Published: May 01, 2008
Vanda Pharmaceuticals Reports First Quarter 2008 Results
ROCKVILLE, Md., May 1 /PRNewswire-FirstCall/ -- Vanda Pharmaceuticals Inc.
(Nasdaq: VNDA), a biopharmaceutical company focused on the development and
commercialization of clinical-stage product candidates for central nervous
system disorders, today announced financial and operational results for the
first quarter ended March 31, 2008.
Vanda reported research and development (R&D) expenses in the first
quarter of 2008 of $11.1 million, compared to fourth quarter of 2007 R&D
expenses of $12.6 million and first quarter of 2007 R&D expenses of $10.6
million. The decrease in R&D expenses in the first quarter of 2008 relative
to the fourth quarter of 2007 is primarily attributable to lower tasimelteon
(VEC-162) clinical program costs including the ongoing Phase III tasimelteon
chronic primary insomnia clinical trial for which Vanda plans to report the
top-line results in June of 2008. The increase in R&D expenses in the first
quarter of 2008 relative to the first quarter of 2007 is primarily
attributable to the same tasimelteon Phase III trial that was initiated in
late 2007.
Net loss was $19.2 million for the first quarter of 2008, compared to
$20.7 million in the fourth quarter of 2007 and $15.4 million in the first
quarter of 2007. Net loss per common share for the first quarter of 2008 was
$0.72, compared to $0.78 in the fourth quarter of 2007, and $0.61 in the first
quarter of 2007.
As of March 31, 2008, Vanda's cash, cash equivalents, and marketable
securities totaled approximately $77.0 million. As of March 31, 2008, the
company had a total of approximately 26.6 million shares of common stock
outstanding.
OPERATIONAL HIGHLIGHTS
Fanapta(TM) (iloperidone)
On September 27, 2007, Vanda announced that it had submitted a New Drug
Application (NDA) to the U.S. Food and Drug Administration (FDA) for
Fanapta(TM) (formerly referred to as Fiapta), its investigational atypical
antipsychotic for the treatment of schizophrenia. On November 27, 2007 the
company announced that the FDA had accepted and filed the NDA. Under the
Prescription Drug User Fee Act (PDUFA) of 1992, Vanda expects a PDUFA action
on or about July 27, 2008.
Tasimelteon (VEC-162)
As previously announced, Vanda has completed enrollment for its
tasimelteon Phase III chronic primary insomnia clinical trial. Vanda expects
to report top-line results in June 2008. Vanda enrolled 324 patients in the
trial, which is a randomized, double-blind, placebo-controlled 35-day study,
measuring sleep onset and maintenance, as well as next-day performance.
Analyst Day Announcement
Vanda will host an Analyst Day on Tuesday, May 6, 2008 inWashington, D.C.
at the American Psychiatric Association (APA) Annual Meeting, beginning at
6:30 p.m. ET. Vanda management and key opinion leaders in the field of
schizophrenia will discuss the company's development and commercial plans and
recently presented poster data.
Interested parties are invited to listen and view a live webcast of this
event from 6:30 p.m. ET to approximately 8:00 p.m. ET on Tuesday, May 6, 2008
on the company's Web site, www.vandapharma.com. Investors should go to the
Web site at least 15 minutes early to register, download, and install any
necessary audio software. A webcast replay will be available for 90 days
following the live event.
FINANCIAL DETAILS
-- Operating Expenses. First quarter 2008 R&D expenses, primarily
consisting of salaries and related costs of R&D personnel, stock-based
compensation, and the costs of consultants, materials and supplies
associated with the company's clinical trials and research initiatives,
were $11.1 million, down from $12.6 million in the previous quarter and
up from $10.6 million in the first quarter of 2007. The decrease in R&D
expenses in the first quarter of 2008 relative to the fourth quarter of
2007 is primarily attributable to lower tasimelteon clinical program
costs including the ongoing Phase III chronic primary insomnia clinical
trial for which Vanda plans to report the top-line results in June of
2008. The increase in R&D expenses in the first quarter of 2008
relative to the first quarter of 2007 is primarily attributable to the
same tasimelteon Phase III trial that was initiated in late 2007. In
the first quarter of 2007 R&D expenses were attributable to
Fanapta(TM), tasimelteon and VSF-173 clinical trial costs for programs
that were primarily conducted in 2006 and completed in early 2007.
General and administrative (G&A) expenses totaled $9.0 million in the
first quarter of 2008, down from $9.5 million in the fourth quarter of
2007, and up from $6.2 million in the first quarter of 2007. The
decrease in G&A expenses in the first quarter of 2008 relative to the
fourth quarter of 2007 is primarily due to lower costs for Fanapta(TM)
pre-launch commercial activities. The increase in G&A expenses in the
first quarter of 2008 relative to the first quarter of 2007 is
primarily due to increased stock-based compensation charges, salaries
and related costs of non-R&D personnel, marketing, insurance, and
facilities expenses.
Employee stock-based compensation expense recorded in the first quarter
of 2008 was $5.1 million. Of the total $5.1 million of non-cash
charges, $1.1 million was recorded in R&D expenses and $4.0 million was
recorded in G&A expenses. In the fourth quarter of 2007 and the first
quarter of 2007, total stock-based compensation was $5.2 million and
$4.0 million, respectively. The increase in stock-based compensation
from the first quarter of 2008 and the fourth quarter of 2007 compared
to the first quarter of 2007 is primarily the result of the higher fair
value of options granted during 2007 compared to options granted in
prior periods.
-- Net loss for the first quarter of 2008 was $19.2 million. This
compares to a net loss of $20.7 million in the fourth quarter of 2007,
and $15.4 million in the first quarter of 2007.
-- Net loss per common share for the first quarter of 2008 was $0.72,
compared to $0.78 in the fourth quarter of 2007 and $0.61 in the first
quarter of 2007.
-- Cash and marketable securities decreased by $16.2 million during the
first quarter of 2008. Changes included $19.2 million of net losses
and decreases in accrued R&D expenses and accounts payable of $2.7
million, fixed asset purchases of $0.2 million offset by $5.2 million
in non-cash depreciation, amortization, and stock-based compensation
expenses, decreases in prepaid expenses of $0.6 million and net
decreases in other working capital of $0.1 million.
-- Vanda's cash, cash equivalents, and marketable securities at the end of
the first quarter of 2008 totaled approximately $77.0 million, compared
to approximately $93.2 million as of December 31, 2007.
FINANCIAL GUIDANCE
The company reaffirms its prior guidance and anticipates that its current
cash balance will be sufficient to fund operations through the Fanapta(TM)
PDUFA action date and into the fourth quarter of 2008. Vanda plans to focus
its efforts primarily on completing and reporting the top-line results for the
ongoing tasimelteon Phase III chronic primary insomnia clinical trial and
continuing essential Fanapta(TM) pre-launch commercial activities.
CONFERENCE CALL
The company has scheduled a conference call for today, Thursday, May 1,
2008 at 10:30 AM ET. During the call, Mihael H. Polymeropoulos, M.D.,
President and CEO, and Steven A. Shallcross, Sr. Vice President and CFO, will
discuss quarterly results and other corporate activities. Investors can call
1-866-510-0710 (domestic) and 1-617-597-5378 (international) prior to the
10:30 AM start time and ask for the Vanda Pharmaceuticals conference call
hosted by Dr. Polymeropoulos. A replay of the call will be available
Thursday, May 1, 2008, at 12:30 PM ET and will be accessible until Thursday,
May 8, 2008, 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 34135192.
The conference call will be broadcast simultaneously on the company's Web
site, http://www.vandapharma.com . Investors should click on the Investor
Relations tab and are advised to go to the Web site at least 15 minutes early
to register, download, and install any necessary software. The call will also
be archived on the Vanda Web site for a period of 30 days, through May 30,
2008.
ABOUT VANDA PHARMACEUTICALS INC.:
Vanda Pharmaceuticals Inc. is a biopharmaceutical company focused on the
development and commercialization of clinical-stage product candidates for
central nervous system disorders. The company has three product candidates.
Vanda's lead product candidate, Fanapta(TM) (iloperidone), is a compound for
the treatment of schizophrenia and bipolar disorder, for which Vanda has
recently submitted an NDA to the FDA. Vanda's second product candidate,
tasimelteon (VEC-162), is a compound for the treatment of sleep and mood
disorders, which is currently in Phase III for chronic primary insomnia.
Vanda's third product candidate, VSF-173, is a compound for the treatment of
excessive sleepiness in Phase II. 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. Vanda is at an early stage of development and may not ever
have any products that generate significant revenue. Important factors that
could cause actual results to differ materially from those reflected in the
company's forward-looking statements include, among others: delays in the
completion of Vanda's clinical trials; a failure of Vanda's product candidates
to be demonstrably safe and effective; Vanda's failure to obtain regulatory
approval for its products or to comply with ongoing regulatory requirements; a
lack of acceptance of Vanda's product candidates in the marketplace, or a
failure to become or remain profitable; 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 product candidates; 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 (Item 1A) of Vanda's annual
report on Form 10-K for the year ended December 31, 2007 (File No. 000-51863).
In addition to the risks described above and in 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.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31, March 31,
2008 2007
Revenues from services $- $-
Operating expenses:
Research and development 11,102,665 10,592,059
General and administrative 8,959,214 6,233,549
Total operating expenses 20,061,879 16,825,608
Loss from operations (20,061,879) (16,825,608)
Interest income 865,750 1,433,654
Total other income, net 865,750 1,433,654
Loss before tax provision (19,196,129) (15,391,954)
Tax provision - 806
Net loss $(19,196,129) $(15,392,760)
Basic and diluted net loss per
share attributable to $(0.72) $(0.61)
common stockholders
Shares used in calculation of
basic and diluted net loss
per share attributable to
common stockholders 26,648,344 25,340,455
VANDA PHARMACEUTICALS INC.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, 2008 December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents $56,015,493 $41,929,533
Marketable securities 15,028,210 43,243,960
Prepaid expenses, deposits and
other current assets 1,176,179 1,781,881
Total current assets 72,219,882 86,955,374
Marketable securities, long-term 5,994,202 7,979,331
Property and equipment, net 1,602,025 1,345,845
Deposits 150,000 150,000
Restricted cash 430,230 430,230
Total assets $80,396,339 $96,860,780
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,825,933 $2,988,069
Accrued expenses 8,491,785 9,789,738
Total current liabilities 10,317,718 12,777,807
Long-term liabilities:
Deferred rent 422,407 354,042
Total liabilities 10,740,125 13,131,849
Stockholders' equity:
Common stock 26,653 26,653
Additional paid-in capital 262,706,082 257,600,368
Accumulated other comprehensive
income (loss) 29,874 12,176
Deficit accumulated during the
development stage (193,106,395) (173,910,266)
Total stockholders' equity 69,656,214 83,728,931
Total liabilities and
stockholders' equity $80,396,339 $96,860,780
VANDA PHARMACEUTICALS INC.
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31, March 31,
2008 2007
Cash flows from operating activities:
Net loss $(19,196,129) $(15,392,760)
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 122,629 148,671
Stock-based compensation 5,105,714 4,107,972
Loss on disposal of assets 610 -
Accretion of discount on investments (162,519) (230,268)
Changes in assets and liabilities:
Prepaid expenses and other
current assets 606,421 109,921
Accounts payable (1,355,101) (767,846)
Accrued expenses (1,299,209) (1,419,185)
Other liabilities 68,365 38,361
Net cash used in operating
activities (16,109,219) (13,405,134)
Cash flows from investing activities:
Purchases of property and equipment (186,442) (118,678)
Purchases of marketable securities (1,485,150) (65,477,330)
Proceeds from sales of marketable
securities 2,790,026 -
Maturities of marketable securities 29,060,000 950,000
Net cash provided by (used in)
investing activities 30,178,434 (64,646,008)
Cash flows from financing activities:
Proceeds from exercise of stock
options and warrants - 56,516
Proceeds from issuance of common
stock, net of issuance costs - 111,291,219
Net cash provided by financing
activities - 111,347,735
Effect of foreign currency
translation 16,745 (4,150)
Net increase in cash and cash
equivalents 14,085,960 33,292,443
Cash and cash equivalents, beginning
of period 41,929,533 30,928,895
Cash and cash equivalents, end of
period $56,015,493 $64,221,338
SOURCE Vanda Pharmaceuticals Inc.
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