Vanda Pharmaceuticals Inc. Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Fanapt: Completed first phase of sales force build-out for bipolar I disorder launch, with over 90% increase in new patient starts (NBRx metric). Initiating second phase of sales force expansion to ~200 reps by year-end. Plan to file NDA for milsaperidone in schizophrenia and bipolar I disorder in early 2025, initiate Phase 3 for major depressive disorder, and start pivotal long-term relapse prevention study for Fanapt LAI.
• PONVORY: Completed distribution transition from Janssen, built sales team, showed strong prescriber and patient preferences in studies. Submitted IND for psoriasis and ulcerative colitis, with potential for once-daily oral treatment in these indications.
• Tradipitant: FDA denied approval for gastroparesis, but plan to pursue via scientific advisory committee and initiate trial for GLP-1 analog-induced vomiting.
• Financials: First nine months 2024 total revenue $145.6M, net loss $14M; Q3 2024 total revenue $47.7M, net loss $5.3M. Operating expenses increased due to commercial launches and corporate activities.

Segment Performance

• Fanapt: Net product sales for the first nine months of 2024 were $67.6 million, representing 46.4% of total revenue ($145.6M). In Q3 2024, Fanapt net product sales were $23.9 million. The sales force for Fanapt has expanded to ~150 reps, with plans to reach ~200 reps by year-end.
• Hetlioz: Net product sales for the first nine months of 2024 were $56.6 million, making up 38.9% of total revenue. In Q3 2024, Hetlioz net product sales were $17.9 million. Continued generic competition impacts Hetlioz sales.
• PONVORY: Net product sales for the first nine months of 2024 were $21.3 million, accounting for 14.6% of total revenue. In Q3 2024, PONVORY net product sales were $5.9 million. The launch transition from Janssen was completed, with potential for psoriasis and ulcerative colitis indications.

Guidance

• Total net product sales from Fanapt, Hetlioz, and PONVORY expected between $190 million and $210 million (upward revision from prior $180M-$210M) due to momentum in product portfolio.
• Year-end 2024 cash expected between $370 million and $390 million (upward revision from prior $360M-$390M) reflecting portfolio momentum.

Risks

• Impact of Medicare benefit redesign starting January 2025, negatively affecting gross to net for Medicare payer segment (industry-wide change).
• Uncertainties around FDA decisions, such as denial of tradipitant for gastroparesis, and variability in Hetlioz sales due to continued generic competition.

Question and Answer

Q: Charles Duncan asks about Fanapt sales reps' feedback and sales force optimization for the bipolar I disorder launch.

A: Mihael Polymeropoulos notes over 90% increase in new patient starts, Kevin Moran mentions 3-4 fold increase in sales force interactions with prescribers, and plans to expand sales force to 200 reps by year-end.

Q: Ram Selvaraju inquires about Fanapt LAI timeline, milsaperidone's future applications, and PONVORY's ulcerative colitis and psoriasis plans.

A: Mihael Polymeropoulos states Fanapt LAI Phase 3 to start in Q4 2024, milsaperidone to initiate Phase 3 for major depression soon, and PONVORY submitted IND for ulcerative colitis and near submission for psoriasis.

Q: Unidentified Analyst asks about balancing Fanapt and PONVORY sales forces, inventory destocking, and early-stage program strategy.

A: Kevin Moran addresses inventory destocking resolved post-transition, separate sales forces for Fanapt and PONVORY, and balanced risk development strategy with potential partnerships for early-stage programs.