VNDA - Earnings call transcript Q1 2018 | Vanda Pharmaceuticals Inc.

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Operator

Hello and welcome to the Q1 2018, Vanda Pharmaceuticals Incorporated Earnings Conference Call. My name is Sharron. I will be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. that call note being Please Instructions] this is conference recorded. [Operator over now turn will to the I call Mr. Vanda's Chief Financial Kelly, Officer. Jim Executive Vice President and Mr. begin. Kelly, may you

Jim Kelly

All XXXX performance. thank afternoon to right. Sharron. Vanda for discuss quarter joining us Great. and first Pharmaceuticals you, Thank you Good

SEC's XXXX the system first available quarter afternoon are our were results Our and this on released and on EDGAR www.vandapharma.com. website

our be versions of call on archived providing this and website. live we'll addition, In conference

Joining our CEO. me on President Dr. call Polymeropoulos, Mihael today's is and

you lines update will will our questions. Mihael ongoing financial I remarks, introductory my Then on comment results activities. Following before for our on opening the your

Before we forward-looking I like be of statements make we that to remind meaning proceed, statements that various will would this within laws. call securities on the everyone federal

The as required CEO, to With this call law. filings. turn we except our over may on account for based changes annual Results future EDGAR upon no involve by fiscal call Factors make Polymeropoulos. These are call today, and and Operations SEC uncertainties. publicly system statements our forward-looking Dr. to SEC's obligation revise and other encourage that expectations sections our any otherwise, XXXX, we of only ended of new said, and in and of the or we to December on Analysis all the are and our as and provide year on on assumptions of read Financial this statements website. now report is on the undertake information these provided described the risks, risks I to reports XX, We current Form information, Condition that Mihael Management's which forward-looking available in investors would is of Risk update like circumstances, or events Our on XX-K Discussion

Mihael Polymeropoulos

and you Jim. very today. you, afternoon Good joining for us Thank much thank

In high was first patients These update and all-time from psychiatric The number The launched on the psychiatry of of performance. begin well our patient all-time quarter number on which new We XXXX share I Non-XX. confirmation acceleration initiative HETLIOZ, of a community continues new we drive in the first is year are XXXX to with will business. patient HETLIOZ quarter HETLIOZ pleased achieved an response of our as therapy. need significant are the a demand. late to last with starts an high the a positive unmet a prescriptions of new as patients intakes. new medical

study announced opportunities JETX of we metrics. disorder. from we have refill strategy treat clinical as the study effects on last clears in lag to many the treatment are should this HETLIOZ meaningful March for and to-date the way a filing. our showed leave quarters jet The That drive lag the as include is initiatives have the Phase primary this In study secondary years In and demand said to these us the of generation, to script fill to growth potential accomplished delivering the there expected to optimistic still come. that of results what beyond to two areas While improve we well HBI optimize metrics and results endpoint clinically III the completion as NDA of multiple significant for treat study to HETLIOZ this supplemental jet disorder. endpoints of of

strategy the into the our non-XX inform including initiation proceeding, is can to to management of U.S. of successful understanding We other is campaign. translate DTC launch of commercial consistent by submit development pediatric HETLIOZ of vision including awareness Smith-Magenis and full The of go-to-market consumer for activities our lifecycle an direct with and to are In the how process pilot will term plan HETLIOZ formulation Germany our the Syndrome. in begin of sNDA long of preparing ongoing end markets. This year. aspect

intellectual to of a the a I yesterday as Paragraph defend now including to under X two of dermatitis dermatology with major of neurokinin stage our a pruritus April with pipeline recently turn Teva against the HETLIOZ filing. in We II Pharmaceuticals, an will a atopic Tradipitant, atopic driver our pursued, significant in emerged franchise program. XX, in dermatitis indications We continue held that the discuss development Phase filing X XXXX lawsuit, meeting property clinical and antagonist clinical late has to division end FDA gastroparesis. pruritus receptor

is a points and Scale. that clinical although endpoint on the Rating that dermatitis on have primary to end for not we the have on pruritus will such specific will will believe protocol that important in the design related study Itch allow claims. Numeric potential yet assessments capture the agreed We indication severity, of we label pursuit, Worst We atopic that disease agreed

are our in the begin stage We of III plan Phase which we final preparing mid-year. by study to

disease deep understanding of pruritus in presented develop we international have biomarkers dermatitis does of to scientific at number a in severity, a continue several evaluating including of and We number atopic what studies atopic meetings. dermatitis a and Tradipitant in

unmet treatment and and the are with and Americans, currently now represents disorder is thousands of carries of enrolling Phase midst of patients II mortality we're need. a testing Tradipitant gastroparesis. for in significant delayed That medical a patients We study. hundreds of of also effects in significant the Gastroparesis mobility this gastric emptying

patients these Tradipitant as for well therapeutic opportunity are by for a large of represent effect you disorder options advance there could few a a as Vanda. with patients commercial for treatment a this demonstration As significant

formulation to Court results. will West clinic now entire a XXXX win This of team this the underway to remaining Ward path. Federal the District infringed XXXX Pharmaceuticals to the April the in as that the Iloperidone further Court injectable is continues Fanapt. patent the year. Moving the schizophrenia. we the financial to to Fanapt. Delaware of an we an solidifies for Fanapt litigation XXX U.S. investments sales call I significantly our additional month Vanda's introducing affirmed decision our Kelly adult for win of plan of turn Court in lifecycle de-risks over and treating Circuit years of making later option Appeals Jim make in plan On discuss Fanapt, with of exclusivity The nine progress XX, patients first and management Manufacturing quarter once enter Appeals

Jim Kelly

Thank increase quarter you, million, fourth of XXXX X% was decrease of for quarter $XX.X XXXX. first XXXX revenue the when $XX.X Total Mihael. in the XX% to million a quarter fourth in $XX.X and million a the compared of to compared

grew trade increase million compared by quarter-over-quarter monthly First the fourth XX% reductions, million compared new XXXX. trends a $XX HETLIOZ growth HETLIOZ and the a impacted and rates therapy of million, our full million Fanapt. to first to with sales of first totaling quarter quarter with XXXX, quarter in continue sales $XX.X million on to guidance. across X% and quarter were $XX.X increase $X.X in in grow product XXXX, $X consistent patient year between to the of net HETLIOZ XXXX both patients financial inventory

expectations. the As of first million changes, decrease, $XX.X quarter on Vanda quarter The this XX, X% fourth in March demand. of combined de-stocking compared XXXX quarter of $XX.X million to a XXXX XXXX, was $XXX,XXX. channel. reflect quarter hand, by were weeks XX,XXX million the $X.X to and the sales held to quarter $X.X the The first trailing Units IQVIA XXXX XXXX X% of to the Fanapt destocking XXXX two to is with inventory the to full XXXX the of of decrease $XX.X QX year increase impact compared mid-point XXXX. impact this quarter Fanapt inventory million. and units by was patients for XXXX. reported in decreased calculated QX in first of fourth fourth on million channel pharmacy have based impact prescriptions XXXX, approximately quarter over over the of the the XXXX. specialty dispensed of as compared inventory the inventory by a by sold a over inventory specialty this compared HETLIOZ consistent sequential in of exceeded of specialty in pharmacies grew first X% our net Adjusting the when demand of of as for and of product Wholesalers guidance

Tradipitant the first stock sold, programs figures. as that as with that quarter offering placed by believe the in to slightly of SG&A to the quarter million You and the XXXX. the in will of understanding of end of Fanapt XX, Vanda's of on and fourth and million an and its expected expense during million because financial million; in information XXXX cost guidance, Net non-GAAP XXXX. Vanda gastroparesis Hetlioz of between of Non-GAAP million in the of XXXX prior of million enhance marketable cash million offset Tradipitant compared On $XXX.X achieve quarter of expenses a can quarter operating $X.X non-GAAP decreasing to both product of which XXXX fully out million to Vanda first psychiatry based study recent million reiterates the so primary XXXX information. amortization. to the of of considered intangible atopic overall million, the quarter net asset do initiative. amortization million, XXXX. guidance $XXX gastroparesis. this loss emphasis or the net $XXX.X million; with million Hetlioz, clinical our $XX.X release, cash Non-GAAP the a million first $XXX is we Yearend income its non-GAAP awareness to common expected the between the payment its for a Non-GAAP non-GAAP a million includes an in down impact now expects updates to first operating to prior sequential and between operating less in in cash, intangible objectives common non-GAAP million million for which financial and driver when December $XXX.X in ongoing. XXXX. cumulative representing cash $XX stock March first quarter of to Vanda XX, income the net performance net as the Fanapt of dermatitis of $XXX as Phase commercial DTC expenses, in compared We excluding was XXXX. of XX% million. was the obligation of of to the our jet sold result of goods stock-based see spend guidance and occur of lag based in which $XX milestone a GAAP were fourth turn Vanda Non-XX studies in spend to non-GAAP are $XX including of and over that when of associated This net $XXX and compensation non-GAAP expenses quarter $X net quarter call completed we second XXXX. and resulted from study, XXXX of as cash expect quarter $XXX launching press disorder sales basis between prior the asset financial XXXX million decrease compared equivalents and clinical million the and income $XX.X sales together Mihael. sales to the or The primary a for to of and close quarter XXXX I'll compared XXXX. referred of team decline compensation excludes during spend securities million. on $XX when than the $XXX March asset first In recorded quarter in Hetlioz of cash quarter year public in was back the loss million. intangible of $XXX.X stock-based offering HETLIOZ of reduced in is net increased On a investment expenses by first stock of is $X.X XXXX, quarter be $XXX guidance compared product were year as financial $XXX first financial offering of exclude of in Vanda development million. compared reflect $XXX XXXX Vanda increase of $XX.X net proceeds research non-GAAP non-GAAP The of sales product of $X.X and $X.X million; the products non-GAAP decreased the a over fourth cost excluding goods non-GAAP of increase and $XXX between by a of $XX partially a $X.X $XXX the a rise and compensation compared million, to III fourth following recorded drivers amortization net to investments basis million the This and XXXX

Mihael Polymeropoulos

we questions. for now the open And your will Operator? lines Jim. Thanks,

Operator

Thank you.

will from session. is Jason Instructions] Securities. question open. And our JMP Butler [Operator first now begin line from Butler, question-and-answer We the your Mr. comes

Unidentified Analyst

taking William Hi, for it's guys, Jason, the thanks for question.

of want to a guess I the Serlopitant couple dermatitis don't discuss sure program. failure in was Just you I mean surprising. ones. quick atopic I'm another

just population I question you Are with And or Just could, in wondered patient this success Scott found how another if setting? different have the after drugs, design? Tradipitant that. trial you

Mihael Polymeropoulos

very Thank much. you

Since atopic course, antagonist Of than with know maybe dermatitis, presents clinical is it. and dermatitis. of international very important we to Alongside an small reiterate attempted clinical that the scientific SCORing that to program. Phase where II know that why in very public or comes convinced, September, remind suggested pharmacokinetic, Atopic of II show a that XXXX dose last showed from we known study reported don't we in and number response in we Tradipitant, SCORAD we pruritus effect in more antipruritic as improvement AD, by larger where study, this receptor the everybody to patients significant understand to then a And treat a in-depth treat in in on measured like the significant is meaningful effect for that severity of are to the anything is EZ. atopic patients meetings. they effect XXXX neurokinin-X pruritus conviction pharmacodynamic then Phase of what a suggested is improvements suited and a Dermatitis analysis All two and Tradipitant studies, significant we that measurements conducted have company data What analysis failed. attempt we disease this domain, scales

and and agreed that for it II we're treat atopic to meeting with pruritus AD. treating drug the So the space treatment actually successful proposed these that pruritus us the commercial can Phase end FDA to the in work so as ending Phase that just of data important are be that with body patients is evidence with that all in of gives III Tradipitant suggest ready that dermatitis. point, that And on an conviction to the will with accumulated consistent dose go far hypothesis to a in

Unidentified Analyst

you for Okay you met great. then, or lag have plan regarding to? sNDA And jet guys with FDA the do the

Mihael Polymeropoulos

it a the sNDA now we're clinical process And not have the and that We communicate we likely that yet, or defined. have prior the to the made is actually in study filling. report of putting will and PsNDA meeting is FDA sNDA guidance will together be with that to whether

the However end. of by believe file everyone this in lag of phased but the of years of concept remind Phase consist second a events just a ago. a and position treating will this all that endpoint. hour significant small to in jet and the in should studies, that X support eight-hour phase two in primary year event few of efficacy of And a in to one we And succeeded studies, one three second round a sNDA them main proof we secondary conducted tasimelteon III was study then sNDA in

Unidentified Speaker

Great. had follow-up, the more just your that could you I from I one there? quick guess out tell HDAC briefly are inhibitor what other really ones differentiates

Mihael Polymeropoulos

to that be of inhibitor, in will a today aimed approach the And quick tell is inhibitors hematologic is product not HDAC understand well pharmacogenomics approach differentiation. we malignancies it treating HDAC but you malignancies patients in treatment to use therapeutic a it pharmacogenetics of hematologic prototypical cytotoxic effects inhibitor. with whether action Trichostatin terminal more and approved want hematologic and I'm inducing the to successfully of malignancies deacetylase. in beat and number considered evaluate question is will is for you means found of Well by with is it with What HDAC pan his achieve can that mechanism Histone of likely And an actually inhibits our agents. TSA. angle just to D our inhibitor HDAC A said malignancies other to glad TSA I which respond is HDAC significant no there nature answer. quick a that inhibitor

Unidentified Speaker

Great. Thank Okay. you.

Operator

Matthew Andrews Our open. from Mr. Andrews next your question comes line Jefferies. from is

Matthew Andrews

you IgE very of Hey how presented suggesting tradipitant recently on elevated extent good to will subgroup that derive patients My view you? what's higher that these talk what some and afternoon. or to analyses data FDA's from you guys worse. Can Mihael have tradipitant interesting what patients benefit about conversely placebo

Mihael Polymeropoulos

Yeah absolutely so.

Matthew Andrews

include possibly Richmond And a the population? for strategy patient

Unidentified Speaker

you, Thank Absolutely. Matthew.

and largest had II patients of obvious our Phase So that are baseline experience finding observation that not second the this normal you patients of IgE effect. summarize the baseline just of drug who placebo as XXXX unexpected same And the to had the difference levels about change ones was with for the study in above the between the normal at drug size experienced mentioned placebo. same IgE of fact levels but about

perform if biomarker saying on IgE placebo patients identifies drug. that as will as these as well that So

different they of So within signify with it observation. that may have a that rate emission of relapsed the period course disease

have we the on So the did FDA, to IgE. with opportunity begin the discussion

from part is course in to not this discuss the whether did can encounter strategy We time people this is of first or with the normal enrichment do this that continue and be And the useful. debate. the agree concept enrichment IgE, this we next we they biomarker. should we study exclude Of

exclude have we IgE IgE will different course, the of biomarker continue the is exclude to which order may that In this in of to value we evaluate and the but that to option show So at the time not of do the higher we finalizing normal If same patients likelihood you showing ask may validity while are the benefit levels. to the a design of biomarker. question effect we space opportunity in with you miss an however enriched a larger population. is

study the now where we're with normal we're is leaning and So very decision not final the IDA to close starting exclude levels. patients making to

Unidentified Analyst

Terrific. X the AAD Phase And what the to agreement component remains endpoint for of on study. relative

h] about You NRS. for What portion? have agreement NRS, on for-stitch AD the

Mihael Polymeropoulos

Yeah, appropriate? with we be manner an scale and on if What the what have the in the relative endpoint secondary don't following. a that the claimed agreement This can successful is label. is of

dermatitis. But in core would drive So you as where dermatitis atopic rather treat then finding have meaningful most as been If is over the unexpected physician the that atopic and clinically improvement base that worth in complain you'll not improvement a only will pruritus is and II so of indication improved severity the with treating. placebo. stitch agreement by Phase recall, of this start seeing say is significant its I an worse NRS sold we does with but also centered patients improved worse we have measurements lesion study significant that easy the surprising last of

they of discussion that we that way greater the last to gave than have patients on So XX scale And their in order figure approvals with a dermatitis it is our but actually how out degree a in dupilamab atopic like an X we of to on was in the a dermatitis, AD we not study, a has the that in that. to lesions, we happens have FDA improve this to confirm indication clear is and improve that two that again points. clear certain effect if would The get phase to FDA couple that been and of the crisaborole atopic only indication claim two had an skin. they included things. which severity One required

we is that the from population to the go mild clear. in which population to you and pursuing study, moderate almost Phase to of have to severe The had results same have only score or means the have a this X you we last we're zero. and almost So disease do very severe. to is That X everybody excluded

cannot The is X entry They drugs to be met than not use points. this the do why therefore a large pruritus everybody FDA get going they severe. not with this require measured show That IDA it, us improvement to criteria continued Understand threshold cannot discussion. entered threshold. IDA opportunity and And if X. severity greater of than from that not X the have to to occurs has a patients is approved say of because patients pruritus. two that has really we for is able number So will of that population the less meet question but of score the with than we'll to mild patient the are improve in more course severity we

in broader population is us agreement the believe will an appropriate is we have don't FDA SCORAD that now. other data. in easy. once So we it a I bridge suggest it two drugs? what than is scale We the is this it discussion is cross maybe But the more and is with

Unidentified Analyst

you it's it. way Jim. rationale down then Should tick see launch kind year? number And ticked progresses? one if for to some as for it. discussed of flat that is And guess Phase for you I trend the going through of a the bit quite would Got a year R&D end X correct? G&A QX uptick sort some And up this sequentially. this as CP be Is the the we

Mihael Polymeropoulos

meaningful And non-XX decrease first the in majority direct-to-consumer in is with of start the million. the advertising decline a characterization quarter, which for $X.X the I'll is of a awareness. So, SG&A which

entire worked launch have break the we As to doesn't HPI scale however here going and year. the we back a for took that program we're to mean

go we'll that point for I a back that the course would continue would program year and be this so Of of SG&A. and expect low

should you rise. to So it expect

Unidentified Analyst

Thank Okay. you.

Operator

Corey from Davis Seaport. Davis comes line Corey question your open. is from next Our

Corey Davis

and Thanks it me things. go the III design wasn't a very just much. still tradipitant few to I to back clear to Phase want for

their that get you by it normal the is sounds are can't is but that you segregating patients saying like FDA mouth exclude The saying and first mouth? your what about IgE, levels I IgE - putting with in

Mihael Polymeropoulos

to trying full I yet had all now, think IgE, have don't they the my is believe to Yes in they understanding are study review works. I data. it opportunity the They clinical and within a mouth putting report full their IgE don't they mouth. words

strategy. way this use appreciate characterize I enrichment the the So, of Tom, do they

given the the exclude indication. these of market, they before that more kind novelty they certain However like from population suggest you to of can would the IG learn

finding Now we to if on it. IgE significantly we like the would the and possible confirm hand other are intrigued by

So that said I is normal why exclude are not we that to IgE. leaning with patients

to So we'll opportunity have if the present. difference effect to that in be see continues

Corey Davis

Okay, way III it you would be so the can in Phase your study? confirm

Mihael Polymeropoulos

one. Correct, in the first

Corey Davis

And do you you going finalizing FDA so start these it? allowed are the it, finalize chose with few or things before to to start Phase III again a mid-year you things more to to be need without you before or start

Mihael Polymeropoulos

move the with would happen to FDA within to we finalize is exclusion thing next is are I and the only with imagine forward will point. that now we The dose, primary the the the of decision normal remains end patients have indication all that and be and type finalized XX that IgE pursuing internally, days. We need or inclusion of

by of study this year. start will we June this So

Corey Davis

Okay,

Mihael Polymeropoulos

need to No, FDA. the go back to

Corey Davis

studies sequentially. see to And parallel. you help it. have first Phase two that got Okay, to in III do got Do second you why not design cash, the want extra results the wait now and

Mihael Polymeropoulos

in-tangent. cannot do parallel, things you it be sequential course, Of can or in

of the We run atopic even to continue existing from dermatitis things data. the lot in

potential things learn exclude to the a conduct our larger not for operations expectation the of study, that in and begin are think many the we I do the study. of III the a of Phase rest we this study year be second III for there would of - start much Phase So

Corey Davis

see. I Now,

take Okay, as soon and be XXXX? how long market should expect is you this as it on think enroll to it you will do unreasonable it, the to

Mihael Polymeropoulos

the am product I Jim. at our longer plan looking - Actually our for term is

Jim Kelly

Yeah results exactly. filing had our in XXXX. we of spoken desire previously, course this point got our this a to is worked have before We and of and to

to to get going to I year, inform and to ramp complete we're going that this to think further we're our both timing to the learn up go Now that ability and study will point. this about

Mihael Polymeropoulos

Yeah, the with have said. so Corey we the A of within range XXXX consistent the what is market in you plan today.

Corey Davis

last figure And in for you out to if have then you ever how remind much Okay. you're paying Jim. taxes. just left Can question start going trying to us NOLs,

Jim Kelly

Yeah, in XXXX NOL magnitude of also and in a up the is ex-pop But it's is of of the overarching feedback $XXX million. number function the course our change impact. the

credits got to and credits working of million. addition in are range the $XX Now in which that, R&D I've

Mihael Polymeropoulos

it function And of of our course Corey, revenue. is a

do we're So we to to taxes, try the increase intend that's fine. pay have revenue. If to

Corey Davis

That's very all you Thank I have. guys. much

Operator

And I call was to speakers, back Polymeropoulos. our over question. that will now Mihael Dr. turn final the

Mihael Polymeropoulos

us. you And Thank or thank much. you all you. upcoming call. see very in you joining quarter for We'll Thank next soon conference our

Operator

ladies Thank This you, concludes gentlemen. and for Thank participating. conference call. today's you

You now may disconnect.

Vanda Pharmaceuticals (VNDA) 2 May 182018 Q1 Earnings call transcript