Vanda Pharmaceuticals (VNDA -1.64%), a pharmaceutical company focused on central nervous system and rare disease treatments, reported financial results for Q2 2025 on July 31, 2025. The most important news was a GAAP net loss of $27.2 million for Q2 2025, driven by sharply higher operating costs. GAAP revenue for Q2 2025 rose 4.0% from the prior year to $52.6 million, but still missed analyst forecasts of $54.77 million for Q2 2025 (GAAP). Overall, the quarter saw robust sales growth for Fanapt®, offset by continued challenges for other key products and substantial increases in research and selling expenses.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($0.46) | ($0.36) | ($0.08) | (475%) |
| Revenue (GAAP) | $52.6 million | $54.8 million | $50.5 million | 4.2% |
| Fanapt® Net Product Sales | $29.3 million | $23.2 million | 26.3% | |
| HETLIOZ® Net Product Sales | $16.2 million | $18.7 million | (13.4%) | |
| PONVORY® Net Product Sales | $7.1 million | $8.6 million | (17.4%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company overview and key success factors
Vanda Pharmaceuticals specializes in developing and commercializing therapies for neurological and rare disorders. Its main products include Fanapt®, an antipsychotic for schizophrenia and bipolar I disorder; HETLIOZ®, a treatment for circadian rhythm disorders; and PONVORY®, a therapy for multiple sclerosis.
Recently, the company has focused on expanding commercial success with Fanapt®, investing in direct-to-consumer marketing, and seeking new indications. Key success factors for Vanda include effective management of its product pipeline, obtaining regulatory approvals, and maintaining strong intellectual property protection to defend its market position. Expanding the reach of current products while managing costs and competition also remains central for future growth.
Quarterly highlights and detailed performance
The quarter featured commercial momentum for Fanapt®, with net product sales rising 27% to $29.3 million in Q2 2025. Prescription volume for Fanapt® grew 24% in the second quarter of 2025 compared to the same period in 2024. This antipsychotic saw prescription growth of approximately 14% in Q1 2025, fueled by a direct-to-consumer campaign and sales force expansion promoting its new indication for bipolar I disorder.
In contrast, HETLIOZ®, a therapy for sleep-wake disorders, posted a 13% decline in net product sales to $16.2 million in Q2 2025, driven by the entry of generic competitors and changes in pharmacy inventory stocking. HETLIOZ®'s share of company revenues dropped as a result, and management cited ongoing pricing and inventory headwinds. PONVORY®, an oral therapy for relapsing multiple sclerosis, also saw net sales fall 18% to $7.1 million in Q2 2025 as market competition pressured volumes, despite ongoing marketing efforts and a growing specialty sales team targeting neurologists.
Selling, general, and administrative costs (SG&A), which cover marketing and commercial activities, reached $64.6 million in Q2 2025, up 63.5% compared to Q2 2024. This jump reflects larger sales teams and heavy spending on direct-to-consumer advertising for Fanapt® and PONVORY®. Research and development costs climbed 32% to $21.99 million in Q2 2025 compared to Q2 2024, mainly due to active pipeline projects like Imsidolimab, Bysanti™, and expanded indications. Management acknowledged these cost increases, pointing to ongoing launches and investments in future growth strategies as major drivers.
Vanda ended the quarter with $325.6 million in cash, cash equivalents, and marketable securities, down $15.4 million from March 31, 2025, and $49.1 million since December 31, 2024. Despite the cash use, the company reaffirmed its expectation to finish fiscal 2025 with cash between $280 million and $320 million. There were no new strategic partnerships, licensing deals, or significant collaborations during the period.
Product pipeline and regulatory updates
The pipeline remains an important area for Vanda. Bysanti™ (milsaperidone), an antipsychotic for bipolar I disorder and schizophrenia, had its new drug application accepted for filing by the FDA, with a Prescription Drug User Fee Act (PDUFA) target action date of February 21, 2026. A pivotal Phase III trial is ongoing for Bysanti™ in major depressive disorder with results anticipated in 2026. Tradipitant, targeting motion sickness, has an FDA decision (PDUFA target action date) deadline of December 30, 2025.
Imsidolimab, a monoclonal antibody for generalized pustular psoriasis, is slated for regulatory submission in 2025. Fanapt® continues to see label expansions, with a long-acting injectable version now in Phase III for schizophrenia relapse prevention and plans to study its use in hypertension. European market filings for Fanapt® and HETLIOZ® are in progress, with regulatory authorities reviewing both assets for expanded indications.
PONVORY® is being developed for new uses such as psoriasis and ulcerative colitis, with Investigational New Drug (IND) applications accepted by the FDA in the fourth quarter of 2024. The company is also moving early-stage candidates forward, such as VQW-765 for performance anxiety and VCA-894A for neuropathy, both with regulatory milestones in view for 2025. The progress and eventual outcomes of these programs are critical for Vanda’s future revenue as competition and lifecycle risks grow for current products.
Management emphasized in the earnings release that regulatory and clinical milestones for its pipeline will play a significant role in shaping future commercial portfolio strength. Pipeline assets with FDA decision dates in late 2025 and early 2026 add execution and timing risk, especially given the need to balance heavy spending with uncertain future approval outcomes.
Outlook and what to watch next
Vanda reaffirmed its guidance for fiscal 2025, with expected total revenues of $210 million to $250 million and year-end cash between $280 million and $320 million. Management expects continued quarterly growth for Fanapt® throughout 2025, but flagged the possibility of further revenue declines for HETLIOZ® and unpredictable results for other products as competition and market shifts play out. The company warned that Medicare policy changes stemming from the Inflation Reduction Act will negatively impact gross-to-net revenue figures for both Fanapt® and HETLIOZ® in the Medicare segment in 2025.
No additional guidance on profitability or expense trends was provided. Investors should watch for regulatory decisions on pipeline drugs and monitor how ongoing investments in marketing and development influence both top-line growth and operating cash burn. VNDA does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
