Vanda Pharmaceuticals Inc (VNDA) 2025 Q4 法說會逐字稿

Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At time, I'd like to welcome Vanda Pharmaceuticals, Inc. earnings conference call. (Operator Instructions) Thank you. I'd now like to turn the call over to Kevin Moran, Vanda's Chief Financial Officer. Please go ahead.

Thank you, Jordan. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals' fourth quarter and full year 2025 performance. Our fourth quarter and full year 2025 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 Tim Williams, our General Counsel. Following my introductory remarks, Mihael 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. Mihael Polymeropoulos.

Thank you very much, Kevin. Good afternoon, everyone, and thank you for joining Vanda Pharmaceuticals fourth quarter and full year 2025 financial results conference call. 2025 was a year of strong commercial execution and significant regulatory and clinical advancements for Vanda. I will briefly address some of the key highlights.

Our lead product, Fanapt, drove impressive growth. Full year net product sales increased 24% to $117.3 million versus 2024, and supported by a 28% rise in total prescriptions and a remarkable 149% surge in new-to-brand prescriptions. This reflects accelerating momentum broader prescriber adoption and the impact of our target commercial investments, including direct-to-consumer campaigns that boosted brand awareness.

Our full commercial franchise, Fanapt, HETLIOZ, HETLIO LQ and PONVORY generated total revenues of $216 million for the year, up 9% year-over-year, demonstrating solid performance across our marketed products. Clinical and regulatory milestone highlights, we achieved a major regulatory win with the FDA approval of Nereus tradipitant in late 2025, for the prevention of vomiting induced by motion. The first new oral pharmacologic option in this space in over 40 years. This approval offers a substantial market opportunity in motion signals.

Most of sickness is a common condition with prevalence estimates indicating that approximately 25% to 30% of US adults roughly 65 million to 78 million people experience symptoms during travel or motion in exposure. Tens of millions seek pharmacologic relief annually, yet current users are often limited by adverse events or inconsistent efficacy.

Nereus addresses this unmet need is well-tolerated, targeted neurokin receptor antegrade and we're actively preparing for its commercial launch to bringing this common issue. Separately, we see strong adjunct potential for Nereus in the rapidly expanding GLP-1 agonist market. These therapies used for diabetes and obesity management have seen explosive growth with market projections in tens of millions annually and vomiting remains a frequent side effect, impacting up to 50% patients on agents like semaglutide. Nereus demonstrated positive clinical results in preventing vomiting induced by the GLP-1 analog semaglutide in our study.

To capitalize on this, we plan to initiate a dedicated Phase III program in the first half of 2026, pursuing label expansion in this high potential area where better tolerability will significantly improve based on adherence and outcomes. Bysanti, milsaperidone, NDA for bipolar 1 disorder in schizophrenia is under FDA review with a PDUFA target action date of February 21, 2026, approval would further strengthen our growing suite and franchise alongside Fanapt in the global and psychotic category.

This category has a total addressable market estimated at approximately $20 billion in 2025. We submitted the imsidolimab BLA in the fourth quarter of 2025 for generalized pustular psoriasis, advancing us towards potential approval for this serious unmet need. Imsidolimab is a fully humanized ID4 monoclonal antibody that inhibits IL-36 receptor signaling and is being developed for GPP (inaudible) indication. Regulatory and patent exclusivity for Imsidolimab is expected to extend into the late 2030s.

Vanda hold an exclusive global license for the development and commercialization of imsidolimab from [AnaptysBio]. GPP flares involved painful (inaudible) over large skin areas accompanied by redness, itching and systemic symptoms and can be life-threatening. Late-stage clinical development programs include a Phase III study of Bysantias a once-a-day adjunct treatment for major depression which is ongoing and results expected by end of the year.

Major depressive disorder is the most common psychiatric disorder in the United States, affecting more than 20 million American adults in any given year according to estimates from the usual into mental health and large-scale servers. It is characterized by persistent feelings of sadness, loss of interest or pleasure, fatigue, changes in appetite to sleep feelings of worthless and impaired concentration for decision-making, often leading to significant functional impairment in work, relationships and daily live. MTD exhibits highly variable clinical expression and natural course, ranging from single episodic events to recurrent or chronic forms with episodes varying the severity, duration and responsive triggers.

Despite the availability of multiple evidence-based treatments, a substantial unmet medical need remains, approximately 30% to 50% of patients achieved only partial response or emission with first-line therapies, many experienced treatment resistant depression relapse rates are high even after initial improvement and side effects were delayed the onset of action, limit tolerability and appearance for a significant percent of individuals.

This persistent gap underscores the need for novel, more effective and better-tolerated adjunctive or alternative treatments to address the full spectrum of MDD. The Phase III study of the long-acting injectable LAI formulation of iloperidone continues to enroll patients for schizophrenia in lapse prevention representing a key enhancement to Fanapt's long-term utility in psychiatric care.

The long-acting injectable LAI and psychotics market represents a significant and growing opportunity within the broader antipsychotic and psychiatric treatment landscape driven by the need for improved adherence in chronic conditions like schizophrenia and bipolar 1 disorder, where nonadherence total meds contributes to high relapse rates, hospitalizations and costs.

Estimates for the global LAI and psychotic specific market vary across reports, but consensus points to a 2025 size in the $6 billion to $7 billion range with strong growth projected. A Phase III study of VQW765 our alpha-7 nicotinic acetylcholine receptor partial agonist in adults with social anxiety disorder has been initiated with results expected by end of 2026.

Social anxiety disorder SAD affects approximately 30 million American adults according to the 2023, National Health and Wellness Survey with onset typically in the mid-teens or earlier and slightly higher diagnosis rates in females and males. It manifests as excessive fear of embarrassment, humiliation, scrutiny, evaluation or ejection social or performance situations leading to avoidance or intense distress a significantly bears daily routine portation functioning, social life and overall quality of life.

Though individuals are generally asymptomatic, absent such triggers. Standard treatments include cognitive behavioral therapy, but many patients struggle to initiate or tolerate exposure due to the severity of anxiety. Off-label options like benzodiazepines offer rapid calming effects but carry risks of abuse, misuse, addiction and black box warnings for interactions and dependency.

Beta blockers provide situational relief, but limited broader efficacy. This highlights the need for novel on-demand therapies like VQW765 to address acute episode more effectively. Our clinical development programs for PONVORY, ponesimod in psoriasis and ulcerative colitis are ongoing, building on its established profile as a selective S1 P1receptor modulator approved for relapsing multiple sclerosis.

For psoriasis, PONVORY has already demonstrated strong efficacy in earlier studies, including a Phase II randomized double-blind placebo-controlled trial, so a significant policy 75 responses that is greater than 75% reduction in psoriasis area and severity index at week 16 across tested doses of 10, 20, and 40 milligrams with sustained improvements in symptoms of moderate to severe chronic plaque psoriasis in a favorable time course of response.

Recent updates indicate advancement toward Phase III evaluation positioning Poor as a potential oral option in this large inflammatory dermatology market. For ulcerative colitis, the S1P mechanism has been robustly validated by the successful commercialization and approvals of other modulators, symposia (inaudible) have shown efficacy in Phase III trials for moderate-to-severe ulcerative colitis, achieving clinical remission and mucosal healing superior to placebo. PONVORY may be particularly well suited for this indication due to its pharmacological advantages result of rapid onset of action, faster lymphocyte sequestration compared to some (inaudible) members and rapid lymphocyte recovery upon discontinuation.

This profile offers greater flexibility for managing infections, vaccination, surgery, pregnancy planning, or therapy switches, key considerations in chronic IBD where treatment interruptions or adjustments are coming. These expansions which significantly broadened for PONVORY addressable patient population and leverage its differential-aided pharmacokinetics to address unmet need in autoimmune informatory diseases beyond multiple sclerosis.

We look forward to progressing these programs and sharing updates as they advance. Looking forward, we expect 2026 total revenues of $230 million to $260 million from our current marketing products only that is Fanapt, HETLIOZ, HETLIO LQ and PONVORY establishing a strong baseline. We anticipate continued growth from this portfolio with further contributions from the Nereus launch and potential approvals of Bysanti and imsidolimab plus progress across our late sales programs.

We believe that our growing psychiatry franchise is well positioned for expansion anchored by Fanapt on the market for schizophrenia and bipolar 1 disorder with is caped currently under FDA review for bipolar 1 in schizophrenia with a PDUFA February 21, and in 2026.

And in ongoing Phase III clinical development as an adjunctive treatment for major depressive disorder. Long-acting injectable formulation of Alpert advanced in Phase III for schizophrenia relapse prevention and 765 in a Phase III study for social an disorder with results expected by the end of 2026, collectively strengthening our portfolio across key psychiatric indications.

In summary, 2025 showcased our ability to drive revenue while building a diversified, high-potential pipeline. We remain committed to delivering innovative therapies and long-term value for patients and shareholders. With that, I'll turn it over to Kevin. Kevin?

Thank you, Mihael. I'll begin by summarizing our financial results for the full year 2025 before turning to discuss the fourth quarter of 2025. Total revenues for the full year 2025 were $216.1 million, a 9% increase compared to $198.8 million for the full year 2024. The increase was primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch, partially offset by decreased HETLIOZ revenue as a result of generic competition. Let me break this down now by product.

Fanapt net product sales were $117.3 million for the 24% increase compared to $94.3 million for the full year 2024. This increase in net product sales relative to the full year 2024 was attributable to an increase in volume. Fanapt total prescriptions, or TRx, as reported by Equibia Exponent for the full year 2025 increased by 28% compared to the full year 2024. Fanapt new patient starts for the full year 2025, as reflected by new-to-brand prescriptions, or NBRx, increased by 149% compared to the full year 2024.

Turning to HETLIOZ. HETLIOZ net product sales were $71.4 million for the full year 2025, a 7% decrease compared to $76.7 million in the out of continued generic competition in the US. The decrease to net product sales relative to the full year 2024 was attributable to a decrease in volume and price net of deductions.

Of note, for the full year 2025, HETLIOZ continued to retain the majority of market share despite generic competition now for over three years. And finally, turning to PONVORY. PONVORY product sales were $27.4 million for the full year 2025, a 2% decrease compared to $27.8 million for the full year 2024.

Of note, an amount of variable consideration related upon PONVORY net product sales is subject to dispute of which approximately $3 million was recognized for the three months ended December 31, 2024. For the full year 2025, Vanda recorded a net loss of $220.5 million compared to a net loss of $18.9 million for the full year 2024. The net loss for the full year 2025 included income tax expense of $81.8 million as compared to an income tax benefit of $4 million for the full year 2024, primarily driven by a onetime noncash income tax charge. The provision for income taxes for the full year 2025 includes the impact of the recording of a valuation allowance of $113.7 million against all of Vanda's deferred tax assets.

To reiterate, the recording of this valuation allowance is onetime in nature and is a noncash charge. The company has its deferred tax asset each quarter through the review of all available positive and negative evidence.

Deferred tax assets are reduced by a valuation allowance when in the opinion of management, it is more likely than not that some portion or all of those deferred tax assets will not be realized. This analysis is highly dependent upon historical and projected pretax income.

Projected pretax income includes significant assumptions related to revenue, which could be affected by the trajectory of the commercial launches of Fanapt in bipolar disorder PONVORY multiple sclerosis and Nereus in the prevention of vomiting induced by motion, which was approved on December 30 of 2025 and HETLIOZ generic competition as well as commercial and research and development activities, including spend on our commercial launches and late-stage clinical activities and our ability to obtain regulatory approval from the FDA for products or new indications in development, among other factors.

In the fourth quarter of 2025, after considering all available positive and negative evidence including, but not limited to, historical, current and future projected results, and significant risks and uncertainties related to forecast, the company concluded that it is more likely than not that substantially all of its deferred tax assets are realizable in future periods and recorded a valuation allowance against all net deferred tax assets.

Resulting in a noncash income tax expense of $113.7 million for the year ended December 31, 2025. Operating expenses for the full year 2025 were $367.3 million compared to $239.4 million for the full year 2024.

The $127.8 million increase was primarily driven by higher SG&A expenses related to spending on Vanda's commercial products as a result of the commercial launches of Fanapt in bipolar disorder and PONVORY in multiple sclerosis. Expenses associated with the preparation for future commercial launches and higher R&D expenses primarily related to the exclusive global license agreement with an Fanapt for the development and commercialization of imsidolimab, which was entered into during the first quarter of 2025 and our Fanapt long-acting injectable and Bysanti major depressive disorder clinical development programs.

During 2024 and 2025, we commenced a host of activities as a result of the commercial launches of Fanapt by for disorder and PONVORY multiple sclerosis including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.

Additionally, in the first quarter of 2025, we launched our direct-to-consumer campaign, which has driven meaningful gains in brand awareness for the company and our products in (inaudible). 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, cash equivalents and marketable securities referred to as cash as of December 31, 2025, was $263.8 million, representing a decrease of $110.8 million compared to December 31, 2024, and a decrease of $29.9 million compared to September 30, 2025.

The changes in cash during the full year 2025 and the fourth quarter 2025 were driven by the net loss in those periods, excluding the impact of the onetime noncash charge related to the tax valuation allowance 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.

Turning now to our quarterly results. Total revenues were $57.2 million for the fourth quarter of 2025, an 8% increase compared to $53.2 million for the fourth quarter of 2024 and a 2% increase compared to $56.3 million in the third quarter of 2025. The increases as compared to the fourth quarter of 2024 and the third quarter of 2025 were primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch.

Let me break this down now by product. Fanapt net product sales were $33.2 million for the fourth quarter of 2025, a 25% increase compared to $26.6 million in the fourth quarter of 2024 and a 6% increase compared to $31.2 million in the third quarter of 2025. Fanapt total prescriptions, or TRx, as reported by Equibia Exponent in the fourth quarter of 2025, increased by 36% compared to the fourth quarter of 2024 and 8% compared to the third quarter of 2025. Fanapt new patient starts in the fourth quarter of 2025 as reflected by new-to-brand prescriptions, or NBRx, increased by 108% compared to the fourth quarter of 2024 and by 7% compared to the third quarter of 2025.

The increase in Fanapt revenue between the fourth quarter of 2024 and the fourth quarter of 2025 was primarily attributable to an increase in volume. The increase in Fanapt revenue between the third quarter of 2025 and the fourth quarter of 2025 was also attributable to an increase in volume. These increases in volume were primarily driven by increased total prescription demand.

Historically, Fanapt inventory at wholesalers has ranged between three and four weeks on hand as calculated based on trailing demand. As of the end of the fourth quarter of 2025, 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 the fourth quarter of 2024 and the third quarter of 2025, but slightly above the historic range.

Turning to HETLIOZ. HETLIOZ net product sales were $16.4 million for the fourth quarter of 2025, an 18% decrease compared to $20 million in the fourth quarter of 2024 and a 9% decrease compared to $18 million in the third quarter of 2025. The decrease in net product sales relative to the fourth quarter of 2024 was primarily attributable to a decrease in price net of deductions as well as a decrease in volumes sold.

The decrease in net product sales relative to the third quarter of 2025 was primarily attributable to a decrease in price net deductions, partially offset by an increase in volume. HETLIOZ net product sales continue to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period.

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 maybe variable depending on when specialty pharmacy customers need to purchase again. Further, HETLIOZ net product sales may decline in future periods potentially significantly related to continued generic competition in the US.

And finally, turning to PONVORY. PONVORY net product sales were $7.6 million for the fourth quarter of 2025, an increase of 17% compared to $6.5 million in the fourth quarter of 2024 and an increase of 8% compared to $7 million in the third quarter of 2025.

The increase in net product sales as compared to the fourth quarter of 2024 was attributable to an increase in price net of deductions, partially offset by volume. The increase in net product sales as compared to the third quarter of 2025 was attributable to an increase in price net of deductions, partially offset by volume. The specialty distributor and specialty pharmacy inventory on hand levels during these periods were in line with normal ranges.

Of note, underlying patient demand has increased, albeit modestly on a sequential quarter basis for the last three quarters. Additionally, as previously noted, an amount of variable consideration related PONVORY net product sales is subject to dispute of which approximately $3 million is recognized for the three months ended December 31, 2024.

For the fourth quarter of 2025, Vanda recorded a net loss of $141.2 million compared to a net loss of $4.9 million for the fourth quarter of 2024. From an income tax perspective, the net loss for the fourth quarter of 2025 included an income tax expense of $103.2 million as compared to an income tax benefit of $1.6 million for the fourth quarter of 2024.

Primarily driven again by the onetime noncash income tax charge of $113.7 million for the tax valuation allowance. Operating expenses in the fourth quarter of 2025 were $97.6 million compared to $63.5 million in the fourth quarter of 2024. 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 commercial launches of Fanapt in bipolar disorder and or is associated with the preparation for future commercial launches and higher R&D expenses.

During 2024 and 2025, we commenced the host of activities as a result of the commercial launches of Fanaptum bipolar 1 disorder and PONVORY multiple sclerosis, including expansions of our sales force and the development of prescriber awareness and comprehensive marketing programs. Additionally, in the first quarter of 2025, we launched our direct-to-consumer campaign, which has driven meaningful gains in brand awareness for the company and our products, Fanaptum PONVORY.

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 fenaptin bipolar 1 disorder and PONVORY multiple sclerosis, as I mentioned, the launches were initiated in 2024, and we continue to enhance our commercial infrastructure in 2025, and with the impact of these commercial efforts contributing to revenue growth in 2025 and expected to continue to contribute to revenue growth in 2026 and beyond.

We have already seen significant growth in our commercial activities. Several lead indicators suggest a strong market response to our commercial activities related to Fanapt. Total prescriptions increased by 36% in the fourth quarter of 2025 as compared to the fourth quarter of 2024, New patient starts or NBRx, increased by 108% in the fourth quarter of 2025 as compared to the fourth quarter of 2024.

And of particular note, Fanapt was one of the fastest-growing atypical antipsychotics in the market throughout 2025 and based on numerous prescription metrics. Our Fanapt sales force numbered approximately 160 representatives at the end of 2024 and increased to approximately 300 representatives at the end of 2025.

These sales force expansions have allowed us to significantly increase our reach and frequency with prescribers. To that end, the number of face-to-face calls in the fourth quarter of 2025 was more than twice the number of face calls in the fourth quarter of 2024.

We've established a specialty sales force to market upon borates and neurology prescribers around the country. We've grown this sales force to approximately 50 representatives at the end of 2025. Fanapt performance remains the focus of our commercial initiatives and encourages us to content and, if approved, the franchise extending launch of Bysanti.

Before turning to our financial guidance, I would like to remind folks that with Fanapt, HETLIOZ and PONVORY already commercially available, and with the nearest NDA recently approved for motion sickness, and the Bysanti NDA for bipolar 1 disorder and schizophrenia under review by the FDA, and a biologics license application, BLA, for imsidolimab now submitted to the FDA, Vanda could have six products commercially available in 2026.

Turning now to our financial guidance. Due to the recent and upcoming regulatory and commercial milestones, Vanda's 2026 financial guidance is limited to revenue guidance for currently commercialized products, which includes Fanapt, HETLIOZ and PONVORY. Vanda expects to achieve the following financial objectives in 2026. Total revenues from Fanapt HETLIOZ and PONVORY of between $230 million and $260 million.

The midpoint of this revenue range would imply revenue growth in 2026 of approximately 13% as compared to full year 2025 revenue. Fanapt net product sales of between $150 million and $170 million. The midpoint of this revenue range would imply a revenue growth in 2026 of approximately 36% as compared to full year 2025 Fanapt revenue. Assuming consistent gross to net dynamics between 2025 and 2026, the bottom end of this range assumes mid- to high single-digit quarterly TRx growth for Fanapt in 2026.

The top end of this range assumes low double-digit to mid-teen quarterly TRx growth for Fanapt in 2026. Other net product sales of between $80 million and $90 million. This range assumes a further decline of the HETLIOZ business due to the generic competition and modest growth in the PONVORY business, we are seeking to significantly improve market access to the product.

Depending on our success in these efforts, we could see meaningful improvement in patients on therapy, prescriptions filled and prescriptions written by prescribers. It is worth commenting that the quarterization of revenue in 2026 will be impacted by several items, including insurance plan transitions as patients adjust to new insurance plans at the start of the year, there may be some disruptions in the first quarter.

This is typical industry-wide occurrence and consistent with our own historical trends. As I previously mentioned, as of December 31, 2025, HETLIOZ inventory at specialty pharmacy customers was elevated, which may result in fewer specialty pharmacies customers ordering or specialty pharmacy customers ordering smaller amounts in the first quarter of 2026.

Vanda is currently making conditional investments to facilitate future revenue growth. Both in the form of R&D investments, commercial inventory production and potentially outsized commercial investments, which could vary moving forward depending on the success of these commercial strategies. 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.

It is also worth noting that the quarterization of cash balances will be impacted by several items. The first quarter cash balance will be impacted by a milestone payment of $10 million made to (inaudible) in the first quarter of 2026 for the approval of Nereus in the US. The $10 million was accrued in the fourth quarter of 2025 and capitalized as an intangible asset that was not paid as of year-end 2025.

The impact of revenue quarterization previously noted, and the standard timing of certain items paid in the first quarter of each year. The full year cash balance will also be impacted by the potential of a $5 million milestone payment to Anaptys if the imsidolimab BLA is approved by the FDA and the timing of payments associated with commercial inventory production for our upcoming and potential commercial launches.

With that, I'll now turn the call back to Mihael.

Thank you very much, Kevin. At this point, we'll be happy to address your questions.

(Operator Instructions) Madison El-Saadi, B. Riley Securities.

Maybe I'll start with Bysanti, given the 505(b)(2) pathway and the bioequivalent to Fanapt you've shown, I'm just curious if you could characterize any FDA communication on outstanding issues that came up during the review cycle. If there any requests related to CMC, or labeling scope questions that you could discuss. And then assuming approval, is there a day one commercial strategy you could walk us through? Just recognizing it's really about transition patients from Fanapt to Bysanti.

Yes, sure. Thanks, Madison. So first of all, this is a NDA, and it is not a bioequivalents like a generic, while bioequivalence data are important. So think of it as a completely new drug application. In terms of the -- how the review is going -- of course, we don't give incrementals. But I would say, we remain optimistic for an on-time approval.

Now your question on commercial plan. First of all, the commercialization, if approved later this month, will have to wait for some time in Q3 when commercial supplies will be ready. And between the sign and then we'll have more color we can give on the launch strategy of Bysanti and also the interplay with Fanapt.

Raghuram Selvaraju Vera, HCW.

I was wondering if you could comment on what you expect the commercial infrastructure size and scope to be for imsidolimab assuming timely approval?

Thank you very much. So as you know, GPP is quite rare that most likely would be addressed with a small sales force visiting dermatologists and any advocacy organizations around this disorder. And there is a better awareness than it used to be since the 2021 approval of specolimab from Berger Ingelheim. So we believe that a dedicated small specialty sales force will be the key commercial asset that is needed.

Okay. Great. Is there any additional detail you can provide to us regarding promotional activities in support of Fanapt and Bysanti, particularly as this pertains to any direct-to-consumer campaigns you may have planned over the course of 2026.

Yes. At this time, we don't have a Visante campaign plan, the direct-to-consumer campaigns that Kevin alluded to, is consisting of a brand awareness of Vanda overall through sponsorships and direct-to-consumer campaign on product that is Fanapt and PONVORY. We expect that to continue in similar cadence like the past year. And with the commercial launch of Bysanti, we expect to have a dedicated campaign for that, but no concrete plans at this time.

And then with respect to Nereus and tradipitant as a whole, can you maybe offer us some additional contextual information on the following three aspects. Firstly, I'm not sure whether I may have missed this earlier. But can you just confirm to us when you expect Nereus to be commercially available the recently approved indication.

Secondly, if you have any additional feedback or context to provide at this time regarding the regulatory outlook for tradipitant in gastroparesis. And then lastly, if you can give us a sense of what you expect the timeline to be completion of enrollment in the envisaged Phase III trial assessing tradipitant and attenuation or prevention of nausea and vomiting associated with GLP-1 receptor agonist drugs.

Of course. On commercial availability, we're working in preparing now commercial materials. And we expect available commercial materials, either by late Q2 or beginning of Q3. In terms of the regulatory path in gastroparesis, we are now preparing for a hearing at the FDA. That was in the balance for a little while, but now we have resumed and we expect to hear from the FDA in the near future, whether or not they're going to grant a hearing, and we'll take it from there.

In terms of the US study for GLP-1 analog, remind everyone, we had a very strong Phase II study in prevention of vomiting. And we are now in the process of initiating a Phase III study, which we believe could produce results by late Q3, Q4 for this new Phase III study.

And then very -- one last quick one for me. Regarding the iloperidone LAI. You mentioned, I think, in the prepared remarks and the press release. that the Phase III program for iloperidone LAI is currently enrolling patients. Do you anticipate completing enrollment in that Phase III program before the end of this year?

Yes, it is enrolling. However, we're not satisfied much with the speed. And that is primarily because of the delays in launching this study in Europe. And it's not delays the company can control it is more resistance in conducting placebo-controlled studies in Europe and other considerations. So that is definitely slowed down. The rate of recruitment we have now, it is encouraging that things are picking up and moving in the US alone. But I would say I don't have good visibility where they will be able to reach the recruitment goals by year-end.

Olivia Brayer, Cantor Fitzgerald.

This is Sam on for Olivia. A quick one from me. I may have missed this during the call, but could you provide some more color on the Fanapt GTN impacts given the increase in volume and the difference between that and the sales increase year-over-year?

Yes. Thanks, Sam. Yes, so what we saw on a year-over-year basis, and I think what you're highlighting is that the script growth outpaced the overall revenue growth and wh1at we've seen on a year-over-year basis is a relatively small reduction in net price, and that's due to a couple of gross-to-net items, some of which we highlighted during last year's earnings call which was primarily related to the introduction of the Medicare benefit redesign as part of the IR -- so that began at the beginning of this year.

So that was a gross to net differential between 2025 and 2024. And then additionally, in the Q3 call, we commented on that we've seen an increased gross to net item and unfavorable gross item related to commercial co-pay support which, to some extent, should be expected as with the bipolar indication, you would expect to see a higher proportion of commercial patients relative to governmental and co-pay support would then increases in terms of gross to net items. So that's the bridge kind of between the TRx growth and the revenue growth where there was a relatively small difference between the 2 percentage wise.

And is that expected to stabilize? Or is there a possibility that it could keep increasing moving forward?

Well, so the Medicare piece has a phase in on there was a 1% fee in 2025 that increases to 2% this year. But in general, we would expect the gross to net to be consistent, absent there being some significant change in the underlying business or payer dynamics.

The one thing that I would flag for you that we've highlighted previously, especially with Bysanti PDUFA date right in front of us, is that the gross to net dynamics on Bysanti are significantly different and favorable relative to Fanapt. And that's because Bysanti will get a new Medicaid URA calculation, a reset there. And so as you might remember, 30% to 40% of our Fanapt business is Medicaid.

And currently, that contributes negative revenue, meaning the gross to net adjustment exceeds the gross revenue for us. It's actually a negative revenue contribution. And with Bysanti, you'll get a complete reset on that so that you'll be subject to the statutory 23.1% discount, but none of the other adjustments that come with having a product on the market over time. And so whereas our gross to net, we've previously communicated is in the neighborhood of 50% on Fanapt. We'd expect it to be more like in the mid-30s on Bysanti.

Andrew Tsai, Jefferies.

One more on the guidance (inaudible) this year, $150 million to $170 million at the midpoint. Seems like that could be 35% to 40% year-over-year growth. And I believe you mentioned in the prepared remarks, maybe volume grows by 10%, give or take, at the midpoint. So is it -- do we imply that net price will be growing by 30%, if so, why? And then secondly, how much of that guidance range for 2026 seems cannibalization from Bysanti launch in Q3.

Yes. So Andrew, first, on the first point there, so our revenue guidance range, the $150 million to $170 million, right? So midpoint of $160 million. I think what you're referencing is I, in the prepared remarks, commented that the lower end of the range would have mid- to high single-digit TRx growth and then the higher end of the range would have low double digit to mid-teens. Yes.

So Andrew, first, on the first point there. engine a I think what you're referencing is in the prepared remarks commented that the lower end of the range would have mid- to high single-digit TRx growth and then the higher end of the range would have low double digit to mid-teens.

That's sequential quarter growth, so quarterly growth of those numbers. So the revenue getting to $160 million would be almost entirely TRx driven, volume driven. With Medicaid and now the Medicare redesign as part of IRA, price increases are somewhat capped if your business is not significantly driven by commercial markets. And so yes, that revenue growth is almost entirely volume-driven.

And then on your second question, on Bysanti, again, we are very excited about the PDUFA date coming up very quickly here. But as Mihael mentioned, it will be in the back half of the year by the time that a launch would occur and there's $0 of revenue contribution in the revenue guidance that we've provided.

Okay. And secondly, Nereus, how are you thinking about remind us list price, net price how fast can sales grow in the first four quarters when you launch also in Q3?

Yes. Thanks, Andrew. So we haven't communicated a price on Nereus yet. But what we have noted is that in terms of some data points drawn in the market, the NK1 class, which you typically see there is that for a dose of one of the other NK1s that's approved in the market, those can range from between $200 to as high as $600 a dose. And what we also have commented on is that for the available treatments in the market for -- that are used for motion sickness, namely Dramamine or scopolamine patches, we expect our price to have a premium relative to those prices.

So hopefully, those are some data points that can kind of help frame the kind of pricing dynamic there. And then as Mihael mentioned, with the launch likely happening in late Q2 or early Q3, we didn't provide guidance at this time, but the numbers Mihael quoted in his prepared remarks around the prevalence of motion sickness and the proportion of those people seeking treatment. And so we're excited about the possibilities there, although we haven't provided specific guidance.

Very good. And then last one for me. study Phase III, where I think you said the data could be ready second half of this year. Is there going to be the same trial design in the Phase II? And are you expecting to see the same 50% relative reduction in vomiting?

And then secondly, my understanding is the trial is using a high upfront dose of WEGOVI. And so are there precedents of drugs that were approved the reference drug also use a relatively high upfront dose sale?

On the first question, Andrew. Yes, the design is going to be very similar to the prior study. And we will use, again, as the challenge a 1 milligram again we gave naive patient. I understood your second question, would you mind clarifying?

Sure. Rather than titrating (inaudible) over the course of weeks, your trial lines have been using a high 1 mg upfront dose (inaudible) is that have FDA buy in? Or is there some kind of precedent around that kind of unique trial design kind of thing?

Well, it is a logical design. If the drug works at a higher challenge than you expect it to work in the lower sales. And the selling patients are facing is usually with rapid titration in higher doses. You are correct if you are implying that we've got the guidance now on the label is to start low and go slow, you start with 0.25 milligrams, and you only reach the 1 milligram dose we're using at week 9. So while it is true that the titration is different. We don't expect that the drug will work.

That concludes the question-and-answer session. I'd now like to turn the call back over to Vanda management for closing remarks.

Thank you very much all for joining us. We will see you at the next call.

That concludes today's meeting. You may now disconnect.