Q2 2021 Vanda Pharmaceuticals Inc Earnings Call
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Good day and thank you for standing by welcome to the Vanda Pharmaceuticals, Inc. Second quarter 2021earnings conference call. At this time all participants are another thing on the mode. After the speaker's presentation, there will be a question.
[music] assertion ask a question day in this session you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded if you acquire any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today, Kevin Moran Vanda as Chief Financial Officer. Please go.
Net income.
Yeah.
Thank you Doyle.
Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals second quarter 2021 performance.
Our second quarter 2020 on results released this afternoon and are available on the SEC's Edgar system and on our website Www Dot Vanda pharma dot com.
Go ahead. In addition were providing live and archived versions of this conference call on our website.
Joining me on today's call is Dr. <unk>, Polymeropoulos, our president and Chief Executive Officer, and Chairman of the board.
Following my introductory remarks from also update you on our ongoing activities.
He will then comment on our financial results before opening the law.
On your questions.
Before we proceed I would like to remind everyone that various statements that we make on this call will be forward looking statements within the meaning of federal securities laws or forward looking statements are based on current expectations and assumptions that involve risks changes in 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 as updated by our subsequent quarterly reports on form 10-Q.
Current reports on form 8-K, and other filings with the SEC, which are available on the SEC's Edgar system and our website.
We encourage all investors to read these reports and our other filings.
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.
Forward looking statements we may make on this call.
On account of new information future events or otherwise, except as required by law.
I would now like to turn the call over to our CEO, Dr. Mahalo volume requests.
Thank you very much Kevin.
Good afternoon, everyone.
Yes.
We're excited to share our second quarter, 2021 performance and our upcoming clinical milestones.
2021 is supposed to be an exciting year for vanda with several late stage clinical programs.
That have potential for significant short term value creation as.
As well as.
Long term advancement of the Gulf took on it.
And addiction took on.
Bolt on commercial launch of catalyst for Smith <unk> syndrome.
We're looking forward.
Moving to the completion of our phase Iia Gastroparesis study and reporting the top line results by the end of the year.
On commercial performance, we see continued growth year over year.
In the second quarter of 2021.
Hello, net product revenue.
For example is in Fanapt was 67.9 million, a 9% increase compared to the second quarter of 2020.
Net product revenue for 10 years, so it's 10% increase in the second quarter 2021, compared to the second quarter 2020.
And net product revenue for Fanapt, so a 13% increase compared to the second quarter of 2020.
Catalyst demand.
Diapers Gibson's received contingent on exceed scripts filled.
We're keen to improve access to pay attention to.
To this end, we have engaged with a number of payers to discuss ways to.
Based on axis.
Now on the Smith <unk> syndrome nighttime sleep disturbances.
Approval and launch.
In December 2020.
T E approved the oral capsule emulation of cat years and the new.
Formulation carefully as L queue for the treatment of adults and children, respectively with nighttime sleep disturbances in Smith <unk> syndrome.
While we're still engaged with each other.
The echelon.
Kaplan capital Q liquid formulation, whereas whereas the IV results.
We continue to connect with SMS families well.
But there is aged on discussing their treatment option with their physicians.
We're now implementing.
Most of the phase of our commercial loan.
Which is intended to reach a larger number of diagnosed and undiagnosed individuals in a similar fashion to our non 24 airports.
Well I have to reach patients and doctors with a combination of direct to consumer advertising and our specialized in.
Personal auto scores.
While it is difficult at this time to estimate the true.
For the adoption of <unk> by SMA patients.
We're excited about the emerging opportunity as we continue to deploy a number of strategies to reach ended form the community of approximately.
<unk> 15000, SMA patients in the U S.
Given the genetic testing available for SMS.
The number of patients are already diagnosed and these are expected to be the first cancer treatment.
The zip debates that between 80% to 100% of patients with SMS.
<unk> Chopra from nighttime sleep disturbances for which half years is the only approved treatment.
We expect that the number of patients on treatment with truck here will.
We will keep to increase in the second half of the year.
And that greater awareness will lead to adoption.
B paper, describing our standard and Smith <unk> syndrome, the largest of its kind wasn't this week in the journal synthetics in medicine.
This.
The largest ever conducted in patients with <unk>.
Enrolled genetically confirmed issues with.
In a double blind 2 period crossover study has demonstrated favorable effects that often over placebo in a number of primary and secondary endpoints, including sleep quality and sleep duration measures.
The results presented this paper.
This COVID-19.
And as for vaccines of course, Nokia is a suitcase yeah regulator.
That's where he is human activity in most of our key goal.
Programs I would like to highlight our progress in some of these key programs.
Converse.
The phase III study of Triptan Gastroparesis.
Hearing completion.
With 95% of the target of 200 patients already enrolled.
We expect results. This study by the end of the year.
Following the completion of this study we plan.
Plant it would be F T a pre NDA meeting.
On this us are coming up.
As we have previously for me it.
We believe the current phase III study will be the last time.
Higher for NDA filing.
As a reminder.
Growing phase.
<unk> aims to enroll gastroparesis patients with idiopathic or diabetic etiology.
This time he is 12 week double blind placebo controlled study will measure the effects of predicting and improving the symptoms of the operations.
This phase 3 study follows the successful completion of a 4 week phase 2 randomized study in the same population.
The results of that study were published in the journal Gastroenterology in January of 2021.
Additionally.
More.
Then 1000 study.
Good.
We want to continue on with 3 dividend post completion of the clinical study through expanded access program.
We have worked in collaboration with the patients.
Their doctors M. P F T E 2.
So that they can receive the trip.
And with the dividend.
Gastroparesis is a severe unmet.
Unmet medical condition with only 1 approved treatment option in the last couple of years.
Our estimates for the size of the commercial opportunity.
For Gastroparesis therapy are based on several key assumptions.
1 the estimated prevalence of gas in the U S is about 6 million patients the majority of whom remain intact.
Second.
At present, there are more than 600000 patients.
He made.
To have a confirmed diagnosis of gas replaces and finally based on <unk> data. There are 300000 prescription oral metoclopramide per month in the U S.
Given clearly limited treatment options and the ponds.
We witness.
On the recruitment through direct to consumer advertising to a dividend in gastroparesis.
<unk> achieved a significant market share.
Which we believe will create an opportunity for vanda to address an important unmet medical need.
And it presents.
A potentially transformational commercial opportunity there.
Okay.
Going into the second half of the year. The completion of the gastric study represents our most imminent and significant clinical milestone. However, there are a number of additional programs.
<unk>.
Total value creation, and I will briefly discuss.
First on the headwinds.
We have previously passed on.
Our clinical programs with our peers.
Sadly in delayed sleep phase disorder, or the Expedia, Inc.
Art is spectrum disorder, and pediatric non 20.
4 hours sleep wake disorder, all of which are on corn.
The most advanced from this event is it SPD, which.
Vince will believes to be an important value creation opportunity for vanda.
On a high profitability.
With success.
This P D is likely the most prevalent.
Suitcase sleep disorder.
Affecting approximately 1% of the population.
7.7 patients with disorders of initiating or maintain sleep.
The Netherlands accolade phase disorder is highest in adolescents and young adults.
Right.
Estimated Q.
3.4% and some as high as 7%.
We believe that <unk> could have a significant benefit of a classic insomnia drugs to treat this vision by addressing the underlying cost and aligning the Intel clock and therefore, improving sleep okay appropriate.
Plastic in some new drugs provide a small sleep benefit with an M side effects not addressing the underlying issue.
Line she came back book.
This PD study has started randomized in patients in a number of clinical sites across the United States and we will be able to provide.
Can you detail on timelines as we understand the right from the equipment.
2 months.
An observational open label treatments of the effects of Shetlands in patients with autism spectrum disorder, and sleep disorders is scheduled to begin imminently.
Slipped.
Great option is commonly seen people autism and is associated with increased burden of disease and impact on function.
There is currently no FDA approved treatment for sleep disturbance in autism.
I will now turn down for that.
The ongoing development programs for <unk>, including bipolar disorder.
Clarksons psychosis, and the long acting injectable formulation because of training are also in various stages of preparation and execution.
The full week based on these type of bipolar 1 disorder with.
With our low paid them includes sites in both the United States and Europe.
Decided he is quickly started randomized patients in the U S net.
Planned to begin randomized patients in Europe later this summer.
Yes.
On Parkinson's disease psychosis, we're applying in 2 studies a phase 2 open label.
I'd have to cohort followed by a larger randomized placebo controlled phase III study.
Started to evaluate the efficacy and tolerability of Fanapt in the treatment of Parkinson's.
Parkinson's disease.
20% to 40% of people with Parkinson's disease are reported to date.
I mean, the basic pay courses.
They're almost 10 million people in the U S with Parkinson's.
Does it.
With only 1 approved treatment for Parkinson's disease psychosis.
And then.
And then this.
Pat from the patients from their caregivers this means important unmet.
Medical Inc.
The phase 2.2 cohort open label with 24 patient cause received approval to proceed by the FDA.
And is expected to commence soon.
Studies with a long acting injectable formulation fanapt ongoing there.
They are expected to lead.
Yeah.
I guess is that the opinion in 2022.
In addition, the clinical pharmacology study.
Of the active metabolite D day 8 of our low paradigm is ongoing as well.
Entre dividend and beyond the better places.
Instagram the Odyssey study for 3 deep talent base with COVID-19.
It's growing.
Well, it's a dividend motion sickness study is on hold due to pandemic related travel restrictions.
<unk> W.
65.
Vicki <unk> 765 is an alpha 7 nicotinic.
Opera news with constantly.
In a program to be tested for.
The effects on performance anxiety.
And that study.
<unk> is currently recruiting patients.
The primary objective of this study is to evaluate the effect of a single oral dose of 10 milligrams <unk>.
65 relative to placebo in change of anxiety as measured by distracted it's true.
Distress scale sides.
During a clear social stress test.
P S S.
The P S T.
Tendered for inducing could take with total test in a lab setting and has been accepted by the FDA for developers.
Study.
Shipments for anxiety related disorders.
Subjective units of chip scale or subs.
Clinically validated self assessment for a good exactly the court from JP.
200 <unk>.
It is to measure the intensity of this trial.
Thank you Randy PST assessment.
We will be talking more about Wi Fi.
<unk> and the performance anxiety study.
And future discussions.
In conclusion this net.
Quarter of 2020.
1.
It was another strong quarter for vanda.
And we're looking forward to a number of important milestones in the second half.
For the year.
Launch of healthier from a nighttime sleep disturbance SMS is progressing well and we are pursuing collaborations with payors.
Further I sleep with access to charter's priorities.
We also continue to look forward the results of our dividend gastro basis.
Tabulated this year.
And the N number of lifecycle management programs in our pipeline that I point.
To continue vendors.
2 creation well into the future.
Upcoming or a superior results vanda approaching what we believe to be is transformational and postpone with a significant opportunity.
Opportunity.
I will now turn the call back to Kevin to discuss financial results for the second.
Value.
And after that we'll be happy to address.
Any questions you may have.
Evan.
Thank you boss.
I'll begin by summarizing our financial results for the first 6 months of 2021 before turning to discuss the second quarter of 2021.
Total revenues for the first.
Core total 2021, or $130.6 million, a 9% increase compared to $122 million for the same period in 2020.
U S net product sales of $83.9 million for the primary contributor and driver of our revenues for the first 6 months of 2021 and saw a 9% increase.
Compared to the same period in 2020.
Snap net product sales of $46.7 million for the first 6 months of 2021 reflect an 8% increase compared to the same period in 2020.
For the first 6 months of 2021 Vanda recorded net income of $18.3 million compared to net income of.
6 months 2 million for the same period in 2020.
Net income for the first 6 months of 2021 included an income tax provision of $4.7 million as compared to an income tax provision of $3.1 million in the same period in 2020.
<unk> cash cash equivalents in marketable securities referred to as cash as of June 30.
2021 or $396.5 million, representing an increase of $56.6 million compared to June 32020.
Turning now to our quarterly results total revenues for the second quarter of 2021 were $67.9 million, a 9% increase compared to 62.
$9 million for the second quarter of 2020.
<unk> net product sales were $44.5 million for the second quarter of 2021, a 7% increase compared to $41.6 million from the second quarter of 2020.
Net net product sales in the second quarter of 2021, or $23.4 million or 13.
Point increase compared to $20.6 million in the second quarter of 2020.
So net net product sales in the second quarter of 2021 were essentially flat as compared to $23.3 million in the first quarter of 2021.
Fanapt prescriptions in the second quarter of 2021 as reported by equivalent exponent.
<unk> increased by 1% compared.
To the first quarter of 2021.
For the second quarter of 2021, Vanda recorded net income of $9.7 million compared to net income of $8.7 million for the second quarter of 2020.
Net income for the second quarter of 2021 included an income tax provision of $3 million as compared to an income tax provision of $2.4 million for the same period.
In 2020.
Operating expenses in the second quarter of 2021 were $55.5 million compared to operating expenses of $53 million in the second quarter of 2020.
The $2.5 million increase was primarily driven by higher R&D expenses related to the late stage true dividend <unk> and Fanapt development programs.
Partially offset by lower SG&A expenses related to awareness and branded DTC campaigns.
Vanda expects to achieve the following financial objectives in 2021 net product sales from both <unk> and fanapt of between 270 and $300 million.
Yes.
Net product sales of between 180 and $200 million.
Fanapt net product sales of between 90 and $100 million.
Year end 2021 cash of greater than $400 million.
Of note our heaviest net product sales guidance is based on our currently approved FDA indications for non 24, and night time sleep disturbances and SMS with that.
Graham I'll turn the call back from a house.
Thank you very much Kevin at this point, we'll be happy to answer any questions and I understand my audio b have not been good.
But please let me know if he cannot Manuel.
On thank you as a reminder to ask a question you will need to test star 1 on your telephone to limit to try your question press the pound key please standby, while we compile the Q&A roster.
And our first question comes from Olivia Brayer on with Bank of America. Your line is open.
Hi.
Congrats on the quarter and thanks for the question.
My first 1 is around payer positioning now that we're several quarters into the SNF launch.
I know getting on formularies has obviously been a hurdle for heavily ocean and non 24, but are you seeing a similar level of pushback on SMS or or have there been any sort of advantages to being that second.
Hi, guys for how he owes that that could maybe help patients get faster access to therapy.
And then I have 1 on 1 follow up on on for dividend.
Yeah Olivia thank.
Thank you very much for the question first of all I would say that we're very focused on patient access.
On an acute care a lot that every patient that is being prescribed <unk> get the chance to try had carriers have continued.
Okay.
I will answer briefly and I will let Kevin elaborate a little bit.
First.
<unk> is on the formulary of.
I would say Costco at all our plants today.
That is for non force for.
SMS is a bit early given the cycle of the P&C committees, which have been great.
Inclusion their utilization management criteria.
But.
Clark.
Do not tied in particular.
From a resistance by payers on covering Jason's, which slipped my goodness.
Syndrome.
However, we continue to see something we have reported in prior quarters.
Can you just kind of resistance.
On non 20, where the.
Man it is much higher.
On the Scripps fields, and we're talking about on label.
The cadence.
It can be true there is reasons, but the most come on 1.
The misperception.
With Payors.
The Ah indication.
Does not necessarily include non 24 side.
But so far it has been settled with.
A lengthy 14 page document.
That the FTA produced a loss 20 and signed.
Hi, Dr Woodcock.
We're actually it clarifies and confirms that the indicators from forgiveness is non 24 without any cash.
Coalification, some visual acuity, having total debt.
We are engaged with payers to find ways.
To improve access.
And I will ask Kevin if you have anything to add to that.
Yes, Thanks Paul.
Just to reiterate you know very focused on improving patient access and reducing patient burden.
Looking for ways to collaborate with the payers to increase that patient access.
And just highlighting that are prescribed.
And demand is foreign excess of our prescription filled which just means that this will also represents an opportunity for.
For patients who get access to the drug and for us to continue to look to grow the business.
Okay, great. Thanks, guys and I know, we're coming up obviously on on the Gastroparesis data on in filing for <unk>.
But I do think there's a lot of interest.
Prescript expanded access program and how much of that patient data will eventually be looked at by the FDA. So I guess the question is how much of the EAP data could feasibly be included on the initial filing and is there a certain minimum length of time on therapy to make the cut for for that initial portion of the submission.
And then maybe just as a quick follow up on that you know it is.
Whether there are other opportunities through the review process in which you could add more safety data from that extended access program.
As more patients take part on the program.
Yeah. Thank you very much livia.
First of all.
We're.
It's pretty low.
With the interest of patients who.
We're concluding the 3 months.
Either in the double blind randomized study or the open label and their interest to continue on the drugs.
And in the words any of these patients they are describing it.
And does the.
Yeah.
Slide 14, now in terms of numbers.
We have at least a dozen patients.
<unk> fully applied for the expense that's this program.
The majority of them have been already reviewed by the FDA.
The truth.
The initial approval for each 1 of these patients is a period of 6 months.
Several patients coming up too.
2 the 6 month Mark Inc.
Including patients that have been approved beyond that to extend to tears.
And I.
Our cluster spacing will be completing the total months and seeking extended beyond the 12 month very shortly.
In terms of the NDA applications, we're collecting.
The data and we will be submitted all of these data to the application.
Hum.
That would mean that at least for several of the basins by the tariffs.
We will have a 12 month save.
Safety data.
And certainly there is an opportunity.
Within the middle of the.
Indeed.
So to submit updated safety data so we expect all.
All of these basins.
Better now the expanded access program and others that may come.
We will continue to produce safety data, which actually will bolster the safety data submitted to the agency.
Okay, great. Thank you very much.
Thanks.
Thank you.
I'm not showing any further questions at this time I would now like to turn the call back over to Vanda management for closing remarks.
Yes. Thank you very much. Thank you all for joining us and we look.
Forward.
So I can be clear about our progress in future calls.
Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
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