UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): May 1, 2007
VANDA
PHARMACEUTICALS INC.
(Exact
name of Registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
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000-51863
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03-0491827
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(Commission
File No.)
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(IRS
Employer Identification No.)
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9605
Medical Center Drive
Suite 300
Rockville,
Maryland 20850
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (240)
599-4500
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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On
May 1,
2007, Vanda Pharmaceuticals Inc. issued a press release relating to its results
of operations and financial condition for the first quarter ended March 31,
2007. The full text of this press release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K.
The
information in Item 2.02 of this Form 8-K and the Exhibit attached
hereto shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference
in
any filing under the Securities Act of 1933 or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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99.1
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Press
release of Vanda Pharmaceuticals Inc. dated May 1,
2007.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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VANDA
PHARMACEUTICALS INC.
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||
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By:
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/s/
STEVEN
A. SHALLCROSS
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Name:
Steven A. Shallcross
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Title:
Senior Vice President, Chief Financial Officer and
Treasurer
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Dated:
May 1, 2007
For
Immediate Release
Company
Contact:
Steven
A.
Shallcross
Senior
Vice President & CFO
Vanda
Pharmaceuticals Inc. .
(240)
599-4500
sshallcross@vandapharma.com
Vanda
Pharmaceuticals Reports First Quarter 2007 Results
ROCKVILLE,
MD. –
May 1, 2007 -
Vanda Pharmaceuticals Inc. (NASDAQ: VNDA),
a
biopharmaceutical company focused on the development and commercialization
of
clinical-stage product candidates for central nervous system disorders, today
announced financial and operational results for the first quarter ended March
31, 2007.
Vanda
reported research and development (R&D) expenses in the first quarter of
$10.6 million, compared to fourth quarter 2006 R&D expenses of $7.9 million
and first quarter 2006 R&D expenses of $15.5 million. The increase in
R&D expenses in the first quarter of 2007 relative to the fourth quarter of
2006 is primarily attributable to higher costs related to the preparation of
the
new drug application (NDA) for iloperidone, clinical supply manufacturing costs
for VEC-162 and Phase II trial initiation expenses for VSF-173. The decrease
in
R&D expenses in the first quarter of 2007 relative to the first quarter of
2006 was primarily due to lower clinical trial expenses for the company’s
iloperidone and VEC-162 Phase III trials that were completed in 2006. Total
expenses for the first quarter of 2007 were $16.8 million, compared to $12.4
million in the fourth quarter of 2006 and $18.4 million in the first quarter
of
2006.
Net
loss
applicable to common stockholders was $15.4 million for the first quarter of
2007, compared to $11.9 million in the fourth quarter of 2006 and $18.1 million
in the first quarter of 2006. Net loss per share applicable to common
stockholders during the first quarter for 2007 was $0.61, compared to $0.54
in
the fourth quarter of 2006, and $385.61 in the first quarter of
2006.
As
of
March 31, 2007, Vanda’s cash, cash equivalents, and marketable securities
totaled $130 million. In January 2007, Vanda completed a follow-on offering
of
4.37 million shares of common stock at $27.29 per share, which included 570,000
shares purchased by the underwriters upon exercise of their over-allotment
option. Including the over-allotment shares, the offering resulted in net
proceeds to the company of approximately $111.3 million after deducting
underwriting discounts and commissions and offering expenses of approximately
$8.0 million. As of March 31, 2007, the company had a total of approximately
26.6 million shares of common stock outstanding.
Page
1 of 8
OPERATIONAL
HIGHLIGHTS
Iloperidone
As
previously announced, Vanda held a Pre-NDA meeting with the Federal Drug
Administration (FDA) during the first quarter of 2007. This meeting was largely
procedural, and focused on the structure and content of our NDA submission.
Based on this meeting the company remains confident that it will be able to
file
its NDA for iloperidone in schizophrenia in the fourth quarter of 2007.
VEC-162
On
April
30, Vanda held an End of Phase II meeting with the FDA to discuss Phase III
clinical trial designs and path to an NDA filing for VEC-162 in sleep disorders.
Based on the meeting the company remains on track to initiate its next VEC-162
trial in the third quarter of 2007.
VSF-173
On
April
25, 2007, Vanda announced the initiation of a Phase II clinical trial for
VSF-173 in excessive sleepiness. The trial is a randomized, double-blind,
placebo-controlled study to investigate the efficacy and safety of three oral
doses of VSF-173 for the treatment of induced excessive sleepiness in
approximately 60 healthy male and female subjects. The primary endpoint of
the
study is the difference from placebo on the Maintenance of Wakefulness Test
(MWT), a standard measure of sleepiness.
FINANCIAL
DETAILS
|
·
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Operating
Expenses.
First quarter 2007 R&D expenses, primarily consisting of salaries and
related costs of R&D personnel, stock-based compensation, and the
costs of consultants, materials and supplies associated with the
company’s
clinical trials and research initiatives, were $10.6 million, up
from $7.9
million in the previous quarter and down from $15.5 million in the
first
quarter of 2006. The increase in R&D expenses in the first quarter of
2007 relative to the fourth quarter of 2006 was primarily due to
higher
costs related to the preparation of the NDA for iloperidone, clinical
supply manufacturing costs for VEC-162, and Phase II trial initiation
expenses for VSF-173. The decrease in R&D expenses in the first
quarter of 2007 relative to the first quarter of 2006 was primarily
due to
lower clinical trial expenses for the company’s iloperidone and VEC-162
Phase III trials that were completed in
2006.
|
General
and administrative (G&A) expenses totaled $6.2 million in the first quarter
of 2007, up from $4.5 million in the fourth quarter of 2006, and up from $2.9
million in the first quarter of 2006. The increase in G&A expenses in the
first quarter of 2007 relative to both the fourth and first quarters of 2006
was
primarily due to increased stock-based compensation charges, salaries and
related costs of non-R&D personnel, marketing, insurance, and facility
expenses.
Employee
stock-based compensation expense recorded in the first quarter of 2007 was
$4.0
million, or $0.16 per share. Of the total $4.0 million, $1.0 million was
recorded in R&D expenses and $3.0 million was recorded in G&A expenses.
In the fourth quarter of 2006 and the first quarter of 2006, total stock-based
compensation was $1.6 million and $1.5 million, respectively.
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·
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Net
loss applicable to common stockholders
for the first quarter of 2007 was $15.4 million. This compares to
a net
loss of $11.9 million in the fourth quarter of 2006, and $18.1 million
in
the first quarter of 2006.
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Page
2 of 8
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·
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Net
loss per share applicable to common stockholders
for the first quarter of 2007 was $0.61, compared to $0.54 in the
fourth
quarter of 2006 and $385.61 in the first quarter of 2006.
|
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·
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Cash
and marketable securities
increased by $98.1 million during the first quarter. Changes included
net
cash proceeds of $111.3 million from the issuance of common stock
in the
company’s follow-on public offering, $15.4 million of operating losses,
decreases in accrued R&D expenses and accounts payable of $2.2
million, and $0.1 million in fixed asset additions; offset by $4.3
million
of non-cash depreciation, amortization, and stock-based compensation
expenses and other items of $0.2
million.
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·
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The
balance sheet
at
the end of the first quarter of 2007 reflected $130.0 million of
unrestricted cash, cash equivalents and marketable securities, compared
to
$31.9 million as of December 31, 2006, and $20.1 million as of March
31,
2006.
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FINANCIAL
GUIDANCE
Full
year
2007 financial results are expected to show total cash used in company
operations to be approximately $80 million to $90 million. The total cash
balance at December 31, 2007 is expected to be between $55 million and $65
million, and does not include any proceeds from collaborations or partnerships
that the company may enter into in 2007. Vanda anticipates that its current
funds will be sufficient to complete the work necessary to file an NDA for
iloperidone by the end of 2007, to continue the pre-launch commercial activities
for iloperidone, to expend funds on the extended-release injectable formulation
of iloperidone, to initiate at least one additional VEC-162 Phase III trial
for
chronic sleep disorders in the second half of 2007, to conduct a VSF-173 Phase
II trial for excessive sleepiness and to continue additional R&D activities
into mid-2008.
Net
loss
for the year is expected to be between $110 million to $120 million, or
approximately $4.18 to $4.56 per share. Non-cash charges for 2007, consisting
primarily of stock-based compensation expense and depreciation and amortization,
are expected to be approximately $20 million. Per share figures were computed
on
a weighted average basis of 26,321,527 shares of common stock outstanding at
the
end of the year.
CONFERENCE
CALL
The
company has scheduled a conference call for today, Tuesday, May 1, 2007 at
10:30
AM ET. During the call, Mihael Polymeropoulos, M.D., President and CEO, and
Steven Shallcross, Sr. Vice President and CFO, will discuss quarterly results
and other corporate activities. Investors can call 1-866-383-8108 (domestic)
and
1-617-597-5343 (international) prior to the 10:30 AM start time and ask for
the
Vanda Pharmaceuticals conference call hosted by Dr. Polymeropoulos. A replay
of
the call will be available on Tuesday, May 1, 2007, beginning at 12:30 PM ET
and
will be accessible until Tuesday, May 8, 2007, at 5:00 PM ET. The replay call-in
number is 1-888-286-8010 for domestic callers and 1-617-801-6888 for
international callers. The access number is 51446322.
The
conference call will be broadcast simultaneously on the company's Web site,
www.vandapharma.com.
Investors should click on the Investor Relations tab and are advised to go
to
the Web site at least 15 minutes early to register, download, and install any
necessary audio software. The call will also be archived on the Vanda Web site
for a period of 30 days, through May 31, 2007.
Page
3 of 8
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
release contains forward-looking statements within the meaning of Section 21E
of
the Securities Exchange Act of 1934, as amended, including statements regarding
Vanda’s plans for its product candidates. Words such as, but not limited to,
“look forward to,” “believe,” “expect,” “anticipate,” “estimate,” “intend,”
“plan,” “targets,” “likely,” “will,” “would,” “should,” and “could,” and similar
expressions or words identify forward-looking statements. Such forward-looking
statements are based upon current expectations that involve risks, changes
in
circumstances, assumptions and uncertainties. Vanda is at an early stage of
development and may not ever have any products that generate significant
revenue. Important factors that could cause actual results to differ materially
from those reflected in Vanda’s forward-looking statements include, among
others, a failure of Vanda’s product candidates to be demonstrably safe and
effective, a failure to obtain regulatory approval for the company’s products or
to comply with ongoing regulatory requirements, a lack of acceptance of Vanda’s
product candidates in the marketplace, a failure of the company to become or
remain profitable, Vanda’s inability to obtain the capital necessary to fund its
research and development activities, a loss of any of the company’s key
scientists or management personnel, and other factors that are described in
the
“Risk Factors” section (Item 1A) of Vanda’s annual report on Form 10-K for the
year ended December 31, 2006 (File No. 000-51863). No forward-looking statements
can be guaranteed and actual results may differ materially from such statements.
The information in this release is provided only as of the date of this release,
and Vanda undertakes no obligation to update any forward-looking statements
contained in this release on account of new information, future events, or
otherwise, except as required by law.
ABOUT
VANDA PHARMACEUTICALS INC.:
Vanda
Pharmaceuticals Inc. is a biopharmaceutical company focused on the development
and commercialization of clinical-stage product candidates for central nervous
system disorders. The company has three product candidates in clinical
development. Vanda's lead product candidate, iloperidone, is a compound for
the
treatment of schizophrenia and bipolar disorder and has recently completed
its
Phase III program in schizophrenia. Vanda's second product candidate, VEC-162,
is a compound for the treatment of sleep and mood disorders which is currently
in Phase III for sleep disorders. Vanda's third product candidate, VSF-173,
is a
compound for the treatment of excessive sleepiness that is currently in a Phase
II trial. For more on Vanda Pharmaceuticals Inc., please visit
http://www.vandapharma.com.
####
Page
4 of 8
VANDA
PHARMACEUTICALS INC.
(A
Development Stage Company)
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
Three
Months Ended
|
|||||||
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March
31,2007
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March
31, 2006
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||||||
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Revenues
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$
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-
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$
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-
|
|||
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Operating
expenses:
|
|||||||
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Research
and development
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10,592,059
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15,488,554
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|||||
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General
and administrative
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6,233,549
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2,924,948
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|||||
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Total
operating expenses
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16,825,608
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18,413,502
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|||||
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Loss
from operations
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(16,825,608
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)
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(18,413,502
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)
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|||
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Interest
income
|
1,433,654
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293,861
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|||||
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Interest
expense
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-
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(2,809
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)
|
||||
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Total
other income, net
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1,433,654
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291,052
|
|||||
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Net
loss before tax provision
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(15,391,954
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)
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(18,122,450
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)
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|||
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Tax
provision
|
806
|
-
|
|||||
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Net
loss applicable to common stockholders
|
$
|
(15,392,760
|
)
|
$
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(18,122,450
|
)
|
|
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Basic
and diluted net loss per share applicable to common stockholders
|
$
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(0.61
|
)
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$
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(385.61
|
)
|
|
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Shares
used in calculation of basic and diluted net loss per
share
|
25,340,455
|
46,997
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|||||
Page
5 of 8
VANDA
PHARMACEUTICALS INC.
(A
Development Stage Company)
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
March
31,
2007
|
December
31,
2006
|
||||||
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ASSETS
|
|||||||
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Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
64,221,338
|
$
|
30,928,895
|
|||
|
Marketable
securities
|
62,698,169
|
941,981
|
|||||
|
Prepaid
expenses, deposits and other current assets
|
1,838,638
|
1,949,466
|
|||||
|
Total
current assets
|
128,758,145
|
33,820,342
|
|||||
|
|
|||||||
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Marketable
securities, long-term
|
3,000,181
|
-
|
|||||
|
Property
and equipment, net
|
1,829,893
|
1,859,704
|
|||||
|
Deposits
|
150,000
|
150,000
|
|||||
|
Restricted
cash
|
430,230
|
430,230
|
|||||
|
Total
assets
|
$
|
134,168,449
|
$
|
36,260,276
|
|||
|
|
|||||||
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|
|||||||
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LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
2,010,347
|
$
|
2,783,249
|
|||
|
Accrued
expenses
|
4,904,128
|
6,322,808
|
|||||
|
Total
current liabilities
|
6,914,475
|
9,106,057
|
|||||
|
|
|||||||
|
Long-term
liabilities:
|
|||||||
|
Deferred
rent
|
246,075
|
238,413
|
|||||
|
Deferred
grant revenue
|
142,411
|
129,950
|
|||||
|
Other
long-term liabilities
|
59,683
|
28,984
|
|||||
|
Total
liabilities
|
7,362,644
|
9,503,404
|
|||||
|
|
|||||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
26,562
|
22,129
|
|||||
|
Additional
paid-in capital
|
242,029,862
|
126,578,588
|
|||||
|
Accumulated
other comprehensive loss
|
(17,283
|
)
|
(3,269
|
)
|
|||
|
Deficit
accumulated during the development stage
|
(115,233,336
|
)
|
(99,840,576
|
)
|
|||
|
Total
stockholders' equity
|
126,805,805
|
26,756,872
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
134,168,449
|
$
|
36,260,276
|
|||
Page
6 of 8
VANDA
PHARMACEUTICALS INC.
(A
Development Stage Company)
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
Three
Months Ended
|
|||||||
|
March
31,
2007
|
March
31,
2006
|
||||||
|
Cash
flows from operating activities:
|
|||||||
|
Net
loss
|
$
|
(15,392,760
|
)
|
$
|
(18,122,450
|
)
|
|
|
Adjustments
to reconcile net income to net cash used
in
operating activities:
|
|||||||
|
Depreciation
and amortization
|
148,671
|
120,235
|
|||||
|
Employee
and non-employee stock-based compensation
|
4,107,972
|
1,520,317
|
|||||
|
Loss
on disposal of assets
|
-
|
29,528
|
|||||
|
Accretion
of discount on investments
|
(230,268
|
)
|
(92,261
|
)
|
|||
|
Changes
in assets and liabilities:
|
|||||||
|
Prepaid
expenses and other current assets
|
109,921
|
(252,666
|
)
|
||||
|
Deposits
|
-
|
-
|
|||||
|
Accounts
payable
|
(767,846
|
)
|
1,122,758
|
||||
|
Accrued
expenses
|
(1,419,185
|
)
|
4,627,273
|
||||
|
Deferred
grant revenue
|
-
|
-
|
|||||
|
Other
liabilities
|
38,361
|
328,546
|
|||||
|
Net
cash used in operating activities
|
(13,405,134
|
)
|
(10,718,720
|
)
|
|||
|
Cash
flows from investing activities:
|
|||||||
|
Purchases
of property and equipment
|
(118,678
|
)
|
(358,048
|
)
|
|||
|
Purchases
of marketable securities
|
(65,477,330
|
)
|
(1,639,702
|
)
|
|||
|
Proceeds
from sales of marketable securities
|
-
|
-
|
|||||
|
Maturities
of marketable securities
|
950,000
|
4,270,000
|
|||||
|
Investment
in restricted cash
|
-
|
-
|
|||||
|
Net
cash provided by (used in) investing activities
|
(64,646,008
|
)
|
2,272,250
|
||||
|
Cash
flows from financing activities:
|
|||||||
|
Principal
payments on obligations under capital lease
|
-
|
(344
|
)
|
||||
|
Principal
payments on note payable
|
-
|
(45,873
|
)
|
||||
|
Proceeds
from exercise of stock options and warrants
|
56,516
|
294
|
|||||
|
Proceeds
from issuance of common stock, net of
issuance
costs
|
111,291,219
|
-
|
|||||
|
Net
cash provided by (used in) financing activities
|
111,347,735
|
(45,923
|
)
|
||||
|
Effect
of foreign currency translation
|
(4,150
|
)
|
(458
|
)
|
|||
|
Net
increase (decrease) in cash and cash equivalents
|
33,292,443
|
(8,492,851
|
)
|
||||
|
Cash
and cash equivalents, beginning of period
|
30,928,895
|
21,012,815
|
|||||
|
Cash
and cash equivalents, end of period
|
$
|
64,221,338
|
$
|
12,519,964
|
|||
Page
7 of 8
SOURCE
Vanda Pharmaceuticals Inc.
05/1/2007
CONTACT:
Steven A. Shallcross, Senior Vice President, Chief Financial Officer of Vanda
Pharmaceuticals Inc., +1-240-599-4500
Web
site:
http://www.vandapharma.com
(VNDA)
CO:
Vanda
Pharmaceuticals Inc.
Page
8 of 8