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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
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 19, 2006
VANDA PHARMACEUTICALS INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
(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)
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)
(Former Name or Former Address, if Changed Since Last Report)
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 | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
| Item 7.01. Regulation FD disclosure | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| EX-99.1 Presentation slides to be furnished to investors. | ||||||||
Table of Contents
Item 7.01. Regulation FD disclosure
The Company intends to make presentations to certain investors regarding the Company’s
operations, financial condition and prospects. The slides that will be used for such presentations
are furnished as Exhibit 99.1 to this report.
Various statements to be made in the presentations, including statements in the slides
furnished as Exhibit 99.1 to this report, are forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Words such as, but not limited to,
“believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,”
“would,” and “could,” and similar expressions or words, identify forward-looking statements. Such
forward-looking statements are based upon expectations that involve risks, changes in
circumstances, assumptions and uncertainties. The Company 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 the Company’s forward-looking
statements include, among others: delays in the completion of the Company’s clinical trials, a
failure of the Company’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 the Company’s product candidates in the marketplace, or a
failure to become or remain profitable, the Company’s inability to obtain the capital necessary to
fund its research and development activities, the Company’s failure to identify or obtain rights to
new product candidates, a failure to develop or obtain sales, marketing and distribution resources
and expertise or to otherwise manage the Company’s growth, a loss of any of the Company’s key
scientists or management personnel, losses incurred from product liability claims made against the
Company, a loss of rights to develop and commercialize the Company’s products under its license and
sublicense agreements, and the increased expenses and administrative workload associated with being
a public company. Forward-looking statements should be considered in light of all of the risks
included or referred to in this report or in the slides attached as Exhibit 99.1 to this report, as
well as the information set forth in the “Risk Factors” section of Item 1A to Part II of the
Company’s report on Form 10-Q for the quarter ended March 31, 2006.
The information in the slides attached as Exhibit 99.1 to this report will be provided only as
of the applicable dates on which such slides are presented, and the Company undertakes no
obligation to update any forward-looking statements contained in such slides from and after the
dates of such presentations on account of new information, future events, or otherwise, except as
required by law.
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Item 9.01. Financial Statements and Exhibits.
| (c) | Exhibits |
| Exhibit No. | Description | |
99.1
|
Presentation slides to be furnished to investors. |
Table of Contents
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.
| VANDA PHARMACEUTICALS INC. | ||||||
| By: | /s/ STEVEN A. SHALLCROSS | |||||
| Name: Steven A. Shallcross | ||||||
| Title: Senior Vice President, Chief Financial Officer and Treasurer |
||||||
Dated: July 19, 2006
Exhibit 99.1
| Corporate Overview Mihales Polymeropoulos, MD President and CEO |
| Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results from operations and business, and our expectations and beliefs about future events. Actual results may vary materially from our expectations and beliefs. Meaningful factors which could cause actual results to differ from expectations include, but are not limited to, uncertainty of the Company's future profitability, uncertainty of market acceptance for the Company's products, delay in or failure to obtain regulatory approvals for the Company's product candidates, uncertainty regarding patents and proprietary rights, risks inherent in international transactions, limited sales and marketing experience, dependence on third party reimbursement, competition, uncertainty of clinical trial results, extent of government regulations, and inability to obtain requisite additional financing, as well as other factors discussed in the Company's Securities and Exchange Commission filings. All forward-looking statements in this presentation are expressly qualified by the above paragraph in their entirety. We have no obligation to update any forward- looking statements which are made in this presentation. |
| Vanda Highlights Multiple late-stage CNS products targeting large markets Pharmacogenetic (PG) expertise to identify, develop and differentiate products Management team with extensive bio/pharma experience Stream of impending value-creating milestones |
| Late-Stage Product Pipeline Pre-clinical Phase I Phase IIa Phase IIb Phase III 2005 Market Size1 Schizophrenia 4-week Injectable Insomnia >$12bn >$3bn >$20bn >$500mm Sources: 1 IMS - World Review Analyst; analyst estimates Iloperidone VEC-162 VSF-173 Bipolar Disorder Excessive Sleepiness Depression |
| Industry-Leading Expertise in Pharmacogenetics (PG) CEO founded and ran Novartis' Pharmacogenetics Department Differentiates Vanda and builds sustainability Today's applications Tomorrow's applications Compound repositioning Commercial differentiation Pipeline replenishment |
| Strong Management and Team Core development team came from Novartis with CEO Name Title Prior Affiliations Mihales Polymeropoulos, MD Co-Founder, CEO Novartis NIH/NHGRI Paolo Baroldi, MD, PhD CMO Chiesi Novartis Chip Clark Co-Founder, CBO Care Capital SmithKline Beecham Steve Shallcross CFO Advancis Bering Tom Copmann, PhD VP, Regulatory Eli Lilly Novo Nordisk Deepak Phadke, PhD VP, Manufacturing HMR MMD |
| Stream of Value-Creating Milestones Iloperidone VEC-162 VSF-173 Q4 2006 Q1 2007 Finish phase III enroll. Q2 2007 Q3 2007 Q4 2007 Report phase III results File NDA Finish phase III enroll. Report phase III results Initiate phase III (chron.) Initiate phase II (dep.) Initiate phase II trial Finish phase II trial |
| Iloperidone: Late Phase III Compound (Schizophrenia) |
| Iloperidone Summary Strong observed profile Improved safety relative to approved products Superior compliance relative to approved products Unique drug response tool Reduced development, regulatory risk Demonstrated efficacy No FDA objections to trial design, NDA filing with successful trial Large commercial opportunity |
| Schizophrenia: A Debilitating Chronic Disease Affects ~3 million in U.S. and ~1% of world population Severe symptoms: "Positive" symptoms (hallucinations, delusions) "Negative" symptoms (moodiness, withdrawal) "Cognitive" symptoms (attention and memory deficits) Sufferers typically receive drug therapy for life Successful integration to society is rare |
| Substantial, Growing Market for Anti-Psychotics Sources: 1 IMS - World Review Analyst; company press releases; analyst estimates 2 L.E.K. Consulting LLC study Growth drivers2: New uses: on and off-label Replacing older therapies ("typical" anti-psychotics) |
| Room for Improvement: Safety/Side Effects Issue: sub-optimal anti-psychotic safety 74% change drugs within 18 months1 Iloperidone: strong observed safety Source: 1 CATIE Study, New England Journal of Medicine 2Vanda analysis of NDA packages, FDA-approved labeling Safety/Side Effect Issue Examples2 Iloperidone Observed Profile2 Weight gain Zyprexa(r), Seroquel(r) Low Diabetes risk Zyprexa(r) None shown Extrapyramidal symptoms Risperdal(r) Low Akathisia Abilify(r), Geodon(r) None Prolactin elevation Risperdal(r), Geodon(r) None Drowsiness Seroquel(r) Non-sedating QTc prolongation Geodon(r) Similar to Geodon(r) |
| Room for Improvement: Compliance Issue: Poor patient compliance to oral anti-psychotic dosing Compliance tied to symptom management Iloperidone: 4-week injectable to complement oral form Successfully completed phase I/IIa Simplified path to filing Large commercial opportunity Risperdal(r) Consta(r) (2-week injectable) ~$600 MM in worldwide sales in 20051 Source: 1 JP Morgan North American Equity Research, December 16, 2005 |
| Room for Improvement: Efficacy Issue: Hit-or-miss efficacy with anti-psychotics Iloperidone: Pharmacogenetic test for iloperidone response Approximately 70% of patients have marker Confirming marker in current Phase III trial Unique point of differentiation in crowded market |
| One Successful Phase III Trial from NDA Filing Conclusions from September 2005 FDA meeting: Ongoing Phase III trial is sufficient for schizophrenia Current package sufficient for NDA filing, with successful Phase III trial Design of Ongoing Phase III Trial (VP-VYV-683-3101) |
| Enrollment Update Enrollment as of March 30: 372 patients (out of 600) Ahead of schedule Key drivers of accelerated enrollment: Investigator enthusiasm Few competing trials Strong execution Next enrollment update: 2nd Quarter Earnings Call (08/03) |
| Expected Clinical Development Timeline Oral (Bipolar Disorder) Oral iloperidone Inj. iloperidone Phase III Phase III Phase III NDA (Q4) 2006 H1 H2 2007 2008 H1 H2 H1 H2 2009 H1 Manufacturing, PK Launch (Q1) |
| Bipolar Other Switchers Stable 20 20 50 50 Large Commercial Opportunity At launch iloperidone targets a $3.8 billion market $12.7 billion1 Patients who switch therapy, annually Sources: 1 IMS - World Review Analyst; analyst estimates; 2 L.E.K. Consulting LLC study Total Antipsychotic Market Schizophrenia Market $7.6 billion1 Bipolar disorder Other CNS disorders Stable or refractory patients Schizophrenia 50%2 50% |
| Large Commercial Opportunity (2) U.S: A specialty sales force sufficient to match big pharma detailing efforts Ex-U.S.: Will seek partnership(s) Vanda owns exclusive, worldwide rights NCE Patent: U.S.: October 2011 (2016)*; E.U.: October 2010(a) Long-acting injectable, PG, active metabolite claims: 2021+ * 5-year Hatch-Waxman extension (a) also eligible for additional protection in E.U. |
| Iloperidone Summary Strong observed profile Improved safety relative to approved products Superior compliance relative to approved products Unique drug response tool Reduced development, regulatory risk Demonstrated efficacy No FDA objections to trial design, NDA filing with successful trial Large commercial opportunity |
| VEC-162: Phase III Compound (Sleep Disorders) |
| Insomnia: Significant Untapped Opportunity Sources: 1 Company press releases; analyst estimates; 2 L.E.K. Consulting LLC study 11 mm 62 mm U.S. Insomnia Sufferers (number of people)2 Treated Approved drug limitations include: Do not address cause of sleeplessness Safety/side effect issues Perception of controlled substances $3.5 billion market in 20051 Not treated |
| Sleep Facilitation vs. General CNS Depression |
| 68.5 minute improvement Strong Efficacy in Phase II Transient Insomnia Trial Staying Asleep Longer: WASO vs. Baseline (minutes) * = p < 0.05 Faster Falling Asleep: LPS vs. Baseline (minutes) * * * Placebo 10mg 20mg 50mg 100mg * VEC-162 doses VEC-162 doses Statistically significant dose/response curves for each measure 0 10 20 30 40 50 60 70 80 90 Placebo 10mg 20mg 50mg 100mg |
| Strong Effect on Circadian Rhythm Findings: First night effect Clear phase advance of up to 5 hours Significance vs. placebo of p < 0.025 in linear and non- parametric regression analysis Proof-of-mechanism for circadian rhythm disorders Sample: VEC-162 effect on patient plasma melatonin curve |
| Commercial Differentiation: Unaddressed Target Market Source: 1 L.E.K. Consulting LLC study, Vanda interviews Initial target: market with low competitive intensity matching unique VEC-162 value proposition Primary Insomnia Circadian Rhythm Sleep Disorders Secondary Insomnia Examples Onset insomnia Maintenance insomnia Shift Worker Sleep Disorder (SWSD) Delayed Sleep Phase Syndrome (DSPS) Jet lag Due to depression Due to anxiety % of Sleep Disorder Population1 30-40% 20-30% 20-30% |
| Benchmarking VEC-162 in Transient Insomnia Drug LPS Benefit? WASO/Sleep Efficiency Benefit? Sleep Architecture Preserved? Sleep/Wake Cycle Benefit? Ambien(r) Y CR only N N Lunesta(r) Y Y N N RozeremTM Y N Expected N VEC-162 Y Y Y Y Sources: US labels, Vanda analysis Transient insomnia results predict chronic insomnia results |
| A Placebo-Like Side Effect Profile Not CNS-depressant No next-day performance problems Memory, attention, motor function No rebound insomnia No unpleasant taste 300+ patients dosed to date Up to four weeks of exposure |
| Not Expected to be a Controlled Substance All hypnotics (Ambien(r), Lunesta(r), etc.) are controlled substances (DEA Schedule IV) Potential for abuse, tolerance, withdrawal problems Restrictions on prescribing and dispensing VEC-162 not likely to be a controlled substance RozeremTM not scheduled |
| Overall Potential Differentiation in Sleep Disorders Ambien(r) Lunesta(r) RozeremTM VEC-162 Sleep onset ? ? ? ? Sleep maintenance CR only ? ? No CNS depressant side effects ? ? Not controlled substance ? ? No effect on sleep architecture Expected ? Circadian rhythm shift Gradual ? Sources: Company press releases; analyst estimates; Vanda analysis |
| Enrollment Update Initiated Phase III transient insomnia trial 400 patients Enrollment as of March 30: on target Next enrollment update: 2nd Quarter Earnings Call (08/03) |
| Expected Clinical Development Timeline - Sleep Phase III (transient) NDA 2006 H1 H2 2007 2008 H1 H2 H1 H2 2009 H1 H2 Phase III (chronic I) Phase III (chronic II) |
| Opportunity in Mood Disorders Clinical rationale for melatonin agonists in depression Validated by Novartis/Servier deal VEC-162 animal data in depression promising $20 billion market in 20051 Sources: 1 IMS - World Review Analyst; analyst estimates |
| Attractive Asset for Partnering Global partner important to target GP prescribing base Vanda acquired exclusive, worldwide rights from BMS Intellectual Property NCE: U.S./E.U.: December 2017 (2022)*(a) Vanda will seek co-promotion option in the U.S. * 5-year Hatch-Waxman extension (a) also eligible for additional protection in E.U. |
| A Differentiated Compound for Sleep and Depression Proven mechanism of action Strong efficacy and safety profile Opportunity for significant commercial differentiation in large and growing markets |
| VSF-173 |
| Overview Target market: Excessive sleepiness $500+ million market Only 2 products: Provigil(r) (Cephalon), Xyrem(r) (Jazz Pharma) Ready for Phase II trials Intellectual Property NCE: U.S.: June 2014 (2019)*; E.U.: September 2012(a) Acquired exclusive, worldwide rights from Novartis * 5-year Hatch-Waxman extension (a) also eligible for additional protection in E.U. |
| Company Review |
| Summary Financials Full-year guidance on end of year cash (from Q1 Earnings Call): $20-25 million * On April 12, 2006, Vanda raised additional $53.1 million through an IPO |
| Stream of Value-Creating Milestones Iloperidone VEC-162 VSF-173 Q4 2006 Q1 2007 Finish phase III enroll. Q2 2007 Q3 2007 Q4 2007 Report phase III results File NDA Finish phase III enroll. Report phase III results Initiate phase III (chron.) Initiate phase II (dep.) Initiate phase II trial Finish phase II trial All completed with no partnerships, no additional proceeds |
| Iloperidone Driving enrollment ahead of schedule VEC-162 Initiated Phase III trial Driving enrollment to target HR Hired CMO Post-IPO Accomplishments |
| Vanda Highlights Multiple late-stage CNS products targeting large markets Pharmacogenetic (PG) expertise to identify, develop and differentiate products Management team with extensive bio/pharma experience Stream of impending value-creating milestones |
| Back-Up Slides |
| Iloperidone Phase III Efficacy Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Column 11 Column 12 Column 13 Column 14 Column 15 Column 16 ILO 4-8mg 9.7 30 ILO 10-16mg 10.7 40 ILO 20-24mg 13.1 50 Placebo 5.5 60 P=0.006 P=0.0001 P=0.0003 PANSS - Change from Baseline Pooled efficacy from 3 ST Phase III trials Individual ST Phase III trial results * Denotes declared primary endpoint dose Strong efficacy across doses Efficacy per Phase III trial |
| Iloperidone Attractive in Today's Environment Market has changed significantly since Novartis stopped development (2002) Regulatory, commercial clarity on QTc prolongation Substantial market expansion Drug safety now drives prescribing Long-acting injectable an unexpected success PG-enhanced profile a potentially significant differentiator |