Q2 2025 Vanda Pharmaceuticals Inc Earnings Call
Everyone to the Q2 'twenty 'twenty five Vanda Pharmaceuticals, Inc. Earnings Conference 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 would like to ask a question. During this time simply press star followed by the number one.
On your telephone keypad, if you would like to withdraw your question Press Star. One again. Thank you I would now like to turn the call over to <unk> Chief Financial Officer, Kevin Moran. Please go ahead.
Great. Thank you Audrey.
And thank you for joining us to discuss Vanda Pharmaceuticals second quarter 2025 performance. Our second quarter 2025 results released this morning and are available on the Sec's Edgar system and on our website Www Dot Vanda pharma dot com and.
In addition, we are providing live and archived versions of this conference call on our website Joy.
Joining me on today's call is Dr. <unk>, Polymeropoulos, our president and Chief Executive Officer, and Chairman of the Board and Tim Williams, Our General Counsel.
Following my introductory remarks Mohan will update you on our ongoing activities I will then comment on our financial results before we open 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 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 with that said I would now like to turn the call over to our CEO Dr. <unk>.
Thank you very much Kevin.
Good morning, everyone.
The second quarter, we continued the expansion of the Fanapt sales force.
<unk> continued our broad awareness campaign.
<unk> revenue increased by two 7% compared to the same period in the prior year driven by the long.
Paulo, one indication.
And that is now promoted in the U S across all 50 states.
Dedicated sales force of approximately.
100 representatives.
With the expansion of the sales force during the second quarter.
Observed significant increase in activity with a total number of course growing by more than 40%.
To the first quarter.
Five and growing by over 400% compared to the second quarter two.
2024.
Since the bipolar lungs.
And as measured by total prescriptions <unk> new prescriptions.
The new to brand prescriptions and <unk> reached new highs.
During the quarter.
The commercialization of Fanapt is also supported by improved Speakers' program operating across the country that educate prescribers.
Siloed fanapt and how to use it.
We're excited by the progress.
The basin has made as we continue to support the commercialization of <unk> gaming.
Aiming for further growth in the time periods.
Total revenues from our critical missile guided projects.
<unk> catalyst and portability.
$2 6 million in the first six months of 2025.
<unk> continues to be the market leader despite the availability.
And I think products are testament to the brand loyalty of our base and customers.
11 years.
We will continue to build out and claim.
<unk> <unk> sales force team addressing prescribers for multiple sclerosis.
Last quarter, we saw an increase in new prescriptions as we.
Our consumer and prescriber awareness programs.
Regulatory clinical updates first on Disanti.
<unk> for the acute treatment of bipolar one disorder in the treatment.
Hey Man, who was accepted for filing by the <unk>.
We did produce a target action date of February 21, 2026.
Exclusive.
Santee, including pending patent applications.
It was the 2014.
<unk> is a new chemical entity.
Identified as an active metabolite of allocated them.
<unk> discovered that many separated them.
That said genetic enabled the sandy.
He said orderly quickly into converts to either pay them.
That is most apparent and I looked at it and have.
<unk> has been shown to be bio equivalent at both low and high doses administered both in single and multiple dose studies.
These clinical studies were presented in late May at the.
2025.
Society of clinical Psychopharmacology annual meeting in Scottsdale, Arizona.
The <unk> phase three clinical study for years.
Daily Adjunctive treatment for major depressive disorder is ongoing.
So that study expected in 2026.
Okay.
The new drug application for the dividend for the system of motion sickness.
For filing by the FDA with a <unk> target action date of December 32025.
In the fourth quarter of 2024.
Initiate the clinical trial decided to redeploy in the prevention of vomiting.
DLP, one analog regardless that is semi <unk>.
Intel's unexpected soon in the third quarter of 2025.
Okay.
On Fanapt.
Because you're saying yes.
The program was the long acting injectable.
Formulation.
Ill now.
Just because you're playing here in the relapse prevention is ongoing.
Yeah.
On the hypertension.
They're in ECA to acknowledge study.
The net long acting injectable is it once a month injectable.
Both hypertension and plans to begin enrolling.
Patients stood.
M seaborne demand.
A BLA for incident.
In the treatment of the rare orphan disorder.
Generalized pustular psoriasis GDP is expected to be submitted to the FDA. This year in 2003.
Couldn't body.
Investigation.
<unk> in the treatment of psoriasis and ulcerative colitis were accepted by the FDA in the fourth quarter of 2024.
<unk> has initiated this study in <unk>.
Lyons to initiate this study in ulcerative colitis by early 2026.
On the early stage programs.
<unk> W 716 pilot the Alpha seven nicotinic acetylcholine receptor peso.
Yes.
Currently in clinical development for the treatment of acute performance anxiety is situated.
Situations.
<unk> has initiated the phase three program.
To begin enrolling patients soon.
The IMT application.
Sure.
894 eight.
The teams are in those sort of equivalent to disease at several type to us and make sure it is bigger.
For which there is no available treatment was accepted by the FDA in 2000.
VCA anytime before <unk> was granted not all of that designation for the same indication in 2023.
Medical Society for VCA, <unk> enrolled the patient with <unk>.
Retention in this space and has already received several doses of <unk> 48.
Finally.
Public policy contributions to drag developing vanda responded to them.
<unk> SaaS request for information.
For 2025, the U S Department of Health and Human services HHS issued a request for information entitled inserting lawful regulation.
The basin to make America healthy again.
On slide 14 2020.
<unk> submitted the public response to this resi.
As far as proposed.
FTAA repeal and local regulations.
The burden the drug approval process and that the FDA. It appeal, it's 19 nineties era guidance mandating little argument.
Our fluids phones with exhibits is available on the investors page.
Website, Www GW does vanda pharma dot com.
The government website regulations.
Com.
With this back to Kevin Kevin.
Great. Thanks Ross.
I'll begin by summarizing our financial results for the first six months of 2025 before turning to discuss the second quarter of 2025.
Total revenues for the first six months of 2025 or $102 6, million% to 5% increase compared to $97 9 million for the same period in 2020 for the.
The increase was primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch.
Fanapt net product sales were $52 8 million for the first six months of 2025% to 21% increase compared to $43 7 million in the same period in 2024.
This increase in net product sales relative to the first six months of 2024 was attributable to an increase in volume.
Turning to heavier and heavier.
<unk> net product sales were $37 1 million for the first six months of 2025% to 4% decrease compared to $38 8 million in the same period in 2024.
The decrease to net product sales relative to the first six months of 2024 was attributable to a decrease in volume partially offset by an increase in price net of deduction.
Of note through the second quarter of 2025 heaviest continues to retain the majority of market share despite generic competition for over two and a half years.
Heaviest net product sales continued to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period going forward <unk> net product sales may reflect lower unit sales as a result of reduction of the elevated inventory levels at specialty pharmacy customers or maybe variable depending on when specialty pharmacy customers need.
To purchase again.
Further <unk> net product sales may decline in future periods potentially significantly related to continued generic competition in the U S. Additionally, the company constrained heaviest net product sales for the first and second quarters of 2025 and for the years ended December 31, 2024, and 2023 turn them out not probable.
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 customers are resolved.
Turning now to Tom <unk>, Tom boring net product sales were $12 7 million for the first six months of 2025, an 18% decrease compared to $15 4 million in the same period of 2020 for the decrease in net product sales relative to the first six months of 2024 was attributable to a decrease in volume and a decrease in price net of deductions.
For the first six months of 2025 Vanda recorded a net loss of $56 7 million compared to a net loss of $8 7 million for the same period in 2024, the net loss for the first six months of 2025 included an income tax benefit of $15 6 million as compared to an income tax benefit of $1 5 million for the same period in.
2024.
Operating expenses for the first six months of 2025 were $182 2 million compared to $117 3 million for the same period in 2024.
The $64 8 million increase was primarily driven by higher SG&A expenses related to spending on Venus commercial products. As a result of the commercial launches of Fanapt in bipolar disorder, and <unk> in multiple sclerosis, and higher R&D expenses, primarily related to the exclusive global license agreement with <unk> for the development and.
<unk> of <unk>, which was entered into during the first quarter of 2025.
During 2024 and 2025, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar disorder, and <unk> in multiple sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.
A direct to consumer campaign that started in the first quarter of 2025 continued in the second quarter of 2025, elevating brand awareness of the company and the key products Fanapt and pump or U S.
SG&A expenses may increase in future periods as a result of the ongoing commercial launches of Fanapt in bipolar disorder and <unk> in multiple sclerosis.
<unk> cash cash equivalence and marketable securities referred to as cash as of June 32025 was $325 6 million, representing a decrease of $49 1 million compared to December 31, 2024, and a decrease of $15 4 million compared to March 31 2025.
The change in cash during the second quarter of 2025 as compared to the first quarter of 2025 was driven by the net loss in the second quarter of 2025, partially offset by the favorable impact of the timing of cash in from customers for revenue and related payments of rebates to payers as well as the timing of cash due to third parties for services related to operating expenses.
Turning now to our quarterly results.
Total revenues for the second quarter of 2025, or $52 6, million% to 4% increase compared to $50 5 million for the second quarter of 2024 the increase.
As compared to the second quarter of 2024 was primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch.
I'll break this down by product.
Fanapt net product sales were $29 3 million for the second quarter of 2025, or 27% increase compared to $23 2 million in the second quarter of 2024, and a 24% increase compared to $23 5 million in the first quarter of 2025.
Fanapt total prescriptions in the second quarter of 2025 increased by approximately 24% compared to the second quarter of 2024, and 13% compared to the first quarter of 2025, the increase in Fanapt revenue between the second quarter of 2025 in the second quarter of 2024 was primarily attributable to an increase in volume which was driven.
By increased total prescriptions or <unk> as reported by <unk> exponent the.
The increase in Fanapt revenue between the second quarter of 2025 in the first quarter of 2025% was attributable to an increase in volume primarily driven by increased total prescription demand and increased inventory levels at wholesalers in line with historic levels.
For that new patient starts in the second quarter of 2025 as reflected by new to brand prescriptions or <unk> increased by over 200% compared to the second quarter of 2024 and by over 50% compared to the first quarter of 2025.
Turning now to <unk>.
<unk> net product sales were $16 2 million for the second quarter of 2025% to 13% decrease compared to $18 7 million in the second quarter of 2024.
The decrease in net product sales relative to the second quarter of 2024 was primarily attributable to a decrease in volume and price net of deductions.
And finally, turning to <unk> I'm worrying net product sales were $7 1 million for the second quarter of 2025, a decrease of 18% compared to $8 6 million in the second quarter of 2024, and an increase of 26% compared to $5 6 million in the first quarter of 2025, the decrease in net product sales as compared to the second quarter of <unk>.
<unk> 24 was attributable to a decrease in price net of deductions, partially offset by higher volume the increase in net product sales as compared to the first quarter of 2025 was attributable to an increase in volume sold a portion of which was driven by increased underlying patient demand, but was also impacted by increased specialty pharmacy and specialty distributor inventory levels.
<unk> historic levels.
As a reminder, we completed the acquisition of the U S and Canadian rates upon brewery in December of 2023 and initiated the commercial launch of <unk> in the third quarter of 2024 as such this represents the third full quarter of on boarding revenue recognition since the initiation of commercial launch activities and significant progress in diversifying our product mix with innovative.
And value generating products.
Note an amount of variable consideration related to <unk> net product sales is subject to dispute of which approximately $3 million was recognized for the three months ended December 31 2024.
For the second quarter of 2025, Vanda recorded a net loss of $27 2 million compared to a net loss of $4 5 million for the second quarter of 2024 from an income tax perspective, the net loss for the second quarter of 2025 included an income tax benefit of $7 7 million as compared to an income tax benefit of $1 million for the second quarter of 2024.
Of note on the tax side the company assesses the need for evaluation allowance against its deferred tax asset each quarter through the review of all available positive and negative evidence the company generated a pre tax loss for the quarter ended June 32025, if the company continues to generate pre tax losses, and or if the companys projections indicate pre <unk>.
Tax losses in future periods, the conclusion about the appropriateness of the valuation allowance could change in the future.
An increase in the valuation allowance would result in a noncash income tax expense during the period of change.
Operating expenses in the second quarter of 2025 were $91 1 million compared to $60 6 million in the second quarter of 2000 and for the.
The $35 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 disorder, and <unk> in multiple sclerosis, and higher R&D expenses. During 2024 and 2025, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar disorder.
And Tom Morey in multiple sclerosis, including expansions of our sales force and the development of prescriber awareness and comprehensive marketing programs a direct to consumer campaign that started in the first quarter of 2025 continued in the second quarter of 2025, elevating brand awareness of the company and the key products Fanapt and <unk>.
G&A expenses may continue to increase in future periods. As a result of the continued ongoing commercial efforts around fanapt in bipolar disorder and <unk> in multiple sclerosis.
With regards to the launches of Fanapt in bipolar one disorder and pump where a multiple sclerosis as I mentioned the launches were initiated in 2024, and we expect to continue the build out of our FERC full commercial infrastructure with the impact of these commercial efforts expected to contribute to revenue growth in 2025 and beyond we.
We have already seen significant growth in our commercial activities. Several lead indicators suggest a strong market response to our commercial launch of Fanapt for bipolar one disorder, including new patient starts as reflected by <unk>, increasing by more than 200% in the second quarter of 2025 as compared to the second quarter of 2024.
In the second quarter of 2025 as compared to the second quarter of 2024 total prescriptions increased by approximately 24% of particular note Fanapt is one of the fastest growing atypical antipsychotics in the market through the first half of 2025 based on prescription metrics.
Our Fanapt sales force continues to expand as of the end of the second quarter of 2020 for our sales force number of approximately 100 Representatives and currently we now have approximately 300 representatives.
These expansions have allowed us to significantly increase our reach and frequency with prescribers to that and face to face calls in the second quarter of 2025, where more than 40% higher than face to face calls in the first quarter of 2025 and face to face calls in the second quarter of 2025, where more than 400% higher than the face to face calls in the second quarter of 2024.
We have now completed over 1400, Fanapt prescriber awareness programs and the number of programs completed in the second quarter of 2025 was 10% higher than the number of programs completed in the first quarter of 2025.
In addition to our Fanapt sales force, we have established a specialty sales force to market <unk>, turning neurology prescribers around the country.
We are currently in the process of growing the sales force to approximately 50 representatives in the third quarter of 2025.
Of particular note <unk>, new patient prescriptions in the second quarter of 2025 grew to a record high since the initiation of <unk> commercial launch.
Before turning to our financial guidance I would like to remind folks that with Fanapt <unk> already commercially available <unk> NDA for motion sickness accepted for filing by the FDA. The mill, so paradigm or hopefully to be known under the brand name brand named Basanti NDA for bipolar one disorder and schizophrenia accepted for filing by the FDA and a BLA for <unk>.
<unk> expected to be submitted later this year vanda could have six products commercially available in 2026.
Turning now to our financial guidance.
And it is reiterating its 2025 financial guidance and expects to achieve the following financial objectives in 2025 total.
Total revenue from fin apps, <unk> and <unk> of between 210 and $250 million.
Year end 2025 cash of $280 to $320 million.
This revenue range would imply revenue growth in 2025 of between 6% and 26% as compared to full year 2020 for revenue.
Of note related to revenue for the remainder of 2025 with Fanapt and <unk>. Both in the early stages of commercial launch Fanapt for bipolar one disorder and <unk> for multiple sclerosis revenue is expected to be back weighted as these products continue to grow our.
Our expectation is that Fanapt will grow on a quarterly basis with the trajectory accelerating as we move later into the year and exit into next year. This growth will potentially be offset by variability <unk> a decline in <unk> revenue.
If the conversion of our investments into Fanapt revenue takes a little longer <unk>, we see a larger decline in <unk> revenue, we could end the year at the lower end of the revenue guidance range.
The year end 2025 cash guidance reflects the impact of the conditional investments that vanda is currently making to facilitate future revenue growth both in the form of R&D investments and potentially outsized commercial investments, which could continue to increase depending on the success of these commercial strategies again, if we see the conversion of our investments in the Fanapt revenue, taking a little longer.
<unk>, we see a larger decline in <unk> revenue than expected, we could end the year at or below the lower end of our cash guidance range.
The potential market opportunity for our growing psychiatry portfolio with significant and necessitates. The increased investments. We are currently making to enhance the commercial profile of fanapt obtain approval for Basanti in Fanapt and.
And bring them to market and expand the Basanti label if approved to include major depressive disorder.
With that I'll now turn the call back to my House.
Thank you very much Kevin at this point, we will be happy to answer your questions.
Thank you gentlemen at this time I would like to remind everyone in order to ask a question press time.
Then the number one and your telephone keypad, we will pause for just a moment to compile the Q&A roster.
And your first question comes from the line of from <unk> of H C. Wainwright. Please go ahead.
Thank you very much for taking my questions and congratulations on all the progress made on multiple fronts. So far this year I.
I wanted to first of all ask about the outlook for <unk> commercialization, assuming an on time approval next year. How quickly do you expect to be able to put all of the commercial preparations in place to launch this product and what kind of sales and marketing infrastructure expansion do you think would be necessary to some.
The launch assuming again, an on time approval.
Okay.
Thank you very much for the question.
Okay.
Key items.
With the launch of the center.
Well listen product preparedness.
And we believe that.
We'll do that.
By the end of second quarter.
So the drive.
By the end of February.
We would be ready to be able to launch.
Okay.
However, the other one is a also.
Consideration of timing.
Given with Fanapt is.
Lifecycle.
So we're going to have to talk about that.
She's a workers as we're getting closer to that date.
One of your question.
In fact the.
Investments, we have been making.
Demand from that.
<unk> scores and awareness.
All immediately.
Credible to be counted.
So we expect upon launch of <unk>.
Very helpful.
Immediately additional co.
Commercial operation.
Spend needed.
But again it's.
Hi, Thanks.
But it will be a.
That's right.
Thank you very much and then second question is related to <unk>. There are a couple of things here Firstly, Kevin you mentioned in your prepared remarks.
The existence of a dispute and I just wanted to understand better what the nature of this dispute is and what the revenue amount related to Laurie.
Is that could conceivably be affected by or be the subject of this dispute and then secondly, with respect to kind of where things are with <unk> on the multiple sclerosis front I was just wondering what your expectations are at this point for upon royalty revenues related to the on label indication and if you anticipate.
Meaningful acceleration of revenue growth for that product in the second half of 2025 based on the efforts made so far to position it optimally.
Yes in my House I can take that one and you can chime in so on the first question, Rob as you might expect given the nature of the dispute can't comment extensively on.
Dispute <unk> litigation matters, but based on what we've disclosed it relates to our gross to net.
And in terms of the quantification of it what we communicated is there's about $3 million, which is the same amount we disclosed last quarter that was included in revenue in 2024.
Where we have received the proceeds.
The gross to net adjustment is in dispute.
On the second question around the expectations for <unk> moving forward.
As we previously communicated.
<unk> in multiple sclerosis efforts, we believe there is a significant commercial opportunity there, but it is an opportunity that takes time to both build the relationships with the neurology prescribers in the space.
Generate kind of a trust both in the product and in the company and then once prescription activity has generated for to work it through.
The hub.
Reimbursement process.
So all of those things that have been initiated and we continue to see progress on that front with the commercial launch activities being initiated in the back half of last year.
And with the second quarter, having the highest number of new patient prescriptions that we've seen since bringing the product the product.
Over the wall to Vanda, so very encouraged by the uptake of the product in the market and the trends that we're seeing but I expect the growth to be more kind of steady rather than a rapid acceleration.
And just very quickly the sorry go ahead go ahead.
Yes.
A little more color.
As Kevin explained earlier.
We commercially launched.
Third quarter.
With a <unk>.
Small sales force.
I have to say to people.
There are a lot of learnings.
One of them.
The number of calls that the possible daily is small.
Given the format of this prescriber practices gloves, academics and dose et cetera.
So we're in the midst of.
Doing great.
In the sales force and further bolster.
With an emphasis.
To be able to address not only more prescribers, but with higher frequency.
And the annual results.
Very encouraging.
Kevin highlighted.
We saw.
A significant increase in new prescriptions coming in.
However.
Given the specialty coating royalty side between this clip.
Okay.
And then just very very quickly. Thank you very much for that information I wanted to ask about <unk> and whether you anticipate between now and the end of this year.
<unk> on the regulatory front with that candidates.
And what you anticipate might potentially be.
Now the scenario unfolds for that product candidates and if you have better line on when or if it might ultimately make it to the market in the U S.
Yes so.
Two part answer on this.
First of all.
It's been.
For the indication of industrial producers.
<unk>.
Okay.
Did not approve last September.
And we seem to have gone through.
The option of him.
Again.
And that's hitting us now.
Tds.
Right.
Neither the review division of the FDA.
Is it advising.
The commission not to have the Q&A.
And of course, we have explained.
But he said it shows that the FDA.
Yes.
Avoided hitting.
For about the last 30 years.
So we think.
It is important to have these hearings well first of all that's what the law says.
And if we wanted to have a hearing.
An independent group of people.
And by the law decided by the Commission.
We think we will succeed in that indication.
Now on predicting motion sickness any view.
Going on.
We.
Understand.
The Division the review Division does not have any issues.
Because the data and that they will continue to review the advocacy of the preclinical and clinical safety data.
And to remind you Paul.
A very large market.
So patients treated.
Many of them up to three months.
And the preclinical package.
Extensively that it is multi dimensional.
So volume levels.
<unk>.
No evidence of any.
Issue and also.
First in the industry, we have submitted a comprehensive answer.
The physiological system.
But Jason package.
Got it.
<unk>.
Micro steroids and also.
A four.
Oregon.
So all of that.
<unk> kept provided no safety issues.
No.
Would be of any concern so having said all of that.
To answer your question when would to dividend beyond the market it could be in the market.
As early as.
January one.
26.
If it is approved on December 30th.
We're keen to see the dividend.
Its full potential.
Especially.
And first before the benefit of taste.
Adobe one debt.
<unk> been patient.
In.
Clinically significant attacks.
Quality of life.
And dozens of them over 100 now.
All right.
Have requested expanded access and for the majority of the deal.
The FDA has already granted expanded access.
First facing has been on the drug.
Almost five years.
And.
Quite a big number of them have been on the drug for over a year.
So it is daily which is a huge and corn as its been for us to keep trying to get this project Mike.
Thank you very much.
Your next question comes from the line of Olivia Brayer.
Okay.
Please go ahead.
Hi, Good morning, guys. Thank you for the questions on the <unk> are you able to characterize how your interactions with the agency are going so far with the review and.
As we think about the commercial launch next year, how should we be thinking about margins in Medicaid impact for that product.
Because assuming a similar lag I know we've touched on this in.
The path, but I'd imagine you'd start to see more upside to revenues.
By capturing a similar number of patients that are already on snap.
That's my first question and then as a follow up on the <unk> just gone N. D. D can you remind us what the agency stances.
On running one phase III study versus needing to.
Thank you.
The questions.
I'll take the.
Dissenting regulatory can't recall.
And I will let Kevin.
A walk through the.
For revenue benefit on a design to loans.
First of all thank you Anthony.
The view is ongoing.
We have not.
Is the knee.
You seem to have any major issues.
Or are there any questions back and forth.
And I remind everyone that.
Or clinical data from the two.
Bioequivalence pharmacokinetic studies that we have already published and there is times where extensively discussed.
With the FDA both of the design phase, but also the results of them.
So.
Pre NDA preparation that the NDA.
So we are.
It requires that.
The view.
We will continue to be going well.
And that will have a good outcome.
Yeah.
You asked about the.
Major depression.
So the one study.
Bob.
In general.
The fda's position.
Has been.
<unk>.
Oh study.
Could be adequate.
But.
Drugs that are for the first time on the market they prefer to see two settings.
We have a precedent here that the bipolar one indicator.
Moved last year.
It was based on one study and I know there is a lot of.
Question, especially.
Investors none of the side.
Other one is enough or too are needed.
And clearly the case.
Bipolar is a good example.
The FDA will approve for any indication.
Depending on the.
Thanks and of the data, but also.
Got it.
The ended this study this is a large.
Yes.
And if successful.
Without any.
This is sort of uncertainties.
I am sure that there is a very good sense.
It could be adequate for approval.
I'll, let Kevin answer that.
Chris.
Yeah. Thanks, Martin Thanks, Olivia for the question, so maybe just for a bit of background before answering it.
You look at the <unk>.
Equivalent data on payer mix for both Fanapt and the broader atypical antipsychotic market.
Three large payer segments between Medicaid Medicare and commercial with Medicaid generally being about 30% to 40% of the unit volume.
And then for Medicaid, there's a statutory rebate that every product.
Oz is a rebate as part of participating in Medicaid that begins at 23, 1%, but can increase beyond that potentially significantly depending on certain factors, including price increases above inflation.
Now specifically on Fanapt in Basanti, given that Fanapt has been on the market for about 15 years.
And the inflation during that period compared to price increases taken both by Vanda, but also by Novartis in the earlier days of the product or price increases relative to that calculation resulted in essentially 100% rebate on our Medicaid business. So for Fanapt, we're about 30% to 40% of our business is Medicaid given that Medicaid.
Essentially that contributes zero net revenue.
With the Basanti approval, if we just assume.
Hypothetical of similar whack and a similar payer mix that 30% to 40% of revenue would give me given a reset and will be subject to the $23 one statutory rebate, but no additional rebate at launch and so as you can see that could result in a significant.
Gross to net favorability between Fanapt and Basanti, where we've typically spoken about the fanapt gross to net being in the neighborhood of 50% and basanti could be meaningfully below that potentially about half that number at 25% to 30%.
So hopefully that helps characterize just given the significant price favorability that we could see on a basanti net revenue calculation compared to the current fanapt net revenue calculation.
Again as a reminder, if you would like to ask question breast Star one on your telephone keypad. Our next question comes from the line of Andrew <unk> of Jefferies. Please go ahead.
Hi, good morning, Thanks, I appreciate the update.
For my first question on <unk> My understanding is you filed.
505 being won for the NDA as opposed to five O.
The two and so can you just remind us the justification of doing that I would've thought bioequivalence is more related to 505, two and what exactly is included in your current Dana back. Thanks.
Thank you Andrew for the question. So the justification is because the FDA.
To do that.
We are also a little confused whether it was.
Be two or it would be one.
And we asked them a couple of years ago, what would that be.
The rationale the game is because it is a new molecule.
So it is not the bioequivalence.
That drives so.
The way it works is that it is a new molecule.
Chris is what evidence do you need.
To get this molecule approved.
In this case.
The evidence that was needed was in evidence of bioequivalence.
That's why it is a it would be one.
And what is included.
Are the studies we discussed.
The pharmacokinetic bioequivalence.
Multiple doses multiple doses both are they.
Low dose and the highest.
It does.
Too so.
And infer linearity and these are.
The FDA had requested.
And B.
The preclinical and clinical file is by reference.
To the.
NDA.
And it has.
Unique.
CMC section.
New tablets.
All big.
These are.
<unk>.
The strengths.
Which has the same with Fanapt, but of course it is.
New chemical molecule.
It is a new manufacturing package.
I see thank you and secondly.
From Nielsen Teardown, Basanti again phase.
Phase III <unk> and the results are expected in Q2 thousand 26, as an adjunct to therapy. So.
What kind of efficacy delta.
Versus placebo do you want to see to make you feel like you have a very compelling product over the anti other anti psychotics.
The political does not specify.
Thank you.
It is a typical primary endpoint.
Physical superiority over placebo.
And it is.
Powered at the same power that all other risks.
Uh huh.
No.
Yeah.
Competitive.
So what happens in this category is a lot of variability.
In the magnitude.
As you know.
Uh huh.
Within the same drug from Sad study.
That is.
The reason that is indeed the studies.
The state's forward to do.
<unk>.
Variable placebo effect.
The determination of.
Competitiveness.
Is not done on the magnitude of change.
Savings as compared to placebo.
But it is rather.
Over to file and Tolerability of the drug.
Having said that.
Is it.
Miniscule.
In fact.
Yes, it was.
Very variable from side to society.
Questions.
So overall so the simple question is those outlets.
We'll tell us superiority over placebo and of course, we're going to again to the <unk> response.
But.
Until we see that.
To be able to discuss whether it's going to be comparable.
Understood and then my last question.
To the commercial launches of snap on Laurie you started DTC campaign in Q1 and Q2.
Can you remind us when that campaign and are those campaigns and then once that.
And how do you expect sales to change from there. Thank you.
That's correct.
Consumer campaigns, which are.
Include.
Company brand awareness and.
<unk> and Fanapt.
Coin.
And we will continue to be.
<unk> investments.
In support of the commercial program.
Is.
Shindig campaigns don't go on forever.
You have a plus.
Plato effect.
Response, and then these campaigns.
We're not there yet.
And we are continuing to evaluate daily.
Effectiveness with competitors.
Great. Thank you congrats on the execution.
Thanks for that.
Yeah.
That ends our Q&A session and we appreciate their participation I will now turn the call back over to Vanda management. Please go ahead.
Thank you Barry and thanks, everybody for participating on this call.
We look forward seeing you too.
Future cost thank you very much.
Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.