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): August 5, 2008
VANDA
PHARMACEUTICALS INC.
(Exact
name of Registrant as specified in its charter)
Delaware
(State
or
other jurisdiction of incorporation)
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000-51863
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03-0491827
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(Commission
File No.)
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(IRS
Employer Identification No.)
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9605
Medical Center Drive
Suite 300
Rockville,
Maryland 20850
(Address
of principal executive offices and zip code)
Registrant’s
telephone number, including area code: (240)
599-4500
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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On
August
5, 2008, Vanda Pharmaceuticals Inc. issued a press release relating to its
results of operations and financial condition for the second quarter ended
June
30, 2008. 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 August 5,
2008.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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VANDA
PHARMACEUTICALS INC.
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||
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By:
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/s/
STEVEN
A. SHALLCROSS
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Name:
Steven A. Shallcross
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Title:
Senior Vice President, Chief Financial Officer and
Treasurer
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Dated:
August 5, 2008
For
Immediate Release
Company
Contact:
Steven
A.
Shallcross
Senior
Vice President & CFO
Vanda
Pharmaceuticals Inc. .
(240)
599-4500
steven.shallcross@vandapharma.com
Vanda
Pharmaceuticals Reports Second Quarter 2008 Results
ROCKVILLE,
MD.
- August
5, 2008 - Vanda Pharmaceuticals Inc. (NASDAQ: VNDA),
a
biopharmaceutical company focused on the development and commercialization
of
clinical-stage product candidates for central nervous system disorders, today
announced financial and operational results for the second quarter ended June
30, 2008.
Vanda
reported research and development (R&D) expenses in the second quarter of
2008 of $5.5 million, compared to first quarter of 2008 R&D expenses of
$11.1 million and second quarter of 2007 R&D expenses of $10.2 million. The
decrease in R&D expenses in the second quarter of 2008 relative to the first
quarter of 2008 is primarily attributable to lower costs in the Phase III
tasimelteon (VEC-162) chronic primary insomnia clinical trial for which Vanda
announced top-line results in June of 2008. The decrease in R&D expenses in
the second quarter of 2008 relative to the second quarter of 2007 is
attributable to lower clinical trial costs in 2008 compared to costs from trials
performed in 2007.
Net
loss
was $13.5 million for the second quarter of 2008, compared to $19.2 million
in
the first quarter of 2008 and $16.0 million in the second quarter of 2007.
Net
loss per common share for the second quarter of 2008 was $0.51, compared to
$0.72 in the first quarter of 2008, and $0.60 in the second quarter of
2007.
As
of
June 30, 2008, Vanda’s cash, cash equivalents, and marketable securities totaled
approximately $65.6 million. As of June 30, 2008, the company had a total of
approximately 26.6 million shares of common stock outstanding.
OPERATIONAL
HIGHLIGHTS
iloperidone
On
July
28, 2008, Vanda announced the receipt of a not approvable letter from the U.S.
Food and Drug Administration (FDA) in response to its New Drug Application
for
iloperidone, an investigational atypical antipsychotic that was reviewed for
the
treatment of schizophrenia.
Vanda
has
put on hold all iloperidone-related activities pending further review.
Tasimelteon
(VEC-162)
On
June
26, 2008, Vanda reported positive top-line results for its tasimelteon Phase
III
chronic primary insomnia clinical trial. This Phase III, multi-center,
placebo-controlled, 4-week trial evaluated 322 patients with chronic primary
insomnia.
FINANCIAL
DETAILS
|
·
|
Operating
Expenses. Second quarter 2008 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
clinical trials and research initiatives, were $5.5 million, down
from
$11.1 million in the previous quarter and down from $10.2 million
in the
second quarter of 2007. The decrease in R&D expenses in the second
quarter of 2008 relative to the first quarter of 2008 is primarily
attributable to lower costs in the Phase III tasimelteon chronic
primary
insomnia clinical trial for which Vanda reported the top-line results
in
June of 2008. The decrease in R&D expenses in the second quarter of
2008 relative to the second quarter of 2007 is primarily attributable
to
lower clinical trial costs in the second quarter of 2008 versus the
costs
from trials conducted in the second quarter of 2007.
|
General
and administrative (G&A) expenses totaled $8.5 million in the second quarter
of 2008, down from $9.0 million in the first quarter of 2008, and up from $7.4
million in the second quarter of 2007. The decrease in G&A expenses in the
second quarter of 2008 relative to the first quarter of 2008 is primarily due
to
lower employee stock-based compensation expense. The increase in G&A
expenses in the second quarter of 2008 relative to the second quarter of 2007
is
primarily due to increased pre-launch commercial activities for
iloperidone.
Employee
stock-based compensation expense recorded in the second quarter of 2008 was
$4.0
million. Of the total $4.0 million of non-cash charges, $0.7 million was
recorded in R&D expenses and $3.3 million was recorded in G&A expenses.
For both the first quarter of 2008 and the second quarter of 2007, total
stock-based compensation was $5.1 million. The decrease in stock-based
compensation from the second quarter of 2008 compared to the first quarter
of
2008 and the second quarter of 2007 is primarily due to the lower fair market
value of options granted in 2008.
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·
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Net
loss for the second quarter of 2008 was $13.5 million. This compares
to a
net loss of $19.2 million in the first quarter of 2008, and $16.0
million
in the second quarter of 2007.
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·
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Net
loss per common share for the second quarter of 2008 was $0.51 compared
to
$0.72 in the first quarter of 2008 and $0.60 in the second quarter
of
2007.
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·
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Cash
and marketable securities decreased by $11.4 million during the second
quarter of 2008. Changes included $13.5 million of net losses and
decreases in accrued R&D expenses and accounts payable of $0.9
million, net increases in prepaid expenses of $0.9 million, fixed
asset
purchases of $0.3 million offset by $4.1 million in non-cash depreciation,
amortization, and stock-based compensation expenses and net decreases
in
other working capital of $0.1 million.
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·
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Vanda’s
cash, cash equivalents, and marketable securities at the end of the
second
quarter of 2008 totaled approximately $65.6 million, compared to
approximately $93.2 million as of December 31, 2007.
|
FINANCIAL
GUIDANCE
The
company has placed on hold all iloperidone-related activities and is
undertaking steps to minimize its cash burn. The company is also evaluating
all options for its development pipeline and will provide guidance as soon
as
its plans are more definitive.
2
CONFERENCE
CALL
The
company has scheduled a conference call for today, Tuesday, August 5, 2008
at
10:30 AM ET. During the call, Mihael H. Polymeropoulos, M.D., President and
CEO,
and Steven A. Shallcross, Sr. Vice President and CFO, will discuss quarterly
results and other corporate activities. Investors can call 1-800-259-0251
(domestic) and 1-617-614-3671 (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 Tuesday, August 5, 2008,
at 12:30 PM ET and will be accessible until Tuesday, August 12, 2008, at 5:00
PM
ET. The replay call-in number is 1-888-286-8010 for domestic callers and
1-617-801-6888 for international callers. The access number is 98529573.
The
conference call will be broadcast simultaneously on the company's Web site,
http://www.vandapharma.com.
Investors should click on the Investor Relations tab and are advised to go
to
the Web site at least 15 minutes early to register, download, and install any
necessary software. The call will also be archived on the Vanda Web site for
a
period of 30 days, through September 4, 2008.
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. For more on Vanda Pharmaceuticals Inc., please visit
http://www.vandapharma.com.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Various
statements in this release are “forward-looking statements” under the securities
laws. Words such as, but not limited to, “believe,” “expect,”
“anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,”
“would,” and “could,” and similar expressions or words, identify forward-looking
statements. Forward-looking statements are based upon current expectations
that involve risks, changes in circumstances, assumptions and
uncertainties. 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
the
company’s forward-looking statements include, among others: delays in the
completion of Vanda’s clinical trials; a failure of Vanda’s product candidates
to be demonstrably safe and effective; Vanda’s failure to obtain regulatory
approval for its products or to comply with ongoing regulatory requirements;
a
lack of acceptance of Vanda’s product candidates in the marketplace, or a
failure to become or remain profitable; Vanda’s inability to obtain the capital
necessary to fund its research and development activities; Vanda’s failure to
identify or obtain rights to new product candidates; Vanda’s failure to develop
or obtain sales, marketing and distribution resources and expertise or to
otherwise manage its growth; a loss of any of Vanda’s key scientists or
management personnel; losses incurred from product liability claims made against
Vanda; a loss of rights to develop and commercialize Vanda’s products under its
license and sublicense agreements and other factors that are described in the
“Risk Factors” section (Part II, Item 1A) of Vanda’s quarterly report on
Form 10-Q for the quarter ended March 31, 2008 (File No. 000-51863). In
addition to the risks described above and in Part II, Item 1A of Vanda’s
quarterly report on Form 10-Q, other unknown or unpredictable factors also
could
affect Vanda’s results. There can be no assurance that the actual results
or developments anticipated by Vanda will be realized or, even if substantially
realized, that they will have the expected consequences to, or effects on,
Vanda. Therefore, no assurance can be given that the outcomes stated in
such forward-looking statements and estimates will be achieved.
All
written and verbal forward-looking statements attributable to Vanda or any
person acting on its behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to herein. Vanda cautions
investors not to rely too heavily on the forward-looking statements Vanda makes
or that are made on its behalf. The information in this release is
provided only as of the date of this release, and Vanda undertakes no
obligation, and specifically declines any obligation, to update or revise
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.
####
3
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VANDA
PHARMACEUTICALS INC.
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|||||||||||||||
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(A
Development Stage Enterprise)
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|||||||||||||||
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CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three
Months Ended
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Six
Months Ended
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||||||||||||
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June
30,
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June
30,
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June
30,
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June
30,
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||||||||||
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2008
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2007
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2008
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2007
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||||||||||
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Revenues
from services
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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
|
5,480,909
|
10,193,825
|
16,583,574
|
20,785,884
|
|||||||||
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General
and administrative
|
8,454,985
|
7,449,375
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17,414,199
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13,682,924
|
|||||||||
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Total
operating expenses
|
13,935,894
|
17,643,200
|
33,997,773
|
34,468,808
|
|||||||||
|
Loss
from operations
|
(13,935,894
|
)
|
(17,643,200
|
)
|
(33,997,773
|
)
|
(34,468,808
|
)
|
|||||
|
Interest
income
|
441,012
|
1,659,781
|
1,306,762
|
3,093,435
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|||||||||
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Total
other income, net
|
441,012
|
1,659,781
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1,306,762
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3,093,435
|
|||||||||
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Loss
before tax provision
|
(13,494,882
|
)
|
(15,983,419
|
)
|
(32,691,011
|
)
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(31,375,373
|
)
|
|||||
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Tax
provision
|
-
|
1,604
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-
|
2,410
|
|||||||||
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Net
loss
|
$
|
(13,494,882
|
)
|
$
|
(15,985,023
|
)
|
$
|
(32,691,011
|
)
|
$
|
(31,377,783
|
)
|
|
|
Basic
and diluted net loss per
|
|||||||||||||
|
share
attributable to
|
$
|
(0.51
|
)
|
$
|
(0.60
|
)
|
$
|
(1.23
|
)
|
$
|
(1.21
|
)
|
|
|
common
stockholders
|
|||||||||||||
|
Shares
used in calculation of
|
|||||||||||||
|
basic
and diluted net loss
|
|||||||||||||
|
per
share attributable to
|
|||||||||||||
|
common
stockholders
|
26,649,439
|
26,567,160
|
26,648,892
|
25,978,437
|
|||||||||
4
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VANDA
PHARMACEUTICALS INC.
|
||||||||||||
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(A
Development Stage Enterprise)
|
||||||||||||
|
|
||||||||||||
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CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
June
30, 2008
|
December
31, 2007
|
||||||
|
ASSETS
|
|||||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
56,503,815
|
$
|
41,929,533
|
|||
|
Marketable
securities
|
6,564,684
|
43,243,960
|
|||||
|
Prepaid
expenses, deposits and other current assets
|
2,030,329
|
1,781,881
|
|||||
|
Total
current assets
|
65,098,828
|
86,955,374
|
|||||
|
Marketable
securities, long-term
|
2,557,411
|
7,979,331
|
|||||
|
Property
and equipment, net
|
2,021,374
|
1,345,845
|
|||||
|
Deposits
|
150,000
|
150,000
|
|||||
|
Restricted
cash
|
430,230
|
430,230
|
|||||
|
Total
assets
|
$
|
70,257,843
|
$
|
96,860,780
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Accounts
payable
|
$
|
5,825,757
|
$
|
2,988,069
|
|||
|
Accrued
expenses
|
3,856,127
|
9,789,738
|
|||||
|
Total
current liabilities
|
9,681,884
|
12,777,807
|
|||||
|
Long-term
liabilities:
|
|||||||
|
Deferred
rent
|
490,776
|
354,042
|
|||||
|
Total
liabilities
|
10,172,660
|
13,131,849
|
|||||
|
Stockholders'
equity:
|
|||||||
|
Common
stock
|
26,653
|
26,653
|
|||||
|
Additional
paid-in capital
|
266,674,962
|
257,600,368
|
|||||
|
Accumulated
other comprehensive income (loss)
|
(15,155
|
)
|
12,176
|
||||
|
Deficit
accumulated during the development stage
|
(206,601,277
|
)
|
(173,910,266
|
)
|
|||
|
Total
stockholders' equity
|
60,085,183
|
83,728,931
|
|||||
|
Total
liabilities and stockholders' equity
|
$
|
70,257,843
|
$
|
96,860,780
|
|||
5
|
VANDA
PHARMACEUTICALS INC.
|
||||||||||
|
(A
Development Stage Enterprise)
|
||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Six
Months Ended
|
|||||||
|
June
30,
|
June
30,
|
||||||
|
2008
|
2007
|
||||||
|
Cash
flows from operating activities:
|
|||||||
|
Net
loss
|
$
|
(32,691,011
|
)
|
$
|
(31,377,783
|
)
|
|
|
Adjustments
to reconcile net income to net cash used
|
|||||||
|
in
operating activities:
|
|||||||
|
Depreciation
and amortization
|
259,707
|
293,660
|
|||||
|
Stock-based
compensation
|
9,074,594
|
9,323,664
|
|||||
|
Loss
on disposal of assets
|
211
|
-
|
|||||
|
Accretion
of discount on investments
|
(195,911
|
)
|
(859,296
|
)
|
|||
|
Changes
in assets and liabilities:
|
|||||||
|
Prepaid
expenses and other current assets
|
(247,729
|
)
|
(1,354,085
|
)
|
|||
|
Accounts
payable
|
2,425,921
|
(183,682
|
)
|
||||
|
Accrued
expenses
|
(5,979,353
|
)
|
(33,290
|
)
|
|||
|
Other
liabilities
|
136,734
|
(13,661
|
)
|
||||
|
Net
cash used in operating activities
|
(27,216,837
|
)
|
(24,204,473
|
)
|
|||
|
Cash
flows from investing activities:
|
|||||||
|
Purchases
of property and equipment
|
(479,581
|
)
|
(202,683
|
)
|
|||
|
Purchases
of marketable securities
|
(2,081,121
|
)
|
(93,239,541
|
)
|
|||
|
Proceeds
from sales of marketable securities
|
4,875,076
|
-
|
|||||
|
Maturities
of marketable securities
|
39,460,000
|
23,025,000
|
|||||
|
Net
cash provided by (used in) investing activities
|
41,774,374
|
(70,417,224
|
)
|
||||
|
|
|||||||
|
Cash
flows from financing activities:
|
|||||||
|
Proceeds
from exercise of stock options and warrants
|
-
|
79,587
|
|||||
|
Proceeds
from issuance of common stock, net of
|
|||||||
|
issuance
costs
|
-
|
111,254,850
|
|||||
|
Net
cash provided by financing activities
|
-
|
111,334,437
|
|||||
|
|
|||||||
|
Effect
of foreign currency translation
|
16,745
|
(10,678
|
)
|
||||
|
|
|||||||
|
Net
increase in cash and cash equivalents
|
14,574,282
|
16,702,062
|
|||||
|
|
|||||||
|
Cash
and cash equivalents, beginning of period
|
41,929,533
|
30,928,895
|
|||||
|
|
|||||||
|
Cash
and cash equivalents, end of period
|
$
|
56,503,815
|
$
|
47,630,957
|
|||
6
SOURCE
Vanda Pharmaceuticals Inc.
8/5/2008
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.
7