Q4 2022 Vanda Pharmaceuticals Inc Earnings Call

Yeah.

Ladies and gentlemen, thank you Christine and welcome to the Q4 2022 Vanda Pharmaceuticals, Inc earnings Conference call I.

I would now like to turn the call over to Kevin Moran.

As Chief Financial Officer. Please go ahead.

Thank you Mardi.

Good afternoon, and thank you for joining us to discuss Vanda pharmaceuticals fourth quarter and full year 2022 performance, our fourth quarter and full year 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.

In addition, we are providing live and archived versions of this conference call on our website.

Joining me on today's call is Dr. Mahalo Farmer Atlas, our President Chief Executive Officer, and Chairman of the Board and Tim Williams, Our General Counsel.

Following my introductory remarks, my 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 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 most recent annual report on Form 10-K as updated by our subsequent quarterly reports on Form 10-Q current reports on form 8-K and other.

Fillings 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.

With that said I would now like to turn the call over to our CEO Dr. <unk> Polymeropoulos.

Thank you very much Kevin and good afternoon, everyone.

Thank you for joining us to discuss <unk> fourth quarter and full year 2022 results.

I will first discuss key highlights from our clinical programs and then I will ask our general counsel, Tim Williams to provide a brief update on litigation matters before turning the call over to Kevin to discuss our commercial progress and financial results.

I will begin with our announcement of positive results in the phase III clinical study of Fanapt in the treatment of bipolar one disorder in adult patients.

This was realized placebo controlled study conducted in the U S and Europe that enrolled approximately 400 patients with acute episodes of bipolar one disorder.

The primary endpoint of that study was measured in week four of treatment and it was assessed by the young mania rating scale why am I S. A rating scale of clinical severity in a core symptoms of menu.

At the end of the study with for Fanapt in the space and so the lion's share improvement than placebo treated patients and this difference was highly statistically significant.

Well I am Budd asked was SaaS.

And of which 123 and four statistically significant benefit in the Fanapt group over placebo was observed as early as week too.

Caitlin.

Consistent with the total way about that score the individual why am I. The subscale items also showed improvement in group versus the placebo.

Placebo group over the course of the four week study other outcomes such as clinical global impression of severity and the clinical global impression of change also achieved.

High statistical significance.

We plan to submit a supplemental new drug application in San Diego for Fanapt for the treatment of acute man you can mix that says associated with bipolar one disorder in adults in the first half of this year 2023.

As a reminder, bipolar disorder is estimated to affect 2.8% of the U S. Adult population and number of approximately up to 10 times higher than the other.

The estimated prevalence.

Prevalence of schizophrenia.

Therefore, and indications bipolar disorder presents a substantial opportunity to expand the <unk> franchise above and beyond the already approved indication of schizophrenia in adults.

Yeah.

We also reported results for <unk> 765.

A novel Alpha seven nicotinic acetylcholine receptor partial languages.

From clinical studies to twos, you know what in the treatment of acute performance anxiety in social situations.

In study 2201 participants who received <unk> 765, so numerically lowest dose levels compared to those who received placebo.

The stress level was assessed by the subjective units of this first scale S. E. T. S has held pace and scale of level of nervousness or distress ranging from zero to 100 at multiple time points during the duration of the T. S has the test.

In particular in female participants approximately 70% of the total participants a larger magnitude of effect was observed which was also statistically significant.

This is the first time that alpha seven nicotinic acetylcholine receptor partial agonist has shown efficacy in a clinical study of performance anxiety.

And we look forward to confirming the efficacy in future studies.

Okay.

Onto the dividend preparation of the new drug application NDA in Gastroparesis is ongoing with an expected FDA submission in the first half of 2023.

Additionally, an open label study of <unk> in patients with Gastroparesis is ongoing with the first 400 pesos, having already completed this 12 week study.

Patients continue to seek access to the expanded access program.

We the number of patients having been treated with a dividend for over a year.

But the dividend for the tape out of motion sickness enrollment in the clinical program is over 75% complete and we expect results by mid 2023, we've experienced great success in recruitment.

We look forward to being at our clinical programs to the successful completion in pursuit of regulatory filings and approvals.

As we reported today 2022 was another successful year commercializing catches for non 24, and SMS and Fanapt with schizophrenia.

The adverse decision in December by the District Court on the executives and the litigation poses a significant Charlotte, but we remain focused and determined.

In our pockets.

I will now turn the call to Kim Williams, our general counsel to discuss these and other legal matters Tim.

Thank you my house.

As you probably know in December the Delaware District Court found certain of our head Leos patent claims invalid or not infringed the generic defendants in our end of litigation.

We appeal that ruling and we have a hearing at the federal circuit scheduled for March 14th we expect a decision by the court after that hearing.

Type of Pharmaceuticals has since launched the generic version of <unk> and we have brought several actions against the tablet based on problematic aspects of that launch including infringement of other had leos patents Lanham Act violations in patient safety issues to name a few.

These are separate and distinct cases from our federal circuit appeal, but nonetheless important to protect the safety of patients and to protect vendor's legal rights.

As an example, we discovered that tevis generic has a melting is sold without braille labeling, which presents an immediate risk to blind at Leo's users, who are accustomed to the brand labelling packaging and safety information that is accompanied head leos since its launch.

To address this concern we filed a citizens petition with the F D. A and filed suit in federal court requesting immediate action from the F D. A.

On the regulatory front, we continue to pursue multiple actions against the F. D. A on a variety of regulatory matters in an effort to continue to hold the F D. A carnival to law.

We intend to continue this litigation to protect the interest of <unk> and to make our products more broadly available to the patients we serve.

Uh-huh.

Thank you very much for him.

Will turn now to call to Kevin Moron to discuss our commercial progress and financial results Kevin.

Thank you mass.

I'll begin by summarizing our full year 2022 financial results before turning to discuss the fourth quarter of 2022.

Total revenues for the full year 2022 for $254.4 million, a 5% decrease compared to $268.7 million for the same period in 2021.

Net product sales of $159.7 million, where the primary contributor and driver of our 2022 revenues and so on 8% decrease compared to 2021.

A year over year decline in the heaviest business reflects continued reimbursement challenges for prescriptions for patients with 924.

Net product sales of $94.7 million for the full year 2022 were essentially flat compared to 2021.

For the full year 2022, Vander recorded net income of six $3 million compared to net income of $33.2 million for 2021.

Net income for the full year 2022 included an income tax provision of $5 million as compared to an income tax provision of $9.2 million for 2021.

We end as cash cash equivalents marketable securities referred to as cash as of December 31, 2022 were $466 $9 million, representing an increase of $34 million as compared to December 31 2021.

Turning now to our quarterly results.

Total revenues for the fourth quarter of 2022, where $64.5 million, a 5% decrease compared to $68 million for the fourth quarter of 2021.

<unk> net product sales were $40.1 million for the fourth quarter of 2022, a 9% decrease compared to $44.1 million in the fourth quarter of 2021.

Consistent with the full year of 2022 net sales for the fourth quarter reflect the continued reimbursement challenges for prescriptions for patients with 924.

Net product sales in the fourth quarter of 2022 or $24.4 million, a 2% increase compared to $24 million in the fourth quarter of 2021.

Net product sales in the fourth quarter of 2022 increased by 2% as compared to $24 million in the third quarter of 2022.

[noise] prescriptions in the fourth quarter of 2022 as reported by equivalent exponents decreased by approximately 2% compared to the third quarter of 2022.

For the fourth quarter of 2022, Vander recorded net income of $6 $9 million compared to net income of seven $1 million for the fourth quarter of 2021.

The net income for the fourth quarter of 2022 include income tax provision of $2.8 million as compared to an income tax provision of $1.5 million for the same period in 2021.

Operating expenses in the fourth quarter of 2022 were 57 $9 million compared to $59.4 million in the fourth quarter of 2021.

The $1.5 million decrease was primarily driven by lower R&D expenses related to the late stage for an App development program.

Operating expenses in the fourth quarter of 2022 decreased by $3.6 million as compared to $61.4 million in the third quarter of 2022.

This decrease was primarily driven by lower R&D expenses related to the late stage can App development program and our previously announced Ollie past agreements, partially offset by higher SG&A expenses related to spending for ongoing litigation.

As a reminder, a $3 million upfront fee was expense and the third quarter of 2022 upon entering into the only fast agreement.

Given the uncertainty surrounding the U S market for <unk> for the treatment of non 24 as a result of the ongoing U S. Patent litigation Vanda is unable to provide 2000 twenty-three financial guidance at this time.

<unk> will continue to evaluate its ability to provide financial guidance as the year progresses.

With that I'll now turn the call back to my House.

Thank you very much Kevin at this point, we'll be happy to answer any questions you may have.

The florist now.

Your questions to ask a question at this time. Please press star one on your telephone keypad. If at any point you would like to withdraw from the can you. Please press star one again, we will take a moment to render a roster.

There are no questions at this time I would now like to turn the call over to <unk> Pharmaceuticals management for closing remarks.

Thank you very much everybody for joining us on this court in your call and we look forward to discussing our progress in the future.

Thank you.

Thank you ladies and gentlemen, this does conclude today's call. Thank you for your participation you may now disconnect.

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