Vanda, Titan Shares Surge on Schizophrenia Study
Shares of Vanda Pharmaceuticals Inc. (VNDA) and Titan Pharmaceuticals Inc. (TTP) surged after a study showed an experimental drug to treat schizophrenia worked better than a placebo and comparable to Pfizer Inc.'s Geodon.
Shares of Rockville, Maryland-based Vanda jumped 69 percent, the most since the company first offered stock to the public in April. Titan soared 54 percent on the news.
Iloperidone belongs to a class that includes Eli Lilly (LLY) & Co.'s Zyprexa and Johnson & Johnson (JNJ)'s Risperdal, the two top-selling schizophrenia drugs. A key study finding was the greater reduction in symptoms for certain patients taking iloperidone, Vanda said today. It hopes to profit by targeting patients with a specific genetic profile to determine those who may better metabolize it and be shielded from certain side effects.
While iloperidone ``works comparably to the other drugs, the response is even greater in those who have the genetic marker,'' said Chief Executive Officer Mihael Polymeropoulos in a telephone interview today. ``We've developed additional genetic markers to identify what doses to use in each patient.''
The drug also appears to have ``a very mild profile'' for weight gain and Parkinson's disease-like tremor, Polymeropoulos said. The four-week study examined 604 patients suffering from schizophrenia.
Shares of Vanda, which has no drug on the market, climbed $10.65 to $26.15 at the close of Nasdaq Stock Market composite trading and as much as 85 percent earlier. Titan added $1.28 to $3.65 on the American Stock Exchange after rising as much as 73 percent.
Vanda's biggest shareholders are Care Capital II LLC, with a 12 percent stake, and Domain Partners, with 11.6 percent; both sold shares last month, according to data compiled by Bloomberg. Oppenheimer Fund, with 8.8 percent, bought shares in September.
Atypical antipsychotics such as Zyprexa, Risperdal and Geodon carry the FDA's most stringent warning about side effects. The drugs may cause weight gain and metabolic changes associated with increased risk of diabetes and high cholesterol, as well as certain muscle-control disorders.
Iloperidone and Geodon showed no difference in effectiveness during the trial, Chip Clark, Vanda's chief business officer, said in a phone interview today. The frequency of side effects was ``identical,'' he said. Clark wouldn't comment on the relative magnitude of the adverse events for each drug.
``We haven't completed the analysis'' of the adverse events, he said.
In the study, 25 percent of subjects received a placebo, 25 percent got Geodon, and 50 percent got Vanda's drug, according to Don Budwick, an outside spokesman for the company.
Vanda founder Polymeropoulos headed the pharmacogenetics department at Basel, Switzerland-based Novartis AG (NOVN) from 1998 to 2003. Part of his strategy since he left there has been to identify compounds discontinued for development to see whether they could be applied to other uses. Prior to Novartis, he headed a division of the National Human Genome Research Institute.
Vanda acquired the rights to iloperidone from Titan's sub-licensee, Novartis, Titan said in a separate statement today. The companies have agreed that Titan, based in South San Francisco, California, will receive a royalty of 8 percent to 10 percent on worldwide sales of iloperidone.
Vanda said today that iloperidone performed well enough in human trials for the company to apply for U.S. approval late next year.
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