Q1 2021 Vanda Pharmaceuticals Inc Earnings Call
And is that Peter and today's country. So scheduled to begin momentarily until that time. Your line. So they can be placed on hold and thank you for.
For your patients.
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Good day, and thank you free standing by and welcome to the Q1, so any kind of wanted and Vanda Pharmaceuticals, Inc. Earnings Conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
Ask the question during the session you will need to basketball and one on your telephone.
And for the assistance, Please press star zero and I.
I would now like to turn the conference over to Kevin, Matt and Ventas Chief Financial Officer. Please go ahead.
Great. Thanks Ashley.
Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals first quarter 2021 performance.
Our first quarter 2021 and the results were released this afternoon and are available on the SEC's Edgar system and on our website Www Dot Vanda pharma dotcom.
In addition, we are providing live and archived versions of this conference call on our website.
Joining me on today's call the Doctor Mahalo, Steimer Op Lewis, our president and CEO.
Following my introductory remarks I'll also update you on our ongoing activities I will then comment on our financial results before opening the lines for your questions.
Before we proceed I would like to remind everyone that various statements and we make on this call will be forward looking statements within the meaning of federal securities laws of.
Our forward looking statements are based upon current expectations and assumptions and involve risks changes and circumstances and uncertainties.
These risks are described in the cautionary note regarding forward looking statements risk factors and management's discussion and analysis of financial condition and results of operations sections of our annual report on form 10-K for the fiscal year ended December 31, 2020 and.
The updated by our subsequent quarterly reports on form 10-Q.
The current reports on form 8-K, and other filings with the S E C.
They are available on the SEC's Edgar system and on our website.
We encourage all investors to read these reports and our other filings the.
The information we provide on this call is provided only as of today and we undertake no obligation to update or revise publicly any forward looking statements. We may make on this call on account of new information future events or otherwise, except as required by law.
With that said I would now like to turn the call over to our CEO, Dr from the house Pi and Robert.
Thank you very much Kevin good afternoon, everyone.
Fully a talents in the year as the world phase of the COVID-19 pandemic.
<unk> entered 2021 with a focus on value creation from both of the pipeline and the continuous call uk's from from our commercial projects.
And the potential future value creation, and the base and our pipeline can be seen in predicting for the treatment of gastroparesis with the results from our ongoing phase three study expected later this year and then anticipated launch in 2022.
The emerging the SPD delayed sleep phase of the program and help us, which we believe can advance quickly and finally, our late stage fanapt evaluations and bipolar disorder, and long acting injectable formulation and in Parkinson's disease psychosis.
And the first quarter. We also launched the tiers and Becky is Oh Q4, Smith <unk> syndrome nighttime sleep disturbances and we're excited about its anticipated contribution towards value piece of cotton.
And the commercial performance, we see continued growth year over year.
And the first quarter of 2021.
Total net product revenue for happier and for that were 62.7 million and 8% increase compared to the first quarter of 2020.
Net product revenue and happier signed 11% increase and the first quarter of 2021 compared to the first quarter of cause of 'twenty.
And net product revenue for us for that so a 3% increase compared to the first quarter of 2000 and twin.
While during the first quarter of every year patients navigate and certain stages with contemporary and the impact piece and some therapy. We're pleased with the performance on both churches and kidnapped despite the challenges.
I will let us discuss our late stage lifecycle management programs, which can present us with the number of additional revenue growth opportunities and the near term.
I will now turn to the Spitsbergen syndrome nighttime sleep disturbances approval by the FDA and launch of the project.
In December the FDA approved the oral capsule formulation of catalyst and the new liquid formulation courteous L Q4 of the treatment of nighttime sleep disturbances in the adults and children with Smith <unk> syndrome.
Got it.
SMS is a neurodevelopmental disorder.
Caused by genetic mutation of accomplished from 17, which is the micro deletion in about 90% of of the patients and the point mutation in the R. H I G, which is included in this micro deletion region and the remaining 10% of the patients.
That's the mess affects one in 15 to 25000 births.
With an estimated U S prevalence of approximately 15000 patients.
The most common and most disruptive clinical expense from the rest of the bass is a sleep disorder that impacts the function of patient and consequently.
And their families.
During the first quarter of 2021, we launched happier and healthier sell coupon instruments.
As part of the relaunch we have retired toward exist database of S and Ms patients.
The members and caregivers and in collaboration with the patient advocacy organization prisms ex.
Standard our outreach to the broader group of patients and their families.
Well, while we're still in the beginning phase of the most of the launch of the hit is capturing the kimpton as of Q liquid formulations. We're encouraged by the early results.
We continue to connect with newest and most families and these kind of at least our DAU of different stages of discussion and the treatment option with acquisitions.
At the same time already more than 50 patients have already received prescriptions and and navigating the insurance approval process.
What is the maybe the finalized and the second phase of our course of launch which will reach out to a larger number of diagnosed and undiagnosed individuals Walter.
While it is difficult at this time to estimate and the exact growth trajectory from the adoption of SAP years by year from the spaces. We're excited about the birds and opportunity as we continue to deploy and number of saddens us to reach and inform the community of approximately 15000 listen the stations in the U S.
Given the genetic testing available for and it's the best a significant number of patients are already diagnosed and ease of expects to be the first who come to tip. The.
And this maybe that between 80% to 100% of patients with us the best suffer from nighttime sleep disturbances pool, which has kept years is the only approved.
We expect of the penumbra of SMS patients on treatment and we picked this will continue to increase throughout the year and the greater awareness will lead to adoption.
And we're assuming the activity in most of our clinical programs.
I would like to highlight our progress in some key clinical programs.
First of all ultra deep sector.
We're excited about the upcoming completion of the Gastroparesis study, leading to an expected NDA filing either later this year or early next.
The phase III study and Gastroparesis is ongoing.
With 85% of the study now invoke.
And on track to complete the enrollment over the summer and report results later in 2021.
Following the results of the study we plan to meet with the FDA put of P. M D a beating.
Depending on the timing of the meeting R&D filing may occur at the end of 2021 or early 2020 to us.
As we have previously communicated we believe the kicker and phase three study can be the lifestyle because kb required for NDA filing.
Minder Bianca.
The ongoing phase III study aims to enroll a total of 200 patients with gastroparesis with either IV of pocket or diabetic.
Ideology.
The Saudi the 12 week double blind placebo controlled study with.
It will measure of the effect of the dividend and improving the symptoms of Gastroparesis.
And this phase III study follows the successful completion of the four week phase two randomized study and the same population.
The results of that study were published in the journal Gastroenterology in January of 2021.
Several study participants and request to continue the feedback with the dividend post completion of the clinical study.
Who and expanded access program.
We have worked and collaboration with the space and their doctors and the F. D. A to ensure the can receive the treatment with the different the spaces have been approved put up to six months of expanded access treatment of traded with them with one patient already approved for up to 12 months of <unk>.
And it acts as the.
Patients with Gastroparesis suffer from chronic and severe and debilitating nausea as well as other Gi symptoms and many patients with Gastroparesis also experienced vomiting, which could lead the weight loss and in severe cases hospitalizations due to the personnel.
Deficiencies.
The debilitating does the and other Gi symptoms makes it difficult for patients with Gastroparesis can function day to day gas.
Gastroparesis severe unmet medical condition.
With only one approved treatment option and the last 40 years and.
Person and can be a significant unmet need COVID-19 disorder.
And the response to our TV campaign for recruitment in the Phase III study has been overwhelming with thousands of patients already expressed an interest since late December.
Our estimates for the opportunity for Gastroparesis therapy are based and several key assumptions one the estimated prevalence of Gastroparesis and the US is about 6 million patients the majority of whom remain undiagnosed.
Second at present their more than 600000 basis ex.
He made it we have the confirmed diagnosis of Gastroparesis and finally based on Q V of data. There are 300000 prescriptions of oral metoclopramide per month and the United States. Metoclopramide is currently the only FDA approved treatment for Gastroparesis approved in the.
1979.
And due to its potential of severe side effects. It carries a black box warning and limitations of years of no more than three months.
Given the highly limited treatment options, we believe that the nuc therapy could achieve significant market share.
We're excited about the Gibson Gastroparesis is this phase three program represents a transformational up the tend to prevent us to address and important unmet medical need and create the substantial revenue.
I will now turn to us headless.
The emerging clinical program for Hippias is the delayed sleep phase disorder or D. S. P D. It.
It is progressing quickly and represents what we believe to be and important value creation opportunity for vanda with the high probability of technical success.
D. S. P. D is likely the most prevalent Acadian rhythm sleep disorder affecting approximately 1% of of the population and 7% to 10% of patients with disorders moving east.
The aid and are maintaining the sleep.
The defining feature of individuals with D. S. P. D is delayed sleep onset in.
Individuals with the SPD habitually go to bed and wake up significantly later than the typical of the desired times and havent and ability to pull of sleep at an appropriate time.
In addition to the Glades coupons it pieces with the SPD suffering from insufficient sleep and daytime impairment the.
The delayed the time combined with conventional schoolwork three times the to acquire any waiting can pose significant reductions and total sleep time put the SPD of patients.
Sue Keenan the synchronization and the SPD is similar to that of Jetlag, where individuals may have low energy and the daytime because the attempt to stay awake well the propensity for sleep and sky.
Co Morbid depression is common among patients with the SPD and of delayed to KBR and preference has been described in adults with bipolar one disorder in some cases correlating with high relapse rates.
The prevalence of delayed sleep wake phases of these hires in adolescents and young adults with rates. This debate between 3.3, and four 6% and found us high 7%.
And the prevalence of the SPD and adult is lower.
And with estimates between 0.2 and the 1.7%.
These PD is less prevalent and adult likely due to the changes in the personal speakeasy and timing is to get all of them.
The U S. P. D is the most common who gave you and rhythm sleep disorder in.
And the study of pace and seen from force UK theories of sleep disorders, 83% were diagnosed with the SPD in the same study 90% of those patients diagnosed with the SPD reported and the onset of their symptoms during childhood or adolescence.
Taken together the consensus and the literature is that the prevalence of the golf with the SPD is about 1% of years population or other 3 million people.
The SPD represent a large commercial opportunity for vanda with prevalence estimates vary and across the crown and Brooks.
We believe a circadian regulator like check years cause of significant probability of technical success and treating patients with delayed sleep phase sort of.
We also believe the tap years could have a significant benefit of our classic insomnia drugs to treat this condition.
By addressing the underlying cause and aligning the internal clock and therefore improve and sleep at the appropriate time.
Clark's classic insomnia drugs provide us mostly benefit the number of side effects, while not address and the underlying issue of Emmis Alliance UK day clock.
The news PD study is expected to begin randomized and patient imminently in the number of clinical sites across the United States.
Finally on Fanapt the.
The ongoing clinical development programs for Fanapt, including bipolar disorder, Parkinson's disease psychosis, and the long acting injectable formulations because of the Premier are also in various stages of preparation and execution.
The four week phase three study of bipolar one disorder include sites in both the United States and Europe.
The study recently began randomize the patients and the U S and and we plan to begin randomized and patients in Europe later this summer.
On the Parkinson's disease psychosis, we're planning to study the.
The phase two open label study of two cohorts followed by a larger randomized placebo controlled phase three study. Both studies are designed to evaluate the efficacy of fanapt in the treatment of the psychosis in Parkinson's disease, 20% to 40% of people with Parkinson's disease are reported to expire.
He is the.
And in degrees of psychosis.
And they're almost a million people in the us with Parkinson's disease with only one other approved treatment for Parkinson's disease psychosis, and the significant burden and the condition of half of the patients their caregivers.
Remains an important unmet medical need.
The phase two two.
Two cohorts. The open label study of 24 patients has received approval to proceed by the FDA and is expected to commence soon.
The pharmacokinetic study of the Fanapt long acting injectable is ongoing and we and the process of understanding and optimizing the dosing and administration.
Upon completion of this repeat dose PK study, we're planning the phase three study of the long acting injectable for acute schizophrenia treatment.
In addition, core fanapt programs.
The investigation, new drug for P. H D Inc. The active metabolite of other paid the recently received clearance from the F. D. A to proceed we plan to begin of Bioequivalence study of Fanapt competing the eight in healthy volunteers in the near term, we believe that pega has it.
And so to improve on the clinical profile of olive garden and create sustained long term value in the understatement portfolio for psychiatric disorders.
In conclusion.
The first quarter of 2021 was the strong quarter for Vanda and we are optimistic that the positive momentum will continue for the rest of 2021.
The approval of <unk> from nighttime sleep disturbances and Smith <unk> syndrome patients provides an opportunity to continue our innovative and successful approach to identifying and treating patients with orphan disorders.
We also continue to look forward to the results of our two different Gastroparesis study and the number of lifecycle management programs and our pipeline that are poised to continue vanda is value creation well into the future.
I will now turn the call back to Kevin to discuss our financial results for the first quarter and after that I would be happy to address any questions you may have Kevin.
Thank you Paul.
I'll begin by summarizing our first quarter, 2020, one and financial results total revenues for the first quarter of 2021, or $62 7 million and 8% increase compared to $58 million for the first quarter of 2020.
S. Net product sales were $39 3 million for the first quarter of 2020, one and 11% increase compared to $35 3 million for the first quarter of 2020.
<unk> net product sales and the first quarter of 2021 decreased by 11% as compared to $44 2 million and the fourth quarter of 2020 <unk>.
Consistent with prior years and expectations and early first quarter 2020, one we saw a decline and our ears patients on therapy attributable to the annual payer disruption linked to new play and years plan changes and re authorizations.
As expected this early first quarter decline reversed and patient demand and subsequently grew during the remainder of the first quarter.
Turning to finance.
Fanapt net product sales and the first quarter of 2021 were $23 3 million of 3% increase compared to $22 7 million in the first quarter of 2020.
GAAP net product sales and the first quarter of 2021 decreased by 1% as compared to $23 5 million in the fourth quarter of 2020.
And that prescriptions and the first quarter of 2021 as reported by could be exponent decreased by 5% compared to the fourth quarter of 2020. This decrease is consistent with the performance of Fanapt during the first quarter of 2020.
For the first quarter of 2021, Vanda recorded net income of $8 7 million compared to net income of 500000 and for the first quarter of 2020.
Net income for the first quarter of 2020. One included an income tax provision of 1.8 million that's true.
Character and income tax provision of 800000 and for the same period and 2020.
Operating expenses and the first quarter of 2021 were $52 3 million compared to operating expenses of $58 1 million in the first quarter of 2000 and 'twenty the.
The $5 8 million decrease was primarily driven by lower SG&A expenses related to awareness and branded DTC campaigns.
Vanda expects to achieve the following financial objectives in 2020 one.
Net product sales from both heavier Simpson apps of between 270 and $300 million.
The us net product sales of between 180 and $200 million.
Fanapt net product sales of between 90 and $100 million.
And year end 2021 cash of greater than $400 million.
Of note are hitting the us net product sales guidance is based on our currently approved FDA indications for non 24 and nighttime sleep disturbances in SMS.
Now I'll turn the call back from Us.
Thank you very much Kevin at this point I will be happy to answer any questions you may have.
As a reminder to ask the question you wouldn't be Egypt and star one on your telephone COVID-19. The already question that's the fountain.
Your first question comes from the line of Chris Howerton with Jefferies. Your line is now open.
Great. Thank you so much for taking the questions and can.
Gratulation and the progress despite the pandemic.
And so I guess, maybe a few questions from me for first of all on the.
The Gastroparesis program and I and the submission outside obviously of.
Of completing the the.
The efficacy study that you described.
What other steps need to be taken by the team to kind of get that package ready to go and be submitted and the timeline that you described so that's one question and the second question would be.
I'm very interested in thinking about the opportunity for I think you said it was P 88 the.
The active.
So what what specifically are the potential advantages that that metabolite would have over the the the parent molecule.
And then maybe just the last one for Kevin with respect to the guidance you know is it possible for you.
To give us some relative contribution of SMS within the head Leos revenue guidance. Thank you.
Okay. Thank you very much Chris.
I'll kick the.
The first of all of the last one for March of them.
So the question is preparedness for NDA filing.
As you know there are.
Three main components, the preclinical package, which we have adjusted EBITDA discussed and.
It is complete.
And the clinical package, which has been completed.
Along this a phase III clinical society, where come back and.
Pharmacokinetic clinical pharmacology.
The understanding the two the fact is there is any.
These are the.
Labeling studies.
Otherwise the manufacturing.
Preparedness is there.
Of course, we've scaled up.
For some time now.
And we'll have all the necessary.
Stability data for filing by the end of the year.
Really what is and the critical path here are the results of the study.
And the subsequent and.
And meeting with the F D a to make make sure that we're all of the same things.
Your second question was on P. The eight and what could be a potential advantage silver out of the paradigm.
As you know and the pay them because of its Oh Alpha one.
Hum adrenergic receptor blocking the effect.
It does have a orthostatic hypotension and the beginning of treatment.
The leading to take.
Titration requirement and then to finish the there's a twice a day.
Of course, we don't know the answer.
But there is a likelihood of bong other potentials for P. Eight.
US to decrease this.
Peak to trough change.
And the decrease the need for both titration and the twice a day make.
Making the.
Administration of the P. Eight over a period of more tolerable and of.
Of course, the dosing more flexible and of course, there could be other things we learned along the way.
What is interesting Chris also is that you know all of these were conducting the bioequivalence study and that is because we know from metabolism net.
I'll of Perry the when administered quickie.
And our cash into an equilibrium.
Between P. The eight and allocated and itself.
And therefore, there is a likelihood that P. The eight maybe bioequivalence trial of Peyton.
Where you can understand that this may did the bulge faster.
And marriage station.
And if it did we can substitute one for the other.
And the P 88.
It was to show some pharmacokinetic and Tolerability advantages.
You would have actually a very interesting.
Quick extension of the franchise itself.
Okay.
Any follow up questions of that before Kevin addresses here.
Yeah.
First of all thank you.
And it's very clear for the I guess.
Yeah.
B with respect to.
The pharmacokinetic features is that kind of like speculation at this point or is that supported by evidence of state that your team has generated.
Yeah, we have some initial data.
But of course, we would need to have a direct stag and of that before we can make the knee.
If any of these claims.
And and us.
Other.
The interesting part about the 88 is that as you know, we're developing the long acting injectable and pretty good.
Which actually is based on a Chris.
Chris the formulation.
We're injecting directly.
And that allows actually the depth of behavior into muscle.
P H P D H.
The chemistry is.
The.
The potentially allows us.
For a.
Lipid conjugate.
Each would be and more classic way of developing a long acting injectable.
So that can be in the diesel opportunity to develop a long acting injectable with different properties from mile appraisal itself.
Got it yeah, I mean, I actually I was that was one of the questions in the back of my mind was just you know if there were.
Advantages for P 88, along both the clinical path and and certainly for a.
Sustainable growth as you say.
Does it make sense to continue to invest in the long acting injectable formulation for the island paradigm and as well.
It absolutely does we're actually very late and the development.
We have two kinds of results so.
Being able to achieve great. The pharmacokinetic profiles with the crystals and you understand and have increased sales is actually the.
The most straightforward manufacturing.
And you can possibly have it's actually crystals of olopade than.
That you would go through the process of that.
In fact the.
The <unk>.
The other big advantage of starting with.
A lot of paradigm is that.
We know how and periods of itself behaves and efficacy so the oh.
Phase three study of two of design and now and the initial thinking around the efficacy.
Is to run a short towards the six week acute schizophrenia phase III study.
And then the injectable of all of paired them.
Will first be applied to the short term.
Treatment of schizophrenia.
And in the acute space.
And they're not of lot of examples.
Of all of that can we take and we have the unique commercial advantage as well. So many reasons why to proceed one we know that.
And that this formulation works for the P. Eight.
Don't know the pharmacokinetics and from a we don't fully understand the potential of file and lipid conjugate.
Okay.
Okay, well very good and well I mean like I said, that's a very interesting and potentially very exciting advance of the pipeline. So.
I guess, we'll just stay tuned for that and.
And I guess the other question that I had was just released the guidance.
Yes.
The.
Breaking out of some us Kevin.
Please go ahead.
Yeah, and just as a reminder, our financial guidance for the year included honored and 80 to 200 million of heavy US revenue, we didn't provide any detail around the breakout of that between us.
Non 24 in the us or heavier us on 24, and in Germany or heavier at the messenger and the U S.
And so but I can't tell you, though is the we're very excited about the early progress of the house noted.
With the pace.
Patient family engagement, continuing to increase and the prescription generation that we're seeing there was revenue included in the first quarter related to estimates, but given the timing of the approval and launch and we expect to see this continue to build through future quarters.
Okay.
Okay.
And maybe I'll just hop back in the queue, then and I appreciate you taking the questions.
Sure. Thank you Chris.
And there are no further questions at this time I will now turn the call back to Vanda management for closing remarks.
And I. Thank you very much.
In fact, Chris if you have any follow up we'll be happy to take.
Taking the question.
Okay.
And there are no more questions.
I'd like to thank you all for participating in this call we look forward.
And to a successful and exciting year.
The bulk from the commercial side and.
The clinical pipeline.
Pretty much.
This concludes today's conference call and thank you for joining you may now disconnect.
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