Vanda Pharmaceuticals Reports Third Quarter 2012 Results

           Vanda Pharmaceuticals Reports Third Quarter 2012 Results

PR Newswire

WASHINGTON, Nov. 7, 2012

WASHINGTON, Nov. 7, 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 third
quarter and nine months ended September 30, 2012.

Key Highlights:

  oThe tasimelteon Non-24-Hour Disorder (Non-24) program continues towards
    the goal of a projected mid-2013 New Drug Application (NDA) filing with
    the U.S. Food and Drug Administration (FDA).
  oThe SET and RESET Phase III efficacy studies for Non-24 are both fully
    enrolled. Vanda expects to report top-line results for the SET study by
    the end of 2012 and to report top-line results for the RESET study in the
    first quarter of 2013.
  oThe tasimelteon MAGELLAN Phase IIb/III efficacy study for Major Depressive
    Disorder (MDD) is fully enrolled and Vanda expects to report top-line
    results in the first quarter of 2013.
  oVanda recorded third quarter 2012 revenue of $8.3 million including
    Fanapt® royalties of $1.5 million. Fanapt® prescriptions, as reported by
    IMS, were approximately 38,500 for the third quarter of 2012. This
    represents a 3% increase over second quarter 2012 prescriptions and a 15%
    increase over third quarter 2011 prescriptions. 

THIRD QUARTER 2012 REPORTED RESULTS
Total revenues for the third quarter of 2012 were $8.3 million, compared to
$8.0 million for the same period in 2011. Third quarter 2012 revenues
included $1.5 million in Fanapt® royalties received from Novartis as compared
to royalties of $1.2 million for the third quarter of 2011. 

Total operating expenses for the third quarter of 2012 were $13.7 million,
compared to $11.3 million for the third quarter of 2011. The higher expenses
were primarily due to the ongoing support of the tasimelteon Non-24 and MDD
clinical studies.

Vanda recorded a net loss of $5.3 million for the third quarter of 2012,
compared to a net loss of $3.1 million for the third quarter of 2011. Diluted
net loss per share for the third quarter of 2012 was $0.19, compared to
diluted net loss per share of $0.11 for the third quarter of 2011.

Year to date September 30, 2012 Key Financial Figures^1

                              

                              Nine Months Ended
                              September 30  September 30
(in thousands, except per     2012          2011           Change ($)  Change
share amounts)                                                          (%)
Total revenues                $         $         $        8%
                              24,807        22,900        1,907
Research & development       34,829        18,440        16,389        89%
expenses
General & administrative      10,657        8,141         2,516         31%
expenses
Non-cash stock-based          3,171         4,183         (1,012)       (24%)
compensation^2
Loss before tax benefit       (21,295)      (4,437)       (16,858)      (380%)
Tax benefit                   -             (158)         158           100%
Net loss                      (21,295)      (4,279)       (17,016)      (398%)
Diluted net loss per share    $        $        $        (400%)
                              (0.75)       (0.15)       (0.60)

Third Quarter 2012 Key Financial Figures^1

                               

                               Three Months Ended
                               September 30  June 30
(in thousands, except per      2012          2012          Change ($)  Change
share amounts)                                                          (%)
Total revenues                 $        $       $        (1%)
                               8,288         8,378          (90)
Research & development        10,159        12,490       (2,331)       (19%)
expenses
General & administrative       3,147         3,601        (454)         (13%)
expenses
Non-cash stock-based           576           1,193        (617)         (52%)
compensation^2
Loss before tax benefit        (5,326)       (8,007)      2,681         33%
Tax benefit                    -             -            -
Net loss                       (5,326)       (8,007)      2,681         33%
Diluted net loss per share     $        $       $        32%
                               (0.19)       (0.28)       0.09

Select Cash Flow Data^1

                               Nine Months Ended
                               September 30  September 30
(in thousands)                 2012          2011
Net cash provided by (used in)
Operating activities           $ (31,068)    $ (16,053)
Investing activities           47,660        33,815
Financing activities           -             5



Select Balance Sheet Data^1

                                     September 30  June 30    September 30
(in thousands)                       2012          2012       2011
Total cash and marketable securities $ 134,404     $ 144,701  $ 180,459



(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 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, and
while no agreement has been reached with the agency, the FDA has suggested
that Vanda present its Non-24 study results to further the discussions. The
SET and RESET Phase III efficacy studies for Non-24 are both fully enrolled.
Vanda expects to report top-line results for the SET study by the end of 2012
and to report top-line results for the RESET study in the first quarter of
2013.

In October 2012, Vanda announced that tasimelteon was shown for the first time
to restore daily cortisol rhythms in totally blind patients suffering from
Non-24. Tasimelteon's effect has now been demonstrated on both melatonin and
cortisol circadian rhythms, which further supports its potential to reset the
master body clock. This observation was made during an open-label screening
segment of the RESET study. Tasimelteon has the potential to be the first
pharmaceutical product to address the circadian dyssynchrony which is
definitional for Non-24.

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

The review of Vanda's Marketing Authorization Application for oral iloperidone
tablets in the European Union is ongoing. Vanda is preparing for an expected
oral hearing in November 2012 as it continues to evaluate its European
strategy. In August 2012, Fanapt™ was granted market approval in Israel for
the treatment of schizophrenia. In November 2012, Vanda was notified by its
distribution partner, Biotoscana Farma S.A., that Fanapt™ had been granted
market approval in Argentina for the treatment of schizophrenia. 

Vanda recorded third quarter 2012 revenue of $8.3 million including Fanapt®
royalties of $1.5 million. Fanapt® prescriptions, as reported by IMS, were
approximately 38,500 for the third quarter of 2012. This represents a 3%
increase over second quarter 2012 prescriptions and a 15% increase over third
quarter 2011 prescriptions. In October 2012, Novartis discontinued
development of the long-acting injectable formulation of iloperidone. Vanda
has the right to develop and commercialize all formulations of iloperidone in
markets outside the United States and Canada.

CONFERENCE CALL
Vanda has scheduled a conference call for today, Wednesday, November 7, 2012,
at 10:00 AM ET. During the call, Vanda's management will discuss the third
quarter 2012 results and other corporate activities. Investors can call
800-299-7089 (domestic) and 617-801-9714 (international) and use passcode
66514556. A replay of the call will be available beginning Wednesday,
November 7, 2012 at 12:00 PM ET and will be accessible until Wednesday,
November 14, 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 34968750.

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
December 6, 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. 

Company Contact:
Cristina Murphy
Senior Communications Manager
Vanda Pharmaceuticals Inc.
(202) 734-3414
cristina.murphy@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:
the inability to reach agreement with the FDA regarding Vanda's regulatory
approval strategy or proposed path to approval for tasimelteon; the failure of
Vanda's clinical trials to demonstrate the safety and/or efficacy of
tasimelteon in the treatment of Non-24-Hour Disorder or Major Depressive
Disorder; 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 and its partners' 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
revenues, costs, expenses and liabilities; 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          Nine Months Ended
                        September 30  September 30  September 30  September 30
(in thousands, except   2012          2011          2012          2011
for per share amounts)
Revenues:
     Licensing          $ 6,753       $ 6,753       $ 20,037      $ 20,037
     agreement
     Royalty revenue      1,535         1,216         4,770         2,863
             Total        8,288         7,969         24,807        22,900
             revenues
Operating expenses:
     Research and         10,159        8,174         34,829        18,440
     development
     General and          3,147         2,711         10,657        8,141
     administrative
     Intangible asset     377           377           1,118         1,118
     amortization
             Total
             operating    13,683        11,262        46,604        27,699
             expenses
Loss from operations      (5,395)       (3,293)       (21,797)      (4,799)
     Other income         69            106           502           362
Loss before tax           (5,326)       (3,187)       (21,295)      (4,437)
benefit
     Tax benefit          -             (113)         -             (158)
Net loss                $ (5,326)     $ (3,074)     $ (21,295)    $ (4,279)
Net loss per share:
     Basic              $ (0.19)      $ (0.11)      $ (0.75)      $ (0.15)
     Diluted            $ (0.19)      $ (0.11)      $ (0.75)      $ (0.15)
Shares used in
calculation of net loss
     per share:
     Basic               28,226,743    28,107,363    28,226,743    28,104,749
     Diluted              28,226,743    28,107,363    28,226,743    28,104,749

VANDA PHARMACEUTICALS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)                            September 30,      December 31, 2011
                                          2012
ASSETS
 Current assets:
  Cash and cash equivalents               $    104,515       $    87,923
  Marketable securities, current               29,889             60,961
  Accounts receivable                          1,535              1,618
  Inventory                                    161                -
  Prepaid expenses and other current           3,323              2,999
  assets
  Restricted cash, current                     430                -
        Total current assets                   139,853            153,501
 Marketable securities, non-current            -                  19,012
 Property and equipment, net                   2,446              964
 Other assets, non-current                     -                  84
 Intangible asset, net                         6,909              8,027
 Restricted cash, non-current                  600                1,030
        Total assets                      $    149,808       $    182,618
LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
  Accounts payable                        $    1,090         $    996
  Accrued liabilities                          6,753              3,381
  Deferred rent, current                       -                  453
  Deferred revenues, current                   26,789             26,789
        Total current liabilities              34,632             31,619
 Non-current liabilities:
  Deferred rent, non-current                   2,797              461
  Deferred revenues, non-current               97,027             117,064
        Total liabilities                      134,456            149,144
 Stockholders' equity:
  Common stock                                 28                 28
  Additional paid-in capital                   300,039            296,868
  Accumulated other comprehensive income       23                 21
  Accumulated deficit                          (284,738)          (263,443)
        Total stockholders' equity             15,352             33,474
        Total liabilities and             $    149,808       $    182,618
        stockholders' equity



SOURCE Vanda Pharmaceuticals Inc.

Website: http://www.vandapharma.com
 
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