What: After reporting third quarter financial results after the bell yesterday, shares in Vanda Pharmaceuticals (NASDAQ:VNDA) slipped by as much as 14% earlier today before recovering slightly.

So what: Vanda Pharmaceuticals' third quarter results show that the company continues to make headway in its efforts to commercialize Hetlioz, a treatment for non-24, a sleep-wake disorder affecting roughly 80,000 Americans.

In the third quarter, Hetlioz sales totaled $11.7 million, which is up from $10 million in Q2, $7.5 million in Q1, and $6 million in the fourth quarter of 2014.

However, the company's sales of Fanapt, a schizophrenia drug that it acquired the rights to in 2014, lost ground between the second and third quarter. Fanapt sales were $16.7 million in Q3, which is down from $17.6 million in Q2 and 1% below last year's levels.

Overall, Vanda's total third quarter sales were $28.3 million and its net loss was $4.5 million, or a negative $0.11 per share, in the quarter.

Now what: Vanda believes that its full year 2015 sales will be between $100 million and $115 million, including between $40 million and $45 million in sales of Hetlioz and between $60 and $70 million in sales of Fanapt. Vanda also estimates that its full year operating expenses will be between $100 million and $110 million, which is in line with management's expectations exiting Q2.

Although Vanda Pharmaceuticals is making strides in growing sales and reducing losses, it's likely that the company's spending to support prescription volume growth and advance trials evaluating Hetlioz for use as a jet-lag treatment mean that it will continue to lose money. Until Vanda Pharmaceuticals turns the corner to consistent profitability, its shares remain best suited for high-risk investors who can tolerate the volatility associated with small cap biotech stocks.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. 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.