Here’s why Vanda Pharmaceuticals jumped higher today
Actions of Vanda Pharmaceuticals (NASDAQ: VNDA) are up 8.7% as of 2:35 p.m. EST after the drugmaker obtained expanded Food and Drug Administration (FDA) approval for its sleeping pill Hetlioz. The new approval covers patients with Smith-Magenis syndrome (SMS), a rare neurodevelopmental disorder.
One of the hallmarks of SMS is that patients find it difficult to sleep at night. It’s a fairly rare disease – Vanda estimates that about 15,000 Americans have text messages. Hetlioz works by inhibiting the melatonin receptor. Taking the drug before bed helps reset patients’ circadian rhythms.
Hetlioz is also approved to treat non-24-hour sleep-wake disorder, a condition found in blind people who cannot sense light, which disrupts their circadian rhythms.
Non-24-hour sleep-wake disorder is a much larger indication than SMS, with Vanda estimating that there could be as many as 95,000 people living with non-24-hour sleep-wake disorder. But reaching these patients and their doctors has been somewhat difficult – Vanda only sold $ 116.5 million worth of the drug in the first three quarters of this year.
SMS patients may be easier to reach for Vanda, as they are likely seeing a specialist for their condition. And there is a Smith-Magenis Syndrome Advocacy, Parents and Researchers (PRISMS) group where Vanda can promote Hetlioz. Without any other approved treatment for SMS, it may also be easier for Vanda to obtain insurance coverage for the disease.
The capsule form of Hetlioz, which adult SMS patients will take, is already available as it is the same formulation as for patients with sleep-wake disorder other than 24 hours. A liquid formulation for children with SMS is expected to launch in the first quarter of 2021.
Even after today’s jump, Vanda’s market cap is less than three times management’s forecast for 2020 of around $ 250 million in sales, which looks cheap enough for a company with the potential. to accelerate its growth with this new indication.
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