Q4 2024 Vanda Pharmaceuticals Inc Earnings Call
Speaker Change: [music].
Okay.
Hello, and thank you for standing by.
Welcome you to the Q4 2024, Vanda Pharmaceuticals, Inc earnings Conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session.
I would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
I would like to withdraw your question Press Star one again.
Speaker Change: I'd now like to turn to conference over to Mr. Kevin Moran vendors Chief Financial Officer.
Speaker Change: Go ahead Sir.
Kevin Moran: Thank you Jackie.
Speaker Change: Good afternoon, and thank you for joining us to discuss Vanda pharmaceuticals fourth quarter and full year 2024 performance, our fourth quarter and full year 2024 results released this afternoon and are available on the Sec's Edgar system and on our website Www Dot Vanda pharma dot com.
Speaker Change: In addition, we are providing live and archived versions of this conference call on our website joining.
Speaker Change: Joining me on today's call are Dr. <unk>, <unk>, our president and Chief Executive Officer, and Chairman of the Board and Tim Williams, Our General Counsel.
Speaker Change: Following my introductory remarks from also update you on our ongoing activities I will then comment on our financial results before we open the lines for your questions.
Speaker Change: 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 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.
Speaker Change: And managements 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 filings with the SEC, which are available on the Sec's Edgar system and on our website we encourage.
Speaker Change: All investors to read these reports and our other filings.
Speaker Change: 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.
Speaker Change: With that I would now like to turn the call over to our CEO Dr. <unk>.
Thank you very much Kevin and good afternoon, everyone. Thank you for joining us to discuss vanda.
Speaker Change: Fourth quarter and full year two.
Speaker Change: 2024 results.
Speaker Change: As we discussed in our press release earlier this afternoon.
Speaker Change: <unk> revenue growth for Nab is putting us in a significant growth trajectory for 2025 and beyond supported also by the commercial performance objectives and convoy.
Speaker Change: The Fanapt long acting injectable program.
Speaker Change: The new drug application for <unk>.
Speaker Change: Except pay done for.
Speaker Change: Bipolar disorder, and schizophrenia, along with its development for major depressive disorder have the potential to drive future growth in our psychiatry portfolio for many years to come.
Speaker Change: <unk>, new drug application for motion sickness.
Speaker Change: File with a potential approval. This here, while we're pursuing approval in Gastroparesis and the development of <unk> to improve Tolerability, Oh G. L. P. One analogue with golf.
Speaker Change: Our entire anti inflammatory portfolio anchored by putting boy was strengthened with the addition of in Sidoti mud from adaptive and IL 36 receptor inhibitor for the treatment of generalized pustular psoriasis.
Speaker Change: We plan to file a BLA later this year well, we're exploring vegetation in Europe, and Japan as well as the development of this novel drug for other inflammatory disorders within unopposed action.
Speaker Change: The IL 36 system.
Speaker Change: In 2024 will return to revenue growth driven by the commercial launches in bipolar disorder in multiple sclerosis, and advance our development pipeline with a number of projects at or near marketing applications. All this was achieved by the hard work.
Speaker Change: <unk> and the efficiency of our organization and its wonderful people.
Speaker Change: I will now turn to for net Fanapt was approved in the second quarter of 2024 for the acute treatment of bipolar one disorder.
Speaker Change: Because I mean, you see the commercial launch of <unk> in this indication in the third quarter of 2024 in the fourth quarter as compared to the fourth quarter was 23 new.
Speaker Change: New patient starts as reflected by new to brand prescriptions or N. B R X increase by over 160% and Fanapt net product sales increased by 18%.
Speaker Change: A dedicated specialty sales force of approximately 200 pesos has been promoting for that supported by speaking program to improve peer to peer awareness.
Speaker Change: Given the successful trajectory and consistent with other peers. We're currently in the process of further expanding our sales force to 300 Representatives, which will allow for increased in both reach and frequency.
Speaker Change: In January of 2025, we began our direct to consumer advertising to increase general consumer awareness.
Speaker Change: <unk>.
We expect product adoption to continue as more prescribers developed based on experiences and identify candidate basis.
Speaker Change: <unk> also initiated a phase III program for the long acting injectable and AI formulation of for that in the fourth quarter of 2024.
Speaker Change: The long acting injectable once about Fanapt is evaluated in relapse prevention for schizophrenia, where the oral formulation has already been shown to be successful and is already included in the Fanapt prescribing information.
Well all products. So far have been developed in double blind placebo controlled studies and while Vanda and the FDA have agreed on this design.
Speaker Change: And IRB Institutional review Board has objected to a placebo controlled design for schizophrenia maintenance.
Speaker Change: We're evaluating with the F D. A waste to proceed outside of a placebo controlled study, which could include a bridging study with the oral formulation.
Speaker Change: This evaluation is not specific to bad debt and the outcome of this design will likely be required of others.
Speaker Change: <unk> plans to initiate a study for the Fanapt long acting injectable is it once a month injectable for the treatment of hypertension.
Speaker Change: To address both treatment resistance and treatment compliance.
In the course of our extensive clinical program with Fanapt for over 20 years, we have now identified an unexpected but robust benefit in treating hypertension with for that.
Speaker Change: Specifically in a large meta analysis or placebo controlled studies, we have identified a rapid and sustainable effect in reducing systolic and diastolic blood pressure, especially among people with baseline hypertension.
Speaker Change: The effect size is comfortable to effective anti hypertensive.
Speaker Change: Well the exact mechanism there is not known we believe that this effect is likely due to the mixed alpha suite autonomy and dopamine receptor antagonist observed with for that we plan to initiate a study to evaluate this effect with a once a month injectable fanapt delay I in <unk>.
Speaker Change: <unk> with treatment resistant hypertension.
Speaker Change: It has been reported that medication non adherence.
Speaker Change: Retention is a significant public health risk and as such if we're successful in our studies, but absolutely I could become the first medication to address these large public health need.
Speaker Change: Additionally, vanda submitted a marketing authorization application.
Speaker Change: In Europe in the fourth quarter of 2024 for Fanapt.
That is the European medicines agency for bipolar one disorder and schizophrenia.
Speaker Change: I will now turn to <unk>.
Speaker Change: Known as mills of paradigm.
Speaker Change: Vanda expects to submit a new drug application for <unk> for the treatment of acute bipolar one disorder and schizophrenia to the U S food and drug administration in the first quarter of 2025.
Speaker Change: Exclusively including pending patent applications could extend into the 20 <unk>.
Speaker Change: <unk> is an active metabolite of allo Paydown and has been extensively studied in the last year, we've met with the FDA and agreed upon the clinical and manufacturing requirements and we're now prepared to submit a new drug application in the coming weeks.
Speaker Change: But as you stated a phase III clinical study for <unk> S.
Speaker Change: A once a day adjunctive treatment for major depressive disorder in the fourth quarter of 2024.
Speaker Change: Results are expected in 2026.
Speaker Change: I will now move on to Hecklers does Malkin Vanda has initiated clinical programs in pediatric insomnia and delayed sleep phase disorder. If these programs are ongoing.
Speaker Change: Banderas MAA for <unk> L cute.
Speaker Change: For Smith <unk> syndrome is now pending with the European Medicines agency.
Speaker Change: In addition, vanda.
Speaker Change: That is continuing to pursue the approval of catalyst in sleep onset insomnia and the treatment of jet lag.
Speaker Change: Vanda has completed successfully multiple studies in these indications that have demonstrated substantial evidence of efficacy and a positive benefit risk profile.
Speaker Change: But it has requested an FDA here on the insomnia indication and an appeals court is expected to rule in the coming months on the jet lag application.
Speaker Change: Okay.
Speaker Change: Boy, but estimate.
Speaker Change: Monday initiated the commercial launch of convoy for the treatment of relapsing forms of multiple sclerosis in the third quarter of 2024.
Speaker Change: A new specialty sales force is now promoting convoy for this indication across the United States. We believe that's been voiced profile when appreciated will drive the preferences of prescribers and patients. The sales force supported by Newsweek as program for.
Speaker Change: Peer to peer awareness.
Speaker Change: Investigational new drug applications for body in the treatment of psoriasis and ulcerative colitis were accepted by the FDA in the fourth quarter of 2024.
Speaker Change: But before he had been previously shown to be effective in treating acute episodes of psoriasis as well as preventing relapse. This.
Speaker Change: This study was conducted by Actelion before this acquisition of the product and the results have been published.
Speaker Change: That is now finalizing the development program that could lead to a new drug application filing in this indication.
Speaker Change: So at least at the new drug application for a difficult for the treatment of motion sickness were submitted to the FDA in the fourth quarter of 2024.
Speaker Change: This application supported by three positive studies in prevention of motion induced vomiting in actual see travel conditions.
Speaker Change: We expect an FDA decision later this year.
Speaker Change: Vanda has recently initiated a clinical trial to study to a dividend in the prevention of vomiting induced by a G. L. P. One analogue with Dolby that a semi growth guide in the fourth quarter of 2024.
Speaker Change: A frequent and at times severe treatment emergent adverse event with <unk>, one analogue is nausea, and vomiting, which requires slowly titration and delayed onset of effect.
Speaker Change: We're evaluating whether it's a dividend can prevent where golby induced nausea, and vomiting, and if it does it could become a very useful product during <unk>, one analogue treatment initiation.
Speaker Change: Yes.
Speaker Change: Vanda has now accepted the opportunity for a hearing with the FDA on the approval ability of the NDA for <unk> for the treatment of symptoms of Gastroparesis.
Speaker Change: Vanda has identified a number of folks in the FDA review that led to a complete response letter and we believe that if allowed to be reviewed by experts. They would also reach the conclusion that the dividend can be a useful product ingredient symptoms of gastroparesis.
Speaker Change: In the meantime.
Speaker Change: More than 50 patients are currently treated with the dividend through the expanded access program and many additional ones are being evaluated to initiate treatment.
Speaker Change: Yes.
Speaker Change: <unk> daily map.
Speaker Change: In February 2025, Vanda announced it entered into an exclusive global license agreement with an artist <unk> and <unk> for the development and commercialization of <unk>.
Speaker Change: That is an IL 36 receptor antagonist monoclonal antibody.
Speaker Change: Vanda expects to initiate and complete the technology transfer activities in 2025 and to immediately begin preparing the biologic license application BLA and MAA for generalized pustular psoriasis GPP.
Speaker Change: U S and European Union.
Speaker Change: Yeah.
Speaker Change: Generalized pustular psoriasis or GPP is a rare severe skin disorder that is often caused by recessive mutations in the IL 36, Arda M. Jean a regulator of the IL 36 activities.
They're all a SaaS mutations in <unk> state, which are far more common is not get appreciated but it may play a significant role in the pathogenesis and progression of other inflammatory skin conditions.
Speaker Change: We plan to fly to.
Speaker Change: To file a BLA later this year well, we're exploring registration in Europe, and Japan, and as well as the development of this novel drug in other inflammatory disorders with an unopposed action of the IL six cytokine system.
Speaker Change: Okay.
Speaker Change: Finally on early stage program highlights.
Speaker Change: <unk> 765, and Alpha seven nicotinic acetylcholine receptor partial agonist is currently in clinical development for the treatment of acute performance anxiety in the social situations.
Speaker Change: We have previously reported results from a phase III study.
Speaker Change: In accordance and outcomes in a model of acute performance anxiety.
Speaker Change: We plan to meet with the FDA in the coming months.
Speaker Change: At the end of Phase II meeting and plan to initiate phase III program.
Speaker Change: In social excited disorder.
Speaker Change: In 2025.
Speaker Change: V I N D application for VCA 894, a and anti sense oligonucleotide in the treatment of sorry, Marie tooth disease Axonal type two S M.
Speaker Change: And in Haiti, peripheral neuropathy for which there is no available treatment was accepted by the FDA in 2024.
Speaker Change: The phase one clinical study for VCA 94, a is expect to enroll this single patient by mid 2025.
Speaker Change: In December 2024, Vanda announced that the FDA has granted orphan drug designation for.
Speaker Change: <unk> 18, 49, a <unk>.
Speaker Change: Selective anti sense oligonucleotide based JAK two inhibitor for the treatment of Polycythemia Vera.
Speaker Change: <unk> of a rare hematologic malignancy that is estimated to affect one in 2000 Americans.
Speaker Change: I will just review the key regulatory milestones.
<unk> NDA for motion sickness submitted in Q4 2020 for Fanapt MAA in Europe for bipolar one disorder schizophrenia submitted in Q4 2024 hecklers MAA in Europe for <unk>.
Speaker Change: <unk> syndrome submitted in Q4 2024.
Speaker Change: <unk>, new drug application for bipolar one disorder and schizophrenia expected to be submitted in Q1 2025 and in pseudo element BLA in generalized pustular psoriasis expects to be submitted in 2025.
Speaker Change: With that I will turn now to Kevin to discuss our financial results Kevin.
Kevin Moran: Thank you boss al.
Kevin Moran: First discuss the results for the full year of 2024 before turning to the fourth quarter of 2024.
Kevin Moran: Total revenues for the full year 2024 were $198 8, million% to 3% increase compared to $192 6 million for the full year of 2023.
Kevin Moran: As miles mentioned this increase was primarily due to increased fanapt revenue as a result of the bipolar commercial launch and the introduction of Pompe worry revenue following our acquisition of the product in December of 2023, partially offset by decreased <unk> revenue as a result of generic competition.
Kevin Moran: I'll break this down by product.
Kevin Moran: Net product sales were $94 3 million for the full year, 2024% to 4% increase compared to $90 9 million for the full year 2023.
Kevin Moran: The increase in net product sales relative to the full year 2023 was attributable to increased volume and increased price net of deductions.
Kevin Moran: <unk> net product sales were $76 7 million for the full year, 2024, or 23% decrease compared to $100 2 million for the full year 2023 with.
Kevin Moran: The decrease relative to the full year 2023 was the result of continued generic competition in the U S.
Kevin Moran: <unk> net product sales as reported for the first quarter of 2023 reflected higher unit sales as compared to recent prior periods. The higher unit sales during the first quarter of 2023 resulted in a significant increase of inventory stocking at specialty pharmacy customers at March 31 2023.
Kevin Moran: During the remainder of 2023, although there was continued destocking in specialty pharmacy customers inventory levels remained elevated relative to inventory levels. Prior to the entrance of a generic competition and continued to remain elevated throughout 2024.
Kevin Moran: Going forward heaviest net product sales may reflect a lower unit sales as a result of reduction of the elevated inventory levels and specialty pharmacy customers or maybe variable depending on when specialty pharmacy customers need to purchase again.
Kevin Moran: Further <unk> net product sales will likely decline in future periods potentially significantly related to continued generic competition in the U S.
Kevin Moran: Additionally, the company constrained heavier net product sales for the years ended December 31, 2024, and 2023 turn them out not probable of significant revenue reversal as a result, <unk> net product sales could experience variability in future periods as the remaining uncertainties associated with variable consideration related to inventory stocking by specialty pharmacy.
Kevin Moran: Customers are resolved.
Kevin Moran: <unk> net product sales were $27 8 million for the full year 2024 and include approximately $3 million of variable consideration that may be subject to dispute, but that the company believes is not probable of significant revenue reversal. As a reminder, we completed the acquisition of the U S and Canadian rights upon brewery in December of 2023 as such.
Kevin Moran: This represents the fourth full quarter of <unk> revenue recognition, Amanda and significant progress in diversifying our product mix with innovative and value generating products.
Kevin Moran: For the full year 2024, Vanda recorded a net loss of $18 9 million compared to net income of $2 5 million for the full year 2023.
Kevin Moran: The net loss for the full year 2024 included an income tax benefit of $4 million as compared to an income tax provision of $3 8 million for the full year 2024 of.
Kevin Moran: Of note on the tax side the company assesses the need for evaluation allowance against this deferred tax asset each quarter through the review of all available positive and negative evidence the company generated a pre tax loss for the year ended December 31, 2024, if the company continues to generate pre tax losses, and or if the company's projections and to keep pre tax losses in future periods.
Kevin Moran: At the conclusion about the appropriateness of the valuations valuation allowance could change in a future period, an increase in the valuation allowance would result in a noncash income income tax expense during the period of change.
Kevin Moran: Operating expenses for the full year 2024, four $239 4 million compared to $206 6 million for the full year 2023.
Kevin Moran: The $32 8 million increase was primarily driven by higher SG&A expenses related to spending on vantage commercial products as a result of the commercial launches of Fanapt in bipolar one disorder and <unk> in multiple sclerosis, and legal and other corporate activities as well as higher intangible asset amortization expense due to the amortization recall.
Kevin Moran: On the Pompe Orientable ASUR.
During 2024, we commenced a host of activities as part of our commercial launches of Fanapt in bipolar one disorder and have already in multiple sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.
Kevin Moran: SG&A expenses may increase in future periods as a result of the continued ongoing commercial efforts around fanapt in bipolar one disorder and <unk> in multiple sclerosis.
<unk> cash cash equivalence and marketable securities referred to as cash as of December 31, 2024 was $374 6 million, representing a decrease of $1 6 million compared to September 32024, and a decrease of $13 6 million compared to December 31 2023.
Kevin Moran: Turning now to our quarterly results total revenues for the fourth quarter of 2024 were $53 2, million% to 17% increase compared to $45 3 million for the fourth quarter of 2023, and a 12% increase compared to $47 7 million in the third quarter of 2024.
Kevin Moran: The increase as compared to the fourth quarter of 2023 was primarily due to the introduction upon boarding revenue following our acquisition of the product in December of 2023 and increased Fanapt revenue.
Kevin Moran: Fanapt net product sales were $26 6 million for the fourth quarter of 2024, and 18% increase compared to $22 6 million in the fourth quarter of 2023.
The increase in Fanapt revenue between the fourth quarter of 2024 in the fourth quarter of 2023 was primarily attributable to an increase in volume, which was driven by increased prescription demand or <unk> as reported by <unk> exponent and inventory stocking at the wholesalers historically fanapt inventory at wholesalers as range between three and four weeks on hand is calculated based off trade.
Kevin Moran: Demand as of the end of the fourth quarter of 2020 for Fanapt inventory at wholesalers was just above four weeks on hand, Fanapt prescriptions in the fourth quarter of 2024 increased by approximately 9% compared to the fourth quarter of 2023 and Fanapt new patient starts in the fourth quarter of 2024 as reflected by new to brand prescriptions or <unk> in.
Creased by over 160% compared to the fourth quarter of 2023.
Kevin Moran: Fanapt net product sales in the fourth quarter of 2024 increased by 11% as compared to $23 9 million in the third quarter of 2024.
Kevin Moran: Fanapt prescriptions in the fourth quarter of 2024 increased by approximately 7% compared to the third quarter of 2024.
Kevin Moran: Turning now to happier healthier net product sales were $20 million for the fourth quarter of 2024% to 5% decrease compared to $21 1 million in the fourth quarter of 2023.
Kevin Moran: The decrease in net product sales relative to the fourth quarter of 2023 was attributable to a decrease in price net deductions, partially offset by an increase in volume.
Kevin Moran: <unk> net product sales in the fourth quarter increased by 12% as compared to $17 9 million in the third quarter of 2024.
Kevin Moran: And finally turning to automotive.
<unk> net product sales were $6 5 million in the fourth quarter of 2024, an increase of 11% compared to $5 9 million in the third quarter of 2024.
Kevin Moran: The increase in net product sales was attributable to an increase in volume of units sold partially offset by a decrease in price net of deductions the.
The increase in volume in the fourth quarter of 2024 was partially attributable to a temporary inventory destocking in the third quarter at the specialty distributor distributors and pharmacies due to the transition of distribution from Janssen, Nevada.
Kevin Moran: As a reminder, we completed the acquisition of the U S and Canadian rights Upon board in December of 2023.
Kevin Moran: For the fourth quarter of 2020 for Vanda recorded a net loss of $4 9 million compared to a net loss of $2 4 million for the fourth quarter of 2023, the net loss for the fourth quarter of 2024 included an income tax benefit of $1 6 million as compared to an income tax provision of <unk> 7 million for the fourth quarter of 2023.
Kevin Moran: Operating expenses in the fourth quarter of 2024 were $63 5 million compared to $52 4 million in the fourth quarter of 2023 the <unk>.
Kevin Moran: $11 1 million increase increase was primarily driven by higher SG&A expenses related to spending on Venice commercial products. As a result of the commercial launches of Fanapt in bipolar one disorder and pump, we're in multiple sclerosis, and legal and other corporate activities, partially offset by a decrease in R&D expense, primarily driven by lower spend on our true dividend.
Kevin Moran: <unk> progress.
Kevin Moran: Operating expenses in the fourth quarter of 2024 increased by $4 8 million as compared to $58 7 million in the third quarter of 2024. This increase was primarily driven by higher R&D spend due in large part to increased expenses on our psychiatry programs and increase spending on various commercial products as a result of the commercial launches of Fanapt in bipolar one disorder.
<unk> and <unk> in multiple sclerosis.
Kevin Moran: During 2024, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar one disorder, and <unk> have already multiple sclerosis, and including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.
Kevin Moran: G&A expenses may increase in future periods as a result of the continued ongoing commercial efforts around fanapt in bipolar one disorder and onboarding multiple sclerosis.
Kevin Moran: With regards to the launches of Fanapt in bipolar one disorder and pump worry in multiple sclerosis, as I mentioned the launches we're initiating 2024, and we expect to continue to build out our full commercial infrastructure with the impact of these commercial efforts expected to contribute to revenue growth in 2025 and beyond.
We've already seen significant progress in our commercial activities. Several lead indicators suggest a strong initial market response to our commercial launch of Fanapt in bipolar one disorder, including new patient starts as reflected by <unk>, increasing by over 160% in the fourth quarter of 2024 as compared to the fourth quarter of 2023.
Kevin Moran: Our Fanapt sales force continues to expand currently our sales force has grown to over 200 persons and we have now initiated a further expansion as miles mentioned in.
Kevin Moran: In addition to our Fanapt sales force, we have established a specialty sales force to market <unk> neurology prescribers around the country.
Kevin Moran: The expansion has allowed us to significantly increase our reach and frequency with prescribers and we've now had over 700 Fanapt prescriber awareness programs completed in 2024, and the <unk> Prescriber awareness program continues to expand with over four times as many programs completed in the fourth quarter of 2024 as compared to the third quarter of 2024.
Kevin Moran: Before turning to our financial guidance I would like to remind folks that with Fanapt <unk> already commercially available the <unk> NDA for motion sickness submitted to the FDA that Asahi NDA for bipolar one disorder and schizophrenia expected to be submitted in the coming weeks and a BLA for <unk> <unk> expected to be submitted later this year, we and it could have six prong.
Kevin Moran: <unk> is commercially available in 2026.
Kevin Moran: Turning now to our financial guidance Vanda expects to achieve the following financial objectives. In 2025 total revenues from Fanapt <unk> of between 210 and $250 million.
Kevin Moran: This revenue range would imply revenue growth in 2025 of between 6% and 26% as compared to full year 2020 for revenue is worth commenting that the quarter Ization of revenue in 2025 will be impacted by several items, including the Medicare benefit redesign portion of the inflation reduction Act, which went into effect as of January one 2025.
Kevin Moran: Limitation of the benefit redesign is expected to negatively impact gross to net for the Medicare payer segment of our products more significantly on Fanapt and heavier.
Kevin Moran: Note that this change is not linked specifically demand, but it is an industry wide change will still have varying impacts on pharmaceutical companies.
Kevin Moran: Insurance planned transitions as patients adjust the new insurance plans to start the year there may be some disruption in the first quarter. This is also a typical industry wide occurrence and as I previously mentioned Fanapt inventory levels as of December 31, 2024 were higher than typical levels based on trailing demand if wholesalers adjust their inventory to historical levels as <unk>.
Kevin Moran: Have a short term negative impact on revenue in the period in which the Destocking occurs.
Kevin Moran: Given the conditional investments of Vanda is currently making to facilitate future revenue growth both in the form of R&D investments and potentially outside of commercial investments, which could increase depending on the success of these commercial strategies Vanda is not providing 2025 cash guidance at this time.
Kevin Moran: And we'll continue to evaluate its ability to provide cash guidance in future periods.
Kevin Moran: It is worth noting that the quarter is <unk> of cash balances will be impacted by several items, including payments totaling $15 million, which were made to Annapolis in the first quarter of 2025 upon entering into the global license agreement for <unk>.
Kevin Moran: Fees and costs associated with the filing of our applications with regulatory agencies in the U S and Europe, including the Basanti NDA for bipolar one disorder and schizophrenia and the standard timing of certain items paid in the first quarter each year.
Kevin Moran: Given the significant progress made during 2024 on establishing our commercial infrastructure and the commercial investments, we expect to make in coming periods Vanda is providing 2030 revenue targets.
Kevin Moran: For the psychiatry portfolio alone Vanda is targeting annual revenue in excess of $750 million in 2030, assuming the potential approval of basanti for the treatment of acute bipolar one disorder and schizophrenia in early 2026, the potential approval of <unk> for the treatment of MTV and the potential approval of Fanapt.
Speaker Change: We ended is also targeting total annual revenue in excess of $1 billion in 2030.
Speaker Change: It is worth noting that the revenue economics for <unk> are expected to be significantly favorable relative to the current revenue economics for fanapt.
Speaker Change: The potential market opportunity for our growing psychiatry portfolio is significant and necessitates. The increased investments. We are currently making to enhance the commercial profile of fanapt bring basanti in fanapt NII to market and expand the <unk> label to include major depressive disorder.
Speaker Change: With that I'll now turn the call back to my House.
Speaker Change: Thank you Kevin at this time I would like to answer any questions you may have.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: Dialed in I would like to ask a question. Please press star one on your telephone keypad to ratio had been joined the queue.
Speaker Change: If you would like to withdraw your question simply press Star one again.
Speaker Change: Yes.
Charles Duncan: And our first question comes from the line of Charles Duncan from Cantor Fitzgerald. Please go ahead.
Charles Duncan: Hey, good afternoon, Alex and team congrats on a good good youre seeing the commercial turn as.
Charles Duncan: As well as kind of things going on with the pipeline so lots of productivity.
Speaker Change: Had a question first on commercial and then pipeline with regard to Fanapt I guess I'm wondering as you see that Q on Q growth, where do you think you're picking up traction.
Charles Duncan: And I'm like.
Charles Duncan: What types of prescribers and then I wanted to ask you about that 300 reps, 50% growth in the sales force I'm wondering if you think that'll be sufficient to.
Charles Duncan: I guess compete with potentially larger pharma companies coming in and marketing obviously <unk>.
Charles Duncan: But also perhaps J&J in future with cap later.
Charles Duncan: Yes, thank you very much.
Charles Duncan: Charles.
Charles Duncan: So in terms of.
Charles Duncan: Where the growth is coming from.
Charles Duncan: The prescribers that are coming to fanapt.
Charles Duncan: Scribe is that has patients with bipolar disorder.
Charles Duncan: And this is a difference from the.
Charles Duncan: Smaller group of psychiatrist and psychiatric nurses that sort of schizophrenia patients.
So it seems that the growth is exclusively coming outside of schizophrenia.
Charles Duncan: In terms of the size of the sales force.
Charles Duncan: As you know very well this is a highly promotional sense.
Charles Duncan: Sensitive class of drugs and we have very recent examples of.
Charles Duncan: Successful commercialization from.
Charles Duncan: Some of our peers.
Charles Duncan: Whether this is.
Charles Duncan: <unk> right sized sales force.
Charles Duncan: I would venture to say likely it's going to be on the lower side.
Charles Duncan: But certainly you want to build.
Charles Duncan: Rapidly, but at the same time don't jeopardize the quality and.
Charles Duncan: Very important training of the sales force.
Charles Duncan: Now we do.
Charles Duncan: See the potential competition.
Charles Duncan: By more deep pocketed Big pharma of course, DNS with condensate at this time, there will be primarily focused on the only indication that they have schizophrenia.
Charles Duncan: That is not our main focus.
Charles Duncan: Yes.
Charles Duncan: And in terms of.
Charles Duncan: J&J if they complete the acquisition of intra cellular certainly theres going to be a lot of strength.
Charles Duncan: But it seems that the people that there will be in patients with major depression.
Charles Duncan: If.
Charles Duncan: They succeed in security.
Charles Duncan: Approval in that indication, which seems quite possible given the very nice data they have.
Charles Duncan: Very good that's helpful makes sense with regard to the DTC that you started in January I assume that's targeting then the bipolar patients do you think that those patients.
Charles Duncan: Patients are amenable to picking up the messaging of the GTC them, perhaps bringing that to their prescribers and talking about finance.
Yes. Thank you.
Charles Duncan: Yes.
Charles Duncan: Target is specifically.
Charles Duncan: For people with bipolar one disorder.
Charles Duncan: And certainly we don't have to guess on the effectiveness.
Charles Duncan: In that before as there have been others almost every other drag.
Charles Duncan: Recently the category.
Charles Duncan: Have advertised the DTC, which increase.
Charles Duncan: Not just awareness, but also confidence of support of the drug.
Charles Duncan: Among <unk>.
Charles Duncan: Pieces, but we're also finding it.
Charles Duncan: It is actually intriguing to prescribers themselves.
Charles Duncan: So we believe that is.
Charles Duncan: A very effective way to increase awareness.
Charles Duncan: And I would point out that Vanda has a significant track record.
Charles Duncan: Efficiently.
Charles Duncan: Our launching a DTC campaign and by media and I think that's going to become very important.
Charles Duncan: In the coming months.
Charles Duncan: I would like to underscore.
Charles Duncan: Kevin suggested that.
Charles Duncan: Yes.
Speaker Change: At this time, we do not give a cost guidance and.
Charles Duncan: This is.
Speaker Change: Primarily driven.
By trying to gauge what is the right size direct to consumer.
Speaker Change: You buy as you go so we unlike some large companies we're not doing pre buys.
Speaker Change: At this time, we buy.
Speaker Change: On demand.
Speaker Change: And we're very carefully evaluating the return of our investment. So it is a measured approach.
Speaker Change: But we are prepared.
Speaker Change: To make a significant investment provided.
Speaker Change: A good ROI on the other side.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thank you for that information on bite Santee, if I could ask a quick question I am intrigued with one per day.
Speaker Change: Mbd study that you started towards the end of last year I'm wondering if you have specific information on either fanapt or mill. So paragon that suggests that it may have activity in M. D D.
Speaker Change: Well it is perhaps depressed patients with bipolar.
Speaker Change: What is the kind of rationale behind that phase III.
Speaker Change: Yes.
Speaker Change: No.
Speaker Change: Of course, you know that we have a lot of experience.
Speaker Change: On Fanapt carload Paydown.
Speaker Change: With twice a day, but we also have experience.
Speaker Change: And the utilization across different doses.
Speaker Change: Our studies have.
Speaker Change: Been primarily done.
Speaker Change: On the higher dose side 12 milligram today divided those with 24 milligrams a day.
Speaker Change: Divide the dose.
Speaker Change: But our observation so far suggest that.
Speaker Change: A large number of patients.
Have been prescribed <unk>.
Speaker Change: <unk> doses, which reflect.
Speaker Change: Total.
Speaker Change: Today of approximately 12 milligrams on average.
Speaker Change: And we know that based on the pharmacokinetics and the steady state levels.
Speaker Change: That once a day 12 milligrams.
Speaker Change: Does not present any significant issues of peak to trough and Tolerability and the combination of all of this.
Speaker Change: Suggested to us.
That.
Speaker Change: Once a day.
Speaker Change: Uh huh.
Speaker Change: Administration of <unk> will be a good approach.
Speaker Change: Major depressive disorder, and as you can guess.
Speaker Change: Happens also to be likely more convenient done a twice a day dosing.
Speaker Change: For sure.
Speaker Change: Look forward to that final question <unk> Congrats on the recent in licensing I'm intrigued with that program.
Speaker Change: BLA and later on this year, but I think the napped listen I'm not going to ask you to defend the Annapolis, but I think they spoke about a BLA as early as October <unk> in 2023 is having having already been filed so im wondering if you have a sense of what the delay.
Speaker Change: Filing in April pre BLA.
Speaker Change: Has been conducted or is that all.
Speaker Change: Stuff that Youll do once you once you fully accept all the information from that.
Speaker Change: Yes, I cannot comment on the first part of the question.
Speaker Change: A pre BLA.
Speaker Change: Meeting with the FDA on the GPP indication has been conducted.
Speaker Change: And upon review of this information we're confidant.
Speaker Change: That we have in hand, what needs to be had for filing.
Speaker Change: So of course, we're only a few days away.
Speaker Change: That I would say.
Speaker Change: This is a great partner of this.
Speaker Change: Our transition is ongoing quickly of materials. So we are confident we'll be able to file this BLA within this year.
Charles Duncan: And I have to say Charles said.
Speaker Change: Maybe we get an opportunity at a future call.
Speaker Change: We have.
Speaker Change: Intrigued by the mechanism of action.
Speaker Change: And we believe that the IL 36 cytokine system.
Speaker Change: Is a.
Speaker Change: Perhaps not fully explored.
Speaker Change: Therapeutic in a number of autoimmune and inflammatory conditions and of course, we understand.
Speaker Change: We're all in keratinocytes and generalized pustular psoriasis as I pointed out in my.
Speaker Change: Discussion GPP is caused by two beds in a recessive disorder.
Speaker Change: But of course.
Speaker Change: That is a much larger.
Speaker Change: Portion of the population that they're heterozygous carriers of announced mutation, which under some circumstances.
Speaker Change: <unk> may lead to a relatively unopposed action of <unk> 36.
And there are theories of lettuce population may be there may be a class of people with atopic dermatitis or psoriasis.
Speaker Change: Or actually other inflammatory conditions, where IL 36 is important in.
Speaker Change: Monitoring intruders at barrier tissues, but.
Speaker Change: More to be discussed in the future.
Speaker Change: The pipeline that's going on thanks for taking the questions congrats on the progress.
Charles Duncan: Thank you Charles.
Speaker Change: Our next question comes from <unk> <unk> from H C. Wainwright. Please go ahead.
Speaker Change: Hi, Thanks, very much for taking my questions and congrats on all the recent progress.
Speaker Change: First of all I wanted to start with a question around your.
Anticipated timing for the development of the other part on long acting injectable.
Speaker Change: Specifically I wanted to ask when you anticipate.
Speaker Change: Enrolling the first patient in that pivotal program and how long you expect enrollment to take as well as if you can provide any kind of updated.
Speaker Change: <unk>.
Speaker Change: Outlook on the competitive landscape given the fact that this appears to be changing quite rapidly although it.
Speaker Change: Obviously is also.
Speaker Change: Victims of.
Speaker Change: Steadily expanding broader.
Speaker Change: Total addressable market yes.
Speaker Change: Thank you very much for the question.
Speaker Change: Yes.
At the bottom I would say we agree with you.
Speaker Change: That third.
Speaker Change: There appears to be.
Speaker Change: Sort of need in large commercial opportunity.
Speaker Change: Around injectable and Psychotics, and especially new entrance of molecules that have not been translated.
Speaker Change: From oral to a long acting injectable.
Speaker Change: <unk>.
Speaker Change: <unk>.
Speaker Change: In terms of the program.
Speaker Change: We are ready to go.
Speaker Change: And in fact that program can be initiated imminently.
Speaker Change: The initial treatment period is.
Speaker Change: About 12 week.
Speaker Change: <unk> of stabilization before we lead to the re randomization relapse prevention and what didn't mention Ram is that.
Speaker Change: Question from the IRB was that they felt no one should be running placebo controlled studies on relapse prevention mode.
Speaker Change: And they offer that.
Speaker Change: Placebo people may be at some risk.
Speaker Change: Disagree with that but nonetheless, it is the IRB.
Speaker Change: And we're in total agreement with the FDA on what protocol as needed and in fact, we are in agreement that this study if successful, which we expect it to be is the pivotal study required for registration.
Speaker Change: So.
Speaker Change: We are actually waiting we've launched his question to the FDA and they're working I guess on their policy side to see what is shifting the iab means and what type of studies may be required but be it as it may.
Speaker Change: This placebo is the most involved study.
Speaker Change: And we could end up with a more simple design, whereas there is a bridging of sorts.
With the oral formulation.
Speaker Change: Nobody knows what it is.
Speaker Change: <unk>.
Ken start this study very quickly now in terms of.
Speaker Change: Timing to enrollment.
Speaker Change: As you know Thats hard.
Speaker Change: Two.
Speaker Change: Evaluate.
Speaker Change: Given the difficulty in recruiting in general.
Speaker Change: But this study is a long study.
Speaker Change: Recruitment.
Speaker Change: And large could take up to one year.
Speaker Change: That means I think we've discussed before that we will not expect results, but in sometime in 2007.
Speaker Change: 2020.
Speaker Change: Okay, and then with respect to the guidance that you provided today with.
On potential revenue in 2025.
Speaker Change: Can you confirm that even the.
Speaker Change: Upper end of that guidance range does not actually include.
Speaker Change: <unk> contribution from <unk> in any indication or in the dollar amount is that correct.
Speaker Change: That is correct.
Speaker Change: The range guidance, we're giving is solely based on the commercialized products today in the commercialized <unk>.
Speaker Change: Indications.
Speaker Change: And of course, we could be pleasantly surprised towards the upper end.
Speaker Change: Depending on the Fanapt trajectory and put avoid gaining speed.
Speaker Change: <unk> given the generic contribution we have more teamed expectations.
Speaker Change: To what extent do you anticipate there to be a significantly larger number of generic competitors generic purveyors of tasimelteon by the end of 2025 versus the end of 2024.
Speaker Change: At this time, we do not expect that.
Speaker Change: Field to change outside of the three approved loans.
Speaker Change: Okay and then just the last question is with respect to broader reimbursement changes.
Speaker Change: Any specific developments of note that you anticipate taking.
Speaker Change: Taking effect in 2025 that could significantly impact gross to nets.
Speaker Change: Yes.
Speaker Change: Rob It's Kevin so on the main one which we talked about in the scripted portion of that a bit is the introduction of the Medicare benefit redesign, which went into effect at the beginning of January and the reminder, there is previously where there was the donut hole concept and the manufacturer had a portion of that contribution until the patient and moves through the <unk>.
Speaker Change: Hold for the year.
Speaker Change: Redesign has a different structure, where for the catastrophic portion of the coverage. The manufacturer has a either 10 or 20% contribution to that with some exceptions for different types of manufacturers in different types of patient populations.
Speaker Change: <unk> went into effect at the beginning of January as I mentioned and was factored into our projections for 2025.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks, Rob.
Speaker Change: Our next question comes from the line of Andrew Tsai from Jefferies. Please go ahead.
Andrew Tsai: Hey, Thanks, Good afternoon I appreciate all the updates first question is about the 2030 guidance.
Andrew Tsai: What exactly compelled you guys to provide that guidance today, and then within that $1 billion guidance of course.
Speaker Change: He is coming from psychiatry, how much of that 750 is based on products or indications that have yet to be approved.
Speaker Change: As opposed to currently approved products.
Speaker Change: Thanks, Andrew Yes, so maybe starting with the psychiatry portfolio first obviously with Fanapt currently on the market doing about $100 million this year.
Speaker Change: The commercial investments, we're making hoping to see growth as we head into next year and beyond.
Speaker Change: But then even beyond that we noted that included in that 2030 projection is the approval of Basanti for bipolar one disorder and schizophrenia, hopefully next year, and then potentially a label expansion therein mbd beyond that as well as the approval of Fanapt in la so.
Speaker Change: The one thing I also made note of in the script Thats an important piece to that is that mill. So paradigm is expected to have.
Speaker Change: Santee, rather is expected to have very different economics than Fanapt currently has and at a minimum that's due to the price reset that we would experience under Medicaid with a new drug application being approved so all of those obviously, we didn't provide kind of a breakout of the contributions of those individual factors, but hopefully that gives you a sense.
Speaker Change: Of what contributions would go into the 750 from existing product indications future product indications and then on the balance obviously with heavy Houston palm already on the market <unk>.
Speaker Change: As miles mentioned, where our expectations are a bit more teamed at least on the short term.
Speaker Change: And with <unk> growing and hopefully even more so in the years to come.
Speaker Change: And also the possibility that we mentioned of an additional three products being on the market next year, including most of paradigm, but also true dividend and <unk>.
Speaker Change: Those products also provide some of the bridge between the 750 and the $1 billion.
Speaker Change: Thanks and.
Speaker Change: When we think about your overall business.
Speaker Change: Or when should we think the trough here is in terms of revenue and your total cash balance.
Speaker Change: Another way do you think the trough year.
Speaker Change: Already happened or could it be somewhere in 2025 or a little bit later.
Speaker Change: Yes, thanks for the question, Andrew So obviously with our.
Speaker Change: Reported revenue for this year being growth from the year before so we saw growth from about 193 million up to about $199 million in the most recent year in our midpoint of our guidance being $2 30, which would imply about a 15% growth on 2024.
Speaker Change: The trough year as you kind of expressed it is over the shoulder and our expectation is that we're growing revenue from here, both with the existing products indications, but obviously all of the products and indications that were planning on bringing to market in the short term and the long term.
Speaker Change: Okay. Thanks, and then last question is for <unk>, if we stripped out.
Speaker Change: The indications where generics.
Speaker Change: Where you are facing generics.
Speaker Change: You know how much sales are you generating from the other formulations are indications, where this is not facing generic <unk>. So I guess the liquid formulation in the EU.
Speaker Change: Component how much or.
Speaker Change: How much are those sales currently thank you, yes, so to Andrew we haven't gotten into a breakout by geography or by indication. So I cant provide any further color to that.
Speaker Change: Very good thank you.
Speaker Change: Thanks, Andrew.
Speaker Change: There are no further questions at this time I'll turn the call back over to the team.
Speaker Change: Well. Thank you very much for joining us on this call we will see Ya.
Speaker Change: On a future earnings call. Thank you.
Speaker Change: This concludes today's call. Thank you for joining you may now disconnect.
Speaker Change: [music].