VNDA - NASDAQ

Hello, and thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2025 Vanda Pharmaceuticals Inc. earnings conference call. [Operator Instructions] Now I would like to turn the call over to Kevin Moran, Vanda's Chief Financial Officer. Please go ahead.

Thank you, Mark. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' third quarter 2025 performance. Our third quarter 2025 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; and Tim Williams, our General Counsel. Following my introductory remarks, Mihael will update you on our ongoing activities. I will then comment on our financial results before we open the lines for your questions. 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, changes 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 most recent annual report on Form 10-K 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 Third Quarter 2025 Results. This quarter reflects strong commercial execution with total net product sales reaching $56.3 million, up 18% year-over-year, led by a 31% increase in Fanapt sales and 35% growth in prescriptions. HETLIO

Thank you, Mihael. I'll begin by summarizing our financial results for the first 9 months of 2025 before turning to discuss the third quarter of 2025. Total revenues for the first 9 months of 2025 were $158.9 million, a 9% increase compared to $145.6 million for the same period in 2024. The increase was primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch. Fanapt net product sales were $84.1 million for the first 9 months of 2025, a 24% increase compared to $67.6 million in the same period in 2024. This increase to net product sales relative to the first 9 months of 2024 was attributable to an increase in volume, partially offset by a decrease in price net of deductions. Turning to HETLIO

Thank you very much, Kevin. At this point, we will be happy to answer your questions.

[Operator Instructions] And your first question comes from the line of Raghuram Selvaraju with H.C. Wainwright.

I was wondering if you could first and foremost comment on some hypothetical scenarios with respect to the interactions with the FDA. And if these ultimately result in approval decisions, particularly as this pertains to tradipitant, when those approvals might occur? Should we expect potential -- the possibility of tradipitant approval sometime in the first half of 2026, if ultimately the interactions with the FDA proceed positively?

Yes. Thank you very much, Ram. First of all, I would say and I reiterate that we're very pleased with the new collaborative framework that has been established with the FDA. And just as a background, that comes after the significant development of a win in the appellate court by Vanda in August of this year, where we challenged the decision of rejection of HETLIO

Secondly, I wanted to ask about PONVORY performance and what you look for in terms of future quarterly growth rate pickup in revenue from this product, particularly given the current investment that you are making in sales and marketing behind the product at this point. Maybe you can give us a sense of what kind of quarterly growth you would expect in terms of net sales for PONVORI over the course of the next 2, 3 quarters? That would be helpful.

Yes. I will let Kevin comment on the future growth. But I would say, we're still in the early phase. The sales force that was built to about 50 people is actually a very recent event, in the last quarter or so, fully staffed. The speaker programs are just starting. And PONVORY has been a smaller piece of our direct-to-consumer campaign so far. That being said, these are significant investments, and we're investing towards future growth. But I will pass it on to Kevin for his comment.

Thanks, Mihael. Thanks, Ram, for the question. Just as a bit of reminder on the background here. So we acquired the product from J&J at the end of 2023. And at that point, J&J had ceased support for the product a little over a year prior to that. We completed the transition of the PONVORY product from J&J right at the end of the third quarter of last year, so about a year ago. And what we saw during that period from when J&J ceased commercial support through the first quarter of this year was a decline in the underlying patient demand. And that would be expected given that there wasn't any active support in the market from essentially the end of 2022 through roughly the end of the third quarter of last year. What we've seen in the last 2 quarters that's very encouraging to us is we've seen increases in the underlying patient demand, both from the first quarter to the second quarter and then again from the second quarter to the third quarter. There's been some buying patterns from the SPs and SDs that have made the quarterly revenue a little bit up or a little bit down depending on the timing of their purchases, but the underlying demand during those 2 periods is up. And so for us, that's an encouraging sign that our commercial strategy and support for the product is beginning to take hold. And as Mihael had mentioned, with the recent investment in the commercial sales force that, as I mentioned in my script, was completed during the third quarter of this year, we're hopeful that we'll begin to see that trend continue and potentially increase as we exit this year and head into next year, where we not yet have provided guidance beyond 2025.

And then just very quickly, 2 other time line aspects. I was wondering if you could, A, comment on the perspectives for the imsidolimab BLA to receive priority review once it has been submitted to the FDA? And secondly, if you could give us any sense of whether you have revised or more specific timing guidance to provide on the MDD study?

So Ram, I think your 2 questions were on the imsidolimab priority review.

Yes. I will address that. But go ahead, Kevin.

And then on the timing for the MDD study, Ram, so maybe I'll take that one second, is what we communicated at this point is that we expect results by the end of next year. But given that we've enrolled patients over the last few quarters, we'd like to see a bit more of kind of a run rate before we provide an exact timing on what period we expect to see the results in. But at this point, we've communicated results by the end of next year and hope to be able to share more as we get a few more quarters under our belt.

Yes, that's right. And sites are coming up in the U.S., but also very recently, we got approval for initiation for a number of sites in Europe. So hopefully, that will accelerate recruitment. Regarding imsidolimab, of course, this is a rare or orphan disorder, and we expect a 6-month priority review.

And your next question comes from the line of Olivia Brayer with Cantor.

Can you talk a little bit about the guidance change this quarter? I mean at the midpoint, it still implies growth for 4Q, but at the lower end of the range, it wouldn't necessarily. So maybe just thoughts around the pushes and pulls of that guidance change and what you're seeing so far into October that helped inform today's update? And then I've got a couple of questions on Bysanti.

Yes, absolutely. Thanks, Olivia, for the question. So a couple of pieces there. And one thing that I commented on in my script was that underlying the guidance for this year is strong Fanapt revenue growth for the year, right, which is, I think, an underpinning of our guidance. But the other thing that's a variable in that consideration is the HETLIO

Super helpful, Kevin. And then is there anything you guys can tell us at this point around just the engagement that you're having with the FDA for your ongoing Bysanti review? Have they indicated wanting to see any additional information as part of your submission package? And anything you can tell us on when you might enter into label discussions for that asset? And then just kind of as a -- I know there's a couple of questions in there, but as a follow-up on the commercial side, as you look out to your PDUFA next year, what's the commercial strategy for actually convincing patients to switch from Fanapt over to this newer product? Is there a commercial hook or an incentive that would actually incentivize patients to make the switch before a generic version of Fanapt becomes available?

Maybe I'll start off with the regulatory update, and I'll let Kevin comment on the commercial strategy. The -- I think we have given an update that so far, the interactions with the division have been quite positive in that there have been no issues raised on the efficacy and the safety of the drug. So that is progressing well. Now in terms of label negotiations, we don't comment if they have started or about to start. But typically, those will precede the PDUFA date by a couple of months or so.

Yes. And then, Olivia, on the commercial strategy, we haven't shared, I would say, some key elements of our commercial strategy for Bysanti and the potential transition for Fanapt to Bysanti. But what I would tell you is, as we've talked about in the past, the atypical antipsychotic class is both a highly promotionally sensitive class and also a high switch class. So products that are actively promoted out there, as you know, will do significantly better than products that are not actively promoted. And as part of that, with it being a high switch class, if there are certain commercial tools that are available to prescribers, namely starter packs or titration packs in our case, or commercial co-pay programs, if those programs are available to patients that are starting, they'd be more likely to start on a product that offers those programs versus a product that doesn't. So I think both the nature of the class being highly promotionally sensitive and the potential support that could be available for patients, I think will lead to meaningful success on Bysanti when we decide to pull that trigger.

And I will add, Olivia, that the longer commercial plan is the addition of indications starting with the adjunct treatment of major depression with actually a key differentiator of how Fanapt has been used so far with a once-a-day dosing, increasing the convenience and hopefully compliance.

And your next question comes from the line of Andrew Tsai with Jefferies.

On the quarter. This is [ Matt Marcus ] on for Andrew Tsai. First off, for tradipitant in motion sickness, it could be approved on December 30, and then HETLIO

Yes. Thank you. We're actually very excited for both of these potential approvals because they share in common the consumer-centric focus, both in HETLIO

And then for your GLP vomiting study, can you describe that study? Like what does the positive efficacy data look like? And what would be the next steps for the program? And then similarly, for Bysanti, should have like Phase III data in 2026. What kind of measures to efficacy separation do you hope to achieve in that study?

Yes. So I will start with the last question. On MDD, like any other study, there is not a threshold of response. We are looking for a positive primary endpoint on the typical clinical scales that will be used. And of course, subsequently, people are doing a responder analysis, trying to identify a portion of patients responding to a certain effect. But there is no threshold that is required. But of course, the study is powered to detect a significant minimal threshold of efficacy. Your other question was on the use of tradipitant in preventing the GI, specifically vomiting side effects of Wegovy, semaglutide. And we know that GLP-1 analogs have to be titrated slowly because of the very frequent nausea and vomiting side effects, which actually limits the efficacy at least for a certain period of time. And for a number of patients, around 15% or so, may actually drop out of treatment and obviously the benefit of GLP-1 analogs. So this is a well understood and very significant therapeutic issue. The study we have designed, administers tradipitant for a few days prior to initiating a Wegovy injection, which is administered at a much higher dose than the recommended titration dose. Titration dose begins at 0.25 milligrams and escalates in 4-week increments. The dose we're using in the study is 1 milligram. And patients are randomized to receive either Wegovy or placebo. And what we do is we follow these people and measure the efficacy with the number of vomiting episodes and other secondary endpoints like nausea, duration of nausea, et cetera. And as I said, this study has completed now. The sites and data are being monitored and data clean, and we hope soon to be able to analyze the top line results.

That concludes our question-and-answer session. I will now turn the call back over to the management for closing remarks.

Thank you very much for joining this call. We'll see you at a later time.