Vanda Pharmaceuticals is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. Vanda commenced its operations in 2003 and their product portfolio includes:
- HETLIOZ® (tasimelteon), a product for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24), was approved by the U.S. Food and Drug Administration (FDA) in January 2014 and launched commercially in the U.S. in April 2014. In July 2015, the European Commission (EC) granted centralized marketing authorization with unified labeling for HETLIOZ® for the treatment of Non-24 in totally blind adults. HETLIOZ® was commercially launched in Germany in August 2016. HETLIOZ® has potential utility in a number of other circadian rhythm disorders and is presently in clinical development for the treatment of Pediatric Non-24, Jet Lag Disorder and Smith-Magenis Syndrome (SMS).
- Fanapt® (iloperidone), a product for the treatment of schizophrenia, the oral formulation of which was approved by the FDA in May 2009 and launched commercially in the U.S. by Novartis Pharma AG (Novartis) in January 2010. Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt® franchise to us on December 31, 2014. Additionally, our distribution partners launched Fanapt® in Israel and Mexico in 2014. Fanapt® has potential utility in a number of other disorders. An assessment of new Fanapt® clinical opportunities is ongoing.
- Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis and the treatment of gastroparesis.
- VTR-297 (formerly Trichostatin A), a small molecule histone deacetylase (HDAC) inhibitor.
- VQW-765 (formerly AQW-051), a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.
- Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors.
Vanda Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of products for the treatment of central nervous system disorders. The company's marketed products include HETLIOZ (tasimelteon), a product for the treatment of non-24-hour sleep-wake disorders; and Fanapt (iloperidone), a product for the treatment of schizophrenia. Its products also include Tradipitant (VLY-686), a small molecule neurokinin-1 receptor antagonist that is under the clinical development for the treatment of chronic pruritus in atopic dermatitis and gastroparesis; VTR-297, a small molecule histone deacetylase inhibitor, which is in development for the treatment of hematologic malignancies; and VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. In addition, the company is developing cystic fibrosis transmembrane conductance regulator activators and inhibitors. It markets its products in the United States, Canada, Europe, Israel, and Mexico. Vanda Pharmaceuticals Inc. was incorporated in 2002 and is headquartered in Washington, the District of Columbia.
(Summary) (Company) (Chart)
| 11 March 2018 Price $19.90 1yr Target $20.67 Analysts 6 Dividend $0.00 Payout Ratio 0.00% 1yr Cap Gain 3.86% Yield 0.00% 1yr Tot Return 3.86% P/E --- PEG --- Beta 1.01 | EPS (ttm) $-0.35 EPS next yr $0.72 Forward P/E 27.64 EPS next 5yr 15.70% 1yr Price Support $11.30 Market Cap $873.81 Mil Revenues $165.10 Mil Earnings $-15.60 Mil Profit Margin --- Quick Ratio 2.40 Current Ratio 2.40 Debt/Equity 0.00 | 1yr RevGR % 3yr RevGR % 5yr RevGR % 1yr EarnGR % 3yr EarnGR % 5yr EarnGR % 1yr DivGR % 3yr DivGR % 5yr DivGR % ROA -7.50% ROE -11.90% |
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Products
Hetlioz
In January 2014, HETLIOZ® was approved in the U.S. for the treatment of Non-24. Non-24 is a serious, rare and chronic circadian rhythm disorder characterized by the inability to entrain (synchronize) the master body clock with the 24-hour day-night cycle. HETLIOZ is the first FDA approved treatment for Non-24. HETLIOZ is a melatonin agonist of the human MT1 and MT2 receptors, with greater specificity for MT2. These receptors are thought to be involved in the control of circadian rhythms. HETLIOZ is believed to reset the master body clock in the suprachiasmatic nucleus, located in the hypothalamus, resulting in the entrainment and alignment of the body’s melatonin and cortisol rhythms to the 24-hour day-night cycle. HETLIOZ was launched commercially in the U.S. in April 2014. In addition, in July 2015, the EC granted centralized marketing authorization with unified labeling for HETLIOZ for the treatment of Non-24 in totally blind adults and included post-marketing commitments related to a pediatric investigation plan. This authorization is valid in the 28 countries that are members of the European Union (E.U.), as well as European Economic Area members Iceland, Liechtenstein and Norway. HETLIOZ was launched commercially in Germany in August 2016.
In January 2010, the FDA granted orphan drug designation status for HETLIOZ in Non-24 in blind individuals. The FDA grants orphan drug designation to drugs that may provide significant therapeutic advantage over existing treatments and target conditions affecting 200,000 or fewer U.S. patients per year. Orphan drug designation provides potential financial and regulatory incentives, including study design assistance, tax credits, waiver of FDA user fees, and up to seven years of market exclusivity upon marketing approval. In February 2011, the European Medicines Agency (EMA) designated HETLIOZ as an orphan medicinal product for the same indication.
Non-24 affects a majority of totally blind individuals, or approximately 80,000 people in the U.S. Blind individuals who develop Non-24 lack the light sensitivity necessary to synchronize the master body clock in the brain with the 24-hour day-night cycle. In sighted individuals, decreased exposure or sensitivity to light and social and physical activity cues may contribute to a free-running circadian rhythm. With the high frequency of mental disorders involving social isolation and cases of Non-24 developing after a change in sleep habits, behavioral factors in combination with physiological tendency may precipitate and perpetuate this disorder in sighted individuals. Hospitalized individuals with neurological and psychiatric disorders can become insensitive to social cues, predisposing them to the development of Non-24.
Most people have a master body clock that naturally runs longer than 24-hours and light is the primary environmental cue that resets it to 24 hours each day. Individuals with Non-24 have a master body clock that is not reset, and continually delays, resulting in prolonged periods of misalignment between their circadian rhythms and the 24-hour day-night cycle, including the timing of melatonin and cortisol secretion. As a result of this misalignment, Non-24 is associated with significant disruption of the sleep-wake cycle and impairments in social and occupational functioning, and marked subjective distress. Individuals with Non-24 cycle in-and out-of phase and suffer from disrupted nighttime sleep patterns and/or excessive daytime sleepiness.
While there are no FDA or EC approved treatments for Non-24 other than HETLIOZ, there are a number of drugs approved and prescribed for patients with sleep disorders. The most commonly prescribed drugs are hypnotics.
Fanapt
Fanapt® is a product for the treatment of schizophrenia. In May 2009, the FDA granted U.S. marketing approval of Fanapt for the acute treatment of schizophrenia in adults. In October 2009, the Company entered into an amended and restated sublicense agreement with Novartis. They had originally entered into a sublicense agreement with Novartis in June 2004 pursuant to which we obtained certain worldwide exclusive licenses from Novartis relating to Fanapt. Pursuant to the amended and restated sublicense agreement, Novartis had exclusive commercialization rights to all formulations of Fanapt in the U.S. and Canada. In January 2010, Novartis launched Fanapt in the U.S. On December 31, 2014, Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt franchise to Vanda as part of a settlement agreement. In June 2015, Vanda announced positive results from REPRIEVE, a Phase III long-term maintenance study that was conducted by Novartis. In May 2016, the FDA approved a sNDA for Fanapt for the maintenance treatment of schizophrenia in adults.
In July 2017, the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion recommending against approval of Fanaptum (oral iloperidone tablets) for the treatment of schizophrenia in adult patients in the E.U. The CHMP was of the opinion that the benefits of Fanaptum did not outweigh its risks and recommended against marketing authorization. The negative opinion was upheld upon appeal in November 2017.
Pursuant to a settlement agreement with Novartis, the Company reacquired the U.S. and Canadian rights to the long-acting injectable (depot) formulation of Fanapt and are evaluating the commercial opportunity around the depot formulation.
Tradipitant (VLY-686)
Tradipitant is a small molecule NK-1R antagonist that the Company licensed from Eli Lilly and Company (Lilly) in April 2012. NK-1R antagonists have been evaluated in a number of indications including chemotherapy-induced nausea and vomiting, post-operative nausea and vomiting, gastroparesis, alcohol dependence, anxiety, depression and chronic pruritus associated with atopic dermatitis.
Vanda commenced a Phase II clinical study of tradipitant in the treatment of chronic pruritus in patients with atopic dermatitis in 2014. Results from this study, which were announced in March 2015, showed no significant difference from placebo on the pre-specified primary endpoint. Vanda believes this proof of concept study was informative, in that through subsequent analyses, it revealed statistically significant and clinically meaningful responses across multiple outcomes evaluated in individuals with higher blood plasma levels of tradipitant at the time of their pruritus assessments. Vanda initiated a placebo controlled pruritus proof of concept study in the second quarter of 2016. Results from this study, which were announced in September 2017, showed significant improvements in itch and disease severity. These results were presented at the 9th World Congress of Itch in October 2017.
Vanda initiated a placebo controlled Phase II clinical study of tradipitant in the treatment of gastroparesis in the fourth quarter of 2016.
VTR-297
VTR-297 is a small molecule HDAC inhibitor with potential use as a treatment for several oncology indications. The FDA accepted an Investigational New Drug (IND) application for VTR-297 in 2017 and provided authorization to proceed with the treatment of patients with relapsed and/or refractory hematologic malignancies.
VQW-765
VQW-765 is a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist that the Company licensed from Novartis on December 31, 2014 pursuant to a settlement agreement. Vanda is now evaluating potential indications, including cognitive impairment.
Hetlioz
In January 2014, HETLIOZ® was approved in the U.S. for the treatment of Non-24. Non-24 is a serious, rare and chronic circadian rhythm disorder characterized by the inability to entrain (synchronize) the master body clock with the 24-hour day-night cycle. HETLIOZ is the first FDA approved treatment for Non-24. HETLIOZ is a melatonin agonist of the human MT1 and MT2 receptors, with greater specificity for MT2. These receptors are thought to be involved in the control of circadian rhythms. HETLIOZ is believed to reset the master body clock in the suprachiasmatic nucleus, located in the hypothalamus, resulting in the entrainment and alignment of the body’s melatonin and cortisol rhythms to the 24-hour day-night cycle. HETLIOZ was launched commercially in the U.S. in April 2014. In addition, in July 2015, the EC granted centralized marketing authorization with unified labeling for HETLIOZ for the treatment of Non-24 in totally blind adults and included post-marketing commitments related to a pediatric investigation plan. This authorization is valid in the 28 countries that are members of the European Union (E.U.), as well as European Economic Area members Iceland, Liechtenstein and Norway. HETLIOZ was launched commercially in Germany in August 2016.
In January 2010, the FDA granted orphan drug designation status for HETLIOZ in Non-24 in blind individuals. The FDA grants orphan drug designation to drugs that may provide significant therapeutic advantage over existing treatments and target conditions affecting 200,000 or fewer U.S. patients per year. Orphan drug designation provides potential financial and regulatory incentives, including study design assistance, tax credits, waiver of FDA user fees, and up to seven years of market exclusivity upon marketing approval. In February 2011, the European Medicines Agency (EMA) designated HETLIOZ as an orphan medicinal product for the same indication.
Non-24 affects a majority of totally blind individuals, or approximately 80,000 people in the U.S. Blind individuals who develop Non-24 lack the light sensitivity necessary to synchronize the master body clock in the brain with the 24-hour day-night cycle. In sighted individuals, decreased exposure or sensitivity to light and social and physical activity cues may contribute to a free-running circadian rhythm. With the high frequency of mental disorders involving social isolation and cases of Non-24 developing after a change in sleep habits, behavioral factors in combination with physiological tendency may precipitate and perpetuate this disorder in sighted individuals. Hospitalized individuals with neurological and psychiatric disorders can become insensitive to social cues, predisposing them to the development of Non-24.
Most people have a master body clock that naturally runs longer than 24-hours and light is the primary environmental cue that resets it to 24 hours each day. Individuals with Non-24 have a master body clock that is not reset, and continually delays, resulting in prolonged periods of misalignment between their circadian rhythms and the 24-hour day-night cycle, including the timing of melatonin and cortisol secretion. As a result of this misalignment, Non-24 is associated with significant disruption of the sleep-wake cycle and impairments in social and occupational functioning, and marked subjective distress. Individuals with Non-24 cycle in-and out-of phase and suffer from disrupted nighttime sleep patterns and/or excessive daytime sleepiness.
While there are no FDA or EC approved treatments for Non-24 other than HETLIOZ, there are a number of drugs approved and prescribed for patients with sleep disorders. The most commonly prescribed drugs are hypnotics.
Fanapt
Fanapt® is a product for the treatment of schizophrenia. In May 2009, the FDA granted U.S. marketing approval of Fanapt for the acute treatment of schizophrenia in adults. In October 2009, the Company entered into an amended and restated sublicense agreement with Novartis. They had originally entered into a sublicense agreement with Novartis in June 2004 pursuant to which we obtained certain worldwide exclusive licenses from Novartis relating to Fanapt. Pursuant to the amended and restated sublicense agreement, Novartis had exclusive commercialization rights to all formulations of Fanapt in the U.S. and Canada. In January 2010, Novartis launched Fanapt in the U.S. On December 31, 2014, Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt franchise to Vanda as part of a settlement agreement. In June 2015, Vanda announced positive results from REPRIEVE, a Phase III long-term maintenance study that was conducted by Novartis. In May 2016, the FDA approved a sNDA for Fanapt for the maintenance treatment of schizophrenia in adults.
In July 2017, the EMA’s Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion recommending against approval of Fanaptum (oral iloperidone tablets) for the treatment of schizophrenia in adult patients in the E.U. The CHMP was of the opinion that the benefits of Fanaptum did not outweigh its risks and recommended against marketing authorization. The negative opinion was upheld upon appeal in November 2017.
Pursuant to a settlement agreement with Novartis, the Company reacquired the U.S. and Canadian rights to the long-acting injectable (depot) formulation of Fanapt and are evaluating the commercial opportunity around the depot formulation.
Tradipitant (VLY-686)
Tradipitant is a small molecule NK-1R antagonist that the Company licensed from Eli Lilly and Company (Lilly) in April 2012. NK-1R antagonists have been evaluated in a number of indications including chemotherapy-induced nausea and vomiting, post-operative nausea and vomiting, gastroparesis, alcohol dependence, anxiety, depression and chronic pruritus associated with atopic dermatitis.
Vanda commenced a Phase II clinical study of tradipitant in the treatment of chronic pruritus in patients with atopic dermatitis in 2014. Results from this study, which were announced in March 2015, showed no significant difference from placebo on the pre-specified primary endpoint. Vanda believes this proof of concept study was informative, in that through subsequent analyses, it revealed statistically significant and clinically meaningful responses across multiple outcomes evaluated in individuals with higher blood plasma levels of tradipitant at the time of their pruritus assessments. Vanda initiated a placebo controlled pruritus proof of concept study in the second quarter of 2016. Results from this study, which were announced in September 2017, showed significant improvements in itch and disease severity. These results were presented at the 9th World Congress of Itch in October 2017.
Vanda initiated a placebo controlled Phase II clinical study of tradipitant in the treatment of gastroparesis in the fourth quarter of 2016.
VTR-297
VTR-297 is a small molecule HDAC inhibitor with potential use as a treatment for several oncology indications. The FDA accepted an Investigational New Drug (IND) application for VTR-297 in 2017 and provided authorization to proceed with the treatment of patients with relapsed and/or refractory hematologic malignancies.
VQW-765
VQW-765 is a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist that the Company licensed from Novartis on December 31, 2014 pursuant to a settlement agreement. Vanda is now evaluating potential indications, including cognitive impairment.
My Analysis
Vanda Pharmaceuticals is one of those rare small Biotechnology companies that actually has products approved by the FDA and currently selling and bringing earnings into the company. Just that fact is noteworthy in itself. But in addition to that, the Company has three other products in the pipeline of which one of those products is in Phase 3 testing. While that doesn't guarantee it'll make it to the shelves of your local Walgreens, it does mean it made thru the first tow phases with success. And that's a good sign.
So with $165M in sales, $180M to $200M in sales next year, and an expected EPS growth rate of 15% over the next few years, I believe this is a company that needs to be in my portfolio. These shares also have options associated with them so there's ways to accumulate these shares rather than simply buying them on the open market. There's also ways to make money in the options market once the shares are acquired.
But note that these shares have moved up quite a bit over the last couple of months. Personally I'd like to buy these shares below $19 per share but there's no guarantee they'll pullback that far before they continue to move higher. With a little luck and a little patience, I believe I can be an owner of a few of these shares.
Vanda Pharmaceuticals is one of those rare small Biotechnology companies that actually has products approved by the FDA and currently selling and bringing earnings into the company. Just that fact is noteworthy in itself. But in addition to that, the Company has three other products in the pipeline of which one of those products is in Phase 3 testing. While that doesn't guarantee it'll make it to the shelves of your local Walgreens, it does mean it made thru the first tow phases with success. And that's a good sign.
So with $165M in sales, $180M to $200M in sales next year, and an expected EPS growth rate of 15% over the next few years, I believe this is a company that needs to be in my portfolio. These shares also have options associated with them so there's ways to accumulate these shares rather than simply buying them on the open market. There's also ways to make money in the options market once the shares are acquired.
But note that these shares have moved up quite a bit over the last couple of months. Personally I'd like to buy these shares below $19 per share but there's no guarantee they'll pullback that far before they continue to move higher. With a little luck and a little patience, I believe I can be an owner of a few of these shares.
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