UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): November 8, 2007
VANDA
PHARMACEUTICALS INC.
(Exact
name of Registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
|
000-51863
|
|
03-0491827
|
|
(Commission
File No.)
|
|
(IRS
Employer Identification No.)
|
9605
Medical Center Drive
Suite 300
Rockville,
Maryland 20850
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (240)
599-4500
|
Not
Applicable
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
|
|
|
|
o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
|
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
On
November 8, 2007, Vanda Pharmaceuticals Inc. issued a press release relating
to
its results of operations and financial condition for the third quarter ended
September 30, 2007. The full text of this press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K.
The
information in Item 2.02 of this Form 8-K and the Exhibit attached
hereto shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference
in
any filing under the Securities Act of 1933 or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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|
Description
|
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99.1
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Press
release of Vanda Pharmaceuticals Inc. dated November 8,
2007.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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VANDA
PHARMACEUTICALS INC.
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||
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By:
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/s/
STEVEN
A. SHALLCROSS
|
|
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Name:
Steven A. Shallcross
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|
|
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Title:
Senior Vice President, Chief Financial
Officer
and Treasurer
|
Dated:
November 8, 2007
For
Immediate Release
Company
Contact:
Steven
A.
Shallcross
Senior
Vice President & CFO
Vanda
Pharmaceuticals Inc. .
(240)
599-4500
sshallcross@vandapharma.com
Vanda
Pharmaceuticals Reports Third Quarter 2007 Results
Submits
Iloperidone New Drug Application (NDA);
Begins
Phase III Chronic Insomnia Study for VEC-162;
Reports
Results in VSF-173 Phase II Proof of Concept Trial;
Updates
Full Year 2007 Financial Guidance
ROCKVILLE,
MD.
-
November 8, 2007 - Vanda Pharmaceuticals Inc. (NASDAQ: VNDA),
a
biopharmaceutical company focused on the development and commercialization
of
clinical-stage product candidates for central nervous system disorders, today
announced financial and operational results for the third quarter ended
September 30, 2007.
Vanda
reported research and development (R&D) expenses in the third quarter of
2007 of $13.9 million, compared to second quarter of 2007 R&D expenses of
$10.2 million and third quarter of 2006 R&D expenses of $9.5 million. The
increase in R&D expenses in the third quarter of 2007 relative to the second
quarter of 2007 is primarily attributable to a $5.0 million milestone charge
resulting from the submission of the iloperidone NDA, which was partially offset
by lower clinical trial costs associated with the completion of the long-term
open label portion of the Phase III trial for iloperidone. The increase in
R&D expenses in the third quarter of 2007 relative to the third quarter of
2006 was also primarily attributable to the $5.0 million NDA milestone charge,
which was partially offset by lower clinical trial expenses for the company’s
iloperidone and VEC-162 Phase III trials that were primarily completed in 2006.
Total expenses for the third quarter of 2007 were $23.5 million, compared to
$17.6 million in the second quarter of 2007 and $12.8 million in the third
quarter of 2006.
Net
loss
applicable to common stockholders was $21.9 million for the third quarter of
2007, compared to $16.0 million in the second quarter of 2007 and $12.1 million
in the third quarter of 2006. Net loss per share applicable to common
stockholders for the third quarter of 2007 was $0.82, compared to $0.60 in
the
second quarter of 2007, and $0.55 in the third quarter of 2006.
As
of
September 30, 2007, Vanda’s cash, cash equivalents, and marketable securities
totaled $109.4 million. As of September 30, 2007, the company had a total of
approximately 26.6 million shares of common stock outstanding.
Page
1 of
8
OPERATIONAL
HIGHLIGHTS
Iloperidone
On
September 27, 2007 Vanda announced that it had submitted an NDA to the U.S.
Food
and Drug Administration (FDA) for iloperidone, its investigational atypical
antipsychotic for the treatment of schizophrenia.
VEC-162
Vanda
announced today the initiation of a Phase III clinical trial to evaluate the
safety and efficacy of VEC-162 in chronic primary insomnia. The trial is a
randomized, double-blind, placebo-controlled study, and will enroll
approximately 400 patients. The trial will measure time to fall asleep and
sleep
maintenance, as well as next-day performance and mood. Vanda expects results
in
the fourth quarter of 2008.
VSF-173
On
October 30, 2007 Vanda announced top-line results from a Phase II clinical
trial
evaluating VSF-173 in excessive sleepiness.
FINANCIAL
DETAILS
|
·
|
Operating
Expenses. Third quarter 2007 R&D expenses, primarily consisting of
salaries and related costs of R&D personnel, stock-based compensation,
licensing fees, and the costs of consultants, materials and supplies
associated with the company’s clinical trials and research initiatives,
were $13.9 million, up from $10.2 million in the previous quarter
and up
from $9.5 million in the third quarter of 2006. The increase in
R&D
expenses in the third quarter of 2007 relative to the second quarter
of
2007 was primarily attributable to a $5.0 million milestone charge
resulting from the submission of the iloperidone NDA, which was
partially
offset by lower clinical trial costs related to the completion
of the
long-term open label portion of the Phase III trial for iloperidone.
The
increase in R&D expenses in the third quarter of 2007 relative to the
third quarter of 2006 was also primarily attributable to the $5.0
million
NDA milestone charge, which was partially offset by lower clinical
trial
expenses for the company’s iloperidone and VEC-162 Phase III trials that
were primarily completed in 2006.
|
General
and administrative (G&A) expenses totaled $9.6 million in the third quarter
of 2007, up from $7.4 million in the second quarter of 2007, and up from
$3.3
million in the third quarter of 2006. The increase in G&A expenses in the
third quarter of 2007 relative to the second quarter of 2007 was primarily
attributable to an increase in marketing costs associated with the pre-launch
commercial activities for iloperidone. The increase in G&A expenses in the
third quarter of 2007 relative to the third quarter of 2006 was primarily
due to
increased marketing costs associated with the pre-launch commercial activities,
stock-based compensation charges, salaries and related costs of non-R&D
personnel, insurance and facility expenses.
Employee
stock-based compensation expense recorded in the third quarter of 2007 was
$5.2
million, or $0.19 per share. Of the total $5.2 million, $1.1 million was
recorded in R&D expenses and $4.1 million was recorded in G&A expenses.
In the second quarter of 2007 and the third quarter of 2006, total stock-based
compensation was $5.1 million and $1.5 million, respectively.
|
·
|
Net
loss applicable to common stockholders for the third quarter of
2007 was
$21.9 million. This compares to a net loss of $16.0 million in
the second
quarter of 2007, and $12.1 million in the third quarter of
2006.
|
|
·
|
Net
loss per share applicable to common stockholders for the third
quarter of
2007 was $0.82, compared to $0.60 in the second quarter of 2007
and $0.55
in the third quarter of 2006.
|
Page
2 of
8
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·
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Cash
and marketable securities decreased by $10.3 million during the
third
quarter. Changes included $21.9 million of operating losses, offset
by
increases in accrued R&D expenses and accounts payable of $6.4
million, $5.3 million of non-cash depreciation, amortization, and
stock-based compensation expenses, and net decreases in other working
capital of $0.1 million.
|
|
·
|
The
balance sheet at the end of the third quarter of 2007 reflected
$109.4
million of unrestricted cash, cash equivalents and marketable securities,
compared to $119.7 million as of June 30, 2007, and $31.9 million
as of
December 31, 2006.
|
FINANCIAL
GUIDANCE
Vanda
is
updating its full year 2007 financial guidance as a result of favorable
variances from expected spending levels, and a later-than-planned initiation
of
the VEC-162 trial in primary insomnia. Full year financial results are now
expected to show total cash used in company operations to be approximately
$55
million to $60 million, or $25 million to $30 million less than previously
reported. The total cash balance at December 31, 2007 is now expected to
be in
the range of $85 million to $90 million. Vanda anticipates that its current
funds will be sufficient to continue its pre-launch commercial activities
for
iloperidone, the ongoing VEC-162 Phase III trial for chronic sleep disorders
and
additional R&D activities into mid-2008.
Net
loss
for the year is expected to be between $70 million to $75 million, or
approximately $2.66 to $2.84 per share. Non-cash charges for 2007, consisting
primarily of stock-based compensation expense and depreciation and amortization,
are expected to be approximately $20 million. Per share figures were computed
on
a weighted average basis of 26,362,723 shares of common stock outstanding
at the
end of the year.
CONFERENCE
CALL
The
company has scheduled a conference call for today, Thursday, November 8,
2007 at
10:30 AM ET. During the call, Mihael H. Polymeropoulos, M.D., President and
CEO,
and Steven A. Shallcross, Sr. Vice President and CFO, will discuss quarterly
results and other corporate activities. Investors can call 1-866-578-5801
(domestic) and 1-617-213-8058 (international) prior to the 10:30 AM start
time
and ask for the Vanda Pharmaceuticals conference call hosted by Dr.
Polymeropoulos. A replay of the call will be available Thursday, November
8,
2007, at 12:30 PM ET and will be accessible until Thursday, November 15,
2007,
at 5:00 PM ET. The replay call-in number is 1-888-286-8010 for domestic callers
and 1-617-801-6888 for international callers. The access number is 60186931.
The
conference call will be broadcast simultaneously on the company's Web site,
http://www.vandapharma.com.
Investors should click on the Investor Relations tab and are advised to go
to
the Web site at least 15 minutes early to register, download, and install
any
necessary software. The call will also be archived on the Vanda Web site
for a
period of 30 days, through December 8, 2007.
Page
3 of
8
ABOUT
VANDA PHARMACEUTICALS INC.:
Vanda
Pharmaceuticals Inc. is a biopharmaceutical company focused on the development
and commercialization of clinical-stage product candidates for central nervous
system disorders. The company has three product candidates in clinical
development. Vanda's lead product candidate, iloperidone, is a compound for
the
treatment of schizophrenia and bipolar disorder, for which Vanda has recently
submitted an NDA to the FDA. Vanda's second product candidate, VEC-162, is
a
compound for the treatment of sleep and mood disorders, which is currently
in
Phase III for sleep disorders. Vanda's third product candidate, VSF-173,
is a
compound for the treatment of excessive sleepiness, which recently completed
its
Phase II study. For more on Vanda Pharmaceuticals Inc., please visit
http://www.vandapharma.com.
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
release contains forward-looking statements within the meaning of Section
21E of
the Securities Exchange Act of 1934, as amended, including statements regarding
Vanda’s plans for its product candidates. Words such as, but not limited to,
“look forward to,” “believe,” “expect,” “anticipate,” “estimate,” “intend,”
“plan,” “targets,” “likely,” “will,” “would,” “should,” and “could,” and similar
expressions or words identify forward-looking statements. Such forward-looking
statements are based upon current expectations that involve risks, changes
in
circumstances, assumptions and uncertainties. Vanda is at an early stage
of
development and may not ever have any products that generate significant
revenue. Important factors that could cause actual results to differ materially
from those reflected in Vanda’s forward-looking statements include, among
others, a failure of Vanda’s product candidates to be demonstrably safe and
effective, a failure to obtain regulatory approval for the company’s products or
to comply with ongoing regulatory requirements, a lack of acceptance of Vanda’s
product candidates in the marketplace, a failure of the company to become
or
remain profitable, Vanda’s inability to obtain the capital necessary to fund its
research and development activities, a loss of any of the company’s key
scientists or management personnel, and other factors that are described
in the
“Risk Factors” section (Part II, Item 1A) of Vanda’s report on Form 10-Q for the
quarter ended June 30, 2007 (File No. 000-51863). No forward-looking statements
can be guaranteed and actual results may differ materially from such statements.
The information in this release is provided only as of the date of this release,
and Vanda undertakes no obligation to update any forward-looking statements
contained in this release on account of new information, future events, or
otherwise, except as required by law.
####
Page
4 of
8
|
VANDA
PHARMACEUTICALS INC.
|
||||||||||||||
|
(A
Development Stage Enterprise)
|
||||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
September
30,
2007
|
September
30,
2006
|
September
30,
2007
|
September
30,
2006
|
||||||||||
|
Revenues
from services
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
|
Operating
expenses:
|
|||||||||||||
|
Research
and development
|
13,874,248
|
9,542,385
|
34,660,132
|
44,130,788
|
|||||||||
|
General
and administrative
|
9,647,646
|
3,264,849
|
23,330,570
|
9,170,439
|
|||||||||
|
Total
operating expenses
|
23,521,894
|
12,807,234
|
57,990,702
|
53,301,227
|
|||||||||
|
Loss
from operations
|
(23,521,894
|
)
|
#(12,807,234
|
)
|
(57,990,702
|
)
|
#(53,301,227
|
)
|
|||||
|
Interest
income
|
1,514,708
|
683,469
|
4,608,143
|
1,686,363
|
|||||||||
|
Interest
expense
|
-
|
(396
|
)
|
-
|
(4,829
|
)
|
|||||||
|
Other
income
|
71,345
|
-
|
71,345
|
-
|
|||||||||
|
Total
other income, net
|
1,586,053
|
#683,073
|
4,679,488
|
#1,681,534
|
|||||||||
|
Loss
before tax provision
|
(21,935,841
|
)
|
#(12,124,161
|
)
|
(53,311,214
|
)
|
#(51,619,693
|
)
|
|||||
|
Income
tax provision
|
7,660
|
-
|
10,070
|
-
|
|||||||||
|
Net
loss
|
$
|
(21,943,501
|
)
|
$
|
(12,124,161
|
)
|
$
|
(53,321,284
|
)
|
$
|
(51,619,693
|
)
|
|
|
Basic
and diluted net loss per
|
|||||||||||||
|
common
share
|
$
|
(0.82
|
)
|
$
|
(0.55
|
)
|
$
|
(2.03
|
)
|
$
|
(3.72
|
)
|
|
|
Shares
used in calculation of
|
|||||||||||||
|
basic
and diluted net loss
|
|||||||||||||
|
per
common share
|
26,612,853
|
21,871,542
|
26,223,151
|
13,862,613
|
|||||||||
Page
5 of
8
|
VANDA
PHARMACEUTICALS INC.
|
|||||||||||
|
(A
Development Stage Enterprise)
|
|||||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
September
30, 2007
|
December
31, 2006
|
||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
59,954,473
|
$
|
30,928,895
|
|||
|
Marketable
securities
|
45,474,370
|
941,981
|
|||||
|
Prepaid
expenses, deposits and other current assets
|
3,439,284
|
1,949,466
|
|||||
|
Total
current assets
|
108,868,127
|
33,820,342
|
|||||
|
Marketable
securities, long-term
|
3,992,347
|
-
|
|||||
|
Property
and equipment, net
|
1,444,925
|
1,859,704
|
|||||
|
Deposits
|
150,000
|
150,000
|
|||||
|
Restricted
cash
|
430,230
|
430,230
|
|||||
|
Total
assets
|
$
|
114,885,629
|
$
|
36,260,276
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
3,446,423
|
$
|
2,783,249
|
|||
|
Accrued
expenses
|
11,868,130
|
6,322,808
|
|||||
|
Total
current liabilities
|
15,314,553
|
9,106,057
|
|||||
|
Long-term
liabilities:
|
|||||||
|
Deferred
rent
|
280,655
|
238,413
|
|||||
|
Deferred
grant revenue
|
-
|
129,950
|
|||||
|
Other
long-term liabilities
|
-
|
28,984
|
|||||
|
Total
liabilities
|
15,595,208
|
9,503,404
|
|||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
26,643
|
22,129
|
|||||
|
Additional
paid-in capital
|
252,412,208
|
126,578,588
|
|||||
|
Accumulated
other comprehensive gain (loss)
|
13,430
|
(3,269
|
)
|
||||
|
Deficit
accumulated during the development stage
|
(153,161,860
|
)
|
(99,840,576
|
)
|
|||
|
Total
stockholders' equity
|
99,290,421
|
26,756,872
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
114,885,629
|
$
|
36,260,276
|
|||
Page
6 of
8
|
|
|
VANDA
PHARMACEUTICALS INC.
|
|
(A
Development Stage Enterprise)
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
Nine
Months Ended
|
|||||
|
September
30,
|
September
30,
|
||||||
|
2007
|
2006
|
||||||
|
Cash
flows from operating activities:
|
|||||||
|
Net
loss
|
$
|
(53,321,284
|
)
|
$
|
(51,619,693
|
)
|
|
|
Adjustments
to reconcile net income to net cash used
|
|||||||
|
in
operating activities:
|
|||||||
|
Depreciation
and amortization
|
446,806
|
415,197
|
|||||
|
Employee
and non-employee stock-based compensation
|
14,480,108
|
4,525,202
|
|||||
|
Loss
on disposal of assets
|
27,017
|
29,528
|
|||||
|
Accretion
of discount on investments
|
(1,315,609
|
)
|
(301,293
|
)
|
|||
|
Changes
in assets and liabilities:
|
|||||||
|
Prepaid
expenses and other current assets
|
(1,414,371
|
)
|
391,559
|
||||
|
Deposits
|
-
|
660,000
|
|||||
|
Accounts
payable
|
660,697
|
(143,303
|
)
|
||||
|
Accrued
expenses
|
5,544,227
|
5,329,690
|
|||||
|
Deferred
grant revenue
|
(140,599
|
)
|
-
|
||||
|
Other
liabilities
|
13,258
|
209,851
|
|||||
|
Net
cash used in operating activities
|
(35,019,750
|
)
|
(40,503,262
|
)
|
|||
|
Cash
flows from investing activities:
|
|||||||
|
Purchases
of property and equipment
|
(249,728
|
)
|
(1,187,295
|
)
|
|||
|
Proceeds
from sales of property and equipment
|
119,054
|
-
|
|||||
|
Purchases
of marketable securities
|
(107,570,370
|
)
|
(101,313,078
|
)
|
|||
|
Proceeds
from sales of marketable securities
|
-
|
82,137,888
|
|||||
|
Maturities
of marketable securities
|
60,395,000
|
18,520,000
|
|||||
|
Net
cash used in investing activities
|
(47,306,044
|
)
|
(1,842,485
|
)
|
|||
|
Cash
flows from financing activities:
|
|||||||
|
Principal
payments on obligations under capital lease
|
-
|
(1,071
|
)
|
||||
|
Principal
payments on note payable
|
-
|
(141,074
|
)
|
||||
|
Proceeds
from exercise of stock options and warrants
|
103,176
|
48,886
|
|||||
|
Proceeds
from issuance of common stock, net of
|
|||||||
|
issuance
costs
|
111,254,850
|
53,329,951
|
|||||
|
Net
cash provided by financing activities
|
111,358,026
|
53,236,692
|
|||||
|
Effect
of foreign currency translation
|
(6,654
|
)
|
(3,781
|
)
|
|||
|
Net
increase in cash and cash equivalents
|
29,025,578
|
10,887,164
|
|||||
|
Cash
and cash equivalents, beginning of period
|
30,928,895
|
21,012,815
|
|||||
|
Cash
and cash equivalents, end of period
|
$
|
59,954,473
|
$
|
31,899,979
|
|||
Page
7 of
8
SOURCE
Vanda Pharmaceuticals Inc.
11/8/2007
CONTACT:
Steven A. Shallcross, Senior Vice President, Chief Financial Officer of Vanda
Pharmaceuticals Inc., +1-240-599-4500
Web
site:
http://www.vandapharma.com
(VNDA)
CO:
Vanda
Pharmaceuticals Inc.
Page
8 of
8