8-K

 

 

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 10, 2016

 

 

VANDA PHARMACEUTICALS INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

(State or other jurisdiction of incorporation)

 

001-34186   03-0491827
(Commission
File No.)
  (IRS Employer
Identification No.)

2200 Pennsylvania Avenue NW

Suite 300E

Washington, DC 20037

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (202) 734-3400

Not Applicable

(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:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On February 10, 2016, Vanda Pharmaceuticals Inc. (“Vanda”) issued a press release and is holding a conference call regarding its results of operations and financial condition for the quarter and year ended December 31, 2015. The full text of the press release which includes information regarding Vanda’s use of Non-GAAP financial measures, is furnished as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

Various statements to be made during the conference call are “forward-looking statements” under the securities laws, including, but not limited to, Vanda’s financial guidance for 2016. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “project,” “target,” “goal,” “likely,” “will,” “would,” and “could,” or the negative of these terms and similar expressions or words, identify forward-looking statements. Forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties.

Important factors that could cause actual results to differ materially from those reflected in Vanda’s forward-looking statements include, among others: Vanda’s ability to successfully commercialize HETLIOZ® for the treatment of Non-24 in the U.S. and Europe; uncertainty as to the market awareness of Non-24 and the market acceptance of HETLIOZ®; Vanda’s ability to generate U.S. sales of Fanapt® for the treatment of schizophrenia; the timing and costs of Vanda’s establishment of a sales and marketing, supply chain, distribution, pharmacovigilance, compliance and safety infrastructure to promote Fanapt® in the U.S.; Vanda’s dependence on third-party manufacturers to manufacture HETLIOZ® and Fanapt® in sufficient quantities and quality; Vanda’s limited sales and marketing infrastructure; the regulatory status of Fanapt® in Europe; Vanda’s ability to successfully commercialize HETLIOZ® and Fanapt® outside the U.S.; Vanda’s ability to prepare, file, prosecute, defend and enforce any patent claims and other intellectual property rights; Vanda’s ability to obtain the capital necessary to fund its research and development or commercial activities; a loss of rights to develop and commercialize Vanda’s products under its license agreements; the ability to obtain and maintain regulatory approval of Vanda’s products, and the labeling for any approved products; the timing and success of preclinical studies and clinical trials conducted by Vanda or its development partners; a failure of Vanda’s products to be demonstrably safe and effective; the size and growth of the potential markets for Vanda’s products and the ability to serve those markets; Vanda’s expectations regarding trends with respect to its revenues, costs, expenses and liabilities; the timing and costs of complying with the remaining post-marketing commitments and post-marketing requirements established in connection with the FDA’s approval of Fanapt®; the scope, progress, expansion, and costs of developing and commercializing Vanda’s products; Vanda’s failure to identify or obtain rights to new products; a loss of any of Vanda’s key scientists or management personnel; limitations on Vanda’s ability to utilize some or all of its prior net operating losses and orphan drug and research and development credits; the costs and effects of litigation; losses incurred from product liability claims made against Vanda; use of existing cash, cash equivalents and marketable securities and other factors that are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Vanda’s annual report on Form 10-K for the fiscal year ended December 31, 2014, which is on file with the SEC and available on the SEC’s website at www.sec.gov and Vanda’s annual report on Form 10-K for the year ended December 31, 2015, to be filed with the SEC in the first quarter of 2016. In addition to the risks described above and in Vanda’s annual report on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, other unknown or unpredictable factors also could affect Vanda’s results. There can be no assurance that the actual results or developments anticipated by Vanda will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Vanda. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

All written and verbal forward-looking statements attributable to Vanda or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Vanda cautions investors not to rely too heavily on the forward-looking statements Vanda makes or that are made on its behalf. The information conveyed on the conference call will be provided only as of the date of the call, and Vanda undertakes no obligation, and specifically declines any obligation, to update or revise publicly any forward-looking statements made during the call after the date thereof, whether as a result of new information, future events or otherwise.


The information in Item 2.02 of this current report on 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, as amended (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, as amended, 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

 

Exhibit

No.

  

Description

99.1    Press release of Vanda Pharmaceuticals Inc. dated February 10, 2016.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

VANDA PHARMACEUTICALS INC.
By:  

/s/ James P. Kelly

Name:   James P. Kelly
Title:  

Senior Vice President, Chief Financial

Officer, and Treasurer

Dated: February 10, 2016

EX-99.1

Exhibit 99.1

 

LOGO

Vanda Pharmaceuticals Reports Fourth Quarter 2015 and Full Year

2015 Financial Results

 

  HETLIOZ® net product sales grew to $15.1 million in the fourth quarter 2015

 

  Full year 2015 total revenues grew to $109.9 million

WASHINGTON – February 10, 2016 – Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA), today announced financial and operational results for the fourth quarter and full year ended December 31, 2015.

“2015 was a transformational year for Vanda with the continued growth of HETLIOZ in the U.S., and the European market approval of HETLIOZ for Non-24,” said Mihael H. Polymeropoulos, M.D., Vanda’s President and CEO. “The addition of Fanapt to our U.S. product portfolio builds on this success and underscores Vanda’s commitment to bringing important treatment options to patients.”

Key Highlights:

HETLIOZ® (tasimelteon)

 

    HETLIOZ® net product sales grew to $15.1 million in the fourth quarter of 2015, a 30% increase compared to $11.7 million in the third quarter of 2015 and a 152% increase compared to $6.0 million reported in the fourth quarter of 2014.

 

    HETLIOZ® net product sales were $44.3 million for the full year 2015, a 246% increase compared to $12.8 million reported for the full year 2014.

 

    During the fourth quarter of 2015, Vanda initiated an open label interventional study of tasimelteon for the treatment of Smith-Magenis Syndrome. A placebo controlled, Phase III study is planned to begin in the second half of 2016.

 

    During the fourth quarter of 2015, Vanda completed an observational study of Jet Lag Disorder. A placebo controlled, Phase III study is planned to begin in the second half of 2016.

Fanapt® (iloperidone)

 

    Fanapt® net product sales were $16.7 million for the fourth quarter of 2015, compared to $16.7 million in the third quarter of 2015.

 

    Fanapt® net product sales were $65.6 million for the full year 2015, compared to $65.0 million in 2014, as reported by Novartis AG.

 

    In December 2015, the Marketing Authorization Application for oral Fanaptum® tablets was accepted for evaluation by the European Medicines Agency for the treatment of schizophrenia in adults.

 

    The FDA review of the supplemental New Drug Application for Fanapt® for the maintenance treatment of schizophrenia in adults is ongoing. The FDA has set a PDUFA goal date in May 2016.

Cash, cash equivalents and marketable securities (Cash) were $143.2 million as of December 31, 2015, representing an increase to Cash of $13.4 million in 2015.

 

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Non-GAAP Financial Results

Vanda Non-GAAP total revenues for the fourth quarter of 2015 were $31.8 million, an increase of 319% compared to Non-GAAP total revenues of $7.6 million for the fourth quarter of 2014. Vanda Non-GAAP total revenues for the full year 2015 were $109.9 million, an increase of 466% compared to Non-GAAP total revenues of $19.4 million for the full year 2014.

For the fourth quarter of 2015, Non-GAAP net loss was $10.0 million, or $0.23 per share, compared to a Non-GAAP net loss of $13.5 million, or $0.36 per share, for the fourth quarter of 2014. Vanda Non-GAAP net loss was $18.9 million for the full year 2015, compared to a Non-GAAP net loss of $80.0 million for the full year 2014. Non-GAAP Diluted net loss per share for the full year 2015 was $0.45, compared to a Non-GAAP Diluted net loss per share of $2.30 for the full year 2014.

Vanda provides Non-GAAP financial information, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the sections of this press entitled “Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

2016 Financial Guidance

Vanda expects to achieve the following financial objectives in 2016:

 

    Net product sales from both HETLIOZ® and Fanapt® of between $143 and $153 million.

 

    HETLIOZ® net product sales of between $73 and $78 million.

 

    Fanapt® net product sales of between $70 and $75 million.

 

    Non-GAAP Operating expenses, excluding cost of goods sold, of between $125 and $135 million. The primary drivers of the expected increase over the prior year are investments in the U.S. Fanapt® and European HETLIOZ® commercial businesses.

 

    Non-GAAP Operating expenses also excludes intangible asset amortization expense of $10.9 million and stock-based compensation of between $9 and $11 million.

 

    Year end 2016 Cash is expected to be between $123 million and $143 million.

Conference Call

Vanda has scheduled a conference call for today, Wednesday, February 10, 2016, at 4:30 PM ET. During the call, Vanda’s management will discuss the fourth quarter and full year 2015 financial results and other corporate activities. Investors can call 1-888-771-4371 (domestic) or 1-847-585-4405 (international) and use passcode 41672752. A replay of the call will be available on Wednesday, February 10, 2016, beginning at 7:00 PM ET and will be accessible until Wednesday, February 17, 2016, at 11:59 PM ET. The replay call-in number is 1-888-843-7419 for domestic callers and 1-630-652-3042 for international callers. The passcode number is 41672752.

The conference call will be broadcast simultaneously on Vanda’s website, www.vandapharma.com. Investors should click on the Investor Relations tab and are advised to go to the website at least 15 minutes early to register, download, and install any necessary software or presentations. The call will also be archived on Vanda’s website for a period of 30 days.

Non-GAAP Financial Information

Vanda believes that the Non-GAAP financial information provided in this press release can assist investors in understanding and assessing the ongoing economics of Vanda’s business and reflect how it manages the business internally and sets operational goals. Vanda’s “Non-

 

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GAAP Total revenues” excludes the Fanapt® licensing agreement revenue. Vanda’s “Non-GAAP Selling, general and administrative expenses” and “Non-GAAP Research and Development expenses” exclude stock based compensation. Vanda’s “Non-GAAP Net income (loss),” “Non-GAAP Net income (loss) per share” and “Non-GAAP Operating expenses excluding Cost of goods sold” exclude Fanapt® licensing revenue, stock based compensation, intangible asset amortization and gain on arbitration settlement.

Vanda believes that excluding the impact of these items better reflects the recurring economic characteristics of its business, as well as Vanda’s use of financial resources and its long-term performance.

This press release includes a projection of 2016 Non-GAAP Operating expenses, excluding cost of goods sold, a forward-looking Non-GAAP financial measure under the heading “2016 Financial Guidance.” This Non-GAAP financial measure is determined by excluding cost of goods sold, stock-based compensation and intangible asset amortization. Vanda is unable to reconcile this Non-GAAP guidance to GAAP because it is difficult to predict the future impact of these adjustments.

These Non-GAAP financial measures, as presented, may not be comparable to similarly titled measures reported by other companies since not all companies may calculate these measures in an identical manner and, therefore, they are not necessarily an accurate measure of comparison between companies.

The presentation of these Non-GAAP financial measures is not intended to be considered in isolation or as a substitute for guidance prepared in accordance with GAAP. The principal limitation of these Non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Vanda’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these Non-GAAP financial measures. In order to compensate for these limitations, Vanda presents its Non-GAAP financial guidance in connection with its GAAP guidance. Investors are encouraged to review the reconciliation of our Non-GAAP financial measures to their most directly comparable GAAP financial measure.

About Vanda Pharmaceuticals Inc.

Vanda Pharmaceuticals Inc. is a biopharmaceutical company focused on the development and commercialization of novel therapies addressing high unmet medical needs. For more on Vanda, please visit www.vandapharma.com.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Various statements in this release, including, but not limited to, the guidance provided in the subheading to this release and under “2016 Financial Guidance” above, are “forward-looking statements” under the securities laws. Forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties. Important factors that could cause actual results to differ materially from those reflected in Vanda’s forward-looking statements include, among others, Vanda’s assumptions regarding its ability to continue to grow its business in the U.S., Vanda’s ability to successfully commercialize HETLIOZ® in Europe and other factors that are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Vanda’s annual report on Form 10-K for the fiscal year ended December 31, 2014 and quarterly report on Form 10-Q for the quarter ended September 30, 2015, which are on file with the SEC and available on the SEC’s website at www.sec.gov. Additional factors may be described in those sections of Vanda’s annual report on Form 10-K for the fiscal year ended

 

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December 31, 2015, to be filed with the SEC in the first quarter of 2016. In addition to the risks described above and in Vanda’s annual report on Form 10-K and quarterly reports on Form 10-Q, other unknown or unpredictable factors also could affect Vanda’s results. There can be no assurance that the actual results or developments anticipated by Vanda will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Vanda. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

All written and verbal forward-looking statements attributable to Vanda or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Vanda cautions investors not to rely too heavily on the forward-looking statements Vanda makes or that are made on its behalf. The information in this release is provided only as of the date of this release, and Vanda undertakes no obligation, and specifically declines any obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

####

 

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VANDA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

 

     Three Months Ended     Year Ended  
(in thousands, except for share and per share amounts)    December 31
2015
    December 31
2014
    December 31
2015
    December 31
2014
 

Revenues:

        

HETLIOZ® product sales, net

   $ 15,143      $ 6,021      $ 44,302      $ 12,802   

Fanapt® product sales, net

     16,706        —          65,623        107   

Fanapt® royalty revenue

     —          1,584        —          6,502   

Fanapt® licensing revenue

     —          7,765        —          30,746   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     31,849        15,370        109,925        50,157   

Operating expenses:

        

Cost of goods sold

     6,171        682        23,462        1,583   

Research and development

     8,747        4,752        29,145        19,230   

Selling, general and administrative

     28,881        17,323        84,531        84,644   

Intangible asset amortization

     2,943        536        12,972        2,254   

Gain on arbitration settlement

     —          (77,616     —          (77,616
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     46,742        (54,323     150,110        30,095   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     (14,893     69,693        (40,185     20,062   

Other income

     95        26        320        124   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (14,798   $ 69,719      $ (39,865   $ 20,186   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

        

Basic

   $ (0.35   $ 1.85      $ (0.94   $ 0.58   

Diluted

   $ (0.35   $ 1.77      $ (0.94   $ 0.55   

Weighted average shares outstanding:

        

Basic

     42,815,291        37,622,884        42,250,254        34,774,163   

Diluted

     42,815,291        39,421,014        42,250,254        36,686,723   

 

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VANDA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

 

($ in thousands)    December 31,
2015
     December 31,
2014
 

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 50,843       $ 60,901   

Marketable securities

     92,337         68,921   

Accounts receivable, net

     16,331         3,654   

Inventory

     1,294         5,170   

Prepaid expenses and other current assets

     5,742         3,084   
  

 

 

    

 

 

 

Total current assets

     166,547         141,730   

Property and equipment, net

     4,570         2,437   

Intangible assets, net

     38,752         26,724   

Non-current inventory and other

     3,181         813   
  

 

 

    

 

 

 

Total assets

   $ 213,050       $ 171,704   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable and accrued liabilities

   $ 15,767       $ 7,291   

Accrued government and other rebates

     35,550         495   
  

 

 

    

 

 

 

Total current liabilities

     51,317         7,786   

Milestone obligation under license agreement

     25,000         —     

Other non-current liabilities

     3,706         3,101   
  

 

 

    

 

 

 

Total liabilities

     80,023         10,887   

Stockholders’ equity:

     

Common stock

     43         41   

Additional paid-in capital

     460,794         448,744   

Accumulated other comprehensive income

     39         16   

Accumulated deficit

     (327,849      (287,984
  

 

 

    

 

 

 

Total stockholders’ equity

     133,027         160,817   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 213,050       $ 171,704   
  

 

 

    

 

 

 

 

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Reconciliation of GAAP to Non-GAAP Financial Information

VANDA PHARMACEUTICALS INC.

Reconciliation of GAAP to Non-GAAP Financial Information (Unaudited)

 

    Three Months Ended     Year Ended  
(in thousands, except for share and per share amounts)   December 31
2015
    December 31
2014
    December 31
2015
    December 31
2014
 

Net income (loss)

  $ (14,798   $ 69,719      $ (39,865   $ 20,186   

Adjustments:

       

Fanapt® licensing revenue

    —          (7,765     —          (30,746

Stock-based compensation

    1,887        1,631        7,961        5,878   

Intangible asset amortization

    2,943        536        12,972        2,254   

Gain on arbitration settlement

    —          (77,616     —          (77,616
 

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net loss

  $ (9,968   $ (13,495   $ (18,932   $ (80,044
 

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net loss per share:

       

Basic & Diluted

  $ (0.23   $ (0.36   $ (0.45   $ (2.30

Weighted average shares outstanding:

       

Basic & Diluted

    42,815,291        37,622,884        42,250,254        34,774,163   

Total revenues

  $ 31,849      $ 15,370      $ 109,925      $ 50,157   

Adjustment:

       

Fanapt® licensing revenue

    —          (7,765     —          (30,746
 

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Total revenues

  $ 31,849      $ 7,605      $ 109,925      $ 19,411   
 

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

  $ 46,742      $ (54,323   $ 150,110      $ 30,095   

Adjustments:

       

Cost of goods sold

    (6,171     (682     (23,462     (1,583

Stock-based compensation

    (1,887     (1,631     (7,961     (5,878

Intangible asset amortization

    (2,943     (536     (12,972     (2,254

Gain on arbitration settlement

    —          77,616        —          77,616   
 

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating expenses excluding Cost of goods sold

  $ 35,741      $ 20,444      $ 105,715      $ 97,996   
 

 

 

   

 

 

   

 

 

   

 

 

 

Research and development

  $ 8,747      $ 4,752      $ 29,145      $ 19,230   

Adjustment:

       

Stock-based compensation

    (526     (556     (2,269     (1,933
 

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Research and development

  $ 8,221      $ 4,196      $ 26,876      $ 17,297   
 

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative

  $ 28,881      $ 17,323      $ 84,531      $ 84,644   

Adjustment:

       

Stock-based compensation

    (1,361     (1,075     (5,692     (3,945
 

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Selling, general and administrative

  $ 27,520      $ 16,248      $ 78,839      $ 80,699   
 

 

 

   

 

 

   

 

 

   

 

 

 

COMPANY CONTACT:

Jim Kelly

Senior Vice President & Chief Financial Officer

Vanda Pharmaceuticals Inc.

(202) 734-3428

jim.kelly@vandapharma.com

SOURCE Vanda Pharmaceuticals Inc.

 

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