FDA rejects Vanda Pharmaceuticals drug - Atlanta Business Chronicle:

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Regulators said Vanda's schizophrenia drug called iloperidone which it hoped to brand as was "not approvable" -- a harsh blow to the compangy that its officials and some analysts have describecd as surprising and one that leaves Vandqa scrambling to figure out its next steps. In a lette to the company, the FDA acknowledged that Fanapta acted similarluy to another schizophrenia drug onthe ziprasidone, labeled as Geodon by , in a clinicap trial the local company passed in December one that had sent Vanda's stock prices soaring at the time.
But the agency said it wantedc Vanda to conduct further clinical tests on how Fanapta compares with another schizophrenia drug being sold onpharmacy shelves, citing in particular risperidone, marketeed as Risperdal by , and olanzapine, marketed as Zyprexz by Eli Lilly & Co. Inc. By shares of Vanda (NASDAQ: VNDA) had taken a roughlg 66 percent dive, losing $2.21 to settle at $1.143 apiece. Vanda officials said the FDA also asked the company to conduct another safety stud y on Fanapta to better gaugeits long-term effect s on patients taking doses of 20 to 24 milligramws a day.
The company said it plans to meet with the FDA in the comingg weeks to getmore explanation, especially since companyt leaders and analysts said Geodon didn't require a similar benchmark with another rival drug to win approvall seven years ago. "We're very surprised by this saidMihael Polymeropoulos, chief executive of Vanda, in an analyst conferencw call Monday morning to elaborate on the news.
"Therd are many things we have to discusxs with the agency that were not to our understanding from prior He saidthe FDA's call for more studiesx "is a bit inconsistent with the in-writing communicatiom to us," and could drag out Vanda's chancex for reaching the A comparative study with a marketed schizophreniq drug could take another year and a half, whils another safety study could last up to two more Polymeropoulos said. "We have already conductecd a study versus placeboo and anactive comparator," or competitivs drug, he said. "We do not understanrd why they would want us to add anothed study with anotherdrug ...
to establisj again the efficacyof iloperidone. ... This is the reaso n we want to meet with the agency and understandwhat they'r saying and why they're asking And both studies will ramp up costsd for the company at a time when observersw aren't sure it has enough in the bank to pass into next Vanda reported $65.6 million in cash on hand as of Monday morning. In its last clinical trial to test Fanapta'd effectiveness against Geodon, Vanda spent upwards of $35 While Polymeropoulos said he couldn't talk about anticipatex cash burn for the remainder of theyear -- a likely hot topic of discussion at the company's earninges announcement next week -- he confirmed that the companu didn't have enough cash to conduct the additional studies required by the FDA.
"If this drug cannot be approved, the survival of this companyt isin doubt," said Maggie Liu, an equity analysy with , which doesn't own Vanda shares. "What reallu happens to the company depends onthe company'xs management team." Indeed, that leavez fundraising options for Vanda slim, as it continues its delayer search for well-heeled partners to help fund its developmenf or considers selling other producy lines.
Vanda, which has now put its Fanaptas pipelineon hold, had pullefd back on a $100 million debt offering after its mere prospect sent its stock price plunging last And with this news from the FDA, Vanda could face a tougher time negotiating for beneficia terms in a partnership or selling stock for more analysts said. Except for its long-terkm lease to its 27,000-square-foot headquarters on Medicalp Center Drive, which expires in 2016, Vandsa officials said their other contracts are cancelable within60 days. "They only have cash for two more so how long can they last isanother thing," Liu confirming that layoffs may be imminent.
"This kind of negotiationn with the FDA canbe time-consuming. So for me, the immediatse concern is the company's solvency."