Good afternoon, everybody. Thank you for joining us again at the Citizens Life Sciences Conference. Excited to be joined next by Vanda Pharmaceuticals and CFO Kevin Moran. Kevin, welcome. I know you wanted to run through a couple slides real quick, and then we'll jump into the Q&A.
Yep, perfect. Thanks, Jason, and to the entire Citizens team for having us here. Just to give a quick overview of the company before we jump into the Q&A. Vanda is a leading global biopharmaceutical company dedicated to innovating in the service of people's pursuit of happiness. We have a decades-long innovation-led strategy that's led to us now having five approved products here in the U.S. Those five products include Fanapt, which is an atypical antipsychotic approved for both bipolar disorder and schizophrenia. Hetlioz, which is approved for two orphan sleep indications, non-24-hour sleep-wake disorder and nighttime sleep disturbances in Smith-Magenis syndrome.
Ponvory, which is approved for multiple sclerosis, and two newly approved products in the last three months, Nereus, which was approved for motion sickness right around the end of the last year, and then BYSANTI, which was approved in late February, also for bipolar disorder disorder, and schizophrenia. We have a strong debt-free balance sheet. We ended last year with a little more than $260 million in cash and no debt. We have a late-stage growth pipeline with a number of products in Phase III with upcoming clinical readouts. We have a number of imminent regulatory catalysts.
We just had two that recently completed, as I mentioned, and we have a third, which is imsidolimab, which has a BLA that's now been accepted for review with a PDUFA date of December 12, 2026, which, if approved, could give us six approved products, three of which would have been approved within 12 months. On our strategic focus, it's first to grow and diversify our revenue. That includes growing revenue across our existing products and existing indications, but also further diversifying our revenue with the potential for these six approved products by the end of the year. Advancing our pipeline, which I'll step through in a couple slides here.
As I mentioned, with the upcoming PDUFA date, as well as a number of Phase III program readouts in the coming quarters, as well as multiple early-stage programs, including our ASO platform. Then, one of the key highlights of our pipeline is Nereus, which as I mentioned, was approved at the end of the year for motion sickness, but also is in Phase III as a key adjunct in the GLP-1 market, where we've initiated a pivotal Phase III program and results are expected by the end of 2026. Finally, we have a constant focus on consumers. We look to increase access and affordability for patients wherever possible and engage directly with consumers, at every turn.
I'll briefly cover this as I kind of already touched on some of this in the previous slides, but we're focused on advancing our commercial therapies. In the psychiatry space, again, with our Fanapt approved product that we continue to commercialize that most recently had bipolar disorder approval in 2024, and now with the newly approved BYSANTI, further expanding our psychiatry portfolio. Hetlioz, as I mentioned , approved in the U.S. for the two orphan sleep indications, also at the regulatory stage for both insomnia and jet lag disorder, and approved in Europe back in 2016 for non-24-hour sleep-wake disorder, where we've marketed it in Germany, you know, since shortly after that approval. Ponvory, where in addition to the approved indication of multiple sclerosis, we're also pursuing Phase III programs for ulcerative colitis and psoriasis.
Nereus, as I mentioned, approved for motion sickness near the end of last year in the Phase III program for vomiting and nausea in GLP-1, and then also at the regulatory stage in the indication of gastroparesis. On our recent upcoming R&D milestones, we've touched on many of these in the previous slides. Maybe the one that I didn't mention on the far right here is that for BYSANTI, which was again just approved by the FDA for bipolar disorder and schizophrenia, we have a Phase III study in major depressive disorder underway where study results are expected by the end of 2026.
Finally on our portfolio here, so on the Fanapt side, again, in addition to our approvals in bipolar disorder and schizophrenia, we also have a Phase III program underway for the long-acting injectable formulation in schizophrenia. On BYSANTI, in addition to the approved indications in bipolar disorder and schizophrenia, we have the Phase III for MDD with results by the end of this year. On Hetlioz, again, beyond the approved indications, we're at the regulatory stage for jet lag disorder and insomnia. On Ponvory, again, on the market for multiple sclerosis, Phase III program's underway for ulcerative colitis and psoriasis. Imsidolimab, again, which we in-licensed from Anaptys early in 2025, where we've got the upcoming PDUFA date in December.
Finally on Nereus, again, we're on the market now for motion sickness in Phase III for vomiting induced by GLP-1 and at the regulatory stage for gastroparesis. I think with that, we can do Q&A.
Great. Thank you. Let's start with BYSANTI.
Yep.
You know, really big deal getting that approved a few weeks ago, couple weeks ago. Can you maybe just talk to how you see the opportunity for the drug?
Yeah. You know, very importantly, the BYSANTI approval is kind of a continuation of our foundational business, right? Our significant revenue contributor right now is Fanapt, which did about $117 million in revenue in 2025, up from just under $100 million in 2024, and where we forecasted growing to between $150 million and $170 million in 2026. A midpoint of $160 million. The expected LOE on Fanapt is towards the end of 2027, and so the BYSANTI approval extends the runway significantly for our broader psychiatry portfolio, where we've got patents on BYSANTI going out into the mid-2040s.
In addition, the approval of BYSANTI provides for the opportunity for a label expansion for MDD, where our BYSANTI program is underway, and we expect results by late this year. Finally, on the pricing side, one of maybe the underappreciated differentiators between BYSANTI and Fanapt is that BYSANTI gets a pricing reset on Medicaid. Currently our gross- to- net on Fanapt is about 50% in total, and the main driver of that high gross- to- net is our Medicaid business, which represents about 30%-40% of our business, where the gross- to- net is over 100%. We actually have a negative revenue contribution from our Medicaid business on Fanapt.
BYSANTI as a new drug gets a complete reset. It'll be subject to the 23.1% statutory rebate, but it won't be subject to these inflationary penalties that Fanapt is, rather. As a result of that, instead of a 50% gross to net, you know, we expect to see a gross- to- net more in the mid-30s%. What that means is if, as I mentioned, in 2026, we're able to do the midpoint of revenue at $160 million for Fanapt, and this isn't guidance, but just math, if in 2027 we grow at continued growth at that rate, that could put us, you know, a little north of $200 million for Fanapt.
Well, if you just pick that up and say, "Hey, but instead of Fanapt, it's BYSANTI," you'll be closing in on $300 million from the same volume, just the pricing benefit and growing at a clip that we're growing at now, which appears to be sustainable, just given our market penetration rate, which is relatively low in the branded atypical market.
It should be a relatively straightforward integration into the commercial team. Can you just talk about timelines to launch?
Yes. We do expect to be able to leverage, our existing psychiatry platform for the commercialization of BYSANTI. What we've communicated is that we intend to launch in the Q3. Obviously with just receiving approval, for those of you that aren't familiar, there's a number of strengths on the Fanapt and BYSANTI side. There's actually seven commercial strengths in addition to three different commercial titration packs and about five sample SKUs. We have about 15 SKUs that we need to manufacture for the commercial launch. We plan to, you know, initiate the launch in the Q3. We have about a 300-person sales force currently detailing Fanapt in the psychiatry space, which is very robust.
Just for context, some of the competitors in the space have a sales force that's even larger than that sales force. As soon as we introduce BYSANTI into the market, you know, we believe that we'll be immediately able to pivot the current Fanapt sales force towards BYSANTI, and then all of the commercial infrastructure that we have associated with Fanapt can be repurposed, you know, dual and parallel until the time that it's dedicated BYSANTI, such that, you know, we feel very , well equipped and ready to go for the BYSANTI launch later this year.
Do you think that BYSANTI, from a demand perspective, becomes a larger drug than Fanapt is today?
For a couple different reasons. First and foremost, we're seeing nice growth on Fanapt now, but it does have an end of life, on the horizon. We fully anticipate that we'll be able to continue growing BYSANTI at a similar clip as we're growing Fanapt now, so that would obviously take it , it'll exceed Fanapt just from that alone.
Mm-hmm.
Couple that with that we've got this upcoming potential for a label expansion, and as many of you are likely aware, the market size for schizophrenia, you know, varying estimates, but in about the 3 million people in the U.S. range. Bipolar, again, varying estimates, but let's say in the 6 million-8 million people range. You know, the combined total of those two patient populations maybe is 10 million. The MDD market, you know, is estimates a size 20 million. It's twice as big as the market that we're currently pursuing. We certainly think that it could provide an avenue for growth above and beyond from a volume perspective.
Couple that with the pricing favorability , can kind of have a duplicative impact in terms of the growth. One thing that we've communicated on that is last year, we put out 2030 revenue targets.
Mm-hmm
That included a $750 million revenue target for our psychiatry portfolio in 2030. That was qualified with, we need to get BYSANTI approved, we need to get a label expansion for MDD, and then we need to get Fanapt LAI also approved.
Okay.
We're well on our way to kind of , knocking out a lot of those objectives that are towards that revenue target in 2030.
Love to talk a little bit more about the MDD program. What gives you the confidence the drug could be successful in this patient population?
As a bit of a reminder here on the Fanapt side, we ran a bipolar disorder study, right? We only ran one study, which at the time was a bit more, I would say, people were questioning whether that was gonna be sufficient for an FDA approval. It was. As you know, things have progressed more recently, it looks like that might become a bit more of the standard rather than the exception with the one clinical trial , kind of push that we've seen as of late. As we look towards the MDD program, you know, we have this one program running again where we think that will be sufficient for moving us towards registration.
on Fanapt, again, where we hadn't run a bipolar disorder program, but others in the class had run a bipolar disorder program, that gave us conviction that with the same mechanism of action, it was likely that Fanapt also worked in bipolar disorder as some of these other products have. MDD, again, kind of a similar analogy. We've seen a number of products in the class that have worked well in the indication, and so we see no reason why Fanapt also wouldn't have a good likelihood of working in that. I would say one last piece on that is, you know, some of the time when you are able to run two or three Phase III programs, you can have , one or two not work, and you still have a good chance of getting approved because you have a positive trial.
For us, that's a you know difficult proposition to run that many of these expensive trials. That's why we've you know often taken the approach of, hey, one should be sufficient. It does require us to run a very diligent, well-recruited, you know, study in order to make sure it's the highest quality sites, highest quality patients, that are getting in to give us the greatest probability of success, given that we've got one shot on goal.
Right
from the trial.
Okay. Awesome. Long-acting injectable, just where does that fit into the commercial portfolio? Obviously, there are multiple long-acting injectables in the space, but how do you see that fitting in, and can there be a BYSANTI long-acting injectable?
First starting with the Fanapt LAI, as you mentioned, there's a number of LAIs that come in the space, and we've seen, you know, continuing increased demand both for the existing products on market, but also seemingly an appetite for additional products, where there's an unmet need. In potentially a host of different areas, but maybe first in schizophrenia where compliance is such an issue and giving a long-acting injectable, right, can mitigate some of that compliance risk.
Also, whereas we've seen with kind of the proliferation of, you know, many of the GLP-1s, injections, whether they're self-given or doctor administered are becoming, I would say, more acceptable as a treatment option such that you could see people with bipolar disorder that previously may have been scared off by the, "Hey, I don't know that I need a long-acting injectable," saying, "Hey, that sounds pretty reasonable 'cause everybody gets GLP-1 shots and
Right
... this isn't that different. There may be a softening stance on kind of the patient population about that being an acceptable treatment. On the BYSANTI question, it is possible to develop it into an LAI, and there are certain properties of BYSANTI that actually may make it a more advantaged product relative to Fanapt and others, such that it could be instead of where Fanapt is likely to be, you know, a once or a month, you know, or somewhere plus or minus kinda dosing. You know, BYSANTI has the possibility of being once every several months just given some chemical properties about it. Certainly, that'll be something that we continue to explore as part of our life cycle management, and could be something down the line that we're talking more about.
Okay, great. Maybe let me ask a question about Hetlioz and Ponvory and the rest of the commercial kinda platform in the context of guidance.
Yep.
Can you just walk us through the guidance you gave for 2026 and what the different levers or pushes and pulls at the different ends of the range?
Yep, absolutely. The reminder there is that our guidance was on the three products that were in the market as of last year. Fanapt, Ponvory, and Hetlioz. We did not provide guidance on Nereus or BYSANTI, obviously given that those are, you know, upcoming launches, but that we hope to share more in the coming quarters about how we're thinking about those and maybe early metrics on what we see as we get into the launches. As I mentioned on Fanapt, we guided to a range of $150-$170.
Mm-hmm.
On the combined Ponvory and Hetlioz, we guided to a range of $80 million-$90 million, and then our overall total revenue guidance was $230 million-$260 million, right? Underlying those as we look first at Fanapt, the $150 million, $170 million and a $160 million midpoint, the $160 million assumes that we grow at a sequential quarterly rate consistent with last year, with 2025, which was in kind of the low double digits range, let's say, you know, in the 10%-13%. That's if you look back over last year what our TRx were growing at. If we're able to consistently do that into 2026, that would take us to the midpoint of the guidance range.
If we're able to do a little better, like let's say the mid-teens% sequential quarterly growth, that could get us up to the top end of the $170 million, and if we're not able to do quite as well, we go a little bit lighter, you know, that would take us down to the $150 million. On the Hetlioz and Ponvory range, again, we gave that combined product guidance of $80 million-$90 million. For context, last year, those two products together were about $100 million, so that implies a little bit of a downtick there. What's underlying that is that we see kind of very, you know, modest growth on the Ponvory side, which is what we've seen the last three quarters. We've seen modest increased patient demand since Q2 of last year.
Hetlioz, where we had generics enter the market in early 2023, so this is now three years.
Right
With generics on the market, and we've seen erosion from kind of a peak revenue of $170 million.
Mm
... to just over $70 million last year. The expectation is that we see a little bit more erosion this year. As I mentioned on our Q4 call, potentially a little bit of inventory destocking in the channel because we've had some stocking, destocking dynamics just in this, in the kinda more volatile post-generic market that could take it down a little bit more than, you know, maybe just the normal curve, what have you. Those pieces get us back to a midpoint of $245 million for this year, compared to about $217 million.
You've also been pretty clear that this is an investment stage for the company so that you will be spending money this year.
Yep. We ended last year with about $263 million in cash. That included a burn of about $110 million in 2025, and although we didn't provide cash guidance for 2026, what we did say was that we expect the burn to be more in 2026 than it was in 2025. We're certainly in an investment mode here in the company.
Last year, we were investing, you know, in the Fanapt launch plus, I would say, commercial preparation for the coming year, and this year, the big investments beyond those will be launch of Nereus in motion sickness, launch of BYSANTI in both bipolar disorder and schizophrenia, and then investments in our, you know, very robust late-stage pipeline with, you know, Phase III in GLP-1 on Nereus, Phase III on MDD for BYSANTI, Phase III on social performance anxiety for VQW765, and Phase III for Fanapt LAI in schizophrenia.
Nereus, really interesting drug and, you know, motion sickness is a really exciting place, but we'll note you're gonna have to build market too.
Yep.
Can you kinda just talk about how you see the market and what your strategy is for the product?
Yep, absolutely. As we look across the market space, there's actually a tremendous patient population out there that is both experiencing symptoms of motion sickness, and that ranges in about the 70 million people in the U.S. that experience symptoms of motion sickness in some setting, and north of 10 million that are actually seeking treatment, right? There's a tremendous market here for motion sickness products, and the current products in the space, you know, have certain limitations. One of the most significant is the side effect profile. You know, if you're taking a medication where you're gonna be in motion on a boat or in a car, generally you're not trying to fall asleep.
that can be a significant issue if you're actually trying to do something active and knocking yourself out as part of it. We see a very significant opportunity, and Nereus has a great profile, both from an efficacy perspective, but also from a side effect profile, very benign and you know, none of those kind of, I would say diminishing of your engagement in an activity while you're on the medication. From a commercial perspective, you know, pricing wise, as we look at it, we think it's gonna have to command premium pricing to the existing motion sickness treatments that are available, some of which are over the counter, so obviously a premium to that.
At the other end of the spectrum is tradipitant Nereus, an NK-1, and there's NK-1's currently approved in post-op nausea vomiting, chemotherapy-induced nausea vomiting. You know, we think our price point is kind of somewhere in between these two landmarks, right?
Right.
From a commercialization perspective, we expect that this will be largely a consumer driven market, right? Where we're likely doing DTC to engage with patients, make them aware of the treatment option and bring them to, you know, kind of the funnel of potential treatment.
Right.
It's likely gonna have a very significant cash pay component to it, where it's a DTP model where patients are, you know, paying out of pocket. Certainly will have an insurance aspect to it. Where patients, you know, wanna seek medication, they can get a prescription and pay for it out of pocket and be able to get the therapy.
When will you launch the products?
Yeah. What we've said is that we hope to launch in the next few months here.
Okay.
We'd said kind of midyear. I think we're hoping for Q2, no later than Q3.
Right. Okay.
Yeah.
Makes sense. Also the label expansion opportunities for Nereus are really interesting and also pretty different.
Yeah.
Right? Maybe let's start with GLP-1 adjunct, because always, clearly the GLP-1 market is large.
Yep.
Everybody is aware of the tolerability profile of the class.
Yep.
Just walk us through the data you've already generated and what the next steps are for the program.
Yep. In the fall of last year, at the same time that we were seeing some significant progress on the regulatory front for Nereus and motion sickness, and this is both ultimately the approval in December, but we also had a partial clinical hold that was lifted on the program in early December. That's actually critical for, I would say, the GLP-1 program as well. We also at this around the same time reported very positive Phase II data. The trial design here is that you have a placebo arm and a Nereus arm. What's done is for a week a patient receives either placebo or Nereus, then they're dosed with 1 mg of Wegovy, and then they receive either placebo or tradipitant for another week beyond that.
The primary endpoint there was vomiting, right? What we measured was in the drug arm, 1 mg of Wegovy arm, approximately 60% of patients experienced vomiting, whereas in the Nereus arm it was at 30%. A significant reduction in vomiting that we saw and other related symptoms. Very significant data. What we've done is we've moved forward with our Phase III program. We provided the update on our Q4 earnings call that we've initiated the program and we expect results as early as Q3 or Q4 of this year.
Okay.
Very quick, very fast. The study's underway and we're already, you know, recruiting and hopefully gonna be executing very quickly here. You know, still discussions to be had, but that likely could move us towards an sNDA, if we're able to receive positive results there. When we look at kind of the program, you know, very good Phase II data that we think there's a you know, strong chance that we can replicate in a Phase III setting. From a regulatory perspective, it's approved, and again, that partial clinical hold piece being lifted is very important for the Nereus GLP-1 program, as it was obviously for the motion sickness program. From a commercial market opportunity perspective, obviously the GLP-1 market is huge.
Right
Expected to grow significantly in the coming years. You know, this could obviously be a significant revenue driver, you know, as an adjunct to those treatments.
Okay, great. Gastroparesis.
Yep.
A little bit of a tougher path there historically with FDA. Can you just walk us through, you know, where are you today with that process?
Yep. Maybe just for a reminder for folks, so we had very positive Phase II data on tradipitant in gastroparesis. That was followed by our Phase III program had a bit of mixed results where we missed on the primary endpoint for a number of different confounders. We looked at a pooled analysis at the time, which showed that when not accounting for confounders, the pooled Phase II and Phase III was statistically significant. Right? Feel very confident in our data in Nereus being an effective treatment option for gastroparesis. We moved forward with an NDA submission, which was accepted for review, but unfortunately received a CRL in September of 2024.
At this point, with the FDA, we have on a parallel path, our Hetlioz for jet lag program similarly had a CRL. We've moved forward with pushing for an opportunity for a hearing, which is what's afforded to companies under the law, is either an approval or an opportunity for hearing, although there hasn't been a hearing in at least 40 years. Very recently, we won a court decision where a federal appeals court ruled in our favor and said, "Hey, you are entitled to a hearing.
Mm.
We provided the update in the recent weeks that the FDA has agreed that we're gonna have a hearing with an administrative law judge presiding over it on jet lag. Why that matters for gastroparesis is gastroparesis is very much on the same path towards that type of hearing, just a little bit further back. Hopefully in the coming, you know, quarters, we'll be hearing updates on gastroparesis moving down the same path to a potential hearing on the approvability of the drug and where we get to lay out, you know, our evidence and the FDA gets to provide their rationale and somebody gets to take another look at it.
I understand if you don't have a full answer to this, but what would your view on next steps be if FDA, you know, maintained their position and asked for another study was required?
A lot of the part around the hearing is actually, I would say, to be determined.
Yeah
Because there hasn't been one in 40 years, there's not necessarily, you know, precedent that we can look at and say, "How did this hearing go? What was the outcome? Where did it go?
Yeah.
This administrative law judge presumably will be the one that presides over the hearing, and then depending on the outcome, will determine the next steps forward. If we thought there was a rationale to do an additional study where we were going to learn additional data that could be informative for patients and prescribers, it's certainly something we could consider, but we've yet to see that type of suggestion.
Okay. Last minute, just wanted to touch real quick on imsidolimab. Do you wanna just give us the high points on the program?
Yep. Imsidolimab, the reminder there is that we in-licensed this product from Anaptys in early 2025 for a $10 million upfront as well as a purchase of the existing inventory they had. The Anaptys team had run two Phase III programs, the GEMINI-1 and GEMINI- 2 studies that showed tremendous results. We, you know, have moved forward over the last year. Team's done tremendous work to get the BLA ready for submission. We submitted that to the FDA just before the end of the year, and now have heard back that the filing's been accepted, and PDUFA date on December 12. Again, this is in generalized pustular psoriasis, where there is an approved product in the space.
We think our product has some features about it that can make it a preferred differentiated product in the class. We're hopeful we're gonna, you know, receive an approval at the end of the year and likely be then commercializing this in early 2027. Think it's got a very, you know, significant revenue opportunity also from kind of an efficient orphan commercialization type model where we think we can do that, you know, efficiently.
Great. Kevin, thank you for joining us. There's a lot going on both now and, you know, looking longer term, so we'll be paying attention. Thank you.
Wonderful. Thanks, Jason. Thanks for having us.