What happened
Shares of Vanda Pharmaceuticals (VNDA 3.12%) were down more than 16% as of 2:15 p.m. on Tuesday. The pharmaceutical stock has been in decline for several months, and in May, it announced it was suing the federal government, saying the Food and Drug Administration (FDA) passed trade secrets about sleep-disorder drug Hetlioz and schizophrenia therapy Fanapt, Vanda's only marketed therapies, to generic drug competitors.
So what
The long slide was given an additional push over the weekend when the S&P 600 SmallCap Index announced late Friday that Vanda would be dropped from the index. Various exchange-traded funds (ETFs) use the index as a basis for choosing stocks to invest in, so that means likely lower trading for Vanda.
Now what
The company needs some positive news to turn shareholder sentiment around. In the second quarter, the company reported revenue of $46.1 million, down 28% year over year, partially due to generic competition. It also said it had net income of $1.5 million, down from $2.6 million in the same period a year ago.
There is potential for a turnaround, though, thanks to a pipeline that includes several late-stage trials. Hetlioz is being looked at to treat insomnia, delayed sleep-phase disorder, autism spectrum disorder, and non-24 pediatric sleep-wake disorder. Fanapt is being tested to treat bipolar I disease, Parkinson's-induced psychosis and as a long-acting injectable to treat psychosis. Tradipitant is also in phase 3 trials to treat COVID-19 pneumonia, gastroparesis, atopic dermatitis, and motion sickness.
