Vanda Pharmaceuticals (VNDA) 10-Q 8 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 30, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
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		44,927,525

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 22,586	$ 40,426
Marketable securities	117,295	100,914
Accounts receivable, net	18,179	20,268
Inventory	921	779
Prepaid expenses and other current assets	10,738	11,788
Total current assets	169,719	174,175
Property and equipment, net	5,448	5,015
Intangible assets, net	26,501	27,819
Non-current inventory and other	4,038	3,365
Total assets	205,706	210,374
Current liabilities:
Accounts payable and accrued liabilities	18,921	16,196
Accrued government and other rebates	25,615	34,124
Milestone obligations under license agreements	27,000
Total current liabilities	71,536	50,320
Milestone obligation under license agreement		25,000
Other non-current liabilities	3,701	3,724
Total liabilities	75,237	79,044
Commitments and contingencies (Notes 11 and 13)
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; 44,922,724 and 44,000,614 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	45	44
Additional paid-in capital	489,939	477,087
Accumulated other comprehensive income	73	58
Accumulated deficit	(359,588)	(345,859)
Total stockholders' equity	130,469	131,330
Total liabilities and stockholders' equity	$ 205,706	$ 210,374

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
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	44,922,724	44,000,614
Common stock, shares outstanding	44,922,724	44,000,614

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Net product sales	$ 41,336	$ 38,482	$ 120,807	$ 107,773
Total revenues	41,336	38,482	120,807	107,773
Operating expenses:
Cost of goods sold, excluding amortization	4,525	6,990	13,057	19,440
Research and development	10,178	7,294	28,393	21,542
Selling, general and administrative	31,124	21,908	92,792	75,880
Intangible asset amortization	432	2,943	1,318	8,828
Total operating expenses	46,259	39,135	135,560	125,690
Loss from operations	(4,923)	(653)	(14,753)	(17,917)
Other income	396	223	1,073	511
Loss before income taxes	(4,527)	(430)	(13,680)	(17,406)
Provision for income taxes	23		49
Net loss	$ (4,550)	$ (430)	$ (13,729)	$ (17,406)
Basic and diluted net loss per share	$ (0.10)	$ (0.01)	$ (0.31)	$ (0.40)
Weighted average shares outstanding, basic and diluted	44,885,287	43,515,404	44,669,201	43,275,074

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net loss	$ (4,550)	$ (430)	$ (13,729)	$ (17,406)
Other comprehensive income (loss):
Net foreign currency translation gain	5		26
Change in net unrealized gain (loss) on marketable securities	57	18	(11)	103
Tax provision on other comprehensive income (loss)	0	0	0	0
Other comprehensive income, net of tax	62	18	15	103
Comprehensive loss	$ (4,488)	$ (412)	$ (13,714)	$ (17,303)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2016	44,000,614	44,000,614
Beginning balance at Dec. 31, 2016	$ 131,330	$ 44	$ 477,087	$ 58	$ (345,859)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	5,170	$ 1	5,169
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards (in shares)		922,110
Stock-based compensation expense	7,683		7,683
Net loss	(13,729)				(13,729)
Other comprehensive loss, net of tax	$ 15			15
Ending balance (in shares) at Sep. 30, 2017	44,922,724	44,922,724
Ending balance at Sep. 30, 2017	$ 130,469	$ 45	$ 489,939	$ 73	$ (359,588)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities
Net loss	$ (13,729)	$ (17,406)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	895	654
Stock-based compensation	7,683	6,440
Amortization of (discounts) premiums on marketable securities	(274)	76
Intangible asset amortization	1,318	8,828
Other non-cash adjustments, net	399	483
Changes in operating assets and liabilities:
Accounts receivable	2,089	52
Prepaid expenses and other assets	1,023	(5,399)
Inventory	(896)	63
Accounts payable and accrued liabilities	2,552	1,730
Accrued government and other rebates	(8,509)	(2,441)
Milestone obligation under license agreement	2,000
Net cash used in operating activities	(5,449)	(6,920)
Cash flows from investing activities
Purchases of property and equipment	(1,473)	(710)
Purchases of marketable securities	(109,396)	(130,858)
Maturities of marketable securities	93,277	113,409
Net cash used in investing activities	(17,592)	(18,159)
Cash flows from financing activities
Proceeds from the exercise of stock options	5,170	7,001
Net cash provided by financing activities	5,170	7,001
Effect of foreign currencies on cash and cash equivalents	31
Net decrease in cash and cash equivalents	(17,840)	(18,078)
Cash and cash equivalents
Beginning of period	40,426	50,843
End of period	$ 22,586	$ 32,765

Business Organization and Prese

Business Organization and Presentation	9 Months Ended
	Sep. 30, 2017
Business Organization and Presentation	1. Business Organization and Presentation Business organization Vanda Pharmaceuticals Inc. (the Company) is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. The Company commenced its operations in 2003 and operates in one reporting segment. The Company’s portfolio includes the following products: • HETLIOZ ® Non-24-Hour (Non-24), ® Non-24 ® ® Non-24, • Fanapt ® ® ® ® ® • Tradipitant (VLY-686), neurokinin-1 (NK-1R) • VTR-297 • VQW-765 AQW-051), alpha-7 • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors. 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 S-X. Form 10-K. 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

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2017
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates Inventory Inventory, which is recorded at the lower of cost or net realizable value, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out non-current. Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) 2017 2016 2017 2016 HETLIOZ ® $ 22,279 $ 18,715 $ 64,968 $ 52,376 Fanapt ® 19,057 19,767 55,839 55,397 $ 41,336 $ 38,482 $ 120,807 $ 107,773 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 co-pay Prompt-pay: Rebates: Chargebacks: non-profit Medicare Part D Coverage Gap: Service Fees: Co-payment co-payment Co-pay co-pay 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. Non-Cash The Company recorded purchases of property and equipment and the related current liability in the amount of $0.3 million for the nine months ended September 30, 2016. There were no such purchases for the nine months ended September 30, 2017. Recent accounting pronouncements In November 2016, the FASB issued Accounting Standards Update (ASU) 2016-18, Restricted Cash beginning-of-period end-of-period In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting paid-in In February 2016, the FASB issued ASU 2016-02, Leases right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 2015-14, Revenue from Contracts with Customers 2016-08 Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) 2016-10, Revenue from Contracts with Customers, identifying Performance Obligations and Licensing 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients 2014-09. 2016-08, 2016-10, 2016-12 2014-09 2015-14.

Earnings per Share

Earnings per Share	9 Months Ended
	Sep. 30, 2017
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 and nine months ended September 30, 2017 and 2016: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands, except for share and per share amounts) 2017 2016 2017 2016 Numerator: Net loss $ (4,550 ) $ (430 ) $ (13,729 ) $ (17,406 ) Denominator: Weighted average shares outstanding, basic and diluted 44,885,287 43,515,404 44,669,201 43,275,074 Net loss per share, basic and diluted: $ (0.10 ) $ (0.01 ) $ (0.31 ) $ (0.40 ) Antidilutive securities excluded from calculations of diluted net loss per share 3,110,823 3,845,456 3,227,011 5,298,256 The Company incurred net losses for the three and nine months ended September 30, 2017 and 2016 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	9 Months Ended
	Sep. 30, 2017
Marketable Securities	4. Marketable Securities The following is a summary of the Company’s available-for-sale Gross Gross Fair September 30, 2017 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 58,696 $ — $ (22 ) $ 58,674 Corporate debt 58,551 73 (3 ) 58,621 $ 117,247 $ 73 $ (25 ) $ 117,295 The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2016 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 50,661 $ 3 $ (17 ) $ 50,647 Corporate debt 50,194 89 (16 ) 50,267 $ 100,855 $ 92 $ (33 ) $ 100,914

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2017
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 September 30, 2017 and December 31, 2016 consist of available-for-sale As of September 30, 2017, 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 September 30, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs (in thousands) 2017 (Level 1) (Level 2) (Level 3) Available-for-sale U.S. Treasury and government agencies $ 58,674 $ 58,674 $ — $ — Corporate debt 58,621 — 58,621 — $ 117,295 $ 58,674 $ 58,621 $ — As of December 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 December 31, 2016 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2016 (Level 1) (Level 2) (Level 3) Available-for-sale U.S. Treasury and government agencies $ 50,647 $ 50,647 $ — $ — Corporate debt 50,267 — 50,267 — $ 100,914 $ 50,647 $ 50,267 $ — 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 values of which materially approximate their fair values.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2017
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. September 30, December 31, (in thousands) 2017 2016 Current assets Work-in-process $ 63 $ 17 Finished goods 858 762 $ 921 $ 779 Non-Current Raw materials $ 87 $ 127 Work-in-process 2,736 2,225 Finished goods 310 83 $ 3,133 $ 2,435

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	9 Months Ended
	Sep. 30, 2017
Prepaid Expenses and Other Current Assets	7. Prepaid Expenses and Other Current Assets The following is a summary of the Company’s prepaid expenses and other current assets as of September 30, 2017 and December 31, 2016: September 30, December 31, (in thousands) 2017 2016 Research and development expenses $ 2,218 $ 2,397 Consulting and other professional fees 5,748 6,051 Prepaid royalties 25 1,761 Other 2,747 1,579 $ 10,738 $ 11,788

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	9 Months Ended
	Sep. 30, 2017
Accounts Payable and Accrued Liabilities	8. Accounts Payable and Accrued Liabilities The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2017 and December 31, 2016: September 30, December 31, (in thousands) 2017 2016 Research and development expenses $ 4,819 $ 3,024 Consulting and other professional fees 3,820 3,192 Compensation and employee benefits 4,767 4,291 Royalties payable 3,576 4,555 Other 1,939 1,134 $ 18,921 $ 16,196

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2017
Intangible Assets	9. Intangible Assets The following is a summary of the Company’s intangible assets as of September 30, 2017: September 30, 2017 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 6,499 $ 26,501 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 34,440 $ 26,501 The following is a summary of the Company’s intangible assets as of December 31, 2016: December 31, 2016 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 5,181 $ 27,819 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 33,122 $ 27,819 HETLIOZ ® . ® ® The Company is obligated to make a future milestone payment to BMS of $25.0 million when cumulative worldwide sales of HETLIOZ ® non-current ® ® Fanapt ® ® ® Pursuant to a settlement agreement in December 2014, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® ® Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense was $0.4 million and $2.9 million for the three months ended September 30, 2017 and 2016, respectively. Amortization expense was $1.3 million and $8.8 million for the nine months ended September 30, 2017 and 2016, respectively. The following is a summary of the future intangible asset amortization schedule as of September 30, 2017: (in thousands) Total 2017 2018 2019 2020 2021 Thereafter HETLIOZ ® $ 26,501 $ 432 $ 1,728 $ 1,728 $ 1,728 $ 1,728 $ 19,157

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2017
Income Taxes	10. Income Taxes Deferred tax assets are reduced by a tax 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 pretax losses in the U.S. serves as strong evidence that it is more likely than not that deferred tax assets in the U.S. will not be realized in the future. Therefore, the Company had a full tax valuation allowance against all deferred tax assets in the U.S. as of September 30, 2017 and December 31, 2016. As a result of the tax valuation allowance against deferred tax assets in the U.S., the provision or benefit for income taxes for the three and nine months ended September 30, 2017 and 2016 was not material. Certain tax attributes of the Company, including net operating losses (NOLs) and credits, would be subject to a limitation should an ownership change as defined under the Internal Revenue Code of 1986, as amended (IRC), Section 382, occur. The limitations resulting from a change in ownership could affect the Company’s ability to utilize its NOLs and credit carryforward (tax attributes). Ownership changes occurred in the years ending December 31, 2014 and December 31, 2008. However, the Company believes that the IRC Section 382 limitations calculated in 2014 and 2008 will not impact its ability to utilize NOL and credit carryforwards prior to their expiration. 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 U.S. tax attributes, therefore, any IRC Section 382 limitation would not have a material impact on the Company’s provision for income taxes for the three and nine months ended September 30, 2017.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies	11. Commitments and Contingencies Operating leases Commitments relating to operating leases represent the minimum annual future payments under operating leases and subleases for a total of 40,188 square feet of office space for the Company’s headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. that expire in 2026, the operating lease for 2,880 square feet of office space for the Company’s European headquarters in London that has a noncancellable lease term ending in 2021, and 1,249 square feet of office space in Berlin under a short-term operating lease. The following is a summary of the minimum annual future payments under operating leases and subleases for office space as of September 30, 2017: Cash payments due by year (in thousands) Total 2017 2018 2019 2020 2021 Thereafter Operating leases $ 20,367 $ 585 $ 2,308 $ 2,293 $ 2,349 $ 2,174 $ 10,658 In 2011, the Company entered into an operating lease for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. A lease amendment in 2014 increased the office space under lease to 30,260 square feet, and a lease amendment in June 2016 extended the lease term from April 2023 to September 2026. Subject to the prior rights of other tenants, 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 under certain circumstances. In June 2016, the Company entered into a sublease under which the Company leases 9,928 square feet of office space for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. The sublease term began in January 2017 and ends in July 2026, but may be terminated earlier by either party under certain circumstances. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. Rent expense under operating leases was $0.8 million and $0.7 million for the three months ended September 30, 2017 and 2016, respectively. Rent expense under operating leases was $2.4 million and $1.7 million for the nine months ended September 30, 2017 and 2016, 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 ® . ® ® ® ® ® ® ® mid-twenties. ® ® Either party may terminate the HETLIOZ ® Fanapt ® . ® ® mid-twenties ® know-how. know-how pre-payment. know-how ® know-how Tradipitant. NK-1R pre-NDA pre-NDA VQW-765 AQW-051). ® VQW-765, alpha-7 VQW-765 mid-teens. Portfolio of CFTR activators and inhibitors pre-investigational 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.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2017
Stock-Based Compensation	12. Stock-Based Compensation As of September 30, 2017, there were 6,124,336 shares that were subject to outstanding options and RSUs under the 2006 Equity Incentive Plan (the 2006 Plan) and the 2016 Equity Incentive Plan (the 2016 Plan, and together with the 2006 Plan, the Plans). The 2006 Plan expired by its terms on April 12, 2016, and the Company adopted the 2016 Plan. Outstanding options and RSUs under the 2006 Plan remain in effect and the terms of the 2006 Plan continue to apply, but no additional awards can be granted under the 2006 Plan. In June 2016, the Company’s stockholders approved the 2016 Plan under which 2,000,000 shares of common stock were reserved for issuance. In June 2017, the Company’s stockholders approved the amendment and restatement of the 2016 Plan pursuant to which an additional 2,700,000 shares were reserved for issuance, among other administrative changes. As a result, there are a total of 4,700,000 shares of common stock reserved for issuance under the 2016 Plan, 3,170,757 shares of which remained available for future grant as of September 30, 2017. Stock Options The Company has granted option awards under the Plans with service conditions (service option awards) that are subject to terms and conditions established by the compensation committee of the board of directors. Service option awards have 10-year A summary of option activity under the Plans for the nine months ended September 30, 2017 follows: Weighted Average Weighted Average Aggregate 2006 and 2016 Plans Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2016 5,548,336 $ 11.62 5.58 $ 32,453 Granted 643,000 14.44 Forfeited (268,251 ) 10.65 Expired (605,617 ) 29.87 Exercised (565,983 ) 9.14 3,095 Outstanding at September 30, 2017 4,751,485 10.03 5.90 37,386 Exercisable at September 30, 2017 3,380,490 9.23 4.85 29,308 Vested and expected to vest at September 30, 2017 4,573,625 9.92 5.80 36,490 The weighted average grant-date fair value of options granted was $7.81 and $4.51 per share for the nine months ended September 30, 2017 and 2016, respectively. Proceeds from the exercise of stock options amounted to $5.2 million and $7.0 million for the nine months ended September 30, 2017 and 2016, respectively. Restricted Stock Units An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs under the Plans with service conditions (service RSUs) that vest in four equal annual installments provided that the employee remains employed with the Company. As of September 30, 2017, $13.8 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.7 years. No RSUs are classified as a liability as of September 30, 2017. A summary of RSU activity under the Plans for the nine months ended September 30, 2017 follows: Number of Weighted Shares Average Underlying Grant Date 2006 and 2016 Plans RSUs Fair Value Unvested at December 31, 2016 1,138,428 $ 10.07 Granted 839,336 14.56 Forfeited (248,786 ) 11.28 Vested (356,127 ) 9.67 Unvested at September 30, 2017 1,372,851 12.70 The grant date fair value for the 356,127 shares underlying RSUs that vested during the nine months ended September 30, 2017 was $3.4 million. Stock-Based Compensation Stock-based compensation expense recognized for the three and nine months ended September 30, 2017 and 2016 was comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) 2017 2016 2017 2016 Research and development $ 264 $ 539 $ 958 $ 1,552 Selling, general and administrative 2,507 1,561 6,725 4,888 $ 2,771 $ 2,100 $ 7,683 $ 6,440 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 stock options granted during the nine months ended September 30, 2017 and 2016 were as follows: Nine Months Ended September 30, September 30, 2017 2016 Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 57 % Weighted average expected term (years) 5.89 6.10 Weighted average risk-free rate 1.97 % 1.37 %

Legal Matters

Legal Matters	9 Months Ended
	Sep. 30, 2017
Legal Matters	13. 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 ® ® five-day In 2015, the Company filed six separate patent infringement lawsuits in the Delaware District Court against Roxane, Inventia Healthcare Pvt. Ltd. (Inventia), Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin), Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd. (Taro), and Apotex Inc. and Apotex Corp. (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 an ANDA for a generic version of Fanapt ® Lupin filed counter claims for declaratory judgment of invalidity and noninfringement of seven of the Company’s method of treatment patents that are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations ® On October 24, 2016, the Company entered into a License Agreement with Taro to resolve the Company’s patent litigation against Taro regarding Taro’s ANDA seeking approval of its generic version of Fanapt ® non-exclusive ® ® On December 7, 2016, the Company entered into a License Agreement with Apotex to resolve the Company’s patent litigation against Apotex regarding Apotex’s ANDA seeking approval of its generic version of Fanapt ® non-exclusive ® ® On February 26, 2016, Roxane filed suit against the Company in the U.S. District Court for the Southern District of Ohio (the Ohio District Court). The suit sought 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 to transfer the lawsuit to the Delaware District Court. On December 20, 2016, the Ohio District Court ruled in the Company’s favor, dismissing Roxane’s suit without prejudice for lack of personal jurisdiction. On February 26, 2016, Roxane filed a Petition for Inter Partes

Business Organization and Pre21

Business Organization and Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
Business organization	Business organization Vanda Pharmaceuticals Inc. (the Company) is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. The Company commenced its operations in 2003 and operates in one reporting segment. The Company’s portfolio includes the following products: • HETLIOZ ® Non-24-Hour (Non-24), ® Non-24 ® ® Non-24, • Fanapt ® ® ® ® ® • Tradipitant (VLY-686), neurokinin-1 (NK-1R) • VTR-297 • VQW-765 AQW-051), alpha-7 • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors.
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 S-X. Form 10-K. 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
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates
Inventory	Inventory Inventory, which is recorded at the lower of cost or net realizable value, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out non-current.
Revenue from Net Product Sales	Revenue from Net Product Sales The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) 2017 2016 2017 2016 HETLIOZ ® $ 22,279 $ 18,715 $ 64,968 $ 52,376 Fanapt ® 19,057 19,767 55,839 55,397 $ 41,336 $ 38,482 $ 120,807 $ 107,773 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 co-pay Prompt-pay: Rebates: Chargebacks: non-profit Medicare Part D Coverage Gap: Service Fees: Co-payment co-payment Co-pay co-pay 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.
Non-Cash Investing and Financing Activities	Non-Cash The Company recorded purchases of property and equipment and the related current liability in the amount of $0.3 million for the nine months ended September 30, 2016. There were no such purchases for the nine months ended September 30, 2017.
Recent accounting pronouncements	Recent accounting pronouncements In November 2016, the FASB issued Accounting Standards Update (ASU) 2016-18, Restricted Cash beginning-of-period end-of-period In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting paid-in In February 2016, the FASB issued ASU 2016-02, Leases right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 2015-14, Revenue from Contracts with Customers 2016-08 Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net) 2016-10, Revenue from Contracts with Customers, identifying Performance Obligations and Licensing 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients 2014-09. 2016-08, 2016-10, 2016-12 2014-09 2015-14.

Summary of Significant Accoun22

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2017
Revenue From Net Sales by Product	The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) 2017 2016 2017 2016 HETLIOZ ® $ 22,279 $ 18,715 $ 64,968 $ 52,376 Fanapt ® 19,057 19,767 55,839 55,397 $ 41,336 $ 38,482 $ 120,807 $ 107,773

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Sep. 30, 2017
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 and nine months ended September 30, 2017 and 2016: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands, except for share and per share amounts) 2017 2016 2017 2016 Numerator: Net loss $ (4,550 ) $ (430 ) $ (13,729 ) $ (17,406 ) Denominator: Weighted average shares outstanding, basic and diluted 44,885,287 43,515,404 44,669,201 43,275,074 Net loss per share, basic and diluted: $ (0.10 ) $ (0.01 ) $ (0.31 ) $ (0.40 ) Antidilutive securities excluded from calculations of diluted net loss per share 3,110,823 3,845,456 3,227,011 5,298,256

Marketable Securities (Tables)

Marketable Securities (Tables)	9 Months Ended
	Sep. 30, 2017
Summary of Available-for-Sale Marketable Securities	The following is a summary of the Company’s available-for-sale Gross Gross Fair September 30, 2017 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 58,696 $ — $ (22 ) $ 58,674 Corporate debt 58,551 73 (3 ) 58,621 $ 117,247 $ 73 $ (25 ) $ 117,295 The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2016 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 50,661 $ 3 $ (17 ) $ 50,647 Corporate debt 50,194 89 (16 ) 50,267 $ 100,855 $ 92 $ (33 ) $ 100,914

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2017
Assets Measured at Fair Value on Recurring Basis	As of September 30, 2017, 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 September 30, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable September 30, Identical Assets Observable Inputs Inputs (in thousands) 2017 (Level 1) (Level 2) (Level 3) Available-for-sale U.S. Treasury and government agencies $ 58,674 $ 58,674 $ — $ — Corporate debt 58,621 — 58,621 — $ 117,295 $ 58,674 $ 58,621 $ — As of December 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 December 31, 2016 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2016 (Level 1) (Level 2) (Level 3) Available-for-sale U.S. Treasury and government agencies $ 50,647 $ 50,647 $ — $ — Corporate debt 50,267 — 50,267 — $ 100,914 $ 50,647 $ 50,267 $ —

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2017
Inventory	Inventory consisted of the following as of September 30, 2017 and December 31, 2016: September 30, December 31, (in thousands) 2017 2016 Current assets Work-in-process $ 63 $ 17 Finished goods 858 762 $ 921 $ 779 Non-Current Raw materials $ 87 $ 127 Work-in-process 2,736 2,225 Finished goods 310 83 $ 3,133 $ 2,435

Prepaid Expenses and Other Cu27

Prepaid Expenses and Other Current Assets (Tables)	9 Months Ended
	Sep. 30, 2017
Summary of Prepaid Expenses, and Other Current Assets	The following is a summary of the Company’s prepaid expenses and other current assets as of September 30, 2017 and December 31, 2016: September 30, December 31, (in thousands) 2017 2016 Research and development expenses $ 2,218 $ 2,397 Consulting and other professional fees 5,748 6,051 Prepaid royalties 25 1,761 Other 2,747 1,579 $ 10,738 $ 11,788

Accounts Payable and Accrued 28

Accounts Payable and Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2017
Summary of Accounts Payable and Accrued Liabilities	The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2017 and December 31, 2016: September 30, December 31, (in thousands) 2017 2016 Research and development expenses $ 4,819 $ 3,024 Consulting and other professional fees 3,820 3,192 Compensation and employee benefits 4,767 4,291 Royalties payable 3,576 4,555 Other 1,939 1,134 $ 18,921 $ 16,196

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2017
Summary of Intangible Assets	The following is a summary of the Company’s intangible assets as of September 30, 2017: September 30, 2017 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 6,499 $ 26,501 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 34,440 $ 26,501 The following is a summary of the Company’s intangible assets as of December 31, 2016: December 31, 2016 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 5,181 $ 27,819 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 33,122 $ 27,819
Summary of Future Intangible Asset Amortization	The following is a summary of the future intangible asset amortization schedule as of September 30, 2017: (in thousands) Total 2017 2018 2019 2020 2021 Thereafter HETLIOZ ® $ 26,501 $ 432 $ 1,728 $ 1,728 $ 1,728 $ 1,728 $ 19,157

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2017
Summary of Minimum Annual Future Payments under Operating Leases and Subleases	The following is a summary of the minimum annual future payments under operating leases and subleases for office space as of September 30, 2017: Cash payments due by year (in thousands) Total 2017 2018 2019 2020 2021 Thereafter Operating leases $ 20,367 $ 585 $ 2,308 $ 2,293 $ 2,349 $ 2,174 $ 10,658

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2017
Summary of Option Activity Plan	A summary of option activity under the Plans for the nine months ended September 30, 2017 follows: Weighted Average Weighted Average Aggregate 2006 and 2016 Plans Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2016 5,548,336 $ 11.62 5.58 $ 32,453 Granted 643,000 14.44 Forfeited (268,251 ) 10.65 Expired (605,617 ) 29.87 Exercised (565,983 ) 9.14 3,095 Outstanding at September 30, 2017 4,751,485 10.03 5.90 37,386 Exercisable at September 30, 2017 3,380,490 9.23 4.85 29,308 Vested and expected to vest at September 30, 2017 4,573,625 9.92 5.80 36,490
Summary of RSU Activity Plan	A summary of RSU activity under the Plans for the nine months ended September 30, 2017 follows: Number of Weighted Shares Average Underlying Grant Date 2006 and 2016 Plans RSUs Fair Value Unvested at December 31, 2016 1,138,428 $ 10.07 Granted 839,336 14.56 Forfeited (248,786 ) 11.28 Vested (356,127 ) 9.67 Unvested at September 30, 2017 1,372,851 12.70
Stock-Based Compensation Expense	Stock-based compensation expense recognized for the three and nine months ended September 30, 2017 and 2016 was comprised of the following: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (in thousands) 2017 2016 2017 2016 Research and development $ 264 $ 539 $ 958 $ 1,552 Selling, general and administrative 2,507 1,561 6,725 4,888 $ 2,771 $ 2,100 $ 7,683 $ 6,440
Black-Scholes-Merton Option Pricing Model for Employee and Director Stock Options Granted	Assumptions used in the Black-Scholes-Merton option pricing model for stock options granted during the nine months ended September 30, 2017 and 2016 were as follows: Nine Months Ended September 30, September 30, 2017 2016 Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 57 % Weighted average expected term (years) 5.89 6.10 Weighted average risk-free rate 1.97 % 1.37 %

Business Organization and Pre32

Business Organization and Presentation - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2017Segment
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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue from External Customer [Line Items]
Net product sales	$ 41,336	$ 38,482	$ 120,807	$ 107,773
HETLIOZ
Revenue from External Customer [Line Items]
Net product sales	22,279	18,715	64,968	52,376
Fanapt
Revenue from External Customer [Line Items]
Net product sales	$ 19,057	$ 19,767	$ 55,839	$ 55,397

Summary of Significant Accoun34

Summary of Significant Accounting Policies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2017USD ($)Customer	Sep. 30, 2016USD ($)
Summary Of Significant Accounting Policies [Line Items]
Percentage of insurance coverage gap allocated for prescription drugs under Medicare Part D	50.00%
Purchases of property, plant and equipment and the related current liability | $	$ 0	$ 300,000
Customer Concentration Risk | Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	86.00%
Number of major customers that each accounted for more than 10% of total revenues	5
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	95.00%
Number of major customers that each accounted for more than 10% of total accounts receivable	6

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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Numerator:
Net loss	$ (4,550)	$ (430)	$ (13,729)	$ (17,406)
Denominator:
Weighted average shares outstanding, basic and diluted	44,885,287	43,515,404	44,669,201	43,275,074
Net loss per share, basic and diluted:	$ (0.10)	$ (0.01)	$ (0.31)	$ (0.40)
Antidilutive securities excluded from calculations of diluted net loss per share	3,110,823	3,845,456	3,227,011	5,298,256

Summary of Available-For-Sale M

Summary of Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	$ 117,295	$ 100,914
U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	58,674	50,647
Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	58,621	50,267
Current Investment
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	117,247	100,855
Gross Unrealized Gains	73	92
Gross Unrealized Losses	(25)	(33)
Fair Market Value	117,295	100,914
Current Investment | U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	58,696	50,661
Gross Unrealized Gains		3
Gross Unrealized Losses	(22)	(17)
Fair Market Value	58,674	50,647
Current Investment | Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	58,551	50,194
Gross Unrealized Gains	73	89
Gross Unrealized Losses	(3)	(16)
Fair Market Value	$ 58,621	$ 50,267

Assets Measured at Fair Value o

Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 117,295	$ 100,914
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	58,674	50,647
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	58,621	50,267
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	58,674	50,647
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	58,674	50,647
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	58,621	50,267
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	$ 58,621	$ 50,267

Inventory (Detail)

Inventory (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets
Work-in-process	$ 63	$ 17
Finished goods	858	762
Total	921	779
Non-Current assets
Raw materials	87	127
Work-in-process	2,736	2,225
Finished goods	310	83
Total	$ 3,133	$ 2,435

Summary of Prepaid Expenses and

Summary of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Prepaid Expenses And Other Current Assets [Line Items]
Research and development expenses	$ 2,218	$ 2,397
Consulting and other professional fees	5,748	6,051
Prepaid royalties	25	1,761
Other	2,747	1,579
Prepaid expenses and other current assets	$ 10,738	$ 11,788

Summary of Accounts Payable and

Summary of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Accounts Payable and Accrued Liabilities [Line Items]
Research and development expenses	$ 4,819	$ 3,024
Consulting and other professional fees	3,820	3,192
Compensation and employee benefits	4,767	4,291
Royalties payable	3,576	4,555
Other	1,939	1,134
Accounts payable and accrued liabilities	$ 18,921	$ 16,196

Summary of Intangible Assets (D

Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 60,941	$ 60,941
Accumulated Amortization	34,440	33,122
Net Carrying Amount	$ 26,501	$ 27,819
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated future useful life	2033-01	2033-01
Gross Carrying Amount	$ 33,000	$ 33,000
Accumulated Amortization	6,499	5,181
Net Carrying Amount	$ 26,501	$ 27,819
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	$ 27,941	$ 27,941

Intangible Assets (Textual 2 -

Intangible Assets (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Sep. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Milestone obligation under license agreement			$ 27,000
Milestone obligation under license agreement, non-current				$ 25,000
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets		$ 8,000
Intangible assets, estimated future useful life			2033-01	2033-01
Cumulative worldwide sales milestone			$ 250,000
Milestone obligation under license agreement			25,000
Milestone obligation under license agreement, non-current				$ 25,000
Intangible assets capitalized	$ 25,000		$ 25,000

Intangible Assets (Textual 3 -

Intangible Assets (Textual 3 - Fanapt) - Additional Information (Detail) - Fanapt - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016	Dec. 31, 2009	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets			$ 12
Intangible assets, estimated useful life	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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 432	$ 2,943	$ 1,318	$ 8,828

Summary of Future Intangible As

Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Total	$ 26,501	$ 27,819
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Total	26,501	$ 27,819
2,017	432
2,018	1,728
2,019	1,728
2,020	1,728
2,021	1,728
Thereafter	$ 19,157

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2017USD ($)ft²	Sep. 30, 2016USD ($)
Commitments and Contingencies Disclosure [Line Items]
Rent expense | $	$ 0.8	$ 0.7	$ 2.4	$ 1.7
Washington DC Leases and Sublease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage			40,188
Expiration date of leases for office space			2,026
Washington DC Leases and Sublease | Sublease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage			9,928
Washington DC Lease Amendment
Commitments and Contingencies Disclosure [Line Items]
Leased square footage			30,260
Renewal term of lease agreement			5 years
London Lease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage			2,880
Noncancellable lease term ending date			2,021
Berlin Lease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage			1,249

Summary of Minimum Annual Futur

Summary of Minimum Annual Future Payments Under Operating Leases and Subleases for Office Space (Detail) $ in Thousands	Sep. 30, 2017USD ($)
Operating Leased Assets [Line Items]
Operating leases, Total	$ 20,367
Operating leases, 2017	585
Operating leases, 2018	2,308
Operating leases, 2019	2,293
Operating leases, 2020	2,349
Operating leases, 2021	2,174
Operating leases, Thereafter	$ 10,658

Commitments and Contingencies48

Commitments and Contingencies (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Sep. 30, 2017
HETLIOZ
Percentage of future sublicense fees payable to third-party			Mid-twenties
HETLIOZ
HETLIOZ
Acquisition of intangible assets		$ 8
Milestone obligation under license agreement			$ 25
Royalty payable percentage on net sales			10.00%
Cumulative worldwide sales milestone			$ 250
Intangible assets capitalized	$ 25		$ 25

Commitments and Contingencies49

Commitments and Contingencies (Textual 3 - Fanapt) - Additional Information (Detail) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Fanapt
Prepaid royalty	$ 25,000	$ 1,761,000
Royalty Rate for Annual Sales up to $200 million through November 2016
Fanapt
Royalty percentage payable on net sales below annual threshold		23.00%
Royalty Rate for Annual Sales up to $200 million through November 2016 | Maximum
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
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
Royalty Rate for Annual Sales in Excess of $200 million through November 2016 | Maximum
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
November 16,2016 through December 31,2019
Fanapt
Royalty payable percentage on net sales		3.00%
Prepaid royalty		$ 2,000,000
Fanapt
Fanapt
Royalty payable percentage on net sales	6.00%
Royalty payment period	10 years

Commitments and Contingencies50

Commitments and Contingencies (Textual 4 - Tradipitant) - Additional Information (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement, current	$ 27,000
Tradipitant
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	Low double digits
Possible future milestone payments	$ 4,000
Milestone obligation under license agreement, current	2,000
Tradipitant | Research and development
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement	2,000
Tradipitant | Development and Milestone Payments of Phase III Study Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payments	2,000
Tradipitant | Development and Milestone Payment for First Marketing Authorization Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payments	2,000
Tradipitant | Future Regulatory Approval and Sales Milestones
Commitments and Contingencies [Line Items]
Possible future milestone payments	$ 95,000

Commitments and Contingencies51

Commitments and Contingencies (Textual 5 - CFTR Activators and Inhibitors - Additional Information (Detail) - CFTR Activators and Inhibitors - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Mar. 31, 2017	Sep. 30, 2017
CFTR activators and inhibitors
Milestone payment under license agreement	$ 1
Possible future milestone payments		$ 46
Tiered royalties payable on future net sales		Single-digit

Stock-Based Compensation (Textu

Stock-Based Compensation (Textual 1 - Stock-Based Compensation) - Additional Information (Detail) - shares	9 Months Ended
	Sep. 30, 2017	Jun. 30, 2016
2006 Plan and 2016 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	6,124,336
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance	4,700,000	2,000,000
Number of shares of common stock available for future grant	3,170,757
2016 Plan Amendment
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance	2,700,000

Stock-Based Compensation (Tex53

Stock-Based Compensation (Textual 2 Stock Option) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
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	$ 5,170	$ 7,001
Options granted, weighted average fair value per share	$ 7.81	$ 4.51
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 8,600
Unrecognized compensation expenses, weighted average period	1 year 3 months 19 days

Summary of Option Activity for

Summary of Option Activity for 2006 Plan and the 2016 Plan (Detail) - 2006 Plan and 2016 Plan - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Number of Shares
Beginning balance	5,548,336
Granted	643,000
Forfeited	(268,251)
Expired	(605,617)
Exercised	(565,983)
Ending balance	4,751,485	5,548,336
Exercisable	3,380,490
Vested and expected to vest at September 30, 2017	4,573,625
Weighted Average Exercise Price at Grant Date
Beginning balance	$ 11.62
Granted	14.44
Forfeited	10.65
Expired	29.87
Exercised	9.14
Ending balance	10.03	$ 11.62
Exercisable	9.23
Vested and expected to vest at September 30, 2017	$ 9.92
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	5 years 10 months 25 days	5 years 6 months 29 days
Exercisable	4 years 10 months 6 days
Vested and expected to vest at September 30, 2017	5 years 9 months 18 days
Aggregate Intrinsic Value
Beginning balance	$ 32,453
Exercised	3,095
Ending balance	37,386	$ 32,453
Exercisable	29,308
Vested and expected to vest at September 30, 2017	$ 36,490

Stock-Based Compensation (Tex55

Stock-Based Compensation (Textual 3 RSU) - Additional Information (Detail) - Restricted Stock Units (RSU) $ in Millions	9 Months Ended
	Sep. 30, 2017USD ($)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	1 year 8 months 12 days
Unrecognized compensation expenses related to unvested RSUs	$ 13.8
Grant date fair value of common stock vested, shares | shares	356,127
Grant date fair value of common stock vested	$ 3.4

Summary of RSU Activity Plan (D

Summary of RSU Activity Plan (Detail) - Restricted Stock Units (RSU)	9 Months Ended
	Sep. 30, 2017$ / sharesshares
Number of Shares Unvested
Beginning balance | shares	1,138,428
Granted | shares	839,336
Forfeited | shares	(248,786)
Vested | shares	(356,127)
Ending balance | shares	1,372,851
Weighted Average Price/Share Unvested
Beginning balance | $ / shares	$ 10.07
Granted | $ / shares	14.56
Forfeited | $ / shares	11.28
Vested | $ / shares	9.67
Ending balance | $ / shares	$ 12.70

Total Stock-Based Compensation

Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,771	$ 2,100	$ 7,683	$ 6,440
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	264	539	958	1,552
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,507	$ 1,561	$ 6,725	$ 4,888

Black-Scholes-Merton Option Pri

Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]
Expected dividend yield	0.00%	0.00%
Weighted average expected volatility	57.00%	57.00%
Weighted average expected term (years)	5 years 10 months 21 days	6 years 1 month 6 days
Weighted average risk-free rate	1.97%	1.37%