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8-K
VANDA PHARMACEUTICALS INC. filed this Form 8-K on 08/01/2018
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8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2018

 

 

VANDA PHARMACEUTICALS INC.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

(State or other jurisdiction of incorporation)

 

001-34186    03-0491827
(Commission File No.)    (IRS Employer Identification No.)

2200 Pennsylvania Avenue NW

Suite 300E

Washington, DC 20037

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (202) 734-3400

 

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On August 1, 2018, Vanda Pharmaceuticals Inc. (“Vanda”) issued a press release and is holding a conference call regarding its results of operations and financial condition for the quarter ended June 30, 2018. The full text of the press release which includes information regarding Vanda’s use of Non-GAAP financial measures, is furnished as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

Various statements to be made during the conference call are “forward-looking statements” under the securities laws, including, but not limited to, Vanda’s financial guidance for 2018. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “project,” “target,” “goal,” “likely,” “will,” “would,” and “could,” or the negative of these terms and similar expressions or words, identify forward-looking statements. Forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties.

Important factors that could cause actual results to differ materially from those reflected in Vanda’s forward-looking statements include, among others: Vanda’s assumptions regarding its ability to continue to grow its business in the U.S. through the HETLIOZ® to Psychiatrists Initiative, among other means, Vanda’s ability to complete the clinical development and obtain regulatory approval of tradipitant for the treatment of pruritus in atopic dermatitis and the treatment of gastroparesis, Vanda’s ability to successfully commercialize HETLIOZ® in Europe and other factors that are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Vanda’s annual report on Form 10-K for the fiscal year ended December 31, 2017 and quarterly report on Form 10-Q for the quarter ended March 31, 2018, which are on file with the SEC and available on the SEC’s website at www.sec.gov. Additional factors may be described in those sections of Vanda’s quarterly report on Form 10-Q for the quarter ended June 30, 2018, to be filed with the SEC in the third quarter of 2018. In addition to the risks described above and in Vanda’s annual report on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, other unknown or unpredictable factors also could affect Vanda’s results. There can be no assurance that the actual results or developments anticipated by Vanda will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Vanda. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

All written and verbal forward-looking statements attributable to Vanda or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Vanda cautions investors not to rely too heavily on the forward-looking statements Vanda makes or that are made on its behalf. The information conveyed on the conference call will be provided only as of the date of the call, and Vanda undertakes no obligation, and specifically declines any obligation, to update or revise publicly any forward-looking statements made during the call after the date thereof, whether as a result of new information, future events or otherwise.

The information in Item 2.02 of this current report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit No.

  

Description

99.1    Press release of Vanda Pharmaceuticals Inc. dated August 1, 2018.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 1, 2018     VANDA PHARMACEUTICALS INC.
    By:   /s/ James P. Kelly
      Name: James P. Kelly
      Title: Executive Vice President, Chief Financial Officer, Treasurer and Secretary
EX-99.1

Exhibit 99.1

 

LOGO

Vanda Pharmaceuticals Reports Second Quarter 2018 Financial Results

 

    Total net product sales were $47.4 million in the second quarter of 2018
    Hetlioz® net product sales grew to $28.0 million in the second quarter of 2018
    Fanapt® net product sales grew to $19.3 million in the second quarter of 2018
    Vanda reiterates 2018 net product sales guidance of $180 million to $200 million

WASHINGTON – August 1, 2018 – Vanda Pharmaceuticals Inc. (Vanda) (Nasdaq: VNDA) today announced financial and operational results for the second quarter ended June 30, 2018.

“We are excited with the year to date HETLIOZ sales performance, which demonstrates continued strength, and our HETLIOZ life cycle management program, which positions the product well for additional future growth,” said Mihael H. Polymeropoulos, M.D., Vanda’s President and CEO. “We are focused on our upcoming clinical milestones from the tradipitant gastroparesis study and the HETLIOZ Smith-Magenis Syndrome study.”

Key Highlights:

 

    Total net product sales from HETLIOZ® and Fanapt® were $47.4 million during the second quarter of 2018, a 9% increase compared to $43.6 million in the first quarter of 2018 and a 13% increase compared to $42.1 million in the second quarter of 2017.

HETLIOZ® (tasimelteon)

 

    HETLIOZ® net product sales were $28.0 million in the second quarter of 2018, a 10% increase compared to $25.4 million in the first quarter of 2018 and a 25% increase compared to $22.5 million in the second quarter of 2017.

Fanapt® (iloperidone)

 

    Fanapt® net product sales were $19.3 million in the second quarter of 2018, a 6% increase compared to $18.2 million in the first quarter of 2018 and a 1% decrease compared to $19.5 million in the second quarter of 2017.

Research and Development

HETLIOZ®

    Results from the JET study, a 3-night transatlantic Phase II study of the effects of tasimelteon on jet lag disorder showed effectiveness in treating travelers who flew from the US to the UK. Vanda expects to submit a supplemental New Drug Application to the U.S. Food and Drug Administration for HETLIOZ® for the treatment of jet lag disorder by the end of 2018.
    Enrollment in the Smith-Magenis Syndrome clinical study is ongoing. Results are expected by the end of 2018.

Tradipitant

    In June 2018, Vanda initiated EPIONE, a Phase III study of tradipitant for chronic pruritus in atopic dermatitis.

 

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    A tradipitant clinical study for the treatment of gastroparesis is ongoing. Results are expected by the end of 2018.

VTR-297 (histone deacetylase (HDAC) inhibitor)

    A VTR-297 Phase I study (1101) in patients with hematologic malignancies is expected to begin by the end of 2018.

Cash, cash equivalents and marketable securities (Cash) were $231.2 million as of June 30, 2018. During the second quarter of 2018, Cash decreased by $17.6 million and included a $25.0 million milestone payment based on cumulative HETLIOZ® net product sales.

Non-GAAP Financial Results

For the second quarter of 2018, Non-GAAP net income was $7.7 million, or $0.15 per share, compared to Non-GAAP net income of $1.6 million, or $0.03 per share, for the second quarter of 2017.

Vanda provides Non-GAAP financial information, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the sections of this press release entitled “Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information.”

2018 Financial Guidance

Vanda reiterates its prior 2018 net product sales guidance and provides an update to Non-GAAP Operating Expenses and Year-End 2018 Cash guidance and expects to achieve the following financial objectives in 2018:

 

   

Full Year 2018

Financial Objectives

  

Full Year 2018

Guidance

   

Combined net product sales from both HETLIOZ®

and Fanapt®

   $180 to $200 million
   
HETLIOZ® net product sales    $108 to $118 million
   
Fanapt® net product sales    $72 to $82 million
   

Non-GAAP Operating expenses, excluding

Cost of goods sold(1)

  

$153 to $163 million

as compared to prior guidance of $163 to $173 million

   
Intangible asset amortization    $1.7 million
   
Stock-based compensation    $11 to $15 million
   
Year-end 2018 Cash   

$225 to $235 million

as compared to prior guidance of $215 to $225 million

(1) Non-GAAP Operating expenses, excludes Cost of goods sold, intangible asset amortization and stock-based compensation.

 

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Conference Call

Vanda has scheduled a conference call for today, Wednesday, August 1, 2018, at 4:30 PM ET. During the call, Vanda’s management will discuss the second quarter 2018 financial results and other corporate activities. Investors can call 1-800-708-4539 (domestic) or 1-847-619-6396 (international) and use passcode 47289344. A replay of the call will be available on Wednesday, August 1, 2018, beginning at 7:00 PM ET and will be accessible until Wednesday, August 8, 2018, at 11:59 PM ET. The replay call-in number is 1-888-843-7419 for domestic callers and 1-630-652-3042 for international callers. The passcode number is 47289344.

The conference call will be broadcast simultaneously on Vanda’s website, www.vandapharma.com. Investors should click on the Investor Relations tab and are advised to go to the website at least 15 minutes early to register, download, and install any necessary software or presentations. The call will also be archived on Vanda’s website for a period of 30 days.

Non-GAAP Financial Information

Vanda believes that the Non-GAAP financial information provided in this press release can assist investors in understanding and assessing the ongoing economics of Vanda’s business and reflect how it manages the business internally and sets operational goals. Vanda’s “Non-GAAP Selling, general and administrative expenses” and “Non-GAAP Research and development expenses” exclude stock-based compensation. Vanda’s “Non-GAAP Net income (loss),” “Non-GAAP Net income (loss) per share” and “Non-GAAP Operating expenses excluding Cost of goods sold” exclude stock-based compensation and intangible asset amortization.

Vanda believes that excluding the impact of these items better reflects the recurring economic characteristics of its business, as well as Vanda’s use of financial resources and its long-term performance.

This press release includes a projection of 2018 Non-GAAP Operating expenses, excluding Cost of goods sold, a forward-looking Non-GAAP financial measure under the heading “2018 Financial Guidance.” This Non-GAAP financial measure is determined by excluding cost of goods sold, stock-based compensation and intangible asset amortization. Vanda is unable to reconcile this Non-GAAP guidance to GAAP because it is difficult to predict the future impact of these adjustments.

These Non-GAAP financial measures, as presented, may not be comparable to similarly titled measures reported by other companies since not all companies may calculate these measures in an identical manner and, therefore, they are not necessarily an accurate measure of comparison between companies.

The presentation of these Non-GAAP financial measures is not intended to be considered in isolation or as a substitute for guidance prepared in accordance with GAAP. The principal limitation of these Non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Vanda’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these Non-GAAP financial measures. In order to compensate for these limitations, Vanda presents its Non-GAAP financial guidance in connection with its GAAP guidance. Investors are encouraged to review the reconciliation of our Non-GAAP financial measures to their most directly comparable GAAP financial measure.

 

Page 3 of 7


About Vanda Pharmaceuticals Inc.

Vanda 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. For more on Vanda Pharmaceuticals Inc., please visit www.vandapharma.com.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Various statements in this release, including, but not limited to, the guidance provided under “2018 Financial Guidance” above, are “forward-looking statements” under the securities laws. Forward-looking statements are based upon current expectations that involve risks, changes in circumstances, assumptions and uncertainties. Important factors that could cause actual results to differ materially from those reflected in Vanda’s forward-looking statements include, among others, Vanda’s assumptions regarding its ability to continue to grow its business in the U.S. through the HETLIOZ® to Psychiatrists Initiative, among other means, Vanda’s ability to complete the clinical development and obtain regulatory approval of tradipitant for the treatment of chronic pruritus in atopic dermatitis and the treatment of gastroparesis, Vanda’s ability to successfully commercialize HETLIOZ® in Europe and other factors that are described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Vanda’s annual report on Form 10-K for the fiscal year ended December 31, 2017 and quarterly report on Form 10-Q for the quarter ended March 31, 2018, which are on file with the SEC and available on the SEC’s website at www.sec.gov. Additional factors may be described in those sections of Vanda’s quarterly report on Form 10-Q for the quarter ended June 30, 2018, to be filed with the SEC in the third quarter of 2018. In addition to the risks described above and in Vanda’s annual report on Form 10-K and quarterly reports on Form 10-Q, other unknown or unpredictable factors also could affect Vanda’s results. There can be no assurance that the actual results or developments anticipated by Vanda will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Vanda. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

All written and verbal forward-looking statements attributable to Vanda or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Vanda cautions investors not to rely too heavily on the forward-looking statements Vanda makes or that are made on its behalf. The information in this release is provided only as of the date of this release, and Vanda undertakes no obligation, and specifically declines any obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

####

 

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VANDA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for share and per share amounts)

(unaudited)

 

     Three Months Ended     Six Months Ended  
     June 30
2018
     June 30
2017
    June 30
2018
     June 30
2017
 

Revenues:

          

HETLIOZ® product sales, net

   $ 28,045      $ 22,507     $ 53,468      $ 42,689  

Fanapt® product sales, net

     19,305        19,549       37,474        36,782  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

     47,350        42,056       90,942        79,471  

Operating expenses:

          

Cost of goods sold excluding amortization

     5,213        4,529       9,773        8,532  

Research and development

     9,866        7,648       19,282        18,215  

Selling, general and administrative

     27,960        31,371       54,782        61,668  

Intangible asset amortization

     398        432       750        886  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total operating expenses

     43,437        43,980       84,587        89,301  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) from operations

     3,913        (1,924     6,355        (9,830

Other income

     788        397       1,410        677  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) before income taxes

     4,701        (1,527     7,765        (9,153

Provision for income taxes

     90        7       88        26  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 4,611      $ (1,534   $ 7,677      $ (9,179
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss) per share, basic

   $ 0.09      $ (0.03   $ 0.16      $ (0.21

Net income (loss) per share, diluted

   $ 0.09      $ (0.03   $ 0.15      $ (0.21

Weighted average shares outstanding, basic

     52,172,982        44,718,597       49,270,829        44,559,368  

Weighted average shares outstanding, diluted

     53,945,640        44,718,597       51,101,464        44,559,368  

 

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VANDA PHARMACEUTICALS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

     June 30
2018 (1)
    December 31
2017 (1)
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 60,891     $ 33,627  

Marketable securities

     170,325       109,786  

Accounts receivable, net

     24,855       17,601  

Inventory

     1,193       840  

Prepaid expenses and other current assets

     11,838       8,003  
  

 

 

   

 

 

 

Total current assets

     269,102       169,857  

Property and equipment, net

     4,800       5,306  

Intangible assets, net

     25,319       26,069  

Non-current inventory and other

     3,705       4,193  
  

 

 

   

 

 

 

Total assets

   $ 302,926     $ 205,425  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable and accrued liabilities

   $ 18,562     $ 20,335  

Product revenue allowances

     26,319       23,028  

Milestone obligations under license agreements

     2,000       27,000  
  

 

 

   

 

 

 

Total current liabilities

     46,881       70,363  

Other non-current liabilities

     4,774       3,675  
  

 

 

   

 

 

 

Total liabilities

     51,655       74,038  

Stockholders’ equity:

    

Common stock

     52       45  

Additional paid-in capital

     604,889       492,802  

Accumulated other comprehensive income (loss)

     79       (34

Accumulated deficit

     (353,749     (361,426
  

 

 

   

 

 

 

Total stockholders’ equity

     251,271       131,387  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 302,926     $ 205,425  
  

 

 

   

 

 

 
(1) With the adoption of Accounting Standards Codification Subtopic 606, Revenue from Contracts with Customers, on January 1, 2018, provision for product returns is included in product revenue allowances and other non-current liabilities in the current year. Provision for product returns is included in accounts receivable, net in the prior year. Please refer to footnote 2 in the quarterly report on Form 10-Q for the quarter ended June 30, 2018, to be filed with the SEC in the third quarter of 2018, for more information.

 

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VANDA PHARMACEUTICALS INC.

Reconciliation of GAAP to Non-GAAP Financial Information

(in thousands, except for share and per share amounts)

(unaudited)

 

     Three Months Ended     Six Months Ended  
     June 30     June 30     June 30     June 30  
     2018     2017     2018     2017  

Net income (loss)

   $ 4,611     $ (1,534   $ 7,677     $ (9,179

Adjustments:

        

Stock-based compensation

     2,721       2,656       5,872       4,912  

Intangible asset amortization

     398       432       750       886  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income (loss)

   $ 7,730     $ 1,554     $ 14,299     $ (3,381
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income (loss) per share, basic

   $ 0.15     $ 0.03     $ 0.29     $ (0.08

Non-GAAP Net income (loss) per share, diluted

   $ 0.14     $ 0.03     $ 0.28     $ (0.08

Weighted average shares outstanding, basic

     52,172,982       44,718,597       49,270,829       44,559,368  

Weighted average shares outstanding, diluted

     53,945,640       44,718,597       51,101,464       44,559,368  

Operating expenses

   $ 43,437     $ 43,980     $ 84,587     $ 89,301  

Adjustments:

        

Cost of goods sold excluding amortization

     (5,213     (4,529     (9,773     (8,532

Stock-based compensation

     (2,721     (2,656     (5,872     (4,912

Intangible asset amortization

     (398     (432     (750     (886
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Operating expenses excluding Cost of goods sold

   $ 35,105     $ 36,363     $ 68,192     $ 74,971  
  

 

 

   

 

 

   

 

 

   

 

 

 

Research and development

   $ 9,866     $ 7,648     $ 19,282     $ 18,215  

Adjustment:

        

Stock-based compensation

     (316     (285     (637     (694
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Research and development

   $ 9,550     $ 7,363     $ 18,645     $ 17,521  
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative

   $ 27,960     $ 31,371     $ 54,782     $ 61,668  

Adjustment:

        

Stock-based compensation

     (2,405     (2,371     (5,235     (4,218
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Selling, general and administrative

   $ 25,555     $ 29,000     $ 49,547     $ 57,450  
  

 

 

   

 

 

   

 

 

   

 

 

 

COMPANY CONTACT:

Jim Kelly

Executive Vice President & Chief Financial Officer

Vanda Pharmaceuticals Inc.

(202) 734-3428

jim.kelly@vandapharma.com

 

SOURCE Vanda Pharmaceuticals Inc.

 

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