UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): February 14, 2008
VANDA
PHARMACEUTICALS INC.
(Exact
name of Registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
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000-51863
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03-0491827
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(Commission
File No.)
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(IRS
Employer Identification No.)
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9605
Medical Center Drive
Suite 300
Rockville,
Maryland 20850
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (240)
599-4500
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
2.02.
Results of Operations and Financial Condition.
On
February 14, 2008, Vanda Pharmaceuticals Inc. issued a press release relating
to
its results of operations and financial condition for the fourth quarter and
full year ended December 31, 2007. The full text of this press release is
furnished as Exhibit 99.1 to this Current Report on
Form 8-K.
The
information in Item 2.02 of this Form 8-K and the Exhibit attached
hereto shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference
in
any filing under the Securities Act of 1933 or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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99.1
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Press
release of Vanda Pharmaceuticals Inc. dated February 14,
2008.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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VANDA
PHARMACEUTICALS INC.
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||
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By:
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/s/
STEVEN
A. SHALLCROSS
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Name:
Steven A. Shallcross
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Title:
Senior Vice President, Chief Financial Officer and
Treasurer
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Dated:
February 14, 2008
For
Immediate Release
Company
Contact:
Steven
A.
Shallcross
Senior
Vice President & CFO
Vanda
Pharmaceuticals Inc..
(240)
599-4500
sshallcross@vandapharma.com
Vanda
Pharmaceuticals Reports Fourth Quarter and
Full
Year 2007 Results
Expects
FiaptaTM
(Iloperidone) PDUFA Action July 27, 2008
Completes
Enrollment for VEC-162 Phase III Chronic Insomnia Study
ROCKVILLE,
MD.
-
February 14, 2008 - Vanda Pharmaceuticals Inc. (NASDAQ: VNDA),
a
biopharmaceutical company focused on the development and commercialization
of
clinical-stage product candidates for central nervous system disorders, today
announced financial and operational results for the fourth quarter and fiscal
year ended December 31, 2007.
Vanda
reported research and development (R&D) expenses in the fourth quarter of
2007 of $12.6 million, compared to third quarter of 2007 R&D expenses of
$13.9 million and fourth quarter of 2006 R&D expenses of $7.9 million. The
decrease in R&D expenses between the third and fourth quarters is primarily
attributable to costs associated with the ongoing Phase III VEC-162 chronic
insomnia clinical trial being offset by a non-recurring third quarter milestone
charge of $5.0 million for the FiaptaTM
New Drug
Application (NDA) submission in September 2007. The increase in R&D expenses
in the fourth quarter of 2007 relative to the fourth quarter of 2006 is
primarily attributable to the same VEC-162 Phase III chronic insomnia clinical
trial that was initiated in late 2007. For the full year of 2007, total R&D
expenses were $47.2 million compared to $52.1 million during 2006. Total
expenses for the fourth quarter of 2007 were $22.0 million, compared to $23.5
million in the third quarter of 2007 and $12.4 million in the fourth quarter
of
2006. For the full year of 2007, total expenses were $80.0 million, compared
to
$65.7 million in 2006.
Net
loss
was $20.7 million for the fourth quarter of 2007, compared to $21.9 million
in
the third quarter of 2007 and $11.9 million in the fourth quarter of 2006.
Net
loss per common share for the fourth quarter of 2007 was $0.78, compared to
$0.82 in the third quarter of 2007, and $0.54 in the fourth quarter of
2006.
As
of
December 31, 2007, Vanda’s cash, cash equivalents, and marketable securities
totaled approximately $93.2 million. As of December 31, 2007, the company had
a
total of approximately 26.6 million shares of common stock
outstanding.
Pages
1 of
8
“I
am
extremely pleased with the successful submission and acceptance of the
FiaptaTM
NDA
filing in 2007. This important achievement would not have been possible without
the commitment and dedication of the Vanda team,” stated Mihael Polymeropoulos,
M.D., President and CEO of Vanda. “I am looking forward to an exciting 2008
during which we expect the results from our VEC-162 Phase III chronic insomnia
clinical trial and the PDUFA action for FiaptaTM.”
OPERATIONAL
HIGHLIGHTS
Iloperidone
On
September 27, 2007 Vanda announced that it had submitted an NDA to the U.S.
Food
and Drug Administration (FDA) for FiaptaTM,
its
investigational atypical antipsychotic for the treatment of schizophrenia.
On
November 27, 2007 the company announced that the FDA had accepted and filed
the
NDA. Under the Prescription Drug User Fee Act (PDUFA) of 1992, Vanda expects
a
PDUFA action on or about July 27, 2008.
VEC-162
Vanda
has
completed enrollment for its VEC-162 Phase III chronic insomnia clinical trial.
Vanda expects to report top-line results in June 2008. Vanda enrolled 324
patients in the trial, which is a randomized, double-blind, placebo-controlled
35-day study, measuring sleep onset and maintenance, as well as next-day
performance.
FINANCIAL
DETAILS
|
·
|
Operating
Expenses. Fourth quarter 2007 R&D expenses, primarily consisting of
salaries and related costs of R&D personnel, stock-based compensation,
and the costs of consultants, materials and supplies associated with
the
company’s clinical trials and research initiatives, were $12.6 million,
down from $13.9 million in the previous quarter and up from $7.9
million
in the fourth quarter of 2006. The decrease in R&D expenses between
the third and fourth quarters of 2007 is primarily attributable to
an
increase in VEC-162 Phase III chronic insomnia clinical trial costs
being
offset by a non-recurring third quarter milestone charge of $5.0
million
for the FiaptaTM
NDA submission in September 2007. The increase in R&D expenses in the
fourth quarter of 2007 relative to the fourth quarter of 2006 is
primarily
attributable to the same VEC-162 Phase III chronic insomnia clinical
trial
that was initiated in late 2007. For the full year of 2007, total
R&D
expenses were $47.2 million, down from $52.1 million in the full
year of
2006. Lower R&D expenses in 2007 resulted from the substantial
completion of the FiaptaTM
Phase III clinical program in 2006.
|
General
and administrative (G&A) expenses totaled $9.5 million in the fourth quarter
of 2007, down slightly from $9.6 million in the third quarter of 2007, and
up
from $4.5 million in the fourth quarter of 2006. The increase in G&A
expenses in the fourth quarter of 2007 relative to the fourth quarter of 2006
is
primarily due to increased FiaptaTM
pre-launch commercial activities, stock-based compensation charges, salaries
and
related costs of non-R&D personnel, insurance and facility expenses. For the
full year of 2007, total G&A expenses were $32.8 million, up from $13.6
million in the prior year. The increase in G&A expenses is primarily due to
increased salaries, benefits and stock-based compensation expense, increased
business and commercial development expenses, and higher insurance, legal and
professional fees associated with being a public company.
Pages
2 of
8
Employee
stock-based compensation expense recorded in the fourth quarter of 2007 was
$5.2
million. Of the total $5.2 million of non-cash charges, $1.0 million was
recorded in R&D expenses and $4.2 million was recorded in G&A expenses.
In the third quarter of 2007 and the fourth quarter of 2006, total stock-based
compensation was $5.2 million and $1.6 million, respectively. For the full
year
of 2007, total stock-based compensation was $19.5 million, up from $6.1 million
in the prior year. The increase in stock-based compensation is primarily the
result of the higher fair value of options granted during 2007 compared to
options granted in prior periods.
|
·
|
Net
loss for the fourth quarter of 2007 was $20.7 million. This compares
to a
net loss of $21.9 million in the third quarter of 2007, and $11.9
million
in the fourth quarter of 2006. For the full year of 2007, net loss
was
$74.1 million, up from $63.5 million for the full year of
2006.
|
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·
|
Net
loss per common share for the fourth quarter of 2007 was $0.78, compared
to $0.82 in the third quarter of 2007 and $0.54 in the fourth quarter
of
2006. For the full year of 2007, net loss per common share was $2.81,
compared to $3.97 in the full year of
2006.
|
|
·
|
Cash
and marketable securities decreased by $16.2 million during the fourth
quarter. Changes included $20.7 million of net losses and decreases
in
accrued R&D expenses and accounts payable of $2.5 million, offset by
$5.3 million in non-cash depreciation, amortization, and stock-based
compensation expenses, decreases in prepaid expenses of $1.6 million
and
net decreases in other working capital of $0.1 million.
|
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·
|
Vanda’s
cash, cash equivalents, and marketable securities at the end of the
fourth
quarter of 2007 totaled approximately $93.2 million, compared to
approximately $109.4 million as of September 30, 2007, and approximately
$31.9 million as of December 31, 2006.
|
FINANCIAL
GUIDANCE
The
company anticipates that its current cash balance will be sufficient to fund
operations through the FiaptaTM
PDUFA
action date and into the fourth quarter of 2008. Vanda plans to focus its
efforts primarily on completing and reporting the top-line results for the
ongoing VEC-162 Phase III chronic insomnia clinical trial and continuing
essential FiaptaTM
pre-launch commercial activities.
CONFERENCE
CALL
The
company has scheduled a conference call for today, Thursday, February 14, 2008
at 10:30 AM ET. During the call, Mihael H. Polymeropoulos, M.D., President
and
CEO, and Steven A. Shallcross, Sr. Vice President and CFO, will discuss
quarterly results and other corporate activities. Investors can call
1-866-578-5747 (domestic) and 1-617-213-8054 (international) prior to the 10:30
AM start time and ask for the Vanda Pharmaceuticals conference call hosted
by
Dr. Polymeropoulos. A replay of the call will be available Thursday, February
14, 2008, at 12:30 PM ET and will be accessible until Thursday, February 21,
2008, at 5:00 PM ET. The replay call-in number is 1-888-286-8010 for domestic
callers and 1-617-801-6888 for international callers. The access number is
16341258.
The
conference call will be broadcast simultaneously on the company's Web site,
http://www.vandapharma.com.
Investors should click on the Investor Relations tab and are advised to go
to
the Web site at least 15 minutes early to register, download, and install any
necessary software. The call will also be archived on the Vanda Web site for
a
period of 30 days, through March 15, 2008.
Pages
3 of
8
ABOUT
VANDA PHARMACEUTICALS INC.:
Vanda
Pharmaceuticals Inc. is a biopharmaceutical company focused on the development
and commercialization of clinical-stage product candidates for central nervous
system disorders. The company has three product candidates. Vanda's lead product
candidate, FiaptaTM
(iloperidone),
is a compound for the treatment of schizophrenia and bipolar disorder, for
which
Vanda has recently submitted an NDA to the FDA. Vanda's second product
candidate, VEC-162, is a compound for the treatment of sleep and mood disorders,
which is currently in Phase III for chronic insomnia. Vanda's third product
candidate, VSF-173, is a compound for the treatment of excessive sleepiness
in
Phase II. For more on Vanda Pharmaceuticals Inc., please visit
http://www.vandapharma.com.
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
release contains forward-looking statements within the meaning of Section 21E
of
the Securities Exchange Act of 1934, as amended, including statements regarding
Vanda’s plans for its product candidates. Words such as, but not limited to,
“look forward to,” “believe,” “expect,” “anticipate,” “estimate,” “intend,”
“plan,” “targets,” “likely,” “will,” “would,” “should,” and “could,” and similar
expressions or words identify forward-looking statements. Such forward-looking
statements are based upon current expectations that involve risks, changes
in
circumstances, assumptions and uncertainties. Vanda is at an early stage of
development and may not ever have any products that generate significant
revenue. Important factors that could cause actual results to differ materially
from those reflected in Vanda’s forward-looking statements include, among
others, a failure of Vanda’s product candidates to be demonstrably safe and
effective, a failure to obtain regulatory approval for the company’s products or
to comply with ongoing regulatory requirements, a lack of acceptance of Vanda’s
product candidates in the marketplace, a failure of the company to become or
remain profitable, Vanda’s inability to obtain the capital necessary to fund its
research and development activities, a loss of any of the company’s key
scientists or management personnel, and other factors that are described in
the
“Risk Factors” section (Part II, Item 1A) of Vanda’s report on Form 10-Q for the
quarter ended September 30, 2007 (File No. 000-51863). No forward-looking
statements can be guaranteed and actual results may differ materially from
such
statements. The information in this release is provided only as of the date
of
this release, and Vanda undertakes no obligation to update any forward-looking
statements contained in this release on account of new information, future
events, or otherwise, except as required by law.
####
Pages
4 of
8
VANDA
PHARMACEUTICALS INC.
(A
Development Stage Enterprise)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
Three
Months Ended
|
Year
Ended
|
|||||||||||
|
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
|||||||||
|
|
2007
|
2006
|
2007
|
2006
|
|||||||||
|
|
|||||||||||||
|
|
|||||||||||||
|
Revenues
from services
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
|
|
|||||||||||||
|
Operating
expenses:
|
|||||||||||||
|
Research
and development
|
12,574,735
|
7,939,988
|
47,234,867
|
52,070,776
|
|||||||||
|
General
and administrative
|
9,472,938
|
4,467,225
|
32,803,508
|
13,637,664
|
|||||||||
|
Total
operating expenses
|
22,047,673
|
12,407,213
|
80,038,375
|
65,708,440
|
|||||||||
|
|
|||||||||||||
|
Loss
from operations
|
(22,047,673
|
)
|
(12,407,213
|
)
|
(80,038,375
|
)
|
(65,708,440
|
)
|
|||||
|
|
|||||||||||||
|
Interest
income
|
1,299,076
|
516,291
|
5,907,219
|
2,202,654
|
|||||||||
|
Interest
expense
|
-
|
(4
|
)
|
-
|
(4,833
|
)
|
|||||||
|
Other
income
|
-
|
-
|
71,345
|
-
|
|||||||||
|
Total
other income, net
|
1,299,076
|
516,287
|
5,978,564
|
2,197,821
|
|||||||||
|
|
|||||||||||||
|
Loss
before tax provision
|
(20,748,597
|
)
|
(11,890,926
|
)
|
(74,059,811
|
)
|
(63,510,619
|
)
|
|||||
|
|
|||||||||||||
|
Income
tax provision
|
(191
|
)
|
549
|
9,879
|
549
|
||||||||
|
|
|||||||||||||
|
Net
loss
|
$
|
(20,748,406
|
)
|
$
|
(11,891,475
|
)
|
$
|
(74,069,690
|
)
|
$
|
(63,511,168
|
)
|
|
|
|
|||||||||||||
|
Basic
and diluted net loss per
|
|||||||||||||
|
common
share
|
$
|
(0.78
|
)
|
$
|
(0.54
|
)
|
$
|
(2.81
|
)
|
$
|
(3.97
|
)
|
|
|
|
|||||||||||||
|
Shares
used in calculation of
|
|||||||||||||
|
basic
and diluted net loss
|
|||||||||||||
|
per
common share
|
26,644,540
|
21,932,730
|
26,360,177
|
16,001,815
|
|||||||||
Pages
5 of
8
VANDA
PHARMACEUTICALS INC.
(A
Development Stage Enterprise)
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
ASSETS
|
|
December
31, 2007
|
December
31, 2007
|
||||
|
Current
assets:
|
|
|
|||||
|
Cash
and cash equivalents
|
$
|
41,929,533
|
$
|
30,928,895
|
|||
|
Marketable
securities
|
43,243,960
|
941,981
|
|||||
|
Prepaid
expenses, deposits and other current assets
|
1,781,881
|
1,949,466
|
|||||
|
Total
current assets
|
86,955,374
|
33,820,342
|
|||||
|
|
|||||||
|
Marketable
securities, long-term
|
7,979,331
|
-
|
|||||
|
Property
and equipment, net
|
1,345,845
|
1,859,704
|
|||||
|
Deposits
|
150,000
|
150,000
|
|||||
|
Restricted
cash
|
430,230
|
430,230
|
|||||
|
Total
assets
|
$
|
96,860,780
|
$
|
36,260,276
|
|||
|
|
|||||||
|
|
|||||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
2,988,069
|
$
|
2,783,249
|
|||
|
Accrued
expenses
|
9,789,738
|
6,322,808
|
|||||
|
Total
current liabilities
|
12,777,807
|
9,106,057
|
|||||
|
|
|||||||
|
Long-term
liabilities:
|
|||||||
|
Deferred
rent
|
354,042
|
238,413
|
|||||
|
Deferred
grant revenue
|
-
|
129,950
|
|||||
|
Other
long-term liabilities
|
-
|
28,984
|
|||||
|
Total
liabilities
|
13,131,849
|
9,503,404
|
|||||
|
|
|||||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
26,653
|
22,129
|
|||||
|
Additional
paid-in capital
|
257,600,368
|
126,578,588
|
|||||
|
Accumulated
other comprehensive gain (loss)
|
12,176
|
(3,269
|
)
|
||||
|
Deficit
accumulated during the development stage
|
(173,910,266
|
)
|
(99,840,576
|
)
|
|||
|
Total
stockholders' equity
|
83,728,931
|
26,756,872
|
|||||
|
|
|||||||
|
Total
liabilities and stockholders' equity
|
$
|
96,860,780
|
$
|
36,260,276
|
|||
Pages
6 of
8
VANDA
PHARMACEUTICALS INC.
(A
Development Stage Enterprise)
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
Year
Ended
|
|||||||
|
December
31,
|
December
31,
|
||||||
|
2007
|
2006
|
||||||
|
Cash
flows from operating activities:
|
|||||||
|
Net
loss
|
$
|
(74,069,690
|
)
|
$
|
(63,511,168
|
)
|
|
|
Adjustments
to reconcile net income to net cash used in operating
activities:
|
|||||||
|
Depreciation
and amortization
|
571,586
|
575,372
|
|||||
|
Employee
and non-employee stock-based compensation
|
19,622,814
|
6,131,827
|
|||||
|
Loss
on disposal of assets
|
28,713
|
29,528
|
|||||
|
Accretion
of discount on investments
|
(1,571,905
|
)
|
(378,739
|
)
|
|||
|
Changes
in assets and liabilities:
|
|||||||
|
Prepaid
expenses and other current assets
|
168,987
|
270,745
|
|||||
|
Deposits
|
-
|
690,000
|
|||||
|
Accounts
payable
|
204,029
|
526,711
|
|||||
|
Accrued
expenses
|
3,465,028
|
3,811,373
|
|||||
|
Deferred
grant revenue
|
(147,464
|
)
|
-
|
||||
|
Other
liabilities
|
86,644
|
234,833
|
|||||
|
Net
cash used in operating activities
|
(51,641,258
|
)
|
(51,619,518
|
)
|
|||
|
Cash
flows from investing activities:
|
|||||||
|
Purchases
of property and equipment
|
(279,433
|
)
|
(1,354,156
|
)
|
|||
|
Proceeds
from sales of property and equipment
|
200,179
|
-
|
|||||
|
Purchases
of marketable securities
|
(138,953,879
|
)
|
(102,232,608
|
)
|
|||
|
Proceeds
from sales of marketable securities
|
3,577,859
|
82,137,888
|
|||||
|
Maturities
of marketable securities
|
86,695,000
|
29,670,000
|
|||||
|
Net
cash provided by (used in) investing activities
|
(48,760,274
|
)
|
8,221,124
|
||||
|
Cash
flows from financing activities:
|
|||||||
|
Principal
payments on obligations under capital lease
|
-
|
(1,540
|
)
|
||||
|
Principal
payments on note payable
|
-
|
(141,074
|
)
|
||||
|
Proceeds
from exercise of stock options and warrants
|
148,640
|
127,115
|
|||||
|
Proceeds
from issuance of common stock, net of
|
|||||||
|
issuance
costs
|
111,254,850
|
53,329,951
|
|||||
|
Net
cash provided by financing activities
|
111,403,490
|
53,314,452
|
|||||
|
Effect
of foreign currency translation
|
(1,320
|
)
|
22
|
||||
|
Net
increase in cash and cash equivalents
|
11,000,638
|
9,916,080
|
|||||
|
Cash
and cash equivalents, beginning of period
|
30,928,895
|
21,012,815
|
|||||
|
Cash
and cash equivalents, end of period
|
$
|
41,929,533
|
$
|
30,928,895
|
|||
Pages
7 of
8
SOURCE
Vanda Pharmaceuticals Inc.
2/14/2007
CONTACT:
Steven A. Shallcross, Senior Vice President, Chief Financial Officer of Vanda
Pharmaceuticals Inc., +1-240-599-4500
Web
site:
http://www.vandapharma.com
(VNDA)
CO:
Vanda
Pharmaceuticals Inc.
Pages
8 of
8