Vanda Pharmaceuticals Reports Second Quarter 2012 Results

News provided by

Aug 02, 2012, 07:00 ET

WASHINGTON, Aug. 2, 2012 /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 and six months ended June 30, 2012.

Key Highlights:

The tasimelteon Non-24-Hour Disorder (Non-24) program continues to advance towards the goal of a projected mid-2013 New Drug Application (NDA) filing with the U.S. Food and Drug Administration (FDA).
The SET Phase III efficacy study for Non-24 is fully enrolled and Vanda expects to report top-line results by the end of 2012. Vanda expects to report top-line results from the RESET Phase III efficacy study in the first quarter of 2013.
The tasimelteon MAGELLAN Phase IIb/III efficacy study for Major Depressive Disorder (MDD) is ongoing and Vanda expects to report top-line results in the first half of 2013.
Vanda recorded second quarter 2012 revenue of $8.4 million including royalties of $1.7 million. Fanapt® prescriptions, as reported by IMS, reached 37,000 for the second quarter of 2012. This represents a 5% increase over first quarter 2012 prescriptions and a 24% increase over second quarter 2011 prescriptions.

SECOND QUARTER 2012 REPORTED RESULTS
Total revenues for the second quarter of 2012 were $8.4 million, compared to $7.4 million for the same period in 2011. Second quarter 2012 revenues included $1.7 million in Fanapt® royalties received from Novartis as compared to royalties of $0.8 million for the second quarter of 2011.

Total operating expenses for the second quarter of 2012 were $16.5 million, compared to $8.9 million for the second quarter of 2011. The primary drivers of the higher expenses in the second quarter of 2012 were the ongoing support of the tasimelteon Non-24 and MDD clinical studies and the $1 million upfront payment to Eli Lilly & Company in connection with the licensing of VLY-686, a Phase II ready NK-1R antagonist.

Vanda recorded a net loss of $8.0 million for the second quarter of 2012, compared to a net loss of $1.3 million for the second quarter of 2011. Diluted net loss per share for the second quarter of 2012 was $0.28, compared to diluted net loss per share of $0.05 for the second quarter of 2011.

Year to date June 30, 2012 Key Financial Figures¹


	Six Months Ended
(in thousands, except per share amounts)	June 30 2012	June 30 2011	Change ($)	Change (%)

Total revenues	$ 16,519	$ 14,931	$ 1,588	11%
Research & development expenses	24,670	10,266	14,404	140%
General & administrative expenses	7,510	5,430	2,080	38%
Non-cash stock-based compensation²	2,595	2,929	(334)	(11%)
Loss before tax benefit	(15,969)	(1,250)	(14,719)	NA
Tax benefit	-	(45)	45	100%
Net loss	(15,969)	(1,205)	(14,764)	NA

Diluted net loss per share	$ (0.57)	$ (0.04)	$ (0.53)	NA

Second Quarter 2012 Key Financial Figures¹

	Three Months Ended
(in thousands, except per share amounts)	June 30 2012	March 31 2012	Change ($)	Change (%)

Total revenues	$ 8,378	$ 8,141	$ 237	3%
Research & development expenses	12,490	12,180	310	3%
General & administrative expenses	3,601	3,909	(308)	(8%)
Non-cash stock-based compensation²	1,193	1,402	(209)	(15%)
Loss before tax benefit	(8,007)	(7,962)	(45)	(1%)
Tax benefit	-	-	-
Net loss	(8,007)	(7,962)	(45)	(1%)

Diluted net loss per share	$ (0.28)	$ (0.28)	$ -	0%

Select Cash Flow Data¹

	Six Months Ended
	June 30	June 30
(in thousands)	2012	2011
Net cash provided by (used in)
Operating activities	$ (20,904)	$ (8,883)
Investing activities	27,369	16,710
Financing activities	-	-

Select Balance Sheet Data¹

	June 30	March 31	June 30
(in thousands)	2012	2012	2011

Total cash and marketable securities	$ 144,701	$ 157,250	$ 188,399

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

OPERATIONAL HIGHLIGHTS
The tasimelteon Non-24 program continues to advance towards the goal of a projected mid-2013 NDA filing with the FDA. Vanda is in continuing discussions with the FDA to confirm the path and requirements for this regulatory submission. The SET Phase III efficacy study is fully enrolled and Vanda expects to report top-line results by the end of 2012. Vanda expects to report top-line results from the RESET Phase III efficacy study in the first quarter of 2013.

Vanda presented new data from the tasimelteon Non-24 program at SLEEP, the annual meeting of the Associated Professional Sleep Societies (APSS) and the Society for Research on Biological Rhythm (SRBR) annual conference. At APSS, data was reported that showed seventy percent of totally blind individuals with sleep complaints, who enrolled in the ongoing SET study, suffered from Non-24 disorder. This data confirmed previous literature that there is a high prevalence of Non-24 in the totally blind population.

The tasimelteon MAGELLAN Phase IIb/III efficacy study for MDD is ongoing and Vanda expects to report top-line results in the first half of 2013.

The review of Vanda's Marketing Authorization Application (MAA) for oral iloperidone tablets in the European Union is ongoing. In July 2012, the Committee for Medicinal Products for Human Use (CHMP) provided Vanda with the Day 180 List of Outstanding Issues. Vanda expects to be granted an extension to reply by mid-October 2012 and will prepare to participate in an oral hearing in November 2012 as it continues to evaluate its European strategy.

Second quarter 2012 sales of Fanapt® were reported by Novartis to be $17.0 million. Fanapt® prescriptions, as reported by IMS, reached 37,000 for the second quarter of 2012. This represents a 5% increase over first quarter 2012 prescriptions and a 24% increase over second quarter 2011 prescriptions.

CONFERENCE CALL
Vanda has scheduled a conference call for today, Thursday, August 2, 2012, at 10:00 AM ET. During the call, Vanda's management will discuss the second quarter 2012 results and other corporate activities. Investors can call 866-783-2141 (domestic) and 857-350-1600 (international) and use passcode 78268423. A replay of the call will be available beginning Thursday, August 2, 2012 at 12:00 PM ET and will be accessible until Thursday, August 9, 2012, 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 45753237.

The conference call will be broadcast simultaneously on Vanda's website, http://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, through September 1, 2012.

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 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," "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 failure to obtain regulatory approval for its products, product candidates or partnered products or to comply with ongoing regulatory requirements; 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; 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, 2011 which is on file with the SEC and available on the SEC's website at www.sec.gov. 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 Ended				Six Months Ended
(in thousands, except for per share amounts)			June 30 2012		June 30 2011		June 30 2012		June 30 2011

Revenues:
	Licensing agreement		$	6,678	$	6,678	$	13,284	$	13,284
	Royalty revenue			1,700		752		3,235		1,647
		Total revenues		8,378		7,430		16,519		14,931

Operating expenses:
	Research and development			12,490		5,999		24,670		10,266
	General and administrative			3,601		2,572		7,510		5,430
	Intangible asset amortization			372		372		741		741
		Total operating expenses		16,463		8,943		32,921		16,437

Loss from operations				(8,085)		(1,513)		(16,402)		(1,506)
	Other income			78		121		433		256
Loss before tax benefit				(8,007)		(1,392)		(15,969)		(1,250)

	Tax benefit			-		(51)		-		(45)

Net loss			$	(8,007)	$	(1,341)	$	(15,969)	$	(1,205)

Net loss per share:
	Basic		$	(0.28)	$	(0.05)	$	(0.57)	$	(0.04)
	Diluted		$	(0.28)	$	(0.05)	$	(0.57)	$	(0.04)

Shares used in calculation of net loss
	per share:
	Basic			28,226,743		28,103,441		28,226,743		28,102,774
	Diluted			28,226,743		28,103,441		28,226,743		28,102,774



VANDA PHARMACEUTICALS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)


(in thousands)				June 30, 2012		December 31, 2011

ASSETS
	Current assets:
		Cash and cash equivalents		$	94,388	$	87,923
		Marketable securities, current			50,313		60,961
		Accounts receivable			1,700		1,618
		Inventory			165		-
		Prepaid expenses, deposits and other current assets			3,423		2,999
			Total current assets		149,989		153,501

	Marketable securities, non-current				-		19,012
	Property and equipment, net				2,533		964
	Other assets, non-current				-		84
	Intangible asset, net				7,286		8,027
	Restricted cash				1,030		1,030
			Total assets	$	160,838	$	182,618


LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities:
		Accounts payable		$	1,689	$	996
		Accrued liabilities			5,908		3,381
		Deferred rent, current			-		453
		Deferred revenues, current			26,789		26,789
			Total current liabilities		34,386		31,619

	Non-current liabilities:
		Deferred rent, non-current			2,588		461
		Deferred revenues, non-current			103,780		117,064
			Total liabilities		140,754		149,144

	Stockholders' equity:
		Common stock			28		28
		Additional paid-in capital			299,463		296,868
		Accumulated other comprehensive income			5		21
		Accumulated deficit			(279,412)		(263,443)
			Total stockholders' equity		20,084		33,474

			Total liabilities and stockholders' equity	$	160,838	$	182,618