ROCKVILLE, Md., May 4 /PRNewswire-FirstCall/ -- Vanda
Pharmaceuticals Inc. (Vanda) (Nasdaq: VNDA), a biopharmaceutical
company focused on the development and commercialization of
clinical-stage products for central nervous system disorders, today
announced financial and operational results for the first quarter
ended March 31, 2010.
- Vanda records Q1 2010 revenue of $12.4 million
- Fanapt ™ launched in the U.S. by our partner
Novartis
- Iloperidone long-acting injectable patent allowed
- Tasimelteon received orphan designation by the Food and Drug
Administration for the treatment of Non-24 Hour Sleep/Wake Disorder
(N24SWD) in blind individuals with no light perception
Total revenue for the first quarter of 2010 was $12.4 million, compared to $4.5 million for the fourth quarter of 2009 and
$0 for the first quarter of 2009. Total operating expenses for the
first quarter of 2010 were $6.3
million, compared to $13.8
million for the fourth quarter of 2009 and $6.6 million for the first quarter of 2009. Net
income was $0.5 million for the first
quarter of 2010 compared to net losses of $9.2 million for the fourth quarter of 2009 and
$6.5 million for the first quarter of
2009.
Vanda's cash, cash equivalents, and marketable securities as of
March 31, 2010 totaled approximately
$202.4 million. Approximately
27.9 million shares of Vanda common stock were outstanding as of
March 31, 2010. Basic and diluted net
income per common share for the first quarter of 2010 was
$0.02, compared to a net loss per
common share of $0.34 for the fourth
quarter of 2009 and $0.24 for the
first quarter of 2009.
First
Quarter 2010 Key Financial
Figures1
|
|
|
Q1 2010
($)
|
Q4 2009
($)
|
Change
($)
|
Change
(%)
|
|
Total revenues
|
12,421,000
|
4,548,000
|
7,873,000
|
173%
|
|
R&D expenses
|
2,041,000
|
2,253,000
|
(212,000)
|
-9%
|
|
G&A expenses
|
2,489,000
|
9,245,000
|
(6,756,000)
|
-73%
|
|
Non-cash stock-based
compensation
|
1,089,000
|
2,446,000
|
(1,357,000)
|
-55%
|
|
Net income (loss) before tax
provision
|
6,195,000
|
(9,237,000)
|
15,432,000
|
N/A
|
|
Tax provision
|
5,665,000
|
-
|
5,665,000
|
N/A
|
|
Net income (loss)
|
529,000
|
(9,237,000)
|
9,766,000
|
N/A
|
|
Basic and diluted net income (loss)
per share attributable to common stockholders
|
0.02
|
(0.34)
|
0.36
|
N/A
|
|
|
|
|
|
|
|
1 Unaudited
|
|
|
|
|
|
|
OPERATIONAL HIGHLIGHTS
On January 11, 2010, Novartis
Pharmaceuticals Corporation (Novartis) launched Fanapt™ in the U.S.
First quarter sales of Fanapt™ were reported by Novartis to be
approximately $21.0 million. As a
result, Vanda recorded royalty revenue of approximately
$2.1 million for the first quarter of
2010. On February 23, 2010, the U.S.
Patent and Trademark Office (USPTO) issued a notice of allowance
for Vanda’s patent application of a microsphere, long-acting
injectable (depot) formulation of Fanapt™ (iloperidone). The USPTO
has informed Vanda that the application is eligible for patent term
adjustment of an additional 300 days, making the patent expiration
date August 26, 2023. Novartis is
responsible for the further development of the depot formulation in
the U.S. and Canada. Vanda has
retained the rights for the development and commercialization of
the depot formulation outside the U.S. and Canada. Vanda continues to explore the
regulatory path and commercial opportunity for Fanapt™ outside of
the U.S. and Canada.
During the first quarter of 2010, Vanda also made significant
progress in evaluating potential opportunities for tasimelteon,
Vanda’s compound for the treatment of circadian rhythm sleep
disorders (CRSD). On January 19,
2010, the FDA granted orphan drug designation status for
tasimelteon in a specific CRSD, Non-24-Hour Sleep/Wake Disorder
(N24SWD) in blind individuals with no light perception.
Tasimelteon has already been shown in clinical studies to
significantly improve sleep onset and sleep maintenance parameters
and to affect the sleep wake cycle.
Vanda plans to conduct additional clinical trials to pursue FDA
approval of tasimelteon for the treatment of N24SWD in blind
individuals with no light perception beginning in the second
quarter of 2010. The first trial will be a randomized,
double-blind, placebo-controlled study with an enrollment of
approximately 140 patients with N24SWD. The trial will include
measures of both nighttime and daytime sleep, as well as laboratory
measures of the synchronization between the internal body clock and
the environment. Vanda expects to report top-line results for this
trial in the fourth quarter of 2011. Vanda anticipates filing a NDA
with the FDA for tasimelteon in N24SWD by the first quarter of
2013.
On April 15, 2010, Vanda and Bristol-Myers Squibb entered in an
amendment to their amended and restated license, development and
commercialization agreement, to, among other things, extend Vanda's
deadline for filing a NDA for tasimelteon. A more detailed
description and the full text of the amendment are contained in
Vanda's Current Report on Form 8-K, filed with the Securities and
Exchange Commission on April 19,
2010.
.
FINANCIAL DETAILS
- Revenues. First quarter 2010 revenue of $12.4 million consisted of $6.6 million in licensing revenue due to the
amortization of the upfront payment received from Novartis in the
fourth quarter of 2009 under the amended and restated sublicense
agreement, $3.7 million in product
revenue for inventory sold to Novartis and $2.1 million for royalty revenue based on first
quarter 2010 net sales of Fanapt™ in the U.S. by Novartis. Revenue
increased by $7.9 million from
$4.5 million for the fourth quarter
of 2009 due to increases in licensing revenue of $4.0 million and $1.8
million in product revenue coupled with the $2.1 million in royalty revenue.
- Operating Expenses. Cost of sales for the first quarter of 2010
of $1.8 million consisted of
$0.4 million resulting from the
amortization of the capitalized intangible asset related to the
milestone payment to Novartis and $1.4
million for the inventory sold to Novartis, compared to cost
of sales for the fourth quarter of 2009 of $2.3 million, consisting of $0.4 million resulting from the amortization of
the capitalized intangible asset related to the milestone payment
to Novartis and $1.9 million for
inventory sold to Novartis.
Research and development (R&D) expenses of $2.0 million for the first quarter of 2010
consisted primarily of $0.7 million
of salaries and benefits, $0.9
million of non-cash stock based-compensation costs for
R&D personnel and $0.2 million
for overhead allocated to R&D. This compares to $2.3 million for the fourth quarter of 2009 and
$2.3 million for the first quarter of
2009. The decrease in R&D expenses in the first quarter of 2010
relative to the fourth quarter of 2009 is primarily due to the
completion of the carcinogenicity study for Fanapt™ during the
fourth quarter of 2009.
General and administrative (G&A) expenses of $2.5 million for the first quarter of 2010
consisted primarily of $0.6 million
of salaries and benefits and $0.2
million of non-cash stock based compensation costs for
G&A personnel, as well as $0.5
million of legal fees, $0.3
million of audit and tax-related costs and $0.2 million of insurance costs. This compares to
$9.2 million for the fourth quarter
of 2009 and $4.2 million for the
first quarter of 2009. The decrease in G&A expenses in
the first quarter of 2010 relative to the fourth quarter of 2009 is
primarily due to lower consulting fees and advisor fees, primarily
relating to the transaction with Novartis completed in the fourth
quarter of 2009, and lower non-cash stock-based compensation costs
in the first quarter 2010.
Employee stock-based compensation expense recorded in the first
quarter of 2010 totaled $1.1 million.
Of this non-cash charge, $0.9 million
was recorded as R&D expense and $0.2
million was recorded as G&A expense. This compares to
total employee stock-based compensation expense of $2.4 million and $2.3
million for the fourth quarter of 2009 and the first quarter
of 2009, respectively. The decrease in employee stock-based
compensation expense in the first quarter of 2010 relative to the
fourth quarter of 2009 is the result of the cancellation of
unvested options, in the first quarter of 2010.
- Tax provision: Vanda recorded a tax provision of $5.7 million in the first quarter of 2010. The
tax provision is based on an annualized effective tax rate for 2010
applied to the first quarter's pre-tax book income with the
addition or subtraction of discrete items. The quarterly tax
provision is not indicative of estimated quarterly cash tax
payments. The tax provision rate applied in the first quarter of
2010 was determined primarily based upon a net increase in
valuation allowance for excess of the deferred revenue recorded
from the $200.0 million upfront
milestone payment received from Novartis at the end of 2009 over
the existing tax attributes utilized. The provision also includes
the impact of tax credits relating to the orphan drug designation
for tasimelteon. Vanda will continue to evaluate its qualified
expenses for the orphan drug tax credit and, to the extent that
actual qualified expenses vary significantly from Vanda's
estimates, Vanda's effective tax rate will increase or decrease
accordingly.
- Vanda's cash, cash equivalents and marketable securities as of
March 31, 2010 totaled approximately
$202.4 million, compared to
approximately $205.3 million as of
December 31, 2009. Cash, cash
equivalents and marketable securities decreased by $2.9 million during the first quarter of 2010.
Changes included: $0.5 million of net
income, a decrease in non-cash items of $0.4
million, an increase of $2.9
million in amounts due from Novartis for the remaining
finished product, a decrease in inventory of $1.0 million, a decrease of $6.6 million in the deferred revenue related to
the upfront payment received from Novartis in December 2009, a decrease in accounts payable and
accrued expenses of $2.5 million, a
decrease in other working capital of $0.4
million and an increase of $1.9
million in financing activities for the excess tax benefits
from the exercise of stock options.
- Net income for the first quarter of 2010 was $0.5 million, compared to net losses of
$9.2 million for the fourth quarter
of 2009 and $6.5 million for the
first quarter of 2009.
- Basic and diluted net income per common share for the first
quarter of 2010 was $0.02, compared
to a basic and diluted net loss per common share of $0.34 for the fourth quarter of 2009 and
$0.24 for the first quarter of
2009.
FINANCIAL GUIDANCE
Vanda is encouraged by the early prescription data for Fanapt™
as reported by IMS. At this time, however, Vanda cannot forecast
future revenues based on sales milestones or royalties. Vanda
expects that R&D expenses related to the initiation of the
tasimelteon program in N24SWD will increase by approximately
$7.5 million for the full year 2010.
Vanda anticipates that approximately 75 percent of these expenses
will qualify for the orphan drug tax credit.
Vanda submitted a private letter ruling request to the Internal
Revenue Service (IRS) in March of 2010 to clarify the application
of certain code sections regarding the use of prior net operating
losses that may offset some of the tax liability related to the
$197.4 million of deferred revenue
for the upfront payment received from Novartis which will be
recognized as income for tax purposes in 2010. Following the
determination of the IRS on this matter, Vanda may choose to
provide financial guidance for the full year.
CONFERENCE CALL
Vanda has scheduled a conference call for today, Tuesday, May 4, 2010, at 9:30 AM ET. During the call, Mihael H. Polymeropoulos, M.D., President and
CEO, and Stephanie Irish, Acting
CFO, will discuss quarterly results and other corporate activities.
Investors can call 1-866-700-7173 (domestic) and
1-617-213-8838 (international) prior to the 9:30 AM start time and ask for the Vanda
Pharmaceuticals conference call hosted by Dr. Polymeropoulos
(participant passcode 17942676). A replay of the call will be
available Tuesday, May 4, 2010 at
12:30 PM ET and will be accessible
until Tuesday, May 11, 2010, 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 39291542.
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
June 3, 2010.
ABOUT VANDA PHARMACEUTICALS INC.:
Vanda Pharmaceuticals Inc. is a biopharmaceutical company
focused on the development and commercialization of clinical-stage
products for central nervous system disorders. For more on
Vanda Pharmaceuticals Inc., 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," "targets," "likely," "will," "would," and
"could," 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
extent and effectiveness of the development, sales and marketing
and distribution support Fanapt™ receives; Vanda's
inability to utilize a substantial portion of its prior net
operating losses; 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 to be demonstrably
safe and effective; Vanda's failure to obtain regulatory approval
for its products or to comply with ongoing regulatory requirements
for its products; a lack of acceptance of Vanda's 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
its research and development activities; Vanda's failure to
identify or obtain rights to new products; Vanda's failure to
develop or obtain sales, marketing and distribution resources and
expertise or to otherwise manage its growth; 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 under its license and
sublicense agreements and other factors that are described in the
"Risk Factors" section (Part I, Item 1A) of Vanda's annual report
on Form 10-K for the fiscal year ended December 31, 2009 (File No. 001-34186). In
addition to the risks described above and in Part I, Item 1A of
Vanda's annual report on Form 10-K, 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
|
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Licensing agreement
|
$
|
6,605,505
|
|
$
|
-
|
|
|
Product sales
|
|
3,748,549
|
|
|
-
|
|
|
Royalty revenue
|
|
2,066,768
|
|
|
-
|
|
|
|
Total revenues
|
|
12,420,822
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Cost of Sales - licensing
agreement
|
|
368,601
|
|
|
-
|
|
|
Cost of Sales - product
|
|
1,375,318
|
|
|
-
|
|
|
Research and development
|
|
2,040,647
|
|
|
2,333,344
|
|
|
General and administrative
|
|
2,488,971
|
|
|
4,224,031
|
|
|
|
Total operating expenses
|
|
6,273,537
|
|
|
6,557,375
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
6,147,285
|
|
|
(6,557,375)
|
|
Interest income
|
|
47,401
|
|
|
53,387
|
|
Income (loss) before income tax
provision
|
|
6,194,686
|
|
|
(6,503,988)
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
5,665,321
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
529,365
|
|
$
|
(6,503,988)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.02
|
|
$
|
(0.24)
|
|
|
Diluted
|
$
|
0.02
|
|
$
|
(0.24)
|
|
|
|
|
|
|
|
|
|
|
Weighted average of common
shares:
|
|
|
|
|
|
|
|
Basic
|
|
27,704,418
|
|
|
26,653,478
|
|
|
Diluted
|
|
28,318,754
|
|
|
26,653,478
|
|
|
|
|
|
|
|
|
|
VANDA
PHARMACEUTICALS INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2010
|
|
December 31,
2009
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
169,945,639
|
|
$
|
205,295,488
|
|
|
|
Marketable securities
|
|
32,477,895
|
|
|
-
|
|
|
|
Accounts receivable
|
|
6,097,226
|
|
|
3,163,898
|
|
|
|
Inventory
|
|
1,479,500
|
|
|
2,398,517
|
|
|
|
Prepaid expenses, deposits and other
current assets
|
|
1,677,484
|
|
|
2,092,581
|
|
|
|
Deferred tax asset - current
portion
|
|
1,984,591
|
|
|
-
|
|
|
|
|
Total current assets
|
|
213,662,335
|
|
|
212,950,484
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
1,179,167
|
|
|
1,316,302
|
|
|
Restricted cash
|
|
430,230
|
|
|
430,230
|
|
|
Intangible assets, net
|
|
10,648,464
|
|
|
11,017,065
|
|
|
|
|
Total assets
|
$
|
225,920,196
|
|
$
|
225,714,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
867,806
|
|
$
|
2,423,877
|
|
|
|
Accrued expenses
|
|
1,352,505
|
|
|
2,321,301
|
|
|
|
Taxes payable
|
|
5,740,422
|
|
|
-
|
|
|
|
Deferred revenue - short
term
|
|
26,788,991
|
|
|
26,788,991
|
|
|
|
|
Total current liabilities
|
|
34,749,724
|
|
|
31,534,169
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
Deferred rent
|
|
502,690
|
|
|
506,852
|
|
|
|
Deferred revenue - long
term
|
|
164,036,697
|
|
|
170,642,202
|
|
|
|
|
Total liabilities
|
|
199,289,111
|
|
|
202,683,223
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock
|
|
27,865
|
|
|
27,569
|
|
|
|
Additional paid-in capital
|
|
286,889,940
|
|
|
283,836,642
|
|
|
|
Other comprehensive income
|
|
17,268
|
|
|
-
|
|
|
|
Accumulated deficit
|
|
(260,303,988)
|
|
|
(260,833,353)
|
|
|
|
|
Total stockholders' equity
|
|
26,631,085
|
|
|
23,030,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders'
equity
|
$
|
225,920,196
|
|
$
|
225,714,081
|
|
|
|
|
|
|
|
|
|
|
VANDA
PHARMACEUTICALS INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
529,365
|
|
$
|
(6,503,988)
|
|
|
Adjustments to reconcile net income
(loss) to net cash used
|
|
|
|
|
|
|
|
|
in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
94,098
|
|
|
122,795
|
|
|
|
Employee and non-employee stock-based
compensation
|
|
1,120,822
|
|
|
2,308,647
|
|
|
|
Gain on disposal of assets
|
|
(23,185)
|
|
|
-
|
|
|
|
Amortization of premium on
investments
|
|
(3,835)
|
|
|
38,263
|
|
|
|
Amortization of intangible
assets
|
|
368,601
|
|
|
-
|
|
|
|
Deferred tax benefit
|
|
(1,984,591)
|
|
|
-
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current
assets
|
|
415,097
|
|
|
168,728
|
|
|
|
|
Accounts receivable
|
|
(2,867,106)
|
|
|
-
|
|
|
|
|
Inventory
|
|
919,017
|
|
|
-
|
|
|
|
|
Accounts payable
|
|
(1,556,071)
|
|
|
903,002
|
|
|
|
|
Accrued expenses
|
|
(968,796)
|
|
|
(833,198)
|
|
|
|
|
Taxes payable
|
|
5,740,422
|
|
|
-
|
|
|
|
|
Other liabilities
|
|
(4,162)
|
|
|
1,021
|
|
|
|
|
Deferred revenue
|
|
(6,605,505)
|
|
|
-
|
|
|
|
|
|
Net cash used in operating
activities
|
|
(4,825,829)
|
|
|
(3,794,730)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
Purchases of investments
|
|
-
|
|
|
(5,077,656)
|
|
|
Proceeds from sales of
investments
|
|
(32,456,792)
|
|
|
126,547
|
|
|
Proceeds from maturities of
investments
|
|
-
|
|
|
3,500,000
|
|
|
|
|
|
Net cash used in investing
activities
|
|
(32,456,792)
|
|
|
(1,451,109)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
Excess tax benefits from exercise of
stock options
|
|
1,909,490
|
|
|
-
|
|
|
Proceeds from exercise of stock
options
|
|
23,282
|
|
|
-
|
|
|
|
|
|
Net cash provided by financing
activities
|
|
1,932,772
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash
equivalents
|
|
(35,349,849)
|
|
|
(5,245,839)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning
of period
|
|
205,295,488
|
|
|
39,079,304
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of
period
|
$
|
169,945,639
|
|
$
|
33,833,465
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Vanda Pharmaceuticals Inc.