Q2 2022 Vanda Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, this is the operator your lines will remain on music hold until we begin.
We will begin momentarily.
For your patients.
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Thank you for standing by and welcome to the Q2 2022 Vanda Pharmaceuticals, Inc. Earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by.
Number one on your telephone keypad expect to withdraw your question again press the star one. Thank you I'd now like to turn the conference over to Kevin Moran.
Vanda is senior Vice President Chief Financial Officer, and Treasurer. Mr. Moran. Please go ahead.
Thank you very much Jack.
Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals second quarter 2022 performance.
Quarter 2022 results were released this afternoon and are available on the SEC's Edgar system and on our website Www Dot Vanda pharma dot com.
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. Additionally, we have Tim Williams, our general Counsel and Gunther <unk>, our senior Vice President of business development and R&D Committee member.
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 statements 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, 2021 as updated by our subsequent quarterly reports on form.
<unk> 10-Q.
Current reports on form 8-K, and other filings with the SEC, which are available on the SEC 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.
With that said I would now like to turn the call over to our CEO , Dr. Mahalo Steimer Atlas.
Thank you very much Kevin and good afternoon, everyone.
Thank you for joining us to discuss <unk> second quarter 2022 results.
We will proceed with Kevin disgusting.
So highlights and financial results for the quarter.
Following that we will open the line for questions and I will now turn the call back to Kevin.
Thank you very much miles.
I'm excited to discuss the progress we've made on commercial and clinical development initiatives over the past several months and to provide updates on upcoming milestones that we believe will deliver significant momentum for the business leading into 2023.
Looking first at commercial performance, we continue to advance our strategy and remain committed to strong financial execution.
For several quarters, we have discussed payer challenges for <unk> with.
With denials for sighted patients with non 24 remaining an issue.
We are focused on progressing efforts with Medicare and Medicaid and we've outlined successes with state Medicaid programs, specifically in previous quarters.
To date more than 15 states have revised or agreed to revise their Medicaid prior authorization criteria.
<unk> access to <unk> for patients with non 24 and nighttime sleep disturbances in Smith, <unk> syndrome, which is encouraging.
On the Medicare side, we are seeing some progress as well in.
In July 2022 are sighted non 24 patient secured a key victory and the coverage dispute with a Medicare part D plan, which had a coverage policy restricting coverage for non 24 on the basis of vision status.
Following the appeal and administrative law judge held that federal law bars of Medicare part D plan, the limiting heaviest coverage the only those non 24 patients that are blind.
Following this decision we intend to advocate with other part D plans the strike down similar policies and improve access to <unk> for non 24 patients blind and sighted.
Improving access and coverage of our products for patients remains a top priority and we look forward to providing additional updates over the coming quarters.
Turning to SMS for the indication of nighttime sleep disturbances, we continue to work closely with the advocacy organization prisms to engage with and support the education of the SMS community.
We are looking forward to participating prisms, 11th International SMS Conference that begins this week.
On our clinical pipeline, we are making excellent progress in advancing our late stage programs along toward near term milestones.
Beginning with our nearest term milestone our phase III clinical study of Fanapt in acute manic episodes in patients with bipolar disorder is close to fully enrolled and we expect to report results by the end of 2022.
Our team has worked diligently to advance this program and we hope to deliver a new therapeutic option for patients in the near future.
Moving to our traditional clinical programs, we noted last quarter that the phase III study in the prevention of motion sickness as resumed enrollment.
We are pleased with the pace of enrollment with the study now approximately 30% enrolled.
As a reminder, our prior clinical study with <unk> and motion sickness demonstrated a significantly lower incidence of vomiting in patients treated with <unk> as compared to placebo treated patients.
On treatment for Gastroparesis Vanda recently held a pre NDA meeting with the FDA to discuss the planned NDA submission for <unk> dividend in the short term treatment of nausea and Gastroparesis.
Following the meeting we intend to move forward with the submission of an NDA for this indication.
Vanda is continuing to conduct an open label study of safety for traditional Gastroparesis. We also continue to receive requests from patients regarding access to interim dividend through the expanded access program we.
We have multiple patients that had taken treatment for more than a year and remain on therapy, including one patient that has been on therapy for two years.
Enrollment is ongoing in the clinical development programs with <unk> for the treatment of delayed sleep phase disorder and for sleep disturbances in autism spectrum disorder.
Also of note we are preparing for the submission of an S. NDA for <unk> in the treatment of insomnia.
Additionally, I want to provide a quick update on <unk> 765, our alpha seven nicotinic agonist I'm.
I am glad to announce that our clinical study of <unk> 706, five to alleviate social performance anxiety is fully enrolled and we expect results by the end of 2022.
To conclude operational highlights, we expect 2022 to be a year in which we advanced several important programs in our pipeline that we believe can contribute to van to the long term growth as we continue to drive forward our commercial products.
Moving now to financial results I'll begin by summarizing our financial results for the first six months of 2022 before turning to discuss the second quarter of 2022.
Total revenues for the first six months of 2022 were $124 6 million, a 5% decrease compared to $130 6 million for the same period in 2021.
<unk> net product sales of $78 2 million for the primary contributor and driver of our revenues for the first six months of 2022.
And saw a 7% decrease compared to $83 9 million for the same period in 2021.
The first six months of 2020 to reflect the continued reimbursement challenges for prescriptions of <unk> for patients with non 24.
Turning to <unk>.
<unk> net product sales of $46 4 million for the first six months of 2020 to reflect a 1% decrease compared to $46 7 million for the same period in 2021.
For the first six months of 2020 to Vanda recorded net loss of $3 9 million compared to net income of $18 3 million for the same period in 2021.
Net loss for the first six months of 2022, including income tax provision of 100000 as.
<unk> to an income tax provision of $4 7 million for the same period in 2021.
Operating.
Census for the first six months of 2022 or $128 8 million compared to $107 9 million for the first six months of 2021.
The $20 9 million increase was primarily driven by both higher R&D expenses and higher SG&A expenses.
The increase in R&D expenses was primarily driven by increases related to our late stage clinical program for Fanapt, partially offset by decreases related to our tripping activities.
The increase in SG&A expenses was primarily driven by higher expenses associated with legal support related to ongoing litigation DTC awareness campaigns sales activities commercial support and other corporate activities.
<unk> cash cash equivalents and marketable securities referred to as cash as of June 32022 were $440 9 million.
Representing an increase of $44 4 million compared to June 32021, and an increase of $8 million compared to December 31 2021.
Turning now to our quarterly results.
Total revenues for the second quarter of 2022, or $64 4 million, a 5% decrease compared to $67 9 million for the second quarter of 2021.
<unk> net product sales were $41 2 million for the second quarter of 2022 compared to $44 5 billion for the second quarter of 2021.
Consistent with the first six months of 2022 net sales for the second quarter of 2020 to reflect the continued reimbursement challenges for prescriptions of <unk> for patients with non 24.
Turning to <unk>.
Net product sales for the second quarter of 2022 for $23 2 million, 1% decrease compared to $23 4 million for the second quarter of 2021.
Fanapt net product sales for the second quarter of 2022 were essentially flat as compared to $23 2 million for the first quarter of 2022.
That prescriptions for the second quarter of 2022 as reported by <unk> exponent were also essentially flat as compared to the first quarter of 2022.
For the second quarter of 2020 to Vanda recorded net income of $2 6 million compared to net income of $9 7 million for the second quarter of 2021.
Net income for the second quarter of 2022 included an income tax provision of $1 2 million as compared to an income tax provision of 3 million for the same period in 2021.
Operating expenses for the second quarter of 2022 were $60 9 million compared to $55 5 million for the second quarter of 2021.
$5 4 million increase was primarily driven by higher SG&A expenses associated with sales activities DTC awareness campaigns and commercial support activities.
Operating expenses for the second quarter of 2022 for $6 9 million lower as compared to $67 9 million for the first quarter of 2022.
This decrease was primarily attributable to lower SG&A expenses associated with legal support related to ongoing litigation commercial support activities.
Awareness campaigns and other corporate activities.
Vanda expects to achieve the following financial objectives in 2022.
Net product sales from both <unk> and Fanapt of between 240 and $280 million.
<unk> net product sales of between 150 and $180 million.
Net product sales of between 90 and $100 million.
And year end 2022 cash of greater than $440 million.
This concludes our commentary regarding operational highlights and financial performance at this point, we'll be happy to answer any questions you may have.
At this time, if you'd like to ask a question. Please press star one on your telephone keypad.
Chris Howerton with Jefferies. Your line is open.
Yeah.
Great well, thanks for taking my questions I guess.
The big one I would add would be what.
The evidence supports the strategy for <unk> and insomnia.
And then as it relates to that.
How would this how would you anticipate.
A potential approval in insomnia.
Impacting the pricing for Helios.
And then outside of heavily is in terms of development of <unk> for Gastroparesis.
Curious if the discussion of the non human toxicology studies, such as the dog studies, we discussed in the pre NDA meeting and what specifically.
<unk> was decided with respect to a safety database in an approval in that setting. Thank you.
Thank you very much Chris for the questions I'll start off with the question of insomnia.
And your question had to do.
What evidence supports the indication and second.
If approved.
It could be the.
Our pricing strategy.
On the on the first part.
As you know it is a voluntary has been approved.
For a chronic indication of non 24 and of course more recently for Smith <unk> syndrome.
We have shown that.
<unk>.
Has a significant and large my view of this fact and improving slip.
And two types of studies.
One type of studies is the transient and 70 in model.
Some phase advance.
The three studies is smaller than one and two large studies with $5 eight hour phase advance, where we're selling a site.
Very significant effects improving sleep parameters.
The second study is a study at four week duration study in patients with chronic insomnia characterized by difficulties with <unk>.
Again their physical.
<unk> was shown to be <unk>.
Yes.
Both as it became period this was.
Stage.
One and nine as well as four weeks later.
<unk> significantly.
Improving latency persistent slip or sleep onset timing, thanks compared to placebo.
The combination of.
This evidence.
<unk>.
<unk>.
Significant experience for now.
Almost over 80 years.
Chronically using test melted down 24, we believe supports indication.
<unk> of Citi.
<unk> currently can sell me out with sleep disturbances.
Likely.
Support for the short term indication given.
That we have the four week study data.
But also an opportunity.
For insomnia disorder.
With their specification.
Sure.
Changes in the sleep schedule and specifically phase events.
So we will be good.
This.
<unk>.
<unk> vision is a supplemental NDA and we will continue the discussions with the FDA as we prepare the timing.
I will turn to your question on <unk>.
Gastroparesis.
I believe.
Specifically you asked.
On the and I will come back to pricing.
Specifically you asked about the.
Nine month dog study.
And the safety database.
As you know that there has some docs.
Very light.
Glucose values from preclinical toxicology.
And therefore, the profile of the drug has been.
As well in the short term and long term.
As long term data six months.
Rat toxicology study and of course here the studies in mice is there any carcinogenicity studies.
The FDA.
Bob.
Alright.
Says that.
The nine months until the study is.
<unk>.
Recommendation.
Through the guidance, but not required but as we all have found out there is no alternative they have suggested.
That.
Nonetheless.
Our.
Many evaluations to.
To date suggests that such a study is not necessary.
We.
Vanda objects to conduct.
DSO looks solid salaries and not and most especially in dogs is an unnecessary and of course in all of that.
Significant.
<unk> in public opinion.
To support that.
Especially with the recent.
Court decision in the rate.
The agriculture.
In a facility in Virginia.
These dogs.
We are being kept in very difficult conditions.
So we believe that we have sufficient and adequate information for the FDA to conduct <unk> here.
In terms of safety.
We have again.
Can you take on a lot of data with exposures up to three bonds and some data with exposures of six months and a few basins over a year.
The expanded access program. So we believe the combination of this information.
Wood.
Supply is adequate.
Of course file and conduct this year.
Of course, the FDA will not commit either way up until.
The application has been submitted and a 60 day review period on the scalability of <unk>.
Application.
It has been called.
Concluded.
So that's where that stands.
I'll go back to your question about if suddenly as Todd indicated indication.
Was granted what would that mean for pricing of course, we all know that heavily as is now indicated for two orphan indications.
It has.
Very significant price tag that we have discussed cable cost.
Is that the we can identify as indications where this useful therapeutic can be used.
The increase in the pocket.
And of course.
Making the drug more affordable.
That's where I would.
His commentary is that this vision is.
Is too.
<unk> available to patients who need them and do so and make them make the access.
Yes.
Uh huh.
Billable again and that means.
Drags that their mortgage.
Price.
You can do that given the much larger population of patients that can benefit now what we find intriguing.
Is that well for many years in.
And certainly a drag, especially for sleep onset and some yet.
<unk> as a sleep promote donations.
That is a opportunity with the circadian regulator.
Like does now 10 to actually establish a new thinking that it may be that a large number of patients.
Peter Steve Pontchartrain, some yet.
They actually have.
Change is there.
Schedule, which is because of <unk>.
<unk> and tablets.
There may be some caveat etiology, we can slip policy and some yet and this is perhaps why this drug has worked and worked very well and therefore, we can some of those countries.
I know long answers, but.
Please open the line do you have any follow up.
Yes, no very very much appreciated Mohan as I do.
I do have a follow up with respect to the plan for submission for insomnia could you give us maybe.
Overview of what the timeline might be expected and have you or do you plan to meet with the FDA regarding the submission before you actually do so.
We have already met with the FDA and we will continue the discussions.
Okay.
As I said theyre potentially two indications lobbying.
Short term treatment of insomnia chronic insomnia.
Characterized by.
Disturbances.
Sleep onset and the second one.
What is in the DSM five other and.
<unk> disorder characterized by.
Change in flip schedule.
So these discussions will continue.
This is a different mechanism of action from the FDA has approach as I remind everyone that.
The indication I mentioned first short term thing some year characterized obviously constantly services is exactly what indication reads for MBS.
So theres nothing.
New there.
We do expect there will be some significant.
Discussions with the FDA as we proceed in terms of timing.
Of course this supplemental NDA.
Mike.
NDA asset.
Require.
Together the entire package.
Clinical safety factoring all of this information is there.
And therefore, we believe it's a bit more straight forward and.
And therefore it.
It will take less amount of time to prepare I cannot commit right now to timing.
We want to continue those discussions with the agency.
Okay.
That's fantastic and I guess.
If I may just ask one more question I don't know if it would be directed to you and the whole answer Kevin.
With respect to some of the changes that you have observed in terms of the Medicare part D coverage did that impact your financial guidance.
Or like how does that weigh into your thinking for the revenues for this year.
Yes.
It still took by briefly say that.
This is an emerging story.
And the <unk>.
Highlight that Kevin gave.
Sure.
Single cited patient cloud.
Akshay you want the administrative law judge.
Is exemplary that.
There is energy book by the patient.
But also as indicators.
To do the right thing.
Stick to the FDA label.
And.
Improved access for patients.
But it is all at the beginning.
And again remember that.
So I think back in December this year.
<unk> several successes.
With state Medicaid agencies actually advising their criteria.
Hum.
To allow access to <unk> patients, but I will let Kevin.
Discuss the.
Impact.
Yep, Thanks miles and Chris just as a reminder, for our guidance on <unk> was $150 million to $180 million of what we had spoken to you on that was the lower end of the range assumes that we continue to see payer challenges that resulted in a decline in patients on therapy and the upper end of the range reflected improvement in those dynamics.
And returned to growth on patients on therapy.
Obviously, we've affirmed guidance as of our Q2 release and appear to be kind of trending towards somewhere in the middle of those two stories and as miles mentioned. This is recent news that we're continuing to evaluate and we will see.
What the impact will be as we go forward.
And look to have that.
That guidance taking into account by other Medicare plans.
For patients seeking treatment.
Breaking news on that that you will have to continue to monitor and evaluate.
Yeah, Okay. No that's very helpful. Thank you Kevin.
Well I think those are all my questions for the time being I really appreciate you taking this.
Yes.
Thank you very much.
There are no further questions at this time I would like to turn the call back over to Vanda management for closing remarks.
Thank you. Thank you very much for joining us today, we look forward to speaking with you again soon.
This concludes the Q2 2020 to Vanda Pharmaceuticals, Inc. Earnings call. We thank you for your participation you may now disconnect.
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