(VNDA) 2022 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Quarter 1 2022 Vanda Pharmaceuticals Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would like to turn the call over to our speaker today, Kevin Moran, Vanda's Chief Financial Officer. Sir, you may begin.

Thank you, Marjorie. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' First Quarter 2022 performance. Our first quarter 2022 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. Mihales Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board. Additionally, we have Tim Williams, our General Counsel, and Gunther Birznieks, our Senior Vice President of Business Development and R&D Committee Member. Following my introductory remarks, Mihales will update you on our ongoing activities. I will then comment on our financial results before opening the lines for your questions.

Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of Federal Securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances, and uncertainties. These risks are described in the "Cautionary Note Regarding Forward-Looking Statements", "Risk Factors" and "Management's Discussion & Analysis of Financial Condition and Results of Operations" sections of our annual report on Form 10-K for the fiscal year ended December 31, 2021, 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. Mihales Polymeropoulos.

Thank you very much Kevin. Good afternoon, everyone. Thank you for joining us today to discuss Vanda's first quarter 2022 results. We believe 2022 is going to be an exciting year for the company, as we strengthen our commercial efforts and advance our clinical pipeline.

Turning first to commercial performance. On HETLIOZ, challenges with payer denial for sighted patients with Non-24 persist. However, we're progressing efforts with commercial payers, Medicare and Medicaid to support patients and increase reimbursement approval rates.

Since 2021, over 15 states have revised their Medicaid prior authorization criteria, eliminating the restriction of HETLIOZ coverage on the basis of vision status for the treatment of Non-24. At the same time, we see increase in the adoption of coverage for patients with nighttime sleep disturbances in Smith-Magenis Syndrome, or SMS. We will continue to move these efforts forward and are committed to working with all parties to improve coverage for our patients.

On SMS, for the indication of nighttime sleep disturbances, we're seeing continued interest by patients and caregivers, attributed to direct-to-consumer campaigns as we increase awareness around SMS and our ongoing work with advocacy organizations, such as PRISMS.

Other educational initiatives for SMS are underway. As previously noted, many patients with SMS remain undiagnosed and are currently treated for various neurodevelopmental disorders. Our genetics work has identified that among patients with autism, there is an increase in prevalence of the RAI1 gene deletions and loss of function mutations. This suggests that some patients diagnosed with autism may also have SMS. We're evaluating opportunities to engage with the autism community and elevate awareness of SMS among this population as well.

On patent exclusivity for HETLIOZ, the product is currently covered by a number of patents listed in the FDA's orange book with expirations through 2035. In January 2022, Vanda settled its HETLIOZ patent litigation against the MSN Pharmaceuticals defendant. In March 2022, the ANDA trial for the consolidated lawsuit against the remaining defendants was held. A decision is expected from the court by December 2022. The four patents that remain in the suit have expiration dates between 2033 and 2035. We remain confident in these patents and look forward to the court's decision.

On the clinical pipeline front, we have a number of late-stage programs underway. First, I would like to offer an update on our most advanced program with tradipitant. In February, Vanda reported results of the Phase III study of tradipitant in gastroparesis and initial exploratory analysis. We have now completed a pooled analysis of two studies of tradipitant in gastroparesis consisting of a total of 342 patients and examined relevant clinical endpoints. We believe the studies are adequate and well-controlled and the results support substantial evidence of efficacy of tradipitant. I refer you to the two figures and tables presented and included in today's press release.

This large meta-analysis shows tradipitant to be superior to placebo in key clinical parameters, including improvement in nausea, the primary endpoint parameter, percent nausea free days, the Patient Global Impression scale change, the Overall Benefit Score, and the Gastroparesis Cardinal Symptom Index Score.

An open-label study of safety for tradipitant in gastroparesis is ongoing. We continue to receive requests from patients interested in gaining access to tradipitant through the Expanded Access program. Multiple patients in the Expanded Access program have been taking tradipitant now for more than a year, with the longest having been on tradipitant for over 18 months.

Vanda has now scheduled a pre-NDA meeting with the FDA to discuss the planned New Drug Application submission for tradipitant in the short-term treatment of nausea in gastroparesis, and is committed to delivering this much-needed treatment for patients.

In addition, the Phase III study in the prevention of motion sickness has resumed enrollment and is already over 15% enrolled. A prior Phase II study with tradipitant in motion sickness observed a significantly lower instance of vomiting in patients treated with tradipitant as compared to placebo treated patients. We expect enrollment to be complete by the end of 2022. Enrollment is also ongoing in the clinical development programs of HETLIOZ for the treatment of delayed sleep phase disorder and for symptoms of autism spectrum disorder.

Finally, our Phase III clinical study of Fanapt in acute manic episodes in patients with bipolar disorder is progressing and is now over 75% enrolled. We expect to complete enrollment by the end of 2022.

To conclude, we expect 2022 to be a year with significant milestones, as we advance a number of clinical programs towards new indications. On that note, I will turn now the call over to Kevin to discuss the first quarter 2022 financials. Kevin?

Thank you, Mihales. I will begin by summarizing our first quarter 2022 financial results. Total revenues for the first quarter of 2022 were $60.2 million, a 4% decrease compared to $62.7 million for the first quarter of 2021.

HETLIOZ net product sales were $37.0 million for the first quarter of 2022 compared to $39.3 million in the first quarter of 2021. Consistent with prior years and expectations, the first quarter 2022 HETLIOZ revenue was impacted by the annual Medicare manufacturer contribution and the annual payer disruption linked to new plan years, plan changes and reauthorizations, which we have seen in prior years. Additionally, the first quarter of 2022 reflects the continued and significant increase of reimbursement challenges from payers to fill HETLIOZ prescriptions for patients with Non-24.

Turning to Fanapt, Fanapt net product sales in the first quarter of 2022 were $23.2 million, essentially flat as compared to $23.3 million in the first quarter of 2021. Fanapt net product sales in the first quarter of 2022 decreased by 3% as compared to $24.0 million in the fourth quarter of 2021. Fanapt prescriptions in the first quarter of 2022 as reported by IQVIA Xponent decreased by approximately 2% compared to the fourth quarter of 2021. This decrease is consistent with the performance of Fanapt we've seen in the first quarter of prior years.

For the first quarter of 2022, Vanda recorded a net loss of $6.4 million compared to net income of $8.7 million for the first quarter of 2021. The net loss for the first quarter of 2022 included an income tax benefit of $1.1 million as compared to an income tax provision of $1.8 million for the same period in 2021.

Operating expenses in the first quarter of 2022 were $67.9 million compared to $52.3 million in the first quarter of 2021. The $15.5 million increase was primarily driven by higher expenses associated with the support of the HETLIOZ franchise, legal support related to ongoing litigation, awareness DTC campaigns, and other corporate expenses, as well as higher R&D expenses related to the late-stage Fanapt development program. Operating expenses in the first quarter of 2022 were $8.5 million higher as compared to $59.4 million in the fourth quarter of 2021. This increase was primarily attributable to higher expenses associated with support of the HETLIOZ franchise, legal support related to ongoing litigation, and other corporate expenses.

Vanda's cash, cash equivalents and marketable securities, referred to as cash, as of March 31, 2022 were $435.2 million, representing an increase of $57 million compared to March 31, 2021, and an increase of $2.4 million compared to December 31, 2021.

Vanda expects to achieve the following financial objectives in 2022. Net product sales from both HETLIOZ and Fanapt of between $240 and $280 million, HETLIOZ net product sales of between $150 and $180 million, Fanapt net product sales of between $90 and $100 million, year end 2022 cash of greater than $440 million.

With that, I will now turn the call back to Mihales.

Thank you very much Kevin. At this point we will be happy to answer any questions you may have.

(Operator Instructions) There are no questions at this time. Please continue Vanda management for closing remarks.

Yes, thank you very much, and thank you all for joining us. We'll talk to you in the near future. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you, everyone, for participating. You may now disconnect.