Vanda Pharmaceuticals (VNDA) 10-Q 5 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 30, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	VNDA
Entity Registrant Name	Vanda Pharmaceuticals Inc.
Entity Central Index Key	1,347,178
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		43,153,007

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 38,740	$ 50,843
Marketable securities	99,590	92,337
Accounts receivable, net	16,679	16,331
Inventory	938	1,294
Prepaid expenses and other current assets	6,502	5,742
Total current assets	162,449	166,547
Property and equipment, net	4,351	4,570
Intangible assets, net	35,809	38,752
Non-current inventory and other	4,131	3,181
Total assets	206,740	213,050
Current liabilities:
Accounts payable and accrued liabilities	22,664	15,767
Accrued government and other rebates	32,376	35,550
Total current liabilities	55,040	51,317
Milestone obligation under license agreement	25,000	25,000
Other non-current liabilities	3,688	3,706
Total liabilities	$ 83,728	$ 80,023
Commitments and contingencies (Notes 10 and 11)
Stockholders' equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding
Common stock, $0.001 par value; 150,000,000 shares authorized; 43,109,206 and 42,815,291 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively	$ 43	$ 43
Additional paid-in capital	463,084	460,794
Accumulated other comprehensive income	92	39
Accumulated deficit	(340,207)	(327,849)
Total stockholders' equity	123,012	133,027
Total liabilities and stockholders' equity	$ 206,740	$ 213,050

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	43,109,206	42,815,291
Common stock, shares outstanding	43,109,206	42,815,291

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Net product sales	$ 33,262	$ 22,150
Total revenues	33,262	22,150
Operating expenses:
Cost of goods sold	5,956	5,015
Research and development	7,548	4,478
Selling, general and administrative	29,290	18,806
Intangible asset amortization	2,943	4,144
Total operating expenses	45,737	32,443
Loss from operations	(12,475)	(10,293)
Other income	117	72
Net loss	$ (12,358)	$ (10,221)
Basic and diluted net loss per share	$ (0.29)	$ (0.24)
Weighted average shares outstanding, basic and diluted	43,104,462	41,744,948

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net loss	$ (12,358)	$ (10,221)
Other comprehensive income:
Change in net unrealized gain on marketable securities	53	11
Tax provision on other comprehensive income	0	0
Other comprehensive income , net of tax	53	11
Comprehensive loss	$ (12,305)	$ (10,210)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2015	42,815,291	42,815,291
Beginning balance at Dec. 31, 2015	$ 133,027	$ 43	$ 460,794	$ 39	$ (327,849)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	24		24
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards		293,915
Stock-based compensation expense	2,266		2,266
Net loss	(12,358)				(12,358)
Other comprehensive income, net of tax	$ 53			53
Ending balance (in shares) at Mar. 31, 2016	43,109,206	43,109,206
Ending balance at Mar. 31, 2016	$ 123,012	$ 43	$ 463,084	$ 92	$ (340,207)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net loss	$ (12,358)	$ (10,221)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation of property and equipment	219	140
Stock-based compensation	2,266	1,945
Amortization of discounts and premiums on marketable securities	28	197
Intangible asset amortization	2,943	4,144
Other non-cash adjustments		239
Changes in operating assets and liabilities:
Accounts receivable	(348)	(16,466)
Prepaid expenses and other assets	(1,484)	581
Inventory	130	(45)
Accounts payable and accrued liabilities	6,879	10,853
Accrued government and other rebates	(3,174)	14,188
Net cash provided by (used in) operating activities	(4,899)	5,555
Cash flows from investing activities
Purchases of property and equipment		(783)
Purchases of marketable securities	(47,311)	(59,890)
Maturities of marketable securities	40,083	27,105
Net cash used in investing activities	(7,228)	(33,568)
Cash flows from financing activities
Obligations paid in connection with settlement of equity awards		(282)
Proceeds from exercise of employee stock options	24	203
Net cash provided by (used in) financing activities	24	(79)
Net decrease in cash and cash equivalents	(12,103)	(28,092)
Cash and cash equivalents
Beginning of period	50,843	60,901
End of period	$ 38,740	$ 32,809

Business Organization and Prese

Business Organization and Presentation	3 Months Ended
	Mar. 31, 2016
Business Organization and Presentation	1. Business Organization and Presentation Business Organization Vanda Pharmaceuticals Inc. (the Company) is a specialty pharmaceutical company focused on the development and commercialization of novel 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 portfolio includes the following products: • HETLIOZ ® ® ® • Fanapt ® ® ® • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis. • Trichostatin A, a small molecule histone deacetylase (HDAC) inhibitor. • AQW051, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. 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 for the fiscal year ended December 31, 2015 included in the Company’s annual report on Form 10-K. The financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results for these interim periods have been included. The condensed consolidated balance sheet data as of December 31, 2015 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 for a full fiscal year. The financial information included herein should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies 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. Actual results could differ from those estimates. Inventory Inventory, which is recorded at the lower of cost or market, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment by consideration of factors such as lower of cost or market, net realizable value, obsolescence or expiry. Inventory not expected to be consumed within 12 months following the balance sheet date are classified as non-current. Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended (in thousands) March 31, March 31, Revenues: HETLIOZ ® $ 16,201 $ 7,460 Fanapt ® 17,061 14,690 Total revenues $ 33,262 $ 22,150 The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 605-15, Revenue Recognition—Products Major Customers HETLIOZ ® ® Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. Reserves established for discounts and returns are classified as reductions of accounts receivable if the amount is payable to direct customers, with the exception of service fees. Service fees are classified as a liability. Reserves established for rebates, chargebacks or co-pay assistance are classified as a liability if the amount is payable to a party other than customers. The Company currently records sales allowances for the following: Prompt-pay: Rebates: Chargebacks: Medicare Part D Coverage Gap: Service Fees: Co-payment Assistance: Product Returns: Stock-Based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The fair value of stock options granted and restricted stock units (RSUs) awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates 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 not paid dividends to its stockholders since its inception (other than a dividend of preferred share purchase rights, which was declared in September 2008) 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 three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, March 31, Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 61 % Weighted average expected term (years) 6.08 5.97 Weighted average risk-free rate 1.38 % 1.59 % Weighted average fair value per share $ 4.27 $ 6.14 Stock-based compensation expense recognized for the three months ended March 31, 2016 and 2015 was comprised of the following: Three Months Ended (in thousands) March 31, March 31, Research and development $ 524 $ 624 Selling, general and administrative 1,742 1,321 $ 2,266 $ 1,945 Advertising Expense The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.6 million and $1.0 million for the three months ended March 31, 2016 and 2015, respectively. Non-Cash Investing and Financing Activities For the three months ended March 31, 2015, the Company recorded an intangible asset of $25.0 million relating to HETLIOZ ® ® Recent accounting pronouncements In March 2016, the FASB issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, In February 2016, the FASB issued ASU 2016-02, Leases In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) Revenue from Contracts with Customers, identifying Performance Obligations and Licensing

Earnings per Share

Earnings per Share	3 Months Ended
	Mar. 31, 2016
Earnings per Share	3. Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net loss 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 loss per share of common stock for the three months ended March 31, 2016 and 2015: Three Months Ended (in thousands, except for share and per share amounts) March 31, March 31, Numerator: Net loss $ (12,358 ) $ (10,221 ) Denominator: Weighted average shares outstanding, basic and diluted 43,104,462 41,744,948 Net loss per share, basic and diluted: $ (0.29 ) $ (0.24 ) Antidilutive securities excluded from calculations of diluted net loss per share 6,245,280 5,656,662 The Company incurred net losses for the three months ended March 31, 2016 and 2015 causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in dilutive loss per share and basic loss per share attributable to common stockholders being equivalent.

Marketable Securities

Marketable Securities	3 Months Ended
	Mar. 31, 2016
Marketable Securities	4. Marketable Securities The following is a summary of the Company’s available-for-sale marketable securities as of March 31, 2016, which all have contract maturities of less than one year: March 31, 2016 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 54,166 $ 26 $ (1 ) $ 54,191 Corporate debt 45,332 68 (1 ) 45,399 $ 99,498 $ 94 $ (2 ) $ 99,590 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2015: December 31, 2015 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 44,059 $ 6 $ (8 ) $ 44,057 Corporate debt 48,239 46 (5 ) 48,280 $ 92,298 $ 52 $ (13 ) $ 92,337

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
Fair Value Measurements	5. 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 Marketable securities classified in Level 1 and Level 2 as of March 31, 2016 and December 31, 2015 consist of 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 investments classified in Level 2 also is 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 and corporate notes that use as their basis readily observable market parameters. The Company did not transfer any assets between Level 2 and Level 1 during the three months ended March 31, 2016 and 2015. As of March 31, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of March 31, 2016 Using (in thousands) March 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 54,191 $ 54,191 $ — $ — Corporate debt 45,399 — 45,399 $ 99,590 $ 54,191 $ 45,399 $ — As of December 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2015 Using (in thousands) December 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 44,057 $ 44,057 $ — $ — Corporate debt 48,280 — 48,280 $ 92,337 $ 44,057 $ 48,280 $ — 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 and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, and milestone obligations under license agreements, the carrying value of which materially approximate their fair values.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2016
Inventory	6. Inventory The Company evaluates expiry risk by evaluating current and future product demand relative to product shelf life. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. Inventory levels are evaluated for the amount of inventory that would be sold within one year. At certain times, the level of inventory can exceed the forecasted level of cost of goods sold for the next twelve months. The Company classifies the estimate of such inventory as non-current. Inventory consisted of the following as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Current assets Finished goods $ 938 $ 1,294 $ 938 $ 1,294 Non-Current assets Raw materials $ 127 $ 127 Work-in-process 2,249 2,369 Finished goods 346 — $ 2,722 $ 2,496

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	3 Months Ended
	Mar. 31, 2016
Accounts Payable and Accrued Liabilities	7. Accounts Payable and Accrued Liabilities The following is a summary of the Company’s accounts payable and accrued liabilities as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Research and development expenses $ 3,890 $ 3,199 Consulting and other professional fees 10,540 5,088 Compensation and employee benefits 1,465 468 Royalties payable 5,533 5,328 Other 1,236 1,684 $ 22,664 $ 15,767

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2016
Intangible Assets	8. Intangible Assets The following is a summary of the Company’s intangible assets as of March 31, 2016: March 31, 2016 (in thousands) Estimated Useful Life Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,891 $ 29,109 Fanapt ® November 2016 27,941 21,241 6,700 $ 60,941 $ 25,132 $ 35,809 The following is a summary of the Company’s intangible assets as of December 31, 2015: December 31, 2015 (in thousands) Estimated Useful Life (Years) Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,460 $ 29,540 Fanapt ® November 2016 27,941 18,729 9,212 $ 60,941 $ 22,189 $ 38,752 In January 2014, the Company announced that the FDA had approved the NDA for HETLIOZ ® ® ® ® ® ® ® ® ® In 2009, the Company announced that the FDA had approved the NDA for Fanapt ® ® ® ® ® Business Combinations ® The intangible assets are being amortized over their estimated useful economic life using the straight-line method. Amortization expense was $2.9 million and $4.1 million for the three months ended March 31, 2016 and 2015, respectively. The following is a summary of the future intangible asset amortization schedule as of March 31, 2016: (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter HETLIOZ ® $ 29,109 $ 1,290 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935 Fanapt ® 6,700 6,700 — — — — — $ 35,809 $ 7,990 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Taxes	9. Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The fact that the Company has historically generated net operating losses (NOLs) serves as strong evidence that it is more likely than not that deferred tax assets will not be realized in the future. Therefore, the Company has a full valuation allowance against all deferred tax assets as of March 31, 2016 and December 31, 2015. As a result of the tax valuation allowance against deferred tax assets, there was no provision for income taxes for the three months ended March 31, 2016 and 2015. Certain tax attributes of the Company, including NOLs and credits, are subject to limitation as a result of any ownership change as defined under Internal Revenue Code of 1986, as amended (IRC), Section 382. A change in ownership could affect the Company’s ability to use NOLs and credit carryforward (tax attributes). Ownership changes did occur as of December 31, 2014 and December 31, 2008. However, the Company believes that it had sufficient Built-In-Gain to offset the IRC Section 382 limitation generated by the ownership changes. Any future ownership changes may cause the Company’s existing tax attributes to have additional limitations. Additionally, the Company maintains a valuation allowance on its tax attributes and therefore, any IRC Section 382 limitation would not have a material impact on the Company’s provision for income taxes as of March 31, 2016.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies	10. Commitments and Contingencies Operating leases The following is a summary of the minimum annual future payments under operating leases as of March 31, 2016: Cash payments due by year (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter Operating leases $ 12,944 $ 1,129 $ 1,538 $ 1,576 $ 1,616 $ 1,656 $ 5,429 The minimum annual future payments for operating leases consists of the lease for office space for the Company’s headquarters located in Washington, D.C., which expires in 2023. In 2011, the Company entered into an office lease, which was subsequently amended in 2014, with Square 54 Office Owner LLC (Landlord) for its headquarters, consisting of a total of 30,260 square feet of office space at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. (Lease). Subject to the prior rights of other tenants in the building, the Company has the right to renew the Lease for five years following its expiration. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. The Lease may be terminated early by the Company or the Landlord upon certain conditions. Rent expense under operating leases was $0.5 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively. 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 ® . ® ® ® ® ® ® ® ® ® ® ® ® The license agreement was amended in April 2013 to add a process that would allow BMS to waive the right to develop and commercialize HETLIOZ ® ® Either party may terminate the HETLIOZ ® Fanapt ® . ® A predecessor company of Sanofi, Hoechst Marion Roussel, Inc. (HMRI) discovered Fanapt ® ® ® ® ® ® ® ® ® ® Pursuant to the terms of a settlement agreement with Novartis, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® ® The Company has entered into distribution agreements with Probiomed S.A. de C.V. for the commercialization of Fanapt ® ® Tradipitant. Pursuant to the license agreement, the Company paid Lilly an initial license fee of $1.0 million and will be responsible for all development costs. The initial license fee was recognized as research and development expense in the consolidated statement of operations for the year ended December 31, 2012. Lilly is also eligible to receive additional payments based upon achievement of specified development and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. These milestones include $4.0 million for pre-NDA approval milestones and up to $95.0 million for future regulatory approval and sales milestones. The Company is obligated to use its commercially reasonable efforts to develop and commercialize tradipitant. Either party may terminate the license agreement under certain circumstances, including a material breach of the license agreement by the other. In the event that the Company terminates the license agreement, or if Lilly terminates due to the Company’s breach or for certain other reasons set forth in the license agreement, all rights licensed and developed by the Company under the license agreement will revert or otherwise be licensed back to Lilly on an exclusive basis, subject to payment by Lilly to the Company of a royalty on net sales of products that contain tradipitant. AQW051. ® Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize AQW051 and is responsible for all development costs under the AQW051 license agreement. 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. Research and Development and Marketing Agreements 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 services may be terminated on generally 60 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.

Legal Matters

Legal Matters	3 Months Ended
	Mar. 31, 2016
Legal Matters	11. Legal Matters In June 2014, the Company filed suit against Roxane Laboratories, Inc. (Roxane) in the U.S. District Court for the District of Delaware (the Delaware District Court). The suit seeks an adjudication that Roxane has infringed one or more claims of the Company’s U.S. Patent No. 8,586,610 (the ‘610 Patent) by submitting to the FDA an Abbreviated New Drug Application (ANDA) for a generic version of Fanapt ® ® In 2015, the Company filed six separate patent infringement lawsuits in the Delaware District Court against Roxane, Inventia Healthcare Pvt. Ltd., Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin), Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd., and Apotex Inc. and Apotex Corp., (collectively, the Defendants). The lawsuits each seek an adjudication that the respective Defendants infringed one or more claims of the ‘610 Patent and/or the Company’s U.S. Patent No. 9,138,432 (the ‘432 Patent) by submitting to the FDA and ANDA for a generic version of Fanapt ® Approved Drug Products with Therapeutic Equivalence Evaluations ® On February 26, 2016, Roxane filed suit against the Company in the U.S. District Court for the Southern District of Ohio. The suit seeks a declaratory judgment of invalidity and noninfringement of the Method of Treatment Patents. The Company has not sued Roxane for infringing the Method of Treatment Patents. The Company filed a motion to dismiss this lawsuit for lack of personal jurisdiction or, in the alternative, to transfer the lawsuit to the Delaware District Court. The Company intends to vigorously defend the Method of Treatment Patents. On February 26, 2016, Roxane filed a Petition for Inter Partes

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2016
Stock-Based Compensation	12. Stock-Based Compensation As of March 31, 2016, the Company had one equity incentive plan, the 2006 Equity Incentive Plan (the 2006 Plan) that was adopted in April 2006. On January 1 of each year, the number of shares reserved under the 2006 Plan is automatically increased by the lesser of 4% of the total number of shares of common stock that are outstanding at that time or 1,500,000 shares (or such lesser number as may be approved by the Company’s board of directors). As of January 1, 2016, the number of shares of common stock that may be issued under the 2006 Plan was automatically increased by 1,500,000 shares, increasing the number of shares of common stock available for issuance under the Plan to 13,329,472 shares. As of March 31, 2016, there were 8,056,668 shares that were subject to outstanding options and RSUs and 2,157,668 shares remained available for future grant. The 2006 Plan expired by its terms on April 12, 2016. Outstanding options and RSUs under the 2006 Plan will remain in effect and the terms of the 2006 Plan will continue to apply, but no additional awards will be made under the 2006 Plan. The Company has granted option awards 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 and all service option awards granted prior to December 31, 2006, service option awards granted to new employees, and certain service option awards granted to existing employees vest and become exercisable on the first anniversary of the grant date with respect to the 25% of the shares subject to service option awards. The remaining 75% of the shares subject to the service option awards vest and become exercisable monthly in equal installments thereafter over three years. Certain service option awards granted to existing employees after December 31, 2006 vest and become exercisable monthly in equal installments over four years. The initial service option awards granted to directors upon their election vest and become exercisable in equal monthly installments over a period of four years, while the subsequent annual service option awards granted to directors vest and become exercisable in equal monthly installments over a period of one year. Certain service option awards to executives and directors provide for accelerated vesting if there is a change in control of the Company. Certain service option awards to employees and executives provide for accelerated vesting if the respective employee’s or executive’s service is terminated by the Company for any reason other than cause or permanent disability. As of March 31, 2016, $13.4 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 1.5 years. No option awards are classified as a liability as of March 31, 2016. A summary of option activity for the three months ended March 31, 2016 follows: Stock Options (in thousands, except for share and per share amounts) Number of Weighted Average Weighted Average Aggregate Outstanding at December 31, 2015 6,252,448 $ 11.87 6.16 $ 7,498 Granted 749,511 7.94 Forfeited (172,735 ) 11.16 Expired — — Exercised (6,249 ) 3.82 24 Outstanding at March 31, 2016 6,822,975 11.46 6.28 5,872 Exercisable at March 31, 2016 4,439,627 12.02 4.85 5,074 Vested and expected to vest at March 31, 2016 6,586,275 11.52 6.17 5,818 Proceeds from the exercise of stock options amounted to less than $0.1 million for the three months ended March 31, 2016 and $0.2 million for the three months ended March 31, 2015. 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 with service conditions (service RSUs) that vest in four equal annual installments provided that the employee remains employed with the Company. As of March 31, 2016, $11.4 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 2.0 years. No service RSUs are classified as a liability as of March 31, 2016. A summary of RSU activity for the 2006 Plan for the three months ended March 31, 2016 follows: RSUs Number of Weighted Unvested at December 31, 2015 1,022,681 $ 10.90 Granted 569,242 7.96 Forfeited (70,564 ) 11.03 Vested (287,666 ) 9.65 Unvested at March 31, 2016 1,233,693 9.83 The grant date fair value for the 287,666 shares underlying RSUs that vested during the three months ended March 31, 2016 was $2.8 million.

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Business organization	Business Organization Vanda Pharmaceuticals Inc. (the Company) is a specialty pharmaceutical company focused on the development and commercialization of novel 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 portfolio includes the following products: • HETLIOZ ® ® ® • Fanapt ® ® ® • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis. • Trichostatin A, a small molecule histone deacetylase (HDAC) inhibitor. • AQW051, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.
Basis of presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. 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 for the fiscal year ended December 31, 2015 included in the Company’s annual report on Form 10-K. The financial information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results for these interim periods have been included. The condensed consolidated balance sheet data as of December 31, 2015 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 for a full fiscal year. The financial information included herein should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2015.
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. Actual results could differ from those estimates.
Inventory	Inventory Inventory, which is recorded at the lower of cost or market, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment by consideration of factors such as lower of cost or market, net realizable value, obsolescence or expiry. Inventory not expected to be consumed within 12 months following the balance sheet date are classified as non-current.
Net Product Sales	Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended (in thousands) March 31, March 31, Revenues: HETLIOZ ® $ 16,201 $ 7,460 Fanapt ® 17,061 14,690 Total revenues $ 33,262 $ 22,150 The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 605-15, Revenue Recognition—Products Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. Reserves established for discounts and returns are classified as reductions of accounts receivable if the amount is payable to direct customers, with the exception of service fees. Service fees are classified as a liability. Reserves established for rebates, chargebacks or co-pay assistance are classified as a liability if the amount is payable to a party other than customers. The Company currently records sales allowances for the following: Prompt-pay: Rebates: Chargebacks: Medicare Part D Coverage Gap: Service Fees: Co-payment Assistance: Product Returns:
Major Customers	Major Customers HETLIOZ ® ®
Stock-Based Compensation	Stock-Based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The fair value of stock options granted and restricted stock units (RSUs) awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates 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 not paid dividends to its stockholders since its inception (other than a dividend of preferred share purchase rights, which was declared in September 2008) 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 three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, March 31, Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 61 % Weighted average expected term (years) 6.08 5.97 Weighted average risk-free rate 1.38 % 1.59 % Weighted average fair value per share $ 4.27 $ 6.14 Stock-based compensation expense recognized for the three months ended March 31, 2016 and 2015 was comprised of the following: Three Months Ended (in thousands) March 31, March 31, Research and development $ 524 $ 624 Selling, general and administrative 1,742 1,321 $ 2,266 $ 1,945
Advertising Expense	Advertising Expense The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.6 million and $1.0 million for the three months ended March 31, 2016 and 2015, respectively.
Non-Cash Investing and Financing Activities	Non-Cash Investing and Financing Activities For the three months ended March 31, 2015, the Company recorded an intangible asset of $25.0 million relating to HETLIOZ ® ®
Recent accounting pronouncements	Recent accounting pronouncements In March 2016, the FASB issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, In February 2016, the FASB issued ASU 2016-02, Leases In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) Revenue from Contracts with Customers, identifying Performance Obligations and Licensing

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2016
Revenue From Net Sales by Product	The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended (in thousands) March 31, March 31, Revenues: HETLIOZ ® $ 16,201 $ 7,460 Fanapt ® 17,061 14,690 Total revenues $ 33,262 $ 22,150
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 three months ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, March 31, Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 61 % Weighted average expected term (years) 6.08 5.97 Weighted average risk-free rate 1.38 % 1.59 % Weighted average fair value per share $ 4.27 $ 6.14
Stock-Based Compensation Expense	Stock-based compensation expense recognized for the three months ended March 31, 2016 and 2015 was comprised of the following: Three Months Ended (in thousands) March 31, March 31, Research and development $ 524 $ 624 Selling, general and administrative 1,742 1,321 $ 2,266 $ 1,945

Earnings per Share (Tables)

Earnings per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Basic and Diluted Net Loss Per Share of Common Stock	The following table presents the calculation of basic and diluted net loss per share of common stock for the three months ended March 31, 2016 and 2015: Three Months Ended (in thousands, except for share and per share amounts) March 31, March 31, Numerator: Net loss $ (12,358 ) $ (10,221 ) Denominator: Weighted average shares outstanding, basic and diluted 43,104,462 41,744,948 Net loss per share, basic and diluted: $ (0.29 ) $ (0.24 ) Antidilutive securities excluded from calculations of diluted net loss per share 6,245,280 5,656,662

Marketable Securities (Tables)

Marketable Securities (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Available-for-Sale Marketable Securities	The following is a summary of the Company’s available-for-sale marketable securities as of March 31, 2016, which all have contract maturities of less than one year: March 31, 2016 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 54,166 $ 26 $ (1 ) $ 54,191 Corporate debt 45,332 68 (1 ) 45,399 $ 99,498 $ 94 $ (2 ) $ 99,590 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2015: December 31, 2015 (in thousands) Amortized Gross Gross Fair U.S. Treasury and government agencies $ 44,059 $ 6 $ (8 ) $ 44,057 Corporate debt 48,239 46 (5 ) 48,280 $ 92,298 $ 52 $ (13 ) $ 92,337

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2016
Assets Measured at Fair Value on Recurring Basis	As of March 31, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of March 31, 2016 Using (in thousands) March 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 54,191 $ 54,191 $ — $ — Corporate debt 45,399 — 45,399 $ 99,590 $ 54,191 $ 45,399 $ — As of December 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2015 Using (in thousands) December 31, Quoted Prices in Significant Other Significant (Level 3) Available-for-sale securities: U.S. Treasury and government agencies $ 44,057 $ 44,057 $ — $ — Corporate debt 48,280 — 48,280 $ 92,337 $ 44,057 $ 48,280 $ —

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory	Inventory consisted of the following as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Current assets Finished goods $ 938 $ 1,294 $ 938 $ 1,294 Non-Current assets Raw materials $ 127 $ 127 Work-in-process 2,249 2,369 Finished goods 346 — $ 2,722 $ 2,496

Accounts Payable and Accrued 26

Accounts Payable and Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Accounts Payable and Accrued Liabilities	The following is a summary of the Company’s accounts payable and accrued liabilities as of March 31, 2016 and December 31, 2015: (in thousands) March 31, December 31, Research and development expenses $ 3,890 $ 3,199 Consulting and other professional fees 10,540 5,088 Compensation and employee benefits 1,465 468 Royalties payable 5,533 5,328 Other 1,236 1,684 $ 22,664 $ 15,767

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Intangible Assets	The following is a summary of the Company’s intangible assets as of March 31, 2016: March 31, 2016 (in thousands) Estimated Useful Life Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,891 $ 29,109 Fanapt ® November 2016 27,941 21,241 6,700 $ 60,941 $ 25,132 $ 35,809 The following is a summary of the Company’s intangible assets as of December 31, 2015: December 31, 2015 (in thousands) Estimated Useful Life (Years) Gross Accumulated Net HETLIOZ ® January 2033 $ 33,000 $ 3,460 $ 29,540 Fanapt ® November 2016 27,941 18,729 9,212 $ 60,941 $ 22,189 $ 38,752
Summary of Future Intangible Asset Amortization	The following is a summary of the future intangible asset amortization schedule as of March 31, 2016: (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter HETLIOZ ® $ 29,109 $ 1,290 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935 Fanapt ® 6,700 6,700 — — — — — $ 35,809 $ 7,990 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 20,935

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Minimum Annual Future Payments under Operating Leases	The following is a summary of the minimum annual future payments under operating leases as of March 31, 2016: Cash payments due by year (in thousands) Total Remainder 2017 2018 2019 2020 Thereafter Operating leases $ 12,944 $ 1,129 $ 1,538 $ 1,576 $ 1,616 $ 1,656 $ 5,429

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Summary of Option Activity Plan	A summary of option activity for the three months ended March 31, 2016 follows: Stock Options (in thousands, except for share and per share amounts) Number of Weighted Average Weighted Average Aggregate Outstanding at December 31, 2015 6,252,448 $ 11.87 6.16 $ 7,498 Granted 749,511 7.94 Forfeited (172,735 ) 11.16 Expired — — Exercised (6,249 ) 3.82 24 Outstanding at March 31, 2016 6,822,975 11.46 6.28 5,872 Exercisable at March 31, 2016 4,439,627 12.02 4.85 5,074 Vested and expected to vest at March 31, 2016 6,586,275 11.52 6.17 5,818
Summary of RSU Activity for 2006 Plan	A summary of RSU activity for the 2006 Plan for the three months ended March 31, 2016 follows: RSUs Number of Weighted Unvested at December 31, 2015 1,022,681 $ 10.90 Granted 569,242 7.96 Forfeited (70,564 ) 11.03 Vested (287,666 ) 9.65 Unvested at March 31, 2016 1,233,693 9.83 The grant date fair value for the 287,666 shares underlying RSUs that vested during the three months ended March 31, 2016 was $2.8 million.

Business Organization and Pre30

Business Organization and Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016Segment
Organization and Summary of Significant Accounting Policies Disclosure [Line Items]
Number of operating segments	1

Net Sales by Product (Detail)

Net Sales by Product (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Net product sales	$ 33,262	$ 22,150
HETLIOZ
Revenues:
Net product sales	16,201	7,460
Fanapt
Revenues:
Net product sales	$ 17,061	$ 14,690

Summary of Significant Accoun32

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)Customer	Mar. 31, 2015USD ($)	Dec. 31, 2015USD ($)
Summary Of Significant Accounting Policies [Line Items]
Percentage of insurance coverage gap allocated for prescription drugs under Medicare Part D	50.00%
Advertising expenses	$ 600	$ 1,000
Milestone obligation under license agreement	$ 25,000		$ 25,000
HETLIOZ
Summary Of Significant Accounting Policies [Line Items]
Intangible asset acquired		25,000
Milestone obligation under license agreement		25,000
Cumulative worldwide sales milestone		$ 250,000
Customer Concentration Risk | Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	96.00%
Number of major customers for sales revenues | Customer	6
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	86.00%
Number of major customers for accounts receivable | Customer	5

Black-Scholes-Merton Option Pri

Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]
Expected dividend yield	0.00%	0.00%
Weighted average expected volatility	57.00%	61.00%
Weighted average expected term (years)	6 years 29 days	5 years 11 months 19 days
Weighted average risk-free rate	1.38%	1.59%
Weighted average fair value per share	$ 4.27	$ 6.14

Total Stock-Based Compensation

Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,266	$ 1,945
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	524	624
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 1,742	$ 1,321

Basic and Diluted Net Loss Per

Basic and Diluted Net Loss Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Numerator:
Net loss	$ (12,358)	$ (10,221)
Denominator:
Weighted average shares outstanding, basic and diluted	43,104,462	41,744,948
Net loss per share, basic and diluted:	$ (0.29)	$ (0.24)
Antidilutive securities excluded from calculations of diluted net loss per share	6,245,280	5,656,662

Summary of Available-For-Sale M

Summary of Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	$ 99,590	$ 92,337
U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	54,191	44,057
Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	45,399	48,280
Current Investment
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	99,498	92,298
Gross Unrealized Gains	94	52
Gross Unrealized Losses	(2)	(13)
Fair Market Value	99,590	92,337
Current Investment | U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	54,166	44,059
Gross Unrealized Gains	26	6
Gross Unrealized Losses	(1)	(8)
Fair Market Value	54,191	44,057
Current Investment | Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	45,332	48,239
Gross Unrealized Gains	68	46
Gross Unrealized Losses	(1)	(5)
Fair Market Value	$ 45,399	$ 48,280

Assets Measured at Fair Value o

Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 99,590	$ 92,337
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	54,191	44,057
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	45,399	48,280
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	54,191	44,057
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]
Available-for-sale securities	54,191	44,057
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	45,399	48,280
Significant Other Observable Inputs (Level 2) | Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 45,399	$ 48,280

Inventory (Detail)

Inventory (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Finished goods	$ 938	$ 1,294
Total	938	1,294
Raw materials	127	127
Work-in-process	2,249	2,369
Finished goods	346
Total	$ 2,722	$ 2,496

Summary of Accounts Payable and

Summary of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts Payable and Accrued Liabilities [Line Items]
Research and development expenses	$ 3,890	$ 3,199
Consulting and other professional fees	10,540	5,088
Compensation and employee benefits	1,465	468
Royalties payable	5,533	5,328
Other	1,236	1,684
Accounts payable and accrued liabilities	$ 22,664	$ 15,767

Summary of Intangible Assets (D

Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 60,941			$ 60,941
Accumulated Amortization	25,132			22,189
Net Carrying Amount	$ 35,809			$ 38,752
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated useful life	2033-01	2033-01	2022-12	2033-01
Gross Carrying Amount	$ 33,000			$ 33,000
Accumulated Amortization	3,891			3,460
Net Carrying Amount	$ 29,109			$ 29,540
Fanapt
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated useful life	2016-11			2016-11
Gross Carrying Amount	$ 27,941			$ 27,941
Accumulated Amortization	21,241			18,729
Net Carrying Amount	$ 6,700			$ 9,212

Intangible Assets (Textual 2 -

Intangible Assets (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended			12 Months Ended
	Jul. 31, 2013	Feb. 29, 2004	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2006
Finite-Lived Intangible Assets [Line Items]
Milestone obligation under license agreement			$ 25,000			$ 25,000
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets	$ 3,000	$ 500			$ 8,000		$ 1,000
Intangible assets, estimated useful life			2033-01	2033-01	2022-12	2033-01
Cumulative worldwide sales milestone				$ 250,000
Intangible assets capitalized				25,000
Milestone obligation under license agreement				$ 25,000

Intangible Assets (Textual 3 -

Intangible Assets (Textual 3 - Fanapt) - Additional Information (Detail) - Fanapt - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2009	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets			$ 12
Estimated Patent life end date	2016-11	2016-11
Assets acquired and recorded at fair value, Intangible re-acquired right				$ 15.9

Intangible Assets - Additional

Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 2,943	$ 4,144

Summary of Future Intangible As

Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 35,809	$ 38,752
Remainder of 2016	7,990
2,017	1,721
2,018	1,721
2,019	1,721
2,020	1,721
Thereafter	20,935
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	29,109	29,540
Remainder of 2016	1,290
2,017	1,721
2,018	1,721
2,019	1,721
2,020	1,721
Thereafter	20,935
Fanapt
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	6,700	$ 9,212
Remainder of 2016	$ 6,700

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes [Line Items]
Provision for income taxes	$ 0	$ 0

Summary of Minimum Annual Futur

Summary of Minimum Annual Future Payments Under Operating Leases (Detail) $ in Thousands	Mar. 31, 2016USD ($)
Operating Leased Assets [Line Items]
Operating leases, Total	$ 12,944
Operating leases,Remainder of 2016	1,129
Operating leases, 2017	1,538
Operating leases, 2018	1,576
Operating leases, 2019	1,616
Operating leases, 2020	1,656
Operating leases, Thereafter	$ 5,429

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)ft²	Mar. 31, 2015USD ($)
Commitments and Contingencies Disclosure [Line Items]
Rent expense | $	$ 0.5	$ 0.4
Washington DC Lease
Commitments and Contingencies Disclosure [Line Items]
Renewal term of Lease agreement	5 years
Square feet leased | ft²	30,260

Commitments and Contingencies48

Commitments and Contingencies (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		12 Months Ended
	Jul. 31, 2013	Feb. 29, 2004	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2006	Mar. 31, 2016	Dec. 31, 2015
HETLIOZ
Milestone obligation under license agreement						$ 25,000	$ 25,000
Percentage of future sublicense fees payable to third-party			Mid-twenties
HETLIOZ
HETLIOZ
Acquisition of intangible assets	$ 3,000	$ 500		$ 8,000	$ 1,000
Milestone obligation under license agreement			$ 25,000
Royalty payable percentage on net sales			10.00%
Cumulative worldwide sales milestone			$ 250,000
Intangible assets capitalized			$ 25,000

Commitments and Contingencies49

Commitments and Contingencies (Textual 3 - Fanapt) - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016USD ($)
Fanapt
Royalty received percentage on net sales	10.00%
Prepaid royalty Payment	$ 2,000,000
Royalty payment period	10 years
Royalty Rate for Annual Sales in up to $200 million through November 2016
Fanapt
Royalty percentage payable on net sales below annual threshold	23.00%
Royalty Rate for Annual Sales in Excess of $200 million through November 2016
Fanapt
Royalty percentage payable on net sales above annual threshold	Mid-twenties
November 16,2016 through December 31,2019
Fanapt
Royalty payable percentage on net sales	3.00%
Maximum
Fanapt
Agreed upon sales threshold level for royalty rate	$ 200,000,000
Fanapt
Fanapt
Royalty payable percentage on net sales	6.00%

Commitments and Contingencies50

Commitments and Contingencies (Textual 4 - Tradipitant) - Additional Information (Detail) - Tradipitant $ in Millions	12 Months Ended
	Dec. 31, 2012USD ($)
Tradipitant
Future percentage of royalty payments based net sales	Low double digits
Possible future milestone payments	$ 4
Milestone payment under license agreement	1
Future Regulatory Approval and Sales Milestones
Tradipitant
Possible future milestone payments	$ 95

Legal Matters - Additional Info

Legal Matters - Additional Information (Detail)	Mar. 04, 2016Case
Roxane Laboratories Inc.
Legal Proceedings [Line Items]
Number of cases that were consolidated	2

Stock-Based Compensation (Textu

Stock-Based Compensation (Textual 1 - Stock-Based Compensation) - Additional Information (Detail)	Jan. 01, 2016shares	Mar. 31, 2016EquityPlanshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity incentive plan | EquityPlan		1
2006 Plan | Outstanding options and RSUs granted (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares subject to outstanding options and RSUs		8,056,668
Shares available for future grant		2,157,668
2006 Plan | January 1, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase each January 1 in the number of shares reserved under 2006 Plan as a percentage of common stock outstanding		4.00%
Maximum increase each January 1 in the number of shares reserved		1,500,000
Increase in number of shares reserved and available for future grant	1,500,000
Number of common stock available for issuance	13,329,472
Equity incentive plan, expiration date		Apr. 12, 2016
Number of additional shares awarded		0

Stock-Based Compensation (Tex53

Stock-Based Compensation (Textual 2 Stock Option) - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation option awards contractual term	10 years
Portion of initial stock options granted to employees that vests on employee's first anniversary	25.00%
Portion of initial stock options granted to employees that vests ratably over three years after completion of first year of service	75.00%
Option awards vesting period, after completion of one year of service	3 years
Vesting period	4 years
Vesting period for initial stock options granted to directors	4 years
Vesting period for subsequent stock options granted to directors	1 year
Proceeds from exercise of employee stock options	$ 24	$ 203
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 13,400
Unrecognized compensation expenses, weighted average period	1 year 6 months

Summary of Option Activity (Det

Summary of Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2014
Number of Shares
Beginning balance	6,252,448
Granted	749,511
Forfeited	(172,735)
Expired	0
Exercised	(6,249)
Ending balance	6,822,975
Exercisable	4,439,627
Vested and expected to vest at March 31, 2016	6,586,275
Weighted Average Exercise Price at Grant Date
Beginning balance	$ 11.87
Granted	7.94
Forfeited	11.16
Expired	0
Exercised	3.82
Ending balance	11.46
Exercisable	12.02
Vested and expected to vest at March 31, 2016	$ 11.52
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	6 years 3 months 11 days	6 years 1 month 28 days
Exercisable	4 years 10 months 6 days
Vested and expected to vest at March 31, 2016	6 years 2 months 1 day
Aggregate Intrinsic Value
Beginning balance	$ 7,498
Exercised	24
Ending balance	5,872
Exercisable	5,074
Vested and expected to vest at March 31, 2016	$ 5,818

Stock-Based Compensation (Tex55

Stock-Based Compensation (Textual 3 RSU) - Additional Information (Detail) - Restricted Stock Units (RSU) $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of RSU awards in equal installments	4 years
Unrecognized compensation expenses, weighted average period	2 years
Unrecognized compensation expenses related to unvested RSUs	$ 11.4
2006 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of common stock vested, shares | shares	287,666
Fair value of common stock vested	$ 2.8

Summary of RSU Activity for 200

Summary of RSU Activity for 2006 Plan (Detail) - 2006 Plan - Restricted Stock Units (RSU)	3 Months Ended
	Mar. 31, 2016$ / sharesshares
Number of Shares Unvested
Beginning balance | shares	1,022,681
Granted | shares	569,242
Forfeited | shares	(70,564)
Vested | shares	(287,666)
Ending balance | shares	1,233,693
Weighted Average Price/Share Unvested
Beginning balance | $ / shares	$ 10.90
Granted | $ / shares	7.96
Forfeited | $ / shares	11.03
Vested | $ / shares	9.65
Ending balance | $ / shares	$ 9.83