VNDA - Earnings call transcript Q3 2019 | Vanda Pharmaceuticals Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2019 Vanda Pharmaceuticals Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions]

to conference like speaker to now Mr. today, would hand over the your I Vice Chief President Executive Kelly, Jim and Financial Officer. Please sir. go ahead,

Jim Kelly

Thank Good much. joining Vanda you thank third right. Pharmaceuticals' performance. for discuss us afternoon, XXXX quarter you to All and very

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

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

Dr. Mihales me Polymeropoulos, president call today Joining on and is the CEO. our

our remarks, ongoing introductory Following Mihales you on will activities. my update

I then financial before will on comment results questions. opening our your for the lines

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

circumstances, risk for quarterly for December assumptions in results uncertainties. on System ended are the statements and described SEC's Form and year condition of of annual EDGAR ended quarter risks factors and based Our on available expectations forward-looking the that in on our are These report the discussion which on June current operations XX, sections and financial the website. upon XX-K and management's of report analysis is fiscal XXXX, and involve Form our changes risks, XXXX, XX, XX-Q

statements no all undertake filings. as obligation to our today, or to law. provided may otherwise, is required future of events encourage or provide on we reports on new call make on we other account except these update The publicly and We investors read SEC this we this of forward-looking information, any information only by and call revise as

our CEO, turn to like call Dr. now to I'd over said, that With Mihales Polymeropoulos. the

Mihales Polymeropoulos

and us. has much, excellent for been This for very very much you Jim. thank Thank Vanda. Good an quarter afternoon, everyone, you joining

third Vanda's today, the quarter. we products As in revenue from to commercialized grow continued our reported

the driving our opportunities market in growth. pursue our objective long-term third with the of in commitment strength of ongoing the enhancing quarter and position sustainable performance demonstrates to Our the value

awareness years six manner. both this and into testament disorder Hetlioz ability is of a our growth drive non-XX-hour unprecedented to to doctors unique performance drive and with the continue and We for to sleep-wake launch, a continue in patients to

We new with patients and for individuals blind sighted non-XX. strong continue to in see demand both

on a marketing addition Fanapt, kind are for to Hetlioz, first significant treatment, we year. begin direct-to-consumer success of campaign the early preparing commercial our schizophrenia for which will In next its

forward feedback We innovation, improve on magazine a competition. in marketing circulation piloted campaign strategy have our campaign Fanapt appreciate months, few drugs In was print driving have last coming that a positive the changes look also very at comprehensive launched for and the to and broad received this to we summer that regulatory enable Fanapt expand and months. regulatory increase access aimed

intent on business. matters support and our to believe will this is Vanda's we and interest strategy advance serve. undertake collaborative that authorities of regulatory products Our the all the engagement an Vanda with intensive of We and better patients

as with of well for and around models appropriate discussions actively on including Consortium others, Neurogastroenterology feedback safety GI and evaluations, issues process of engaging of our the American engagement issued for including database. plans development Gastroparesis Society the example summer. also with consistent safety commented important and the guidance projects. the number evaluations Motility patients. expressed a the participation were new draft the length by and on of on in gastroparesis Vanda's all safety We're number An the the We this for as common FDA appropriate the Clinical clinical by organizations FDA is the design endpoints, key proposed of of Many of Research and post-marketing physicians, preclinical evaluation of comments advocacy on our this the

discuss will assets significant development, on We a progress in clinical I and made few our have highlights.

confident namely of that the effects number clinical issues approval, parallel during our XX Hetlioz quarter. submissions with the a are in meeting advancing our are we with pre-sNDA NDA scheduled continue regulatory and that months. day of number essential currently trials significant all tracks Hetlioz, of planned for a and significant Also resolve demonstrates the on next FDA Smith-Magenis the of syndrome on lag fourth of precluded engagement jet and features disorder next the the supplemental our jet conducting numerous clinically to for and lag lag disorder, We we we remain the meaningful on On alertness. for a of products, rapidly core for is jet disorder, treatment Hetlioz, insomnia

in for bring Smith-Magenis with to this families controlled include largest look important their we and the and Our the syndrome forward sNDA patients soon to the as treatment FDA conducted will disorder, working study possible. ever as to

For the initiate months. Fanapt, we study to a plan bipolar disorder in in coming

a formulation Fanapt now In injectable I addition, the of turn long-acting of studies are to tradipitant. ongoing. will

positive sickness well XXXX. anticipate study study reported the a motion Phase from our are chart the X for fourth filing We neurokinin-X in Plans X with supports quarter. we motion under and plan beginning path our results year. for an This and this FDA a our tradipitant NDA program is way, with sickness later clinical program in the for to meet our in in antagonist. sickness motion that We earlier Phase receptor study

and as study gastroparesis patients. diabetic additional randomizing you also weeks, to patients. approximately of tradipitant, is enrolling On are and with gastroparesis. XX we the idiopathic XXX for Phase patients two of atopic dermatitis and The duration important the and aware, is indications, plan gastroparesis, study both We're X enroll advancing

dermatitis. of atopic to report in excited the study We are of tradipitant progress significant very

XXXX. in results in and of EPIONE, first first the quarter We study, enrollment completed expect Phase have of October to X the report now

Gastroenterology, circadian continues begun have enrollment meetings presence of College the at Genetics. past whole United have species. genome atopic XX included meetings length this papers Gastroenterology, Research chronotypes also, Gordon sequence number American the the of we quarter, Human for also gastroparesis, and a X of study the presentations of patients, name, We second patterns discoveries to the period analysis schizophrenia regions a affecting Society syndrome in Vanda homozygosity by in of Phase across in EPIONE II. European chronobiology American and presented including Smith-Magenis dermatitis These strong novel human scientific the of at

growing an IP progress, pace. financial progressing through while, summary, defend to We of for very the and and continue at healthy and excited In commercially Jim? portfolio, newly performance, are the addition cash our products. significant same we including strengthen accelerated with our at projects revenue issued clinically, by patents our our innovative a time, balance, profits strong both

Jim Kelly

Mihales. you, Thank right. All

we during $XX.X growth, our revenue As for sales million, XXXX. net Mihales of saw plans. XX% which consistent highlighted, quarter with the Total the is XXXX third year-over-year in the third increase of third exceptional million to of $XX.X XXXX, a compared were quarter product quarter

as early to XXXX. Hetlioz compared Hetlioz compared XX% on with second sales of $XX.X Hetlioz days to quarter of record the third that quarter in second third since in a net product additions therapy million declined patient were growth increase quarter of in launch. of third Reminder the the seen the XXXX. saw of XXXX, number million the the quarter $XX.X number new a patient largest quarter The the slightly

of based XXXX, XX, weeks the inventory September trailing calculated channel demand. two as on less of specialty held than As pharmacy

the inventory approximately of XXXX Specialty lower was Fanapt in quarter was quarter XXXX. the of compared pharmacy's the end $XX.X million reflects XXXX, to in of sales quarter net third this XX% value quarter at when a inventory the of second compared The XXXX. change product on $XX.X hand third the of million XXX,XXX. to increase third of of

the of quarter decreased second September XXXX, to of inventory have compared XXXX. As XX, hand when wholesalers on

this XXXX. $XXX.X remain Fanapt reported income recorded XXXX XXXX. with The the And net quarter income of X% prescription of third trends net to the change prescriptions, consistent XXXX, of our value exponent, approximately full-year million of was by inventory guidance. Vanda third XXX,XXX. compared decreased by quarter the to million $X.X for financial of compared quarter In of as third IQVIA

The asset quarter favorable valuation includes financial results release third in of allowance. the of the of million, Vanda's reflected for the of income tax tax deferred XXXX, benefit the impact $XX.X

tax of a deferred asset and a in an the third this does in XXXX have on reflect balance. is does quarter Vanda's income noncash cash therefore tax and million, this the Now future in and immediate of XXXX. $XX.X our That $X.X tax impact recognition business the benefit one-time item, not of before to the was third conviction quarter million profitability. compared quarter strong Income a management's XX% increase said,

net million a cost combination Operating were quarter $X.X with of of the of expenses of increase expenses to increase the million an goods and the $XX.X in increased of quarter third XXXX. compared higher sales. SG&A of was in cost to associated million product XXXX The operating sold $XX.X third

new by and sickness. driven activities. to our particular R&D DTC expenses tradipitant studies Of in rise are gastroparesis, operating note motion for quarter expect fourth Phase spend dermatitis the atopic XXXX of the X and project commercial We

Vanda's cash, sales results Hetlioz increase $XXX as half in of and of million; from cash quarter and representing compared $XXX.X XXXX. of Vanda securities XXXX, in million, $XX marketable an cash the its guidance referred were reiterates cash net as of to of equivalents third September and to million XXXX product million; million. $XX net and million net sales sales $XXX between both product of Hetlioz the and Fanapt XX, of and million $XXX sales upper $XXX range; between Fanapt $XX million between the net product expects product

achieve to to to following greater compares is an the prior objectives. expected providing is of guidance greater Year-end Vanda $XXX and to expects financial $XXX cash million. be year-end In addition, than cash million, this update XXXX than

back I'll now Mihales. call the turn to

Mihales Polymeropoulos

we would Thank At you to questions. this much. answer your very point, love

Operator

of comes first line from [Operator Roger Instructions] Jefferies. question Our Song the with

now is line Your open.

Roger Song

for question. Hey. Thank taking you my

My So of two. congrats pretty question kind quarter. maybe tradipitant, good related for the first first all, to of third

Phase line And X kind earlier kind could can related atopic line So of enrollment? how quick kind share than a the with for of bit of expected, the you of so attribute little to dermatitis us? this you results, information time any top

Mihales Polymeropoulos

of was of you're XXX XXX. to and good of about XXX, for recruitment, but the reason approximate our in blinded correct increment very the for the at the that recruitment in quarter. of is initial able small which study XXX One speed this also, after our data, the analysis and dual. estimate between is the completing a we And was first study execution and the this the Yes, patients cap showed power were instead

really see first the excited but really the to is we're the that quarter. in results explanation, So

Roger Song

see. I Great.

And for clinical on your partial for FDA you with question understand XX, dispute judgment. summary Okay. the December will the hold motions have next we is, the hearing

what you how would street? So you would of potential to the kind a communicate outcome expect? And

Mihales Polymeropoulos

this comments. public course, who information is the we the your let pass will is cannot question actually But All in here to Counsel, say, any our us. will with Tim And I answer will General question. I I Tim Yes. of Williams, make domain.

Tim Williams

Mihales. Thanks, Sure.

when reminder, July, oral judgment a filed as and the we case request context, did our in set back summary to we in – a as Just motion this hearing.

that So of this did Judge – he Monday well. request, The that for available publicly as granted we this on week. PACER happy Bates the documentation are is system is that which on

So echo we looking that, on from outcomes remain in Apart hearing. hearing. case, the or won't said, and confident Mihales the to strategy we forward speculate position we're that or on our to responses I what

Roger Song

have Phase Sure, what the sickness X? given – Maybe learning question from last X fair. study, motion Phase considerations one positive the key from for is the me been

Mihales Polymeropoulos

Yes.

results, As that we placebo. took tradipitant said took very Phase strong that very X, course, patients those of significant with protection over the of

certain when in we this results with mean One the Phase patients that but the matter will FDA will is of we're sea we of seas soon weather, that to to next upcoming will randomize learned study. I study. the rough and achieved. matters, X I clinical underscore review to to formally wave don't going that the make But want the we plan conditions request meeting are and an least end that also at and learnings controlled height be key

Roger Song

Got you. for all me. That's Congrats it. again. Thank

Mihales Polymeropoulos

right. All you. Thank

Operator

Our comes from question next Beatty with Citi. Joel

is line now open. Your

Joel Beatty

taking Hi. Thanks for my questions.

on is OpEx the you DTC for one heard increasing call, DTC spending. spending. earlier right, first additional the the some you in mentioned So If I

cut you that think if area, on that remember I is bit And a I earlier little back this year. an this right,

increased about would that on, to products presumably, gives So which as well the scripts? that, maybe focused talk lead as spending what you you confidence can be will

Mihales Polymeropoulos

that's a question. fair Yes,

you to target. all, not it around now DTC of will also and from. confidence little that spend experience. I will where behind a I'll to specific say the First bit give speak we're I first comes thinking discuss But prepared our

of creation is smaller has driven our been now fantastic that years to It campaign experience direct-to-consumer DTC campaign. that about our has a growth. non-XX database with continue very of learning before drive saturation and patients the our and a in on significant Hetlioz Our XX,XXX to in first reminder interested performance four campaign with a the drive approximately of now more three

return investment been there, So on the has fantastic.

additional and a Now now direct-to-consumer do campaign As the are television we'll planning we product? Fanapt. DTC is for mentioned, campaign what question for I what

antipsychotics, And promotion. the thinking of category this quite have Fanapt did are behind not direct-to-consumer it actually drugs, sensitive is to any. that

strong aware other of them. that today and campaign we brands Vanda a do consistent for direct-to-consumer have presence of operate, goal The behind are The them. is which antipsychotic available empower this under drugs the principles with make patients which of would be campaign

And our schizophrenia in it Vanda's rather for actually for bring another their disease. And little early pilots Fanapt be and likely and think same to significant with a products horrific time, the their at we're competitors to offer positive destigmatize indication this for ever disorder does front first of advertise We All to the that will doctors. company not their to major of print, the drug word depression. patients bipolar advertised destigmatize discuss from we responses as have very very efforts to but Americans, first getting schizophrenia. schizophrenia, in our treatment

excited what Vanda campaign to very very understand before to But what past that. metrics comment do have spend of DTC But this come. very want plan even should I of And employed the long a point Fanapt. that Joel, I in with is about specifically also will opportunity campaign be. we're the before So and performance we – not that revenues out, to will good has know effect what quickly the we to

doing course, of this we're And metrics of our sure will a ROI. So to revenue. the make increase we we positive understand

Joel Beatty

for additional for change FDA all seem it I And what discuss that Really be – any guess work? you And that consider tradipitant motion does indications clear other certain FDA's question completing at without additional could it FDA appreciate those that at seems preclinical any all as to detail. approve I such willingness and maybe some indication for tradipitant. one indications more is Can wants shorter I'm on getting work, animal And the would the but there guess shorter-term use, preclinical that way indications term? sickness. approving to the it's

Mihales Polymeropoulos

Yes, fair that's a question.

So I'll take time. one a indication at

outside where of will species right, you're safety having a long-term is in of intermittent data this recommendations For ICH incidental motion the treatment two sickness, be guidance. certainly

full our So expectation part it not this the database would of required. that is be

until doesn't and course, Of the file you FDA later. tell them tell you what is you required they maybe

on sickness, would data that exists already for preclinical should However, within be that we requirements. say very well feel confident that database will motion I this

you'll for on comment. this, Vanda's gastroparesis on time gastroparesis, you what program comment plan to in doing a search Now much beyond we plan about regulations.gov, safety and our a feel and can the above that confident produce to guide enhance it's will too I also database the see in of you the guidance, safety publicly spending available Without FDA actually the now. Vanda will is

XX,XXX will patients Within at comprehensive up of continue see FDA study complete analyzing and Difficulty] these reporting database of database time pharmacy a study in very the [Technical will program the data on then data Difficulty] the proposal that continuously safety call you Vanda to to through the a where XX-week a for our [Technical to registry creation, approval, and for distribute specialty and placebo-controlled the comments, FDA. submission of safety placebo-controlled we a

detection that are on exposed we of to improve months and with XX potential current FDA millions way that the the of market signals. We ICH the released and that required of enhance system people believe it drugs is treat all Vanda drugs. safety adopted the XXX grossly guidance, be proposal the for delays inadequate databases thousands of and to should that or patients transform believe our of may is human drugs, safety certainly and the By advancing by has

Joel Beatty

you. Got it. Thank

Operator

next Jason with Securities. question Our JMP from comes Butler

is now open. line Your

Jason Butler

taking for questions. Thanks the Hi.

you more to color First XQ of for XQ? patient any dynamics from give one, can the us Hetlioz

Mihales Polymeropoulos

and it to something. maybe Yes, a Jim wants add I'll bit little characterize

continuing patient-directed continue from our the program, to of We Jim, patients per see add the combination PDP which month. which And Hetlioz is the initiative. is psychiatry program want and physician very the both to growth are comes see a And HPI something? the of a growth in month. you program, do addition added to every significant we demand

Jim Kelly

of – driving a earlier held was that growth the quarter Hetlioz. in Sure. adds the Jason, that heard getting therapy. feat. you an and was which mention for and of It itself in record We effectively new patients third terms quarter me quarter, exceptional Hi of on amazing in is patient second

I DTC work for a we us. a do we head and little less such, think, as into little is and quarter extra third summer

shape think strong and So patient quarter of the on of a we look a as heels the demand at exceptional. is third we business, record second the that maintaining in patient quarter the on-therapy

so really from And here. to building business forward looking the we're

Mihales Polymeropoulos

Yes. to exceptional I to that ingenuity point the in Vanda never up actually want that years into it product gave to try this this team just the will continue to and continue is I'm happens because of proud grow it six product. our But to identify patients to very grow space a Jason, out, and And efforts launch. to for benefit. again,

patients. and or of see effects have doctors given of all misdiagnosed in the are non-XX. we're their answer is and learning the an with day that the lives been were see now that we patients for enlightened that disorder them And untreated our transformed, of to blind many What peculiar either a we sudden being every some years, Vanda sighted, from drug patient has that stories

that representatives hugged male one the was awareness, and be physician our now to a what doctor's sighted for this that an received Hetlioz I it patients. where patient only because That of walked of recognized with he to you mention week sleep issues Only to treated one patient. into done last our his office e-mail say this a has sales non-XX thank successfully peculiar to be may of

this story we that by So And growth us identifying today. patients will make is actually continue underdiagnosed right the drive Vanda doing to think are that thing.

Jason Butler

helpful. That's one question. then just Great. more And

about disorder study trial any on be details you whether On more a give and registration us Fanapt, you're the can a bipolar level you design Thanks. at study? even high this expect thinking to for how

Mihales Polymeropoulos

start the a endpoints Yes, And be will will that study. a psychotics otherwise, would will in-patient would it registration have and studies classic successful all we're be the boring. pretty bottom. or inpatient, Yes, from I four-week And – study. we debating that. It it's have. three have three-week

Jason Butler

for the Thanks taking questions. Great.

Mihales Polymeropoulos

Of course.

Operator

from question next the Stifel. comes with Derek Our Archila line of

is line now Your open.

Derek Archila

guys, questions. thanks afternoon taking for the Good and

release. a from just we the in reconciliation So us. any I few non-GAAP see press first, guess, didn't figures

wanted that. just the of get for sense a figure the was breakdown the quarter I stock-based of to So where and kind comp of

So start can then couple a maybe we have of follow-ups. there, just I and

Jim Kelly

in the And in SG&A between comp the so XX-Q, its and fact, R&D all detail will will breakout Derek. you and see there. still be stock-based Sure, that data

schedule longer on year. that year, guidance had this This this we we our guide no quarter, non-GAAP OpEx. we that decided We because to simply remove gave stopped

to to right continue And make didn't there you the in so it queue. is since it, especially just the all data sense need seem

Derek Archila

And on R&D enough. then expense. Fair Okay. just

and relative the portion to it's consensus good year, least like seems been this well. at our of through the estimates as low kind on it of side So

start some you like So going up, to sounds the be it least you're studies. like – sounds or at starting ramping R&D started should

the sense, So kind us of can give a you just maybe magnitude?

of XX how like we look again, obviously, about, that without studies? cost XX then, a over And should variety be What next different to thinking the XXXX months? could guidance, giving

Jim Kelly

for of is atopic from I example, think at All important to I for dermatitis impressive. right. less. And opposed that the XXX quicker confident in to the enrollment in in business, our things heard and way. earlier us and have as I ability we is original completing number answer a little in get approximately, operate incredibly we Mihales found Well, XXX efficient you one think, pretty feel that, this really mean, that's the bit an the XXX, to

a to you window heard, So sickness And and we're step-up happy do heels the we're as expect going, where with part of expense. into great motion front as the to soon, going the from going on year, hear about to results, the we us R&D that. we're you a we and guidance study next be want Also in I coming initiating up jump gastroparesis but R&D in more of is here get are wouldn't execution. into

Derek Archila

Okay. right. All

just on Hetlioz. moving So to

some a about XQ So about the comments, small of patients to in sounded as therapy on decline we you think like number the talking of it sequential XQ. were from

type guess, of volume. So I that XQ was more record-setting

the you give price us and kind of sense, can third into So just as the stepped quarter? between we a split volume maybe

Jim Kelly

Yes.

whether share in is heels less the the can vacation, all So number that little know quieter, would that patient of first maintain thing thrilled, just patient be on on-therapy I DTC. vacation, were we docs' even QX, to when record growth, it's QXs we

exceptionally happy. we're So

remember, I saw X sequential QX, step up. think in you a million we

So holding thrilled. the and set then go it forward, nice up we're a for having

Derek Archila

Okay.

again, guess, – if I we're about talking volume So

Jim Kelly

of and yes, QX from step And back, as QX flattish, you – view sort think about here. and you think we're just you then to versus move them as if thrilled

Derek Archila

Okay.

there comments I said sequential I So a mean, guess, that it's now decline, your flattish. but was

want that that So this. sure straight got model I make we just to we as

Jim Kelly

with in slight small, you. A therapy, there's in remember, about shared of I pieces couple on a destocking. XXX,XXX patients Well, decline

investor's of clearly, the an looking So Vanda of on point heels the if their to is to second exceptional QX, there's and about, is you're forward that business from tell what in think I view, position here. from about quarter, would you we're I where going, it you, pieces. thinking But mean, as about some me an Jim held building talked moving

Derek Archila

now and question last guess, I a on through then, many quarter. And HPI. Okay. here We've months gone

HPI? continue of in, growth in So And of are here. talk guys think I you about we to terms guess, in ultimately, inning from you kind we're what do

So this go? you can think again, where do

Mihales Polymeropoulos

that. answer can I Well,

strong to continue We find after month. month demand

of demand on And of any So activities we we're to emphasize do new saturation our and HPI. in sales reorganizing not Hetlioz even the sales. of see midst fact, signs more the force in

Derek Archila

Great. Thanks questions. for taking my

Mihales Polymeropoulos

Sure.

Operator

in closing further no showing for like Dr. am Polymeropoulos at I'd to remarks. this I queue questions call turn to the time. back

Mihales Polymeropoulos

very thank on us soon. for all I to joining we'll you much questions, this call. you Yes, and appreciate your talk

Operator

Ladies concludes and conference Thank you for may this call. disconnect. you gentlemen, today’s participating, now

Vanda Pharmaceuticals (VNDA) 8 Nov 192019 Q3 Earnings call transcript