Vanda Pharmaceuticals Q3 Earnings Call Highlights

Key Points

• Third-quarter revenue rose 24% year over year to $69.8 million, driven by Fanapt growth and a sharp, timing-related increase in HETLIOZ sales. The net loss was $22.6 million, while operating expenses fell 18% sequentially to $93.3 million.
• Fanapt sales increased 24% to $38.8 million, but Vanda warned that HETLIOZ remains vulnerable to generic competition despite $21.7 million in quarterly revenue. NEREUS sales reached $1.6 million following its May launch, and BYSANTI is expected to launch in the fourth quarter.
• Vanda raised its 2026 revenue outlook to more than $240 million across its products, while cash and marketable securities declined to $140.5 million at quarter-end. Key upcoming milestones include the FDA action date for Quimilza on Dec. 12, 2026, and a formal HETLIOZ jet-lag-disorder hearing later that month.

Vanda Pharmaceuticals NASDAQ: VNDA reported third-quarter revenue growth of 24% from a year earlier, supported by higher Fanapt sales and a sharp sequential increase in HETLIOZ revenue tied partly to specialty-pharmacy purchasing and shipment timing. The company also said operating expenses declined 18% from the second quarter as certain late-stage development and launch-preparation activities concluded.

Total third-quarter revenue was $69.8 million, up from $56.3 million in the third quarter of 2025 and $50.5 million in the second quarter of 2026. Vanda posted a net loss of $22.6 million, unchanged from the prior-year quarter but improved from a $62.5 million loss in the second quarter.

“We are pleased with the strong revenue growth in the third quarter,” President, Chief Executive Officer and Chairman Mihael Polymeropoulos said, citing continued Fanapt momentum and an early contribution from the company’s NEREUS launch.

Fanapt Growth Offsets Ongoing HETLIOZ Generic Pressure

Fanapt net product sales rose 24% year over year to $38.8 million in the third quarter and increased 8% sequentially. The gains reflected higher volume, according to Chief Financial Officer Kevin Moran. Total Fanapt prescriptions increased 25% from the year-earlier period and 6% from the second quarter, based on IQVIA Xponent data, while new-to-brand prescriptions rose 18% year over year.

Vanda said weekly Fanapt prescriptions reached an 11-year high of nearly 2,800 prescriptions for the week ended Sept. 25. The company expanded its Fanapt sales force to approximately 300 representatives in the second half of 2025, and face-to-face calls during the first nine months of 2026 were 35% higher than in the comparable 2025 period.

HETLIOZ sales totaled $21.7 million in the third quarter, up 21% from a year earlier and 289% from the prior quarter. Moran said the increase primarily reflected the timing of specialty-pharmacy purchases and shipments. About $7 million of orders shipped on June 29 and delivered July 1 were recognized as third-quarter revenue.

However, the company cautioned that HETLIOZ sales remain affected by inventory stocking changes at specialty pharmacies and could decline, potentially significantly, because of continuing U.S. generic competition. For the first nine months of 2026, HETLIOZ revenue fell 21% to $43.2 million.

PONVORY generated third-quarter sales of $7.7 million, up 10% year over year and down 2% sequentially. NEREUS sales were $1.6 million, rising 60% from the second quarter after the product’s May commercial launch. Vanda began sales-force promotion for NEREUS during the third quarter.

Launches and Regulatory Milestones

Vanda expects to launch BYSANTI, which received FDA approval earlier in 2026 for bipolar I disorder and schizophrenia, during the fourth quarter. Polymeropoulos said manufacturing of the product’s multiple dosage strengths was nearing completion.

The company said BYSANTI has data exclusivity through Feb. 20, 2031, and patent protection extending as late as May 31, 2044. Management expects to disclose BYSANTI revenue separately from Fanapt after launch. Moran said BYSANTI’s expected gross-to-net adjustment should be in the mid-30% range, compared with approximately 50% for Fanapt.

Vanda’s biologics license application for Quimilza in generalized pustular psoriasis has an FDA action date of Dec. 12, 2026. Polymeropoulos said the company is preparing commercial supply and aims to bring the product to market in the first half of 2027 if approved.

The company also reported that its Phase III study of BYSANTI as an adjunctive treatment for major depressive disorder is more than halfway enrolled toward a 500-patient target. Results are expected in the first half of 2027.

• Vanda plans to discuss positive Phase III NEREUS data in prevention of vomiting associated with GLP-1 receptor agonists with the FDA before submitting a supplemental new drug application.
• The company also plans to pursue a supplemental application for HETLIOZ in delayed sleep-wake phase disorder following positive pivotal Phase III results.
• A formal FDA hearing regarding HETLIOZ for jet lag disorder is scheduled for Dec. 14 through Dec. 18, 2026.

Expenses Decline Sequentially, Cash Balance Falls

Third-quarter operating expenses were $93.3 million, compared with $114.3 million in the second quarter and $87.5 million a year earlier. The sequential decrease reflected lower research and development spending, including on VQW-765, NEREUS and Fanapt programs, along with reduced commercial-product spending and legal expenses.

For the first nine months of 2026, operating expenses increased to $309.6 million from $269.7 million a year earlier, driven by commercial investments, the NEREUS launch, planned BYSANTI launch activities and development programs. Management expects operating expenses to decrease further in coming quarters as remaining development and launch activities conclude.

Cash, cash equivalents and marketable securities were $140.5 million as of Sept. 30, down $29.5 million from June 30 and $123.4 million from year-end 2025. The year-to-date decline included a $10 million milestone payment to Eli Lilly following U.S. approval of NEREUS, as well as operating losses and working-capital timing.

Updated Revenue Outlook

Vanda raised its full-year 2026 revenue outlook and now expects more than $240 million in combined revenue from Fanapt, BYSANTI, HETLIOZ, PONVORY and NEREUS. The company expects NEREUS revenue to be less than $10 million for the full year as it continues building awareness in the motion-sickness market.

The company did not provide cash guidance, but said 2026 cash burn is likely to exceed the level recorded in 2025.

About Vanda Pharmaceuticals (NASDAQ:VNDA)

Vanda Pharmaceuticals Inc is a biopharmaceutical company focused on developing and commercializing therapies for central nervous system disorders and other conditions with significant unmet medical needs. Founded in 2003 and headquartered in Washington, DC, the company primarily serves patients and healthcare providers in the United States, with certain products and commercial rights extending to international markets.

Vanda's marketed products include Hetlioz (tasimelteon), a treatment for Non-24-Hour Sleep-Wake Disorder in totally blind individuals and nighttime sleep disturbances associated with Smith-Magenis syndrome.

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