UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D/A
Under
the Securities Exchange Act of 1934
(Amendment
No. 2 )*
|
Vanda
Pharmaceuticals Inc.
|
|
(Name
of Issuer)
|
|
Common Stock, par value $0.001 per
share
|
|
(Title
of Class of Securities)
|
|
921659108
|
|
(CUSIP
Number)
|
|
Kevin
C. Tang
Tang
Capital Management, LLC
4401
Eastgate Mall
San
Diego, CA 92121
(858) 200-3830
|
|
(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
|
|
February 13, 2009
|
|
(Date
of Event which Requires Filing of this
Statement)
|
Note: Schedules
filed in paper format shall include a signed original and five copies of the
schedule, including all exhibits. See § 240.13d-7 for other
parties to whom copies are to be sent.
* The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued
on following pages)
Page 1
of 10
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CUSIP
No. 921659108
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13D
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Page
2 of 10
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||||
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1
|
Names
of Reporting Persons.
I.R.S.
Identification Nos. of above persons (entities only).
Tang
Capital Partners, LP
|
|||||
|
2
|
Check
the Appropriate Box if a Member of a Group
|
(a)
¨
(b)
ý
|
||||
|
3
|
SEC
Use Only
|
|||||
|
4
|
Source
of Funds
WC
|
|||||
|
5
|
Check
If Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or
2(e)
|
o
|
||||
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6
|
Citizenship
or Place of Organization
Delaware
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|||||
|
Number
of
|
7
|
Sole
Voting Power
0
|
||||
|
Shares
Beneficially
Owned
by
|
8
|
Shared
Voting Power
3,665,852
|
||||
|
Each
Reporting
Person
With
|
9
|
Sole
Dispositive Power
0
|
||||
|
|
10
|
Shared
Dispositive Power
3,665,852
|
||||
|
11
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
3,665,852
|
|||||
|
12
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares
|
¨
|
||||
|
13
|
Percent
of Class Represented by Amount in Row (11)
13.8%
|
|||||
|
14
|
Type
of Reporting Person
PN
|
|||||
Page 2
of 10
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CUSIP
No. 921659108
|
13D
|
Page 3
of 10
|
||||
|
1
|
Names
of Reporting Persons.
I.R.S.
Identification Nos. of above persons (entities only).
Tang
Capital Management, LLC
|
|||||
|
2
|
Check
the Appropriate Box if a Member of a Group
|
(a)
¨
(b)
ý
|
||||
|
3
|
SEC
Use Only
|
|||||
|
4
|
Source
of Funds
WC
|
|||||
|
5
|
Check
If Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or
2(e)
|
o
|
||||
|
6
|
Citizenship
or Place of Organization
Delaware
|
|||||
|
Number
of
|
7
|
Sole
Voting Power
0
|
||||
|
Shares
Beneficially
Owned
by
|
8
|
Shared
Voting Power
3,665,852
|
||||
|
Each
Reporting
Person
With
|
9
|
Sole
Dispositive Power
0
|
||||
|
|
10
|
Shared
Dispositive Power
3,665,852
|
||||
|
11
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
3,665,852
|
|||||
|
12
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares
|
o
|
||||
|
13
|
Percent
of Class Represented by Amount in Row (11)
13.8%
|
|||||
|
14
|
Type
of Reporting Person
OO
|
|||||
Page 3
of 10
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CUSIP
No. 921659108
|
13D
|
Page 4
of 10
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||||
|
1
|
Names
of Reporting Persons.
I.R.S.
Identification Nos. of above persons (entities only).
Kevin
C. Tang
|
|||||
|
2
|
Check
the Appropriate Box if a Member of a Group
|
(a)
¨
(b)
ý
|
||||
|
3
|
SEC
Use Only
|
|||||
|
4
|
Source
of Funds
PF,
WC, OO
|
|||||
|
5
|
Check
If Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or
2(e)
|
o
|
||||
|
6
|
Citizenship
or Place of Organization
United
States
|
|||||
|
Number
of
|
7
|
Sole
Voting Power
0
|
||||
|
Shares
Beneficially
Owned
by
|
8
|
Shared
Voting Power
3,883,436
|
||||
|
Each
Reporting
Person
With
|
9
|
Sole
Dispositive Power
0
|
||||
|
|
10
|
Shared
Dispositive Power
3,965,852
|
||||
|
11
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
3,965,852
|
|||||
|
12
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares
|
o
|
||||
|
13
|
Percent
of Class Represented by Amount in Row (11)
14.9%
|
|||||
|
14
|
Type
of Reporting Person
IN
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|||||
Page 4
of 10
Explanatory Note: This
Amendment No. 2 relates to and amends the Statement of Beneficial Ownership on
Schedule 13D of Tang Capital Partners, LP, a Delaware partnership, Tang Capital
Management, LLC, a Delaware limited liability company and Kevin C. Tang, a
United States citizen (each, a “Reporting Person” and collectively, the
“Reporting Persons”), initially filed jointly by the Reporting Persons with the
Securities and Exchange Commission on October 6, 2008 and amended on November
17, 2008 (the “Statement”), with respect to the Common Stock, $0.001 par value
(the “Common Stock”), of Vanda Pharmaceuticals Inc., a Delaware corporation (the
“Issuer”).
Items
3, 4, 5 and 7 of the Statement are hereby amended to the extent hereinafter
expressly set forth. All capitalized terms used and not expressly
defined herein have the respective meanings ascribed to such terms in the
Statement.
Item
3. Source and Amount of Funds or Other Consideration
Item 3 of
the Statement is hereby amended to add the following:
Since
the date of the last filing on Schedule 13D, on November 20, 2008, Tang Capital
Partners, LP purchased 145,000 shares of Vanda Pharmaceuticals Inc.’s common
stock through the open market for $0.7278 per share.
In the
past, Tang Capital Partners, LP has held some of its shares in commingled margin
accounts, which extended margin credit to Tang Capital Partners, LP as and when
required to open or carry positions in the margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies.
In such instances, the positions held in the margin accounts were pledged as
collateral security for the repayment of debit balances in the accounts. The
margin accounts may have from time to time had debit balances. Since other
securities were held in the margin accounts, it is not possible to determine the
amounts, if any, of margin used to purchase the shares of common stock reported
herein. As of the date of this letter, no shares of Common Stock are
held in margin accounts or otherwise pledged as security.
Item
4. Purpose of Transaction
Item 4
of the Statement is hereby amended and restated in its entirety as
follows:
The
Reporting Persons are engaged in the investment business. The purpose
of the acquisition of the shares of the Common Stock is for investment, and the
acquisitions of such stock were made in the ordinary course of the Reporting
Persons’ businesses.
Since
the date of the last filing on Schedule 13D, Kevin C. Tang has continued to have
discussions with the Issuer and its Board of Directors in regards to the
strategic direction of the Issuer. Mr. Tang has expressed his opinion and proposed to
the Issuer and its Board of Directors that in order to maximize value for all
Stockholders, the Issuer must cease operations immediately, liquidate the
Issuer’s assets and distribute all remaining capital to the
Stockholders.
Since
the Issuer continues to operate as of the date of this filing and has not
publicly announced any plan of liquidation and dissolution, the Reporting
Persons believe the Issuer’s Board of Directors has rejected their proposal to
immediately cease all operations, liquidate the Issuer’s assets and distribute
all remaining capital to the stockholders. In
light of the foregoing, and in order to preserve and maximize the diminishing
value of the Issuer’s assets for the benefit of all Stockholders, the Reporting
Persons determined to nominate certain individuals to be elected to the Issuer’s
Board of Directors at the 2009 Annual Meeting of Stockholders, and propose
certain resolutions to the Issuer’s Stockholders, as discussed in more detail
below.
On
February 13, 2009, Tang Capital Partners, LP delivered a letter (the “Letter”)
to the Nominating and Governance Committee of the Issuer recommending the
following individuals (the “Nominees”) as nominees for election to the Issuer’s
Board of Directors at the 2009 Annual Meeting of
Stockholders:
Kevin
C. Tang
Andrew
D. Levin, M.D., Ph.D.
Page 5
of 10
On the
same date, Tang Capital Partners, LP also delivered a notice (the “Notice”) to
the Issuer of its intention to take the following actions at the 2009 Annual
Meeting of Stockholders, or any other meetings of stockholders held in lieu
thereof, and any adjournments, postponements, reschedulings or continuations
thereof:
(1)
nominate the Nominees as candidates for election to the Issuer’s Board of
Directors;
(2)
propose resolutions of the stockholders of the Issuer to amend the Bylaws to (i)
provide that the Issuer’s Annual Meetings of Stockholders for each year
commencing in 2010 be held on April 30th or, if April 30th is not a business
day, on the first business day following April 30th and (ii) provide that
certain matters requiring the approval of the Issuer’s Board of Directors
require a unanimous vote for such approval; and
(3)
propose resolutions of the stockholders of the Issuer to request that the Board
of Directors promptly take all necessary action to swiftly and orderly liquidate
the Issuer’s remaining assets and return all remaining capital to the Issuer’s
stockholders.
In
connection with such recommendation and notice, and in full compliance with the
requirements of Section 2.7 of the Issuer’s bylaws, Tang Capital Partners, LP
provided the Issuer with certain information about each
nominee. Copies of the Letter and the Notice are filed as Exhibit 2
and Exhibit 3 to this Statement, respectively, and incorporated by reference
herein.
The
Reporting Persons have requested to inspect stockholder records of the Issuer
pursuant to the Delaware General Corporation Law and may submit a request letter
to the Issuer pursuant to Rule 14a-7 of the Exchange Act, requesting the
Issuer’s stockholder list and security position listings to determine if it is
necessary to disseminate solicitation materials to the holders of the Common
Stock and for use in any such solicitation.
The
Reporting Persons intend to continue to have discussions with the Issuer, its
management, other stockholders of the Issuer or other relevant parties and may
exchange information with such parties. In such discussions, the
Reporting Persons may suggest, discuss or take a position on potential changes
to the Issuer's business, operations, operating budget, cost structure,
management, personnel, strategic direction or future plans, including but not
limited to the composition of the Issuer’s Board, the sale, transfer or other
disposition of some or all of the Issuer’s assets, a corporate restructuring,
spin-off or other organizational changes. Such suggestions,
discussions or positions may relate to one or more of the transactions specified
in clauses (a) through (j) of Item 4 of Schedule 13D of the Exchange
Act. In addition, the Reporting Persons may take such actions in the
future with respect to their investment in the Issuer as they deem advisable
including, without limitation, purchasing additional shares, disposing shares
and/or otherwise changing their intention with respect to the matters referred
to in Item 4 of Schedule 13D. Such actions will depend upon various
factors including, without limitation, the Issuer's financial and strategic
direction and position, the price performance of the Issuer's shares, general
conditions in the Issuer's industry, the economy and the securities markets, and
the availability of other investment opportunities.
Page 6
of 10
Except
as set forth herein, the Reporting Persons do not have any present plan or
proposal that would relate to or result in any of the matters set forth in
subparagraphs (a) - (j) of Item 4 of Schedule 13D.
Item
5. Interest
in Securities of the Issuer.
Item 5 of
the Statement is hereby amended and restated in its entirety as
follows:
| (a) | Amount beneficially owned and percentage of class: | |
| Tang Capital Partners, LP | 3,665,852 shares, representing 13.8% of the class | |
|
Tang
Capital Management, LLC
|
3,665,852 shares, representing 13.8% of the class | |
| Kevin C. Tang | 3,965,852 shares, representing 14.9% of the class | |
Tang
Capital Partners, LP is the beneficial owner of 3,665,852 shares of the Issuer’s
common stock and shares voting and dispositive power over such securities with
Tang Capital Management, LLC and Kevin C. Tang.
Tang Capital Management, LLC, as the
general partner of Tang Capital Partners, LP, may be deemed to beneficially own
the 3,665,852 shares beneficially owned by Tang Capital Partners, LP and
shares voting and dispositive power over such shares with Tang Capital Partners,
LP and Kevin C. Tang.
Kevin
C. Tang is the beneficial owner of 3,965,852 shares of the Issuer’s common
stock, comprising 3,665,852 shares beneficially owned by Tang Capital Partners,
LP, 217,584 shares owned by the Haeyoung and Kevin Tang Foundation, Inc., 41,208
shares owned by the Individual Retirement Account for the benefit of Chang L.
Kong (the “Chang IRA”), and 41,208 shares owned by the Individual Retirement
Account for the benefit of Chung W. Kong (the “Chung
IRA”).
Tang Capital Management, LLC, as the
general partner of Tang Capital Partners, LP, and Kevin C. Tang, as the manager
of Tang Capital Management, LLC, may also be deemed to beneficially own the
shares beneficially owned by Tang Capital Partners, LP. The Haeyoung and Kevin
Tang Foundation, Inc. is a private foundation, for which Kevin C. Tang serves as
President and Treasurer. Mr. Tang shares voting and dispositive power over the
shares held by this foundation with Haeyoung K. Tang. Chang L. and Chung W. Kong
are Kevin C. Tang’s in-laws and Mr. Tang may be deemed to have shared
dispositive power over the shares held in the Chang IRA and the Chung
IRA. Kevin C. Tang disclaims beneficial ownership of all shares
reported herein except to the extent of his pecuniary interest
therein. The Haeyoung and Kevin Tang Foundation, Inc. is a
not-for-profit corporation incorporated in the state of
Delaware. Haeyoung K. Tang is a U.S. citizen. Chang L. and Chung W.
Kong are retired U.S. citizens. The mailing address of all of the
foregoing persons and entities is c/o Tang Capital Management, LLC, 4401
Eastgate Mall, San Diego, CA 92121.
Page 7
of 10
(b) Voting and disposition
powers:
|
Sole
power to vote or direct the vote:
|
|
|
Tang
Capital Partners, LP
|
0
shares
|
|
Tang
Capital Management, LLC
|
0
shares
|
|
Kevin
C. Tang
|
0
shares
|
|
Shared
power to vote or direct the vote:
|
|
|
Tang
Capital Partners, LP
|
3,665,852 shares
|
|
Tang
Capital Management, LLC
|
3,665,852 shares
|
|
Kevin
C. Tang
|
3,883,436 shares
|
|
Sole
power to dispose or direct the disposition:
|
|
|
Tang
Capital Partners, LP
|
0
shares
|
|
Tang
Capital Management, LLC
|
0
shares
|
|
Kevin
C. Tang
|
0
shares
|
|
Shared
power to dispose or direct the disposition:
|
|
|
Tang
Capital Partners, LP
|
3,665,852 shares
|
|
Tang
Capital Management, LLC
|
3,665,852 shares
|
|
Kevin
C. Tang
|
3,965,852 shares
|
(c) Other
than the purchases described in Item 3, none of Kevin C. Tang, Tang Capital
Partners, LP and Tang Capital Management, LLC have effected any transaction in
the Issuer’s common stock within the last 60 days.
(d) N/A.
(e) N/A.
Page 8
of 10
Item
7. Material to Be Filed as Exhibits
Item 7
of the Statement is hereby amended to add the following:
|
Exhibit
2
|
February
13, 2009 Recommendations
for Candidates for Election as Directors at the 2009 Annual Meeting of
Stockholders of Vanda Pharmaceuticals Inc.
|
| Exhibit 3 | February 13, 2009 Stockholder’s Notice of Nomination of Persons for Election as Directors and Other Proposed Business at the 2009 Annual Meeting of Stockholders of Vanda Pharmaceuticals Inc. |
Page 9
of 10
SIGNATURES
After reasonable inquiry and to the
best of his or its knowledge and belief, each of the following Reporting Persons
certifies that the information set forth in this statement is true, complete and
correct.
February 18,
2009
| Tang Capital Partners, LP | |||
| By: | Tang Capital Management, LLC | ||
| By: | /s/ Kevin C. Tang | ||
| Kevin C. Tang, Manager | |||
| Tang Capital Management, LLC | |||
| By: |
/s/ Kevin C.
Tang
|
||
| Kevin C. Tang, Manager | |||
| /s/ Kevin C. Tang | |||
| Kevin C. Tang | |||
Page 10 of
10
EXHIBIT
2
Tang
Capital Management, LLC
4401
Eastgate Mall, San Diego,CA 92121
(858)
200-3830 Fax (858) 200-3837
February
13, 2009
VIA
HAND DELIVERY AND ELECTRONIC MAIL
(ir@vandapharma.com,
chip.clark@vandapharma.com)
William
D. Clark
Corporate
Secretary
Vanda
Pharmaceuticals Inc.
9605
Medical Center Drive, Suite 300
Rockville,
MD 20850
Re: Stockholder’s
Notice of Nomination of Persons for Election as Directors and Other Proposed
Business at the 2009 Annual Meeting of Stockholders of Vanda Pharmaceuticals
Inc.
Dear
Sir or Madam,
Tang
Capital Partners, LP (“TCP” and referred to herein as the “Stockholder”), hereby
submits this notice (together with the annexes and exhibits attached hereto,
collectively, the “Notice”) on the date hereof pursuant to the requirements (the
“Bylaw Requirements”) set forth in Section 2.7 of the Second Amended and
Restated Bylaws (the “Bylaws”) of Vanda Pharmaceuticals Inc., a Delaware
corporation (the “Company”), attached as Exhibit 3.11 to the Form 8-K filed by
the Company with the U.S. Securities and Exchange Commission (the “SEC”) on
December 17, 2008 (the “Bylaws”) of its intent, at the 2009 Annual Meeting of
Stockholders of the Company (the “Annual Meeting”), or any other meeting of
stockholders held in lieu thereof or for similar purpose, and any adjournments,
postponements, reschedulings or continuations thereof, (i) to nominate two
persons for election to the Board of Directors of the Company (the “Board”) and,
as separate matters (ii) to propose resolutions of the stockholders of the
Company to amend the Bylaws (such resolutions collectively the “Bylaw Amendment
Proposals”) and (iii) to propose resolutions of the stockholders of the Company
to request that the Board promptly take all necessary action to swiftly and
orderly liquidate the Company’s remaining assets and return all remaining
capital to the Company’s stockholders (the “Governance
Proposal”). This Notice is submitted by the Stockholder and on behalf
of the Beneficial Owners (as defined in Annex A).
Pursuant
to Section 2.7 of the Bylaws, the undersigned hereby sets forth the
following:
|
1.
|
The
stockholder giving this Notice and intending to make the nominations and
propose the Bylaw Amendment Proposals and Governance Proposal set forth
herein is TCP.
|
|
2.
|
The
principal address of TCP is 4401 Eastgate Mall, San Diego, California
92121.
|
|
3.
|
The
primary business of TCP is investing in
securities.
|
|
4.
|
As
of the close of business on February 13, 2009, TCP is the record holder of
100 shares of the common stock, par value $0.001 per share, of the Company
(the “Common Stock”). TCP is the beneficial owner of 3,665,852
shares of Common Stock, which number includes the 100 shares of which TCP
is the stockholder of record, as further described in Annex
A. Kevin C. Tang and Tang Capital Management, LLC, by virtue of
their relationship with TCP, may be deemed to beneficially own (as that
term is defined in Rule 13d-3 of the Securities Act of 1933, as amended)
the shares of Common Stock which TCP beneficially owns, as further
described in Annex A.
|
Corporate
Secretary
Page 2
of 10
|
5.
|
The
Stockholder hereby represents that it will notify the Company in writing
of the class and number of such shares owned beneficially and of record as
of the record date for the Annual Meeting (or any other meeting of
stockholders held in lieu thereof or for similar purpose, and any
adjournments, postponements, reschedulings or continuations thereof)
promptly following the later of the record date or the date notice of the
record date is first publicly
disclosed.
|
|
6.
|
The
Stockholder intends to deliver a proxy statement and form of proxy to
holders of, in the case of the Bylaw Amendment Proposals and Governance
Proposal, at least the percentage of the Company’s voting shares required
under applicable law to carry each such proposal and, in the case of the
nomination of the Nominees, a sufficient number of holders of the
Company’s voting shares to elect the Nominees (the
“Solicitation”). The Beneficial Owners, other than TCP, do not
intend to separately solicit proxies for the proposals or nominations set
forth herein. However, the Beneficial Owners may be deemed to
be “participants” in the Solicitation as such term is defined in Item 4 of
Rule 14a-101 (Schedule A) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”).
|
|
7.
|
The
Stockholder anticipates that the total cost of the Solicitation will be
between $250,000 and $400,000 or more. If successful with this
proxy solicitation and any of the Bylaw Amendment Proposals or Governance
Proposal are approved by the requisite vote of the stockholders or either
of the Nominees named herein are elected to the Board, the Stockholder may
seek reimbursement from the Company for any expenses or costs incurred or
reimbursed by the Stockholder in connection with nominating the Nominees
and soliciting proxies for their election, but does not intend to submit
the issue of reimbursement to a vote of the stockholders. The
Stockholder has incurred approximately $20,000 in legal fees associated
with the Solicitation as of the date of this Notice, which amount does not
include the costs represented by salaries and wages of regular employees,
partners, and officers of the Stockholder. Any of the
Beneficial Owners may bear all or a portion of the cost of the
Solicitation. As of the date of this Notice, the Stockholder
does not intend to have employees of the Beneficial Owners solicit
security holders and has not yet engaged representatives or other persons
to solicit security holders.
|
|
8.
|
Except
as set forth in this Notice and the Rights Agreement, dated as of
September 25, 2008, between the Company and American Stock Transfer &
Trust Company, LLC, as Rights Agent (the “Rights Agreement”), no
derivative instrument, swap, option, warrant, short interest, hedge or
profit interest or other transaction has been entered into by or on behalf
of the Stockholder with respect to stock of the Company. Other
than as set forth in this Notice, no other agreement, arrangement or
understanding (including any short position or any borrowing or lending of
shares of stock) has been made by or on behalf of the Stockholder, the
effect or intent of any of the foregoing being to mitigate loss to, or to
manage risk of stock price changes, for the Stockholder or to increase or
decrease the voting power or pecuniary or economic interest of the
Stockholder with respect to stock of the
Company.
|
Corporate
Secretary
Page 3
of 10
|
9.
|
Except
as set forth in this Notice and the Rights Agreement, the Stockholder does
not, directly or indirectly, beneficially own any option, warrant,
convertible security, stock appreciation right or similar right with an
exercise or conversion privilege or a settlement payment or mechanism at a
price related to any class or series of shares of the Company or with a
value derived in whole or in part from the value of any class or series of
share of the Company, whether or not such instrument or right shall be
subject to settlement in the underlying class or series of capital stock
of the Company or otherwise (a “Derivative Instrument”). Other
than the opportunities available to all stockholders of the Company and as
set forth herein, the Stockholder does not have any other direct or
indirect opportunity to profit or share in any profit derived from any
increase or decrease in the value of shares of Common
Stock.
|
|
10.
|
The
Stockholder hereby represents that it will notify the Company in writing
of any Derivative Instrument in effect as of the record date for the
Annual Meeting (or any other meeting of stockholders held in lieu thereof
or for similar purpose, and any adjournments, postponements, reschedulings
or continuations thereof) promptly following the later of the record date
or the date notice of the record date is first publicly
disclosed.
|
|
11.
|
Tang
Capital Management, LLC is the general partner of TCP. Kevin C.
Tang is the Managing Director of Tang Capital Management,
LLC. Andrew D. Levin is a Principal at Tang Capital Management,
LLC. Pursuant to such employment, Dr. Levin is a participant in
a deferred compensation plan, and the value of his plan account is indexed
to the performance of the TCP investment fund which includes shares of
Common Stock. Other than pursuant to the foregoing
relationships, there exists no agreement, arrangement or understanding
with respect to the Nominees, Bylaw Amendment Proposals or Governance
Proposal between or among the Stockholder and Beneficial Owners, any of
their respective affiliates or associates, or any others acting in concert
with the foregoing. However, each of the Stockholder and
Beneficial Owners may be deemed to have an arrangement or understanding
with respect to the voting or investment control of the Common Stock held
by such individuals and
entities.
|
|
12.
|
The
Stockholder hereby represents that it will notify the Company in writing
of any agreements, arrangements or understandings with respect to the
Nominees, Bylaw Amendment Proposals or Governance Proposal in effect as of
the record date for the Annual Meeting (or any other meeting of
stockholders held in lieu thereof or for similar purpose, and any
adjournments, postponements, reschedulings or continuations thereof)
promptly following the later of the record date or the date notice of the
record date is first publicly
disclosed.
|
|
13.
|
The
Stockholder hereby represents that it is the holder of record of Common
Stock entitled to vote at the Annual Meeting (or any other meeting of
stockholders held in lieu thereof or for similar purpose, and any
adjournments, postponements, reschedulings or continuations thereof) and
that it (i) intends to appear in person or by qualified representative at
the Annual Meeting (or any other meeting of stockholders held in lieu
thereof or for similar purpose, and any adjournments, postponements,
reschedulings or continuations thereof) to nominate the Nominees specified
herein and, as separate matters (ii) intends to appear in person or by
qualified representative at the Annual Meeting (or any other meeting of
stockholders held in lieu thereof or for similar purpose, and any
adjournments, postponements, reschedulings or continuations thereof) to
propose the Bylaw Amendment Proposals and the Governance
Proposal.
|
Corporate
Secretary
Page 4
of 10
Proposal
1: Election of Directors
The
Stockholder hereby notifies the Company that it intends to nominate for election
to the Board the following persons (each a “Nominee” and together, the
“Nominees”):
Kevin
C. Tang
Andrew
D. Levin, M.D., Ph.D.
Each
Nominee, the Stockholder and each Beneficial Owner has an interest in the
election of directors at the Annual Meeting (or any other meeting of
stockholders held in lieu thereof or for similar purpose, and any adjournments,
postponements, reschedulings or continuations thereof) directly and/or
indirectly through the beneficial ownership, if any, of Common Stock, as
described in Annex A. While the Stockholder strongly believes that
the election of the Nominees to the Board is in the best interest of all of the
stockholders of the Company, the Stockholder will benefit from the expected
improved corporate governance, a benefit that will be enjoyed by all
stockholders. Additionally, the Stockholder may receive unique
benefits if the Nominees set forth herein are elected to the
Board. Such unique benefit will, if realized, result from the fact
that the Nominees are principals within the Stockholder’s organization and may
be more receptive to its suggestions than any of the members of the Board that
are not affiliated with it. Specifically, Mr. Tang, a Nominee, is the
Managing Director of Tang Capital Management, LLC, the general partner of TCP
and Dr. Levin, a Nominee, is a Principal at Tang Capital Management,
LLC.
Information
regarding each Nominee required to be disclosed pursuant to Section 2.7 of the
Bylaws is set forth in Annexes
B and C attached
hereto.
Each
Nominee has signed a Representation and Agreement intended to comply with
Article II Section 2.7(C) of the Bylaws which are attached as Annexes D and E hereto. If the
Company finds these Representation and Agreements to be deficient or not in
compliance with the Bylaw Requirements, the Stockholder hereby requests,
pursuant to Article II, Section 2.7(C) of the Bylaws, that the Company provide
the Company’s form of such representation and agreement to the Stockholder, via
facsimile or electronic mail at the contact information below, not later than
12:00 p.m. Pacific Time on February 16, 2009.
The
Nominees are willing to be nominated. Each Nominee’s written consent
to his nomination, to being named in any proxy statement as a nominee, and to
serving as a director of the Company if elected, is included as Annex F
hereto.
In
addition to the foregoing, certain information regarding the qualifications of
each Nominee responsive to the criteria and attributes said to be considerations
for nominations as director by the Company’s Nominating and Governance Committee
as described in the Company’s proxy statement for its 2008 Annual Meeting of
Stockholders, is set forth in Annexes B and C attached hereto (without
conceding that any such information is required to be disclosed in this
Notice).
Corporate
Secretary
Page 5
of 10
Except
as set forth in this Notice, including the annexes hereto, as of the date
hereof, to the best of the Stockholder’s knowledge, (i) no Nominee holds or has
held any positions or offices within the Company; (ii) no Nominee has any family
relationship with any current or former director or executive officer of the
Company or a person nominated or chosen by the Company to be a director or
executive officer of the Company; (iii) there are no pending legal proceedings
where any Nominee, or an associate of any Nominee, is a party adverse to Company
or has an interest adverse to the Company; (iv) no Nominee has been involved in
legal proceedings as described in Item 401(f) of Regulation S-K of the
Securities Act of 1933, as amended (“Regulation S-K”) during the past five
years; (v) no Nominee owns any securities of the Company (or any parent or
subsidiary of the Company), directly or indirectly, beneficially or of record;
(vi) no Nominee is, or was in the past year, a party to any contract,
arrangement or understanding with any person with respect to any securities of
the Company; (vii) there is no transaction, or series of similar transactions,
since January 1, 2008, or any currently proposed transaction, or series of
similar transactions, to which the Company or any of its subsidiaries was or is
to be a party, in which the amount involved exceeds $120,000 and in which any
Nominee or any associate of any Nominee, or any member of the immediate family
of any Nominee or of any associate of any Nominee, had, or will have, a direct
or indirect material interest; (viii) no Nominee or associate of any Nominee has
any arrangement or understanding with any person with respect to (a) any future
employment with the Company or its affiliates (except in the capacity as a
director), or (b) any future transactions to which the Company or any of its
affiliates will or may be a party, or (c) selection as a director or nominee;
(ix) no Nominee has any substantial interest, direct or indirect, in the matters
to be acted on at the Annual Meeting, except in his interest in being nominated
and elected as a director; (x) no Nominee is, or has an immediate family member
who is, a partner in, or a controlling stockholder or any executive officer of,
any organization to which the Company made, or from which the Company received,
payments (other than those arising solely from investments in the Company’s
securities or payment under non-discretionary charitable contribution matching
programs) that exceed 5% of the organization’s consolidated gross revenues for
that year, or $200,000, whichever is more, in any of the most recent three
fiscal years; (xi) no Nominee is, or has an immediate family member who is,
employed as an executive officer of another entity where at any time during the
most recent three fiscal years any of the Company’s executive officers serve on
the compensation committee of such other entity; (xii) no Nominee is, or has an
immediate family member who is, a current partner of the Company’s outside
auditor, or was a partner or employee of the Company’s outside auditor who
worked on the Company’s audit at any time during any of the past three years;
(xiii) no Nominee has participated in the preparation of the financial
statements of the Company or any current subsidiary of the Company at any time
in the past three years; (xiv) no Nominee has, or has an immediate family member
who has, received any compensation from the Company; and (xv) no Nominee has
failed to file on a timely basis, reports required by Section 16(a) of the
Exchange Act with respect to securities of the Company.
The
Bylaws provide that the election of directors at all meetings of the
stockholders shall be by written ballot and that a plurality of the votes cast
thereat shall elect directors. Therefore, for the election of
directors, the two nominees receiving the most “For” votes (among votes
properly cast in person or by proxy) will be elected. Abstentions and
“broker non-votes” (i.e., shares held by a broker or nominee that are
represented at the meeting, but with respect to which such broker or nominee is
not instructed to vote on a particular proposal and does not have discretionary
voting power) will have no effect on the outcome of the election of candidates
for director.
The
Stockholder understands that two seats on the Board will be up for election at
the Annual Meeting. To the extent that the Company might purport to
increase the size of the Board, declassify the Board or otherwise adjust the
number of directors that are to be elected at the Annual Meeting, or in the
event any of the Nominees is unable, or hereafter becomes unwilling for any
reason, to serve as a director, the Stockholder reserves the right to nominate
additional nominees for election to the Board at the Annual
Meeting. Any additional nominations made pursuant to the preceding
sentence would be without prejudice to the issue of whether such attempt by the
Company to adjust the number of directors that are elected was valid under the
circumstances.
Corporate
Secretary
Page 6
of 10
In a
separate letter to the Company’s Nominating and Governance Committee, the
Stockholder is requesting that the two Nominees also be considered for selection
as the Board’s nominees for director at the Annual Meeting.
Proposals
2 – 3: Bylaw Amendment Proposals
As a
separate matter, the Stockholder hereby notifies the Company that it intends to
propose the following resolutions to the stockholders of the Company whereby the
stockholders amend the Bylaws in ways that are favorable to the
stockholders.
The
Stockholder’s reasons for conducting such business at the Annual Meeting (or any
other meeting of stockholders held in lieu thereof or for similar purpose, and
any adjournments, postponements, reschedulings or continuations thereof) are as
follows:
1. Amendments
to the Company’s Bylaws are a proper matter for stockholder action under the
General Corporation Law of Delaware.
2. The
Stockholder believes it is in the best interest of the Company and its
stockholders to have added certainty as to the date of the annual meeting of
stockholders and to take measures to ensure that the entire board of directors
is involved in certain critical matters related to the management of the
Company.
The
effect of these amendments will be that the Company’s stockholders will have a
greater ability to influence Company affairs and management and the Nominees
nominated herein, if elected, may have greater influence on actions of the
Board. As a stockholder of the Company, TCP and the Beneficial Owners
will share equally with the other stockholders in the benefits expected to arise
from the proposed amendments, particularly if it results in the Company being
more receptive to its recommendations and proposals.
The
Bylaw Amendment Proposals state:
Proposal
2:
Now,
Therefore, Be It Resolved,
that effective as of the date of the 2009 Annual Meeting of Stockholders of
Vanda Pharmaceuticals Inc. (the “Company”), the stockholders of the Company
hereby amend and restated Section 2.1 of the Company’s Bylaws in its entirety to
read as follows:
“Section 2.1. Annual
Meeting. Notwithstanding anything in these Bylaws to the contrary, with
respect to each annual meeting of stockholders of the Corporation held after
calendar year 2009, each such annual meeting shall be held on April 30th or, if
April 30th is not a business day, on the first business day following April
30th. The hour and the place of each annual meeting shall be determined by
the Board of Directors.”
Corporate
Secretary
Page 7
of 10
Proposal
3:
Now,
Therefore, Be It Resolved,
that effective as of the date of the 2009 Annual Meeting of Stockholders of
Vanda Pharmaceuticals Inc. (the “Company”), the stockholders of the Company
hereby amend the Company’s Bylaws to insert the following provision in Article
III:
“3.12. Board Unanimous
Approval. Notwithstanding anything in these Bylaws to the
contrary (including, without limitation, Section 3.8 of these Bylaws), but
subject to any provision of the Corporation’s Certificate of Incorporation and
any law, regulation or stock exchange listing agreement or standard to which the
Corporation is subject, the Board of Directors shall not take any of the
following actions, and shall not delegate to any officer, employee or agent of
the Corporation the authority to take any such actions, without the unanimous
approval of all of the directors then in office:
(a) Authorizing,
issuing, selling or transferring, or amending the terms of, any securities of
the Corporation or any subsidiary of the Corporation (including, without
limitation, any class or series of capital stock of the Corporation or any
right, warrant or option to purchase any such stock);
(b) Taking any action,
or entering into or agreeing to any transaction, the consummation of which would
require the approval or vote of the stockholders of the
Corporation;
(c) Authorizing
or approving the annual budget of the Corporation or any changes
thereto;
(d) Initiating
research and development activities pertaining to any new or existing programs
of the Corporation involving a commitment by the Corporation in excess of
$250,000 or entering into any other contract or agreement involving a commitment
by the Corporation in excess of $250,000;
(e) Hiring
any officer of the Corporation or any employee who, following such employee’s
retention, would be one of the ten employees who receives the greatest amount of
annual salary paid by the Corporation; or
(f) Engaging
in, or agreeing or committing to engage in, any action or transaction involving
the acquisition, transfer, encumbrance, pledge, loan or other disposition,
directly or indirectly, of any assets of the Corporation or any interest therein
with a value in excess of $1,000,000 (or a series of related transactions that,
in the aggregate, have a value in excess of such amount), other than actions or
transactions in the ordinary course of business.
Corporate
Secretary
Page 8
of 10
Notwithstanding
anything to the contrary in these Bylaws (including, without limitation, Section
3.10 of these Bylaws) or any committee charter or resolution adopted by the
Board of Directors prior to adoption of this Section 3.12, but subject to any
requirement of the Corporation’s Certificate of Incorporation or any law,
regulation or stock exchange listing agreement or standard to which the
Corporation is subject, no committee of the Board of Directors shall exercise
the power and authority of the Board of Directors with respect to any action
that requires the unanimous approval of the directors in accordance with this
Section 3.12. The foregoing provisions of this Section 3.12 will not
affect the validity of any agreement between the Corporation and any other party
or parties if such agreement was approved by the Corporation prior to the
adoption of this Section 3.12.”
Article
VIII, Section 8.1 of the Bylaws currently purports to require the affirmative
vote of the holders of at least 80% of the voting power of all of the
then-outstanding shares of the capital stock of the Company entitled to vote
generally in the election of directors, voting together as a single class, to
adopt, amend or repeal any provision of the Bylaws. The Stockholder
asserts that Article VII, Section 8.1 of the Bylaws is unlawful and is exploring
the possibility of challenging it in a court of law. The Company
reported in its quarterly report on Form 10-Q, filed with the SEC on November 6,
2008, that 26,653,478 shares of Common Stock were issued and outstanding as of
September 30, 2008. If the Stockholder’s challenge to the validity of
Article VIII, Section 8.1 of the Bylaws were unsuccessful and assuming no change
to the number of outstanding shares of capital stock of the Company before the
Record Date for the Annual Meeting, the Bylaw Amendment Proposals would require
“For” votes from 21,322,783 shares to be approved at the Annual
Meeting. Abstentions and broker non-votes would not count as “For”
votes.
Proposal
4: Governance Proposal
As a
separate matter, the Stockholder hereby notifies the Company that it intends to
propose the following resolutions to the stockholders of the Company whereby the
stockholders of the Company request that the Board promptly take all necessary
action to swiftly and orderly liquidate the Company’s remaining assets and
return all remaining capital to the Company’s stockholders.
The
Stockholder’s reasons for conducting such business at the Annual Meeting (or any
other meeting of stockholders held in lieu thereof or for similar purpose, and
any adjournments, postponements, reschedulings or continuations thereof) are as
follows:
1. The
Governance Proposals are a proper matter for stockholder action under the
General Corporation Law of Delaware.
2. The
Stockholder believes it is in the best interests of the Company’s stockholders
to monetize the Company’s non-cash assets in a swift and orderly fashion and to
cease ongoing operations. Taking these actions and returning any
remaining capital to the Company’s stockholders will maximize the value of the
stockholders’ investment in the Company and prevent further erosion of
stockholder value. Further, the Stockholder believes that a
stockholder vote on this proposal will help to inform the Board on what the
stockholders believe to be the in the best interest of the Company and its
stockholders.
Corporate
Secretary
Page 9
of 10
The
Stockholder’s interest in the Governance Proposal is the same as that of any
holder of capital stock of the Company. All holders of Common Stock,
including the Stockholder, may receive a distribution of a portion of the
remaining assets of the Company in any liquidation after creditors and others
with priorities senior to the Stockholder.
The
Governance Proposal states:
Proposal
4:
Now,
Therefore, Be It Resolved,
that the stockholders of the Company hereby request that the Board of Directors
of the Company promptly take all necessary action to swiftly and orderly
liquidate the Company’s remaining assets and return all remaining capital to the
Company’s stockholders.
The
Bylaws provide that all matters other than the election of directors submitted
to the stockholders at any meeting shall be decided by a majority of the votes
cast affirmatively or negatively. Accordingly, abstentions and broker
non-votes will have no effect on the approval of the Governance Proposals and
will not be counted in the total votes cast on this matter.
The
Stockholder has filed a Schedule 13D, under the Exchange Act, with the SEC
relating to the Company (the “Filing”). The Filing, all attachments
and any amendments thereto and all future amendments thereto, are hereby
incorporated into and made a part of this Notice (but only to the extent that
the information disclosed therein (i) constitutes information regarding the
Stockholder or Beneficial Owners that is required to be set forth in this Notice
pursuant to the Bylaw Requirements and (ii) does not contradict the information
set forth in this Notice). Accordingly, all such matters disclosed in
any part of the Filing, including all attachments thereto, should be deemed
disclosed for all purposes of this Notice. The Filing is available at
no charge at the SEC’s website at http://www.sec.gov. The Stockholder
will provide original signed questionnaires, agreements and/or consents attached
in the annexes or exhibits hereto upon written request by the
Company.
The
Annexes and Exhibits hereto are hereby incorporated into and made a part of this
Notice. Accordingly, all matters disclosed in any part of this
Notice, including the Annexes and Exhibits, should be deemed disclosed for all
purposes of this Notice. All upper case terms appearing in the
Annexes and Exhibits that are not defined therein shall have the meanings given
in the body of this Notice.
Information
is set forth herein as of the close of business on February 13,
2009. Neither the delivery of this Notice nor any delivery by the
Stockholder, the Beneficial Owners, or any Nominee of additional information to
the Company from and after the date hereof shall be deemed to constitute an
admission by any Stockholder, any Beneficial Owner, any Nominee or any of their
respective affiliates (if any) that such delivery is required or that each and
every item or any item of information is required or as to the legality or
enforceability of any notice requirement or other matter, or a waiver by the
Stockholder, any Beneficial Owner, any Nominee or any of their respective
affiliates (if any) of their right to contest or challenge, in any way, the
validity or enforceability of any notice requirement or any other matter
(including actions taken by the Board of Directors of the Company in
anticipation of or following receipt of this Notice). In the event
that any statement or other information in this Notice is not true, or to the
extent any applicable information has been omitted from this Notice, the
Stockholder, the Beneficial Owners and the Nominees reserve the right to correct
and/or supplement any such statement or other information set forth in this
Notice.
Corporate
Secretary
Page 10
of 10
If
this Notice shall be deemed, for any reason, by a court of competent
jurisdiction to be ineffective with respect to the nomination of any of the
Nominees, the Bylaw Amendment Proposals or the Governance Proposal at the Annual
Meeting, or if any individual Nominee shall be unable to serve for any reason,
then in addition to any other rights or remedies the Stockholder may have, this
Notice shall continue to be effective with respect to the remaining Nominee,
Bylaw Amendment Proposals or Governance Proposal and as to any replacement
Nominee selected by the Stockholder. In addition, if the chair of the
Annual Meeting shall properly determine that any nomination or proposal made
herein is not in compliance with the Bylaws or otherwise disregards any such
nomination or proposal, such action shall not impact the validity and
effectiveness of the remaining nomination or proposals. The
Stockholder reserves the right to challenge any determination or action of the
chair of the Annual Meeting.
The
Stockholder hereby requests written notification from the Company of the
following no later than 12:00 p.m., February 16, 2009:
|
·
|
Confirmation
that the size of the Board is currently fixed at a total of seven
directorships, that there are currently no vacancies on the
Board and that there are a total of two directorships available for
election at the upcoming 2009 Annual Meeting of stockholders of the
Company;
|
|
·
|
Confirmation
that the Bylaws have not been amended since December 16, 2008;
and
|
|
·
|
Either
confirmation that this Notice complies with the notice requirements of
Article II, Section 2.7 of the Bylaws or identification of any alleged
defects in this Notice that lead the Company to conclude that such
notification requirements have not been complied
with.
|
Please
direct any correspondence related to this Notice to Ethan Christensen, Esq.,
Cooley Godward Kronish LLP, via mail at 4401 Eastgate Mall, San Diego,
California 92121, by telephone at (858) 550-6076, by facsimile at (858) 550-6420
or by email at echristensen@cooley.com.
Sincerely,
Tang
Capital Partners, LP
by:
Tang Capital Management, LLC, its general partner
| /s/ Kevin C. Tang | |
|
Kevin
C. Tang
Managing
Director
|
| Encl. | |
| cc: |
Mihales
Polymeropoulos, MD (via electronic mail)
Chief
Executive Officer, Vanda Pharmaceuticals Inc.
|
|
Ethan
E. Christensen, Esq. (via electronic mail)
Cooley
Godward Kronish LLP
|
|
ANNEX
A
CERTAIN
INFORMATION ABOUT BENEFICIAL OWNERS
Each
of TCP, Tang Capital Management, LLC and Kevin C. Tang (each a “Beneficial
Owner” and collectively the “Beneficial Owners”) have an interest in the
election of directors, the passage of the Bylaw Amendment Proposals and the
passage of the Governance Proposal at the Annual Meeting directly or indirectly
through the beneficial ownership of securities, as described
below.
|
Name and Address of
Beneficial Owner
|
Amount and title of class
owned as of 02/13/2009
|
Percentage of class
|
|
Tang
Capital Partners, LP
4401
Eastgate Mall
San
Diego, CA 92121
|
3,665,852
shares of Common Stock
|
representing
13.75% of the Class1
|
|
Tang
Capital Management, LLC
4401
Eastgate Mall
San
Diego, CA 92121
|
3,665,852
shares of Common Stock
|
representing
13.75% of the Class1
|
|
Kevin
C. Tang
4401
Eastgate Mall
San
Diego, CA 92121
|
3,965,852
shares of Common Stock
|
representing
14.88% of the class1
|
Tang
Capital Partners, LP and Tang Capital Management, LLC are in the business of
investing in securities. Kevin C. Tang is the Managing Director of
Tang Capital Management, LLC, which is, in turn, the general partner of Tang
Capital Partners, LP.
Tang
Capital Partners, LP is the beneficial owner of 3,665,852 shares of the Issuer’s
common stock and shares voting and dispositive power over such securities with
Tang Capital Management, LLC and Kevin C. Tang.
Tang
Capital Management, LLC, as the general partner of Tang Capital Partners, LP,
may be deemed to beneficially own the 3,665,852 shares held of record by
Tang Capital Partners, LP and shares voting and dispositive power over such
shares with Tang Capital Partners, LP and Kevin C. Tang.
Kevin
C. Tang is the beneficial owner of 3,965,852 shares of the Issuer’s common
stock, comprising 3,665,852 shares beneficially owned by Tang Capital Partners,
LP, 217,584 shares beneficially owned by the Haeyoung and Kevin Tang Foundation,
Inc., 41,208 shares beneficially owned by the Individual Retirement Account for
the benefit of Chang L. Kong (the “Chang IRA”), and 41,208 shares beneficially
owned by the Individual Retirement Account for the benefit of Chung W. Kong
(the “Chung
IRA”).
Tang
Capital Management, LLC, as the general partner of Tang Capital Partners, LP,
and Kevin C. Tang, as the Managing Director of Tang Capital Management, LLC, may
also be deemed to beneficially own the shares beneficially owned by Tang Capital
Partners, LP. The Haeyoung and Kevin Tang Foundation, Inc. is a
private foundation, for which Kevin C. Tang serves as President and Treasurer.
Mr. Tang shares voting and dispositive power over the shares held by this
foundation with Haeyoung K. Tang. Chang L. and Chung W. Kong are Kevin C. Tang’s
in-laws and Mr. Tang may be deemed to have shared dispositive power over the
shares held in the Chang IRA and the Chung IRA. Kevin C. Tang
disclaims beneficial ownership of all shares reported herein except to the
extent of his pecuniary interest therein. The Haeyoung and Kevin Tang
Foundation, Inc. is a not-for-profit corporation incorporated in the state of
Delaware. Haeyoung K. Tang is a U.S. citizen. Chang L. and Chung W.
Kong are retired U.S. citizens. The mailing address of all of the
foregoing persons and entities is c/o Tang Capital Management, LLC, 4401
Eastgate Mall, San Diego, CA 92121.
___________________________
1
Calculated based a total number of issued and outstanding shares of Common Stock
of 26,653,478 as reported by the Company in its quarterly report on form 10-Q
filed with the SEC on November 6, 2008.
The
following table lists all of the Company’s securities purchased or sold by the
Beneficial Owners:
|
Entity
|
Transaction
|
Security
|
Trade
Date
|
Shares
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
7/28/2008
|
100,000
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
7/29/2008
|
740,600
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
7/30/2008
|
735,800
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
7/31/2008
|
115,726
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/1/2008
|
5,714
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/4/2008
|
5,360
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/5/2008
|
145,583
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/6/2008
|
100,000
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/7/2008
|
413,000
|
||||
|
Tang
Capital Partners, LP
|
Sale
|
Common
Stock
|
8/13/2008
|
(31,703)
|
||||
|
Tang
Capital Partners, LP
|
Sale
|
Common
Stock
|
8/14/2008
|
(33,353)
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/18/2008
|
1,479
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/19/2008
|
182,900
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
8/20/2008
|
177,100
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
9/9/2008
|
1,100,000
|
||||
|
The
Haeyoung and Kevin Tang Foundation, Inc.
|
Purchase
|
Common
Stock
|
9/10/2008
|
52,000
|
||||
|
The
Haeyoung and Kevin Tang Foundation, Inc.
|
Purchase
|
Common
Stock
|
9/11/2008
|
22,900
|
||||
|
The
Haeyoung and Kevin Tang Foundation, Inc.
|
Purchase
|
Common
Stock
|
9/12/2008
|
56,484
|
||||
|
The
Haeyoung and Kevin Tang Foundation, Inc.
|
Purchase
|
Common
Stock
|
9/15/2008
|
86,200
|
||||
|
Chang
L. Kong
|
Purchase
|
Common
Stock
|
9/16/2008
|
41,208
|
||||
|
Chung
W. Kong
|
Purchase
|
Common
Stock
|
9/16/2008
|
41,208
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
9/19/2008
|
1,080,852
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
9/22/2008
|
100,000
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
9/23/2008
|
80,000
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
9/25/2008
|
600,000
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
11/7/2008
|
560,000
|
||||
|
Tang
Capital Partners, LP
|
Purchase
|
Common
Stock
|
11/20/2008
|
145,000
|
||||
|
Tang
Capital Partners, LP
|
Disposal2
|
Common
Stock
|
9/15/2008
|
(2,658,206)
|
||||
______________________________
2 TCP held
2,658,206 shares of Common Stock in an account at Lehman Brothers International
(Europe) (“LBIE”). On September 15, 2008 LBIE was placed into
administration under United Kingdom law and four partners of
PriceWaterhouseCoopers LLP were appointed as joint administrators (the “Joint
Administrators”). The Joint Administrators have advised us that most of TCP’s
shares were rehypothecated. The Joint Administrators and UK counsel
have further advised that LBIE’s customers will not be able to recover
hypothecated shares, but instead will be entitled to a general unsecured claim
with respect to such shares. Accordingly, TCP does not currently have
beneficial ownership of such shares and has reduced the number of shares of the
Company held by TCP to the extent such shares were held at LBIE. TCP does not
waive any argument that it is entitled to recover such shares and expressly
reserves such argument.
In the
past, Tang Capital Partners, LP has held some of its shares in commingled margin
accounts, which extended margin credit to Tang Capital Partners, LP as and when
required to open or carry positions in the margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies.
In such instances, the positions held in the margin accounts were pledged as
collateral security for the repayment of debit balances in the accounts. The
margin accounts may have from time to time had debit balances. Since other
securities were held in the margin accounts, it is not possible to determine the
amounts, if any, of margin used to purchase the shares of Common Stock reported
herein. As of the date of this Notice, no shares of Common Stock are
held in margin accounts or otherwise pledged as security.
Except
as set forth herein, as of the date hereof, to the best of the Stockholder’s
knowledge, (i) no Beneficial Owner holds or has held any positions or offices
within the Company; (ii) no Beneficial Owner has any family relationship with
any current or former director or executive officer of the Company; (iii) there
are no pending legal proceedings where any Beneficial Owner, or an associate of
any Beneficial Owner, is a party adverse to the Company or has an interest
adverse to the Company; (iv) no Beneficial Owner is, or was in the past year, a
party to any contract, arrangement or understanding with any person with respect
to any securities of the Company; (v) there is no transaction, or series of
similar transactions, since January 1, 2008, or any currently proposed
transaction, or series of similar transactions, to which the Company or any of
its subsidiaries was or is to be a party, in which the amount involved exceeds
$120,000 and in which any Beneficial Owner or any associate of any Beneficial
Owner, or any member of the immediate family of any Beneficial Owner or of any
associate of any Beneficial Owner, had, or will have, a direct or indirect
material interest; (vi) no Beneficial Owner or associate of any Beneficial Owner
has any arrangement or understanding with any person with respect to (a) any
future employment with the Company or its affiliates (except in the capacity as
a director), or (b) any future transactions to which the Company or any of its
affiliates will or may be a party, or (c) selection as a director or Nominee;
(vii) no Beneficial Owner has any substantial interest, direct or indirect, in
the matters to be acted on at the Annual Meeting, except, in the case of Mr.
Tang, his interest in being nominated and elected as a director; (viii) no
Beneficial Owner is, or has an immediate family member who is, a partner in, or
a controlling stockholder or any executive officer of, any organization to which
the Company made, or from which the Company received, payments (other than those
arising solely from investments in the Company’s securities or payment under
non-discretionary charitable contribution matching programs) that exceed 5% of
the organization’s consolidated gross revenues for that year, or $200,000,
whichever is more, in any of the most recent three fiscal years; (ix) no
Beneficial Owner is, or has an immediate family member who is, employed as an
executive officer of another entity where at any time during the most recent
three fiscal years any of the Company’s executive officers serve on the
compensation committee of such other entity; (x) no Beneficial Owner is, or has
an immediate family member who is, a current partner of the Company’s outside
auditor, or was a partner or employee of the Company’s outside auditor who
worked on the Company’s audit at any time during any of the past three years;
(xi) no Beneficial Owner has participated in the preparation of the financial
statements of the Company or any current subsidiary of the Company at any time
in the past three years; (xii) no Beneficial Owner has, or has an
immediate family member who has, received any compensation from the Company; and
(xiii) no Beneficial Owner is party to an arrangement, known to the Stockholder,
the operation of which may at a subsequent date result in a change in control of
the Company.
ANNEX
B
Name of Nominee: Kevin C.
Tang
Age of Nominee:
41
Business Address of
Nominee: 4401 Eastgate Mall, San Diego, California
92121
Residence Address of Nominee:
1754 Colgate Circle, La Jolla CA 92037
Principal Occupation or Employment of
Nominee: See below
Citizenship of
Nominee: United States of America
Beneficial
ownership of Nominee:
Kevin
C. Tang may be deemed to be the beneficial owner (as specified in Rule
13d-3(d)(1) under the Exchange Act) of 3,965,852 shares of Common Stock
(14.88%3 of the class), comprising 3,665,852 shares
held by TCP, 217,584 shares owned by the Haeyoung and Kevin Tang Foundation,
Inc., 41,208 shares owned by the Individual Retirement Account for the benefit
of Chang L. Kong (the “Chang IRA”), and 41,208 shares owned by the Individual
Retirement Account for the benefit of Chung W. Kong (the “Chung IRA”). Mr.
Tang is not the record holder of any shares of capital stock of the Company.
None of the shares of which Mr. Tang may be deemed to be the beneficial owner of
are pledged as
security.
Except
as otherwise set forth in the Notice, no derivative instrument, swap, option,
warrant, short interest, hedge or profit interest or other transaction has been
entered into by or on behalf of Mr. Tang with respect to stock of the Company
and no other agreement, arrangement or understanding (including any short
position or any borrowing or lending of shares of stock) has been made by or on
behalf of Mr. Tang, the effect or intent of any of the foregoing being to
mitigate loss to, or to manage risk of stock price changes for, Mr. Tang or to
increase or decrease the voting power or pecuniary or economic interest of such
person with respect to stock of the Company.
Business
Experience, Background and Directorships of the Nominee:
Kevin
C. Tang, 41, is the Managing Director of Tang Capital Management, LLC, an
investment firm focused on the health care industry that he founded in August
2002. From September 1993 to July 2001, Mr. Tang held various
positions at Deutsche Banc Alex. Brown, Inc., an investment banking firm, most
recently serving as Managing Director and head of the firm’s life sciences
research group. Mr. Tang currently serves as a director of Ardea
Biosciences, Inc. and A.P. Pharma, Inc. and serves on the board of two privately
held companies. Mr. Tang received his B.S. degree in Psychology from
Duke University.
Mr.
Tang would not be disqualified from being an independent director as a result of
any of the factors specified in Rule 4200(a)(15) of the rules of the NASDAQ
Stock Market. Accordingly, the Board should determine that Mr. Tang
has no relationship that would interfere with his exercise of independent
judgment in carrying out his responsibilities as a director and is accordingly
independent. Mr. Tang has a reputation for integrity, honesty and
adherence to high ethical standards. Mr. Tang has demonstrated
business acumen, experience and ability to exercise sound judgments in matters
that relate to the current and long-term objectives of the Company and is
willing and able to contribute positively to the decision-making process of the
Company. Mr. Tang is able to read and understand basic financial statements and
possesses a general understanding of the Company’s industry. Mr. Tang
has sufficient time to devote to the affairs of the Company and is committed to
vigorously represent the long-term interests of the Company’s
stockholders. He has the interest and ability to understand the
sometimes conflicting interests of the various constituencies of the Company,
which include stockholders, employees, customers, governmental units, creditors
and the general public, and to act in the interests of all
stockholders. Additionally, Mr. Tang has an absence of any conflicts
of interests, or the appearance of any conflicts of interest, that would impair
his ability to represent the interests of all stockholders and to fulfill the
responsibilities of a director.
3 Calculated
based a total number of issued and outstanding shares of Common Stock of
26,653,478 as reported by the Company in its quarterly report on form 10-Q filed
with the SEC on November 6, 2008.
ANNEX
C
Name of Nominee: Andrew D.
Levin
Age of Nominee:
32
Business Address of
Nominee: 4401 Eastgate Mall, San Diego CA
92121
Residence Address of Nominee:
4476 Granger Street, San Diego, CA 92107
Principal Occupation or Employment of
Nominee: See below
Citizenship of
Nominee: United States of America
Beneficial
ownership of Nominee:
Andrew
D. Levin, M.D., Ph.D. does not have voting or dispositive power or hold of
record any shares of Common Stock.
Except
as otherwise set forth in the Notice, no derivative instrument, swap, option,
warrant, short interest, hedge or profit interest or other transaction has been
entered into by or on behalf of Dr. Levin with respect to stock of the Company
and no other agreement, arrangement or understanding (including any short
position or any borrowing or lending of shares of stock) has been made by or on
behalf of Dr. Levin, the effect or intent of any of the foregoing being to
mitigate loss to, or to manage risk of stock price changes for, Dr. Levin or to
increase or decrease the voting power or pecuniary or economic interest of such
person with respect to stock of the Company.
Business
Experience, Background and Directorships of the Nominee:
Andrew
D. Levin, M.D., Ph.D., 32, has served as a Principal at Tang Capital Management,
LLC, an investment firm focused on the health care industry, since April
2008. From July 2007 to April 2008, Dr. Levin served as a Business
Development Manager at Genzyme Corporation, a pharmaceutical
company. Dr. Levin received a B.S.E. degree in Mechanical Engineering
from Princeton University, a Ph.D. in Bioengineering from the Massachusetts
Institute of Technology and an M.D. from Harvard Medical
School.
Dr.
Levin would not be disqualified from being an independent director as a result
of any of the factors specified in Rule 4200(a)(15) of the rules of the NASDAQ
Stock Market. Accordingly, the Board should determine that Dr. Levin
has no relationship that would interfere with his exercise of independent
judgment in carrying out his responsibilities as a director and is accordingly
independent. Dr. Levin has a reputation for integrity, honesty and
adherence to high ethical standards. Dr. Levin has demonstrated
business acumen, experience and ability to exercise sound judgments in matters
that relate to the current and long-term objectives of the Company and is
willing and able to contribute positively to the decision-making process of the
Company. Dr. Levin is able to read and understand basic financial statements and
possesses a general understanding of the Company’s industry. Dr.
Levin has sufficient time to devote to the affairs of the Company and is
committed to vigorously represent the long-term interests of the Company’s
stockholders. He has the interest and ability to understand the
sometimes conflicting interests of the various constituencies of the Company,
which include stockholders, employees, customers, governmental units, creditors
and the general public, and to act in the interests of all
stockholders. Additionally, Dr. Levin has an absence of any conflicts
of interests, or the appearance of any conflicts of interest, that would impair
his ability to represent the interests of all stockholders and to fulfill the
responsibilities of a director.
ANNEX
D
REPRESENTATION
AND AGREEMENT
The
undersigned Nominee for election to the Board of Directors (the “Board”) of
Vanda Pharmaceuticals Inc. (the “Company”) hereby represents and agrees, as of
the date below, as follows:
1. He
is not and will not become a party to:
(i) any agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any person
or entity as to how he, if elected as a director of the Company, will act or
vote on any issue or question (a “Voting Commitment”); or
(ii) any Voting Commitment that
could limit or interfere with his ability to comply, if elected as a director of
the Company, with his fiduciary duties under applicable law.
2. He
is not and will not become a party to any agreement, arrangement or
understanding with any person or entity other than the Company with respect to
any direct or indirect compensation, reimbursement or indemnification in
connection with service or action as a director of the Company.
3. He,
in his individual capacity and on behalf of any person or entity on whose behalf
his nomination to the Board is made, would be in compliance, if elected as a
director of the Company, and will comply with applicable law and all applicable
publicly disclosed corporate governance, conflict of interest, confidentiality
and stock ownership and trading policies and guidelines of the
Company.
|
Dated:
February 13, 2009
|
|
/s/ Kevin C. Tang | |
| Kevin C. Tang | |||
| Nominee |
ANNEX
E
REPRESENTATION
AND AGREEMENT
The
undersigned Nominee for election to the Board of Directors (the “Board”) of
Vanda Pharmaceuticals Inc. (the “Company”) hereby represents and agrees, as of
the date below, as follows:
1. He
is not and will not become a party to:
(i) any agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any person
or entity as to how he, if elected as a director of the Company, will act or
vote on any issue or question (a “Voting Commitment”); or
(ii) any Voting Commitment that
could limit or interfere with his ability to comply, if elected as a director of
the Company, with his fiduciary duties under applicable law.
2. He
is not and will not become a party to any agreement, arrangement or
understanding with any person or entity other than the Company with respect to
any direct or indirect compensation, reimbursement or indemnification in
connection with service or action as a director of the Company.
3. He,
in his individual capacity and on behalf of any person or entity on whose behalf
his nomination to the Board is made, would be in compliance, if elected as a
director of the Company, and will comply with applicable law and all applicable
publicly disclosed corporate governance, conflict of interest, confidentiality
and stock ownership and trading policies and guidelines of the
Company.
|
Dated:
February 13, 2009
|
|
/s/ Andrew D. Levin | |
| Andrew D. Levin, M.D., Ph.D. | |||
| Nominee |
ANNEX
F
WRITTEN
CONSENTS OF NOMINEES
February
13, 2009
Vanda
Pharmaceuticals Inc.
9605
Medical Center Drive, Suite 300
Rockville,
MD 20850
To
Whom It May Concern:
I
hereby consent to being named as a nominee for election to the board of
directors of Vanda Pharmaceuticals Inc. (the “Company”), including being named
in the proxy statement(s) and proxy card(s) to be filed with the Securities and
Exchange Commission and distributed to the stockholders of the Company by or on
behalf of the Company or Tang Capital Partners, LP and its affiliates, in
connection with the 2009 annual meeting of stockholders of the Company (or any
other meeting of stockholders held in lieu thereof or for a similar purpose, and
any adjournments, postponements, reschedulings or continuations thereof), and
will serve as a director if so elected.
Sincerely,
/s/
Kevin C. Tang
Kevin
C. Tang
February
13, 2009
Vanda
Pharmaceuticals Inc.
9605
Medical Center Drive, Suite 300
Rockville,
MD 20850
To
Whom It May Concern:
I
hereby consent to being named as a nominee for election to the board of
directors of Vanda Pharmaceuticals Inc. (the “Company”), including being named
in the proxy statement(s) and proxy card(s) to be filed with the Securities and
Exchange Commission and distributed to the stockholders of the Company by or on
behalf of the Company or Tang Capital Partners, LP and its affiliates, in
connection with the 2009 annual meeting of stockholders of the Company (or any
other meeting of stockholders held in lieu thereof or for a similar purpose, and
any adjournments, postponements, reschedulings or continuations thereof), and
will serve as a director if so elected.
Sincerely,
/s/
Andrew D. Levin
Andrew
D. Levin, M.D., Ph.D.
EXHIBIT
3
Tang
Capital Management, LLC
4401
Eastgate Mall, San Diego,CA 92121
(858)
200-3830 Fax (858) 200-3837
February
13, 2009
VIA
HAND DELIVERY AND ELECTRONIC MAIL (ir@vandapharma.com,
chip.clark@vandapharma.com)
William
D. Clark
Corporate
Secretary
Vanda
Pharmaceuticals Inc.
9605
Medical Center Drive, Suite 300
Rockville,
MD 20850
|
Re:
|
Recommendations
for Candidates for Election as Directors at the 2009 Annual Meeting of
Stockholders of Vanda Pharmaceuticals Inc. (the
“Company”)
|
Ladies
and Gentlemen:
Tang Capital Partners, LP, a
Delaware limited partnership (“TCP” or
the “Investor”),
and its affiliates collectively control 3,965,852 shares of Common Stock and
have beneficially owned 5% or more of the Common Stock, based on the number of
shares reported outstanding by the Company in its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2008, for at least four
months. Please refer to Exhibit A, attached hereto,
for information regarding the Investor’s holdings.
The Investor believes that it would
serve the best interests of the Company and its stockholders for the
Nominating/Corporate Governance Committee of the Company (the “Committee”)
to nominate the following two candidates (each a “Candidate” and together the
“Candidates”) to the Board of Directors of the Company (the "Board") at
the 2009 Annual Meeting of Stockholders of the Company (the “2009 Annual
Meeting”):
|
1.
|
Kevin
C. Tang
|
|
2.
|
Andrew
D. Levin, M.D., Ph.D.
|
Biographical and background
materials relating to each Candidate are set forth in Exhibits B and C attached
hereto. In addition, the Candidates are prepared to complete any
D&O questionnaire reasonably requested by the Company in connection with
their nomination as directors.
Pursuant to the guidelines outlined
in the Company’s public filings with the Securities and Exchange Commission, the
Investors are hereby submitting these two candidates to the Committee for review
and consideration. Both Candidates meet the criteria and attributes
said to be considerations of the Company’s Nominating/Corporate Governance
Committee as described in the Company’s proxy statement for its 2008 Annual
Meeting of Stockholders, including:
Nominating/Corporate
Governance Committee
Vanda
Pharmaceuticals, Inc.
Page 2 of
3
|
·
|
ability
to read and understand basic financial
statements;
|
|
·
|
general
understanding of the Company’s
industry;
|
|
·
|
relevant
expertise upon which to be able to offer advice and guidance to
management;
|
|
·
|
ability
and sufficient time to devote to the affairs of the
Company;
|
|
·
|
excellence
in his field;
|
|
·
|
ability
to exercise sound business
judgment;
|
|
·
|
commitment
to vigorously represent the long-term interests of the Company’s
stockholders; and
|
|
·
|
an
absence of factors that would preclude the Board from making a
determination that the candidates are independent directors as defined in
Rule 4200(a)(15) of the rules of the NASDAQ Stock
Market.
|
In addition, we believe that the
backgrounds and qualifications of these Candidates, when considered as a group
with the other directors of the Company, will provide a balance of knowledge,
experience and capabilities that will allow the Board to fulfill its
responsibilities. Moreover, the affiliation of each of the Candidates
with a holder of significant shares of the Company will align their interests
with those of stockholders generally.
Except as set forth herein or in the
Notice (defined below), including the exhibits hereto, as of the date hereof, to
the best of the Investor’s knowledge, (i) neither Candidate holds or has held
any positions or offices within the Company; (ii) neither Candidate has any
family relationship with any current or former director or executive officer of
the Company or a person nominated or chosen by the Company to be a director or
executive officer of the Company; (iii) there are no pending legal proceedings
where any Candidate, or an associate of any Candidate, is a party adverse to the
Company or has an interest adverse to the Company; (iv) neither Candidate has
been involved in legal proceedings as described in Item 401(f) of Regulation S-K
of the Securities Act of 1933, as amended (“Regulation S-K”) during the past
five years; (v) neither Candidate owns any securities of the Company (or any
parent or subsidiary of the Company), directly or indirectly, beneficially or of
record; (vi) neither Candidate is, or was in the past year, a party to any
contract, arrangement or understanding with any person with respect to any
securities of the Company; (vii) there is no transaction, or series of similar
transactions, since January 1, 2008, or any currently proposed transaction, or
series of similar transactions, to which the Company or any of its subsidiaries
was or is to be a party, in which the amount involved exceeds $120,000 and in
which any Candidate or any associate of any Candidate, or any member of the
immediate family of any Candidate or of any associate of any Candidate, had, or
will have, a direct or indirect material interest; (viii) neither Candidate or
associate of any Candidate has any arrangement or understanding with any person
with respect to (a) any future employment with the Company or its affiliates
(except in the capacity as a director), or (b) any future transactions to which
the Company or any of its affiliates will or may be a party, or (c) selection as
a director or Candidate; (ix) neither Candidate has any substantial interest,
direct or
Nominating/Corporate
Governance Committee
Vanda
Pharmaceuticals, Inc.
Page 3 of
3
indirect,
in the matters to be acted on at the Annual Meeting, except in his interest in
being nominated and elected as a director; (x) neither Candidate is, or has an
immediate family member who is, a partner in, or a controlling stockholder
or any executive officer of, any organization to which the Company made, or from
which the Company received, payments (other than those arising solely from
investments in the Company’s securities or payment under non-discretionary
charitable contribution matching programs) that exceed 5% of the organization’s
consolidated gross revenues for that year, or $200,000, whichever is more, in
any of the most recent three fiscal years; (xi) neither Candidate is, or has an
immediate family member who is, employed as an executive officer of another
entity where at any time during the most recent three fiscal years any of the
Company’s executive officers serve on the compensation committee of such other
entity; (xii) neither Candidate is, or has an immediate family member who is, a
current partner of the Company’s outside auditor, or was a partner or employee
of the Company’s outside auditor who worked on the Company’s audit at any time
during any of the past three years; (xiii) neither Candidate has participated in
the preparation of the financial statements of the Company or any current
subsidiary of the Company at any time in the past three years; (xiv) neither
Candidate has, or has an immediate family member who has, received any
compensation from the Company; and (xv) neither Candidate has failed to file on
a timely basis, reports required by Section 16(a) of the Exchange Act with
respect to securities of the Company.
In a separate letter to the
Corporate Secretary of the Company, the Investor is simultaneously submitting a
Stockholder’s Notice of Nomination of Persons for Election as Directors and
Other Proposed Business at the 2009 Annual Meeting of Stockholders of Vanda
Pharmaceuticals Inc., dated February 13, 2009 (the “Notice”). If
the Board determines to nominate either of the proposed Candidates, recommends
his election and includes his name in the proxy card for the 2009 Annual
Meeting, the Investor will not directly nominate such Candidate at the 2009
Annual Meeting. If we do not hear from you by the close of business on February 28,
2009, we will pursue any and all courses of action that we determine to
be appropriate for the election of our Nominees at the 2009 Annual
Meeting.
Please address any correspondence or
questions to Tang Capital Management, LLC, Attention: Kevin C. Tang, telephone
(858) 200-3830, facsimile (858) 200-3837 (with a copy to Cooley Godward Kronish
LLP, 4401 Eastgate Mall, San Diego, CA 92121, Attention: Ethan E.
Christensen, Esq., telephone (858) 550-6076, facsimile (858)
550-6420).
Very
truly yours,
Tang
Capital Partners, LP
By: Tang
Capital Management, LLC, its general partner
| By: | /s/ Kevin C. Tang | |
|
Kevin
C. Tang
Managing
Director
|
| Encl. | |
| cc: |
Mihales
Polymeropoulos, MD (via electronic mail)
Chief
Executive Officer, Vanda Pharmaceuticals Inc.
|
|
Ethan
E. Christensen, Esq. (via electronic mail)
Cooley
Godward Kronish LLP
4401
Eastgate Mall
San
Diego, CA 92121
|
|
EXHIBIT
A
CERTAIN
INFORMATION ABOUT BENEFICIAL OWNERS
|
Name and Address of
Beneficial Owner
|
Amount and title of class
owned as of 02/13/2009
|
Percentage of class
|
|
Tang
Capital Partners, LP
4401
Eastgate Mall
San
Diego, CA 92121
|
3,665,8521 shares of Common
Stock
|
representing
13.75% of the Class2
|
|
Tang
Capital Management, LLC
4401
Eastgate Mall
San
Diego, CA 92121
|
3,665,852
shares of Common Stock
|
representing
13.75% of the Class2
|
|
Kevin
C. Tang
4401
Eastgate Mall
San
Diego, CA 92121
|
3,965,852
shares of Common Stock
|
representing
14.88% of the class2
|
Tang
Capital Partners, LP and Tang Capital Management, LLC are in the business of
investing in securities. Kevin C. Tang is the Managing Director of
Tang Capital Management, LLC, which is, in turn, the general partner of Tang
Capital Partners, LP.
Tang
Capital Partners, LP is the beneficial owner of 3,665,852 shares of the Issuer’s
common stock and shares voting and dispositive power over such securities with
Tang Capital Management, LLC and Kevin C. Tang.
Tang
Capital Management, LLC, as the general partner of Tang Capital Partners, LP,
may be deemed to beneficially own the 3,665,852 shares are beneficially
owned by Tang Capital Partners, LP and shares voting and dispositive power over
such shares with Tang Capital Partners, LP and Kevin C. Tang.
Kevin
C. Tang is the beneficial owner of 3,965,852 shares of the Issuer’s common
stock, comprising 3,665,852 shares beneficially owned by Tang Capital Partners,
LP, 217,584 shares beneficially owned by the Haeyoung and Kevin Tang Foundation,
Inc., 41,208 shares beneficially owned by the Individual Retirement Account for
the benefit of Chang L. Kong (the “Chang IRA”), and 41,208 shares beneficially
owned by the Individual Retirement Account for the benefit of Chung W. Kong
(the “Chung
IRA”).
____________________
1
Previously, TCP held 2,658,206 shares of Common Stock in an account at Lehman
Brothers International (Europe) (“LBIE”). On September 15, 2008 LBIE
was placed into administration under United Kingdom law and four partners of
PriceWaterhouseCoopers LLP were appointed as joint administrators (the “Joint
Administrators”). The Joint Administrators have advised us that most of TCP’s
shares were rehypothecated. The Joint Administrators and UK counsel
have further advised that LBIE’s customers will not be able to recover
hypothecated shares, but instead will be entitled to a general unsecured claim
with respect to such shares. Accordingly, TCP, in this exhibit, has
reduced the number of shares of the Company held by TCP to the extent such
shares were held at LBIE. TCP does not currently have beneficial ownership of
such shares. TCP does not waive any argument that it is entitled to
recover such shares and expressly reserves such argument.
2
Calculated based a total number of issued and outstanding shares of Common Stock
of 26,653,478 as reported by the Company in its quarterly report on form 10-Q
filed with the SEC on November 6, 2008.
Tang
Capital Management, LLC, as the general partner of Tang Capital Partners, LP,
and Kevin C. Tang, as the Managing Director of Tang Capital Management, LLC, may
also be deemed to beneficially own the shares beneficially owned by Tang Capital
Partners, LP. The Haeyoung and Kevin Tang Foundation, Inc. is a
private foundation, for which Kevin C. Tang serves as President and Treasurer.
Mr. Tang shares voting and dispositive power over the shares held by this
foundation with Haeyoung K. Tang. Chang L. and Chung W. Kong are Kevin C. Tang’s
in-laws and Mr. Tang may be deemed to have shared dispositive power over the
shares held in the Chang IRA and the Chung IRA. Kevin C. Tang
disclaims beneficial ownership of all shares reported herein except to the
extent of his pecuniary interest therein. The Haeyoung and Kevin Tang
Foundation, Inc. is a not-for-profit corporation incorporated in the state of
Delaware. Haeyoung K. Tang is a U.S. citizen. Chang L. and Chung W.
Kong are retired U.S. citizens. The mailing address of all of the
foregoing persons and entities is c/o Tang Capital Management, LLC, 4401
Eastgate Mall, San Diego, CA 92121.
In the
past, Tang Capital Partners, LP has held some of its shares in commingled margin
accounts, which extended margin credit to Tang Capital Partners, LP as and when
required to open or carry positions in the margin accounts, subject to
applicable federal margin regulations, stock exchange rules and credit policies.
In such instances, the positions held in the margin accounts were pledged as
collateral security for the repayment of debit balances in the accounts. The
margin accounts may have from time to time had debit balances. Since other
securities were held in the margin accounts, it is not possible to determine the
amounts, if any, of margin used to purchase the shares of common stock reported
herein. As of the date of this letter, no shares of Common Stock are
held in margin accounts or otherwise pledged as security.
Name of Candidate: Kevin C.
Tang
Age of Candidate:
41
Business Address of
Candidate: 4401 Eastgate Mall, San Diego, California
92121
Residence Address of Candidate:
1754 Colgate Circle, La Jolla CA 92037
Principal Occupation or Employment of
Candidate: See below
Citizenship of
Candidate: United States of America
Beneficial
ownership of Candidate:
Kevin
C. Tang may be deemed to be the beneficial owner (as specified in Rule
13d-3(d)(1) under the Exchange Act) of 3,965,852 shares of Common Stock
(14.88%3 of the class), comprising 3,665,852 shares
beneficially owned by TCP, 217,584 shares beneficially owned by the Haeyoung and
Kevin Tang Foundation, Inc., 41,208 shares beneficially owned by the Individual
Retirement Account for the benefit of Chang L. Kong (the “Chang IRA”), and
41,208 shares beneficially owned by the Individual Retirement Account for the
benefit of Chung W. Kong (the
“Chung IRA”). Mr. Tang is not the record holder of any shares
of capital stock of the Company.
Business
Experience, Background and Directorships of the Candidate:
Kevin
C. Tang, 41, is the Managing Director of Tang Capital Management, LLC, an
investment firm focused on the health care industry that he founded in August
2002. From September 1993 to July 2001, Mr. Tang held various
positions at Deutsche Banc Alex. Brown, Inc., an investment banking firm, most
recently serving as Managing Director and head of the firm’s life sciences
research group. Mr. Tang currently serves as a director of Ardea
Biosciences, Inc. and A.P. Pharma, Inc. and serves on the board of two privately
held companies. Mr. Tang received his B.S. degree in Psychology from
Duke University.
___________________________
3 Calculated
based a total number of issued and outstanding shares of Common Stock of
26,653,478 as reported by the Company in its quarterly report on form 10-Q filed
with the SEC on November 6, 2008.
EXHIBIT
C
Name of Nominee: Andrew D.
Levin
Age of Nominee:
32
Business Address of
Nominee: 4401 Eastgate Mall, San Diego CA
92121
Residence Address of Nominee:
4476 Granger Street, San Diego, CA 92107
Principal Occupation or Employment of
Nominee: See below
Citizenship of
Nominee: United States of America
Beneficial
ownership of Candidate:
Andrew
D. Levin, M.D., Ph.D. does not have voting or dispositive power or hold of
record any shares of Common Stock.
Dr.
Levin is a Principal at Tang Capital Management, LLC and is a participant in a
deferred compensation plan, pursuant to which the value of his account under
such plan is indexed to the performance of the TCP investment fund which
includes shares of Common Stock.
Business
Experience, Background and Directorships of the Candidate:
Andrew
D. Levin, M.D., Ph.D., 32, has served as a Principal at Tang Capital Management,
LLC, an investment firm focused on the health care industry, since April
2008. From July 2007 to April 2008, Dr. Levin served as a Business
Development Manager at Genzyme Corporation, a pharmaceutical
company. Dr. Levin received a B.S.E. degree in Mechanical Engineering
from Princeton University, a Ph.D. in Bioengineering from the Massachusetts
Institute of Technology and an M.D. from Harvard Medical
School.