Vanda Pharmaceuticals (VNDA) 10-Q 2 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 19, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
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	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		52,110,701

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 155,293	$ 33,627
Marketable securities	93,541	109,786
Accounts receivable, net	23,314	17,601
Inventory	1,011	840
Prepaid expenses and other current assets	9,276	8,003
Total current assets	282,435	169,857
Property and equipment, net	5,105	5,306
Intangible assets, net	25,717	26,069
Non-current inventory and other	4,058	4,193
Total assets	317,315	205,425
Current liabilities:
Accounts payable and accrued liabilities	17,242	20,335
Product revenue allowances	27,713	23,028
Milestone obligations under license agreements	27,000	27,000
Total current liabilities	71,955	70,363
Other non-current liabilities	4,216	3,675
Total liabilities	76,171	74,038
Commitments and contingencies (Notes 8 and 14)
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; 52,109,701 and 44,938,133 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively	52	45
Additional paid-incapital	599,480	492,802
Accumulated other comprehensive loss	(28)	(34)
Accumulated deficit	(358,360)	(361,426)
Total stockholders' equity	241,144	131,387
Total liabilities and stockholders' equity	$ 317,315	$ 205,425

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
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	52,109,701	44,938,133
Common stock, shares outstanding	52,109,701	44,938,133

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues:
Net product sales	$ 43,592	$ 37,415
Total revenues	43,592	37,415
Operating expenses:
Cost of goods sold, excluding amortization	4,560	4,003
Research and development	9,416	10,567
Selling, general and administrative	26,822	30,297
Intangible asset amortization	352	454
Total operating expenses	41,150	45,321
Income (loss) from operations	2,442	(7,906)
Other income	622	280
Income (loss) before income taxes	3,064	(7,626)
Provision (benefit) for income taxes	(2)	19
Net income (loss)	$ 3,066	$ (7,645)
Net income (loss) per share:
Basic	$ 0.07	$ (0.17)
Diluted	$ 0.06	$ (0.17)
Weighted average shares outstanding:
Basic	46,336,430	44,398,359
Diluted	48,225,041	44,398,359

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net income (loss)	$ 3,066	$ (7,645)
Other comprehensive income (loss):
Net foreign currency translation gain	12	4
Change in net unrealized gain (loss) on marketable securities	(6)	(12)
Tax provision on other comprehensive income (loss)	0	0
Other comprehensive income (loss), net of tax	6	(8)
Comprehensive income (loss)	$ 3,072	$ (7,653)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017	44,938,133	44,938,133
Beginning balance at Dec. 31, 2017	$ 131,387	$ 45	$ 492,802	$ (34)	$ (361,426)
Net proceeds from public offering of common stock	100,868	$ 6	100,862
Net proceeds from public offering of common stock (in shares)		6,325,000
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	2,666	$ 1	2,665
Issuance of common stock form the exercise of stock options and settlement of restricted stock awards (in shares)		846,568
Stock-based compensation expense	3,151		3,151
Net income	3,066				3,066
Other comprehensive income, net of tax	$ 6			6
Ending balance (in shares) at Mar. 31, 2018	52,109,701	52,109,701
Ending balance at Mar. 31, 2018	$ 241,144	$ 52	$ 599,480	$ (28)	$ (358,360)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities
Net income (loss)	$ 3,066	$ (7,645)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	349	250
Stock-based compensation	3,151	2,256
Amortization of (discounts) premiums on marketable securities	(208)	(53)
Intangible asset amortization	352	454
Other non-cash adjustments, net	(113)	133
Changes in operating assets and liabilities:
Accounts receivable	(5,713)	2,516
Prepaid expenses and other assets	(1,263)	(446)
Inventory	63	(83)
Accounts payable and accrued liabilities	(2,731)	1,442
Product revenue allowances	4,685	(4,181)
Net cash provided by (used in) operating activities	1,638	(5,357)
Cash flows from investing activities
Purchases of property and equipment	(135)	(478)
Purchases of marketable securities	(30,433)	(53,467)
Maturities of marketable securities	46,880	36,777
Net cash provided by (used in) investing activities	16,312	(17,168)
Cash flows from financing activities
Net proceeds from offering of common stock	101,068
Proceeds from the exercise of stock options	2,666	2,209
Net cash provided by financing activities	103,734	2,209
Effect of exchange rate changes on cash, cash equivalents and restricted cash	18	1
Net change in cash, cash equivalents and restricted cash	121,702	(20,315)
Cash, cash equivalents and restricted cash
Beginning of period	34,335	41,256
End of period	$ 156,037	$ 20,941

Business Organization and Prese

Business Organization and Presentation	3 Months Ended
	Mar. 31, 2018
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, 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	3 Months Ended
	Mar. 31, 2018
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 Revenue Recognition In accordance with Accounting Standards Codification (ASC) Subtopic 606 Revenue from Contracts with Customers The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended March 31, March 31, (in thousands) 2018 2017 HETLIOZ ® $ 25,423 $ 20,182 Fanapt ® 18,169 17,233 $ 43,592 $ 37,415 Major Customers HETLIOZ ® ® Reserves for Variable Consideration The transaction price is determined based upon the consideration to which the Company will be entitled in exchange for transferring product to the customer. The Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method and updates its estimate at each reporting date. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay co-pay prompt-pay non-current Prompt-pay: Rebates: Chargebacks: non-profit Medicare Part D Coverage Gap: Service Fees: Co-payment co-payment Co-pay Product Returns Non-Cash For the three months ended March 31, 2018 and 2017, the Company recorded purchases of property, plant and equipment and the related current liability in the amount of zero and $0.4 million, respectively. For the three months ended March 31, 2018, the Company accrued $0.2 million in expense associated with the March 2018 public offering of common stock. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, Restricted Cash beginning-of-period end-of-period non-current 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 February 2016, the FASB issued ASU 2016-02, Leases right-of-use right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition 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 2014-09. 2016-08, 2016-10, 2016-12 2014-09 2015-14. non-current

Marketable Securities

Marketable Securities	3 Months Ended
	Mar. 31, 2018
Marketable Securities	3. Marketable Securities The following is a summary of the Company’s available-for-sale Gross Gross Fair March 31, 2018 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 53,682 $ — $ (82 ) $ 53,600 Corporate debt 39,928 30 (17 ) 39,941 $ 93,610 $ 30 $ (99 ) $ 93,541 The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2017 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 60,681 $ — $ (63 ) $ 60,618 Corporate debt 49,168 12 (12 ) 49,168 $ 109,849 $ 12 $ (75 ) $ 109,786

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements	4. 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, 2018 and December 31, 2017 consist of available-for-sale As of March 31, 2018, 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, 2018 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable March 31, Identical Assets Observable Inputs Inputs (in thousands) 2018 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 53,600 $ 53,600 $ — $ — Corporate debt 39,941 — 39,941 — $ 93,541 $ 53,600 $ 39,941 $ — As of December 31, 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 December 31, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2017 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 60,618 $ 60,618 $ — $ — Corporate debt 53,164 — 53,164 — $ 113,782 $ 60,618 $ 53,164 $ — Total assets measured at fair value as of December 31, 2017 include $4.0 million of cash equivalents. The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash 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	3 Months Ended
	Mar. 31, 2018
Inventory	5. 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. March 31, December 31, (in thousands) 2018 2017 Current assets Work-in-process $ — $ 80 Finished goods 1,011 760 $ 1,011 $ 840 Non-Current Raw materials $ 87 $ 87 Work-in-process 2,750 2,821 Finished goods 277 408 $ 3,114 $ 3,316

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2018
Intangible Assets	6. Intangible Assets HETLIOZ ® . ® ® The Company is obligated to make a future milestone payment to BMS of $25.0 million when cumulative worldwide sales of HETLIOZ ® ® ® Fanapt ® ® ® Pursuant to a settlement agreement in December 2014, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® ® The following is a summary of the Company’s intangible assets as of March 31, 2018: March 31, 2018 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® May 2034 $ 33,000 $ 7,283 $ 25,717 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 35,224 $ 25,717 The following is a summary of the Company’s intangible assets as of December 31, 2017: December 31, 2017 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® May 2034 $ 33,000 $ 6,931 $ 26,069 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 34,872 $ 26,069 Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense was $0.4 million and $0.5 million for the three months ended March 31, 2018 and 2017, respectively. The following is a summary of the future intangible asset amortization schedule as of March 31, 2018: (in thousands) Total 2018 2019 2020 2021 2022 Thereafter HETLIOZ ® $ 25,717 $ 1,193 $ 1,591 $ 1,591 $ 1,591 $ 1,591 $ 18,160

Accounts Payable and Accrued Li

Accounts Payable and Accrued Liabilities	3 Months Ended
	Mar. 31, 2018
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, 2018 and December 31, 2017: March 31, December 31, (in thousands) 2018 2017 Research and development expenses $ 4,587 $ 4,663 Consulting and other professional fees 2,832 3,961 Compensation and employee benefits 3,447 5,323 Royalties payable 4,352 4,394 Other 2,024 1,994 $ 17,242 $ 20,335

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies	8. Commitments and Contingencies Operating leases Commitments relating to operating leases represent the minimum annual future payments under operating leases and subleases for its Company’s headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C., and operating leases for office space in London and Berlin. The following is a summary of the minimum annual future payments under operating leases and subleases for office space as of March 31, 2018: Cash Payments Due by Year (in thousands) Total 2018 2019 2020 2021 2022 Thereafter Operating leases $ 24,471 $ 1,729 $ 2,423 $ 2,521 $ 2,340 $ 2,354 $ 13,104 In June 2011, the Company entered into an operating lease for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. for 21,400 square feet of office space. The Company subsequently amended the lease in March 2014 and March 2018 to increase the office space under lease to 33,534 square feet and, in March 2018, extended the lease term to July 2028. 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. The Company has an 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. Rent expense under operating leases was $0.9 million and $0.8 million for the three months ended March 31, 2018 and 2017. 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 mid-twenties. The ® ® Fanapt ® . ® ® ® mid-twenties ® manufacturing know-how. The manufacturing know-how royalty. No manufacturing know-how are ® Sanofi know-how not Tradipitant. an NK-1R antagonist, for pre-NDA approval of pre-NDA approval VQW-765. ® VQW-765, a II alpha-7 nicotinic commercialize VQW-765 and the mid-teens. Portfolio of CFTR activators and inhibitors pre-investigational new 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 and marketing 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.

Public Offering of Common Stock

Public Offering of Common Stock	3 Months Ended
	Mar. 31, 2018
Public Offering of Common Stock	9. Public Offering of Common Stock In March 2018, the Company completed a public offering of 6,325,000 shares of common stock, including the exercise of the underwriters’ option to purchase an additional 825,000 shares of common stock, at a price to the public of $17.00 per share. Net cash proceeds from the public offering were $100.9 million, after deducting the underwriting discounts and commissions and $0.2 million accrued offering expenses.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	3 Months Ended
	Mar. 31, 2018
Accumulated Other Comprehensive Loss	10. Accumulated Other Comprehensive Loss The accumulated balances related to each component of other comprehensive income (loss) were as follows as of March 31, 2018 and December 31, 2017: March 31, December 31, (in thousands) 2018 2017 Foreign currency translation $ 41 $ 29 Available-for-sale (69 ) (63 ) $ (28 ) $ (34 ) There was no tax provision (benefit) included in accumulated other comprehensive loss as of March 31, 2018 and December 31, 2017. There were no reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2018 and 2017.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2018
Stock-Based Compensation	11. Stock-Based Compensation As of March 31, 2018, there were 6,264,228 shares that were subject to outstanding options and RSUs under the 2006 Equity Incentive Plan (2006 Plan) and the Amended and Restated 2016 Equity Incentive Plan (2016 Plan, and together with the 2006 Plan, Plans). The 2006 Plan expired by its terms 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, 2,123,780 shares of which remained available for future grant as of March 31, 2018. 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 As of March 31, 2018, $10.7 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, 2018. A summary of option activity under the Plans for the three months ended March 31, 2018 follows: 2006 and 2016 Plans (in thousands, except for share and per share amounts) Number of Weighted Average Weighted Average Aggregate Outstanding at December 31, 2017 4,719,784 $ 10.03 5.63 $ 24,421 Granted 437,500 18.85 Forfeited (5,298 ) 11.39 Exercised (371,201 ) 7.18 3,365 Outstanding at March 31, 2018 4,780,785 11.05 6.11 28,587 Exercisable at March 31, 2018 3,323,764 9.72 4.99 23,708 Vested and expected to vest at March 31, 2018 4,546,315 10.77 5.94 28,230 The weighted average grant-date fair value of options granted was $10.40 and $7.84 per share for the three months ended March 31, 2018 and 2017, respectively. Proceeds from the exercise of stock options amounted to $2.7 million and $2.2 million for the three months ended March 31, 2018 and 2017, 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 generally vest in four equal annual installments provided that the employee remains employed with the Company. As of March 31, 2018, $21.4 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 2.1 years. No RSUs are classified as a liability as of March 31, 2018. A summary of RSU activity under the Plans for the three months ended March 31, 2018 follows: Number of Weighted Shares Average Underlying Grant Date 2006 and 2016 Plans RSUs Fair Value Unvested at December 31, 2017 1,357,838 $ 12.72 Granted 626,086 18.77 Forfeited (25,114 ) 13.33 Vested (475,367 ) 12.50 Unvested at March 31, 2018 1,483,443 15.33 The grant date fair value for the 475,367 shares underlying RSUs that vested during the three months ended March 31, 2018 was $5.9 million. Stock-Based Compensation Stock-based compensation expense recognized for the three months ended March 31, 2018 and 2017 was comprised of the following: Three Months Ended March 31, March 31, (in thousands) 2018 2017 Research and development $ 321 $ 409 Selling, general and administrative 2,830 1,847 $ 3,151 $ 2,256 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 three months ended March 31, 2018 and 2017 were as follows: Thee Months Ended March 31, March 31, 2018 2017 Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 57 % Weighted average expected term (years) 5.90 5.89 Weighted average risk-free rate 2.64 % 1.98 %

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes	12. 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 March 31, 2018 and December 31, 2017. As a result of the tax valuation allowance against deferred tax assets in the U.S., there was no benefit for income taxes associated with the income (loss) before income taxes for three months ended March 31, 2018 and 2017. Taxes have been recorded related to certain U.S. state jurisdictions and non-U.S. Certain tax attributes of the Company, including 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 ended December 31, 2014 and December 31, 2008. The Company believes that the ownership changes in 2014 and 2008 will not impact its ability to utilize NOL and credit carryforwards; however, future ownership changes may cause the Company’s existing tax attributes to have additional limitations. Because the Company maintains a valuation allowance on its U.S. tax attributes, any limitation as a result of application of IRC Section 382 limitation would not have a material impact on the Company’s provision for income taxes for the three months ended March 31, 2018. The Tax Cuts and Jobs Act (TCJA) was enacted in December 2017. The TCJA reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition

Earnings per Share

Earnings per Share	3 Months Ended
	Mar. 31, 2018
Earnings per Share	13. 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, 2018 and 2017: Three Months Ended March 31, March 31, (in thousands, except for share and per share amounts) 2018 2017 Numerator: Net income (loss) $ 3,066 $ (7,645 ) Denominator: Weighted average shares outstanding, basic 46,336,430 44,398,359 Effect of dilutive securities 1,888,611 — Weighted average shares outstanding, diluted 48,225,041 44,398,359 Net income (loss) per share, basic and diluted: Basic $ 0.07 $ (0.17 ) Diluted $ 0.06 $ (0.17 ) Antidilutive securities excluded from calculations of diluted net income (loss) per share 1,057,444 3,160,500 The Company incurred a net loss for the three months ended March 31, 2017 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.

Legal Matters

Legal Matters	3 Months Ended
	Mar. 31, 2018
Legal Matters	14. Legal Matters Fanapt ® ® ® a five-day bench 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 (‘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 ® a 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 ® a non-exclusive ® ® On February 26, 2016, Roxane filed suit against the Company in the U.S. District Court for the Southern District of Ohio (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 HETLIOZ ® ® ® Non-24-Hour-Sleep-Wake ® Since receiving Teva’s notice letter, the Company has received similar notice letters from two additional generic drug manufacturers. The Company received notice letters from (a) MSN Pharmaceuticals Inc. and MSN Laboratories Private Limited (together, MSN) on April 2, 2018 and (b) Apotex on April 3, 2018. Each of MSN and Apotex notified the Company that it has submitted an ANDA to the FDA seeking to market, sell and use a generic version of the 20mg HETLIOZ ® Non-24-Hour ® ® On April 30, 2018, the Company filed a patent infringement lawsuit in the Delaware District Court against Teva. The lawsuit seeks an adjudication that Teva has infringed one or more claims of the Vanda Patents by submitting to the FDA an ANDA for a generic version of HETLIOZ ® ®

Business Organization and Pre22

Business Organization and Presentation (Policies)	3 Months Ended
	Mar. 31, 2018
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, 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
Revenue Recognition	Revenue Recognition In accordance with Accounting Standards Codification (ASC) Subtopic 606 Revenue from Contracts with Customers The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended March 31, March 31, (in thousands) 2018 2017 HETLIOZ ® $ 25,423 $ 20,182 Fanapt ® 18,169 17,233 $ 43,592 $ 37,415
Major Customers	Major Customers HETLIOZ ® ®
Reserves for Variable Consideration	Reserves for Variable Consideration The transaction price is determined based upon the consideration to which the Company will be entitled in exchange for transferring product to the customer. The Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method and updates its estimate at each reporting date. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay co-pay prompt-pay non-current Prompt-pay: Rebates: Chargebacks: non-profit Medicare Part D Coverage Gap: Service Fees: Co-payment co-payment Co-pay Product Returns
Non-Cash Investing and Financing Activities	Non-Cash For the three months ended March 31, 2018 and 2017, the Company recorded purchases of property, plant and equipment and the related current liability in the amount of zero and $0.4 million, respectively. For the three months ended March 31, 2018, the Company accrued $0.2 million in expense associated with the March 2018 public offering of common stock.
Recent accounting pronouncements	Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, Restricted Cash beginning-of-period end-of-period non-current 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 February 2016, the FASB issued ASU 2016-02, Leases right-of-use right-of-use In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition 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 2014-09. 2016-08, 2016-10, 2016-12 2014-09 2015-14. non-current

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Net Sales by Product	The Company’s revenues consist of net product sales of HETLIOZ ® ® Three Months Ended March 31, March 31, (in thousands) 2018 2017 HETLIOZ ® $ 25,423 $ 20,182 Fanapt ® 18,169 17,233 $ 43,592 $ 37,415

Marketable Securities (Tables)

Marketable Securities (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Available-for-Sale Marketable Securities	The following is a summary of the Company’s available-for-sale Gross Gross Fair March 31, 2018 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 53,682 $ — $ (82 ) $ 53,600 Corporate debt 39,928 30 (17 ) 39,941 $ 93,610 $ 30 $ (99 ) $ 93,541 The following is a summary of the Company’s available-for-sale Gross Gross Fair December 31, 2017 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 60,681 $ — $ (63 ) $ 60,618 Corporate debt 49,168 12 (12 ) 49,168 $ 109,849 $ 12 $ (75 ) $ 109,786

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Assets Measured at Fair Value on Recurring Basis	As of March 31, 2018, 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, 2018 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable March 31, Identical Assets Observable Inputs Inputs (in thousands) 2018 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 53,600 $ 53,600 $ — $ — Corporate debt 39,941 — 39,941 — $ 93,541 $ 53,600 $ 39,941 $ — As of December 31, 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 December 31, 2017 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2017 (Level 1) (Level 2) (Level 3) U.S. Treasury and government agencies $ 60,618 $ 60,618 $ — $ — Corporate debt 53,164 — 53,164 — $ 113,782 $ 60,618 $ 53,164 $ —

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2018
Inventory	Inventory consisted of the following as of March 31, 2018 and December 31, 2017: March 31, December 31, (in thousands) 2018 2017 Current assets Work-in-process $ — $ 80 Finished goods 1,011 760 $ 1,011 $ 840 Non-Current Raw materials $ 87 $ 87 Work-in-process 2,750 2,821 Finished goods 277 408 $ 3,114 $ 3,316

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Intangible Assets	The following is a summary of the Company’s intangible assets as of March 31, 2018: March 31, 2018 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® May 2034 $ 33,000 $ 7,283 $ 25,717 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 35,224 $ 25,717 The following is a summary of the Company’s intangible assets as of December 31, 2017: December 31, 2017 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® May 2034 $ 33,000 $ 6,931 $ 26,069 Fanapt ® November 2016 27,941 27,941 — $ 60,941 $ 34,872 $ 26,069
Summary of Future Intangible Asset Amortization	The following is a summary of the future intangible asset amortization schedule as of March 31, 2018: (in thousands) Total 2018 2019 2020 2021 2022 Thereafter HETLIOZ ® $ 25,717 $ 1,193 $ 1,591 $ 1,591 $ 1,591 $ 1,591 $ 18,160

Accounts Payable and Accrued 28

Accounts Payable and Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
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, 2018 and December 31, 2017: March 31, December 31, (in thousands) 2018 2017 Research and development expenses $ 4,587 $ 4,663 Consulting and other professional fees 2,832 3,961 Compensation and employee benefits 3,447 5,323 Royalties payable 4,352 4,394 Other 2,024 1,994 $ 17,242 $ 20,335

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Minimum Annual Future Payments under Operating Leases and Subleases	office space in London and Berlin. The following is a summary of the minimum annual future payments under operating leases and subleases for office space as of March 31, 2018: Cash Payments Due by Year (in thousands) Total 2018 2019 2020 2021 2022 Thereafter Operating leases $ 24,471 $ 1,729 $ 2,423 $ 2,521 $ 2,340 $ 2,354 $ 13,104

Accumulated Other Comprehensi30

Accumulated Other Comprehensive Loss (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss)	The accumulated balances related to each component of other comprehensive income (loss) were as follows as of March 31, 2018 and December 31, 2017: March 31, December 31, (in thousands) 2018 2017 Foreign currency translation $ 41 $ 29 Available-for-sale (69 ) (63 ) $ (28 ) $ (34 )

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Option Activity Plan	A summary of option activity under the Plans for the three months ended March 31, 2018 follows: 2006 and 2016 Plans (in thousands, except for share and per share amounts) Number of Weighted Average Weighted Average Aggregate Outstanding at December 31, 2017 4,719,784 $ 10.03 5.63 $ 24,421 Granted 437,500 18.85 Forfeited (5,298 ) 11.39 Exercised (371,201 ) 7.18 3,365 Outstanding at March 31, 2018 4,780,785 11.05 6.11 28,587 Exercisable at March 31, 2018 3,323,764 9.72 4.99 23,708 Vested and expected to vest at March 31, 2018 4,546,315 10.77 5.94 28,230
Summary of RSU Activity for 2006 Plan and 2016 Plan	A summary of RSU activity under the Plans for the three months ended March 31, 2018 follows: Number of Weighted Shares Average Underlying Grant Date 2006 and 2016 Plans RSUs Fair Value Unvested at December 31, 2017 1,357,838 $ 12.72 Granted 626,086 18.77 Forfeited (25,114 ) 13.33 Vested (475,367 ) 12.50 Unvested at March 31, 2018 1,483,443 15.33
Stock-Based Compensation Expense	Stock-based compensation expense recognized for the three months ended March 31, 2018 and 2017 was comprised of the following: Three Months Ended March 31, March 31, (in thousands) 2018 2017 Research and development $ 321 $ 409 Selling, general and administrative 2,830 1,847 $ 3,151 $ 2,256
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 three months ended March 31, 2018 and 2017 were as follows: Thee Months Ended March 31, March 31, 2018 2017 Expected dividend yield 0 % 0 % Weighted average expected volatility 57 % 57 % Weighted average expected term (years) 5.90 5.89 Weighted average risk-free rate 2.64 % 1.98 %

Earnings per Share (Tables)

Earnings per Share (Tables)	3 Months Ended
	Mar. 31, 2018
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, 2018 and 2017: Three Months Ended March 31, March 31, (in thousands, except for share and per share amounts) 2018 2017 Numerator: Net income (loss) $ 3,066 $ (7,645 ) Denominator: Weighted average shares outstanding, basic 46,336,430 44,398,359 Effect of dilutive securities 1,888,611 — Weighted average shares outstanding, diluted 48,225,041 44,398,359 Net income (loss) per share, basic and diluted: Basic $ 0.07 $ (0.17 ) Diluted $ 0.06 $ (0.17 ) Antidilutive securities excluded from calculations of diluted net income (loss) per share 1,057,444 3,160,500

Business Organization and Pre33

Business Organization and Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2018Segment
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, 2018	Mar. 31, 2017
Revenue from External Customer [Line Items]
Net product sales	$ 43,592	$ 37,415
HETLIOZ
Revenue from External Customer [Line Items]
Net product sales	25,423	20,182
Fanapt
Revenue from External Customer [Line Items]
Net product sales	$ 18,169	$ 17,233

Summary of Significant Accoun35

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2018USD ($)Customer	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
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	$ 0.4
Accrued offering expenses	0.2
Accounting Standards Update 2016-18
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	0.7	$ 0.8	$ 0.7	$ 0.8
Accounting Standards Update 2016-18 | Other Noncurrent Assets
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	0.7		0.7
Accounting Standards Update 2014-09
Summary Of Significant Accounting Policies [Line Items]
Provision for product revenue returns	$ 3.8		$ 4.1
Customer Concentration Risk | Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	87.00%
Number of major customers that each accounted for more than 10% of total revenues | Customer	5
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage	79.00%
Number of major customers that each accounted for more than 10% of total accounts receivable | Customer	4

Summary of Available-For-Sale M

Summary of Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	$ 93,541	$ 109,786
Current Investment
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	93,610	109,849
Gross Unrealized Gains	30	12
Gross Unrealized Losses	(99)	(75)
Fair Market Value	93,541	109,786
Current Investment | U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	53,682	60,681
Gross Unrealized Losses	(82)	(63)
Fair Market Value	53,600	60,618
Current Investment | Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	39,928	49,168
Gross Unrealized Gains	30	12
Gross Unrealized Losses	(17)	(12)
Fair Market Value	$ 39,941	$ 49,168

Assets Measured at Fair Value o

Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 93,541	$ 113,782
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	53,600	60,618
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	39,941	53,164
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	53,600	60,618
Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	53,600	60,618
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	39,941	53,164
Significant Other Observable Inputs (Level 2) | Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 39,941	$ 53,164

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 93,541	$ 113,782
Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		$ 4,000

Inventory (Detail)

Inventory (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets
Work-in-process		$ 80
Finished goods	$ 1,011	760
Total	1,011	840
Non-Current assets
Raw materials	87	87
Work-in-process	2,750	2,821
Finished goods	277	408
Total	$ 3,114	$ 3,316

Intangible Assets - (HETLIOZ) -

Intangible Assets - (HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Mar. 31, 2018	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Milestone obligation under license agreement	$ 27,000			$ 27,000
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets			$ 8,000
Intangible assets, estimated future useful life	2034-05			2034-05
Cumulative worldwide sales milestone	$ 250,000
Milestone obligation under license agreement	25,000			$ 25,000
Intangible assets capitalized	$ 25,000	$ 25,000

Intangible Assets - (Fanapt) -

Intangible Assets - (Fanapt) - Additional Information (Detail) - Fanapt - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	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

Summary of Intangible Assets (D

Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 60,941	$ 60,941
Accumulated Amortization	35,224	34,872
Net Carrying Amount	$ 25,717	$ 26,069
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated future useful life	2034-05	2034-05
Gross Carrying Amount	$ 33,000	$ 33,000
Accumulated Amortization	7,283	6,931
Net Carrying Amount	$ 25,717	$ 26,069
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 - Additional

Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 352	$ 454

Summary of Future Intangible As

Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Total	$ 25,717	$ 26,069
HETLIOZ
Finite-Lived Intangible Assets [Line Items]
Total	25,717	$ 26,069
2,018	1,193
2,019	1,591
2,020	1,591
2,021	1,591
2,022	1,591
Thereafter	$ 18,160

Summary of Accounts Payable and

Summary of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accounts Payable and Accrued Liabilities [Line Items]
Research and development expenses	$ 4,587	$ 4,663
Consulting and other professional fees	2,832	3,961
Compensation and employee benefits	3,447	5,323
Royalties payable	4,352	4,394
Other	2,024	1,994
Accounts payable and accrued liabilities	$ 17,242	$ 20,335

Summary of Minimum Annual Futur

Summary of Minimum Annual Future Payments Under Operating Leases and Subleases for Office Space (Detail) $ in Thousands	Mar. 31, 2018USD ($)
Operating Leased Assets [Line Items]
Operating leases, Total	$ 24,471
Operating leases, 2018	1,729
Operating leases, 2019	2,423
Operating leases, 2020	2,521
Operating leases, 2021	2,340
Operating leases, 2022	2,354
Operating leases, Thereafter	$ 13,104

Commitments and Contingencies -

Commitments and Contingencies - (Operating Leases) - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)ft²	Mar. 31, 2017USD ($)	Jun. 30, 2011ft²
Commitments and Contingencies Disclosure [Line Items]
Rent expense | $	$ 0.9	$ 0.8
Washington DC Sublease [Member]
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	9,928
Lease term expiration	2026-07
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
Washington DC Lease Amendment
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	33,534		21,400
Renewal term of lease agreement	5 years
Lease term expiration	2028-07

Commitments and Contingencies48

Commitments and Contingencies - (HETLIOZ) - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2015	Mar. 31, 2014
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 - (Fanapt) - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2016
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%	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 - (Tradipitant) - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement	$ 27,000	$ 27,000
Tradipitant
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	Low double digits
Possible future milestone payment	$ 4,000
Milestone obligation under license agreement	2,000	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 payment	2,000
Tradipitant | Development and Milestone Payment for First Marketing Authorization Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payment	2,000
Tradipitant | Future Regulatory Approval and Sales Milestones
Commitments and Contingencies [Line Items]
Possible future milestone payment	$ 95,000

Commitments and Contingencies51

Commitments and Contingencies - (VQW-765) - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2018
VQW765
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	Mid-teens

Commitments and Contingencies52

Commitments and Contingencies - (CFTR Activators and Inhibitors) - Additional Information (Detail) - CFTR Activators and Inhibitors - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 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

Public Offering of Common Sto53

Public Offering of Common Stock - Additional Information (Detail) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)$ / sharesshares
Subsidiary, Sale of Stock [Line Items]
Net proceeds from public offering	$ 101,068
Accrued offering expenses	$ 200
Public Offering
Subsidiary, Sale of Stock [Line Items]
Public offering of common stock, shares | shares	6,325,000
Public offerings of common stock, Price Per Share | $ / shares	$ 17
Net proceeds from public offering	$ 100,900
Accrued offering expenses	$ 200
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Public offering of common stock, shares | shares	825,000

Summary of Accumulated Balances

Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation	$ 41	$ 29
Available-for-sale securities	(69)	(63)
Accumulated other comprehensive income (loss)	$ (28)	$ (34)

Accumulated Other Comprehensi55

Accumulated Other Comprehensive Loss - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax provision (benefit)	$ (2,000)	$ 19,000
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax provision (benefit)	0
Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassifications out of accumulated other comprehensive loss	$ 0	$ 0

Stock-Based Compensation - (Sto

Stock-Based Compensation - (Stock-Based Compensation) - Additional Information (Detail) - shares	1 Months Ended	3 Months Ended
	Jun. 30, 2017	Mar. 31, 2018	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		6,264,228
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
Additional shares reserved for issuance under equity incentive plans	2,700,000
Number of shares of common stock available for future grant		2,123,780

Stock-Based Compensation - (S57

Stock-Based Compensation - (Stock Option) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
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	$ 2,666	$ 2,209
Options granted, weighted average fair value per share	$ 10.40	$ 7.84
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 10,700
Unrecognized compensation expenses, weighted average period	1 year 6 months

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	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Number of Shares
Beginning balance	4,719,784
Granted	437,500
Forfeited	(5,298)
Exercised	(371,201)
Ending balance	4,780,785	4,719,784
Exercisable	3,323,764
Vested and expected to vest at March 31, 2018	4,546,315
Weighted Average Exercise Price at Grant Date
Beginning balance	$ 10.03
Granted	18.85
Forfeited	11.39
Exercised	7.18
Ending balance	11.05	$ 10.03
Exercisable	9.72
Vested and expected to vest at March 31, 2018	$ 10.77
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	6 years 1 month 9 days	5 years 7 months 17 days
Exercisable	4 years 11 months 26 days
Vested and expected to vest at March 31, 2018	5 years 11 months 8 days
Aggregate Intrinsic Value
Beginning balance	$ 24,421
Exercised	3,365
Ending balance	28,587	$ 24,421
Exercisable	23,708
Vested and expected to vest at March 31, 2018	$ 28,230

Stock-Based Compensation - (RSU

Stock-Based Compensation - (RSU) - Additional Information (Detail) - Restricted Stock Units (RSU) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)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 1 month 6 days
Unrecognized compensation expenses related to unvested RSUs	$ 21.4
Grant date fair value of common stock vested, shares | shares	475,367
Grant date fair value of common stock vested	$ 5.9

Summary of RSU Activity Plan (D

Summary of RSU Activity Plan (Detail) - Restricted Stock Units (RSU)	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Number of Shares Unvested
Beginning balance | shares	1,357,838
Granted | shares	626,086
Forfeited | shares	(25,114)
Vested | shares	(475,367)
Ending balance | shares	1,483,443
Weighted Average Price/Share Unvested
Beginning balance | $ / shares	$ 12.72
Granted | $ / shares	18.77
Forfeited | $ / shares	13.33
Vested | $ / shares	12.50
Ending balance | $ / shares	$ 15.33

Total Stock-Based Compensation

Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 3,151	$ 2,256
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	321	409
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,830	$ 1,847

Black-Scholes-Merton Option Pri

Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
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 25 days	5 years 10 months 21 days
Weighted average risk-free rate	2.64%	1.98%

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Income Taxes [Line Items]
Federal tax at statutory rate	21.00%	35.00%
Percentage at which certain U.S. federal deferred tax assets and liabilities remeasured		21.00%

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, 2018	Mar. 31, 2017
Numerator:
Net income (loss)	$ 3,066	$ (7,645)
Denominator:
Weighted average shares outstanding, basic	46,336,430	44,398,359
Effect of dilutive securities	1,888,611
Weighted average shares outstanding, diluted	48,225,041	44,398,359
Net income (loss) per share, basic and diluted:
Basic	$ 0.07	$ (0.17)
Diluted	$ 0.06	$ (0.17)
Antidilutive securities excluded from calculations of diluted net income (loss) per share	1,057,444	3,160,500