Vanda narrows 2025 revenue guidance to $210M-$230M amid Fanapt growth and strategic investments

Earnings Call Insights: Vanda Pharmaceuticals Inc. (VNDA) Q3 2025

MANAGEMENT VIEW

* CEO Mihael Polymeropoulos reported "strong commercial execution with total net product sales reaching $56.3 million, up 18% year-over-year, led by a 31% increase in Fanapt sales and 35% growth in prescriptions." He highlighted the stable performance of HETLIOZ with $18 million in Q3 sales and noted that Fanapt's expansion was "driven by the launch of the bipolar I indication."
* Polymeropoulos discussed advancing the pipeline, mentioning the tradipitant NDA for motion sickness under FDA review with a PDUFA date of December 30, 2025, the Bysanti NDA under FDA review with a PDUFA date of February 21, 2026, and the planned Q4 submission of the imsidolimab BLA for generalized pustular psoriasis.
* Investments in commercial infrastructure were emphasized, with a focus on increased brand visibility and targeted sponsorships to "support long-term market leadership and future commercial launches."
* CFO Kevin Moran stated, "Total revenues for the first 9 months of 2025 were $158.9 million, a 9% increase compared to $145.6 million for the same period in 2024. The increase was primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch."
* Moran highlighted that "Fanapt net product sales were $31.2 million for the third quarter of 2025, a 31% increase compared to $23.9 million in the third quarter of 2024 and a 7% increase compared to $29.3 million in the second quarter of 2025."

OUTLOOK

* Management updated 2025 financial guidance, expecting "total revenues from Fanapt, HETLIOZ, and PONVORY of between $210 million and $230 million" and "year-end 2025 cash of between $260 million and $290 million." This guidance was narrowed to the lower end from previous revenue guidance of $210 million-$250 million and cash of $280 million-$320 million.
* The revised revenue range "reflects strong Fanapt revenue growth in 2025 that is expected to grow on a quarterly basis and potentially accelerate with the full impact of the expanded sales force."
* Management noted that the lowered cash guidance "reflects the impact of the significant investments that Vanda is currently making to facilitate future revenue growth, both in the form of R&D investments and strategic investments in commercial infrastructure."

FINANCIAL RESULTS

* Q3 2025 total revenues were $56.3 million, an 18% increase compared to Q3 2024 and a 7% increase from Q2 2025.
* Fanapt net product sales reached $31.2 million, up 31% year-over-year and 7% over the previous quarter, with total prescriptions increasing by 35% year-over-year and 11% sequentially. New patient starts were up 147% year-over-year and 14% over Q2 2025.
* HETLIOZ net product sales were $18 million for Q3, a 1% increase year-over-year and an 11% rise from Q2, impacted by inventory shifts and generic competition.
* PONVORY net product sales were $7 million, up 20% from Q3 2024, but slightly lower than Q2 2025. Underlying patient demand for PONVORY increased for the second consecutive quarter.
* Vanda reported a net loss of $22.6 million for Q3 2025 versus a net loss of $5.3 million in Q3 2024. Operating expenses were $87.5 million, up from $58.7 million a year earlier, mainly due to higher SG&A and R&D related to commercial launches and new product development.
* Cash, cash equivalents, and marketable securities were $293.8 million as of September 30, 2025, down $31.8 million from June 30, 2025.

Q&A

* Raghuram Selvaraju, H.C. Wainwright: Asked about the FDA review of tradipitant and potential approval timing. Polymeropoulos said, "We're very pleased with the new collaborative framework that has been established with the FDA...we are optimistic for an approval by end of this year."
* Selvaraju, H.C. Wainwright: Queried about PONVORY's growth trajectory. Moran responded that recent investments in the sales force are expected to support ongoing demand increases, with underlying demand up for two consecutive quarters.
* Selvaraju, H.C. Wainwright: Asked about imsidolimab BLA priority review and MDD study timing. Moran said, "We expect results by the end of next year," and Polymeropoulos added that they expect a 6-month priority review for imsidolimab.
* Olivia Brayer, Cantor Fitzgerald: Questioned the rationale behind the guidance change and specifics on HETLIOZ variability. Moran explained, "Underlying the guidance for this year is strong Fanapt revenue growth...but the other thing that's a variable in that consideration is the HETLIOZ revenue, which...can be very variable from quarter-to-quarter."
* Brayer, Cantor Fitzgerald: Asked about Bysanti regulatory engagement and commercial strategy for switching from Fanapt. Polymeropoulos described positive ongoing interactions with the FDA and noted that the commercial strategy leverages the "highly promotionally sensitive" nature of the antipsychotic class, with incentives such as starter packs and co-pay programs.
* An unknown analyst (Jefferies): Asked about marketing strategies for new approvals and the shape of launch curves. Polymeropoulos highlighted a consumer-centric focus and plans for concierge service, aiming for market entry by the first half of 2026.

SENTIMENT ANALYSIS

* Analysts focused on regulatory timelines, product launch strategies, and guidance changes, with a tone that was generally probing and slightly cautious, particularly regarding variability in HETLIOZ revenue and future growth for PONVORY.
* Management's tone was confident and optimistic in prepared remarks, particularly referencing the "strong commercial execution" and "collaborative framework" with the FDA, although more measured and explanatory when addressing questions about guidance changes and regulatory uncertainties.
* Compared to the previous quarter, both analysts and management maintained a focus on growth opportunities and regulatory progress, but management was more explicit about the risks and variability impacting guidance.

QUARTER-OVER-QUARTER COMPARISON

* The company narrowed its full-year revenue and cash guidance compared to last quarter, citing continued strong Fanapt growth but increased investments and HETLIOZ revenue variability as drivers.
* Strategic focus shifted toward leveraging expanded sales forces and building consumer-centric launches for upcoming products, while maintaining investments in R&D and commercial infrastructure.
* Fanapt sales and new patient starts continued strong sequential growth, while HETLIOZ and PONVORY results showed variability influenced by inventory and market factors.
* Analysts' focus remained on regulatory timing, guidance implications, and commercial strategies for upcoming product launches, with slightly more scrutiny on the impact of revenue guidance changes.
* Management's confidence in commercial momentum was balanced by a more detailed discussion of operational risks and the impact of strategic investments.

RISKS AND CONCERNS

* Management cited variability in HETLIOZ net product sales due to specialty pharmacy inventory and ongoing generic competition as a key risk, noting that "HETLIOZ net product sales may decline in future periods, potentially significantly, related to continued generic competition in the U.S."
* The net loss and increased operating expenses, primarily from higher SG&A and R&D for commercial launches, were highlighted as impacting cash guidance.
* Regulatory outcomes for tradipitant, Bysanti, and imsidolimab remain critical, with management noting ongoing FDA reviews and the potential for priority review for new applications.
* The company noted that a change in the need for a valuation allowance against deferred tax assets could result in a "noncash income tax expense during the period of change."

FINAL TAKEAWAY

Vanda Pharmaceuticals reported robust Fanapt growth and highlighted an advancing late-stage pipeline, while narrowing 2025 revenue and cash guidance to reflect increased commercial and R&D investments and ongoing variability in HETLIOZ sales. Management emphasized continued progress with the FDA on key regulatory milestones, the expansion of commercial capacity, and a focus on strategic product launches positioned for growth in 2026, while acknowledging the risks inherent in its evolving portfolio and market landscape.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/vnda/earnings/transcripts]

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