0001347178-21-000032 | 10-Q | XBRL Viewer | Vanda Pharmaceuticals INC

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2021	Oct. 28, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
Document Transition Report	false
Entity File Number	001-34186
Entity Registrant Name	VANDA PHARMACEUTICALS INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	03-0491827
Entity Address, Address Line One	2200 Pennsylvania Avenue NW
Entity Address, Address Line Two	Suite 300E
Entity Address, City or Town	Washington
Entity Address, State or Province	DC
Entity Address, Postal Zip Code	20037
City Area Code	202
Local Phone Number	734-3400
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	VNDA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		55,712,230
Entity Central Index Key	0001347178
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 50,522	$ 61,031
Marketable securities	355,446	306,709
Accounts receivable, net	41,496	30,036
Inventory	902	1,280
Prepaid expenses and other current assets	13,442	10,089
Total current assets	461,808	409,145
Property and equipment, net	3,318	4,136
Operating lease right-of-use assets	9,580	10,459
Intangible assets, net	20,450	21,559
Deferred tax assets	76,105	81,516
Non-current inventory and other	8,506	6,641
Total assets	579,767	533,456
Current liabilities:
Accounts payable and accrued liabilities	31,820	31,509
Product revenue allowances	40,177	34,427
Total current liabilities	71,997	65,936
Operating lease non-current liabilities	10,457	11,497
Other non-current liabilities	3,992	2,757
Total liabilities	86,446	80,190
Commitments and contingencies (Notes 8 and 13)
Stockholders’ equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding at September 30, 2021 and December 31, 2020	0	0
Common stock, $0.001 par value; 150,000,000 shares authorized; 55,708,730 and 54,865,092 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	56	55
Additional paid-in capital	664,408	650,300
Accumulated other comprehensive income	111	239
Accumulated deficit	(171,254)	(197,328)
Total stockholders’ equity	493,321	453,266
Total liabilities and stockholders’ equity	$ 579,767	$ 533,456

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	55,708,730	54,865,092
Common stock, shares outstanding (in shares)	55,708,730	54,865,092

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenues:
Net product sales	$ 70,095	$ 60,308	$ 200,663	$ 180,515
Total revenues	70,095	60,308	200,663	180,515
Operating expenses:
Cost of goods sold excluding amortization	6,797	5,898	19,393	16,952
Research and development	19,653	12,298	56,032	40,728
Selling, general and administrative	32,456	34,001	90,600	104,939
Intangible asset amortization	370	369	1,109	1,108
Total operating expenses	59,276	52,566	167,134	163,727
Income from operations	10,819	7,742	33,529	16,788
Other income (expense)	(97)	659	225	3,943
Income before income taxes	10,722	8,401	33,754	20,731
Provision for income taxes	2,951	2,454	7,680	5,584
Net income	$ 7,771	$ 5,947	$ 26,074	$ 15,147
Net income per share:
Basic (in dollars per share)	$ 0.14	$ 0.11	$ 0.47	$ 0.28
Diluted (in dollars per share)	$ 0.14	$ 0.11	$ 0.46	$ 0.28
Weighted average shares outstanding:
Basic (in shares)	55,668,156	54,666,128	55,467,528	54,325,832
Diluted (in shares)	57,040,736	55,209,032	56,818,295	55,054,772

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 7,771	$ 5,947	$ 26,074	$ 15,147
Other comprehensive income (loss):
Net foreign currency translation gain (loss)	(17)	32	(48)	29
Change in net unrealized gain (loss) on marketable securities	33	(323)	(102)	130
Tax benefit (provision) on other comprehensive income (loss)	(8)	74	22	(29)
Other comprehensive income (loss), net of tax	8	(217)	(128)	130
Comprehensive income	$ 7,779	$ 5,730	$ 25,946	$ 15,277

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Amount after tax and reclassification adjustments of other comprehensive income (loss).

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Amount of tax expense (benefit) allocated to other comprehensive income (loss).

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2019		53,549,612
Beginning balance at Dec. 31, 2019	$ 410,945	$ 54	$ 631,307	$ 249	$ (220,665)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		582,724
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	479		479
Stock-based compensation expense	3,944		3,944
Net income	486				486
Other comprehensive income (loss), net of tax	532			532
Ending balance (in shares) at Mar. 31, 2020		54,132,336
Ending balance at Mar. 31, 2020	416,386	$ 54	635,730	781	(220,179)
Beginning balance (in shares) at Dec. 31, 2019		53,549,612
Beginning balance at Dec. 31, 2019	410,945	$ 54	631,307	249	(220,665)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	15,147
Other comprehensive income (loss), net of tax	130
Ending balance (in shares) at Sep. 30, 2020		54,689,654
Ending balance at Sep. 30, 2020	440,572	$ 55	645,656	379	(205,518)
Beginning balance (in shares) at Mar. 31, 2020		54,132,336
Beginning balance at Mar. 31, 2020	416,386	$ 54	635,730	781	(220,179)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		496,000
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	3,600	$ 1	3,599
Stock-based compensation expense	3,069		3,069
Net income	8,714				8,714
Other comprehensive income (loss), net of tax	(185)			(185)
Ending balance (in shares) at Jun. 30, 2020		54,628,336
Ending balance at Jun. 30, 2020	431,584	$ 55	642,398	596	(211,465)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		61,318
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	123		123
Stock-based compensation expense	3,135		3,135
Net income	5,947				5,947
Other comprehensive income (loss), net of tax	(217)			(217)
Ending balance (in shares) at Sep. 30, 2020		54,689,654
Ending balance at Sep. 30, 2020	$ 440,572	$ 55	645,656	379	(205,518)
Beginning balance (in shares) at Dec. 31, 2020	54,865,092	54,865,092
Beginning balance at Dec. 31, 2020	$ 453,266	$ 55	650,300	239	(197,328)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		695,122
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	1,849	$ 1	1,848
Stock-based compensation expense	3,909		3,909
Net income	8,650				8,650
Other comprehensive income (loss), net of tax	(47)			(47)
Ending balance (in shares) at Mar. 31, 2021		55,560,214
Ending balance at Mar. 31, 2021	$ 467,627	$ 56	656,057	192	(188,678)
Beginning balance (in shares) at Dec. 31, 2020	54,865,092	54,865,092
Beginning balance at Dec. 31, 2020	$ 453,266	$ 55	650,300	239	(197,328)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	26,074
Other comprehensive income (loss), net of tax	$ (128)
Ending balance (in shares) at Sep. 30, 2021	55,708,730	55,708,730
Ending balance at Sep. 30, 2021	$ 493,321	$ 56	664,408	111	(171,254)
Beginning balance (in shares) at Mar. 31, 2021		55,560,214
Beginning balance at Mar. 31, 2021	467,627	$ 56	656,057	192	(188,678)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		67,452
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	289		289
Stock-based compensation expense	3,740		3,740
Net income	9,653				9,653
Other comprehensive income (loss), net of tax	(89)			(89)
Ending balance (in shares) at Jun. 30, 2021		55,627,666
Ending balance at Jun. 30, 2021	481,220	$ 56	660,086	103	(179,025)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		81,064
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	371		371
Stock-based compensation expense	3,951		3,951
Net income	7,771				7,771
Other comprehensive income (loss), net of tax	$ 8			8
Ending balance (in shares) at Sep. 30, 2021	55,708,730	55,708,730
Ending balance at Sep. 30, 2021	$ 493,321	$ 56	$ 664,408	$ 111	$ (171,254)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net income	$ 26,074	$ 15,147
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	1,026	1,043
Stock-based compensation	11,600	10,148
Amortization of premiums and accretion of discounts on marketable securities	1,451	(175)
Gain on sale of marketable securities	(12)	(229)
Intangible asset amortization	1,109	1,108
Deferred income taxes	5,432	3,793
Other non-cash adjustments, net	1,222	1,361
Changes in operating assets and liabilities:
Accounts receivable	(11,484)	(1,774)
Prepaid expenses and other assets	(2,932)	2,897
Inventory	(2,156)	(3,128)
Accounts payable and other liabilities	860	1,408
Product revenue allowances	5,417	874
Net cash provided by operating activities	37,607	32,473
Cash flows from investing activities
Purchases of property and equipment	(418)	(829)
Purchases of marketable securities	(315,187)	(264,112)
Sales and maturities of marketable securities	264,907	240,128
Net cash used in investing activities	(50,698)	(24,813)
Cash flows from financing activities
Proceeds from the exercise of stock options	2,509	4,202
Net cash provided by financing activities	2,509	4,202
Effect of exchange rate changes on cash, cash equivalents and restricted cash	10	41
Net change in cash, cash equivalents and restricted cash	(10,572)	11,903
Cash, cash equivalents and restricted cash
Beginning of period	61,613	45,650
End of period	$ 51,041	$ 57,553

Business Organization and Presentation	9 Months Ended
Business Organization and Presentation	Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Organization and Presentation	Business Organization and Presentation Business Organization Vanda Pharmaceuticals Inc. (the Company) 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. The Company commenced its operations in 2003 and operates in one reporting segment. The Company’s commercial portfolio is currently comprised of two products, HETLIOZ® for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and nighttime sleep disturbances in Smith-Magenis Syndrome (SMS) and Fanapt® for the treatment of schizophrenia. HETLIOZ® is the first product approved by the United States Food and Drug Administration (FDA) for patients with Non-24 and patients with SMS. In addition, the Company has a number of drugs in development, including: •HETLIOZ® (tasimelteon) for the treatment of jet lag disorder, delayed sleep phase disorder (DSPD), sleep disturbances in autism spectrum disorder (ASD) and pediatric Non-24; •Fanapt® (iloperidone) for the treatment of bipolar disorder and Parkinson's disease psychosis and a long acting injectable (LAI) formulation for the treatment of schizophrenia; •Tradipitant (VLY-686), a small molecule neurokinin-1 (NK-1) receptor antagonist, for the treatment of gastroparesis, motion sickness, atopic dermatitis and COVID-19 pneumonia; •VTR-297, a small molecule histone deacetylase (HDAC) inhibitor for the treatment of hematologic malignancies and with potential use as a treatment for several oncology indications; •Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors, including VSJ-110 for the treatment of dry eye and ocular inflammation and BPO-27 for the treatment of secretory diarrhea disorders, including cholera; and •VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist, with potential use for the treatment of psychiatric disorders. Basis of Presentation The accompanying unaudited condensed consolidated financial statements includes the accounts of Vanda Pharmaceuticals Inc. and its wholly-owned subsidiaries and have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K (Annual Report) for the fiscal year ended December 31, 2020. The financial information as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or any future year or period.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in the Annual Report.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

For purposes of the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows, cash equivalents represent highly-liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents include investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers. Restricted cash relates primarily to amounts held as collateral for letters of credit for leases for office space at the Company’s Washington, D.C. headquarters.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total end of period cash, cash equivalents and restricted cash reported within the Condensed Consolidated Statement of Cash Flows:


(in thousands)	September 30, 2021		September 30, 2020
Cash and cash equivalents	$	50,522	$	56,973
Restricted cash included in:
Prepaid expenses and other current assets	—		57
Non-current inventory and other	519		523
Total cash, cash equivalents and restricted cash	$	51,041	$	57,553

Revenue from Net Product Sales

The Company’s net product sales consist of sales of HETLIOZ® and Fanapt®. Net sales by product for the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
HETLIOZ® net product sales	$	45,615	$	39,618	$	129,467	$	116,515
Fanapt® net product sales	24,480		20,690		71,196		64,000
Total net product sales	$	70,095	$	60,308	$	200,663	$	180,515

Major Customers

HETLIOZ® is available in the United States (U.S.) for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Fanapt® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse, which is the point at which control is transferred to the customer. There were five major customers that each accounted for more than 10% of total revenues and, as a group, represented 92% of total revenues for the nine months ended September 30, 2021. There were five major customers that each accounted for more than 10% of accounts receivable and, as a group, represented 93% of total accounts receivable at September 30, 2021. Receivables are carried at transaction price net of allowance for credit losses. Allowance for credit losses is measured using historical loss rates based on the aging of receivables and incorporating current conditions and forward-looking estimates.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The adoption of this standard on January 1, 2021 did not have a material impact on the Company's condensed consolidated financial statements.

Marketable Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

The following is a summary of the Company’s available-for-sale marketable securities as of September 30, 2021, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	177,091	$	29	$	(22)	$	177,098
Corporate debt	178,252		106		(10)		178,348

Total marketable securities	$	355,343	$	135	$	(32)	$	355,446

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2020, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	165,966	$	129	$	(3)	$	166,092
Corporate debt	140,538		87		(8)		140,617

Total marketable securities	$	306,504	$	216	$	(11)	$	306,709

Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 — defined as observable inputs such as quoted prices in active markets

•Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable

•Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions

The Company's assets classified in Level 1 and Level 2 as of September 30, 2021 and December 31, 2020 consist of cash equivalents and available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper, corporate notes and asset-backed securities that use as their basis readily observable market parameters.

The Company held certain assets that are required to be measured at fair value on a recurring basis as of September 30, 2021, as follows:


			Fair Value Measurement as of September 30, 2021 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	177,098	$	177,098	$	—	$	—
Corporate debt	178,348		—		178,348		—

Total assets measured at fair value	$	355,446	$	177,098	$	178,348	$	—

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2020, as follows:


			Fair Value Measurement as of December 31, 2020 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	166,092	$	166,092	$	—	$	—
Corporate debt	140,617		—		140,617		—

Total assets measured at fair value	$	306,709	$	166,092	$	140,617	$	—

Total assets measured at fair value as of September 30, 2021 and December 31, 2020 include no cash equivalents.

The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash, accounts receivable, restricted cash, accounts payable and accrued liabilities, product revenue allowances, and milestone obligations under license agreements, the carrying values of which materially approximate their fair values.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Inventory

9 Months Ended

Sep. 30, 2021

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following as of September 30, 2021 and December 31, 2020:


(in thousands)	September 30, 2021		December 31, 2020
Current assets
Work-in-process	$	—	$	66
Finished goods	902		1,214
Total inventory, current	$	902	$	1,280
Non-Current assets
Raw materials	$	2,016	$	744
Work-in-process	4,233		4,045
Finished goods	1,032		302
Total inventory, non-current	7,281		5,091
Total inventory	$	8,183	$	6,371

Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

HETLIOZ®. In January 2014, the Company announced that the FDA had approved the New Drug Application (NDA) for HETLIOZ®. As a result of this approval, the Company met a milestone under its license agreement with Bristol-Myers Squibb (BMS) that required the Company to make a license payment of $8.0 million to BMS. The $8.0 million is being amortized on a straight-line basis over the estimated economic useful life of the related product patents.

In April 2018, the Company met its final milestone under its license agreement with BMS when cumulative worldwide sales of HETLIOZ® reached $250.0 million. As a result of the achievement of this milestone, the Company made a payment to BMS of $25.0 million in 2018. The $25.0 million, which was capitalized as an intangible asset in the first quarter of 2015, was determined to be additional consideration for the acquisition of the HETLIOZ® intangible asset and is being amortized on a straight-line basis over the estimated economic useful life of the related product patents.

The following is a summary of the Company’s intangible assets as of September 30, 2021:


		September 30, 2021
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	12,550	$	20,450

The following is a summary of the Company’s intangible assets as of December 31, 2020:


		December 31, 2020
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	11,441	$	21,559

As of September 30, 2021 and December 31, 2020, the Company also had $27.9 million of fully amortized intangible assets related to Fanapt®.

Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense was $0.4 million for each of the three months ended September 30, 2021 and 2020. Amortization expense was $1.1 million for each of the nine months ended September 30, 2021 and 2020. The following is a summary of the future intangible asset amortization schedule as of September 30, 2021:


(in thousands)	Total		2021		2022		2023		2024		2025		Thereafter
HETLIOZ®	$	20,450	$	370	$	1,478	$	1,478	$	1,478	$	1,478	$	14,168

Accounts Payable and Accrued Liabilities

9 Months Ended

Sep. 30, 2021

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2021 and December 31, 2020:


(in thousands)	September 30, 2021		December 31, 2020
Research and development expenses	$	9,010	$	6,173
Consulting and other professional fees	7,371		5,052
Royalties payable	6,061		5,817
Compensation and employee benefits	5,434		10,951
Operating lease liabilities	2,295		2,117
Milestone obligations under license agreements	350		350
Accounts payable and other accrued liabilities	1,299		1,049
Total accounts payable and accrued liabilities	$	31,820	$	31,509

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Guarantees and Indemnifications The Company has entered into a number of standard intellectual property indemnification agreements in the ordinary course of its business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual from the date of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Since inception, the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company also indemnifies its officers and directors for certain events or occurrences, subject to certain conditions. License Agreements The Company’s rights to develop and commercialize its products are subject to the terms and conditions of licenses granted to the Company by other pharmaceutical companies. HETLIOZ®. In February 2004, the Company entered into a license agreement with BMS under which it received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize HETLIOZ®. As of September 30, 2021, the Company has paid BMS $37.5 million in upfront fees and milestone obligations, including $33.0 million of regulatory approval and commercial milestones capitalized as intangible assets (see Note 6, Intangible Assets). The Company has no remaining milestone obligations to BMS. Additionally, the Company is obligated to make royalty payments on HETLIOZ® net sales to BMS in any territory where the Company commercializes HETLIOZ® for a period equal to the greater of 10 years following the first commercial sale in the territory or the expiry of the new chemical entity (NCE) patent in that territory. During the period prior to the expiry of the NCE patent in a territory, the Company is obligated to pay a 10% royalty on net sales in that territory. The royalty rate is decreased by half for countries in which no NCE patent existed or for the remainder of the 10 years after the expiry of the NCE patent. The Company is also obligated under the license agreement to pay BMS a percentage of any sublicense fees, upfront payments and milestone and other payments (excluding royalties) that it receives from a third party in connection with any sublicensing arrangement, at a rate which is in the mid-twenties. The Company is obligated to use its commercially reasonable efforts to develop and commercialize HETLIOZ®. Fanapt®. Pursuant to the terms of a settlement agreement with Novartis Pharma AG (Novartis), Novartis transferred all U.S. and Canadian rights in the Fanapt® franchise to the Company on December 31, 2014. The Company paid directly to Sanofi S.A (Sanofi) a fixed royalty of 3% of net sales through December 2019 related to manufacturing know-how. The Company is also obligated to pay Sanofi a fixed royalty on Fanapt® net sales equal to 6% on Sanofi know-how not related to manufacturing under certain conditions for a period of up to 10 years in markets where the NCE patent has expired or was not issued. The Company is obligated to pay this 6% royalty on net sales in the U.S. through November 2026. Tradipitant. In April 2012, the Company entered into a license agreement with Eli Lilly and Company (Lilly) pursuant to which the Company acquired an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize an NK-1 receptor antagonist, tradipitant, for all human indications. Lilly is eligible to receive future payments based upon achievement of specified development, regulatory approval and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. As of September 30, 2021, the Company has paid Lilly $3.0 million in upfront fees and development milestones. As of September 30, 2021, remaining milestone obligations include a $2.0 million development milestone due upon the filing of the first marketing authorization for tradipitant in either the U.S. or European Union (E.U.), $10.0 million and $5.0 million for the first approval of a marketing authorization for tradipitant in the U.S. and E.U., respectively, and up to $80.0 million for sales milestones. The Company is obligated to use its commercially reasonable efforts to develop and commercialize tradipitant. Portfolio of CFTR activators and inhibitors. In March 2017, the Company entered into a license agreement with the University of California San Francisco (UCSF), under which the Company acquired an exclusive worldwide license to develop and commercialize a portfolio of CFTR activators and inhibitors. Pursuant to the license agreement, the Company will develop and commercialize the CFTR activators and inhibitors and is responsible for all development costs under the license agreement, including current pre-investigational new drug development work. UCSF is eligible to receive future payments based upon achievement of specified development and commercialization milestones as well as single-digit royalties on net sales. As of September 30, 2021, the Company has paid UCSF $1.2 million in upfront fees and development milestones. As of September 30, 2021, remaining milestone obligations include $12.2 million for development milestones and $33.0 million for future regulatory approval and sales milestones. Included in the $12.2 million of development milestones are $1.1 million of milestone obligations due upon the conclusion of clinical studies for each licensed product but not to exceed $3.2 million in total for the CFTR portfolio. In the fourth quarter of 2020, the Company determined a $350,000 development milestone to be probable based upon the first clinical study initiated by the Company in the fourth quarter of 2020 and recorded it as research and development expense in the Condensed Consolidated Statements of Operations. The milestone obligation was accrued as a current liability in the Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020. VQW-765. In connection with a settlement agreement with Novartis relating to Fanapt®, the Company received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize VQW-765 and is responsible for all development costs. The Company has no milestone obligations; however, Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens. Purchase Commitments In the course of its business, the Company regularly enters into agreements with clinical organizations to provide services relating to clinical development and clinical manufacturing activities under fee service arrangements. The Company’s current agreements for clinical, marketing and other services may be terminated on generally 90 days’ notice without incurring additional charges, other than charges for work completed but not paid for through the effective date of termination and other costs incurred by the Company’s contractors in closing out work in progress as of the effective date of termination.

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Accumulated Other Comprehensive Income

The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows as of September 30, 2021 and December 31, 2020:


(in thousands)	September 30, 2021		December 31, 2020
Foreign currency translation	$	33	$	81
Unrealized gain on marketable securities	78		158
Accumulated other comprehensive income	$	111	$	239

Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

As of September 30, 2021, there were 5,875,098 shares subject to outstanding options and restricted stock units (RSUs) under the 2006 Equity Incentive Plan (2006 Plan) and the Amended and Restated 2016 Equity Incentive Plan (2016 Plan, and together with the 2006 Plan, Plans). The 2006 Plan expired by its terms in April 2016, and the Company adopted the 2016 Plan. Outstanding options under the 2006 Plan remain in effect and the terms of the 2006 Plan continue to apply, but no additional awards can be granted under the 2006 Plan. In June 2016, the Company’s stockholders approved the 2016 Plan. The 2016 Plan has been amended a number of times since to increase the number of shares reserved for issuance, among other administrative changes. Each of the amendments to the 2016 Plan was approved by the Company's stockholders. There is a total of 10,790,000 shares of common stock authorized for issuance under the 2016 Plan, 4,517,717 shares of which remained available for future grant as of September 30, 2021.

Stock Options

The Company has granted option awards under the Plans with service conditions (service option awards) that are subject to terms and conditions established by the compensation committee of the board of directors. Service option awards have 10-year contractual terms. Service option awards granted to employees and new directors upon their election vest and become exercisable over four years, with the first 25% of the shares subject to service option awards vesting on the first anniversary of the grant date and the remaining 75% of the shares subject to the service option awards in 36 equal monthly installments thereafter. Subsequent annual service option awards granted to directors vest and become exercisable in full on the first anniversary of the grant date. Certain service option awards granted to employees and executive officers provide for partial acceleration of vesting if the employee or executive officer is subject to an involuntary termination, and full acceleration of vesting if the employee or executive officer is subject to an involuntary termination within 24 months after a change in control of the Company. Service option awards granted to directors provide for accelerated vesting if there is a change in control of the Company or if the director's service terminates as a result of the director's death or total and permanent disability.

As of September 30, 2021, $9.9 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 1.4 years. No option awards are classified as a liability as of September 30, 2021.

A summary of option activity under the Plans for the nine months ended September 30, 2021 follows:


(in thousands, except for share and per share amounts)	Number of Shares	Weighted Average Exercise Price at Grant Date		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	3,606,818	$	12.24	5.76	$	8,511
Granted	708,500	20.20

Expired	(10,000)	18.30
Exercised	(272,760)	9.20			2,075
Outstanding at September 30, 2021	4,032,558	13.83		5.88	17,304
Exercisable at September 30, 2021	2,717,949	12.12		4.47	14,951
Vested and expected to vest at September 30, 2021	3,856,582	13.64		5.73	17,061

The weighted average grant-date fair value of options granted was $8.91 and $5.53 per share for the nine months ended September 30, 2021 and 2020, respectively. Proceeds from the exercise of stock options amounted to $2.5 million and $4.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Restricted Stock Units

An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs under the Plans with service conditions (service RSUs) that are subject to terms and conditions established by the compensation committee of the board of directors. Service RSUs granted to employees vest in four equal annual installments provided that the employee remains employed with the Company. Certain service RSUs granted to employees and executive officers provide for accelerated vesting if the employee or executive officer is subject to an involuntary termination within 24 months after a change in control. Annual service RSUs granted to directors vest on the first anniversary of the grant date and provide for accelerated vesting if there is a change in control of the Company.

As of September 30, 2021, $25.7 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.8 years. No RSUs are classified as a liability as of September 30, 2021.

A summary of RSU activity under the Plans for the nine months ended September 30, 2021 follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2020	1,639,563	$	15.26
Granted	891,305	19.59
Forfeited	(115,950)	16.15
Vested	(572,378)	15.72
Unvested at September 30, 2021	1,842,540	17.15

The grant date fair value for the 572,378 shares underlying RSUs that vested during the nine months ended September 30, 2021 was $9.0 million.

Stock-Based Compensation Expense

Stock-based compensation expense recognized for the three and nine months ended September 30, 2021 and 2020 was comprised of the following:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Research and development	$	893	$	853	$	2,970	$	2,864
Selling, general and administrative	3,058		2,282		8,630		7,284
Total stock-based compensation expense	$	3,951	$	3,135	$	11,600	$	10,148

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model that uses the assumptions noted in the following table. Expected volatility rates are based on the historical volatility of the Company’s publicly traded common stock and other factors. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has never paid cash dividends to its stockholders and does not plan to pay dividends in the foreseeable future. Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the nine months ended September 30, 2021 and 2020 were as follows:


	Nine Months Ended
	September 30, 2021		September 30, 2020
Expected dividend yield	0	%	0	%
Weighted average expected volatility	46	%	51	%
Weighted average expected term (years)	5.98		6.07
Weighted average risk-free rate	0.75	%	1.14	%

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesFor the three months ended September 30, 2021 and 2020, the Company recorded income tax expense of $3.0 million and $2.5 million, respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded income tax expense of $7.7 million and $5.6 million, respectively. The income tax expense for the three months ended September 30, 2021 and 2020 was primarily driven by the estimated effective tax rate for the year, as well as discrete income tax expense of $0.1 million and $0.5 million, respectively. The income tax expense for the nine months ended September 30, 2021 and 2020 was primarily driven by the estimated effective tax rate for the year, as well as discrete income tax expense of $0.2 million and $1.6 million, respectively.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Earnings per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings per Share

Basic earnings per share (EPS) is calculated by dividing the net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive.

The following table presents the calculation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended				Nine Months Ended
(in thousands, except for share and per share amounts)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Numerator:
Net income	$	7,771	$	5,947	$	26,074	$	15,147
Denominator:
Weighted average shares outstanding, basic	55,668,156		54,666,128		55,467,528		54,325,832
Effect of dilutive securities	1,372,580		542,904		1,350,767		728,940
Weighted average shares outstanding, diluted	57,040,736		55,209,032		56,818,295		55,054,772
Net income per share, basic and diluted:
Basic	$	0.14	$	0.11	$	0.47	$	0.28
Diluted	$	0.14	$	0.11	$	0.46	$	0.28
Antidilutive securities excluded from calculations of diluted net income per share	2,233,806		3,898,896		2,194,547		3,602,648

Legal Matters	9 Months Ended
Legal Matters	Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Legal Matters	Legal Matters Fanapt®. In 2014 and 2015 Roxane Laboratories, Inc. (Roxane) and its affiliates, West-Ward Pharmaceuticals International Limited and West-Ward Pharmaceuticals Corp (West-Ward), Inventia Healthcare Pvt. Ltd. (Inventia), Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin), Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd. (Taro), and Apotex Inc. and Apotex Corp. (Apotex) (collectively, the Fanapt® Defendants) each submitted an Abbreviated New Drug Applications (ANDA) to the FDA seeking approval to market generic versions of Fanapt® prior to the expiration of certain of the Company’s patents covering Fanapt®, including U.S. Patent No. 8,586,610 (‘610 Patent) and U.S. Patent No. 9,138,432 (‘432 Patent). In response, the Company filed separate lawsuits in 2014 and 2015 against each of the Fanapt® Defendants in the U.S. District Court for the District of Delaware (Delaware District Court) for patent infringement. In August 2016, the Delaware District Court ruled in the Company’s favor, permanently enjoining Roxane from manufacturing, using, selling, offering to sell, distributing or importing any generic iloperidone product described in Roxane’s ANDA until the expiration of the ‘610 Patent in November 2027, or May 2028 if the Company obtains pediatric exclusivity. This ruling was affirmed on appeal by the Federal Circuit Court of Appeals in April 2018. West-Ward, having replaced Roxane as defendant following the acquisition of Roxane by West-Ward’s parent company, Hikma Pharmaceuticals PLC (Hikma), petitioned the U.S. Supreme Court for a writ of certiorari, which was denied in January 2020. The Company’s lawsuit against Hikma regarding the ‘432 Patent remains pending. The Company entered into separate license agreements with each of Taro, Apotex and Lupin resolving these lawsuits in October 2016, December 2016 and July 2020, respectively. The license agreements grant Taro, Apotex and Lupin non- exclusive licenses to manufacture and commercialize a version of Fanapt® in the U.S. effective as of the expiration of the ‘610 Patent or earlier under certain limited circumstances. The Company entered into a confidential stipulation with Inventia regarding any potential launch of its generic versions of Fanapt®, but the Company’s lawsuit against Inventia regarding the ‘610 and ‘432 Patents remains pending. HETLIOZ®. Between April 2018 and March 2021, the Company filed numerous Hatch-Waxman lawsuits in the Delaware District Court against Teva Pharmaceuticals USA, Inc. (Teva), MSN Pharmaceuticals Inc. and MSN Laboratories Private Limited (MSN) and Apotex (collectively, the HETLIOZ® Defendants) asserting that U.S. Patent Nos. RE46,604, 9,060,995, 9,539,234, 9,549,913, 9,730,910, 9,844,241, 10,071,977, 10,149,829, 10,376,487, 10,449,176, 10,610,510, 10,610,511, 10,829,465, and 10,611,744 will be infringed by the HETLIOZ® Defendants’ generic versions of HETLIOZ® for which they are seeking FDA approval. These consolidated lawsuits are scheduled for trial in March 2022. Other Matters. In February 2019, a qui tam action filed against the Company was unsealed by order of the U.S. District Court for the District of Columbia (DC District Court). The qui tam action, which was filed under seal in March 2017, was brought by a former Company employee on behalf of the U.S., 28 states and the District of Columbia (collectively, the Plaintiff States) and the policyholders of certain insurance companies under the Federal False Claims Act and state law equivalents to the Federal False Claims Act and related state laws. The complaint alleged that the Company violated these laws through the promotion and marketing of its products Fanapt® and HETLIOZ® and sought, among other things, treble damages, civil penalties for each alleged false claim, and attorneys’ fees and costs. By virtue of the DC District Court having unsealed the original complaint, the Company learned that in January 2019, the U.S. Department of Justice (the DOJ), as well as the Plaintiff States, elected not to intervene in the qui tam action at that time. In May 2019, the plaintiff filed an amended complaint under seal repeating the same allegations and seeking the same relief. According to a filing unsealed in June 2019, the DOJ reaffirmed its decision not to intervene and incorporated its prior filing, indicating that neither the DOJ nor the Plaintiff States were intervening regarding the original complaint. Although the DOJ and the Plaintiff States have elected not to intervene, the plaintiff has continued to litigate this action and the DOJ and the Plaintiff States may later seek to intervene. In August 2019, the Company filed a motion to dismiss, and in May 2020, the DC District Court dismissed the plaintiff’s complaint in its entirety, without prejudice. In June 2020, the plaintiff filed a second amended complaint with similar allegations and seeking the same relief. In July 2020, the Company filed another motion to dismiss, which was denied by the DC District Court in March 2021. The Company filed its answer to the plaintiff’s second amended complaint in April 2021 and intends to continue to vigorously defend itself in the case. In February 2019, a securities class action, Gordon v. Vanda Pharmaceuticals Inc., was filed in the U.S. District Court for the Eastern District of New York naming the Company and certain of its officers as defendants. An amended complaint was filed in July 2019. The amended complaint, filed on behalf of a purported stockholder, asserts claims on behalf of a putative class of all persons who purchased the Company’s publicly traded securities between November 4, 2015 and February 11, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The amended complaint alleges that the defendants made false and misleading statements and/or omissions regarding Fanapt®, HETLIOZ® and the Company’s interactions with the FDA regarding tradipitant between November 3, 2015 and February 11, 2019. In March 2020, the Company filed a motion to dismiss the complaint. In March 2021, the motion to dismiss was granted in part and denied in part. In April 2021, the Company filed its answer to the amended complaint. The Company believes that it has meritorious defenses and intends to vigorously defend this lawsuit. The Company does not anticipate that this litigation will have a material adverse effect on its business, results of operations or financial condition. However, this lawsuit is subject to inherent uncertainties, the actual cost may be significant, and the Company may not prevail. The Company believes it is entitled to coverage under its relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient. In July 2019, a shareholder derivative complaint, Samuel Williams v. Mihael Polymeropoulos, et al., was filed in the U.S. District Court for the Eastern District of New York naming certain current and former Company directors and officers as defendants. In September 2019, a shareholder derivative complaint, Michael Bavaro v. Mihael Polymeropoulos, et al., was filed in the Delaware District Court naming certain current and former Company directors and officers as defendants. In October 2019, the Company filed a motion to transfer the Bavaro case to the Eastern District of New York, where the Gordon and Williams cases are pending. In March 2020, the Delaware District Court transferred the Bavaro case to the Eastern District of New York, consolidating the Williams and Bavaro cases, and the plaintiffs filed a consolidated complaint in April 2020. These complaints, filed on behalf of purported stockholders, derivatively on behalf of the Company, assert claims for alleged breach of fiduciary duties by certain of the Company’s current and former directors and officers. In April 2021, the parties to the consolidated case reached a settlement to resolve all of the claims asserted in the consolidated complaint for the Williams and Bavaro cases, with no admission of wrongdoing by any defendant. In September 2021, the Court issued an order approving the settlement, which does not have a material impact to the Company's business, results of operation or financial condition.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of PresentationThe accompanying unaudited condensed consolidated financial statements includes the accounts of Vanda Pharmaceuticals Inc. and its wholly-owned subsidiaries and have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K (Annual Report) for the fiscal year ended December 31, 2020. The financial information as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2020 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or any future year or period.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted CashFor purposes of the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows, cash equivalents represent highly-liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents include investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers. Restricted cash relates primarily to amounts held as collateral for letters of credit for leases for office space at the Company’s Washington, D.C. headquarters.
Major Customers	Major Customers HETLIOZ® is available in the United States (U.S.) for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Fanapt® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse, which is the point at which control is transferred to the customer. There were five major customers that each accounted for more than 10% of total revenues and, as a group, represented 92% of total revenues for the nine months ended September 30, 2021. There were five major customers that each accounted for more than 10% of accounts receivable and, as a group, represented 93% of total accounts receivable at September 30, 2021. Receivables are carried at transaction price net of allowance for credit losses. Allowance for credit losses is measured using historical loss rates based on the aging of receivables and incorporating current conditions and forward-looking estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The adoption of this standard on January 1, 2021 did not have a material impact on the Company's condensed consolidated financial statements.
Marketable Securities	The Company's assets classified in Level 1 and Level 2 as of September 30, 2021 and December 31, 2020 consist of cash equivalents and available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper, corporate notes and asset-backed securities that use as their basis readily observable market parameters.
Earnings per Share	Earnings per ShareBasic earnings per share (EPS) is calculated by dividing the net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Schedule of Cash, Cash Equivalents and Restricted Cash


(in thousands)	September 30, 2021		September 30, 2020
Cash and cash equivalents	$	50,522	$	56,973
Restricted cash included in:
Prepaid expenses and other current assets	—		57
Non-current inventory and other	519		523
Total cash, cash equivalents and restricted cash	$	51,041	$	57,553

Revenue from Net Product Sales

The Company’s net product sales consist of sales of HETLIOZ® and Fanapt®. Net sales by product for the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
HETLIOZ® net product sales	$	45,615	$	39,618	$	129,467	$	116,515
Fanapt® net product sales	24,480		20,690		71,196		64,000
Total net product sales	$	70,095	$	60,308	$	200,663	$	180,515

Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Available-for-Sale Marketable Securities

The following is a summary of the Company’s available-for-sale marketable securities as of September 30, 2021, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	177,091	$	29	$	(22)	$	177,098
Corporate debt	178,252		106		(10)		178,348

Total marketable securities	$	355,343	$	135	$	(32)	$	355,446

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2020, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	165,966	$	129	$	(3)	$	166,092
Corporate debt	140,538		87		(8)		140,617

Total marketable securities	$	306,504	$	216	$	(11)	$	306,709

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

The Company held certain assets that are required to be measured at fair value on a recurring basis as of September 30, 2021, as follows:


			Fair Value Measurement as of September 30, 2021 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	177,098	$	177,098	$	—	$	—
Corporate debt	178,348		—		178,348		—

Total assets measured at fair value	$	355,446	$	177,098	$	178,348	$	—

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2020, as follows:


			Fair Value Measurement as of December 31, 2020 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	166,092	$	166,092	$	—	$	—
Corporate debt	140,617		—		140,617		—

Total assets measured at fair value	$	306,709	$	166,092	$	140,617	$	—

Inventory (Tables)

9 Months Ended

Sep. 30, 2021

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following as of September 30, 2021 and December 31, 2020:


(in thousands)	September 30, 2021		December 31, 2020
Current assets
Work-in-process	$	—	$	66
Finished goods	902		1,214
Total inventory, current	$	902	$	1,280
Non-Current assets
Raw materials	$	2,016	$	744
Work-in-process	4,233		4,045
Finished goods	1,032		302
Total inventory, non-current	7,281		5,091
Total inventory	$	8,183	$	6,371

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

The following is a summary of the Company’s intangible assets as of September 30, 2021:


		September 30, 2021
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	12,550	$	20,450

The following is a summary of the Company’s intangible assets as of December 31, 2020:


		December 31, 2020
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	11,441	$	21,559

Summary of Future Intangible Asset Amortization

The following is a summary of the future intangible asset amortization schedule as of September 30, 2021:


(in thousands)	Total		2021		2022		2023		2024		2025		Thereafter
HETLIOZ®	$	20,450	$	370	$	1,478	$	1,478	$	1,478	$	1,478	$	14,168

Accounts Payable and Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Payables and Accruals [Abstract]

Summary of Accounts Payable and Accrued Liabilities

The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2021 and December 31, 2020:


(in thousands)	September 30, 2021		December 31, 2020
Research and development expenses	$	9,010	$	6,173
Consulting and other professional fees	7,371		5,052
Royalties payable	6,061		5,817
Compensation and employee benefits	5,434		10,951
Operating lease liabilities	2,295		2,117
Milestone obligations under license agreements	350		350
Accounts payable and other accrued liabilities	1,299		1,049
Total accounts payable and accrued liabilities	$	31,820	$	31,509

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss)

The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows as of September 30, 2021 and December 31, 2020:


(in thousands)	September 30, 2021		December 31, 2020
Foreign currency translation	$	33	$	81
Unrealized gain on marketable securities	78		158
Accumulated other comprehensive income	$	111	$	239

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Summary of Option Activity

A summary of option activity under the Plans for the nine months ended September 30, 2021 follows:


(in thousands, except for share and per share amounts)	Number of Shares	Weighted Average Exercise Price at Grant Date		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2020	3,606,818	$	12.24	5.76	$	8,511
Granted	708,500	20.20

Expired	(10,000)	18.30
Exercised	(272,760)	9.20			2,075
Outstanding at September 30, 2021	4,032,558	13.83		5.88	17,304
Exercisable at September 30, 2021	2,717,949	12.12		4.47	14,951
Vested and expected to vest at September 30, 2021	3,856,582	13.64		5.73	17,061

Summary of RSU Activity

A summary of RSU activity under the Plans for the nine months ended September 30, 2021 follows:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at December 31, 2020	1,639,563	$	15.26
Granted	891,305	19.59
Forfeited	(115,950)	16.15
Vested	(572,378)	15.72
Unvested at September 30, 2021	1,842,540	17.15

Stock-Based Compensation Expense

Stock-based compensation expense recognized for the three and nine months ended September 30, 2021 and 2020 was comprised of the following:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Research and development	$	893	$	853	$	2,970	$	2,864
Selling, general and administrative	3,058		2,282		8,630		7,284
Total stock-based compensation expense	$	3,951	$	3,135	$	11,600	$	10,148

Black-Scholes-Merton Option Pricing Model for Employee and Director Stock Options Granted

Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the nine months ended September 30, 2021 and 2020 were as follows:


	Nine Months Ended
	September 30, 2021		September 30, 2020
Expected dividend yield	0	%	0	%
Weighted average expected volatility	46	%	51	%
Weighted average expected term (years)	5.98		6.07
Weighted average risk-free rate	0.75	%	1.14	%

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Basic and Diluted Net Income Per Share of Common Stock

The following table presents the calculation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended				Nine Months Ended
(in thousands, except for share and per share amounts)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Numerator:
Net income	$	7,771	$	5,947	$	26,074	$	15,147
Denominator:
Weighted average shares outstanding, basic	55,668,156		54,666,128		55,467,528		54,325,832
Effect of dilutive securities	1,372,580		542,904		1,350,767		728,940
Weighted average shares outstanding, diluted	57,040,736		55,209,032		56,818,295		55,054,772
Net income per share, basic and diluted:
Basic	$	0.14	$	0.11	$	0.47	$	0.28
Diluted	$	0.14	$	0.11	$	0.46	$	0.28
Antidilutive securities excluded from calculations of diluted net income per share	2,233,806		3,898,896		2,194,547		3,602,648

Business Organization and Presentation (Details)	9 Months Ended
Business Organization and Presentation (Details)	Sep. 30, 2021 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 50,522	$ 61,031	$ 56,973
Restricted cash included in:
Total cash, cash equivalents and restricted cash	51,041	$ 61,613	57,553	$ 45,650
Prepaid expenses and other current assets
Restricted cash included in:
Restricted cash	0		57
Non-current inventory and other
Restricted cash included in:
Restricted cash	$ 519		$ 523

Summary of Significant Accounting Policies - Revenue from Net Product Sales (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue from External Customer [Line Items]
Net product sales	$ 70,095	$ 60,308	$ 200,663	$ 180,515
HETLIOZ® net product sales
Revenue from External Customer [Line Items]
Net product sales	45,615	39,618	129,467	116,515
Fanapt® net product sales
Revenue from External Customer [Line Items]
Net product sales	$ 24,480	$ 20,690	$ 71,196	$ 64,000

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (a)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Summary of Significant Accounting Policies - Major Customers (Details) - Major Customers	9 Months Ended
	Sep. 30, 2021 customer
Customer Concentration Risk \| Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Number of major customers that each accounted for more than 10% of total revenues	5
Concentration risk, percentage	92.00%
Credit Concentration Risk \| Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	93.00%
Number of major customers that each accounted for more than 10% of total accounts receivable	5

Marketable Securities - Available-For-Sale Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 355,343	$ 306,504
Gross Unrealized Gains	135	216
Gross Unrealized Losses	(32)	(11)
Fair Market Value	355,446	306,709
U.S. Treasury and government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	177,091	165,966
Gross Unrealized Gains	29	129
Gross Unrealized Losses	(22)	(3)
Fair Market Value	177,098	166,092
Corporate debt
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	178,252	140,538
Gross Unrealized Gains	106	87
Gross Unrealized Losses	(10)	(8)
Fair Market Value	$ 178,348	$ 140,617

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets
Work-in-process	$ 0	$ 66
Finished goods	902	1,214
Total inventory, current	902	1,280
Non-Current assets
Raw materials	2,016	744
Work-in-process	4,233	4,045
Finished goods	1,032	302
Total inventory, non-current	7,281	5,091
Total inventory	$ 8,183	$ 6,371

Intangible Assets - (HETLIOZ) - Additional Information (Details) - HETLIOZ® - USD ($) $ in Millions	1 Months Ended		3 Months Ended	12 Months Ended	212 Months Ended
	Apr. 30, 2018	Jan. 31, 2014	Mar. 31, 2015	Dec. 31, 2018	Sep. 30, 2021
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets		$ 8.0		$ 25.0	$ 37.5
Cumulative worldwide sales milestone	$ 250.0
Intangible assets capitalized			$ 25.0		$ 33.0

Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 20,450	$ 21,559
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	33,000	33,000
Accumulated Amortization	12,550	11,441
Net Carrying Amount	$ 20,450	$ 21,559

Intangible Assets - (Fanapt) - Additional Information (Details) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Fanapt®
Finite-Lived Intangible Assets [Line Items]
Fully amortized intangible assets	$ 27.9	$ 27.9

Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset amortization	$ 370	$ 369	$ 1,109	$ 1,108

Intangible Assets - Summary of Future Intangible Asset Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 20,450	$ 21,559
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	20,450	$ 21,559
2021	370
2022	1,478
2023	1,478
2024	1,478
2025	1,478
Thereafter	$ 14,168

Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Research and development expenses	$ 9,010	$ 6,173
Consulting and other professional fees	7,371	5,052
Royalties payable	6,061	5,817
Compensation and employee benefits	5,434	10,951
Operating lease liabilities	2,295	2,117
Milestone obligations under license agreements	350	350
Accounts payable and other accrued liabilities	1,299	1,049
Total accounts payable and accrued liabilities	$ 31,820	$ 31,509

Commitments and Contingencies - (HETLIOZ) - Additional Information (Details) - HETLIOZ® - USD ($) $ in Millions	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	212 Months Ended
	Jan. 31, 2014	Mar. 31, 2015	Sep. 30, 2021	Dec. 31, 2018	Sep. 30, 2021
HETLIOZ
Acquisition of intangible assets	$ 8.0			$ 25.0	$ 37.5
Intangible assets capitalized		$ 25.0			$ 33.0
Royalty payment period			10 years
Royalty payable percentage on net sales			10.00%
Percentage of future sublicense fees payable to third-party			mid-twenties

Commitments and Contingencies - (Fanapt) - Additional Information (Details) - Fanapt®	9 Months Ended
	Sep. 30, 2021
Fanapt
Royalty payable percentage on net sales	6.00%
Royalty payment period	10 years
November 16, 2016 through December 31, 2019
Fanapt
Royalty payable percentage on net sales	3.00%

Commitments and Contingencies - (Tradipitant) - Additional Information (Details) - Tradipitant - USD ($) $ in Millions	9 Months Ended	114 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	low double digits
Development and milestone obligations paid to third party		$ 3.0
Pre-NDA Approval Milestones
Commitments and Contingencies [Line Items]
Possible future milestone payment	$ 2.0
Regulatory Approval Milestone \| U.S.
Commitments and Contingencies [Line Items]
Possible future milestone payment	10.0
Regulatory Approval Milestone \| E.U.
Commitments and Contingencies [Line Items]
Possible future milestone payment	5.0
Sales Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment	$ 80.0

Commitments and Contingencies - (CFTR Activators and Inhibitors) - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		55 Months Ended
	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021
CFTR activators and inhibitors
Milestone obligations under license agreements	$ 350	$ 350		$ 350		$ 350
Research and development	19,653		$ 12,298	$ 56,032	$ 40,728
CFTR Activators and Inhibitors
CFTR activators and inhibitors
Future percentage of royalty payments based net sales				single-digit
Development and milestone obligations paid to third party						1,200
CFTR Activators and Inhibitors \| Regulatory Approval Milestone
CFTR activators and inhibitors
Possible future milestone payments				$ 12,200
CFTR Activators and Inhibitors \| Future Regulatory Approval and Sales Milestones
CFTR activators and inhibitors
Possible future milestone payments				33,000
CFTR Activators and Inhibitors \| Development and Milestone Payment, Conclusion of Clinical Studies
CFTR activators and inhibitors
Possible future milestone payments				1,100
Milestone obligations under license agreements	$ 350	350		350		$ 350
Research and development		$ 350
CFTR Activators and Inhibitors \| Development and Milestone Payment, Conclusion of Clinical Studies \| Maximum
CFTR activators and inhibitors
Possible future milestone payments				$ 3,200

Commitments and Contingencies - (VQW-765) - Additional Information (Details)	9 Months Ended
	Sep. 30, 2021
VQW-765
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	mid-teens

Commitments and Contingencies - Purchase Commitments (Details)	9 Months Ended
	Sep. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Agreements for clinical and marketing services, termination notice period	90 days

Accumulated Other Comprehensive Income - Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Equity [Abstract]
Foreign currency translation	$ 33	$ 81
Unrealized gain on marketable securities	78	158
Accumulated other comprehensive income	$ 111	$ 239

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References + Details

Stock-Based Compensation - (Stock-Based Compensation) - Additional Information (Details)	Sep. 30, 2021 shares
2006 Plan and 2016 Plan \| Outstanding Options and RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares subject to outstanding options and RSUs (in shares)	5,875,098
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock authorized for issuance (in shares)	10,790,000
Number of shares of common stock available for future grant (in shares)	4,517,717

Stock-Based Compensation - (Stock Option) - Additional Information (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) installment $ / shares	Sep. 30, 2020 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation option awards contractual term	10 years
Vesting period for subsequent stock options granted to employees and new directors	4 years
Portion of initial stock options granted to employees and new directors that vests on first anniversary of grant date	25.00%
Portion of initial stock options granted to employees and new directors that vests ratably over three years after completion of first year of service	75.00%
Number of vesting equal installments \| installment	36
Options granted, weighted average fair value per share (in dollars per share) \| $ / shares	$ 8.91	$ 5.53
Proceeds from exercise of employee stock options	$ 2,509	$ 4,202
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Full acceleration of vesting, employee or executive officer subject to involuntary termination, period post change of control of the Company	24 months
Unrecognized compensation expenses	$ 9,900
Unrecognized compensation expenses, weighted average period	1 year 4 months 24 days

Stock-Based Compensation - Summary of Option Activity (Details) - 2006 Plan and 2016 Plan - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Number of Shares
Beginning balance (in shares)	3,606,818
Granted (in shares)	708,500
Expired (in shares)	(10,000)
Exercised (in shares)	(272,760)
Ending balance (in shares)	4,032,558	3,606,818
Exercisable at end of period (in shares)	2,717,949
Vested and expected to vest at end of period (in shares)	3,856,582
Weighted Average Exercise Price at Grant Date
Beginning balance (in dollars per share)	$ 12.24
Granted (in dollars per share)	20.20
Expired (in dollars per share)	18.30
Exercised (in dollars per share)	9.20
Ending balance (in dollars per share)	13.83	$ 12.24
Exercisable at end of period (in dollars per share)	12.12
Vested and expected to vest at end of period (in dollars per share)	$ 13.64
Weighted Average Remaining Term (Years)
Weighted average remaining term	5 years 10 months 17 days	5 years 9 months 3 days
Exercisable at end of period	4 years 5 months 19 days
Vested and expected to vest at end of period	5 years 8 months 23 days
Aggregate Intrinsic Value
Beginning balance	$ 8,511
Exercised	2,075
Ending balance	17,304	$ 8,511
Exercisable at end of period	14,951
Vested and expected to vest at end of period	$ 17,061

Stock-Based Compensation - (RSU) - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2021 USD ($) installment shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting equal installments \| installment	36
Restricted Stock Units (RSU)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting equal installments \| installment	4
Full acceleration of vesting, employee or executive officer subject to involuntary termination, period post change of control of the Company	24 months
Unrecognized compensation expenses related to unvested RSUs \| $	$ 25.7
Unrecognized compensation expenses, weighted average period	1 year 9 months 18 days
Grant date fair value of common stock granted (in shares) \| shares	572,378
Grant date fair value of common stock vested \| $	$ 9.0

Stock-Based Compensation - Summary of RSU Activity Plan (Details) - Restricted Stock Units (RSU)	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Number of Shares
Beginning balance (in shares) \| shares	1,639,563
Granted (in shares) \| shares	891,305
Forfeited (in shares) \| shares	(115,950)
Vested (in shares) \| shares	(572,378)
Ending balance (in shares) \| shares	1,842,540
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 15.26
Granted (in dollars per share) \| $ / shares	19.59
Forfeited (in dollars per share) \| $ / shares	16.15
Vested (in dollars per share) \| $ / shares	15.72
Ending balance (in dollars per share) \| $ / shares	$ 17.15

Stock-Based Compensation - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 3,951	$ 3,135	$ 11,600	$ 10,148
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	893	853	2,970	2,864
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 3,058	$ 2,282	$ 8,630	$ 7,284

Stock-Based Compensation - Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Details)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Expected dividend yield	0.00%	0.00%
Weighted average expected volatility	46.00%	51.00%
Weighted average expected term (years)	5 years 11 months 23 days	6 years 25 days
Weighted average risk-free rate	0.75%	1.14%

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income tax expense	$ 2,951	$ 2,454	$ 7,680	$ 5,584
Discrete income tax expense (benefit)	$ 100	$ 500	$ 200	$ 1,600

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net income	$ 7,771	$ 9,653	$ 8,650	$ 5,947	$ 8,714	$ 486	$ 26,074	$ 15,147
Denominator:
Weighted average shares outstanding, basic (in shares)	55,668,156			54,666,128			55,467,528	54,325,832
Effect of dilutive securities (in shares)	1,372,580			542,904			1,350,767	728,940
Weighted average shares outstanding, diluted (in shares)	57,040,736			55,209,032			56,818,295	55,054,772
Net income per share, basic and diluted:
Basic (in dollars per share)	$ 0.14			$ 0.11			$ 0.47	$ 0.28
Diluted (in dollars per share)	$ 0.14			$ 0.11			$ 0.46	$ 0.28
Antidilutive securities excluded from calculations of diluted net income per share (in shares)	2,233,806			3,898,896			2,194,547	3,602,648

Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 355,446,000	$ 306,709,000
Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	177,098,000	166,092,000
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	178,348,000	140,617,000
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	177,098,000	166,092,000
Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	177,098,000	166,092,000
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	178,348,000	140,617,000
Significant Other Observable Inputs (Level 2) \| U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Other Observable Inputs (Level 2) \| Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	178,348,000	140,617,000
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) \| U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) \| Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 0	$ 0