETLIOZ® in sufficient quantities and quality, Vanda's limited sales and marketing infrastructure, the regulatory status of HETLIOZ® in Europe 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, 2013 which is on file with the SEC and available on the SEC's website at www.sec.gov and Vanda's quarterly report on Form 10-Q for the quarter ended June 30, 2014 to be filed with the SEC.  In addition to the risks described above and in Vanda's annual report on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, 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 Ended


Six Months Ended






June 30,


June 30,


June 30,


June 30,

($ in thousands, except per share amounts)

2014


2013 (1)


2014


2013 (1)

















Revenues:















HETLIOZ®product revenue(2)


$

1,559


$

-


$

1,559


$

-


Fanapt®royalty revenue



1,539



1,641



3,230



3,103


Fanapt®licensing agreement (3)



7,764



6,678



15,216



13,284



Total revenues




10,862



8,319



20,005



16,387

















Operating expenses:















Cost of sales




198



-



198



-


Research and development



3,514



6,100



10,777



14,211


Selling, general and administrative


28,139



5,260



56,032



9,413


Intangible asset amortization



617



372



1,182



741



Total operating expenses



32,468



11,732



68,189



24,365

















Loss from operations




(21,606)



(3,413)



(48,184)



(7,978)


Other income




31



30



76



76

Loss before tax benefit



(21,575)



(3,383)



(48,108)



(7,902)


Tax benefit




-



-



-



-

Net loss



$

(21,575)


$

(3,383)


$

(48,108)


$

(7,902)

















Net loss per share:















Basic and diluted 



$

(0.64)


$

(0.12)


$

(1.42)


$

(0.28)

















Shares used in calculations of net loss













per share:















Basic and diluted




33,874,625



28,377,254



33,777,207



28,361,340


(1) Prior year amounts have been restated to reflect a change in accounting method for the attribution of stock-based compensation. Refer to footnote 3 in the quarterly report on Form 10Q for the quarter ending June 30, 2014.

(2) HETLIOZ® product revenue is recognized upon delivery of product shipments to the specialty pharmacies.

(3) Fanapt® licensing agreement revenue reflects the amortization of the $200 million upfront payment received from Novartis for the right to commercialize and develop Fanapt® in the U.S. and Canada.

 

VANDA PHARMACEUTICALS INC.

 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)



























($ in thousands)





June 30,
 2014


December 31,
 2013 (1)












ASSETS











Current assets:












Cash and cash equivalents



$

16,994


$

64,764



Marketable securities





46,591



65,586



Accounts receivable





2,376



2,031



Inventory






1,093



-



Prepaid expenses and other current assets



4,166



2,703



Restricted cash





-



530




Total current assets





71,220



135,614















Property and equipment, net




2,312



2,198


Intangible asset, net





11,855



5,037


Restricted cash, non-current




785



500




Total assets




$

86,172


$

143,349



























LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:











Accounts payable




$

248


$

661



Accrued liabilities





6,753



5,180



Deferred rent






234



221



Deferred revenues





31,059



26,789




Total current liabilities




38,294



32,851
















Deferred rent, non-current




2,853



2,888



Deferred revenues, non-current



44,000



63,486



Other liabilities





140



-




Total liabilities





85,287



99,225















Stockholders' equity:











Common stock





34



33



Additional paid-in capital





357,119



352,240



Accumulated other comprehensive income



10



21



Accumulated deficit





(356,278)



(308,170)




Total stockholders' equity




885



44,124




Total liabilities and stockholders' equity


$

86,172


$

143,349


(1)  Prior year amounts have been restated to reflect a change in accounting method for the attribution of stock-based compensation. Refer to footnote 3 in the quarterly report on Form 10Q for the quarter ending June 30, 2014.

 

INVESTOR CONTACT:
Chad Rubin
Vice President
The Trout Group
(646) 378-2947
crubin@troutgroup.com

 

SOURCE Vanda Pharmaceuticals Inc.



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