VNDA - NASDAQ

Thank you for standing by, and welcome to the Q2 2022 Vanda Pharmaceuticals, Inc. Earnings Call. Thank you. I would now like to turn the conference over to Kevin Moran, Vanda's Senior Vice President, Chief Financial Officer and Treasurer. Mr. Moran, please go ahead.

Thank you very much, Jack. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals second quarter 2022 performance. Our second quarter 2022 results were released this afternoon and are available on the SEC's EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mihael Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board. Additionally, we have Tim Williams, our General Counsel, and Gunther Birznieks, our Senior Vice President of Business Development and R&D Committee Member. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of Federal Securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, change in circumstances, and uncertainties. These risks are described in the cautionary note regarding forward-looking statements, risk factors, and Management's discussion and analysis of financial condition, and results of operations, sections of our annual report on Form 10-K for the fiscal year ended December 31, 2021, as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K, and other filings with the SEC, which are available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other filings. The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events, or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.

Thank you very much, Kevin, and good afternoon, everyone. Thank you for joining us to discuss Vanda's second quarter 2022 results. We will proceed with Kevin discussing operational highlights and financial results for the quarter. Following that, we will open the line for questions. And I will now turn the call back to Kevin.

Thank you very much, Mihael. I'm excited to discuss the progress we've made on commercial and clinical development initiatives over the past several months, and to provide updates on upcoming milestones that we believe will deliver significant momentum for the business leading into 2023. Looking first at commercial performance, we continue to advance our strategy and remain committed to strong financial execution. For several quarters, we have discussed payer challenges for HETLIO

Chris Howerton with Jefferies. Your line is open.

Great. Well, thanks for taking the questions. I guess, the big one I would have would be what evidence supports the strategy for HETLIO

Thank you very much, Chris, for the questions. I will start off with the question of insomnia. And your question had to do on what evidence supports the indication. And second, if approved, what could be the pricing strategy. On the first part, the -- as you know, Tasimelteon has been approved for a chronic indication of Non-24. And of course, more recently, for Smith-Magenis Syndrome. We have shown that Tasimelteon has a significant and large defect on improving sleep in two types of studies. One type of studies is the transient insomnia model based on phase events. There are three studies, a smaller one and two large studies with 5-hour and 8-hour phase events where we're showing a first very significant effect improving key parameters. And the second study is a study, a 4 week duration study in patients with chronic insomnia characterized by difficulties with sleep function. Again, there Tasimelteon was shown to be effective both in the beginning period. This was defined as Stage 1 and 9 as well as 4 weeks later, in significantly improving persistent sleep, or sleep as compared to placebo. The combination of this evidence plus the significant experience for now almost over 8 years, chronically using Tasimelteon for Non-24, we believe supports the indication of treating chronic insomnia with sleep disturbances, likely a support for the short-term indication, given that we have the 4 week study data, but also an opportunity for insomnia disorder with a specification of changes in the sleep schedule, and specifically phase events. So we will be preparing this for submission is a supplemental NDA and we will continue the discussions with the FDA as we prepare that finally, I will turn to your question on gastroparesis and I believe specifically you asked on and I will come back to pricing on Tasimelteon, specifically you asked about the 9 month dog toxicity study and the safety database. As you know, Vanda has conducted a very large group of studies from preclinical toxicology. And therefore the profile of the drug has been started well in short-term and long-term -- starts long-term being a 6 month study. And of course 2 year other studies in mice. These are the . The FDA says that the 9 month dog study is recommended through the guidance, but not required that as we all have found out, there is no alternative they have suggested to that. Nonetheless, our many devaluations to date suggest that is not necessary. And we at Vanda object to conduct toxicology studies in animals, especially in dogs, if they're necessary. And if of course, that there is a significant trend in public opinion to support that, especially with the recent court decision and the raid by the U.S Department of Agriculture in a facility in Virginia, where these dogs were being kept in very difficult conditions. So we believe that we have sufficient and adequate information for the FDA to conduct the review. In terms of safety, we have, again, significant amount of data with exposures up to 3 months and some data with exposures of 6 months. And if you pay since over a year, through the Expanded Access Program. So we believe the combination of these information would classify as adequate to, of course, file and conduct review. But of course, the FDA will not commit either way, up until the application has been submitted in a 60-day review period on the fileability of the application has been concluded. So that's where that stand. I'll go back to your question about if indicate the indication was granted, what would that mean for pricing? Of course, we all know that HETLIO

Yes. No, very, very much appreciated, Mihael. I do have a follow-up and with respect to the plan for submission for insomnia, could you give us maybe an overview of what a timeline might be expected and have you or do you plan to meet with the FDA regarding this submission before you actually do so?

We have already met with the FDA and we'll continue the discussions. The -- as I said, there are potentially two indications, one being the short-term treatment of insomnia -- chronic insomnia characterized by disturbances of sleep onset. And the second one, what is in the DSM 5 other insomnia disorder characterized by change in sleep schedule. So these discussions will continue. This is a different mechanism of action and the FDA has approved, but I remind everyone that the indication of first short-term treatment insomnia characterized by sleep disturbances is exactly what the indication reads for NBN. So there's nothing new there. And we do expect there will be some significant discussions with the FDA as we proceed. In terms of timing, of course, this supplemental NDA and unlike NDA said, require putting together the entire package, preclinical safety, manufacturing, all of this information is there. And therefore, we believe it's a bit more straightforward. And therefore, it will take less amount of time to prepare, I cannot commit right now to timing as we want to continue these discussions with the agency.

Okay, no, that's fantastic. And I guess, if I may just ask one more question. I don't know if it would be directed to you Mihael or Kevin. But with respect to some of the changes that you have observed in Medicare Part D coverage? Did that impact your financial guidance? Or like how did that weigh into your thinking for the revenues for this year?

Yes, I'll start off by briefly saying that this is an emerging story. The highlight that Kevin gave for a single sighted patient who actually won the administrative law judge here, exemplary that there is energy taught by the patient, but also adjudicators to do the right thing. Stick to the FDA label, and improved access for patients. But it is all at the beginning. And you remember that, starting back in December, and you remember that, starting back in December and more this year, we had actually several successes, with state Medicaid agencies actually revising the criteria to allow access to site in patients, but I will let Kevin discuss the impact.

Yes, thanks, Mihael. And Chris, just as a reminder for our guidance on HETLIO

Yes, Okay. No, that's very helpful. Thank you, Kevin. Okay, well, I think those are all my questions for the time being. I really appreciate you taking them.

Thank you very much, Chris.

There are no further questions at this time. I would like to turn the call back over to Vanda management for closing remarks.

Thank you. Thank you very much for joining us today. We look forward to speaking with you again soon.