VNDA - Vanda Pharmaceuticals: FDA Approvals On Deck In 2024 Makes This A Must Watch

2023-12-14 11:20:18 ET

Summary

• A PDUFA date of September 18th, 2024 has been set by the FDA to review whether or not the tradipitant should be approved for gastroparesis.
• The global gastroparesis treatment market is projected to reach $7.19 billion by 2029.
• An sNDA for the review of HETLIOZ for the treatment of insomnia characterized by difficulties with sleep initiation has a PDUFA date of March 4th, 2024.
• An sNDA for the review of Fanapt for the acute treatment of manic or mixed episodes associated with bipolar I disorder has a PDUFA date of April 2nd, 2024.

Vanda Pharmaceuticals Inc. ( VNDA ) has made great progress in being able to advance its pipeline, especially since it has been able to get the FDA to accept its New Drug Application [NDA] of tradipitant for the treatment of symptoms associated with gastroparesis. The FDA has set a PDUFA date of September 18, 2024, so that it could decide upon whether or not this drug should be approved to treat this patient population. Tradipitant was also explored in a phase 3 study for the prevention of vomiting associated with motion sickness. This is another indication of being advanced with the use of this drug.

While the PDUFA date of tradipitant for gastroparesis is a long way off, that doesn't mean that investors can't benefit from a few other catalysts before then. There are two Supplemental New Drug Applications [sNDAs] expected in 2024 that could also provide a boost in shareholder value. One of which is the sNDA of HETLIOZ for the treatment of insomnia characterized by difficulties with sleep initiation with a PDUFA date of March 4, 2024. The second one is an sNDA of Fanapt for the acute treatment of manic or mixed episodes associated with bipolar I disorder with a PDUFA date of April 2, 2024.

Tradipitant For The Treatment Of Patients With Gastroparesis

As I stated above, Vanda Pharmaceuticals just had its New Drug Application [NDA] of tradipitant accepted by the FDA for the treatment of symptoms of gastroparesis. This is going to be a very important approval decision for this biotech and I state that for two reasons. First, it adds additional shareholder value in that it will allow this pharmaceutical company to generate additional revenue from its pipeline. A second reason is that should it end up being approved, then it would mark the first novel drug type to be approved for gastroparesis in over 40 years. Not only that, but it would also mean the first application to be reviewed by this agency in over 30 years. These patients definitely need new treatment options for this disorder. To put this into perspective the only FDA-approved drug is metoclopramide, which was approved back in 1979. While it may work for these patients, it carries a black box warning for starters. The black box warning is that it may cause the development of tardive dyskinesia, which is the involuntary movement of the face, tongue, or extremities. Along with the many side effects it has, a drug like tradipitant might not only be effective but safer to take.

The NDA submission was made possible thanks to results from several studies that were done such as study 2301, study 3301, and a 12-week open-label study from the Expanded Access Program. Gastroparesis is characterized as a delayed gastric emptying disorder, which in turn causes a host of symptoms for the patient. Some symptoms that these patients might experience are acid reflux, constipation, stomach pain, and indigestion. The global gastroparesis treatment market is projected to reach $7.19 billion by 2029 . The thing is that this drug is not only being advanced for gastroparesis, but it is also being developed for the prevention of vomiting associated with motion sickness. In regard to this indication, Vanda was able to achieve positive results from the phase 3 Motion Syros study. Such a late-stage study recruited a total of 365 patients who embarked on boat trips and were evaluated based on boat trips with varying sea conditions. These patients were randomized to receive either 170 mg tradipitant, 85 mg tradipitant, or placebo. The results of this study were that the tradipitant achieved statistical significance of drug versus placebo with respect to the primary endpoint, with a p-value of p<0.0001 for both doses. This is another indication of an unmet medical need. There has not been a newly approved drug for motion sickness in over 40 years. The last time a drug was approved for these patients was scopolamine, which occurred back in 1979.

Financials

According to the 10-Q SEC Filing , Vanda Pharmaceuticals had cash, cash equivalents, and marketable securities of $489.9 million as of September 30, 2023. It believes that it has enough cash on hand to fund its operations for at least the next 12 months. Most biotechs don't wait until they are close to running out of funds before they raise cash. Not only that, but the company also made a bold move to acquire U.S. and Canadian rights to PONVORY, which is an approved drug to treat patients with relapsing forms of multiple sclerosis [RMS]. The impact of this deal is that Vanda had to pay Johnson & Johnson ( JNJ ) $100 million to acquire these rights. Thus, this further reduced the cash on hand. As such, I believe that it is likely going to need to find a way to raise funds in the coming months. This biotech does have several drugs that are being marketed such as HETLIOZ and Fanapt. Despite having these approved drugs, an investment in this biotech shouldn't be made based on these. That's because, for Q3 2023, net product sales of HETLIOZ were $17.5 million, which was a decrease of 58% compared to the same time period in the prior year. With respect to Fanapt, net product sales were $21.3 million during Q3 2023, which was an 11% decrease compared to the same time period in the prior year.

Risks To Business

There are several risks that investors should be aware of before investing in Vanda Pharmaceuticals. The first risk to consider would be with respect to the PDUFA date decision, whereby the FDA will decide whether or not the tradipitant should be approved for the treatment of symptoms associated with gastroparesis. There is no assurance that this drug will be approved by the FDA to treat this patient population, nor that it will do well once it is being sold on the market. The second risk to consider would be with respect to the program, which is using a tradipitant for the prevention of vomiting associated with motion sickness.

While the first phase 3 study was successful, the company does not anticipate filing an application for this indication until other studies are completed first. There is no assurance these other studies will have the primary endpoint met, nor that the filing of this drug for this patient population will ultimately be accepted. The third risk to consider would be with respect to the other regulatory applications, which are being reviewed by the FDA. One sNDA being reviewed would be HETLIOZ for the treatment of insomnia characterized by difficulties with sleep initiation and then the other sNDA of Fanapt for the acute treatment of manic or mixed episodes associated with bipolar I disorder. There is no guarantee that the FDA will approve one or both of these regulatory applications in 2024.

The fourth and final risk to consider would be based on several ongoing lawsuits that it has filed over the last few years. For instance, in January 2023 it filed a lawsuit challenging the FDA's approval of Teva Pharmaceutical Industries Limited ( TEVA ) Abbreviated New Drug Application [ANDA] for its generic version of HETLIOZ capsules. A second instance would be with respect to a lawsuit filed in May 2023, whereby the company filed a lawsuit in the U.S. Court of Federal Claims against the federal government for the uncompensated taking and misuse of the company's trade secrets and confidential information. There is no assurance that Vanda will be able to win against such lawsuits, nor that it will receive the compensation that it expects.

Conclusion

Vanda Pharmaceuticals has made great progress in being able to advance the use of tradipitant for the treatment of symptoms associated with gastroparesis. That's because not only did it have its New Drug Application [NDA] of this drug was accepted for this patient population, but it was given a review date. This is going to be an important catalyst to watch because it could mean an increase in shareholder value. Not only that, but there are other catalysts for investors to look forward to in 2024 as well. For instance, there are two sNDAs that are expected during that year. This would be in relation to the sNDA of HETLIOZ for the treatment of insomnia characterized by difficulties with sleep initiation and then the sNDA of Fanapt for the acute treatment of manic or mixed episodes associated with bipolar I disorder. With a very large pipeline, plus the FDA review of three regulatory applications in 2024, I believe that investors might be able to capitalize on any potential gains made.

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