Vanda Pharmaceuticals Inc. (VNDA, Financial) filed Quarterly Report for the period ended 2010-06-30.
Vanda Pharmaceuticals Inc. has a market cap of $197.7 million; its shares were traded at around $7.09 with and P/S ratio of 43.5. VNDA is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Pioneer Investments, Steven Cohen of SAC Capital Advisors.
As a result of the FDAs approval of the NDA for Fanapt®, we met a milestone under our original sublicense agreement with Novartis which required us to make a milestone payment of $12.0 million to Novartis. The $12.0 million is being amortized on a straight line basis over the remaining life of the U.S. patent for Fanapt®, which we expect to last until May 15, 2017. This includes the Hatch-Waxman extension that extends patent protection for drug compounds for a period of up to five years to compensate for time spent in development and a six-month pediatric term extension. This term is our best estimate of the life of the patent; if, however, the Hatch-Waxman or pediatric extensions are not granted, the intangible asset will be amortized over a shorter period. Amortization of the intangible asset is recorded as a component of cost of goods sold.
Revenues. Revenues were $8.3 million for the three months ended June 30, 2010 compared to revenues of $0 for the three months ended June 30, 2009. Revenues for the three months ended June 30, 2010 included $6.7 million recognized from Novartis related to straight-line recognition of up-front license fees, $1.5 million for Fanapt® product sales to Novartis and $69,000 in royalty revenue based on second quarter 2010 sales of Fanapt®. Novartis launched Fanapt® in January 2010. Despite a significant growth of Fanapt® prescription demand in the second quarter, royalty revenue decreased from the first quarter due to the amount of revenue in the first quarter related to the stocking of pharmacies for the product launch.
Cost of sales. Cost of sales were $1.9 million for the three months ended June 30, 2010 compared to cost of sales of $0.2 million for the three months ended June 30, 2009. Cost of sales for the three months ended June 30, 2010 consisted of $0.4 million resulting from the amortization of the capitalized intangible asset related to the milestone payment to Novartis and $1.5 million for the inventory sold to Novartis. Prior to approval of Fanapt® by the FDA in May 2009 all inventory costs were expensed as research and development. Cost of sales of $0.2 million for the three months ended June 30, 2009 resulted from the amortization of the capitalized intangible asset related to the $12.0 million milestone payment to Novartis in May 2009.
Research and development expenses. Research and development expenses decreased by approximately $4.8 million, or 66.6%, to approximately $2.4 million for the three months ended June 30, 2010 compared to approximately $7.2 million for the three months ended June 30, 2009.
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Vanda Pharmaceuticals Inc. has a market cap of $197.7 million; its shares were traded at around $7.09 with and P/S ratio of 43.5. VNDA is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Pioneer Investments, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
General and administrative expenses consist primarily of salaries and other related costs for personnel, including stock-based compensation, serving executive, finance, accounting, information technology, marketing and human resource functions. Other costs include facility costs not otherwise included in research and development expenses and fees for legal, accounting and other professional services. For the quarter ended June 30, 2010, we incurred general and administrative expenses in the aggregate of approximately $2.8 million, including stock-based compensation expenses of approximately $1.0 million.As a result of the FDAs approval of the NDA for Fanapt®, we met a milestone under our original sublicense agreement with Novartis which required us to make a milestone payment of $12.0 million to Novartis. The $12.0 million is being amortized on a straight line basis over the remaining life of the U.S. patent for Fanapt®, which we expect to last until May 15, 2017. This includes the Hatch-Waxman extension that extends patent protection for drug compounds for a period of up to five years to compensate for time spent in development and a six-month pediatric term extension. This term is our best estimate of the life of the patent; if, however, the Hatch-Waxman or pediatric extensions are not granted, the intangible asset will be amortized over a shorter period. Amortization of the intangible asset is recorded as a component of cost of goods sold.
Revenues. Revenues were $8.3 million for the three months ended June 30, 2010 compared to revenues of $0 for the three months ended June 30, 2009. Revenues for the three months ended June 30, 2010 included $6.7 million recognized from Novartis related to straight-line recognition of up-front license fees, $1.5 million for Fanapt® product sales to Novartis and $69,000 in royalty revenue based on second quarter 2010 sales of Fanapt®. Novartis launched Fanapt® in January 2010. Despite a significant growth of Fanapt® prescription demand in the second quarter, royalty revenue decreased from the first quarter due to the amount of revenue in the first quarter related to the stocking of pharmacies for the product launch.
Cost of sales. Cost of sales were $1.9 million for the three months ended June 30, 2010 compared to cost of sales of $0.2 million for the three months ended June 30, 2009. Cost of sales for the three months ended June 30, 2010 consisted of $0.4 million resulting from the amortization of the capitalized intangible asset related to the milestone payment to Novartis and $1.5 million for the inventory sold to Novartis. Prior to approval of Fanapt® by the FDA in May 2009 all inventory costs were expensed as research and development. Cost of sales of $0.2 million for the three months ended June 30, 2009 resulted from the amortization of the capitalized intangible asset related to the $12.0 million milestone payment to Novartis in May 2009.
Research and development expenses. Research and development expenses decreased by approximately $4.8 million, or 66.6%, to approximately $2.4 million for the three months ended June 30, 2010 compared to approximately $7.2 million for the three months ended June 30, 2009.
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