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Vanda Pharmaceuticals (VNDA) reported Q1 2026 results featuring $51.7 million in total revenue, up 3% year-over-year. Fanapt drove performance with $29.6 million in sales (up 26%), fueled by its bipolar I disorder indication and an 11-year high in weekly prescriptions. The quarter was marked by the launch of NEREUS for motion sickness through a direct-to-consumer platform and the FDA approval of BYSANTI for bipolar disorder and schizophrenia. Management raised 2026 revenue guidance to $240 million–$290 million, including a $10 million–$30 million contribution from NEREUS. While HETLIOZ revenue fell 24% due to generic competition, the company is preparing for potential year-end approval of imsidolimab for GPP. Pipeline updates were mixed: the Phase III tradipitant GLP-1 study and SAD study remain on track for late 2026, but the MDD study for milsaperidone was pushed to Q1 2027. Cash stood at $202.3 million after significant one-time milestone and manufacturing outlays. Analysts questioned the NEREUS sales model and slowing recruitment for the long-acting iloperidone trial. Despite higher anticipated cash burn in 2026, management emphasized their transition to a six-product commercial portfolio by year-end.

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VANDA PHARMACEUTICALS INC.: A Legal War of Attrition Masking a Rapid Liquidity Drain

Full Earnings Call Transcript — Q1 • 2026-05-07

Operator: Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Q1 2026 Vanda Pharmaceuticals, Inc. Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Vanda's Chief Financial Officer, Kevin Moran.
Kevin Moran: Thank you, Jordan. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals First Quarter 2026 performance. Our first quarter 2026 results were released this afternoon and are available on the SEC's EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mihael Polymeropoulos, our President, Chief Executive Officer and Chairman of the Board. Following my introductory remarks, Mihael will update you on our ongoing activities. I will then comment on our financial results before we open the lines for your questions. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances and uncertainties. These risks are described in the cautionary note regarding forward-looking statements, risk factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recent annual report on Form 10-K as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, which are available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other filings. The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.
Mihael Polymeropoulos: Thank you very much, Kevin. Good afternoon, everyone. Thank you for joining us today for Vanda Pharmaceuticals First Quarter 2026 Earnings Conference Call. Vanda delivered strong commercial execution in the first quarter, highlighted by 26% year-over-year growth in Fanapt sales, the groundbreaking U.S. launch of NEREUS with its pioneering direct-to-consumer platform at nereus.us and the FDA approval of BYSANTI. We believe that these achievements, combined with meaningful pipeline progress and our raised 2026 revenue guidance position the company for continued growth and value creation. Financial highlights, the total net product sales reached $51.7 million in the first quarter of 2026, a 3% increase compared to $50 million in Q1 2025. Fanapt net product sales were $29.6 million, up 26% year-over-year. Full year 2026 revenue guidance was raised to $240 million to $290 million, including $10 million to $30 million from newly launched NEREUS. Key commercial highlights. Fanapt saw continued strong momentum with total prescriptions, TRx, up 32% and new-to-brand prescriptions NBRx, up 76% versus the first quarter of 2025. In April 2026, weekly TRx for Fanapt reached an 11-year high of over 2,600 prescriptions for the week ending April 24, 2026. NEREUS is now commercially available nationwide through nereus.us, Vanda's innovative direct-to-consumer platform. This pioneering patient-centric model enables convenient ordering online with rapid direct delivery, eliminating traditional pharmacy barriers and providing a seamless modern access experience. As the first new prescription therapy approved for the prevention of vomiting induced by motion in adults in more than 40 years, NEREUS represents a breakthrough in both science and patient access. Some key regulatory and clinical development highlights. BYSANTI, milsaperidone received FDA approval for the treatment of bipolar I disorder and schizophrenia. BYSANTI is protected by data exclusivity through February 20, 2031, and multiple patents, the latest of which expires on May 31st, 2044. Vanda's ongoing late-stage clinical studies are progressing rapidly and are expected to generate top line results in 2026 or early 2027, including the Phase III study of BYSANTI as a once-daily adjunctive treatment for major depressive disorder with results expected in Q1 2027. The HETLIOZ Phase III study of NEREUS for the prevention of vomiting in patients receiving GLP-1 receptor agonist therapies with results expected in 2026. The Phase III study of VQW-765 in the treatment of adults with social anxiety disorder with results expected by the end of 2026. The FDA accepted the biologic license application for imsidolimab in Generalized Pustular Psoriasis with a Prescription Drug User Fee Act target action date of December 12, 2026. The results of the pivotal clinical study were published in the April 28, 2026, issue of the New England Journal of Medicine Evidence. In summary, 2026 is developing into a transformational year for Vanda with an extensive and diversified portfolio of commercialized products that include Fanapt, HETLIOZ, HETLIOZ LQ, PONVORY, NEREUS, BYSANTI and potentially imsidolimab by year-end. Our recent innovative launch of NEREUS through the nereus.us platform revolutionizes customer experience through a convenient ordering system at a significantly discounted cash pay price. Finally, our late-stage pipeline with several late-stage Phase III studies are poised to further diversify our pipeline and strengthen Vanda's commercial presence for years to come. With that, I'll turn now to Kevin to discuss our financial results. Kevin?
Kevin Moran: Thank you, Mihael. I will begin by summarizing our first quarter 2026 financial results. Total revenues for the first quarter of 2026 were $51.7 million, a 3% increase compared to $50 million for the first quarter of 2025 and a 10% decrease compared to $57.2 million for the fourth quarter of 2025. The increase as compared to the first quarter of 2025 was primarily due to growth in Fanapt revenue as a result of the continued commercialization efforts for Fanapt in bipolar disorder, partially offset by decreased HETLIOZ revenue as a result of generic competition. The decrease as compared to the fourth quarter of 2025 was primarily driven by the impact of insurance plan disruptions and deductible resets that are typical in the industry at the beginning of the year. Let me break this down now by product. Fanapt net product sales were $29.6 million for the first quarter of 2026, a 26% increase compared to $23.5 million in the first quarter of 2025 and an 11% decrease as compared to $33.2 million in the fourth quarter of 2025. The increase in net product sales relative to the first quarter of 2025 was attributable to an increase in volume, partially offset by a decrease in price net of deductions. Fanapt total prescriptions or TRx, for the first quarter of 2026 as reported by IQVIA Xponent, increased by 32% compared to the first quarter of 2025. Fanapt new patient starts as reflected by new-to-brand prescriptions, or NBRx, for the first quarter of 2026 as reported by IQVIA Xponent, increased by 76% compared to the first quarter of 2025. The decrease to net product sales relative to the fourth quarter of 2025 was attributable to a decrease in volume and price net of deductions. Fanapt TRx for the first quarter of 2026 decreased by 1% as compared to the fourth quarter of 2025. The decrease in volume was primarily driven by the impact of insurance plan disruptions and deductible resets that are typical in the industry at the beginning of the year and that we have observed with Fanapt and the broader atypical antipsychotic market in prior years. Historically, Fanapt inventory at wholesalers has ranged between three and four weeks on hand as calculated based off trailing demand. As of the end of the first quarter of 2026, Fanapt inventory at wholesalers was slightly above four weeks on hand, which was generally consistent with the level of inventory weeks on hand as of the fourth quarter of 2025, but slightly above the historic range. Turning now to HETLIOZ. HETLIOZ net product sales were $15.9 million for the first quarter of 2026, a 24% decrease compared to $20.9 million in the first quarter of 2025 and a 3% decrease compared to $16.4 million in the fourth quarter of 2025. The decrease in net product sales relative to the first quarter of 2025 and the fourth quarter of 2025 was attributable to a decrease in volume as a result of continued generic competition in the U.S., which has contributed to declines in dispenses for both comparative periods. Of note, for the first quarter of 2026, HETLIOZ continued to be the leading product from a market share perspective despite generic competition now for over three years. HETLIOZ net product sales continue to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period. HETLIOZ net product sales have fluctuated and may continue to fluctuate from quarter-to-quarter depending on when specialty pharmacy customers need to purchase again. HETLIOZ net product sales may decline in future periods, potentially significantly, related to continued generic competition in the U.S. And finally, turning to PONVORY. PONVORY net product sales were $6.2 million for the first quarter of 2026, a 10% increase compared to $5.6 million for the first quarter of 2025 and an 18% decrease compared to $7.6 million in the fourth quarter of 2025. The increase in net product sales relative to the first quarter of 2025 was attributable to an increase in volume and price net of deductions. The decrease in net product sales relative to the fourth quarter of 2025 was primarily attributable to a decrease in price net of deductions, partially offset by an increase in volume. The specialty distributor and specialty pharmacy inventory on hand levels during these periods were in line with normal ranges. Of note, underlying patient demand was essentially flat between the fourth quarter of 2025 and the first quarter of 2026, even in light of the negative impact of insurance plan disruptions and deductible resets at the beginning of the year. Additionally, as we have previously discussed, an amount of variable consideration related to PONVORY net product sales is subject to dispute, of which approximately $3 million was recognized for the three months ended December 31, 2024. For the first quarter of 2026, Vanda recorded a net loss of $48.6 million compared to a net loss of $29.5 million for the first quarter of 2025. The net loss for the first quarter of 2026 included income tax expense of $0.1 million as compared to an income tax benefit of $7.9 million for the first quarter of 2025. As a reminder, the company recorded a onetime tax charge in the fourth quarter of 2025 to establish a valuation allowance against all of Vanda's deferred tax assets. Tax expense is expected to be nominal going forward until such time that a valuation allowance is no longer required. Operating expenses for the first quarter of 2026 were $101.9 million compared to $91.1 million for the first quarter of 2025. The $10.8 million increase was primarily driven by higher SG&A expenses related to spending on Vanda's commercial products as a result of the continued commercialization efforts for Fanapt in bipolar disorder and PONVORY multiple sclerosis, expenses associated with the preparation for NEREUS and BYSANTI commercial launches and higher legal expenses. These increases were partially offset by lower R&D expenses on our imsidolimab program, partially offset by an increase in expenses for our BYSANTI major depressive disorder program, VQW-765 social anxiety disorder program and other development programs. The first quarter of 2025 included an upfront payment to Anaptys for the exclusive global license agreement for the development and commercialization of imsidolimab. On the commercial side, during 2024 and 2025, we conducted a host of activities as a result of the commercial launches of Fanapt in bipolar disorder and PONVORY in multiple sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs. Additionally, in the first quarter of 2025, we launched our direct-to-consumer campaign, which has driven meaningful gains in brand awareness for the company and our products, Fanapt and PONVORY. Throughout 2025 and the first quarter of 2026, we maintained strategic investments in our commercial infrastructure, including increased brand visibility through targeted sponsorships with the goal of supporting long-term market leadership and future commercial launches. Vanda's cash, cash equivalents and marketable securities referred to as cash as of March 31, 2026, was $202.3 million, representing a decrease of $61.5 million compared to December 31, 2025. The decrease to cash was driven by the net loss in the first quarter of 2026 as well as a onetime milestone payment of $10 million made to Eli Lilly in the first quarter of 2026 for the approval of NEREUS in the U.S. Seasonal compensation and benefit payments, which generally hit during the first quarter of the year of approximately $7 million and payments to third parties for manufacturing of commercial and clinical product of approximately $11 million, which is significantly higher than recent quarters. As a reminder, payments made in advance of production are capitalized as a prepaid expense. Commercial products are capitalized as inventory on our balance sheet after production, while pre-commercial products are generally expensed as research and development costs as incurred. The timing of manufacturing of pre-commercial products may result in future variability of our R&D expense depending upon the timing of production. When adjusting the decrease in cash for these items, the change in the first quarter of 2026 would have been closer to $40 million. With regard to the launches of Fanapt in bipolar disorder and PONVORY multiple sclerosis, as I mentioned, the launches were initiated in 2024, and we continue to enhance our commercial efforts through the first quarter of 2026 with the impact of these commercial efforts contributing to revenue growth in 2025 and expected to continue to contribute to our revenue growth in 2026 and beyond. We have already seen significant growth in our commercial activities. Several lead indicators suggest a strong market response to our commercial activities related to Fanapt for bipolar disorder, including total prescriptions or TRx increased by approximately 32% in the first quarter of 2026 as compared to the first quarter of 2025. In April of 2026, weekly TRx for Fanapt reached an 11-year high of over 2,600 prescriptions for the week ending April 24, 2026. New patient starts as reflected by NBRx increased by 76% in the first quarter of 2026 as compared to the first quarter of 2025. Of particular note, Fanapt was one of the fastest-growing atypical antipsychotics in the market throughout 2025 and in the first quarter of 2026 based on several prescription metrics. Our Fanapt sales force continues to expand. Our Fanapt sales force number approximately 160 representatives at the end of 2024 and increased to approximately 300 representatives at the end of 2025. These expansions have allowed us to significantly increase our reach and frequency with prescribers. To that end, the number of face-to-face calls in the first quarter of 2026 was more than 80% higher than the number of face-to-face calls in the first quarter of 2025. In addition to our Fanapt sales force, we have established a specialty sales force to market PONVORY to neurology prescribers around the country. We have grown this sales force to approximately 50 representatives. Fanapt performance remains the focus of Vanda's commercial initiatives and encourages us to continue to invest in this differentiated medicine and the franchise extending launch of BYSANTI. Before turning to our financial guidance, I would like to remind folks that with Fanapt, HETLIOZ, PONVORY and now NEREUS already commercially available and with BYSANTI recently approved for bipolar disorder and schizophrenia and a biologics license application for imsidolimab now under review by the FDA, Vanda has five products currently commercially approved and could have six products commercially approved by the end of 2026. Turning now to our financial guidance. Vanda is raising its full year 2026 total revenue guidance to reflect the potential contribution of newly launched NEREUS while maintaining prior ranges for Fanapt and other products. Vanda expects to achieve the following financial objectives in 2026. Total revenues from Fanapt, HETLIOZ, PONVORY and NEREUS of between $240 million and $290 million. The midpoint of this revenue range of $265 million would imply revenue growth in 2026 of approximately 23% as compared to full year 2025 revenue. This compares to the previous guidance of total revenues from Fanapt, HETLIOZ and PONVORY of between $230 million and $260 million. Fanapt net product sales of between $150 million and $170 million. The midpoint of this revenue range would imply Fanapt revenue growth in 2026 of approximately 36% as compared to full year 2025 Fanapt revenue. This guidance is consistent with the previously communicated revenue guidance. Assuming consistent gross to net dynamics between 2025 and 2026, the bottom end of the range assumes high single-digit to low double-digit sequential quarterly TRx growth for Fanapt in the remainder of 2026. The top end of the range assumes mid-teens to high-teens sequential quarterly TRx growth for Fanapt in the remainder of 2026. Other net product sales of between $80 million and $90 million. This range assumes a further decline of the HETLIOZ business due to generic competition and modest growth of the PONVORY business, where we are seeking to significantly improve market access to the product. Depending on our success in these efforts, we could see meaningful improvements in patients on therapy, prescriptions filled, and prescriptions written by prescribers. This guidance is also consistent with the previously communicated revenue guidance. Finally, NEREUS net product sales of between $10 million and $30 million. This guidance was not previously provided and is being introduced as part of the Q1 earnings update. Vanda is currently making conditional investments to facilitate future revenue growth, both in the form of R&D investments, commercial manufacturing, and potentially outsized commercial investments, which could vary moving forward depending on the success of these commercial strategies. As previously communicated, Vanda is not providing 2026 cash guidance at this time. However, it is likely that Vanda's 2026 cash burn will be greater than the cash burn in 2025. With that, I'll now turn the call back to Mihael.
Mihael Polymeropoulos: Thank you very much, Kevin. At this point, we'll be happy to answer your questions.
Operator: [Operator Instructions] Your first question comes from the line of Olivia Brayer from Cantor Fitzerald.
Olivia Brayer: Can you run through what the pushes and pulls are that you're using for that $10 million to $30 million guidance range for NEREUS? It seems like somewhat of a big range, just given that it's so early in the launch. So, I'm curious what the higher end of the range assumes versus the lower end. And then on BYSANTI's launch, what's the progress on getting that to patients at this point? And should we assume that any contribution from BYSANTI this year is essentially embedded in your Fanapt guidance? Or is it just too early to start attributing revenues there?
Mihael Polymeropoulos: Maybe, Olivia, I will start off by saying it is very early on the NEREUS launch. And you have seen that we're approaching it as a broadly available commercial product with a direct-to-consumer platform, which is in the early days. And of course, we're working through all the dynamics and logistics of that. We'll have a better idea on progress by our next call. And in terms of the $10 million to $30 million, we're excited about the opportunity. We know we are tapping a market of potentially 70 million people with motion sickness and a good percentage of them suffering from severe motion sickness that is not properly treated today. The $10 million to $30 million is a relatively wide range, but it is not informed by experience. It is more modeling from the total market opportunity and other treatments for motion sickness. But I'll turn it to Kevin.
Kevin Moran: Yes. And that's right, Olivia. That's what's driving the range there. It's obviously not informed by actual data at this point. It's informed by modeling and what we've seen in some of our qualitative and quantitative research. And so, as we gather more information there, obviously, we'll be able to provide additional context as the year progresses. Maybe on the BYSANTI side, what we previously communicated there is that we were looking to have the product available in the back half of the year, and that's still on track. So, we're working to bring that product to market. And then as far as the revenue contribution goes, obviously, still pre-launch, so a little bit early on this. But I wouldn't necessarily think about it being as embedded in the Fanapt revenue item because we expect that we'll see demand for BYSANTI independent of Fanapt. And for any demand that we see for BYSANTI that replaces Fanapt demand, we're expecting to see meaningful net price favorability, which obviously would lead to a larger revenue contribution from a BYSANTI unit versus a Fanapt unit.
Olivia Brayer: Okay. Got it. So, for BYSANTI specifically, is it just a matter of waiting until it's officially commercially available before providing any sort of revenue numbers around that? Or is 2026 maybe just a little bit too early to start modeling BYSANTI?
Kevin Moran: I think it's going to be -- obviously, we haven't -- we're not committing to providing revenue guidance on BYSANTI at any point in time. But obviously, the launch is, I think, going to be critical to us having better visibility into providing revenue guidance. And then we'll be looking to provide additional updates on it. But I don't think it's necessarily too early depending on the timing at which we launch the product.
Operator: Your next question comes from the line of Ram Selvaraju from H.C. Wainwright & Co.
Raghuram Selvaraju: Firstly, I was wondering if you could provide us with some additional color regarding the timeline to reporting of top-line data for the tradipitant study assessing its ability to attenuate nausea and vomiting and other GI side effects associated with GLP-1 drugs.
Kevin Moran: Yes. Thanks, Ram. So, what we've communicated there is that in the press release today, we said results by the end of 2026. And our timing obviously is consistent with that, and that's consistent with what we communicated in our most recent and our initial launch of the program. And obviously, we're actively enrolling patients at this point. So that's informed by actual activity.
Raghuram Selvaraju: And can you talk a little bit about what your expectations are for that data set? What you would consider to be a clinically meaningful result? And if you are also going to have additional information regarding the impact of tradipitant use on adherence and efficacy outcomes on the GLP-1s for patients enrolled in the study?
Mihael Polymeropoulos: Thank you, Ram. This is Mihael. First of all, the Phase III study is of a very similar design like the Phase II study for which we reported positive results in November. And that is a week of pre-treatment with tradipitant or placebo and then a single injection of Wegovy at 1 milligram and follow-on for another week. So, what we aim to do with this study is confirm the previous finding of the significant reduction in vomiting episodes that we saw. And certainly, that was highly clinically meaningful. On your question whether this will improve adherence, of course, with this short study, we will not have this information. But it is widely known that this GI decreased tolerability, especially around dose escalation to higher doses, is a significant contributor to decreased adherence.
Raghuram Selvaraju: And just two other things on that front. Can you comment on the possibility or likelihood of any off-label use of tradipitant given the fact that it is now an approved drug for motion sickness among those folks taking GLP-1 drugs who may potentially have obtained them via some consumer health initiative, potentially to assist them in achieving long-term adherence?
Mihael Polymeropoulos: So first of all, the key word here is off label. Of course, we don't have any approved use for that indication. We cannot promote off label, especially in the midst of clinical studies and certainly not before approval in that indication. So, we cannot have any insights for that. We certainly hope that upon approval there will be a significant interest in the use of the drug.
Raghuram Selvaraju: And then last question for me is with respect to the long-acting injectable formulation of iloperidone. Can you provide us with an update on that? And how rapidly you expect to be able to advance the product candidate in this context at this juncture?
Mihael Polymeropoulos: Yes. Thank you. For context, this is a long-acting injectable iloperidone being used in the study to measure relapse prevention in schizophrenia. The study is ongoing in the U.S. However, it is going slowly and slowly recruiting. We think that is a phenomenon of the field of these studies and the required design of a placebo controlled. And I know you're quite familiar with this type of designs, but we're highly concerned that this exact model that has worked extremely well for Fanapt oral and other antipsychotics is becoming less and less amenable to study new drugs. And what we are thinking and potentially discussing with the FDA soon is that not only recruitment has become slower in the U.S. for this type of placebo-controlled schizophrenia relapse prevention study, but the rate of relapse has historically been significantly reduced. We observed a significant rate of relapse on placebo in the study that was completed in 2015. We've seen since with other drugs that follow this design, a significant reduction on placebo. It is too early for us to say what the exact placebo rate will be in this study. But certainly, we already believe will be much lower rate of relapse than the oral REPRIEVE study of iloperidone. All these go together to say that we are concerned about the timing of -- and the progress of the study. But we do have several ideas. We plan to engage the FDA in a constructive discussion and perhaps even modify the development plan.
Operator: Your next question comes from the line of Madison El-Saadi from B. Riley.
Madison Wynne El-Saadi: Maybe I'll ask about the recent New England Journal publication on imsidolimab in GPP. So, we're looking at a potential Christmas time approval again. Are you taking steps now to kind of lay the groundwork for a potential year-end commercial launch? Will this likely be something where there's like a one quarter cushion before the launch? And then is the expectation that you would receive approval in both the acute and the maintenance settings out of the gate?
Mihael Polymeropoulos: Yes. Thank you very much, Madison. And you're correct. We're very excited with the publication in such a high-caliber journal, the New England Journal of Medicine evidence on this result, a testament of peer reviewed scrutiny around this very impressive data. I will answer the question on indication first. We believe that the data that we've seen from the GEMINI-I, GEMINI-II studies do support both immediate treatment of acute flares with a single injection and maintenance of that relapse in responders with the once every four-week injections. So that is our proposed indication with the FDA. And we're also making progress with -- towards regulatory filings in Japan and in Europe, but they are much earlier than the FDA submission. In terms of launch timing, this is, of course, a complex project to manufacture being a monoclonal antibody. We do not expect that we will be commercially launching right after the PDUFA date. There would be some lag time. But hopefully, we can do that within the first half of 2027.
Madison Wynne El-Saadi: Understood. And then if I may ask, so on the Fanapt prescription data, this kind of reacceleration in April, BYSANTI was approved late February. Just wondering if there was maybe some type of a halo effect that could have fed into that or if that was purely kind of the sales force that you described earlier?
Kevin Moran: Yes, Madison, thanks for the question on that. So, the reminder there is that historically, including this year, we've seen the first quarter be -- have seasonality with both Fanapt and the broader atypical class. And this first quarter was no exception. And in line with our expectations, we saw a flattish first quarter on prescription demand, which is, again, consistent with what we saw last year and in years prior to that. What we saw last year was after the first quarter, we saw an acceleration and sequential quarterly growth in the double-digit range in the second, third and fourth quarter of last year. And that's our expectation of what we'll see this year, and that's supported by what we see on the April data, which includes our highest TRx prescription number in over 11 years, right, which was over 2,600. So, the pattern that we've seen in prior years and expected to see this year is what we've seen play out to date as the year has gotten started here.
Mihael Polymeropoulos: Yes. I agree with all that. But also, I want to emphasize that the commercial infrastructure is mature. We have approximately 300 representative sales force, which is now well trained, mature, developing their relationships in the field and supported by both a significant awareness speakers' program, but also our brand awareness direct-to-consumer marketing.
Operator: Your next question comes from Leszek Sulewski from Truist.
Leszek Sulewski: So first on Fanapt, do you have a sense of what portion of the TRxs and NBRxs are coming from bipolar versus schizophrenia? And with inventory running above normal, should we expect any wholesaler destocking in 2Q? And then on BYSANTI, can you rank the launch priorities, new patient starts versus switches from Fanapt and targeting the Medicaid heavy patients? And then third, I see the MDD readout was moved to the first quarter of '27 from year-end '26. What drove the timing shift? And I have a follow-up.
Kevin Moran: Thanks, Les. Maybe I'll start with the first two, and then Mihael can take the one on the MDD. So first on the split. So, while we don't analyze the data at an indication level, our expectation on the Fanapt growth is that the primary driver is going to be the bipolar label expansion that we got in 2024. And that's what we seen, and that's what's informed our targeting strategy and call points and call guidance. So, the expectation would be that the growth that we're seeing in the Fanapt business is driven by increased demand from the bipolar patient population. As far as the stocking question goes, so just to point you to what I said in my prepared remarks there, historically, we've seen the Fanapt inventory levels at three to four weeks. What we've seen in the -- at the end of the first quarter of 2026, fourth quarter of 2025 and as far back as the fourth quarter of 2024 is that the inventory levels were at or slightly above four weeks on hand. So actually, the inventory at the end of the first quarter is largely consistent with what we've seen over the recent period. And what we would expect to see for a product that's growing, right? Because as you're measuring this, it's based off a trailing demand figure. But if the demand is growing, then it's actually on a lag. So, I wouldn't expect that. I'd expect the inventory levels to maintain at this as long as Fanapt continues to grow. The second question you had there was around the prioritization of new patients versus switches from Fanapt to BYSANTI. And what I would tell you there is that we're going to be prioritizing both. And that's because with BYSANTI being launched as a newly approved atypical antipsychotic, we're certainly going to be detailing it in that light. And as part of that, we'll be deploying commercial strategies to have prescriptions moved from Fanapt to BYSANTI as appropriate. And the last kind of point I would make on that is that with the nearest -- or sorry, with the BYSANTI launch in the back half of this year and the Fanapt potential loss of exclusivity at the end of next year, we've got five quarters or so where both products will be in the market, and we can execute on a switch strategy while executing a launch strategy as well. With that, Mihael, I think, can address the question on the MDD timing.
Mihael Polymeropoulos: Yes. Les, you're correct. we moved the timing of end of study and results for the MDD in the first quarter of 2027 from end of '26. We're still working hard to get the results as soon as possible and could be by year-end, but we have better data now on recruitment speed and especially bringing on new sites and those in Europe as well. So, it is a reflection of projections from the actual recruitment data.
Leszek Sulewski: That is helpful. And then on your commercialization and motion sickness, can you provide some color around the patient access to the drug and how that pricing looks like outside of the website via the retail pharmacy channel? And then lastly, maybe just kind of curious on your pricing strategy given the competing NK-1s out there and how this would translate to the GLP-1 adjunct opportunity.
Kevin Moran: Yes. Thanks, Les. So, as we look at the insurance reimbursement landscape, obviously, with the product relatively recently approved, that will be a process that plays out over coming quarters and years as the payers conduct their clinical assessments and then their periodic reviews. So, I expect to have more information to share on NEREUS access and progress on that front as we move further into the launch, but it's certainly something that would like to secure as well in addition to the cash pay model. But the cash pay model is our immediate focus for the actual NEREUS launch with the innovative platform that we've deployed. And I'm sorry, Les, what was the second question after that?
Leszek Sulewski: The pricing strategy around and read-through for the GLP-1 opportunity.
Kevin Moran: Yes. Sorry. Thanks, Les. Yes. So, as we kind of evaluate the space and we look at the competitive class for the NK-1s, they range anywhere per dose from the 200 range up to about the 600 range. So, with our pricing strategy there, we're kind of deployed in the middle on the lower end. And we think with an eye towards gastroparesis potentially, if we're able to be successful on the regulatory front there and with the GLP-1 that pricing would put that at a competitive market price to service those patients as well. So certainly, the considerations for us as we launched the pricing were having the appropriate price for the motion sickness market but having an eye towards the potential for a gastroparesis market and a GLP-1 market, hopefully, in the near future.
Mihael Polymeropoulos: And what I would add is a couple of things. We chose this commercial model because we believe motion sickness is a prototypical consumer product. And as you can see on our website, we provide the product in increments of two capsules, which may be enough to supply somebody for their business or personal travel, where they may experience motion. So that's important to us, and we're receiving good comments on being very patient-centric. And while in recent, I would say, years or a year, we've seen a model of cash pay at discounted prices, coming on, especially for drugs like the GLP-1 analogues. This is the first instance we know that you can directly coordinate with manufacturer. And this is an innovative system that we have built at Vanda and works in conjunction with a mail order pharmacy that can get expeditiously the product to patients. We also are working to continue to add value-added measures, including a telemedicine platform so that patients can conveniently obtain the prescriptions. So, it's all focused on the customer experience, and we want this to be really an example for others to follow. You mentioned, I think, briefly other NK-1 antagonist. And yes, there are other approved drugs in the class. None of them have ever been studied or approved in motion sickness or as an adjunct to GLP-1. The lead product there has been precedent by Merck in chemotherapy-induced nausea and vomiting and postoperative nausea and vomiting. And there are some key things and key differences on the label that can make potentially NEREUS more attractive for our consumer base. And what I'm alluding to is the absence of interaction in the study imsidolimab study, which actually differentiates NEREUS from event on Emend contraindication or warning around contraceptive use. So that and other items on the prescribing information, we believe can make the product attractive, especially for this approved indication.
Leszek Sulewski: That's very helpful. Just to clarify one thing, does it seem that you would weigh out the option of a dual model approach for GLP-1 adjunct opportunity, meaning you could roll it out with a DTC plan and also a traditional insurance channel as well?
Mihael Polymeropoulos: Yes. First of all, our premise here is broad access. So, any way people want to acquire the product, we want to make it available for them. At the same time, we recognize the difficulties people are going through with all the, let's call it, middleman, the pharmacy benefits organizations, their own plans. Pharmacies and all the markups of prices that go along. And we know there's a national discussion around that. As Kevin said, the WACC price, the list price of $255 a capsule is within the range of other NK-1 antagonist. However, on the cash pay, we are offering it at about a more than 65% discount from $255 to $85 a capsule, making it affordable for folks who travel for business or pleasure engage in these motion sickness activities. At the same time, we are making the drug available to pharmacies, and we ensure that wholesalers would either stock the drug or will make it available upon demand. So, the premise here is access, but access is not just insurance negotiations is appreciating independence and convenience by individual patients in accessing this drug. And we think this dual model can achieve that.
Operator: Your final question comes from the line of Andrew Tsai from Jefferies.
Unknown Analyst: This is Faye on for Andrew. So, we have two questions. Number one is about milsaperidone. We want to gauge your views on its likelihood of success in the Phase III MDD trial. We know that not all antipsychotics work in MDD. So, do you want to talk about your confidence why milsaperidone should succeed? And is there any existing data to support any of its benefits as antidepressant?
Mihael Polymeropoulos: Yes. We think actually we're quite confident. That's why we're running this study, and we're running it with the once-a-day BYSANTI. We think the study is properly powered to detect a clinical meaningful improvement in symptoms of depression. And generally, atypical antipsychotics are effective as an adjunctive treatment in major depression. Now there are individual receptor binding properties of BYSANTI that differentiated and may increase the ability of effectiveness. And that is not only the dual dopamine and serotonin receptor antagonism, but also the strong and unique in the class alpha-1 receptor antagonism. And whether this will be necessary to achieve the effects or not in major depression will remain to be seen. But we remain very confident on the ability of BYSANTI to achieve the effect.
Unknown Analyst: Okay. And the second question we have is for NEREUS. So, it launched earlier this month, and you briefly touched on the pricing strategy, but can you talk about the sales cadence for this drug later this year moving into 2027?
Kevin Moran: Yes. So obviously, with us launching mid-second quarter, we would expect the revenue to grow as the year progresses. And that's both with the passage of time, but also with the increase of our promotional activities associated with the product launch. So, one of the key elements to the commercial strategy here is a direct-to-consumer campaign, which we have worked on implementing over recent quarters, but will be continue to investing in as the year goes on. So certainly, we're optimistic about the prospects for NEREUS, and we expect the revenue cadence to increase and accelerate as the year goes on.
Operator: There are no further questions. I'd now like to turn it over to Vanna Pharmaceutical management for closing remarks.
Mihael Polymeropoulos: Thank you very much all for joining this call and for your questions. We look forward to talking to you soon.
Operator: That concludes today's meeting. You may now disconnect.