Yesterday, development-stage biotech Vanda Pharmaceuticals (NASDAQ:VNDA) announced its first-quarter financial results. With young biotechs like Vanda, without any commercialized products, the income and statement of cash flows in its financial statements don't offer much perspective on the drugmaker's operations.

The one statement that can useful to look at is the balance sheet, which tells us what its cash level and burn rate are. Vanda ended the first quarter with $130 million in cash and equivalents and burned through $13 million in cash after raising $111 million in a dilutive financing in January. For the full year, Vanda expects to burn through $80 million to $90 million.

The first quarter was relatively light on the drug development side of things. Vanda's lead compound, iloperidone for schizophrenia, just finished a phase 3 study; one of its other top compounds, VSF-173, only just began a small phase 2 trial for excessive sleepiness in April.

Even though Vanda is still a development-stage biotech, by the end of 2008 this status could change if the FDA approves its lead compound, iloperidone. In December, Vanda announced positive phase 3 clinical trial results for the drug and expects to file a New Drug Application for the compound in the  fourth quarter.

All of Vanda's compounds in development, like iloperidone, will be up against tough competition like Eli Lilly's (NYSE:LLY) antipsychotic Zyprexa or Cephalon's (NASDAQ:CEPH) Provigil if they can gain marketing approval. Despite this fact, Vanda has made investors who bought in at the IPO last year quite happy, with shares more than doubling since then. As long as Vanda doesn't stumble and keeps advancing forward, those who continue to stick with the company may be just as happy in the future.

Looking for more Foolish drug stock coverage? Check out the Fool's market-beating Rule Breakers newsletter. You can check out all our recommendations as well as get access to our message boards and exclusive content with a 30-day free trial.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Eli Lilly is an Income Investor recommendation. The Fool has a disclosure policy.