Vanda (VNDA) Q4 2025 Earnings Call Transcript

Image source: The Motley Fool.

Date

Wednesday, February 11, 2026 at 4:30 p.m. ET

Call participants

• President, Chief Executive Officer, and Chairman of the Board — Mihael H. Polymeropoulos
• Chief Financial Officer — Kevin Patrick Moran
• General Counsel — Tim Williams

Takeaways

• Total revenue -- $216,100,000 for the year, representing a 9% increase, driven primarily by Fanapt growth offset by lower HETLIOZ sales due to generic competition.
• Fanapt net product sales -- $117,300,000 for the year, up 24% reflecting a 28% growth in total prescriptions and a 149% increase in new-to-brand prescriptions.
• PONVORY net product sales -- $27,400,000 for the year, a 2% decrease, with $3,000,000 of variable consideration subject to dispute and recognized in Q4 2024.
• HETLIOZ net product sales -- Declined year over year; continued to retain majority US market share despite three years of generic competition.
• Fourth quarter revenue -- $57,200,000, up 8% year over year and 2% sequentially, largely due to Fanapt’s bipolar launch.
• Q4 Fanapt sales -- $33,200,000, a 25% increase year over year and 6% sequentially, driven by 36% total prescription and 108% new-to-brand prescription increases.
• Q4 HETLIOZ sales -- $16,400,000, down 18% year over year and 9% sequentially, with ongoing inventory level adjustments at specialty pharmacies.
• Q4 PONVORY sales -- $7,600,000, up 17% year over year and 8% sequentially, with sales increases attributed to price net of deductions, partially offset by volume.
• Net loss -- $120,500,000 for the year, compared to $18,900,000 prior, including a one-time, noncash $113,700,000 deferred tax valuation allowance expense.
• Operating expenses -- $367,300,000 for the year, up $127,900,000 mainly from higher SG&A spending on commercial launches and R&D expenses, especially from imsidolimab development and Fanapt LAI/Desipramine trials.
• Cash position -- $263,800,000 as of December 31, 2025, down $110,800,000 year over year primarily due to net loss and timing of expenses and collections.
• FDA approval -- Tradipitant (Nirius) approved for motion sickness prevention, representing first new oral agent in over forty years and commercial launch preparation underway for late Q2 or Q3.
• Regulatory progress -- Melperone (Vasanti) NDA under FDA review, PDUFA date set for February 21, 2026; imsidolimab BLA submitted for generalized pustular psoriasis.
• 2026 product revenue guidance -- Anticipated $230,000,000-$260,000,000 from current marketed products, with Fanapt guidance of $150,000,000-$170,000,000, implying growth largely driven by prescription volume.
• Fanapt gross-to-net impact -- 2025 script growth outpaced sales growth due to Medicare benefit redesign and greater commercial copay support, with effect expected to remain consistent barring major changes.
• Vasanti gross-to-net outlook -- Anticipated mid‑thirties percent gross-to-net, improved versus Fanapt's approximate 50%, due to Medicaid Unit Rebate reset post-approval.
• Sales force expansion -- Fanapt sales team increased from approximately 160 to 300 representatives; PONVORY specialty sales force grew to ~50 representatives, doubling face-to-face prescriber engagements year over year.
• Late-stage pipeline -- Phase 3 trials underway for desipramine (major depressive disorder) and iloperidone LAI (schizophrenia relapse prevention); VQW-765 in Phase 3 for social anxiety disorder and PONVORY extension studies advancing.

Need a quote from a Motley Fool analyst? Email pr@fool.com

Risks

• Kevin Patrick Moran stated, "it is likely that Vanda’s 2026 cash burn will be greater than the cash burn in 2025," and that full-year cash balances may be further impacted by milestone and inventory payments.
• HETLIOZ revenues may "decline in future periods, potentially significantly, related to continued generic competition in the U.S." with anticipated lower specialty pharmacy orders as existing inventory levels are worked down.
• Mihael H. Polymeropoulos said clinical trial enrollment for iloperidone LAI was behind expectations due to it is enrolling. However, we are not satisfied much with the speed, and that is primarily because of the delays in launching this study in Europe. And it is not delays the company can control. It is more resistance in conducting placebo-controlled studies in Europe and other considerations. So that has definitely slowed down the rate of recruitment.

Summary

Vanda Pharmaceuticals (NASDAQ:VNDA) delivered robust commercial growth from Fanapt, driven by a substantial increase in prescription volume and the product's bipolar disorder launch. The approval of tradipitant (Nirius) for motion sickness marks a significant addition to the commercial portfolio, with management targeting a late Q2 to Q3 launch and pursuing label expansion for GLP-1-related vomiting. Melperone (Vasanti) and imsidolimab programs progressed to major regulatory review stages, with 2026 guidance forecasting further growth from current franchises while excluding potential upside from new launches.

• Management highlighted that no revenue from Vasanti or Nirius launches is included in 2026 guidance, and Vasanti launch will be possible only after commercial supplies become available in Q3.
• Vasanti is expected to generate improved economics versus Fanapt due to a Medicaid rebate reset, with "to be more like in the mid‑thirties" percent, compared to Fanapt's ~50% range.
• Fanapt’s guidance assumed growth is "almost entirely TRx driven, volume driven" without lift from price and with changes to gross-to-net dynamics from Medicare and Medicaid redesigns.
• Significant increase in sales force size and marketing initiatives, including direct-to-consumer campaigns and specialty outreach efforts, support ongoing revenue growth across the product portfolio.
• Cash expenditures are projected to rise in 2026, compounded by milestone payments for new approvals and investments in commercial infrastructure, with cash guidance withheld.
• PONVORY's net product sales guidance assumes modest growth, while HETLIOZ’s business is forecasted to decline further due to ongoing generic erosion and shifting specialty pharmacy ordering patterns.

Industry glossary

• BLA (Biologics License Application): FDA submission requesting approval to market a biologic product in the United States.
• PDUFA (Prescription Drug User Fee Act) date: Target date by which the FDA must act on a new drug application.
• Gross-to-net: The difference between a drug's gross sales and its actual net revenue after discounts, rebates, and allowances.
• NBRx (New-to-Brand Prescriptions): Prescriptions for patients starting a brand for the first time.
• TRx (Total Prescriptions): The sum of all prescriptions dispensed for a product in a given period.
• SG&A: Selling, General, and Administrative expenses, covering all non-R&D operating costs.
• S1P1 receptor modulator: A drug class targeting sphingosine-1-phosphate receptors, modulating immune system cell movement.
• Psoriasis Area and Severity Index (PASI‑75): A clinical measure indicating at least a 75% reduction in psoriasis area and severity.
• Deferred tax asset valuation allowance: An accounting adjustment reflecting management's judgment that some or all deferred tax assets may not be utilized.
• GLP-1 agonist: Glucagon-like peptide-1 receptor agonist, used mainly for diabetes and obesity management; can cause gastrointestinal side effects.
• URA (Unit Rebate Amount): The rebate pharmacies and manufacturers pay to Medicaid for covered outpatient drugs.
• LAI: Long-acting injectable formulation, extending medication release over an extended period.

Full Conference Call Transcript

Kevin Patrick Moran: Our fourth quarter and full year 2025 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 Mihael H. Polymeropoulos, our President, Chief Executive Officer, and Chairman of the Board, and Tim Williams, our General Counsel. 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 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 and on our website, which are available on the SEC’s EDGAR system.

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, Mihael H. Polymeropoulos.

Mihael H. Polymeropoulos: Thank you very much, Kevin. Good afternoon, everyone, and thank you for joining Vanda Pharmaceuticals Inc.’s fourth quarter and full year 2025 financial results conference call. 2025 was a year of strong commercial execution and significant regulatory and clinical advancements for Vanda. I will briefly address some of the key highlights. Our lead product Fanapt drove impressive growth. Full year net product sales increased 24% to $117,300,000 versus 2024, supported by a 28% rise in total prescriptions and a remarkable 149% surge in new-to-brand prescriptions. This reflects accelerating momentum, broader prescriber adoption, and the impact of our targeted commercial investments, including direct-to-consumer campaigns that boosted brand awareness.

Our full commercial franchise HETLIOZ, HETLIOZ LQ, and PONVORY generated total revenues of $216,100,000 for the year, up 9% year over year, demonstrating solid performance across our marketed products. Clinical and regulatory milestone highlights. In late 2025, we achieved a major regulatory win with the FDA approval of tradipitant, branded as Nirius, for the prevention of vomiting induced by motion, the first new oral pharmacologic option in this space in over forty years. This approval opens a substantial market opportunity in motion sickness. Motion sickness is a common condition with prevalence estimates indicating that approximately 25% to 30% of U.S. adults, roughly 65 to 78 million people, experience symptoms during travel or motion exposure.

Tens of millions seek pharmacologic relief annually, yet current options are often limited by adverse events or inconsistent efficacy. Nirius addresses this unmet need as a well tolerated, targeted neurokinin‑1 receptor antagonist and we are actively preparing its commercial launch to bring this innovation to patients facing this common issue. Separately, we see strong adjunct potential for Nirius in the rapidly expanding GLP‑1 agonist market. These therapies used for diabetes and obesity management have seen explosive growth with market projections in tens of billions annually, and vomiting remains a frequent side effect, impacting up to 50% of patients on agents like semaglutide. Nirius demonstrated positive clinical results in preventing vomiting induced by the GLP‑1 analog semaglutide in our study.

To capitalize on this, we plan to initiate a dedicated Phase 3 program in 2026, pursuing label expansion in this high-potential area where better tolerability could significantly improve patient adherence and outcomes. The melperone (Vasanti) NDA for bipolar I disorder and schizophrenia is under FDA review with a PDUFA target action date of 02/21/2026. Approval will further strengthen our growing psychiatry franchise alongside Fanapt, in the global antipsychotic category. This category had a total addressable market estimated at approximately $20,000,000,000 in 2025. We submitted the imsidolimab BLA in 2025 for generalized pustular psoriasis, advancing us toward potential approval for this serious unmet need.

Imsidolimab is a fully humanized IgG4 monoclonal antibody that inhibits IL‑36 receptor signaling and is being developed for GPP and a rare orphan indication. Regulatory and patent exclusivity for imsidolimab is expected to extend into the late 2030s. Vanda holds an exclusive global license for development and commercialization of imsidolimab from AnaptysBio. CPP flares involve painful pustules over large skin areas accompanied by redness,

Kevin Patrick Moran: itching,

Mihael H. Polymeropoulos: systemic symptoms and can be life-threatening if untreated. Late-stage clinical development programs include a Phase 3 study of desipramine (Desanti) as a once-a-day adjunct treatment for major depression, which is ongoing and results expected by end of the year. Major depressive disorder is the most common psychiatric disorder in the United States, affecting more than 20 million American adults in any given year, according to estimates from the National Institute of Mental Health large-scale surveys. It is characterized by persistent feelings of sadness, loss of interest or pleasure, fatigue, changes in appetite or sleep, feelings of worthlessness, impaired concentration, and decision making, often leading to significant functional impairment in work, relationships, and daily life.

Despite the availability of multiple evidence-based treatments, MDD exhibits highly variable clinical expression and natural course ranging from single episodic events to recurrent or chronic forms. Substantial unmet medical need remains, with episodes varying in severity. Approximately 30% to 50% of patients achieve only partial response or remission with first-line therapies. Many experience treatment-resistant depression, relapse rates are high even after initial improvement, and side effects or delayed onset of action limit tolerability and adherence for a significant percentage of individuals. This persistence

Operator: gap

Mihael H. Polymeropoulos: underscores the need for novel, more effective, and better tolerated adjunctive or alternative treatments to address the full spectrum of MDD. The Phase 3 study of the long-acting injectable LAI formulation of iloperidone continues to enroll patients for schizophrenia relapse prevention, representing an enhancement to Fanapt’s long-term utility in psychiatric care. The long-acting injectable LAI in the market represents a significant and growing opportunity within the broader antipsychotic and psychiatric treatment landscape, driven by the need for improved adherence in chronic conditions like schizophrenia and bipolar I disorder, where nonadherence contributes to high relapse rates, hospitalizations, and costs. Unexpected.

By 2026, social anxiety disorder (SAD) affects approximately 30 million American adults, according to the 2023 National Health and Wellness Survey, with onset typically in the mid-teens or earlier and slightly higher diagnosis rates in females than males. It manifests as excessive fear of embarrassment, humiliation, scrutiny, evaluation, or rejection in social or performance situations, leading to avoidance or intense distress that significantly impairs daily routine, occupational functioning, social life, and overall quality of life, though individuals are generally asymptomatic absent such triggers. Standard treatments include cognitive behavioral therapy, but many patients struggle to initiate or tolerate exposure due to the severity of anxiety.

Off-label options like benzodiazepines offer rapid calming effects but carry risks of abuse, misuse, addiction, black box warnings for interactions, and dependency. Beta blockers provide situational relief but with limiting broader efficacy. This highlights the need for novel on-demand therapies like VQW765 to address acute episodes more effectively. Our clinical development programs for PONVORY (ponesimod) in psoriasis and ulcerative colitis are ongoing, building on its established profile as a selective S1P1 receptor modulator approved for relapsing multiple sclerosis.

For psoriasis, PONVORY has already demonstrated strong efficacy in earlier studies, including a Phase 2 randomized, double-blind, placebo-controlled trial that showed significant PASI‑75 responses, that is greater than 75% reduction in Psoriasis Area and Severity Index at week sixteen across tested doses of 10, 20, and 40 milligrams, with sustained improvements in symptoms of moderate to severe chronic plaque psoriasis and a favorable time course of response. Recent updates indicate advancement toward Phase III evaluation, positioning PONVORY as a potential oral option in this large inflammatory dermatology market.

For ulcerative colitis, the S1P mechanism has been robustly validated by the successful commercialization approvals of other modulators, Zeposia and etrasimod, which have shown efficacy in Phase III trials for moderate to severe ulcerative colitis, achieving clinical remission and mucosal healing superior to placebo. PONVORY may be particularly well suited for this indication due to its pharmacological advantages of rapid onset of action, faster lymphocyte sequestration compared to some class members, and rapid lymphocyte recovery upon discontinuation. This profile offers greater flexibility for managing infections, vaccination, surgery, pregnancy planning, or therapy switches—key considerations in chronic IBD where treatment interruptions or adjustments are common.

These extensions will significantly broaden PONVORY’s addressable patient population and leverage its differentiated pharmacokinetics to address unmet needs in autoimmune inflammatory diseases beyond multiple sclerosis. Looking forward, we expect 2026 total revenues of $230,000,000 to $260,000,000 from our current marketed products only, that is Fanapt, HETLIOZ, HETLIOZ LQ, and PONVORY, establishing a strong baseline. We anticipate continuing growth from this portfolio with further contributions from the Nirius launch and potential approvals of Desipramine and imsidolimab, plus progress across our late-stage programs.

We believe that our growing psychiatry franchise is well positioned for expansion, anchored by Fanapt on the market and bipolar I disorder with Desipramine currently under FDA review for bipolar I schizophrenia, with a PDUFA of February 21, 2026, and in ongoing Phase 3 clinical development as an adjunctive treatment for major depressive disorder. Long-acting injectable formulation of iloperidone advanced in Phase 3 schizophrenia relapse prevention, and VQW765 in a Phase III study for social anxiety disorder with results expected in 2026, collectively strengthening our portfolio across key psychiatric indications. In summary, 2025 showcased our ability to drive revenue while building a diversified, high-potential pipeline. We remain committed to delivering innovative therapies and long-term value for patients and shareholders.

With that, I will turn it over to Kevin. Kevin? Thank you, Mihael.

Kevin Patrick Moran: I will begin by summarizing our financial results for the full year 2025 before turning to discuss the fourth quarter of 2025. Total revenues for the full year 2025 were $216,100,000, a 9% increase compared to $198,800,000 for the full year 2024, primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch,

Operator: partially

Kevin Patrick Moran: offset by decreased HETLIOZ revenue as a result of generic competition. Let me break this down now by product. Fanapt net

Operator: Fanapt

Kevin Patrick Moran: product sales were $117,300,000 for the full year 2025, a 24% increase compared to $94,300,000 for the full year 2024. This increase in net product sales was driven by increased total prescription demand. As reported by IQVIA Xponent, for the full year 2025 total prescriptions increased by 28% compared to the full year 2024. Fanapt new patient starts for the full year 2025, as reflected by new-to-brand prescriptions or NBRx, surged 149% year over year. Turning to HETLIOZ, HETLIOZ net product sales declined year over year, attributable to a decrease in volume and price, net of deductions.

Of note, for the full year 2025, HETLIOZ continued to retain the majority of market share despite generic competition now for over three years. And finally, turning to PONVORY. PONVORY net product sales were $27,400,000 for the full year 2025, a 2% decrease compared to $27,800,000 for the full year 2024. Of note, an amount of variable consideration related to PONVORY net product sales is subject to dispute, of which approximately $3,000,000 was recognized for the three months ended 12/31/2024. For the full year 2025, Vanda recorded a net loss of $120,500,000, compared to a net loss of $18,900,000 for the full year 2024.

The net loss for the full year 2025 included income tax expense of $81,800,000, as compared to an income tax benefit of $4,000,000 for the full year 2024, primarily driven by a one-time noncash income tax charge. The provision for income taxes for the full year 2025 includes the impact of the recording of a valuation allowance of $113.7 million against all of Vanda’s deferred tax assets, a noncash charge. To reiterate, the recording of this valuation allowance is one time in nature. The company assesses the need for a valuation allowance against its deferred tax assets each quarter through the review of all available positive and negative evidence.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of those deferred tax assets will not be realized. Analysis is highly dependent upon historical and projected pretax income. Projected pretax income includes significant assumptions related to revenue, which could be affected by the trajectory of the commercial launches of Fanapt in bipolar disorder, PONVORY in multiple sclerosis, and Nirius in the prevention of vomiting induced by motion, which was approved in 2025, and HETLIOZ generic competition, including spend as well as commercial and research and development activities on our commercial launches and late-stage clinical activities.

Limited to historical, current, and future projected results, risks, and uncertainties related to forecasts and significant judgment, the company concluded that it is more likely than not that substantially all of its deferred tax assets are not realizable in future periods and recorded the valuation allowance against all net resulting deferred tax assets, a noncash income tax expense of $113,700,000 for the year ended 12/31/2025. Operating expenses for the full year 2025 were $367,300,000 compared to $239,400,000 for the full year 2024.

The $127,900,000 increase was primarily driven by higher SG&A expenses related to spending on Vanda’s commercial products as a result of commercial launches of Fanapt in bipolar disorder and expenses associated with the preparation for future commercial launches, and higher R&D expenses primarily related to the exclusive global license agreement with AnaptysBio for the development and commercialization of imsidolimab, which was entered into during the first quarter of 2025, and our Fanapt long-acting injectable and Desipramine major depressive disorder clinical development programs.

On the commercial side, during 2024 and 2025, we commenced 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 2025, we launched our direct-to-consumer campaign, which has driven meaningful gains in brand awareness for the company and our products. We maintain 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 December 31, 2025, was $263,800,000, representing a decrease of $110,800,000 compared to December 31, 2024, and a decrease of $29,900,000 compared to September 30, 2025. The changes in cash during the full year 2025 and the fourth quarter 2025 were driven by the net loss in those periods, excluding the impact of the one-time noncash charge related to the tax valuation allowance, as well as timing of cash received from customers for revenue and related payments of rebates to payers and the timing of cash paid to third parties for services related to operating expenses. Turning now to our quarterly results.

Total revenues were $57,200,000 for the fourth quarter of 2025, an 8% increase compared to $53,200,000 for the fourth quarter of 2024, and a 2% increase compared to $56,300,000 in the third quarter of 2025. The increases as compared to the fourth quarter of 2024 and the third quarter of 2025 were primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch. Let me break this down now by product. Fanapt net product sales were $33,200,000 for the fourth quarter of 2025, a 25% increase compared to $26,600,000 in the fourth quarter of 2024, and a 6% increase compared to $31,200,000 in the third quarter of 2025.

Fanapt total prescriptions, or TRx, as reported by IQVIA Xponent, in the fourth quarter of 2025 increased by 36% compared to the fourth quarter of 2024, and 8% compared to the third quarter of 2025. Fanapt new patient starts in the fourth quarter of 2025, as reflected by new-to-brand prescriptions, increased by 108% compared to the fourth quarter of 2024 and by 7% compared to the third quarter of 2025. The increase in Fanapt revenue between the fourth quarter of 2024 and the fourth quarter of 2025 was primarily attributable to an increase in volume. The increase in Fanapt revenue between the third quarter of 2025 and the fourth quarter of 2025 was also attributable to an increase in volume.

These increases in volume were primarily driven by increased total prescription demand. Historically, Fanapt inventory at wholesalers has ranged between three and four weeks on hand, calculated based off trailing demand. As of the end of the fourth quarter of 2025, 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 2024 and the third quarter of 2025, but slightly above the historic range. Turning to HETLIOZ.

HETLIOZ net product sales were $16,400,000 for the fourth quarter of 2025, an 18% decrease compared to $20,000,000 in the fourth quarter of 2024 and a 9% decrease compared to $18,000,000 in the third quarter of 2025. The decrease in net product sales relative to the fourth quarter of 2024 was primarily attributable to a decrease in price net of deductions, as well as a decrease in volume sold. The decrease in net product sales relative to the third quarter of 2025 was primarily attributable to a decrease in price net of deductions, partially offset by an increase in volume.

HETLIOZ net product sales continue to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period. Going forward, HETLIOZ net product sales may reflect lower unit sales as a result of the reduction of the elevated inventory levels at specialty pharmacy customers or may be variable depending on when specialty pharmacy customers need to purchase again. Further, 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 $7,600,000 for the fourth quarter of 2025, an increase of 17% compared to $6,500,000 in the fourth quarter of 2024 and an increase of 8% compared to $7,000,000 in the third quarter of 2025. The increase in net product sales as compared to the fourth quarter of 2024 was attributable to an increase in price net of deductions, partially offset by volume. The increase in net product sales as compared to the third quarter of 2025 was attributable to an increase in price net of deductions, partially offset by 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 has increased, albeit modestly, on a sequential quarter basis for the last three quarters. Additionally, as previously noted, an amount of variable consideration related to PONVORY net product sales is subject to dispute, of which approximately $3,000,000 is recognized for the three months ended 12/31/2024. For the fourth quarter of 2025, Vanda recorded a net loss of $141,200,000 compared to a net loss of $4,900,000 for the fourth quarter of 2024.

From an income tax perspective, the net loss for the fourth quarter of 2025 included income tax expense of $103,200,000 as compared to an income tax benefit of $1,600,000 for the fourth quarter of 2024, primarily driven again by the one-time noncash income tax charge of $113,700,000 for the tax valuation allowance. Operating expenses in the fourth quarter of 2025 were $97,600,000 compared to $63,500,000 in the fourth quarter of 2024. The $34,100,000 increase was primarily driven by higher SG&A expenses related to spending on Vanda’s commercial products as a result of the commercial launch of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, expenses associated with the preparation for future commercial launches, and higher R&D expenses.

During 2024 and 2025, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar disorder and PONVORY in multiple sclerosis, including expansions of our sales force and the development of prescriber awareness and comprehensive marketing programs. Additionally, in the fourth 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. We maintain 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.

With regards to the launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, as I mentioned, the launches were initiated in 2024 and we continued to enhance our commercial infrastructure in 2025, with the impact of these commercial efforts contributing to revenue growth in 2025. We have already seen significant growth in our commercial activities. Several lead indicators suggest a strong market response to our commercial activities, related to 36% TRx growth in the fourth quarter of 2025 as compared to the fourth quarter of 2024.

New patient starts, or NBRx, increased by 108% in the fourth quarter of 2025 as compared to the fourth quarter of 2024 and are expected to continue to contribute to revenue growth in 2026 and beyond. In particular, Fanapt was one of the fastest growing atypical antipsychotics in the market throughout 2025 based on numerous prescription metrics. Our Fanapt sales force numbered approximately 160 representatives at the fourth quarter of 2024, increasing to approximately 300 representatives at the fourth quarter of 2025. The sales force expansion has allowed us to significantly increase our reach and frequency with prescribers.

To that end, the number of face-to-face calls in the fourth quarter of 2025 was more than twice the number of face-to-face calls in the fourth quarter of 2024. 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 at the fourth quarter of 2025. Fanapt performance remains the focus of our commercial initiatives, and we will continue to invest in this differentiated medicine and, if approved, the franchise-extending launch of Vasanti.

Before turning to our financial guidance, I would like to remind folks that with Fanapt, HETLIOZ, and PONVORY already commercially available, and with the Nirius NDA recently approved for motion sickness, and the Vasanti NDA for bipolar I disorder and schizophrenia under review by the FDA, and a Biologics License Application (BLA) for imsidolimab now submitted to the FDA, Vanda could have six products commercially available in 2026. Turning now to our financial guidance. Due to the recent and upcoming regulatory and commercial milestones, Vanda’s 2026 financial guidance is limited to revenue guidance for currently commercialized products, which includes Fanapt, HETLIOZ, and PONVORY. Vanda expects to achieve the following financial objectives in 2026.

Total revenues from Fanapt, HETLIOZ, and PONVORY of between $230,000,000 and $260,000,000. The midpoint of this revenue range would imply revenue growth in 2026 of approximately 13% as compared to full year 2025 revenue. Fanapt net product sales of between $150,000,000 and $170,000,000. The midpoint of this revenue range would imply Fanapt revenue growth in 2026 of approximately 36% as compared to full year 2025 Fanapt revenue. Assuming consistent gross-to-net dynamics between 2025 and 2026, the bottom end of this range assumes mid- to high-single-digit quarterly TRx growth for Fanapt in 2026. The top end of this range assumes low double-digit to mid-teen quarterly TRx growth for Fanapt in 2026. Other net product sales of between $80,000,000 and $90,000,000.

This range assumes a further decline of the HETLIOZ business due to the generic competition and modest growth in the PONVORY business. We are seeking to significantly improve market access to the product. Depending on our success in these efforts, we could see meaningful improvement in patients on therapy, prescriptions filled, and prescriptions written by prescribers. It is worth commenting that the quarterization of revenue in 2026 will be impacted by several items, including insurance plan transitions. As patients adjust to new insurance plans at the start of the year, there may be some disruptions in the first quarter. This is a typical industry-wide occurrence and consistent with our own historical trends.

As I previously mentioned, as of 12/31/2025, HETLIOZ inventory at specialty pharmacy customers was elevated, which may result in fewer specialty pharmacy customers ordering or specialty pharmacy customers ordering smaller amounts in 2026. Vanda is currently making conditional investments to facilitate future revenue growth. Both in the form of R&D investments, commercial inventory production, and potentially outsized commercial investments, spend could vary moving forward depending on the success of these commercial strategies. 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. It is also worth noting that the quarterization of cash balances will be impacted by several items.

The first quarter cash balance will be impacted by a milestone payment of $10,000,000 made to Eli Lilly in 2026 for the approval of Nirius in the U.S. The $10,000,000 was accrued in 2025 and capitalized as an intangible asset but was not paid as of year end 2025. Additional impacts include the revenue quarterization previously noted and the standard timing of certain items paid in the first quarter of each year. The full year cash balance will also be impacted by the potential of a $5,000,000 milestone payment to AnaptysBio if the imsidolimab BLA is approved by the FDA, and the timing of payments associated with commercial inventory production for our upcoming and potential commercial launches.

With that, I will now turn the call back to Mihael.

Kevin Patrick Moran: Thank you very much, Kevin. At this point, we will be happy to address your questions.

Operator: As a reminder, if you would like to ask a question during the question and answer session, you may press star followed by one on your telephone keypad. Your first question comes from the line of Mattison Elsedy from B. Riley Securities. Your line is live. Hi, guys. Thanks for taking our question. Maybe I will start with Vasanti.

Kevin Patrick Moran: Given the 505(b)(2) pathway and the bioequivalence to Fanapt you have shown, I am just curious if you could characterize any FDA communication on outstanding issues that came up during the review cycle. If there are any requests related to CMC or labeling scope questions that you could discuss, and then assuming approval, is there a day-one commercial strategy you could walk us through, just recognizing it is really about transitioning patients from Fanapt to Vasanti? Thanks. Yes, sure. Thanks, Mattison. So first of all, this is an NDA and it is not a bioequivalence like a generic. While bioequivalence data are important, think of it as a completely new drug application.

In terms of how the review is going, of course, we do not give incrementals, but I would say we remain optimistic for an on-time approval. Now your question on commercial plan. First of all,

Mihael H. Polymeropoulos: the commercialization, if approved later this month, will have to wait for some time in Q3 when commercial supplies will be ready. And between this time and then, we will have more color we can give on the launch strategy of Vasanti and also the interplay with Fanapt.

Mihael H. Polymeropoulos: Your next question comes from the line of Ram Selvaraju from H.C. Wainwright. Your line is live.

Kevin Patrick Moran: Thanks very much for taking my questions. I was wondering if you could comment

Mihael H. Polymeropoulos: on what you expect the

Ram Selvaraju: commercial infrastructure size and scope to be for imsidolimab assuming timely approval?

Mihael H. Polymeropoulos: Hi, Ram. Thank you very much. So as you know, GPP is a quite rare dermatological condition that most likely would be addressed with a small sales force visiting dermatologists and any advocacy organizations around this disorder. And there is better awareness than it used to be since the 2021 approval of spesolimab from Boehringer Ingelheim. So we believe that a dedicated small specialty sales force will be the key commercial asset that is needed.

Ram Selvaraju: Okay, great. Is there any additional detail you can provide to us regarding promotional activities in support of Fanapt and Vasanti, particularly as this pertains to any direct-to-consumer campaigns you may have planned over the course of 2026?

Mihael H. Polymeropoulos: Yeah. At this time, we do not have a Vasanti campaign planned. The direct-to-consumer campaign that Kevin alluded to is consisting of brand awareness of Vanda overall through sponsorships and a direct-to-consumer campaign on products, that is Fanapt and PONVORY. We expect that to continue in similar cadence like the past year, and with the commercial launch of Desipramine, we expect to have a dedicated campaign for that. But no concrete plans at this time.

Ram Selvaraju: And then with respect to Nirius, and tradipitant as a whole, can you maybe offer us some additional contextual information on the following three aspects? Firstly, I am not sure whether I may have missed this earlier, but can you just confirm to us when you expect Nirius to be commercially available for the recently approved indication? Secondly, if you have any additional feedback or context to provide at this time regarding the regulatory outlook in gastroparesis.

And then lastly, if you can give us a sense of what you expect the timeline to be to completion of enrollment in the envisaged Phase 3 trial assessing tradipitant in attenuation or prevention of nausea and vomiting associated with GLP‑1 receptor agonist drugs. Thank you.

Kevin Patrick Moran: Of course. On commercial availability,

Mihael H. Polymeropoulos: we are working in preparing now commercial materials. And we expect available commercial materials either by late Q2 or Q3. In terms of the regulatory path on gastroparesis, we are now preparing for a hearing at the FDA. That hearing was in abeyance for a little while, but now we have resumed, and we expect to hear from the FDA in the near future whether or not they are going to grant the hearing and we will take it from there.

In terms of the Nirius study for GLP‑1 analogs, remind everyone we had a very strong Phase 2 study in prevention of vomiting, and we are now in the process of initiating a Phase 3 study which we believe could produce results by late Q3, Q4 for this new Phase 3 study.

Ram Selvaraju: And then, one last quick one regarding the iloperidone LAI. You mentioned, I think, in the prepared remarks and the press release that the Phase 3 program for iloperidone LAI is currently enrolling patients. Do you anticipate completing enrollment in that Phase 3 program before the end of this year?

Mihael H. Polymeropoulos: Yes, it is enrolling. However, we are not satisfied much with the speed, and that is primarily because of the delays in launching this study in Europe. And it is not delays the company can control. It is more resistance in conducting placebo-controlled studies in Europe and other considerations. So that has definitely slowed down the rate of recruitment. We have now, it is encouraging that things are picking up and moving in the U.S. alone. But I would say I do not have good visibility whether we will be able to reach the recruitment goals by year end.

Operator: Thank you.

Mihael H. Polymeropoulos: Sure.

Mihael H. Polymeropoulos: Your next question comes from the line of Olivia Brayer from Cantor Fitzgerald. Your line is live.

Olivia Simone Brayer: Hey, guys. This is Sam on for Olivia. A quick one for me.

Unknown Analyst: I may have missed this during the call, but could you provide some more color on the Fanapt GTN impacts, given the increase in volume and the difference between that and the sales increase year over year?

Kevin Patrick Moran: Yep. Thanks, Sam. Yeah, so what we saw on a year-over-year basis—I think what you are highlighting is that the script growth outpaced the overall revenue growth. And what we have seen on a year-over-year basis is a relatively small reduction in net price, and that is due to a couple of, you know, gross-to-net items, some of which we highlighted during last year’s earnings call, which was primarily related to the introduction of the Medicare benefit redesign as part of the IRA. So that began at the beginning of this year. So that was a gross-to-net differential between 2025 and 2024.

And then additionally, in the third quarter call, we commented that we had seen an increased gross-to-net item, an unfavorable gross-to-net item related to commercial copay support, which to some extent should be expected, as with the bipolar indication you would expect to see a higher proportion of commercial patients relative to governmental, and copay support would then increase in terms of a gross-to-net item. So that is the bridge between the TRx growth and the revenue growth where there was a, you know, relatively small difference between the two percentage-wise.

Unknown Analyst: Thank you. And is that expected to stabilize, or is there a possibility that it could keep increasing moving forward?

Kevin Patrick Moran: Well, so the Medicare piece has a phase-in on existing products, a five-year phase-in. So there was a 1% fee in 2025 that increases to 2% this year. But in general, we would expect the gross-to-net to be consistent absent there being some, you know, significant change in the underlying business or payer dynamic. The one thing that I would flag for you that we have highlighted previously, especially with the Vasanti date right in front of us, is that the gross-to-net dynamics on Vasanti are significantly different and favorable relative to Fanapt. And that is because Vasanti will get a new Medicaid URA calculation, a reset there.

So as you might remember, 30% to 40% of our Fanapt business is Medicaid, and currently, that contributes negative revenue, meaning the gross-to-net adjustment exceeds the gross revenue for us. It is actually a negative revenue contribution. And with Vasanti, you will get a complete reset on that so that you will be subject to the statutory 23.1% discount but none of the other adjustments that come with having a product on the market over time. And so whereas our gross-to-net, we have previously communicated, is in the neighborhood of 50% on Fanapt, we would expect it to be more like in the mid‑thirties on Vasanti.

Mihael H. Polymeropoulos: Thanks, Sam.

Unknown Analyst: So much, and best of luck for the end of the month. Thank you.

Kevin Patrick Moran: Thanks, Sam.

Mihael H. Polymeropoulos: Your final question comes from the line of Andrew Tsai from Jefferies. Your line is live.

Andrew Tsai: Hey, thanks for taking my question. One more on the guidance for Fanapt for this year, $150 to $170 million. At the midpoint, seems like that could be 35% to 40% year-over-year growth. And I believe you mentioned in the prepared remarks maybe volume grows by 10%, give or take, at the midpoint. So can we imply that the net price will be growing by 30%? If so, why? And then secondly, how much of that

Unknown Analyst: guidance

Andrew Tsai: range for 2026 sees cannibalization from Vasanti’s launch in Q3? Thanks.

Kevin Patrick Moran: Yes. So Andrew, first on the first point there, so our revenue guide range, the $150,000,000 to $170,000,000—right, the midpoint of $160,000,000—I think what you are referencing is I, in the prepared remarks, commented that the lower end of the range would have mid- to high-single-digit TRx growth, and then the higher end of the range would have low double-digit to mid-teen sequential quarter growth—so quarterly growth—of those numbers. So the revenue getting to $160,000,000 would be almost entirely TRx driven, volume driven. With, you know, Medicaid and now the Medicare redesign as part of IRA, price increases are somewhat capped if your business is not significantly driven by commercial markets.

And so, yeah, that revenue growth is almost entirely volume driven. And then on your second question, you know, on Vasanti, again, we are very excited about the PDUFA date coming up very quickly here. But as Mihael has mentioned, you know, it will be in the back half of the year by the time that a launch would occur, and there is $0 of revenue contribution in the revenue guidance that we have provided.

Mihael H. Polymeropoulos: Okay. Thank you. And secondly, Nirius,

Andrew Tsai: how are you thinking about—remind us—list price, net price, how fast can sales grow in the first four quarters when you launch also in Q3? Thanks.

Kevin Patrick Moran: Yep.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.