Vanda Pharmaceuticals Reports Third Quarter 2013 Results

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Nov 07, 2013, 06:55 ET

WASHINGTON, Nov. 7, 2013 /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 third quarter ended September 30, 2013.

Key Highlights:

On July 29, 2013 Vanda announced that the U.S. Food and Drug Administration (FDA) accepted the filing of and granted priority review classification to Vanda's New Drug Application (NDA) for tasimelteon, a circadian regulator for the treatment of Non-24-Hour Disorder (Non-24) in the totally blind.
The FDA has scheduled a Peripheral and Central Nervous System Drugs Advisory Committee Meeting on November 14, 2013, for the review of Vanda's NDA for tasimelteon, proposed trade name HETLIOZ™, for the treatment of Non-24.
The FDA determined the action target date under the Prescription Drug User Fee Act (PDUFA-V) for tasimelteon to be January 31, 2014.
On August 7, 2013 Vanda completed the public offering of 4.68 million shares of common stock resulting in net proceeds of $48.6 million.
Vanda recorded third quarter 2013 revenue of $8.7 million including royalties of $2.0 million. Fanapt® prescriptions, as reported by IMS, were approximately 43,600 for the third quarter of 2013. This represents a 13% increase over third quarter 2012 prescriptions and a 5% increase over second quarter 2013 prescriptions.

THIRD QUARTER 2013 REPORTED RESULTS

Total revenues for the third quarter of 2013 were $8.7 million, compared to $8.3 million for the same period in 2012. Third quarter 2013 revenues included $2.0 million in Fanapt^® royalties received from Novartis as compared to royalties of $1.5 million for the third quarter of 2012.

Total operating expenses for the third quarter of 2013 were $14.1 million, compared to $13.7 million for the third quarter of 2012. Third quarter 2013 research and development expenses of $8.0 million includes $3.5 million in milestones associated with the FDA acceptance of the tasimelteon filing. The primary driver of the lower research and development expenses in the third quarter of 2013 as compared to $10.2 million in the third quarter of 2012 was the completion of the tasimelteon Non-24 and Major Depressive Disorder efficacy studies. General and administrative expenses of $5.7 million for the third quarter of 2013 were $2.6 million higher than the third quarter of 2012 and reflect the increased commercial activity in preparation for a potential tasimelteon commercial launch in the United States.

Vanda recorded a net loss of $5.4 million for the third quarter of 2013, compared to a net loss of $5.3 million for the same period in 2012. Diluted net loss per share for the third quarter of 2013 was $0.17, compared to a diluted net loss per share of $0.19 for the third quarter of 2012.

Cash, cash equivalents and marketable securities (Cash) increased by $38.5 million to $142.2 million as of September 30, 2013, primarily as a result of the sale of common stock in Vanda's public offering in August 2013.

Year to Date September 30, 2013 Key Financial Figures¹

	Nine Months Ended
	September 30	September 30
($ in thousands, except per share amounts)	2013	2012	Change ($)	Change (%)

Total revenues	$ 25,096	$ 24,807	$ 289	1%
Research & development expenses	21,968	34,829	(12,861)	(37%)
General & administrative expenses	14,743	10,657	4,086	38%
Non-cash stock-based compensation²	3,321	3,171	150	5%
Net loss	(12,632)	(21,295)	8,663	41%

Diluted net loss per share	$ (0.43)	$ (0.75)	$ 0.32	43%



Third Quarter 2013 Key Financial Figures¹

	Three Months Ended
	September 30	June 30
($ in thousands, except per share amounts)	2013	2013	Change ($)	Change (%)

Total revenues	$ 8,709	$ 8,319	$ 390	5%
Research & development expenses	8,026	5,982	2,044	34%
General & administrative expenses	5,711	5,074	637	13%
Non-cash stock-based compensation²	1,539	830	709	85%
Net loss	(5,380)	(3,079)	(2,301)	(75%)

Diluted net loss per share	$ (0.17)	$ (0.11)	$ (0.06)	(55%)


Select Cash Flow Data¹
	Nine Months Ended
	September 30	September 30
($ in thousands)	2013	2012
Net cash provided by (used in)
Operating activities	$ (27,439)	$ (31,068)
Investing activities	31,421	47,660
Financing activities	49,418	-


Select Balance Sheet Data¹

	September 30	June 30	September 30
($ in thousands)	2013	2013	2012

Total cash and marketable securities	$ 142,172	$ 103,633	$ 134,404

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

OPERATIONAL HIGHLIGHTS

On July 29, 2013, Vanda announced that the FDA accepted the filing of and granted a priority review classification to Vanda's NDA for tasimelteon, a circadian regulator for the treatment of Non-24 in the totally blind. Currently, there is no approved treatment for Non-24 and tasimelteon has the potential to address this unmet medical need. The FDA has scheduled a Peripheral and Central Nervous System Drugs Advisory Committee Meeting on November 14, 2013, for the review of Vanda's NDA for tasimelteon, proposed trade name HETLIOZ™, for the treatment of Non-24. The FDA determined the action target date under the Prescription Drug User Fee Act (PDUFA-V) for tasimelteon to be January 31, 2014.

Vanda recorded third quarter 2013 revenue of $8.7 million including $6.7 million in licensing revenue related to the amortization of the upfront payment received from Novartis for U.S. and Canadian commercial rights to Fanapt® and Fanapt® royalties of $2.0 million. Fanapt® prescriptions, as reported by IMS, were approximately 43,600 for the third quarter of 2013. This represents a 13% increase over third quarter 2012 prescriptions and a 5% increase versus second quarter 2013 prescriptions.

2013 FINANCIAL GUIDANCE

2013 expenses are expected to reflect lower research and development spending as compared to 2012 and an increase in commercial spending. Reflecting the recent public offering and year to date expenditures, Vanda now expects that it will end the year with between $130.0 and $135.0 million in Cash. Total 2013 operating expenses are expected to be between $50.0 and $55.0 million and decrease in Cash, excluding the impact of the recent public offering, is expected to be between $35.0 and $40.0 million.

CONFERENCE CALL

Vanda has scheduled a conference call for today, Thursday, November 7, 2013, at 10:00 AM ET. During the call, Vanda's management will discuss the third quarter 2013 financial results and other corporate activities. Investors can call 1-888-895-5271 (domestic) and 1-847-619-6547 (international) and use passcode 35919679. A replay of the call will be available beginning Thursday, November 7, 2013 at 12:00 PM ET and will be accessible until Thursday, November 14, 2013, at 5:00 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 35919679.

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 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, or any delay in obtaining, regulatory approval for tasimelteon for the treatment of Non-24-Hour Disorder or to comply with ongoing regulatory requirements; the costs and effects of current or potential litigation 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, 2012 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 September 30, 2013 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, 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				Nine Months Ended
			September 30		September 30		September 30		September 30
($ in thousands, except per share amounts)			2013		2012		2013		2012

Revenues:
	Licensing agreement		$	6,753	$	6,753	$	20,037	$	20,037
	Royalty revenue			1,956		1,535		5,059		4,770
		Total revenues		8,709		8,288		25,096		24,807

Operating expenses:
	Research and development			8,026		10,159		21,968		34,829
	General and administrative			5,711		3,147		14,743		10,657
	Intangible asset amortization			377		377		1,118		1,118
		Total operating expenses		14,114		13,683		37,829		46,604

Loss from operations				(5,405)		(5,395)		(12,733)		(21,797)
	Other income			25		69		101		502
Loss before tax benefit				(5,380)		(5,326)		(12,632)		(21,295)
	Tax benefit			-		-		-		-
Net loss			$	(5,380)	$	(5,326)	$	(12,632)	$	(21,295)

Net loss per share:
	Basic		$	(0.17)	$	(0.19)	$	(0.43)	$	(0.75)
	Diluted		$	(0.17)	$	(0.19)	$	(0.43)	$	(0.75)

Shares used in calculations of net loss
	per share:
	Basic			31,332,993		28,226,743		29,363,162		28,226,743
	Diluted			31,332,993		28,226,743		29,363,162		28,226,743

VANDA PHARMACEUTICALS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)


($ in thousands)				September 30, 2013		December 31, 2012

ASSETS
	Current assets:
		Cash and cash equivalents		$	142,172	$	88,772
		Marketable securities			-		31,631
		Accounts receivable			1,956		1,168
		Prepaid expenses and other current assets			2,412		3,967
		Restricted cash, current			530		430
			Total current assets		147,070		125,968

	Property and equipment, net				2,106		2,348
	Intangible asset, net				5,414		6,532
	Restricted cash, non-current				500		600
			Total assets	$	155,090	$	135,448


LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities:
		Accounts payable		$	369	$	287
		Accrued liabilities			4,532		5,187
		Deferred rent, current			215		-
		Deferred revenues, current			26,789		26,789
			Total current liabilities		31,905		32,263

		Deferred rent, non-current			2,945		3,005
		Deferred revenues, non-current			70,238		90,275
			Total liabilities		105,088		125,543

	Stockholders' equity:
		Common stock			33		28
		Additional paid-in capital			353,708		300,974
		Accumulated other comprehensive income			-		10
		Accumulated deficit			(303,739)		(291,107)
			Total stockholders' equity		50,002		9,905

			Total liabilities and stockholders' equity	$	155,090	$	135,448