Q3 2021 Vanda Pharmaceuticals Inc Earnings Call
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Good day and thank you for standing by welcome to the third quarter 2021, Vanda Pharmaceuticals Conference call.
At this time all participant lines are in listen only mode.
After the speaker's presentation, there will be a question and answer session.
I ask a question during the session you will need to press Star then one on your telephone keypad.
Please be advised that today's conference maybe recorded.
If you require operator assistance during the call. Please press Star then zero.
I'd now like to hand, the conference over to your host today, Kevin Durant Mendez Chief Financial Officer. Please go ahead.
Thank you Liz.
Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals third quarter 2021 performance.
Our third quarter 2021 results were released this afternoon and are available on the SEC's Edgar system and on our website Www Dot Vanda pharma dotcom and.
In addition, we are 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, well 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 that we make on this call will be forward looking statements within the meaning of federal securities laws.
Our forward looking.
Are based upon 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 on our website.
We encourage all investors to read these reports and our other filings.
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 the kind of new information future events or otherwise except as required by law.
That said I would now like to turn the call over to our CEO, Dr from Hollister polymer helpless.
Thank you very much Kevin and good afternoon, everyone.
First of all.
Like say that as we progress towards the end of 2021, we continue to be excited about our ongoing commercial launch et cetera, Yes, and fifth U S. L. Can you push me again, you syndrome, and our late stage clinical programs, especially the completion of our phase III Gastroparesis study.
That is expected to report top line results by the end of the year.
I will first discuss our commercial performance before moving to highlight of our clinical development programs.
On the commercial performance, we see continued year over year revenue growth in the third quarter of 2021 total net product revenue for <unk> and Kodak was $70 1 million, a 16% increase compared to the third quarter of 2020.
Net product revenue for heavy years, so a 15% increase in the third quarter of 2021 compared to the third quarter of 2020, and net product revenue for that so an 18% increase compared to the third quarter of 2020.
Catalyst demand measured by prescriptions received continues to exceed the prescriptions filled.
Although demand remains strong we are experiencing increasing hurdles.
The payers completely curfews prescriptions for patients with non 24.
We have engaged in discussions with several payers in hopes of improving access of Hercules because these patients.
Happiness is the only FDA approved treatment available for non 24, while we remain optimistic that patient access will improve the magnitude of the reimbursement talent and the timing during this calendar year dictates that we lowered our full year <unk> forecast range.
70, <unk> hundred $90 million from the prior guidance of 180 to 200 million.
The lower end of the range assumes that it would be little to note is the lithium or the patient access issue. This year, while the higher end of the range assumes improvement in patient access within this current period.
Smith <unk> syndrome logs.
Onto Kittila and courteous I'll queue for the treatment of adults and children, respectively with nighttime sleep disturbances in again syndrome continues to progress.
We continue to work with us.
In the SMA space and advocacy group prisms to improve awareness to date more than 90 patients with SMS had been prescribed check, yes or at least help to.
We plan to extend our awareness campaign with a goal of creating awareness among the community of approximately 15000 SMA patients in the U S.
Establishing the trajectory of the number of patients from treatment at this time. It is difficult we believe that the clinical profile objectives and the degree of unmet medical need.
Mrs with SMS provides a substantial growth opportunity in the kitchen.
Clinical development.
Our hedges lifecycle management program is robust.
During 2021, we have initiated two large programs that represent important value creation opportunity for vanda.
Delayed sleep wake phase disorder, or D. S. W. P D and insomnia in autism spectrum disorder.
Thank you.
Yeah.
Has been initiated.
DSW PD is likely the most prevalent who came in with them.
Org affecting approximately 1% of the population.
In the 7% to 10% basis with disorders, Obe's 18 core maintaining snake.
The prevalence populate sleep wake disorder is highest in adolescence and young adults with rates estimated between 3.3, and propylene and 6% and some as high as 7%.
We delivered 10 years with it to Kerrigan regulation mechanism of action addresses the underlying mechanism of symptoms in these PD by aligning the internal clock and therefore, improving smith of the appropriate and desired time.
We're in the process of undertaking the law.
Large direct to consumer recruitment campaign to aid with the recruitment of the ongoing study and at the same time, we're beginning to quantify DSW PPD patients seeking treatment for this disorder.
I will now turn to the dividend.
The phase three studies significant investor bases has completed enrollment.
And we expect topline results from this study by the end of the year.
Following the completion of this study we plan to meet with the FDA for a pre NDA meeting and discuss our planned new drug application.
As a reminder, the phase III study aims to enroll approximately equal number of customer base as patients with either idiopathic or diabetic etiology.
The study is a 12 week double blind placebo controlled study, which.
Measure as the effects of the victim and improving the symptoms of Gastroparesis.
This phase three study follows the successful completion of the four week phase two randomized study in the same population.
The results of that study were published in the journal of Gastroenterology in January of 2021.
In that study so victim met kinase Prespecified aim and achieved clinically meaningful outcomes in patients with Gastroparesis.
<unk> was shown to be well tolerated with an adverse event profile similar to placebo.
The overall benefit risk profile. It confirmed is likely to offer advantages over both approved and off label treatment kind of three years.
The effective significantly than achieving complete response in those yet but also improving overall symptoms may suggest a disease modifying effect to an action to the local muscular network as well as the central nervous system centers were nosy and vomiting.
The ongoing phase II studies of similar design compared to the phase II study with a few differences.
This phase III study enrolled approximately 200 patients compared to approximately 150 in the phase II study.
Second the current study has a duration of 12 weeks compared to four weeks in the prior study.
Third in the current study a vomiting episodes during the screening period is required.
And.
And finally in the current study patients are stratified based on idiopathic or diabetic utility in order to allow for independent and balanced efficacy analysis in a subgroup.
A separate phase III 12 week open label studies ongoing.
She is currently enrolled over 250 patients.
In addition, more than a dozen study participants have requests to continue treatment with the dividend post completion of the clinical study through an expanded access program the.
The majority of these patients had received FDA approval to continue treatment beyond three months with the longest a lot of them with exposure currently yield 15 months.
Regarding gas to places and it's prevalent in a recent review by <unk> 90 at all he also has highlighted that.
A population based study in Minnesota in the United States estimated that the age of the adjusted incidence of Gastroparesis. During the 10 year period was two point part or pesos per hundred thousand person years for men and 9.8 basins for 100000 persons gifts for women.
Evelyn who is estimated to be $9 six cases per 100000 men and 37.8 patients per 100000 women.
Some individuals with typical symptoms of Gastroparesis may never undergo confirmatory testing one study estimated that as many as one 8% of the general population they have gastroparesis, but only 0.2% are diagnosed.
The authors concluded that presumably this relates to a lack of awareness of the disorder and existing diagnostic confusion caused by an overlap between the symptoms of gastroparesis and functional dyspepsia.
Given the estimated prevalence upon successful completion of the program, we see a significant commercial opportunity in creating awareness for both the condition and puts the dividend is a new pharmacological option for patients with Gastroparesis.
Our clinical pipeline programs are advancing including among others, the fanapt bipolar and long acting injectable studies and this idea of predicting in motion sickness.
To conclude we are focused on improving patient access to therapies for non 24 is going to increase in awareness, we're checklists and categorical cure for insomnia patients as well.
The clinical program of DPM is nearing completion, and we look forward to the results of the phase II study and continued discussions with the FDA regarding the regulatory path to approval and preparing for commercial launch.
With this.
Uh huh.
Thank you boss.
I'll begin by summarizing our financial results for the first nine months of 2021 before turning to discuss the third quarter of 2021.
Total revenues for the first nine months of 2021 for $200 7 million, an 11% increase compared to $180 5 million for the same period in 2020.
<unk> net product sales of $129 5 million for the primary contributor and driver of our revenues for the first nine months of 2021 and saw an 11% increase compared to $116 5 million for the same period in 2020.
Fanapt net product sales of $71 2 million for the first nine months of 2021, reflecting an 11% increase compared to $64 million for the same period in 2020.
For the first nine months of 2021 Randall recorded net income of $26 1 million compared to net income of $15 1 million for the same period in 2020.
Net income for the first nine months of 2021 included an income tax provision of $7 7 million as compared to an income tax provision of $5 6 million in the same period in 2020.
And as cash cash equivalents and marketable securities referred to as cash as of September 32021, or 406 million, representing an increase of 57 4 million compared to September 32020.
Sure.
Turning now to our quarterly results.
Total revenues for the third quarter of 2021 were $70 1 million, a 16% increase compared to $60 3 million for the third quarter of 2020.
<unk> net product sales were $45 6 million for the third quarter of 2021, a 15% increase compared to $39 6 million in the third quarter of 2020.
Fanapt net product sales in the third quarter of 2021 or $24 5 million.
18% increase compared to $20 7 million in the third quarter of 2020.
Snap net product sales in the third quarter of 2021 increased by 5% as compared to $23 4 billion in the second quarter of 2021.
Fanapt prescriptions in the third quarter of 2021 as reported by <unk> could be exponent were essentially flat as compared to the second quarter of 2021.
For the third quarter of 2021, Vanda recorded net income of $7 8 million compared to net income of $5 9 million for the third quarter of 2020.
Net income for the third quarter of 2021 included an income tax provision of $3 million as compared to an income tax provision of $2 5 million for the same period in 2020.
Operating expenses in the third quarter of 2021, or $59 3 million compared to operating expenses of $52 6 million in the third quarter of 2020.
The $6 7 million increase was primarily driven by higher R&D expenses related to the late stage <unk> <unk> and Fanapt development programs as well as our early stage development programs, partially offset by lower SG&A expenses related to awareness and branded DTC campaigns.
Vanda is providing update to its prior 2021 guidance.
<unk> expects to achieve the following financial objectives in 2021.
Net product sales from both heavier Cincinnati of between 260 and $290 million. This compares to prior guidance of between 270 and $300 million.
<unk> net product sales of between 170 and $190 million. This compares to prior guidance 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.
Vanda is revising its full year 2021, <unk> net product sales guidance to between 170 and $190 million.
Prior full year 2021 U S net product sales guidance of between 180 and $200 million was based on key assumptions around chat, we used a man and payer approval rates among others.
Demand measured by prescriptions received has been consistent and continues to far exceed the prescriptions filled.
Payer approval rates were expected to be inline with historical trends, however, reimbursement challenges from payers to fill prescriptions for patients with non 24 have increased significantly.
Vanda is working with patients in an effort to improve their access to the only FDA approved treatment for their condition.
Given these challenges and the timing during the year, we have revised downward our full year 2021, <unk> net product sales guidance.
The lower end of the revised guidance range assumes minimal to no improvement in patient access and reimbursement challenges in the fourth quarter, while the high end of our revised guidance range assumes improvement during the period.
I'll now turn the call back to malls.
Thank you very much Kevin at this point, we would be happy to answer any questions.
Right.
As a reminder, if you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
Withdraw your question press the pound key.
Please standby, while we compile the Q&A roster.
Our first question comes from Chris Howerton with Jefferies.
Chris Your line maybe on mute.
I was I was I had some great questions you didn't hear.
Thanks, so much for taking them.
I guess the two from me would be.
Policy and Kevin if you can just give us a little more color around what the specific reimbursement challenges or are there you know I'm just.
Not being reimbursed at all are there more prior authorizations I guess, just what exactly are some of the challenges that you're facing there and.
And then the second question I have is respect to the Gastroparesis read out you know one of them.
The key changes that you highlighted was the increase duration of treatment from the prior I think it was four weeks to 12 weeks currently.
I guess talk to us about why do you think that there would be an improvement of the drug effect over time.
Or alternatively, maybe just the difference between the placebo arm over time. Thank you.
Yes, Thank you very much Chris.
Happy to.
Answer part of your first question and I'll, let Kevin.
Give more color.
But the.
Salinger.
With Payors.
Of course are not new and what is new is the escalated.
And what the effects primarily.
He is a.
Oh increased number of denials among non 24 patients with light perception.
While the investment rates.
For blind patients with non 24.
Remain at near their historical norms.
And we began seeing actually.
Good coverage on SMS as well it is the.
Non 24 patients that are.
Alrighty door they have light perception.
And there what we see is not some new criteria or some alternative treatments because no alternative treatment exists it.
It is just.
From some payers it flat out.
Denial.
This budget denial is that we don't reimburse you because your sided.
And of course Uh huh.
This is Bob.
Tremendous issue for the patients.
But also it's contrary to what the FDA label is in the clarification by Dr. Woodcock Ah in 2020, and the long letter.
Whereas he explained that the.
Indication for non 24 without a consideration too.
Two.
Visual acuity, so pretty much that's the key.
Content, and maybe I will let Kevin add more color on.
Timing versus.
Flood out in house.
Yes, that's exactly right most of them what I, what I would layer on to that as you know.
As I highlighted in my script, we continue to see consistent strong demand.
From patients and prescribers, so it's not a demand issue here simply an access issue and as.
This is began to escalate in recent periods, there's been a fairly significant backlog of patients who are seeking access to the drug.
Which could be very meaningful even a fraction of that.
It is able to convert in either the fourth quarter or in the future periods and Joe.
Working as Mohamad mentioned engaging with these payers to understand their objections and find a path forward.
Given the significant backlog and folks need access to this important treatment.
And just to add.
So even though this is a very important.
Issue other principle.
We believe we develop these innovations to help people.
If people cannot access to drugs.
Innovations.
Or actually are wasted and it is important that we stand up for patient access.
Do our part and have a reasonable discussion with the payers.
Because you know as the community it will not be sustainable.
Layers.
Of whatever financial interests.
Would you be skus.
Got to pay for a drug that is the only option for these patients and then that is very often.
Discuss conditions. He then a.
Value based contracting which are becoming popular pretty expensive drugs to make sure.
We.
Provided that the patients so the issue escalated it was not new.
Sure.
<unk> doing everything that needs to be done to make sure. These patients.
Get some treatment and as a result.
Hum.
Benefits of course, who did happen.
I don't know if you have any follow up on this case, otherwise I will switch to the no Jessica pretty nice instead.
That's clear and I appreciate all the extra information there yes. Thank you.
But of course.
Okay on the gas the paces. Your question was one of the difference in the design is between the.
For a week.
The 12 week study correct.
Yeah, and I think I mean, maybe I'm, putting words in your mouth, but intimating that the drug effect would be improved over time or perhaps the difference between the placebo and the drug would improve over time and again, maybe I'm putting words in your mouth excuse me [laughter], Okay, alright, well.
They are interested is that.
For a condition that is.
He has not lessened.
Less than a few days it is important to understand the durability of the effect.
And therefore, while we're measuring the effects of the drug at four weeks, we're also measuring.
12 weeks, what do we know from the screening data.
Is that the condition does not often.
Dissipate very quickly over a short period of time so to answer the question, whether we expect an increase.
Placebo effect over time.
The answer is likely not because of the nature of the disorder and the other side of the or the.
Question.
Do we expect a dissipation of the effects of the drug and the answer is likely not because mechanistically bind in the neuro Canyon one receptor.
Is not anticipated that you will develop I keep relaxes, meaning that you could take the drag but at some point it stops working.
So the answer is a likely.
We're not going to see much difference so the effect between four and 12.
And maybe for some people that it takes a little longer.
To improve the symptoms.
We could see continuous improvement beyond four weeks to 12 weeks.
Okay.
Very good and I guess I mean, maybe if you would entertain a follow up on the other kind of topic of discussion I think I just went and browse the label there we're now.
With D a who actually.
<unk> gave us the label of non 24, despite the fact that.
The clinical study for control reasons was conducted in a totally blind individuals.
And finally.
The answer by the FCA is a doctor would cook.
Sundar at a time in 2020, she actually responded to a citizens petition who is statistically the SBA to change the indication for catalyst from non 24, 2024 and blind people given some rationale.
The FTA and Doctor will Cook our assignment.
Explain the reasons why this is not true the mechanism of action of the Dragon. The disease is such that the FDA understands it started circling back did improve.
In populations, where there's better control of the action of the drug and that Uh huh.
<unk> is approved for the full indication without any consideration of visual acuity.
And finally, and that's something Chris that we have not really talked much overdue.
Over the last several years.
4000 doctors.
Have written prescriptions for about 10000.
Non 24 patients who are not blind.
So it is hard to have a reasonable discussion or with a payer who.
Who believes that they know better.
On the Advisory Committee, the FDA Division, Dr Woodcock and the 4000.
Our doctors have prescribed the drug so.
We're optimistic that we're going to get down to a reasonable dialogue and we understand that there are concerns about.
Cos and absolutely we appreciate that and we're open to do.
And you can it takes to make sure these patients.
Our on drug and they're not there.
Disincentivize to seek treatment.
Because that's not a.
Tenable outcome.
Very good well my honest I really appreciate it thank you and I will hop back in the queue.
Thank you Chris.
Our next question comes from Olivia Brayer with Bank of America.
Hey, guys. Thanks for the question and congrats on the quarter.
I wanted to ask about your development plans for Fanapt in bipolar and whether there have been any discussions so far with FDA around.
Potentially needing a second phase III confirmatory study.
Is there a second trial something that Youre planning for at this point or do you really feel confident that.
That one trial is enough for a complete filing package down the road and then I've got a couple of follow ups.
Yeah. Thank you very much into that.
Hum.
Correct that.
We believe that a successful study of fanapt in improving their symptoms with bipolar disorder and there's a large study can provide substantial evidence of efficacy required to support this indication.
And.
I would remind you that the hum.
Guidance and.
<unk> anticipates for drugs that are approved in different indications they have treated a lot of people that additional indications could be.
Pursued by a single channel of course, the results of that trial.
It would be grow on that decision.
So I would say we wait for the child is out and we're.
We're optimistic that if the results are convincing.
This evidence will sometimes.
Okay, great. Thanks, and then we're obviously getting pretty close to your Gastroparesis data.
I know that trial has been fully enrolled for about two months now. So can you just give us a sense of of.
How long it could take between the close of that study to the actual.
No disclosure of the data in and as a follow up to that you know how youre thinking about turnaround time in terms of a pre NDA meeting and and then official filing yes.
Yeah. Thank you very much.
Just to finish I remember you had another part can hear bipolar question.
If you could discuss and send them.
We're continuously having our protocols.
If you then adjusted based on advice of the F. D. A on the bipolar study and they have actually provided.
Very thoughtful in this with comments on the development of the long acting injectable as well.
Entre dip event.
Ah yes, the enrollment finished about a lost base them in.
Two months ago and since this is a three months 12 week study.
We expect the last patient to compete.
At the end of this month.
And then.
Hopefully with a quick turnaround of monitoring and closing the data we can lock the database.
And towards the.
End of December and we can report top line results.
By the end of the year, that's certainly our goal, it's a very tight timeline.
Now in terms of.
Preparing towards.
NDA application.
We will be in.
In very short order.
Requesting an NDA meeting right after we see the data.
N D a meeting which hopefully can be granted.
Sometime.
In.
The first quarter.
And we have already initiated a.
The words pre NDA meeting.
For the manufacturing section of his application so that's where it stands with his time.
Okay, Great and then just one last one from me on D. D. I know you guys get asked a lot about cash deployment and you obviously have a lot of programs to manage internally, but.
Is there an area, where you feel like you've maybe benefit most from in licensing in licensing another asset class.
Nickel development.
Yeah at this time I would say that we.
We have a few things in clinical development, and we want to do them well.
However, we.
We are always looking for in licensing.
I remind you that we.
We have a program with a licensee from the.
If I sort of part of your point in San Francisco on D. C. P. R inhibitors activators.
We have a program in social phobia, we'd have been licensed our alpha seven nicotinic program David <unk>.
From Novartis, so there thinks in the pipeline, but I can.
We are always kind of need to be mindful.
In terms of business development.
We're certainly thinking of how to.
Strengthen our presence.
With our sales force on the commercial setting and always looking for complementary.
That will not detract from our own calls, but at the same time.
Additional.
And offerings to the positions we search.
Okay perfect. Thank you very much.
Excellent.
That concludes today's question and answer session I'd like to turn the call back to Vanda management for closing remarks.
Yes.
Thank you very much all and.
I am so we're gonna be talking soon around the exciting results from the yes, we did some programs.
You very much.
This concludes today's conference call.
You for participating you may now disconnect.
[music].
[music].
Good day and thank you for standing by welcome to the third quarter 2021, Vanda Pharmaceuticals Conference call.
At this time all participant lines are in listen only mode.
After the speaker's presentation, there will be a question and answer session.
Can I ask a question during the session you will need to press Star then one on your telephone keypad.
Please be advised that today's conference maybe recorded.
If you require operator assistance during the call. Please press Star then zero.
I'd now like to hand, the conference over to your host today, Kevin Durant band as Chief Financial Officer. Please go ahead.
Thank you Liz.
Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals third quarter 2021 performance.
Our third quarter 2021 results were released this afternoon and are available on the SEC's Edgar system and on our website Www Dot Vanda pharma dot com.
In addition, we are 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, well 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 that we make on this call will be forward looking statements within the meaning of federal securities laws.
Our forward looking.
Events are based upon current expectations and assumptions that involve risks changes in circumstances 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 on 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 looking statements. We may make on this call on account of new information future events or otherwise, except as required by law.
That said I would now like to turn the call over to our CEO Dr from house polymer helpless.
Thank you very much Kevin and good afternoon, everyone.
First of all.
I would like to say that as we progressed towards the end of 2021, we continue to be excited about our ongoing commercial launch of <unk>.
And so if you say oh tier for Smith, <unk> syndrome, and our late stage clinical programs.
Basically the completion of our phase III Gastroparesis study that is expected to report.
The end result by the end of the year.
I will first discuss our commercial performance before moving to highlights of our clinical development programs.
On our commercial performance, we see continued year over year revenue growth in the third quarter of 2021 total net product revenue for happier and connect which have any point 1 billion, a 16% increase compared to the third quarter of 2020.
Product revenue for happier, so a 15% increase in the third quarter of 2021 compared to the third quarter of 2020, and net product revenue for that so an 18% increase compared to the third quarter of 2020.
Jetblue is demand measured by prescriptions received continues to exceed the prescriptions filled.
Although demand remains strong we are experiencing increasing hurdles been resistance from payors and feel like that is prescriptions for patients with non 24.
We have engaged in discussions with several payers in hopes of improving access to care for these patients.
This is the only FDA approved treatment available for non 24, while we remain optimistic that patient access will improve the magnitude of the reimbursement challenge and the timing during this calendar year dictates that we lowered our full year <unk> forecast range $270 million to $190 million.
From the prior guidance of $180 million to $200 million.
The longer end of the day.
So it would be little to note as Elisa or the patient access issue. This year, while the high end of the range assumes improvement in patient access within this current period.
And again you syndrome logs.
Once you've kept yours and kept US Q4 is kind of adults and children, respectively with nighttime sleep disturbances.
Again, he syndrome continues to progress with.
We continue to work with us nice Communist Mds, a nice pace and advocacy group prisms to improve I've witnessed to date more than 90 patients with SMS had been prescribed check yours or kept yourself too.
We plan to extend our awareness campaign with a goal of creating awareness amongst the community of approximately 10000 SMA patients in the U S.
While establishing the trajectory of the number of patients on treatment at this time. It is difficult we believe that the clinical profile of captives and the degree of unmet medical need.
Patients with SMS provides a substantial growth opportunity in the future.
Clinical development.
Heck lifecycle management program is robust.
During 2021, we have initiated two large programs because at present important value creation opportunity for vanda.
Delayed sleep wake phase disorder, or D. S. W. P D and insomnia in autism spectrum disorder.
Thanks, Chris.
Yeah.
Has been initiated.
Yes, that'd be if COVID-19 is likely the most prevalent who came in with them.
As always there affecting approximately 1% of the population and the <unk>.
10% on a basis, where there's always this could be initiated or maintaining snake.
The prevalence of accolades sleep wake phase disorder is highest in adolescence and young adults with rates estimated between 3.3 and propylene and 6%.
Some as high as 7%.
We believe the patios with its UK again regulation mechanism of action addresses the underlying mechanism of symptoms, India Africa P. D by aligning the internal clock and therefore, improving Smith I'd be appropriate and desired time.
We're in the process of undertaking.
A large direct to consumer recruitment campaign to age with the recruitment of the ongoing study and at the same time, we're beginning to quantify they're starting to get the PD patients seeking treatment for this disorder.
I will now turn to a dividend.
The phase three studies significant investor bases has completed enrollment.
And we expect topline results from this study by the end of the year.
Following the completion of the study we plan to meet with the FDA for a pre NDA meeting and discuss our planned new drug application.
As a reminder, the phase III study aims to enroll approximately equal number of gastroparesis patients with either idiopathic or diabetic etiology.
Hi, This is a 12 week double blind placebo controlled study, which measures the effect of the dividend and improving the symptoms of gastroparesis.
This phase III study follows the successful completion of the four week phase two randomized study in the same population.
The results of that study was published in the journal of Gastroenterology in January of 2021.
In that study so it did come back to kind of pre specified aim and achieved clinically meaningful outcomes in patients with gastroparesis.
The dividend was shown to be well tolerated with an adverse event profile similar to placebo.
The overall benefit risk profile. It confirmed is likely to offer advantages over both approved and all type of treatments.
She is there.
The effects of the difficulty in achieving complete response in those here, but also improving overall symptoms may suggest a disease modifying effect.
The action to the local muscular network as well as the central nervous system centers for nausea and vomiting.
The ongoing phase III studies of similar design compared to the phase two study with a few differences.
This phase three study enrolled approximately 200 patients compared to approximately 150 in the phase II study.
Second the current study has a duration of 12 weeks compared to four weeks in the prior study.
Third in the current study vomiting episodes during the screening period is required for inclusion in.
And finally in the current study patients are stratified based on idiopathic or diabetic etiology in order to allow for independent imbalanced efficacy analysis subgroup.
A separate phase III 12 week open label studies ongoing.
Got his currently enrolled over 250 patients.
In addition, more than a dozen study participants kept requests to continue treatment with the dividend post completion of the clinical study through an expanded access program.
40 of these patients had received FDA approval to continue treatment beyond three months with the longest a lot of them with exposure kind of until 15 months.
Regarding gas the places and it's prevalent in a recent review by commonality at all he also has highlighted that.
A population based study in Minnesota in the United States.
David that the age of the adjusted incidence of Gastroparesis. During the 10 year period was 2.54 pesos.
<unk> thousand person, yes for men and 9.8 basins for 100000 persons gifts for women prevalence.
Estimated to be 9.6 cases per 100000 men and 37.8 patients per 100000 women.
Individuals with typical symptoms of Gastroparesis may never undergo confirmatory testing.
The study estimated that as many as one 8% of the general population they have gastroparesis, but only 0.2% are diagnosed.
The authors concluded that presumably this relates to a lack of awareness of the disorder and existing diagnostic confusion caused by another lap between the symptoms of Gastroparesis and functional dyspepsia.
Given the estimated prevalence upon successful completion of the program, we see a significant commercial opportunity in creating awareness for both the condition and puts the dividend isn't new pharmacological option for patients with Gastroparesis.
Our clinical pipeline programs are advancing including among others, the fanapt bipolar and long acting technical studies.
And this idea of predicting in motion sickness.
To conclude we're focused on improving patient access to captives for non 24 is going to increase awareness for hfcs and cattleya till Q4, SLS patients as well.
The clinical program. After a dividend is nearing completion and we look forward to the results of the phase II study and continue our discussions with the FDA regarding the regulatory path to approval and preparing for commercial launch.
With this trend.
Uh huh.
Thank you boss.
I'll begin by summarizing our financial results for the first nine months of 2021 before turning to discuss the third quarter of 2021.
Total revenues for the first nine months of 2021 for $207 million, an 11% increase compared to $180 5 million for the same period in 2020.
U S net product sales of $129 5 million for the primary contributor and driver of our revenues for the first nine months of 2021 and saw an 11% increase compared to $116 5 million for the same period in 2020.
Net product sales of $71 2 million for the first nine months of 2021, reflecting an 11% increase compared to $64 million for the same period in 2020.
For the first nine months of 2021 Vanda recorded net income of $26 1 million compared to net income of $15 1 million for the same period in 2020.
Net income for the first nine months of 2021 included an income tax provision of $7 7 million as compared to an income tax provision of $5 6 million in the same period in 2020.
<unk> cash cash equivalents in marketable securities referred to as cash as of September 32021 or four.
406 million, representing an increase of $57 4 million compared to September 30 of 2020.
Sure.
Turning now to our quarterly results.
Total revenues for the third quarter of 2021 were $70 1 million, a 16% increase compared to $60 3 million for the third quarter of 2020.
<unk> net product sales were $45 6 million for the third quarter of 2021, a 15% increase compared to $39 6 million in the third quarter of 2020.
Shnaps net product sales in the third quarter of 2021 were $24 5 million.
14% increase compared to $20 7 million in the third quarter of 2020.
<unk> net product sales in the third quarter of 2021 increased by 5% as compared to $23 4 billion in the second quarter of 2021.
Snack prescriptions in the third quarter of 2021 as reported by equity exponent were essentially flat as compared to the second quarter of 2021.
For the third quarter of 2021, Vanda recorded net income of $7 8 million compared to net income of $5 9 million for the third quarter of 2020.
Net income for the third quarter of 2021 included an income tax provision of $3 million as compared to an income tax provision of $2 5 million for the same period in 2020.
Operating expenses in the third quarter of 2021, or $59 3 million compared to operating expenses of $52 6 million in the third quarter of 2020.
The $6 7 million increase was primarily driven by higher R&D expenses related to the late stage for dividend at least in Fanapt development programs as well as our early stage development programs, partially offset by lower SG&A expenses related to awareness and branded DTC campaigns.
Vanda is providing update to its prior 2021 guidance vanda expects to achieve the following financial objectives in 2021.
Net product sales from both heavier Simpson apt of between 260 and $290 million.
This compares to prior guidance of between 270 and $300 million.
<unk> net product sales of between 170 and $190 million. This compares to prior guidance 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.
Vanda is revising its full year 2021, net product sales guidance to between 170 and $190 million.
Prior full year 2021 U S net product sales guidance of between 180 and $200 million was based on key assumptions around shall we use demand and payer approval rates among others at least.
Demand measured by prescriptions received it's been consistent and continues to far exceed the prescriptions filled.
Payer approval rates were expected to be in line with historical trends, however, reimbursement challenges from payers to fill prescriptions for patients with non 24 have increased significantly.
<unk> is working with patients in an effort to improve their access to the only FDA approved treatment for their condition.
Given these challenges and the timing during the year, we have revised downward our full year 2021 U S net product sales guidance.
Lower end of the revised guidance range assumes minimal to no improvement in patient access and reimbursement challenges in the fourth quarter.
High end of the revised guidance range assumes improvement during the period.
With that I'll now turn the call back to malls.
Thank you very much Kevin at this point, we would be happy to answer any questions you may have.
As a reminder, if you'd like to ask a question at this time. Please press. The Star then the number one key on your Touchtone telephone.
To withdraw your question press the pound key.
Please standby, while we compile the Q&A roster.
Our first question comes from Chris Howerton with Jefferies.
Chris Your line maybe on mute.
I was I was.
Had some great questions you didn't hear.
Thanks, so much for taking them.
I guess the two from me would be.
Mahalo and Kevin if you can just give us a little more color around what the specific reimbursement challenges or are there you know I'm just not being reimbursed at all are there more prior authorizations I guess, just what exactly are some of them.
<unk> just that that you're facing there and then the second question I have.
Is respect to the Gastroparesis read out one of the key changes that you highlighted in Mohali was the increased duration of treatment from the prior I think it was four weeks to 12 weeks currently.
Talk to US about why do you think that there would be an improvement of the drug effect overtime or.
Or alternatively, maybe just the difference between the placebo arm over time. Thank you.
Yeah. Thank you very much Chris.
Happy to.
Answer a part of your first question and I'll, let Kevin give more color.
But the.
Solid yes.
With Payors.
Of course are not new and what is new is the escalated.
And what are the effects primarily is.
A oh increased number of denials among non 24 patients with light perception.
While the investment rates.
For blind patients with non 24.
Remain at near their historical norms.
And we began seeing actually.
Good coverage on SMS as well it is the a non 24 patients that are.
The door they have light perception.
And there what we see is not some new criteria or some alternative treatments because no alternative treatment exists.
It is just.
From some payers it flat out.
Denial.
MS. Bachelet denial is that we don't reimburse you because your site.
And of course Uh huh.
This is <unk>.
It's a tremendous issue for the patients.
But also each country.
What the FDA label is and the clarification by Dr. Woodcock Ah in 2020, and a long letter.
Whereas he explained that the.
The indication is for non 24 without a consideration too.
To.
Visual acuity, so pretty much that's the key.
Content, and maybe I will let Kevin add more color on.
Timing versus.
Flat out your mouse.
Yes, that's exactly right most of them what I, what I would layer on to that is you know.
As I highlighted in my script, we continue to see consistent strong demand.
And you know from patients and prescribers. So it's not a demand issue here simply an access issue and.
This is began to escalate in recent periods, there's been a fairly significant backlog of patients who are seeking access to the drug.
Which could be very meaningful even a fraction of that is able to convert in either the fourth quarter or in the future periods and so.
Working as Mohamad mentioned engaging with these payers to understand their objections and find a path forward.
Given the significant backlog in folks needing access to this important treatment.
And just to add.
So even though this is a very important.
Issue out of principle.
We believe we developed is innovations to help people.
If people cannot access to drugs.
Innovations.
Or actually are wasted and it is important that we stand up for patient access.
Do our part and have a reasonable discussion with the payers.
Because you know as the community it will not be sustainable.
Layers.
Of whatever financial interest.
They would refuse.
Got to pay for a drug that is the only option for these patients and then that is very often.
Discuss conditions see then a.
Value based contracting which are becoming popular quite expensive drugs to make sure.
We.
Provided that the patients so big issue escalated it was not new.
There are definitely doing everything that needs to be done to make sure. These patients.
Get some treatment and as a result, our band Oh.
Benefits of course, who did happen.
Yeah.
I don't know if you have any follow up on this case, otherwise I will switch to the no guests were pretty nice instead.
That's clear and I appreciate all the extra information there yeah. Thank you.
But of course Oh.
Okay on the gas to places. Your question was one of the defense the design is between the.
For a week and the 12 week study correct.
Yeah, and I think I mean, maybe I'm, putting words in your mouth, but intimating that the drag effect would be improved over time or perhaps the difference between the placebo and the drug would improve over time and again, maybe I'm putting words in your mouth excuse me.
Okay, alright, well they are.
They are interested is that for a condition that is.
He is not a loss.
Lastly, a few days it is important to understand the durability of the effect.
And therefore, while we were measuring the effects of the drug at four weeks, we're also measuring.
12 weeks, what do we know from the screening data.
Is that the condition does not often.
Dissipate very quickly over a short period of time so to answer the question, whether we expect an increase.
Placebo effect over time.
The answer is likely not because of the nature of the disorder.
And the other side of the or the.
Question do.
Do we expect a dissipation of the effect of the drug and the answer is likely not because mechanistically bind in the canyon one receptor.
Is not anticipated that you will develop I keep phylaxis, meaning that you could take the drag but at some point it stops working.
The answer is a likely.
We're not going to see much difference so the fact between four and 12.
And maybe for some people that it takes a little longer.
To improve the symptoms.
We could see continuous improvement beyond the four weeks to 12 weeks.
Okay.
Very good and I guess I mean, maybe if you would entertain a follow up on the other kind of topic of discussion I think I, just went and browse the label.
There were now sighted.
Patients in the pivotal trial for non 24, so is that kind of what payors point to or what or what are some of the pardon me what are some of the things that they point to to say that you know sighted individuals should not be covered and reimbursed from their perspective yeah.
Well I I.
What is it all disappointed he is that they.
They say why they don't cover it because here's how I did right.
But we have not seen really inviting.
These objections.
Objections to have a reasonable discussion, but anecdotally, yes, they decided that.
They were not sighted patients in the study and.
And they say they are.
Guidelines before the drag was actually a place in the market that they're silent about the existence of.
Cause milk and have kids.
But more importantly, the answer comes directly from several sources.
First one is the experts of the AR.
Advisory Committee advised the FDA on the approval.
Division at the time that the FDA, who actually.
<unk> gave us the label of non 24, despite the fact that the.
The clinical study for control reasons.
<unk> is totally blind individuals.
And finally.
Hi.
The answer by the FCA is a doctor would cook.
See there at the time in 2020.
She actually responded to a citizens petition who is statistically the FTA to change the indication for catalyst from down 24, 2024, and blind people, giving some rationale.
The F D. A doctor will Cook signed it explained the reasons why this is not true the mechanism of action of the Dragon. The disease is such that the FDA understands that study started pulling back did.
Populations, where there's better control of the action of the drug and that helped.
<unk> is approved for the full indication without any consideration of visual acuity.
And finally, and that's something that we have not really talked much older.
Over the last several years.
4000 doctors.
Have written prescriptions for about 10000.
Non 24 patients who are not blind.
So it is hard if you have a reasonable discussion or will they pay you who.
Who believes that they know better.
On the Advisory Committee, the FDA Division, Dr Woodcock and the 4000.
Our doctors have prescribed the drug so.
We're optimistic that we're going to get down to a reasonable dialogue and we understand that there are concerns about a course and absolutely. We appreciate that and we're up and to do it.
And you can it takes to make sure that these patients are.
Our on drug and they're not.
Incentivize to seek treatment.
That's not a sustainable outcome.
Very good well my honest I really appreciate it thank you and I will hop back in the queue.
Thank you Chris.
Our next question comes from Olivia Brayer with Bank of America.
Hey, guys. Thanks for the question and congrats on the quarter.
Wanted to ask about your development plans for Fanapt in bipolar and whether there have been any discussions so far with FDA around.
Potentially needing a second phase III confirmatory study.
Is there a second trial something that you're planning for at this point or do you really feel confident that.
That one trial is enough for a complete filing package down the road.
And then I've got a couple of follow ups.
Yeah, I think very much into that.
Hum.
Correct that.
We believe that a successful.
Star deal Fanapt in improving their symptoms bipolar disorder, and there's a large study can provide substantial evidence of efficacy.
Required to support this indication.
And Hum.
I would remind you that the FTA.
The FDA guidance and.
TC Bates for drugs that are approved in different indications they have treated a lot of people that additional indications could be.
Pursued by a single trial of course, the results of that trial.
It would be grow on that decision.
So I would say, we wait for the tile yourselves and.
We're optimistic that if the results.
I'll start convincing.
That does evidence will sometimes.
Okay, great. Thanks, and then we're obviously getting pretty close to your Gastroparesis data.
I know that trial has been fully enrolled for about two months now. So can you just give us a sense of.
How long it could take between the close of that study to the actual.
No disclosure of the data in and as a follow up to that you know how youre thinking about turnaround time in terms of a pre NDA meeting and then official filing yes.
Yeah. Thank you very much.
Just to finish.
You had another part can hear bipolar question.
You know if you could discuss and send them.
We're continuously having our protocols.
If you then adjusted based on the size of the S. T E on the bipolar study and they have actually provided.
Very thoughtful and just for the comments on the development of the long acting injectable as well.
Onto the dividend.
Oh, yes, the enrollment finished about a lost base them in two.
Two months ago and since this is a three months 12 week study.
We expect the last patient to compete.
At the end of this month.
And then.
Hopefully with a quick turn that out of our Malaysian touring and closing the data we can lock the database sometime towards the.
End of December and we can report top line results.
By the end of the year, that's certainly our goal, it's a very tight timeline.
In terms of.
Preparing towards.
NDA application.
We will be in very short order.
Requesting an NDA meeting right after we see the data at peak.
A N D a meeting which hopefully can be granted.
Sometime in.
The first quarter.
And we have already initiated a.
The words pre NDA meeting for.
For the manufacturing section of it is applications. So that's where it stands with his time.
Okay, Great and then just one last one for me on D. D. I know you guys get asked a lot about cash deployment and you obviously have a lot of programs to manage internally, but is there an area, where you feel like you've maybe benefit most from <unk>.
Rising in licensing another asset that's in clinical development.
Yeah at this time I would say that we have a few things in clinical development and we want to do them well. However, you know we are always looking for in licensing.
Mind, you that we have the program with a licensee from B E.
San Francisco on D. C. P R inconsistent activators.
We have a program in social phobia, we'd have been licensed our alpha seven nicotinic program, David <unk> from Novartis. So there thinks in the pipeline, but we.
We are always kind of need to be mindful.
In terms of business development.
We're certainly thinking of how to.
Strengthen our presence.
With our sales force on the commercial setting and always looking for complementary.
That will not detract from our own calls, but at the same time give us additional time and offerings to the positions we search.
Okay perfect. Thank you very much.
Excellent.
That concludes today's question and answer session I'd like to turn the call back to Vanda management for closing remarks.
Yes.
Very much all and.
I'm sure we're gonna be talking soon.
The exciting results from the yes, we did some programs.
You very much.
This concludes today's conference call.
You for participating you may now disconnect.