VNDA - Vanda Pharmaceuticals' Portfolio Likely Has Upside From 2024 Approvals Underpinned By Cash

2024-02-12 22:59:06 ET

Summary

• Vanda Pharmaceuticals is trading materially below its holdings of cash and marketable securities (worth almost $7/share).
• Multiple FDA approvals, if forthcoming, in 2024 could prove to be material catalysts, perhaps highlighting that the company has operational assets beyond its cash.
• The market's current valuation of VNDA appears too pessimistic and a range of $5-10/share may be more reasonable, even assuming imperfect capital allocation.
• There could be further upside if drug approvals and operational performance go well in 2024.
• If things trend poorly, a valuation below $4/share is possible if operational performance is weak in 2024 and FDA approvals are not forthcoming.

Trading Below Cash

Vanda Pharmaceuticals (VNDA) should, in a sense, be a simple buy. It's trading below its December 2023 holdings of cash and marketable securities with two in-market products generating material revenue, another recently acquired, and the opportunity for three FDA approvals in 2024 in the best case....

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