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Vanda Pharma's Fanapt receives FDA approval for treatment of schizophrenia; Stock soars in after-hours trade - Update

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Biopharmaceutical company Vanda Pharmaceuticals, Inc. (VNDA: Quote) on Wednesday revealed the receipt of the US Food and Drug Administration or FDA approval to market Fanapt or iloperidone for the acute treatment of adult patients with schizophrenia. Vanda intends to make Fanapt available in pharmacies later this year. Following the announcement, the company's stock sky rocketed 824% in after-hours trading.

South San Francisco, California-based biopharmaceutical company Titan Pharmaceuticals, Inc. (TTNP.PK) said it is entitled to receive royalties on global net sales of Fanapt equal to 8% on annual net sales up to $200 million, and 10% on annual net sales of above $200 million. Titan incurs no ongoing expenses associated with this potential future income.

In a statement, Vanda's chief executive officer, Mihael Polymeropoulos said, "The approval of Fanapt(TM) by the FDA represents many years of tireless efforts by current and former colleagues, many investigators and thousands of patients who participated in the development of this new treatment for schizophrenia. I would like to extend my gratitude to all those who contributed and reaffirm the commitment of Vanda Pharmaceuticals to the discovery and development of medicines for those in need."

Schizophrenia is a chronic debilitating disorder which affects more than two million Americans, and millions more worldwide. While significant progress has been made in understanding the disease and developing treatments, there remains a significant unmet medical need. The global sales from the class of atypical antipsychotics exceeded US$20 billion in 2007.

The Rockville, Maryland-based company noted that the approval for Fanapt was supported by two placebo-controlled Phase III clinical studies comparing Fanapt to placebo and active control in patients with schizophrenia, as well as efficacy and safety data from more than 3,000 patients. Fanapt is a mixed dopamine D2 / serotonin 5HT2A receptor antagonist, belonging in the class of atypical anti-psychotics.

On July 28, 2008, Vanda announced that the company had received a not-approvable action letter for iloperidone from the FDA. However, Vanda submitted a Complete Response to the not-approvable action letter on November 6, 2008, which was accepted by the FDA and the new target action date of May 6, 2009.

VNDA closed Wednesday's regular trading session at $1.08, down $0.01 or 0.92% on a volume of 1.35 million shares, significantly higher than the three-month average volume of 0.12 million shares. However, in Wednesday's after-hours trading, the stock sky rocketed 824% or $8.90 to $9.98.

TTNP.PK closed at $0.05, up $0.01 or 11.11% on a volume of 0.36 million shares, higher than the three-month average volume of 0.14 million shares.

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by RTT Staff Writer

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