Vanda Pharma shares fall on analyst downgrade
Vanda Pharmaceuticals falls as analyst lowers expectations for schizophrenia drug Fanapt
Associated PressAssociated Press – Tue, Mar 13, 2012 3:44 PM EDT
NEW YORK (AP) -- Shares of Vanda Pharmaceuticals Inc. declined Tuesday after an analyst downgraded the stock, saying he expects weaker sales of the company's schizophrenia drug Fanapt.
THE SPARK: Jefferies & Co. analyst Corey Davis downgraded Vanda shares to "Hold" from "Buy" and cut his price target to $4.50 per share to $8.50. Davis said he is reducing his estimates for sales of Fanapt because of stiff competition and a delay in the drug's approval in Europe. Davis said Dainippon Sumitomo's drug Latuda is selling well, and low-cost generic versions of Eli Lilly and Co.'s drug Zyprexa and Pfizer Inc.'s Geodon are competing with Fanapt.
Davis said prescriptions for Fanapt were unchanged in the fourth quarter of 2011 compared to the third quarter, although Vanda got more money from Novartis AG, which markets the drug. He said European Union regulators might want more data from a trial of Fanapt, and may not approve the drug until late 2013.
THE BIG PICTURE: The Rockville, Md., company reported $31.3 million in revenue in 2011. Of that total, $4.5 million came from Fanapt royalties, and the rest was recognized from Novartis' initial payment for Fanapt. Vanda said 120,000 prescriptions for Fanapt were written in 2011, more than double the total of 55,000 from 2010.
The company said it has received a three-month extension to prepare a response to EU regulators about Fanapt, and will submit more information by mid-May.
Vanda is also developing tasimelteon, a potential treatment for sleep and mood disorders. Tasimelteon is receiving orphan drug incentives in the U.S.
SHARE ACTION: Vanda Pharmaceuticals shares lost 26 cents, or 5.5 percent, to $4.51 in afternoon trading. The stock is down 33.3 percent since Aug. 4, when the company reported its second-quarter results.
surf's up......crikey
