Please ensure Javascript is enabled for purposes of website accessibility

Vanda Pharmaceuticals' Q4 Loss Widens on Higher Expenses

By Sean Williams – Feb 13, 2014 at 11:59AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Vanda Pharmaceuticals reduced R&D expenses by 41%, but a tripling in SG&A expenses combined with modest Fanapt growth caused its loss to widen by 20%.

Vanda Pharmaceuticals (VNDA), a biopharmaceutical company focused on developing therapies to treat central nervous system disorders, reported modest product growth and a wider net loss before the opening bell today.

In its fourth-quarter report, Vanda noted receiving $8.78 million in revenue, an expansion of 10.9% over the previous year as its net loss widened by 19.7% to $7.62 million. Adjusted EPS losses, however, matched the $0.23 loss reported in the year-ago period due to there now being 5 million more outstanding shares relative to the fourth quarter 2012.

Revenue for the quarter consisted of $6.75 million in amortized licensing revenue related to the $200 million upfront payment received from Novartis (NVS 0.69%) when it purchased the U.S. and Canadian rights to Vanda's FDA-approved schizophrenia drug, Fanapt in October 2009. Since this payment is amortized, it was consistent with the year-ago period. Royalty revenue from the sale of Fanapt, however, rose to $2 million from $1.2 million in the prior year. Furthermore, IMS reports indicate that 43,400 prescriptions for Fanapt were written during the fourth quarter, a 1% sequential decline from the third quarter, but a 14% year-over-year increase.

Total operating expenses for the quarter widened to $16.45 million from $14.35 million as a tripling in selling, general, and administrative expenses to $9.9 million more than offset a 41% decline in research and development expenses. These higher costs were the primary culprit of Vanda's wider net loss.

Although Vanda provided no specific financial guidance, it did note that it anticipates launching Hetlioz, the company's recently approved non-24-hour disorder drug to mediate sleep habits for the blind, sometime in the second quarter. It also ended the year with $130.4 million in cash, an improvement of $10 million over this time last year.

Vanda shares have been quite volatile following the announcement, falling as much as 10% shortly after it opened for trading and rising up to 12% thereafter. 

link

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool has no position in any companies mentioned in this article. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Vanda Pharmaceuticals Stock Quote
Vanda Pharmaceuticals
VNDA
$10.49 (%)
Novartis Stock Quote
Novartis
NVS
$87.97 (0.69%) $0.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.