Vanda Pharmaceuticals, Inc. (VNDA)

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Vanda-Pharmaceuticals Reports Fourth-Quarter 2014 and Full-Year 2014 Financial-Results

Last update: 19/02/2015 7:00:18 am

Vanda Pharmaceuticals Reports Fourth Quarter 2014 and Full Year 2014 Financial Results

- HETLIOZ(R) net product sales in the U.S. grew to $6.0 million in the fourth quarter of 2014, a 15% increase as compared to the third quarter of 2014.

- Vanda expects HETLIOZ(R) net product sales for 2015 to grow to between $40 and $45 million.

- Combined 2015 net product sales from both HETLIOZ(R) and Fanapt(R) are expected to be between $95 million and $110 million.

PR Newswire

WASHINGTON, Feb. 19, 2015

WASHINGTON, Feb. 19, 2015 /PRNewswire/ -- Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA), today announced financial and operational results for the fourth quarter and full year ended December 31, 2014.

"2014 was a transformational year for Vanda with the HETLIOZ launch in the U.S. for the treatment of Non-24-Hour Sleep-Wake Disorder. We are impressed with the continued growth of HETLIOZ and are fortunate to be able to offer this important treatment option for patients" said Mihael H. Polymeropoulos M.D., Vanda's President and CEO. "The return of the U.S. and Canadian commercial rights to Fanapt brings an immediately accretive product to Vanda further strengthening our U.S. commercial portfolio."

Key Highlights:

HETLIOZ(R) (tasimelteon)
-- HETLIOZ(R) net product sales in the U.S. grew to $6.0 million in the
fourth quarter of 2014, a 15% increase, compared to $5.2 million in the
third quarter of 2014. HETLIOZ(R) net product sales were $12.8 million
for the full year 2014.

-- Since the U.S. commercial launch of HETLIOZ(R) in April 2014, over 760
new patient prescriptions have been written including over 220 in the
fourth quarter of 2014. As of December 31, 2014, over 470 patients had
initiated HETLIOZ(R) treatment and over 330 patients were on active
treatment reflecting a cumulative persistence rate of approximately 70%.

-- The HETLIOZ(R) Marketing Authorization Application in the European Union
(EU) is under review with a regulatory decision expected in the third
quarter of 2015.

-- Tasimelteon life cycle management activities are ongoing and include a
Smith-Magenis Syndrome observational study with results expected in the
first half of 2015 and preparations for a clinical development program
for pediatric Non-24.

-- HETLIOZ(R) exclusivity in the U.S. is protected by orphan exclusivity and
two patents listed in the FDA Orange Book (Orphan exclusivity expiry in
2021; Patent No. 5,856,529 expiry expected in 2022 and Patent No.
8,785,492 expiry in 2033).

Fanapt(R) (iloperidone)
-- Fanapt(R) royalty revenue was $1.6 million for the fourth quarter of
2014, compared to $1.7 million in the third quarter of 2014. Fanapt(R)
royalty revenue was $6.5 million for the full year 2014, compared to $7.1
million for 2013.

-- For the full year 2014, Fanapt(R) U.S. net product sales were $65.0
million, as reported by Novartis AG (Novartis). Fanapt(R) U.S.
prescriptions for the fourth quarter of 2014 were approximately 40,500,
as reported by IMS.

-- On December 31, 2014, the Fanapt(R) U.S. and Canadian rights were
returned to Vanda as part of the settlement of arbitration with Novartis.

-- Fanapt(R) exclusivity in the U.S. is protected by two patents listed in
the FDA Orange Book (Patent No. RE39198 expiry in 2016 and Patent No.
8,586,610 expiry in 2027).

VLY-686 (tradipitant)
-- Results of the Phase II study (2101) of tradipitant, an NK1 receptor
antagonist, in patients with chronic pruritus are expected in the first
quarter of 2015.

Financial Results for the Fourth Quarter and Full Year 2014

Vanda total revenues for the fourth quarter of 2014 were $15.4 million, compared to $8.8 million for the fourth quarter of 2013. Vanda total revenues for the full year 2014 were $50.2 million, compared to $33.9 million for 2013.

Selling, general and administrative expenses were $17.3 million in the fourth quarter of 2014, compared to $9.9 million in the fourth quarter of 2013. Selling, general and administrative expenses were $84.6 million in the full year 2014, compared to $25.1 million in 2013. The increases in selling, general and administrative expenses in fourth quarter and full year 2014 were the result of the U.S. commercial launch support for HETLIOZ(R) .

Research and development expenses were $4.8 million in the fourth quarter of 2014, compared to $6.3 million in the fourth quarter of 2013. Research and development expenses were $19.2 million in the full year 2014, compared to $28.5 million in 2013.

Vanda recorded a $77.6 million gain related to the Novartis arbitration settlement in the fourth quarter of 2014.

Vanda net income was $69.7 million for the fourth quarter of 2014, compared to a net loss of $7.7 million for the fourth quarter of 2013. Diluted net income per share for the fourth quarter of 2014 was $1.77, compared to a net loss per share of $0.23 for the fourth quarter of 2013. Vanda net income was $20.2 million for the full year 2014, compared to a net loss of $21.1 million for 2013. Diluted net income per share for the full year 2014 was $0.55, compared to a net loss per share of $0.69 for 2013.

In October 2014, Vanda completed a public common stock offering that resulted in $62.3 million in net proceeds. In December 2014, Vanda sold $25.0 million of common stock to Novartis as part of the arbitration settlement. Cash, cash equivalents and marketable securities were $129.8 million as of December 31, 2014.

Non-GAAP Financial Results

Vanda Non-GAAP Total revenues for the fourth quarter of 2014 were $7.6 million, compared to $2.0 million for the fourth quarter of 2013. Vanda Non-GAAP Total revenues for the full year 2014 were $19.4 million, compared to $7.1 million for 2013.

Vanda Non-GAAP Net loss was $13.5 million for the fourth quarter of 2014, compared to a net loss of $12.7 million for the fourth quarter of 2013. Non-GAAP Diluted net loss per share for the fourth quarter of 2014 was $0.36, compared to a net loss per share of $0.38 for the fourth quarter of 2013. Vanda Non-GAAP net loss was $80.0 million for the full year 2014, compared to a net loss of $40.9 million for 2013. Non-GAAP Diluted net loss per share for the full year 2014 was $2.30, compared to a net loss per share of $1.35 for 2013.

Vanda provides Non-GAAP financial information, which it believe can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the sections of this press entitled "Non-GAAP Financial Information" and "Reconciliation of GAAP to Non-GAAP Financial Information.

2015 Financial Guidance

Vanda expects to achieve the following financial objectives in 2015:
-- Combined net product sales from both HETLIOZ(R) and Fanapt(R) of between
$95 million and $110 million.

-- HETLIOZ(R) net product sales of between $40 million to $45 million and
Fanapt(R) net product sales of between $55 million to $65 million.

-- Non-GAAP Operating expenses, excluding cost of sales, of between $105
million and $120 million.

In addition, for reporting periods beginning in 2015, Vanda will no longer record Fanapt(R) licensing agreement revenues and will no longer report the number of HETLIOZ(R) prescriptions written, dispensed or patients on therapy.

Full HETLIOZ(R) Prescribing Information can be found at: www.hetlioz.com.

Full Fanapt(R) Prescribing Information, including Boxed Warnings and Important Safety Information can be found at: www.fanapt.com.

Conference Call

Vanda has scheduled a conference call for today, Thursday, February 19, 2015, at 10:00 AM ET. During the call, Vanda's management will discuss the fourth quarter and full year 2014 financial results and other corporate activities. Investors can call 1-800-708-4540 (domestic) or 1-847-619-6397 (international) and use passcode 38933858. A replay of the call will be available beginning Thursday, February 19, 2015 at 12:30 PM ET and will be accessible until Thursday, February 26, 2015, at 11:59 PM ET. The replay call-in number is 1-888-843-7419 for domestic callers and 1-630-652-3042 for international callers. The passcode number is 38933858.

The conference call will be broadcast simultaneously on Vanda's website, 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.

Non-GAAP Financial Information

Vanda believes that the Non-GAAP financial information provided in this release can assist investors in understanding and assessing the ongoing economics of the Company's business and reflect how it manages the business internally and sets operational goals. Vanda's "Non-GAAP revenues" excludes the Fanapt(R) licensing agreement revenue. The Company's "Non-GAAP G&A expenses" and "Non-GAAP R&D expenses" exclude stock based compensation. "Non-GAAP net income (loss)" and "Non-GAAP Diluted net income (loss) per share" excludes the Fanapt(R) licensing agreement revenue, stock based compensation, intangible asset amortization and gain on arbitration settlement.

Vanda believes that excluding the impact of these items better reflects the recurring economic characteristics of its business and the Company's use of financial resources and the Company's long-term performance.

This press release includes Non-GAAP Operating expenses, a forward-looking Non-GAAP financial measures under the heading "2015 Financial Guidance". This Non-GAAP financial measures was determined by excluding cost of sales, stock based compensation and intangibile asset amortization. We are unable to reconcile this Non-GAAP guidance to GAAP because it is difficult to predict the future impact of these adjustment.

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February 19, 2015 07:00 ET (12:00 GMT)