We're going to get started with the next session. I'm Andrew Tsai, Senior Biotech Analyst at Jefferies. Thanks for tuning in to Vanda Pharmaceuticals. To my direct left is Mihael Polymeropoulos, President, CEO, and Chairman. Welcome, Mihael.
Thank you.
Maybe there are a few people in the audience who are less familiar with the Vanda story. So could you please provide a brief overview of Vanda, spend a couple of minutes talking about what you're working on, as well as milestones over the coming 12 months?
Yeah, absolutely. First of all, thank you very much for the invitation. Happy to be here and glad to give an overview of Vanda Pharmaceuticals. Some of you may be familiar. Vanda is a publicly traded company in existence for about 21 years. We have a pipeline of commercialized products and a pipeline of products in development. The commercialized products are Fanapt for schizophrenia and bipolar disorder in the U.S., Hetlioz for Non-24-Hour Sleep-Wake Disorder , and Smith-Magenis syndrome in the U.S. and for the first indication in Europe as well. And finally, Ponvory, just acquired from Janssen for multiple sclerosis.
In the pipeline, we have new indication extensions for these programs, building the Fanapt franchise with a long-acting injectable four-week injectable Fanapt, but also shifting our efforts to the active metabolite of iloperidone and milsaperidone, an NDA coming up in the beginning of 2025, and also beginning work in major depression there. On Ponvory, this is an S1P analog, as I said, for multiple sclerosis, but certainly with potential in other indications in this field, including an oral treatment for psoriasis, but also a once-a-day treatment for ulcerative colitis. In both these indications, now we're in the process of starting INDs. Another significant development in the pipeline is tradipitant, the neurokinin-1 receptor antagonist pursued in gastroparesis.
Recently, we reported disappointing results from the FDA on the NDA application, still pursuing that, but also pursuing an indication of motion sickness with great results and a filing, hopefully, by the end of this year. Earlier stage pipeline products are staged that they can allow us to be productive in many years to come. And financially, maybe the overall is we're guiding this year for a total net revenue of about $190 -$210 million and close to net cost neutral. And the cash balance remains strong at about $380 million.
Great. I applaud you for managing the business well despite the genericization of Hetlioz. So maybe just a couple of housekeeping questions on Hetlioz. It's a $70-$75 million product right now. How should we think about that sales cadence going forward? Is there some kind of resiliency as we think about 2025?
Absolutely. We're very pleased with the confidence patients and prescribers have given to the brand. We see brand loyalty. Of course, one cannot predict the future in the face of generics. I want to remind that in the background, we're still prosecuting patents. Teva, Apotex and MSN have launched at risk in that their patents, Patent 129, is actually will be scheduled for trial in the coming 12- 24 months. Also, we have filed a very worthy citizens' petition on MSN's drug, where we believe it was approved incorrectly based on flawed data. What I'm trying to say is that we're committed to the potential of Hetlioz. With the FDA, we're pursuing still additional indications. One of them I would like to highlight, Andrew, is pediatric insomnia.
Of course, what is genericized is Hetlioz capsules, or it is under generic pressure, I would say. The liquid, which is used for Smith-Magenis syndrome nighttime sleep disturbances, is not challenged at this time. And we're pursuing a pediatric insomnia indication where the FDA is actually very excited, underscoring that there is no drug approved for one of the most common conditions in the pediatric population.
Great. Hetlioz, you've been working on jet lag, sleep, delayed sleep phase disorder, insomnia, adult insomnia, I guess. Any updates around those fronts?
Yeah, we are pursuing and challenging the FDA decision, both on jet lag. Most people familiar with the Vanda story would know that we have conducted successfully the largest jet lag program ever. Successfully, the results published in many peer-reviewed journals, including The Lancet. It is unquestionable in expert minds that this drug is worthy for treating jet lag. I just took it. I'm feeling just fine. And for insomnia, we're pursuing sleep latency insomnia with stellar results in a study design which is identical with that of the approved Ambien and doing better there. But the FDA has certain policies of how they think about criteria for approval of drugs. And that's where Vanda is trying to create some challenges to question whether these are the right criteria. So we have not given up. And you mentioned delayed sleep phase disorder. No drug approved for that.
A tough indication to conduct a clinical study. We're doing it. We're in agreement with the FDA on what the protocol looks like, and this study has two phases, one mostly in the U.S. and Germany, which is the main DSWPD, delayed sleep-wake disorder, but also a study in Turkey in families that carry a specific mutation in the CRY1 gene, which is the only known genetic factor for DSWPD that actually underlies the Nobel Prize in Medicine a couple of years ago, and these are the same families. We're doing the study in Turkey now.
Okay, great. Point is, like you said earlier, you're not giving up on this franchise. Okay, then moving on to Fanapt, $100 million product within schizophrenia mostly, but you're just launching a bipolar. And congratulations on getting the approval earlier this year. So the question is, how big do you think this opportunity is and how much of an inflection can we expect at peak?
Yeah. One asterisk on the approval. I know some had questioned the ability of getting approved with one study in bipolar disorder, right? We did and we're confident all along. Why we're confident? Two reasons. The results were stellar in all aspects of the primary and secondary endpoints. It is our conviction that interpreting the law correctly, one study is enough. Actually, you don't have to go far to interpret that. Congress has interpreted that for us. Has the FDA followed that? Not so much. I believe they will. In terms of the opportunity, the opportunity, as we know, is larger than $100 million for almost every other atypical antipsychotic. Why is it that Fanapt has not been used that much, right? It is a product with legacy of 15 years since the first approval.
One is that it all along had one indication, schizophrenia. It exchanged hands from Vanda, who got it approved to Novartis, back to Vanda, so these disruptions caused a little problem, but also the litigation around a long-term patent that expires in late 2020s was a subject of challenges up to the Supreme Court, and we want that, but all these things take time, delay to conduct the bipolar program. That was one reason, and the opportunity is large, and the second one is, on the first approval Vanda secured, the FDA had insisted on the language that because of orthostatic hypotension, QT prolongation, other drugs may be used first, which made it as if it's a second-line indication. We negotiated that with the agency on this bipolar approval, and they agreed with us and removed that condition, right, so the drug works well.
It is certainly of a competitive tolerability profile with others. We are now making a very significant sales effort. I guess you're going to that question.
Yes.
We increased our sales from the beginning of this year of about 50 to about 200 now. And there's more to be done. And we see a good response to that promotion.
I see. And that's helpful. And it sounds like you're investing heavily. Does that mean you also think about launching DTC ads in 2025 to further expand the launch?
Yeah. And we do hear that in the new administration, there may be a discomfort around ads. We know in Europe are not allowed. But certainly, this category of drugs is promotionally sensitive to consumer ads. We absolutely plan to do that. And we plan to be competitive. And Vanda, despite our small size, we have very significant experience of efficiently running large DTC programs.
Okay, great. And in the meantime, when I look at the NBRx's new-to-brand prescriptions, they've been increasing since I actually can't remember, maybe summer. But the point is, TRXs don't seem to be climbing, however. So what exactly is going on? And when do we see that inflection in scripts?
Yeah. First of all, NBRx is our leading indicator because they're new to brand. And as we reported on the Q3, you're correct, in the last quarter, we've jumped from a to about 90% increase or more, which is the lead indicator of what's going to happen in NRx and TRxs. NRxs are following. NRxs are the combination of new to brand and new scripts for refills. So that is increasing. And TRxs, you're correct, they're more sluggish, but they follow. So it has to do with the algorithm and how TRxs are accounted for. So we think that we're on the corner to see the inflection point and start seeing the increases on all aspects of NRx and TRx.
I see. Are you willing to say how much do you think the peak sales can get to with this expansion?
Well, we're not forecasting, but we have said that the potential of doubling or tripling the revenue is actually within reach.
Oh, okay, great, and Fanapt, my understanding, the IP could go into 2027-2028 timeframe, but you are working on milsaperidone, and so I think they're filing around early 2025, if I'm not mistaken.
Correct.
And so, let's just say that got approved. How exactly do you switch patients from Fanapt to milsaperidone? Is the profile of milsaperidone different from Fanapt?
Yeah. They have a similar profile and likely similar level of tolerability and efficacy for schizophrenia and bipolar. And we see milsaperidone as a twofold new offering to patients. One is if we're successful with major depression studies. And in that program, we're actually going to be testing once a day. The half-life is actually compatible with that. And also, as a future to the long-acting injectable franchise, milsaperidone has the potential of being formulated as a fatty acid ester, given the potential of different and variable duration, one month, three months, et cetera. So we see the franchise switching because of indication more than just the difference in the current indications.
I see. And you mentioned MDD. Do you move straight to a phase three MDD study with milsaperidone in Q4, which is coming right up?
We are absolutely starting right now a phase III study.
When do you think we would get data from that phase III ?
I don't know the answer to that yet.
Depends, I don't know.
I think once we start enrolling, we're going to be able to give some forecast. But patients exist. These studies are a little more efficient than others.
Got it. And then the LA, the long-acting, which I think I heard you mentioned, it's a four-week, so every month type of injection.
Yeah, once a month injectable. We've agreed on the pivotal study with the FDA. We're about to begin that. And it is a relapse prevention study, very similar to what you've seen with the recent approval of Teva's paliperidone version.
What percentage of patients' schizophrenia and bipolar would be amenable to a long-acting relative to an oral compound?
Any. And I think all of us have been pleasantly surprised with the uptake of injectables, although there are a few now. But while there are a few, it is very important to underscore there are many versions of risperidone or paliperidone, either from Janssen itself or generic companies, and a couple of versions of Abilify. So while we have about a dozen of atypical antipsychotics, many of them have not been formulated or cannot be formulated as injectables. And one rule of thumb, so for those of you that you wonder, does the atypical antipsychotic I'm watching can be developed? Take the daily dose and multiply it by 30, and you have the answer. If it is above 10-15 milligrams per day, it is too much to deliver, and they will not be able to easily formulate for long term.
I see. Okay. So point is, you're making progress on this front. Okay. So switching to Ponvory, which you acquired from J&J December 2023.
Correct.
Sales have been fluctuating, I think, between $7-$9 million range in 2024. So why haven't sales gone up? And secondly, when do they go up?
Yeah. So we did acquire the rights, U.S. and Canada rights from Janssen last December. Janssen had stopped any and all marketing and sales efforts in 2022. So anything that you see, at least in the first part of the year, is actually performance without any promotion. So one of the sluggish but steady performance is a reflection of that. You're correct. There are ups and downs. As we have explained, these are mostly stocking differences and supply line differences. We are now start having our own data that we can report with more confidence and start putting projections. But again, there, we launched our sales force in the summer. So it's very early. We started now visiting all the multiple sclerosis prescribers around the country, reminding those that have patients on that we're here and will continue and starting new patients on treatment.
I think we're going to be in a better position in the beginning of next year to start communicating what we think Ponvory can be. Just to say, though, Ponvory is in the class of sphingosine-1-phosphate that was led by fingolimod, now generic, a $2 billion revenue program. And the other one promoted is Zeposia from BMS. I want to say that our profile most probably is better with a faster on and faster off, which creates a lot of consumer and prescriber advantages. And I'm pointing out to two publications this year, which are customer preference, both for consumers and prescribers, and Ponvory is on top. We are encouraged by the discussions with our prescribers now. We have launched a speakers program to spread the news. And before you ask, yes, we do plan direct-to-consumer campaign on Ponvory as well.
How many sales reps do you have behind this launch for this one?
It is a small sales force. I think we communicated that they're in the about 30 range.
Okay. Very good. And then you'll have a life cycle management opportunity starting up phase III trials in UC and psoriasis.
Psoriasis.
Okay. And then next is tradipitant for motion sickness. You're submitting an application to NDA filing year-end, is it?
Correct. Yeah. And it is supported by two pivotal studies on boats off the coastal waters of the U.S., plus an earlier phase two study, all of them meeting the primary endpoint of prevention of vomiting induced by motion.
How would that data set compare to existing treatments? Why would someone use this drug over a generic Dramamine?
Yeah. So the drugs that are being used is the over-the-counter Dramamine or scopolamine patch. The tolerability profile or the difficulties, challenge with tolerability profile with both of them are known. There's no head-to-head study. But the results we have shown is a very large reduction of risk of vomiting in the 70%-80% range. So the answer is, it's hard to get any better.
Okay. But this was unfortunately rejected in gastroparesis earlier this year. It's the same drug. Would you expect an adcom for this drug in motion sickness?
Yeah. We would love to have advisory committees for every program we develop. And we actually have asked the FDA to convene an advisory committee to review and opine on their decision in rejecting gastroparesis. And if I spend 30 seconds there, we believe we have run the largest program in gastroparesis, idiopathic, and diabetic ever conducted in the world. We have definitely one positive study on reduction of nausea and a second one study that while nausea was significantly reduced from baseline, placebo was very large. A problem with these studies as well. What is extraordinary is we have an expanded access program that we never witnessed before of people writing to us and the FDA approving people, some of them for as long as four years. And the descriptions are it has changed their lives. We're not saying it's going to change the life of everybody.
But these testimonials need to be heard. We urge the FDA to convene an expert panel. And we believe they're not going to be able to find any expert to agree with their conclusory remarks. So we're not happy with that decision. But certainly, we're going to pursue motion sickness, different indication, different set of results, and hopefully a different decision.
Right and part of why the FDA rejected is they wanted some longer-term preclinical animal data, I believe. Would that apply to this circumstance in motion sickness in your view?
Yeah. You're correct. And to remind everyone, while Vanda presented data from over 3,000 animals, including three-month dog studies, the FDA a couple of years ago, some years ago, insisted that we conduct yet another nine-month dog study. It's very well known. We have taken a position that they're unnecessary, uninformative, and morally unacceptable to continue to be done. We urge other pharmaceutical companies to really decide whether we will continue the studies or not. Now, there is a difference between a chronic indication and what they require and what they require for what is motion sickness, an acute indication induced by a stimulus. Now, can I guarantee you that they're not going to ask for more studies? Not yet.
But certainly, there is precedent in other programs of acute indications where the FDA has come out and said, because it's an acute and not chronic condition, short-term studies in dogs, like 28 days, certainly we've done that, are needed.
Got it. Okay. So I think that's all the time we had. But thank you for walking us through your pipeline and lots of things to come. So look forward to following more.