Q2 2026 Vanda Pharmaceuticals Inc Earnings Call

August 5, 2026

Operator 2: Good afternoon, welcome to the Q2 2026 Vanda Pharmaceuticals Inc. earnings conference call. I am France, and I'll be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Vanda's Chief Financial Officer, Kevin Moran. Please go ahead.

Operator: Good afternoon, welcome to the Q2 2026 Vanda Pharmaceuticals Inc. earnings conference call. I am France, and I'll be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Vanda's Chief Financial Officer, Kevin Moran. Please go ahead.

Speaker #1: 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 *1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, please press *1 again. Thank you. I would now like to turn the call over to Vanda's Chief Financial Officer, Kevin Moran.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Franz. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' second quarter 2026 performance. Our second quarter 2026 results were released this afternoon and are available on the SEC's Edgar system and on our website, www.vandapharma.com.

Kevin Moran: Thank you, France. Good afternoon, thank you for joining us to discuss Vanda Pharmaceuticals' Q2 2026 performance. Our Q2 2026 results were released this afternoon and are available on the SEC's EDGAR system and on our website, www.vandapharma.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. Mihael Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board, and Daniel McGuire, our General Counsel. Following my introductory remarks, Mihalis will update you on our ongoing activities. I will 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.

Speaker #2: In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mahalis Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board, and Daniel McGuire, our General Counsel.

Speaker #2: Following my introductory remarks, Mahalis will update you on our ongoing activities. I will then comment on our financial results before we open the lines for your questions.

Speaker #2: 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.

Speaker #2: 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.

Kevin Moran: 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.

Speaker #2: 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.

Speaker #2: With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.

Kevin Moran: With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.

Speaker #3: Good afternoon, everyone. Thank you for joining us today. For Vanda Pharmaceuticals' second quarter 2026 earnings conference call, we're pleased with the continued strong growth of FinApt and the enthusiastic response to Nereus as it becomes available to patients.

Mihael Polymeropoulos: Good afternoon, everyone. Thank you for joining us today for Vanda Pharmaceuticals' Q2 2026 earnings conference call. We're pleased with the continued strong growth of Fanapt and the enthusiastic response to NEREUS as it becomes available to patients. With Bysanti approved and on track for launch in H2 2026, a December 2026 PDUFA date for Quimilza, or imsidolimab, and multiple late-stage clinical trial results expected before year-end, we believe Vanda is well-positioned for meaningful commercial expansion and pipeline value creation. As our phase III programs launch preparations and commercial supply manufacturing near completion, we expect operating expenses to begin moderating later this year and more significantly in 2027. We believe that our current resources, together with anticipated product revenues, provide a solid foundation to advance our objectives through at least the end of 2027.

Speaker #3: With Visanti approved and on track for launch in the second half of 2026, a December 2026 PDUFA date for Quimilza or Imsudolima and multiple late-stage clinical trial results expected before year-end, we believe Vanda is well-positioned for meaningful commercial expansion and pipeline value creation.

Speaker #3: As our Phase 3 programs launch preparations, and commercial supply manufacturing near completion, we expect operating expenses to begin moderating later this year and more significantly in 2027.

Speaker #3: We believe that our current resources, together with anticipated project revenues, provide a solid foundation to advance our objectives through at least the end of 2027.

Speaker #3: During 2025 and 2026, we have advanced multiple Phase 3 programs and continued execution on the commercialization of FinApt and Punvori, and prepared for the commercial launches including manufacturing, commercial supplies of Nereus, Visanti, and Quimilza.

Mihael Polymeropoulos: During 2025 and 2026, we have advanced multiple phase III programs and continued execution on the commercialization of Fanapt and PONVORY, and prepared for the commercial launches, including manufacturing, commercial supplies of NEREUS, Bysanti, and Quimilza. As these activities conclude, we expect operating expense to begin decreasing by end of 2026 and more substantially through 2027. Based on our current cash position and anticipated revenues, we expect to have sufficient resources to fund operations through at least the end of 2027. Fanapt showed continued strong momentum in Q2 2026, with total prescriptions, TRx, up 31%, and new to brand prescriptions, NBRx, up 32% versus Q2 2025. Since commercial expansion following the approval of bipolar I disorder, Fanapt has seen significant growth, with TRx up 62%, NBRx up 300% versus Q2 2024.

Speaker #3: As these activities conclude, we expect operating expense to begin decreasing by the end of 2026 and more substantially through 2027. Based on our current cash position and anticipated revenues, we expect to have sufficient resources to fund operations through at least the end of 2027.

Speaker #3: FinApt showed continued strong momentum in the second quarter of 2026, with total prescriptions TRX up 31% and new-to-brand prescriptions NBRX up 32% versus the second quarter of 2025.

Speaker #3: Since commercial expansion following the approval of bipolar-1 disorder, FinApt has seen significant growth, with TRX up 62%, NBRX up 300% versus the second quarter of 2024.

Speaker #3: Visanti received U.S. Food and Drug Administration approval for the treatment of bipolar-1 disorder, and schizophrenia in the first quarter of 2026, and is expected to launch in the second half of 2026.

Mihael Polymeropoulos: Bysanti received US Food and Drug Administration approval for the treatment of bipolar I disorder and schizophrenia in Q1 2026 and is expected to launch in H2 2026. Bysanti is protected by data exclusivity through 20 February 2031 and multiple patents, the latest of which expires on 31 May 2044. In May 2026, the early commercial launch of NEREUS was initiated with a direct-to-consumer offering via the web portal nereus.us. Personal promotion is expected to commence later in 2026. Vanda's ongoing late-stage clinical studies are progressing rapidly and are expected to generate top-line results in 2026 or early 2027, including the Thetis Phase III study of NEREUS for the prevention of vomiting in patients receiving GLP-1 receptor agonist therapies, with results expected in 2026. The Phase III study of VQW-765 in the treatment of adults with social anxiety disorder with results expected in 2026.

Speaker #3: Visanti is protected by data exclusivity through February 20, 2031, and multiple patents the latest of which expires on May 31, 2044. In May 2026, the early commercial launch of Nereus was initiated with a direct-to-consumer offering via the web portal nereus.us.

Speaker #3: Personal promotion is expected to commence later in 2026. Vanda's ongoing late-stage clinical studies are progressing rapidly, and are expected to generate top-line results in 2026 or early 2027, including: the 30th Phase 3 study of Nereus, for the prevention of vomiting in patients receiving GLP-1 receptor agonist therapies, with results expected in 2026; the Phase 3 study of VQW-765 in the treatment of adults with social anxiety disorder with results expected in 2026; the Phase 3 study of Hetlius in the treatment of delayed sleep phase disorder, DSPD, with results expected in 2026; finally, the Phase 3 study of Visanti as a once-daily adjunctive treatment for major depressive disorder with results expected in the first half of 2027.

Mihael Polymeropoulos: The Phase III study of HETLIOZ in the treatment of delayed sleep phase disorder, DSPD, with results expected in 2026. Finally, the Phase III study of Bysanti as a once-daily adjunctive treatment for major depressive disorder, with results expected in H1 2027. The Biologic License Application, BLA, for Quimilza in generalized pustular psoriasis is under review by the FDA with a PDUFA target action date of 12 December 2026. The results of the pivotal clinical study were published earlier on 28 April 2026 in the NEJM Evidence. In May 2026, we announced that Japan's Ministry of Health, Labour and Welfare granted orphan drug designation to Quimilza for the treatment of GPP.

Speaker #3: The biologic license application, BLA, for Quimilza in generalized postural psoriasis is under review by the FDA with a prescription drug user fee act target action date of December 12, 2026.

Speaker #3: The results of the pivotal clinical study were published earlier, on April 28, 2026, in the New England Journal of Medicine Evidence. In May 2026, we announced that Japan's Ministry of Health, Labor and Welfare granted orphan drug designation to Quimilza for the treatment of GPP.

Speaker #3: In July 2026, we announced that the Committee for Orphan Medicinal Products at the European Medicines Agency had adopted a positive opinion recommending orphan drug designation for Quimilza for the treatment of GPP.

Mihael Polymeropoulos: In July 2026, we announced that the Committee for Orphan Medicinal Products at the European Medicines Agency had adopted a positive opinion recommending Orphans Act designation for Quimilza for the treatment of GPP. In July 2026, we announced that the FDA had granted rare pediatric disease designation for VCA-894A, our investigational antisense oligonucleotide therapy for the treatment of Charcot-Marie-Tooth disease, axonal type 2S, or CMT2S, a rare, serious, and progressive inherited neurological disorder. We continue to progress the FDA formal hearing regarding HETLIOZ for the treatment of jet lag disorder. The proceeding, a rare administrative hearing process granted after the D.C. Circuit set aside the FDA's prior refusal to approve the application, is advancing according to schedule and is expected to culminate in a 5-day hearing before the administrative law judge in December 2026. With that, I'll turn now to Kevin to discuss our financial results. Kevin?

Speaker #3: In July 2026, we announced that the FDA had granted rare pediatric disease designation for VCA-894A, our investigational antisense oligonucleotide therapy for the treatment of Charcot-Marie-Tooth disease, axonal type 2S, or CMT2S, a rare serious and progressive inherited neurological disorder.

Speaker #3: We continue to progress the FDA formal hearing regarding Hetlius for the treatment of jet-lag disorder. The proceeding, a rare administrative hearing process, granted after the decision circuit set aside the FDA's prior refusal to approve the application, is advancing according to schedule and is expected to culminate in a five-day hearing before the administrative law judge in December of 2026.

Speaker #3: With that, I'll turn now to Kevin to discuss our financial results. Kevin?

Speaker #2: Thank you, Miles. I will begin by summarizing our financial results for the first six months of 2026, before turning to discuss the second quarter of 2026.

Kevin Moran: Thank you, Mihalis. I will begin by summarizing our financial results for H1 2026 before turning to discuss Q2 2026. Total revenues for H1 2026 were $102.2 million, essentially flat as compared to $102.6 million for the same period in 2025. H1 2026 included increased Fanapt revenue as a result of the continued commercialization efforts for Fanapt and bipolar I disorder, increased PONVORY revenue, and revenue contribution from the newly launched NEREUS, offset by decreased HETLIOZ revenue as a result of generic competition and timing of shipments to customers at the end of Q2 2026. Total revenues for H1 do not include approximately $7 million of HETLIOZ revenue for orders shipped on 29 June 2026 that arrived on 1 July 2026. Let me break this down now by product.

Speaker #2: Total revenues for the first six months of 2026 were $102.2 million, essentially flat as compared to $102.6 million for the same period in 2025.

Speaker #2: The first six months of 2026 included increased FinApt revenue, as a result of the continued commercialization efforts for FinApt and bipolar-1 disorder, increased Punvori revenue, and revenue contribution from the newly launched Nereus, all set by decreased Hetlius revenue as a result of generic competition and timing of shipments to customers at the end of the second quarter of 2026.

Speaker #2: Total revenues for the first six months do not include approximately $7 million of 29, 2026, that arrived on July 1, 2026. Let me break this down now by product.

Speaker #2: FinApt net product sales were $65.5 million for the first six months of 2026, a 24% increase compared to $52.8 million in the same period in 2025.

Kevin Moran: Fanapt net product sales were $65.5 million for H1 2026, a 24% increase compared to $52.8 million in the same period in 2025. This increase to net product sales relative to H1 2025 was attributable to an increase in volume, partially offset by a decrease in price net of deductions. Turning to HETLIOZ. HETLIOZ net product sales were $21.5 million for H1 2026, a 42% decrease compared to $37.1 million in the same period in 2025. The decrease was attributable to a decrease in volume as a result of the continued generic competition in the US and the timing of shipments to customers at the end of Q2 2026.

Speaker #2: This increase to net product sales relative to the first six months of 2025 was attributable to an increase in volume, partially offset by a decrease in price net of deductions.

Speaker #2: Turning to Hetlius: Hetlius net product sales were $21.5 million for the first six months of 2026, a 42% decrease compared to $37.1 million in the same period in 2025.

Speaker #2: The decrease was attributable to a decrease in volume as a result of continued generic competition in the U.S. and the timing of shipments to customers at the end of the second quarter of 2026.

Speaker #2: Hetlius net product sales for the first six months of 2026 do not include orders totaling approximately $7 million in revenue that were shipped on June 29 and arrived on July 1.

Kevin Moran: HETLIOZ net product sales for H1 2026 do not include orders totaling approximately $7 million in revenue that were shipped on 29 June and arrived on 1 July. These orders will be recognized as revenue in Q3 2026. During Q2 2026, there was destocking of inventory by certain of our specialty pharmacy customers, primarily as a result of the previously mentioned shipment issue. Of note, for Q2 2026, HETLIOZ continued to be the leading product from a market share perspective, despite generic competition now for over 3 years. Turning to PONVORY. PONVORY net product sales were $14.1 million for H1 2026, an 11% increase compared to $12.7 million for the same period in 2025.

Speaker #2: These orders will be recognized as revenue in the third quarter of 2026. During the second quarter of 2026, there was destocking of inventory by certain specialty pharmacy customers, primarily as a result of the previously mentioned shipment issue.

Speaker #2: Of note, for the second quarter of 2026, Hetlius continued to be the leading product from a market share perspective, despite generic competition now for over three years.

Speaker #2: Turning to Punvori: Punvori net product sales were $14.1 million for the first six months of 2026 and 11% increase compared to $12.7 million for the same period in 2025.

Speaker #2: Of note, an amount of variable consideration related to Punvori net product sales is subject to dispute, of which approximately $3 million was recognized for the three months ended December 31, 2024.

Kevin Moran: Of note, an amount of variable consideration related to PONVORY net product sales is subject to dispute, of which approximately $3 million was recognized for the 3 months ended 31 December 2024. Finally, turning to NEREUS. NEREUS became commercially available in the US in May 2026. NEREUS net product sales were $1 million for H1 2026. NEREUS is sold using both the traditional wholesaler channel and also by prescription directly through the nereus.us website. Revenue recognized during H1 2026 primarily related to units sold through the wholesaler channel. During Q2 2026, there was an initial stocking of NEREUS by wholesalers of $15.2 million. We constrained NEREUS net product sales to an amount not probable of significant revenue reversal.

Speaker #2: And finally, turning to Nereus: Nereus became commercially available in the U.S. in May of 2026. Nereus net product sales were $1 million for the first six months of 2026.

Speaker #2: Nereus is sold using both the traditional wholesaler channel and also by prescription directly through the Nereus.us website. Revenue recognized during the first six months of 2026 primarily related to units sold through the wholesaler channel.

Speaker #2: During the second quarter of 2026, there was an initial stocking of Nereus by wholesalers of $15.2 million. We constrained Nereus net product sales to an amount not probable of significant revenue reversal.

Speaker #2: The constrained revenue of $12.6 million relates to the uncertainties of patient demand and product returns related to the elevated levels of inventory on hand at wholesalers.

Kevin Moran: The constrained revenue of $12.6 million relates to the uncertainties of patient demand and product returns related to the elevated levels of inventory on hand at wholesalers. As a reminder, NEREUS launched commercially in the US in Q2 2026 with the direct-to-consumer offering via the web portal, nereus.us. Personal promotion using our existing sales force is expected to commence later in 2026. For H1 2026, Vanda recorded a net loss of $111.1 million, compared to a net loss of $56.7 million for the same period in 2025. The net loss for H1 2026 included income tax expense of $0.3 million, as compared to an income tax benefit of $15.6 million for the same period in 2025.

Speaker #2: As a reminder, Nereus launched commercially in the U.S. in the second quarter of 2026 with the direct-to-consumer offering via the web portal Nereus.us. Personal promotion using our existing Salesforce is expected to commence later in 2026.

Speaker #2: For the first six months of 2026, Vanda recorded a net loss of $111.1 million compared to a net loss of $56.7 million for the same period in 2025.

Speaker #2: The net loss for the first six months of 2026 included an income tax expense of $0.3 million, as compared to an income tax benefit of $15.6 million for the same period in 2025.

Speaker #2: As a reminder, the company recorded a one-time non-cash income tax charge in the fourth quarter of 2025 to establish a valuation allowance against all of Vanda's deferred tax assets.

Kevin Moran: As a reminder, the company recorded a one-time non-cash income tax charge in Q4 2025 to establish a valuation allowance against all of Vanda's deferred tax assets. Tax expense is expected to be nominal going forward until such time that a valuation allowance is no longer required. Operating expenses for H1 2026 were $216.3 million, compared to $182.2 million for the same period in 2025. The $34.1 million increase was primarily driven by higher SG&A expenses related to spending on Vanda's commercial products as a result of the continued commercialization efforts for Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, the NEREUS commercial launch, and the upcoming Bysanti commercial launch, and higher R&D expenses, primarily related to our VQW-765, Fanapt, and Bysanti programs, partially offset by lower expenses on our Quimilza or imsidolimab program.

Speaker #2: Tax expense is expected to be nominal going forward until such time that a valuation allowance is no longer required. Operating expenses for the first six months of 2026 were $216.3 million compared to $182.82 million for the same period in 2025.

Speaker #2: The $34.1 million increase was primarily driven by higher SG&A expenses related to spending on Vanda's commercial products as a result of the continued commercialization efforts for FinApt and bipolar-1 disorder and Punvori and multiple sclerosis, the Nereus commercial launch, and the upcoming Basanti commercial launch, and higher R&D expenses primarily related to our VQW765 FinApt and Basanti programs partially offset by lower expenses on our Kemilza or Imsadolamab program.

Speaker #2: The first six months of 2025 included an upfront payment to Enaptus for the exclusive global license agreement for the development and commercialization of Imsadolamab.

Kevin Moran: H1 2025 included an upfront payment to Enaptis for the exclusive global license agreement for the development and commercialization of imsidolimab. On the commercial side, starting in 2024, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, and more recently, the launch of NEREUS and upcoming launch of Bysanti. We maintained strategic investments in our commercial infrastructure, including increased brand visibility through targeted sponsorships with the goal of supporting long-term market leadership and future commercial launches. Vanda's cash equivalents, and marketable securities, referred to as cash, as of 30 June 2026, was $170 million, representing a decrease of $93.8 million compared to 31 December 2025, and a decrease of $32.3 million compared to 31 March 2026.

Speaker #2: On the commercial side, starting in 2024, we commenced a host of activities as a result of the commercial launches of FinApt and bipolar-1 disorder and Punvori and multiple sclerosis, and, more recently, the launch of Nereus and upcoming launch of Basanti.

Speaker #2: We maintained strategic investments in our commercial infrastructure, including increased brand visibility through targeted sponsorships with the goal of supporting long-term market leadership and future commercial launches.

Speaker #2: Vanda's cash, cash equivalents, and marketable securities, referred to as cash, as of June 30, 2026, was $170 million, representing a decrease of 93.8 million compared to December 31, 2025, and a decrease of 32.3 million compared to March 31, 2026.

Speaker #2: The change in cash during the second quarter of 2026, as compared to the first quarter of 2026, was driven by the net loss in the second quarter of 2026, excluding the impact of non-cash charges such as stock-based compensation and amortization of our intangible and right-of-use assets, as well as timing of cash received from customers for revenue and related payments of rebates to payers, and the timing of cash paid to third parties for services related to operating expenses and inventory production.

Kevin Moran: The change in cash during Q2 2026 as compared to Q1 2026 was driven by the net loss in Q2 2026, excluding the impact of non-cash charges such as stock-based compensation and amortization of our intangible and right of use assets, as well as timing of cash received from customers for revenue and related payments of rebates to payers, and the timing of cash paid to third parties for services related to operating expenses and inventory production. The decrease compared to the balance as of 31 December 2025, was also driven by the one-time milestone payment of $10 million made to Eli Lilly in Q1 2026 for the approval of NEREUS in the US. As a reminder, payments made in advance of production are capitalized as a prepaid expense.

Speaker #2: The decrease compared to the balance as of December 31, 2025, was also driven by the one-time milestone payment of $10 million made to Eli Lilly in the first quarter of 2026 for the approval of Nereus in the U.S.

Speaker #2: As a reminder, payments made in advance of production are capitalized as a prepaid expense; commercial products are capitalized as inventory on our balance sheet after production while pre-commercial products are generally expensed as incurred as research and development costs.

Kevin Moran: Commercial products are capitalized as inventory on our balance sheet after production, while pre-commercial products are generally expensed as incurred as research and development costs. The timing of production of pre-commercial products, including the imsidolimab program, may result in future variability of our R&D expense and cash payments. Turning now to our quarterly results. Total revenues were $50.5 million for Q2 2026, a 4% decrease compared to $52.6 million for Q2 2025, and a 2% decrease compared to $51.7 million in Q1 2026.

Speaker #2: The timing of production of pre-commercial products, including the Imsadolamab program, may result in future variability of our R&D expense and cash payments. Turning now to our quarterly results.

Speaker #2: Total revenues were $50.5 million for the second quarter of 2026, a 4% decrease compared to $52.6 million for the second quarter of 2025, and a 2% decrease compared to $51.7 million in the first quarter of 2026.

Speaker #2: The decreases as compared to the second quarter of 2025 and the first quarter of 2026 were primarily due to a decrease in Helios revenue as a result of the generic competition and the timing of shipments to customers at the end of the second quarter of 2026, partially offset by growth in FinApt revenue as a result of the bipolar commercial launch.

Kevin Moran: The decreases as compared to Q2 2025 and Q1 2026 were primarily due to a decrease in HETLIOZ revenue as a result of the generic competition and the timing of shipments to customers at the end of Q2 2026, partially offset by growth in Fanapt revenue as a result of the bipolar commercial launch. Total revenues for Q2 2026 do not include approximately $7 million of HETLIOZ revenue for orders shipped on 29 June that arrived on 1 July. Let me now break this down by product. Fanapt net product sales were $36 million for Q2 2026, a 23% increase compared to $29.3 million in Q2 2025, and a 22% increase compared to $29.6 million in Q1 2026.

Speaker #2: Total revenues for the second quarter of 2026 do not include approximately $7 million of Helios revenue for order shipped on June 29 that arrived on July 1.

Speaker #2: Let me now break this down by product. FinApt net product sales were $36 million for the second quarter of 2026, a 23% increase compared to 29.3 million in the second quarter of 2025, and a 22% increase compared to 29.6 million in the first quarter of 2026.

Speaker #2: FinApt total prescriptions or TRX, as reported by Equivia Exponent, in the second quarter of 2026 increased by 31% compared to the second quarter of 2025 and 11% compared to the first quarter of 2026.

Kevin Moran: Fanapt total prescriptions, or TRx, as reported by IQVIA Xponent in Q2 2026 increased by 31% compared to Q2 2025 and 11% compared to Q1 2026. The increases to net product sales relative to Q2 2025 and Q1 2026 were primarily attributable to increases in volume. Fanapt new patient starts in Q2 2026, as reflected by new-to-brand prescriptions, or NBRx, increased by 32% compared to Q2 2025 and by 10% compared to Q1 2026. Historically, Fanapt inventory at wholesalers has ranged between three and four weeks on hand, as calculated based off trailing demand.

Speaker #2: The increases to net product sales relative to the second quarter of 2025 and first quarter of 2026 were primarily attributable to increases in volume.

Speaker #2: FinApt new patient starts in the second quarter of 2026, as reflected by new-to-brand prescriptions or MBRX, increased by 32% compared to the second quarter of 2025, and by 10% compared to the first quarter of 2026.

Speaker #2: Historically, FinApt inventory at wholesalers has ranged between 3 and 4 weeks on hand as calculated based off trailing demand. As of the end of the second quarter of 2026, FinApt inventory at wholesalers was slightly above 4 weeks on hand, which was generally consistent with the level of inventory weeks on hand as of the first quarter of 2026 and the fourth quarter of 2025, but slightly above the historic range.

Kevin Moran: As of the end of Q2 2026, Fanapt inventory at wholesalers was slightly above four weeks on hand, which was generally consistent with the level of inventory weeks on hand as of Q1 2026 and Q4 2025, but slightly above the historic range. Turning to HETLIOZ. HETLIOZ net product sales were $5.6 million for Q2 2026, a 66% decrease compared to $16.2 million in Q2 2025, and a 65% decrease compared to $15.9 million in Q1 2026. The decrease in net product sales relative to Q2 2025 and Q1 2026 was primarily attributable to a decrease in volume due to generic competition and timing of shipments to customers at the end of Q2.

Speaker #2: Turning to Helios. Helios net product sales were $5.6 million for the second quarter of 2026, a 66% decrease compared to 16.2 million in the second quarter of 2025, and a 65% decrease compared to 15.9 million in the first quarter of 2026.

Speaker #2: The decrease in net product sales relative to the second quarter of 2025 was the first quarter and the first quarter of 2026 was primarily attributable to a decrease in volume due to generic competition and timing of shipments to customers at the end of the second quarter.

Speaker #2: Helios net product sales in the second quarter of 2026 do not include orders totaling approximately $7 million in revenue that were shipped on June 29 and arrived on July 1.

Kevin Moran: HETLIOZ net product sales in Q2 2026 do not include orders totaling approximately $7 million in revenue that were shipped on 29 June and arrived on 1 July. These orders will be recognized as revenue in Q3 2026. As mentioned in the discussion of results for H1 2026, HETLIOZ net product sales continue to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period. During Q2 2026, there was destocking of inventory by certain of our specialty pharmacy customers, primarily as the result of timing of shipments. Going forward, HETLIOZ net product sales may reflect lower unit sales as a result of the reduction of the elevated inventory levels at specialty pharmacy customers or may be variable depending on when specialty pharmacy customers need to purchase again. Turning to PONVORY.

Speaker #2: These orders will be recognized as revenue in the third quarter of 2026. As mentioned in the discussion of results for the first six months of 2026, Helios net product sales continued to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period.

Speaker #2: During the second quarter of 2026, there was destocking of inventory by certain of our specialty pharmacy customers, primarily as the result of timing of shipments.

Speaker #2: Going forward, Helios net product sales may reflect lower unit sales as a result of the reduction of the elevated inventory levels at specialty pharmacy customers or may be variable depending on when specialty pharmacy customers need to purchase again.

Speaker #2: Turning to Punvori. Punvori net product sales were $7.9 million for the second quarter of 2026, an increase of 12% compared to 7.1 million in the second quarter of 2025, and an increase of 27% compared to 6.2 million in the first quarter of 2026.

Kevin Moran: PONVORY net product sales were $7.9 million for Q2 2026, an increase of 12% compared to $7.1 million in Q2 2025, and an increase of 27% compared to $6.2 million in Q1 2026. The specialty distributor and specialty pharmacy inventory on-hand levels during these periods were in line with normal ranges. Additionally, as we have previously discussed, an amount of variable consideration related to PONVORY net product sales is subject to dispute, of which approximately $3 million was recognized for the three months ended 31 December 2024. Finally, turning to NEREUS. NEREUS became commercially available in the US in May 2026. NEREUS net product sales were $1 million for Q2 2026. NEREUS is sold using both traditional wholesaler channel and also by prescription directly through the nereus.us website.

Speaker #2: The specialty distributor and specialty pharmacy inventory on hand levels during these periods were in line with normal ranges. Additionally, as we have previously discussed, an amount of variable consideration related to Punvori net product sales is subject to dispute, of which approximately $3 million was recognized for the three-months ended December 31, 2024.

Speaker #2: And finally, turning to Nerius. Nerius became commercially available in the U.S. in May 2026. Nerius net product sales were $1 million for the second quarter of 2026.

Speaker #2: Nerius is sold using both traditional wholesaler channel and also by prescription directly through the Nerius.us website. Revenue recognized during the second quarter of 2026 primarily related to units sold through the wholesaler channel.

Kevin Moran: Revenue recognized during Q2 2026 primarily related to units sold through the wholesaler channel. During Q2 2026, there was an initial stocking of NEREUS by wholesalers of $15.2 million. We constrained NEREUS net product sales to an amount not probable of significant revenue reversal. The constrained revenue of $12.6 million relates to the uncertainties of patient demand and product returns related to the elevated inventory levels on hand at wholesalers. As a reminder, NEREUS launched commercially in the US in Q2 2026 with a direct-to-consumer offering via the web portal nereus.us. Personal promotion using our existing sales force is expected to commence later in 2026. For Q2 2026, Vanda recorded a net loss of $62.5 million compared to a net loss of $27.2 million for Q2 2025.

Speaker #2: During the second quarter of 2026, there was an initial stocking of Nerius by wholesalers of 15.2 million. We constrained Nerius net product sales to an amount not probable of significant revenue reversal.

Speaker #2: The constrained revenue of 12.6 million relates to the uncertainties of patient demand and product returns related to the elevated inventory levels on hand at wholesalers.

Speaker #2: As a reminder, Nerius launched commercially in the U.S. in the second quarter of 2026 with a direct-to-consumer offering via the web portal Nerius.us. Personal promotion using our existing Salesforce is expected to commence later in 2026.

Speaker #2: For the second quarter of 2026, Vanda recorded a net loss of $62.5 million compared to a net loss of $27.2 million for the second quarter of 2025.

Speaker #2: The net loss for the second quarter of 2026 included income tax expense of $0.1 million as compared to an income tax benefit of $7.7 million for the second quarter of 2025.

Kevin Moran: The net loss for Q2 2026 included income tax expense of $0.1 million as compared to an income tax benefit of $7.7 million for Q2 2025. Operating expenses in Q2 2026 were $114.3 million compared to $91.1 million in Q2 2025. The $23.2 million increase was primarily driven by higher R&D expenses related to our VQW and NEREUS programs and higher SG&A expenses related to spending on Vanda's commercial products as a result of the continued commercialization efforts for Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, the NEREUS commercial launch, and upcoming Bysanti commercial launch.

Speaker #2: Operating expenses in the second quarter of 2026 were $114.3 million compared to $91.1 million in the second quarter of 2025. The 23.2 million increase was primarily driven by higher R&D expenses related to our VQW and Nerius programs.

Speaker #2: And higher SG&A expenses related to spending on Vanda's commercial products as a result of the continued commercialization efforts for FinApt and Bipolar I disorder and Punvori and multiple sclerosis.

Speaker #2: The Nerius commercial launch and upcoming Basanti commercial launch. On the commercial side, starting in 2024, we commenced a host of activities as a result of the commercial launches of FinApt and Bipolar I disorder and Punvori and multiple sclerosis and, more recently, the launch of Nerius and upcoming launch of Basanti.

Kevin Moran: On the commercial side, starting in 2024, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, and more recently, the launch of NEREUS and upcoming launch of Bysanti. We maintained strategic investments in our commercial infrastructure, including increased brand visibility through targeted sponsorships with the goal of supporting long-term market leadership and future commercial launches. With regards to the launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, as I mentioned, these launches were initiated in 2024, and we continue to enhance our commercial infrastructure through Q2 2026, with the impact of these commercial efforts contributing to revenue growth for these products in 2026 and expected to continue to contribute to revenue growth for these products in coming periods.

Speaker #2: With regards to the launches of FinApt and Bipolar I disorder and Punvori and multiple sclerosis, as I mentioned, these launches were initiated in 2024, and we continue to enhance our commercial infrastructure through the second quarter of 2026, with the impact of these commercial efforts contributing to revenue growth for these products in 2026 and expected to continue to contribute to revenue growth for these products in coming periods.

Speaker #2: We have seen significant growth in our commercial activities, including the following: several lead indicators suggest a strong and continued market response to our commercial activities related to FinApt for Bipolar I disorder.

Kevin Moran: We have seen significant growth in our commercial activities, including the following. Several lead indicators suggesting a strong and continued market response to our commercial activities related to Fanapt for bipolar I disorder. Total prescriptions or TRx increasing by approximately 31% in Q2 2026 as compared to Q2 2025. In May of 2026, a weekly TRx number for Fanapt reaching an 11-year high of over 2,700 prescriptions. New patient starts, as reflected by NBRx, increased by 32% in Q2 2026 as compared to Q2 2025. Since the commercial expansion following the approval of bipolar I disorder, Fanapt has seen significant growth, with TRx up 62% and NBRx up 300% as compared to Q2 2024.

Speaker #2: Total prescriptions, or TRXs, increased by approximately 31% in the second quarter of 2026 compared to the second quarter of 2025. In May 2026, the weekly TRX number for FinApt reached an 11-year high of over 2,700 prescriptions.

Speaker #2: New patient starts as reflected by NBRX increased by 32% in the second quarter of 2026 as compared to the second quarter of 2025. Since the commercial expansion following the approval of Bipolar I disorder, FinApt has seen significant growth, with TRXs up 62% and NBRXs up 300% as compared to the second quarter of 2024.

Speaker #2: Of particular note, FinApt was one of the fastest-growing atypical antipsychotics in the market throughout 2025 and into the second quarter of 2026 based on several prescription metrics.

Kevin Moran: Of particular note, Fanapt was one of the fastest-growing atypical antipsychotics in the market throughout 2025 and into Q2 2026 based on several prescription metrics. Our Fanapt sales force expanded to approximately 300 representatives in H2 2025. This expansion has allowed us to significantly increase our reach and frequency with prescribers. To that end, the number of face-to-face calls in Q2 2026 was more than 30% higher than the number of face-to-face calls in Q2 2025. Fanapt performance remains the focus of our commercial initiatives and encourages us to invest in this differentiated medicine and the franchise-extending launch of Bysanti in H2 2026.

Speaker #2: Our FinApt Salesforce expanded to approximately 300 representatives in the second half of 2025. This expansion has allowed us to significantly increase our reach and frequency with prescribers, to that end the number of face-to-face calls in the second quarter of 2026 was more than 30% higher than the number of face-to-face calls in the second quarter of 2025.

Speaker #2: FinApt performance remains the focus of our commercial initiatives and encourages us to invest in this differentiated medicine and the franchise-extending launch of Basanti in the second half of 2026.

Speaker #2: Before turning to our financial guidance, I would like to remind folks that with FinApt, Helios, Punvori, and now Nerius already commercially available, and with Basanti recently approved for Bipolar I disorder and schizophrenia, and a biologics license application for Imsudolumab now under review by the FDA, Vanda could have six approved products by the end of 2026.

Kevin Moran: Before turning to our financial guidance, I would like to remind folks that with Fanapt, HETLIOZ, PONVORY, and now NEREUS already commercially available, and with Bysanti recently approved for bipolar I disorder and schizophrenia, and a BLA for imsidolimab now under review by the FDA, Vanda could have six approved products by the end of 2026. Turning now to our financial guidance. Vanda is reiterating its full year 2026 total revenue guidance and expects to achieve the following financial objectives in 2026. Total revenues from Fanapt, Bysanti, HETLIOZ, PONVORY, and NEREUS of between $240 to 290 million. The midpoint of this revenue range of $265 million would imply revenue growth in 2026 of approximately 23% as compared to full year 2025 revenue. Fanapt and Bysanti net product sales of between $150 to 170 million.

Speaker #2: Turning now to our financial guidance. Vanda is reiterating its full-year 2026 total revenue guidance and expects to achieve the following financial objectives in 2026: total revenues from FinApt, Basanti, Helios, Punvori, and Nerius of between $240 and $290 million.

Speaker #2: The midpoint of this revenue range of $265 million would imply revenue growth in 2026 of approximately 23% as compared to full-year 2025 revenue. FinApt and Basanti net product sales of between $150 and $170 million.

Speaker #2: The midpoint of this revenue range would imply combined FinApt and Basanti revenue growth in 2026 of approximately 36% as compared to full-year 2025 FinApt revenue.

Kevin Moran: The midpoint of this revenue range would imply combined Fanapt and Bysanti revenue growth in 2026 of approximately 36% as compared to full year 2025 Fanapt revenue. Note that based on the expected launch timing of Bysanti, we have included the Bysanti revenue contribution in this guidance range. Other net product sales of between $80 to 90 million. Finally, NEREUS net product sales of between $10 to 30 million. Note that NEREUS launched commercially in the US in Q2 2026 with the direct-to-consumer offering via the web portal nereus.us. Personal promotion using our existing sales force is expected to commence later in 2026. As previously communicated, Vanda is not providing 2026 cash guidance at this time. However, it is likely that Vanda's 2026 cash burn will be greater than the cash burn in 2025.

Speaker #2: Note that based on the expected launch timing of Basanti, we have included the Basanti revenue contribution in this guidance range. Other net product sales of between $80 and $90 million.

Speaker #2: And finally, Nerius net product sales of between $10 and $30 million. Note that Nerius launched commercially in the U.S. in the second quarter of 2026 with the direct-to-consumer offering via the web portal Nerius.us.

Speaker #2: Personal promotion using our existing Salesforce is expected to commence later in 2026. As previously communicated, Vanda has not provided 2026 cash guidance at this time.

Speaker #2: However, it is likely that Vanda's 2026 cash burn will be greater than the cash burn in 2025. During 2025 and 2026, we have advanced multiple phase three programs, continued execution on the commercialization of FinApt and Punvori, and prepared for the commercial launches, including manufacturing commercial supplies, of Nerius, Basanti, and Imsudolumab.

Kevin Moran: During 2025 and 2026, we advanced multiple Phase III programs, continued execution on the commercialization of Fanapt and PONVORY, and prepared for the commercial launches, including manufacturing commercial supplies of NEREUS, Bysanti, and imsidolimab. These activities resulted in significantly increased operating expenses in 2025 and 2026. As these activities conclude, Vanda expects operating expenses to begin decreasing by the end of 2026 and more substantially throughout 2027. Based on its current cash position of $170 million as of 30 June 2026, and anticipated future revenues, Vanda expects to have sufficient resources to fund operations through at least the end of 2027. With that, I'll now turn the call back to Miles.

Speaker #2: These activities resulted in significantly increased operating expenses in 2025 and 2026. As these activities conclude, Vanda expects operating expenses to begin decreasing by the end of 2026, and more substantially throughout 2027.

Speaker #2: Based on its current cash position of $170 million as of June 30, 2026, and anticipated future revenues, Vanda expects to have sufficient resources to fund operations through at least the end of 2027.

Speaker #2: With that, I'll now turn the call back to Miles.

Speaker #1: Thank you very much, Kevin. At this point, we will be happy to answer your questions.

Mihael Polymeropoulos: Thank you very much, Kevin. At this point, we will be happy to answer your questions.

Speaker #3: Thank you. And we will now begin the question-and-answer session. If you would like to ask a question during this time, please press star 1 on your telephone keypad to join the queue.

Operator 2: Thank you. We will now begin the question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad to join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from Raghuram Selvaraju from H.C. Wainwright. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad to join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first question comes from Raghuram Selvaraju from H.C. Wainwright. Please go ahead.

Speaker #3: If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker #3: And your first question? Comes from Ragram Ram Selvaraj. From HC Wainwright. Please go ahead.

Speaker #4: Hi, thank you for taking my question. This is Yan Zi, sitting in for Ram. I have two questions. The first is, with respect to the Nerius launch experience, I’m curious—now that you have about three months of experience, where are you seeing the biggest drop-off in the patient funnel?

Jan Z.: Hi. Thank you for taking my question. This is Jan Z., sitting in for Ram. I have two questions. The first is with respect to the NEREUS launch experience. I'm curious, with about three months of experience here, where are you seeing the biggest drop-off in the patient funnel? What metrics should investors watch to judge whether the 2026 sales finish near the low or the high end of the $10 to $30 million range?

Speaker #4: And what metrics should investors watch to judge whether the 2026 sales finished near the low or the high end of the 10 to 30 million dollar range?

Speaker #2: Yeah. Thanks for the question, Yan. So as we look at the Nerius launch, we're obviously very early in the in the launch phase here.

Kevin Moran: Yeah. Thanks for the question, Jan. As we look at the NEREUS launch, we're obviously very early in the launch phase here. We initiated our launch activities in May, first with the nereus.us platform, and DTC campaigns following that. As we head into the back half of the year, we're going to be initiating personal promotion with our sales force, which we expect to support the activities that we're seeing out there in the field. As far as metrics go for what folks should be looking for there, I think that as we continue to report going forward, the sales engagement, and the visits that we see with doctors, and the receptivity to the product in the market is going to be important to seeing what trends we see as far as revenue goes.

Speaker #2: We initiated our launch activities in May, first with the Nerius.us platform, and DTC campaigns following that. As we head into the back half of the year here, we're going to be initiating personal promotion with our Salesforce, which we expect to support, you know, the activities that we're seeing out there in the field.

Speaker #2: You know, as far as metrics go for what folks should be looking for there, I think that, you know, as we continue to report going forward, the sales engagement and the visits that we see with doctors, and the receptivity to the product in the market, is going to be important to seeing what trends we see as far as revenue goes.

Speaker #2: And then similarly to what we discussed in the prior quarter call, some of the important levers here as far as the revenue trajectory and modeling it out will be the, you know, patient acquisition metrics as well as refill metrics and the pills per fill metrics, which obviously early in the launch year we're starting to get some data, but it's fairly minimal.

Kevin Moran: Similarly to what we discussed in the prior Q call, some of the important levers here as far as the revenue trajectory and modeling it out will be the patient acquisition metrics, as well as refill metrics, and the pills per fill metrics, which obviously early in the launch year, we're starting to get some data, but it's fairly minimal. We'll continue to be tracking that closely to determine where in the revenue range we expect to fall in future periods.

Speaker #2: So we'll continue to be tracking that closely to determine kind of where in the revenue range we expect to fall in future periods.

Speaker #4: Thank you so much. And one more about Helios. So following the July 20th pre-hearing conference and the August 3 evidentiary disclosure deadline, what became clear about the hearing for that overall, and which issue is most likely to drive the outcome, do you think it'd be something like interpretation of studies from 3101 and 3107, endpoint validity, or something else?

Jan Z.: Thank you so much. One more about HETLIOZ. Following the 20 July pre-hearing conference and the 3 August evidentiary disclosure deadline, what became clear about the hearing for that overall, and which issue is most likely to drive the outcome? Do you think it'd be something like interpretation of studies from 3101 and 3107, endpoint validity, or something else?

Speaker #1: Yes. Thanks for the question. We have our general counsel here Daniel McGuire. To explain a process, the pre-hearing was more of a process call than actually looking at the facts.

Mihael Polymeropoulos: Yes. Thanks for the question. We have our General Counsel here, Daniel McGuire, to explain a little bit about the process. The pre-hearing was more of a process call than actually looking at the facts. Daniel?

Speaker #1: Daniel?

Speaker #5: Yes. That's right. And so obviously it's never a good idea to speculate about the outcome of litigation or litigation strategy. But, you know, we we are confident in our ability to present our case to the administrative law judge, the process will continue throughout the year, and we're, you know, hoping obviously for a favorable recommendation from the judge early in 2027.

Daniel McGuire: Yes. That's right. Obviously, it's never a good idea to speculate about the outcome of litigation or litigation strategy. We are confident in our ability to present our case to the administrative law judge. The process will continue throughout the year, we're hoping, obviously, for a favorable recommendation from the judge early in 2027.

Operator 2: Your next question comes from Madison El-Saadi from B. Riley Securities. Please go ahead.

Operator: Your next question comes from Madison El-Saadi from B. Riley Securities. Please go ahead.

Speaker #3: What was your next question? Comes from Madison El-Saddi from B. Riley Securities. Please go ahead.

Speaker #6: Hi. Thanks for taking our question. A couple from us, maybe sticking with the Nerius campaign. When exactly does the personal promotion start? How many reps are we talking?

Madison El-Saadi: Hi. Thanks for taking our question. A couple from us. Maybe sticking with the NEREUS campaign, what exactly does the personal promotion start? How many reps are we talking? Does that spend sit inside the OpEx moderation you guided to? Relatedly, now that you're guiding to the OpEx to come down later in 2026 and 2027, is that more related to R&D or SG&A? What drove the Q2 R&D expense? Thanks.

Speaker #6: And does that spin sit inside the OPEX moderation you guided to relatedly now that you're guiding to the OPEX to come down later in '26 and 2027?

Speaker #6: Is that more related to R&D or SG&A? And then what drove the 2Q R&D expense? Thanks.

Speaker #2: Yeah. Thanks, Madison. So first on the Nerius launch side, as we've spoken about before, we have a Salesforce to support our FNAP franchise, you know, and soon to be Basanti franchise in the neighborhood of approximately 300 representatives.

Kevin Moran: Yeah. Thanks, Madison. First on the NEREUS launch side, as we've spoken about before, we have a sales force to support our Fanapt franchise, and soon-to-be Bysanti franchise, in the neighborhood of approximately 300 representatives as well as a sales force in the neighborhood of 50 supporting our PONVORY efforts. We'll be using some element of those two sales forces to be detailing NEREUS in the future. It's yet to be determined exactly what the structure is, we have sufficient resources between those two teams to reach the prescribers that we're looking to reach. On your second question around what we're seeing from an expense trajectory perspective, as we've gone through 2025 and 2026, we now have four phase III programs set to read out either before the end of the year or early in 2027.

Speaker #2: As well as a Salesforce in the neighborhood of 50 supporting our Pombori efforts. And so we'll be using some element of those two Salesforces to be detailing, you know, Nerius in the future.

Speaker #2: It's yet to be determined exactly kind of what the structure is, but we have sufficient resources between those two teams to reach the prescribers that we're looking to reach.

Speaker #2: On your second question around kind of what we're seeing from an expense trajectory perspective, you know, so as we've gone through 2025 and 2026, we now have, you know, four phase three programs set to read out either before the end of the year or early in 2027.

Speaker #2: We have three potential launches with Nerius, Basanti, and hopefully, in the future, Imsadolmab. And so, you know, obviously, the cost of running those Phase 3 programs is not insignificant.

Kevin Moran: We have three potential launches with NEREUS, Bysanti, and hopefully in the future imsidolimab. Obviously the cost of running those phase III programs is not insignificant. The commercial production in order to make sure that we have sufficient supply for the launch of those products is also a significant investment. As we now are reaching the end of those activities with the readouts of the clinical trials right in front of us, and the launch materials either made or being made shortly, those will be driving the most significant reductions in operating expenses as we head towards the end of 2026 and into 2027. Madison, to the second part to your question there, the significant increase in R&D operating expenses during the period, again, was the ramp-up of those programs that have reached or are reaching their conclusion shortly.

Speaker #2: And the commercial production in order to make sure that we have sufficient supply for the launch of those products is also a significant investment.

Speaker #2: So as we, you know, are now reaching the end of those activities with the readouts of the clinical trials, you know, kind of right in front of us, and the launch materials, you know, either made or being made shortly, those will be driving the most, you know, significant reductions in operating expenses as we head towards the end of 2026 and into 2027.

Speaker #2: And Madison, to the second part to your question there, the significant increase in R&D operating expenses during the period, again, was the ramp-up of those programs that, you know, have kind of reached their or are reaching their conclusion shortly.

Speaker #2: And also for some of the products that are not yet approved, namely Imsadolmab, any of the production activities that are associated with making that inventory, our expenses incurred to R&D, and that's just an accounting treatment of you can capitalize inventory once the product is approved, whereas generally prior to approval, you expense that as R&D and it would hit our R&D line item.

Kevin Moran: Also for some of the products that are not yet approved, namely imsidolimab, any of the production activities that are associated with making that inventory are expenses incurred to R&D. That's just an accounting treatment of you can capitalize inventory once the product is approved. Whereas generally prior to approval, you expense that as R&D, and it would hit our R&D line item. Those are the significant drivers in the current period.

Speaker #2: So those are the significant drivers in the current period.

Speaker #4: Got it. Got it. Thanks, Kevin. Appreciate it.

Madison El-Saadi: Got it. Thanks, Kevin. Appreciate it.

Speaker #3: No further questions at this time. I would now like to turn the call back over to Vanda's management for the closing remarks. Please go ahead.

Operator 2: No further questions at this time. I would now like to turn the call back over to Vanda's management for the closing remarks. Please go ahead.

Operator: No further questions at this time. I would now like to turn the call back over to Vanda's management for the closing remarks. Please go ahead.

Mihael Polymeropoulos: Thank you very much all for joining us.

Speaker #3: Oh, sorry.

Operator 2: Oh, sorry.

Operator: Oh, sorry.

Speaker #2: Oh, do we have another question?

Kevin Moran: Oh, do we have another question?

Speaker #3: Sorry, we do actually have a follow-up question coming from Andrew Tsai from Jefferies. Would you take the question?

Operator 2: Sorry. We do actually have a follow-up question coming from Andrew Tsai from Jefferies. Would you take the question?

Operator: Sorry. We do actually have a follow-up question coming from Andrew Tsai from Jefferies. Would you take the question?

Speaker #2: Yeah, please. Please let Andrew in.

Kevin Moran: Yeah, please. Please let Andrew in.

Speaker #3: Okay. Go ahead.

Operator 2: Okay, go ahead.

Okay, go ahead.

Operator: Okay, go ahead.

Speaker #7: So thanks so much for can you hear me okay?

Andrew Tsai: Thanks so much. Can you hear me okay?

Speaker #2: Yep. We can hear you.

Kevin Moran: Yep, we can hear you.

Speaker #7: Oh, okay. Yeah. So, on the 765 program, I was hoping maybe you guys could talk about your prior Phase 2 data and maybe what exactly gives you confidence that you could succeed in Phase 3, and maybe even why efficacy could look even better in Phase 3.

Andrew Tsai: Okay. On the VQW-765 program, I was hoping maybe you guys could talk about your prior phase II data and maybe what exactly gives you confidence that you could succeed in phase III, and maybe even why efficacy could look even better in phase III. Thanks.

Speaker #7: Thanks.

Speaker #1: Yeah. Thank you for the question. The phase three study that we're running now is similar in design with the phase two study. With similar setup and similar primary endpoint.

Mihael Polymeropoulos: Thank you for the question. The phase III study that we're running now is similar in design with the phase II study, with a similar setup and similar primary endpoint. We have reported prior results there with two observations. One, a significant effect in reducing anxiety measures in that setting, but also understanding of a dose response curve. This phase III study, we believe has been appropriately powered with the right number of patients that was informed by the phase II study. Again, minimal changes in the design, no change in the dose, but increase in the size of the study to be powered according to the learnings from the phase II study.

Speaker #1: And we have reported prior results there, with two observations. One, a significant effect in reducing anxiety measures in that setting. But also understanding overdose response curve.

Speaker #1: So these phase three study we believe has been appropriately powered with the right number of patients, but was informed by the phase two study.

Speaker #1: So again, minimal changes in the design, no change in the dose, but increase in the size of the study to be powered according to the learnings from the phase two study.

Speaker #7: Great. Thanks so much. And then maybe one more, if I can. I'm wondering, you know, if you could possibly talk about your, you know, your filing strategy, or potentially timing for the GLP-1 induced vomiting for Nerius.

Andrew Tsai: Great. Thanks so much. Maybe one more, if I can. I'm wondering if you could possibly talk about your filing strategy or potentially timing for the GLP-1-induced vomiting for NEREUS. Just second to that, have you aligned with the FDA on the phase III trial design? Maybe just your latest and greatest on what you hope to see relative to the phase II findings.

Speaker #7: And then just kind of second to that, have you aligned with the FDA on the phase three trial design? And then maybe just your latest and greatest on what you hope to see relative to the phase two findings.

Speaker #1: Yeah. So just to remind everyone on the call, last November we reported a positive study on the effects of Nerius in preventing vomiting in people that take GLP-1 analogs.

Mihael Polymeropoulos: Just to remind everyone on the call, last November, we reported a positive study on the effects of NEREUS in preventing vomiting in people who take GLP-1 analogs in the design of administered Wegovy at 1 milligram, which an advanced dose without any titration. The results pretty much show that while 60% of the people on placebo approximately vomited in that design, only about 30% of the patients with NEREUS did so, showing a significant protection. The current design is a similar design where we aim to confirm the prior findings. We believe that this body of evidence, alongside with all the NEREUS experiences for this approved project, would suffice for the filing of a supplemental NDA. We continue to communicate with the FDA on the statistical analysis plan on this study, we will see how the results go, and we'll continue those conversations.

Speaker #1: In the design of administering Wegovy at 1 milligram, which is an advanced dose without any titration. And the results pretty much show that while 60% of the people on placebo, approximately vomited in that design, only about 30% of the patients with Nerius did so, so in a significant protection.

Speaker #1: So the current design is a similar design where we aim to confirm the prior findings. We believe that this body of evidence alongside with all the Nerius experiences for these approved products would suffice for the filing of a supplemental NDA.

Speaker #1: We continue to communicate with the FDA on the statistical analysis plan on this study. And we will see how the results go and we'll continue those conversations.

Speaker #7: Great. Thanks so much.

Andrew Tsai: Great. Thanks so much.

Speaker #3: As of now, there are no further questions at this time. Again, I would now like to turn the call back over to Vanda's ahead.

Operator 2: As of now, there are no further questions at this time. Again, I would now like to turn the call back over to Vanda's management for the closing remarks. Please go ahead.

Operator: As of now, there are no further questions at this time. Again, I would now like to turn the call back over to Vanda's management for the closing remarks. Please go ahead.

Speaker #1: Yes. Thank you all for your questions. And thank you for joining this call. Thank you.

Mihael Polymeropoulos: Yes. Thank you all for your questions, and thank you for joining this call. Thank you.

Operator 2: Ladies and gentlemen, thank you all for joining, and that concludes today's conference call. All participants may now disconnect. Thank you.

Operator: Ladies and gentlemen, thank you all for joining, and that concludes today's conference call. All participants may now disconnect. Thank you.

Q2 2026 Vanda Pharmaceuticals Inc Earnings Call

Request DemoDemo

Vanda Pharmaceuticals

Earnings