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On Tuesday, H.C. Wainwright reaffirmed their positive stance on Vanda Pharmaceuticals (NASDAQ:VNDA) with a Buy rating and a price target of $18.00, representing significant upside potential from the current price of $4.45. According to InvestingPro data, the company maintains impressive gross profit margins of 93.62% and holds more cash than debt on its balance sheet. The firm's analyst highlighted recent developments regarding Vanda's New Drug Application (NDA) for tradipitant, aimed at treating gastroparesis—a condition that affects the stomach muscles and prevents proper stomach emptying.
Vanda Pharmaceuticals announced on Monday that the FDA had offered a hearing for the NDA of tradipitant, a neurokinin 1 (NK-1) receptor antagonist. This follows a period of contention after the FDA initially rejected the NDA in September 2023, issuing a Complete Response Letter (CRL). The CRL indicated that substantial evidence of efficacy for tradipitant had not been established.
Disagreeing with the FDA's conclusion, Vanda sought access to the FDA reviews of their application through the Freedom of Information Act (FOIA) and has recently received the requested information. The FDA's legal framework, under the federal Food, Drug, and Cosmetic Act (FDCA), mandates that the agency must approve an application within 180 days or provide an opportunity for a hearing before the Secretary makes a final decision. Vanda's case was unusual as the FDA delayed the review by six months and issued a CRL without offering a hearing as required.
The analyst expressed optimism about the FDA's decision to finally grant Vanda a hearing, interpreting it as a positive step forward. The firm believes Vanda will effectively present its case for tradipitant during the upcoming hearing. With the company's next earnings report due in 8 days, InvestingPro subscribers can access detailed analysis and 7 additional key insights about Vanda's financial health, which currently rates as "Fair" according to comprehensive metrics. The reiteration of the Buy rating and the $18 price target reflects the firm's confidence in Vanda Pharmaceuticals' potential to navigate the regulatory process and the anticipated value of tradipitant if approved. While analysts' targets range from $5.50 to $18.00, investors seeking deeper insights can access Vanda's comprehensive Pro Research Report, available exclusively on InvestingPro, which provides detailed analysis of the company's valuation and growth prospects.
In other recent news, Vanda Pharmaceuticals has been active in its pursuit of new developments. The company has submitted a new drug application to the U.S. Food and Drug Administration (FDA) for tradipitant, a potential treatment for motion sickness. This move comes as Vanda Pharmaceuticals reported mixed results for Q3 2024, with revenues slightly dipping to $145.6 million from the previous year's $147.4 million due to generic competition affecting Hetlioz sales. On the other hand, PONVORY sales reached $21.3 million following its acquisition.
Despite a net loss of $14 million for the first nine months of 2024, Vanda Pharmaceuticals adjusted its 2024 guidance upwards, projecting total net product sales of $190 million to $210 million. The company is also preparing for new drug applications and clinical trials for milsaperidone and PONVORY in additional indications. These developments are part of Vanda's strategy to counter challenges and drive growth through new product launches. The company expects growth in sales driven by Fanapt and PONVORY launches and anticipates year-end cash to be between $370 million and $390 million. These are the recent developments that investors should be aware of.
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