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): November 7, 2017

 

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On November 7, 2017, 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 ended September 30, 2017. 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 2017. 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 assumptions regarding its ability to continue to grow its business in the U.S. through the HETLIOZ® to Psychiatrists Initiative, among other means; Vanda’s ability to complete the clinical development and obtain regulatory approval of tradipitant for the treatment of atopic dermatitis; Vanda’s ability to successfully commercialize HETLIOZ® in Europe; 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, 2016 and quarterly report on Form 10-Q for the quarter ended June 30, 2017, 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 quarterly report on Form 10-Q for the quarter ended September 30, 2017, to be filed with the SEC in the fourth quarter of 2017. 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 November 7, 2017.


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.

Dated: November 7, 2017     By:   /s/ Richard L. Gulino
      Name:  Richard L. Gulino
      Title:    Senior Vice President, General Counsel
EX-99.1

Exhibit 99.1

 

LOGO

Vanda Pharmaceuticals Reports Third Quarter 2017 Financial Results

 

  Total net product sales were $41.3 million in the third quarter of 2017

 

  HETLIOZ® to psychiatrists initiative fully launched in October 2017

 

  Tradipitant study showed significant improvement to itch and disease severity in atopic dermatitis

 

  Vanda is providing an update to its 2017 Financial Guidance

WASHINGTON – November 7, 2017 – Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA) today announced financial and operational results for the third quarter ended September 30, 2017.

“During the third quarter of 2017, Vanda demonstrated the importance of the diverse set of ongoing initiatives to advance our growth strategy,” said Mihael H. Polymeropoulos, M.D., Vanda’s President and CEO. “The tradipitant results in atopic dermatitis, early trends from the HETLIOZ to psychiatrists initiative and the resolution of the HETLIOZ pricing negotiation in Germany, all represent significant potential drivers of growth.”

Key Highlights:

 

  Total net product sales from HETLIOZ® and Fanapt® were $41.3 million in the third quarter of 2017, a 2% decrease compared to $42.1 million in the second quarter of 2017 and a 7% increase compared to $38.5 million in the third quarter of 2016.

HETLIOZ® (tasimelteon)

 

  HETLIOZ® net product sales were $22.3 million in the third quarter of 2017, a 1% decrease compared to $22.5 million in the second quarter of 2017 and a 19% increase compared to $18.7 million in the third quarter of 2016.

 

  As of October 2017, the full Fanapt® U.S. field force is promoting HETLIOZ® to psychiatrists for their patients with Non-24-Hour Sleep-Wake Disorder. Early results are encouraging and Vanda believes this initiative has the potential to increase the HETLIOZ® rate of growth in 2018.

 

  In October 2017, Vanda reached a pricing agreement for HETLIOZ® with the German National Association of Statutory Health Insurance Funds after an Arbitration Board decision. Vanda plans to submit pricing and reimbursement dossiers for HETLIOZ® in both France and Italy in the first half of 2018.

Fanapt® (iloperidone)

 

  Fanapt® net product sales were $19.1 million in the third quarter of 2017, a 3% decrease compared to $19.5 million in the second quarter of 2017 and a 4% decrease compared to $19.8 million in the third quarter of 2016.

 

  Fanapt® prescriptions, as reported by QuintilesIMS Incorporated, were 27,797 in the third quarter of 2017, a 2% decline compared to the second quarter of 2017.

 

  The Federal Circuit Court of Appeals has scheduled oral arguments on December 5, 2017 for the appeal by West-Ward Pharmaceutical’s (West-Ward) of the Delaware District Court’s decision that West-Ward’s ANDA product infringes Vanda’s U.S. Patent No. 8,586,610 (the ‘610 Patent). The Delaware District Court issued an injunction barring West-Ward from marketing its product until the expiration of the ‘610 Patent on November 2, 2027.

 

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Research and Development

Tradipitant

 

  In September 2017, results were announced from a Phase II clinical study of tradipitant for patients with atopic dermatitis, which showed significant improvements in itch and disease severity. These results were presented at the 9th World Congress of Itch in October 2017.

 

  Vanda expects to hold an end of Phase II meeting with the U.S. Food and Drug Administration (FDA) in the first quarter of 2018 to discuss the tradipitant for atopic dermatitis clinical study. A tradipitant for atopic dermatitis Phase III clinical study is expected to begin in the first half of 2018.

 

  A tradipitant clinical study for the treatment of gastroparesis is ongoing. Results are expected in mid 2018.

HETLIOZ®

 

  Results from the study of HETLIOZ® for the treatment of jet lag disorder after transmeridian travel (2102) are expected in the fourth quarter of 2017.

 

  An 8-hour phase advance, simulated jet lag disorder study (3107) was initiated in October 2017 and is expected to be fully enrolled by the end of 2017. Results are expected in the first quarter of 2018.

 

  A pharmacokinetic study of the HETLIOZ® pediatric formulation is near completion. The study is expected to be fully enrolled by the end of 2017.

 

  Enrollment in the Smith-Magenis Syndrome clinical study is ongoing. Results are expected in 2018.

VTR-297 (histone deactetylase (HDAC) inhibitor)

 

  The FDA has accepted an Investigational New Drug application for VTR-297, a small molecule HDAC inhibitor, and has provided authorization to proceed with the treatment of patients with relapsed and/or refractory hematologic malignancies.

 

  A VTR-297 Phase I study (1101) is expected to start in the first half of 2018. The 1101 study is a dose escalation trial to evaluate drug safety, tolerability and determine a recommended clinical treatment regimen and dose.

Cash, cash equivalents and marketable securities (Cash) were $139.9 million as of September 30, 2017, representing an increase to Cash of $2.8 million during the third quarter of 2017.

Non-GAAP Financial Results

For the third quarter of 2017, Non-GAAP net loss was $1.3 million, or $0.03 per share, compared to a Non-GAAP net income of $4.6 million, or $0.11 per share, for the third quarter of 2016.

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 release entitled “Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

 

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2017 Financial Guidance

Vanda is updating its 2017 financial guidance and expects to achieve the following financial objectives in 2017:

 

Fourth Quarter 2017

Financial Objectives

   Fourth Quarter
2017
Guidance
    
Combined net product sales from both HETLIOZ® and Fanapt®    $42 to $48 million   
HETLIOZ® net product sales    $24 to $27 million   
Fanapt® net product sales    $18 to $21 million   

Full Year 2017

Financial Objectives

   Revised Full Year
2017
Guidance
   Prior Full Year
2017
Guidance
Combined net product sales from both HETLIOZ® and Fanapt®    $163 to $169 million    $165 to $175 million
HETLIOZ® net product sales    $89 to $92 million    $88 to $93 million
Fanapt® net product sales    $74 to $77 million    $77 to $82 million
Non-GAAP Operating expenses, excluding Cost of goods sold(1)    $150 to $157 million    $162 to $172 million
Intangible asset amortization    $1.7 million    $1.7 million
Stock-based compensation    $9 to $12 million    $9 to $12 million
Year-end 2017 Cash    $131 to $141 million    $121 to $141 million

 

(1) Non-GAAP Operating expenses, excludes cost of goods sold, intangible asset amortization and stock-based compensation.

Conference Call

Vanda has scheduled a conference call for today, Tuesday, November 7, 2017, at 4:30 PM ET. During the call, Vanda’s management will discuss the third quarter 2017 financial results and other corporate activities. Investors can call 1-888-771-4371 (domestic) or 1-847-585-4405 (international) and use passcode 45886211. A replay of the call will be available on Tuesday, November 7, 2017, beginning at 7:00 PM ET and will be accessible until Tuesday, November 14, 2017, 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 45886211.

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

 

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and reflect how it manages the business internally and sets operational goals. 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 stock-based compensation and intangible asset amortization.

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 2017 Non-GAAP Operating expenses, excluding Cost of goods sold, a forward-looking Non-GAAP financial measure under the heading “2017 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 is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. For more on Vanda Pharmaceuticals Inc., please visit www.vandapharma.com.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Various statements in this release, including, but not limited to, the guidance provided under “2017 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. through the HETLIOZ® to Psychiatrists Initiative, among other means, Vanda’s ability to complete the clinical development and obtain regulatory approval of tradipitant for the treatment of atopic dermatitis, 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

 

Page 4 of 7


December 31, 2016 and quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2017, 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 quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2017, to be filed with the SEC in the fourth quarter of 2017. 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.

VANDA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for share and per share amounts)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30
2017
    September 30
2016
    September 30
2017
    September 30
2016
 

Revenues:

        

HETLIOZ® product sales, net

   $ 22,279     $ 18,715     $ 64,968     $ 52,376  

Fanapt® product sales, net

     19,057       19,767       55,839       55,397  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     41,336       38,482       120,807       107,773  

Operating expenses:

        

Cost of goods sold excluding amortization

     4,525       6,990       13,057       19,440  

Research and development

     10,178       7,294       28,393       21,542  

Selling, general and administrative

     31,124       21,908       92,792       75,880  

Intangible asset amortization

     432       2,943       1,318       8,828  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     46,259       39,135       135,560       125,690  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (4,923     (653     (14,753     (17,917

Other income

     396       223       1,073       511  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (4,527     (430     (13,680     (17,406

Provision for income taxes

     23       —         49       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (4,550   $ (430   $ (13,729   $ (17,406
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, basic and diluted

   $ (0.10   $ (0.01   $ (0.31   $ (0.40

Weighted average shares outstanding, basic and diluted

     44,885,287       43,515,404       44,669,201       43,275,074  

 

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VANDA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

     September 30
2017
    December 31
2016
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 22,586     $ 40,426  

Marketable securities

     117,295       100,914  

Accounts receivable, net

     18,179       20,268  

Inventory

     921       779  

Prepaid expenses and other current assets

     10,738       11,788  
  

 

 

   

 

 

 

Total current assets

     169,719       174,175  

Property and equipment, net

     5,448       5,015  

Intangible assets, net

     26,501       27,819  

Non-current inventory and other

     4,038       3,365  
  

 

 

   

 

 

 

Total assets

   $ 205,706     $ 210,374  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable and accrued liabilities

   $ 18,921     $ 16,196  

Accrued government and other rebates

     25,615       34,124  

Milestone obligations under license agreements

     27,000       —    
  

 

 

   

 

 

 

Total current liabilities

     71,536       50,320  

Milestone obligation under license agreement

     —         25,000  

Other non-current liabilities

     3,701       3,724  
  

 

 

   

 

 

 

Total liabilities

     75,237       79,044  

Stockholders’ equity: Common stock

     45       44  

Additional paid-in capital

     489,939       477,087  

Accumulated other comprehensive income

     73       58  

Accumulated deficit

     (359,588     (345,859
  

 

 

   

 

 

 

Total stockholders’ equity

     130,469       131,330  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 205,706     $ 210,374  
  

 

 

   

 

 

 

 

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VANDA PHARMACEUTICALS INC.

Reconciliation of GAAP to Non-GAAP Financial Information

(in thousands, except for share and per share amounts)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30
2017
    September 30
2016
    September 30
2017
    September 30
2016
 

Net loss

   $ (4,550   $ (430   $ (13,729   $ (17,406

Adjustments:

        

Stock-based compensation

     2,771       2,100       7,683       6,440  

Intangible asset amortization

     432       2,943       1,318       8,828  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income (loss)

   $ (1,347   $ 4,613     $ (4,728   $ (2,138
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income (loss) per share, basic

   $ (0.03   $ 0.11     $ (0.11   $ (0.05

Weighted average shares outstanding, basic

     44,885,287       43,515,404       44,669,201       43,275,074  

Operating expenses

   $ 46,259     $ 39,135     $ 135,560     $ 125,690  

Adjustments:

        

Cost of goods sold excluding amortization

     (4,525     (6,990     (13,057     (19,440

Stock-based compensation

     (2,771     (2,100     (7,683     (6,440

Intangible asset amortization

     (432     (2,943     (1,318     (8,828
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating expenses excluding Cost of goods sold

   $ 38,531     $ 27,102     $ 113,502     $ 90,982  
  

 

 

   

 

 

   

 

 

   

 

 

 

Research and development

   $ 10,178     $ 7,294     $ 28,393     $ 21,542  

Adjustment:

        

Stock-based compensation

     (264     (539     (958     (1,552
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Research and development

   $ 9,914     $ 6,755     $ 27,435     $ 19,990  
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative

   $ 31,124     $ 21,908     $ 92,792     $ 75,880  

Adjustment:

        

Stock-based compensation

     (2,507     (1,561     (6,725     (4,888
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Selling, general and administrative

   $ 28,617     $ 20,347     $ 86,067     $ 70,992  
  

 

 

   

 

 

   

 

 

   

 

 

 

COMPANY CONTACT:

Jim Kelly

Executive Vice President & Chief Financial Officer

Vanda Pharmaceuticals Inc.

(202) 734-3428

jim.kelly@vandapharma.com

SOURCE Vanda Pharmaceuticals Inc.

 

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