Vanda Pharmaceuticals, Inc. (VNDA)

[WID]

Vanda said it expects to start shipping the drug later this year. The company said it will consider a partnership in bringing Fanapt to market, but will look at other options as well.

In a note to clients, Natixis Bleichroeder analyst Corey Davis said the decision was "one of the most surprising moves we've seen out of the FDA thisyear." He said Fanapt should have patent protection until 2016 or 2017, and doctors may be willing to switch patients on other drugs over to Fanapt.

He also wrote that Fanapt "arguably has one of the most benign safety profiles of all the (atypical antipsychotic drugs) out there," comparing it treatments like risperidone. Davis upgraded Vanda stock to "buy" from "hold," and lifted his price target to $12 per share from $1.