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spk11: time, your lines will again be placed on hold. Thank you for your patience. Thank you. Thank you. Good day and thank you for standing by. Welcome to the Q1 2021 Evander Pharmaceuticals, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Kevin Moran, Vanda's Chief Financial Officer. Please go ahead.
spk10: Great. Thanks, Ashley. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' first quarter 2021 performance. Our first quarter 2021 results were released this afternoon and are available on the SEC's EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mahalis Polymeropoulos, our president and CEO. Following my introductory remarks, Mahalis will update you on our ongoing activities. I will then comment on our financial results before opening the lines for your questions. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances, and uncertainties. These risks are described in the cautionary note regarding forward-looking statements, risk factors, and management's discussion and analysis of financial condition and results of operations sections of our annual report on Form 10-K for the fiscal year ended December 31, 2020, as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8K and other filings with the SEC, which are available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other filings. The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events, or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mahalis Pai-Moravlos.
spk06: Thank you very much, Kevin. Good afternoon, everyone. Following a challenging year as the world faced the COVID-19 pandemic, Vanda entered 2021 with our focus on value creation from both our pipeline and the continuous value creation from our commercial products. The potential future value creation and innovation in our pipeline can be seen intradipendent for the treatment of gastroparesis, with results from our ongoing phase III study expected later this year and then anticipated launch in 2022. The emerging DSPD, delayed sleep phase disorder program, in head use, which we believe can advance quickly. And finally, our late-stage FNAP evaluations in bipolar disorder, a long-acting injectable formulation, and in Parkinson's disease psychosis. In the first quarter, we also launched HETLIOS and HETLIOS-LQ for Smith-McGain syndrome nighttime sleep disturbances, and we're excited about its anticipated contribution to our value creation story. On commercial performance, we see continued growth year over year. In the first quarter, of 2021. Total net product revenue for Hetlios and Fanapt was 62.7 million, an 8% increase compared to the first quarter of 2020. Net product revenue on Hetlios saw an 11% increase in the first quarter of 2021 compared to the first quarter of 2020. And net product revenue for Fanapt saw a 3% increase compared to the first quarter of 2020. While during the first quarter of every year, patients navigate insurance changes which can temporarily impact patients on therapy, we are pleased with the performance on both HETLIOS and FENAPT despite these challenges. I will later discuss our late-stage lifecycle management programs, which can present us with a number of additional revenue growth opportunities in the near term. I will now turn to the Smith-McGain syndrome nighttime sleep disturbances approval by the FDA and launch of the product. In December, the FDA approved the oral capsule formulation of Hetlius and the new liquid formulation, Hetlius LQ, for the treatment of nighttime sleep disturbances in adults and children with Smith-McGain syndrome, respectively. is a neurodevelopmental disorder caused by genetic mutation of chromosome 17, which is a microdeletion in about 90% of the patients and a point mutation in the RAI gene, which is included in this microdeletion region in the remaining 10% of the patients. SMS affects 1 in 15 to 25,000 births with an estimated US prevalence of approximately 15,000 patients. The most common and most disruptive clinical expression of SMS is a sleep disorder that impacts the function of patients and consequently their families. During the first quarter of 2021, we launched HETLIOS and HETLIOS-LQ for SMS. As part of the early launch, we have reached out to our existing database of SMS patients, family members, and caregivers and in collaboration with the patient advocacy organization PRISMS, expanded our outreach to a broader group of patients and their families. While we're still in the beginning stage of the commercial launch of the HETLIOS capsule and the HETLIOS LQ liquid formulations, we're encouraged by the early results. We continue to connect with new SMS families, and these families are now at different stages of discussing the treatment option with their physicians. At the same time, already more than 50 patients have already received prescriptions and are navigating the insurance approval process. We're in the midst of finalizing the second phase of our commercial launch, which will reach out to a larger number of diagnosed and undiagnosed individuals. While it is difficult at this time to estimate an exact growth trajectory for the adoption of hetliums by SMS patients, we're excited about the emerging opportunity as we continue to deploy a number of strategies to reach and inform the community of approximately 15,000 SMS patients in the U.S. Given the genetic testing available for SMS, a significant number of patients are already diagnosed, and these are expected to be the first to come to treatment. It is estimated that between 80 to 100% of patients with SMS suffer from nighttime sleep disturbances for which hetlios is the only approved treatment. We expect that the number of SMS patients on treatment with hetlios will continue to increase throughout the year and that greater awareness will lead to adoption. As we resume an activity in most of our clinical programs, I would like to highlight our progress in some key clinical programs. First of all, we're excited about the upcoming completion of the gastroparesis study leading to an expected NDA filing either later this year or early next. The phase three study in gastroparesis is ongoing with 85% of the study now enrolled. On track to complete enrollment over the summer, and report results later in 2021. Following the results of the study, we plan to meet with the FDA for a pre-MDA meeting. Depending on the timing of that meeting, our MDA filing may occur at the end of 2021 or early 2022. As we have previously communicated, we believe that the current Phase III study can be the last effective study required for MDA filing. As a reminder, The ongoing phase three study aims to enroll a total of 200 patients with gastroparesis with either idiopathic or diabetic etiology. The study is a 12-week double-blind placebo-controlled study, which will measure the effect of tradipidant in improving the symptoms of gastroparesis. This phase three study follows the successful completion of the four-week phase two randomized study in the same population. The results of that study were published in the journal Gastroenterology in January of 2021. Several study participants have requested to continue treatment with tradipitin post completion of the clinical study through an expanded access program. We have worked in collaboration with these patients, their doctors, and the FDA to ensure they can receive further treatment with tradipitin. These patients have been approved for up to six months of expanded access treatment of tradipitin with one patient already approved for up to 12 months of expanded access treatment. Patients with gastroparesis suffer from chronic, severe, and debilitating nausea as well as other GI symptoms. Many patients with gastroparesis also experience vomiting, which can lead to weight loss, and in severe cases, hospitalizations due to nutritional deficiencies. The debilitating nausea and other GI symptoms makes it difficult for patients with gastroparesis to function day to day. Gastroparesis is a severe, unmet medical condition with only one approved treatment option in the last 40 years. As a testament to the significant and net need for this disorder, the response to our television campaign for recruitment in the Phase 3 study has been overwhelming, with thousands of patients already expressing interest since late December. Our estimates for the opportunity for a gastroparesis therapy are based on several key assumptions. One, the estimated prevalence of gastroparesis in the U.S. is about 6 million patients, the majority of whom remain undiagnosed. Second, at present there are more than 600,000 patients estimated to have a confirmed diagnosis of gastroparesis. And finally, based on IQVIA data, there are 300,000 prescriptions of oral metoclopramide per month in the United States. Metoclopramide is currently the only FDA approved treatment for gastroparesis approved in 1979. And due to its potential of severe side effects, it carries a black box warning and limitations of use of no more than three months. Given the highly limited treatment options, we believe that a new therapy could achieve significant market share. We're excited about traditional gastroparesis as this phase three program represents a transformational opportunity for Vanda to address an important unmet medical need and create a substantial revenue opportunity. I will now turn to Hetlios. The emerging clinical program for Hetlios is in delayed sleep phase disorder or DSPD. It is progressing quickly and represents what we believe to be an important value creation opportunity for Vanda with a high probability of technical success. DSPD is likely the most prevalent circadian rhythm sleep disorder affecting approximately 1% of the population and 7% to 10% of patients with disorders of initiating or maintaining sleep. The defining feature of individuals with DSPD is delayed sleep onset. Individuals with DSPD habitually go to bed and wake up significantly later than the typical or desired times and have an inability to fall asleep at an appropriate time. In addition to the delayed sleep onset, patients with DSPD suffer from insufficient sleep and daytime impairment. Their delayed bedtime combined with conventional schoolwork start times that require early waking can cause significant reductions in total sleep time for DSPD patients. Circadian desynchronization in DSPD is similar to that of jet lag, where individuals may have low energy in the daytime because they attempt to stay awake while the propensity for sleep is high. Comorbid depression is common among patients with DSPD, and a delayed circadian preference has been described in adults with bipolar I disorder, in some cases correlating with higher relapse rates. The prevalence of delayed sleep-awake phase disorder is highest in adolescents and young adults, with rates estimated between 3.3% and 4.6%, and some as high as 7%. The prevalence of DSPD in adults is lower, with estimates between 0.2% and 1.7%. DSPD is less prevalent in adults, likely due to the changes in a person's circadian timing as they get older. DSPD is the most common circadian rhythm sleep disorder. In a study of patients seen for circadian rhythm sleep disorders, 83% were diagnosed with DSPD. In the same study, 90% of those patients diagnosed with DSPD reported an onset of their symptoms during childhood or adolescence. Taken together, the consensus in the literature is that the prevalence of adults with DSPD is about 1% of US population or over 3 million people. DSPD represents a large commercial opportunity for Vanda with prevalence assessments varying across different groups. We believe a circadian regulator like Hetlios has a significant probability of technical success in treating patients with delayed sleep phase disorder. We also believe that Hetlios could have a significant benefit over classic insomnia drugs to treat this condition by addressing the underlying cause and aligning the internal clock and therefore improving sleep at the appropriate time. Classic insomnia drugs provide a small sleep benefit with a number of side effects while not addressing the underlying issue of a misaligned circadian clock. The DSPD study is expected to begin randomizing patients imminently in a number of clinical sites across the United States. Finally, on FNAPT. The ongoing clinical development programs for FNAPT, including bipolar disorder, Parkinson's disease psychosis, and the long-acting injectable formulation schizophrenia, are also in various stages of preparation and execution. The four-week Phase III study of bipolar I disorder includes sites in both the United States and Europe. The study recently began randomizing patients in the U.S., and we plan to begin randomizing patients in Europe later this summer. On Parkinson's disease psychosis, we're applying two studies, a Phase II open-label study of two cohorts, followed by a larger randomized placebo-controlled Phase III study. Both studies are designed to evaluate the efficacy of FNAPT in the treatment of psychosis in Parkinson's disease. 20 to 40% of people with Parkinson's disease are reported to experience varying degrees of psychosis. There are almost a million people in the U.S. with Parkinson's disease. With only one other approved treatment for Parkinson's disease psychosis and the significant burden the condition has on the patients and their caregivers, this remains an important unmet medical need The phase two cohort open label study of 24 patients has received approval to proceed by the FDA and is expected to commence soon. The pharmacokinetic study of the FANAT long-acting infectable is ongoing, and we're in the process of understanding and optimizing the dosing and administration. Upon completion of this repeat dose PK study, we're applying the phase three study of the long-acting infectable for acute schizophrenia treatment. In addition to our FNAP programs, the investigation new drug for P88, the active metabolite of alloperidone, recently received clearance from the FDA to proceed. We plan to begin a bioequivalent study of FNAP and P88 in healthy volunteers in the near term. We believe that P88 has the potential to improve on the clinical profile of alloperidone and create sustained long-term value in Vanda's treatment portfolio for psychiatric disorders. In conclusion, the first quarter of 2021 was a strong quarter for Vanda, and we're optimistic that the positive momentum will continue for the rest of 2021. The approval of HETLIOS for nighttime sleep disturbances in Smith-Mageni syndrome patients provides an opportunity to continue our innovative and successful approach to identifying and treating patients with orphan disorders. We also continue to look forward to the results of our Tridyptan gastroparesis study and the number of lifecycle management programs in our pipeline that are poised to continue that as value creation well into the future. I will now turn the call back to Kevin to discuss our financial results for the first quarter, and after that, I would be happy to address any questions you may have. Kevin?
spk10: Thank you, Mahal. I'll begin by summarizing our first quarter 2021 financial results. Total revenues for the first quarter of 2021 were $62.7 million, an 8% increase compared to $58 million for the first quarter of 2020. Hetlios net product sales were $39.3 million for the first quarter of 2021, an 11% increase compared to $35.3 million for the first quarter of 2020. Hetlios net product sales in the first quarter of 2021 decreased by 11% as compared to $44.2 million in the fourth quarter of 2020. Consistent with prior years and expectations, in early first quarter 2021, we saw a decline in our Hetlios patients on therapy attributable to the annual payer disruption linked to new plan years, plan changes, and reauthorizations. As expected, this early first quarter decline reversed, and patient demand subsequently grew during the remainder of the first quarter.
spk01: Turning to FNAP.
spk10: FNAP net product sales in the first quarter of 2021 were 23.3 million, a 3% increase compared to 22.7 million in the first quarter of 2020. FNAP net product sales in the first quarter of 2021 decreased by 1% as compared to 23.5 million in the fourth quarter of 2020. FNAP prescriptions in the first quarter of 2021, as reported by Equivia Exponent, decreased by 5% compared to the fourth quarter of 2020. This decrease is consistent with the performance of FNAP during the first quarter of 2020. For the first quarter of 2021, BANDA recorded net income of $8.7 million compared to net income of $500,000 for the first quarter of 2020. Net income for the first quarter of 2021 included an income tax provision of $1.8 million as compared to an income tax provision of $800,000 for the same period in 2020. Operating expenses in the first quarter of 2021 were $52.3 million compared to operating expenses of $58.1 million in the first quarter of 2020. The $5.8 million decrease was primarily driven by lower SG&A expenses related to awareness and branded DTC campaigns. Vanda expects to achieve the following financial objectives in 2021. Net product sales from both Hetlios and FNAPT of between $270 and $300 million. Hetlios net product sales of between $180 and $200 million. FNAPT net product sales of between $90 and $100 million. And year-end 2021 cash of greater than $400 million. Of note, our Hetlios net product sales guidance is based on our currently approved FDA indications for non-24 and nighttime sleep disturbances in SMS. I'll now turn the call back to Mahal.
spk06: Thank you very much, Kevin. At this point, I will be happy to answer any questions you may have.
spk11: As a reminder, to ask a question, you will need to press star 1 on your telephone. To review our question, press the pound key. Your first question comes from the line of Chris Haverton with Jefferies. Your line is now open.
spk13: Great. Thank you so much for taking the questions. Congratulations on the progress despite the pandemic. I guess maybe a few questions from me. First of all, on the gastroparesis program and the submission, outside obviously of completing the efficacy study that you described, what other steps need to be taken by the team to kind of get that package ready to go and be submitted in the timeline that you described. So that's one question. The second question would be, you know, I'm very interested in thinking about the opportunity for, I think you said it was P88, the active materials. Yes. What specifically are the potential advantages that that metabolite would have over the parent molecule? And then maybe just a last one for Kevin. With respect to the guidance, you know, is it possible for you to give us some relative contribution of SMS within the HET-LEOS revenue guidance? Thank you.
spk06: Okay. Thank you very much, Chris. I'll take the first one and the last one for Kevin. So the question is preparedness for NDA filing. As you know, there are three main components. The preclinical package, which we have just discussed and it is complete. The clinical package which has been completed along this phase three clinical side we're conducting. a pharmacokinetic clinical pharmacology study, understanding the food effect, if there is any. These are labeling studies. Otherwise, the manufacturing preparedness is there. Of course, we've scaled up for some time now, and we'll have all the necessary stability data for filing by the end of the year. So really what is in the critical path here are the results of the study and subsequent meeting with the FDA to make sure that we're all on the same page. Your second question was on P88 and what could be potential advantage over alloperidone. As you know, alloperidone, because it's alpha-1 adrenergic receptor blocking effect, it does have orthostatic hypertension at the beginning of treatment, leading to titration requirement. And then it's administered twice a day. Of course, we don't know the answer, but there is a likelihood among other potentials for P88 is to decrease this pick-to-drop chains and decrease the need for both titration and the twice a day, making the administration of P88 over aloperidone more tolerable and, of course, the dosing more flexible. Of course, there could be other things we learned along the way. What is interesting, Chris, also, is that you noticed we're conducting a bioequivalent study. And that is because we know from metabolism that alloperidone, when administered, quickly comes into an equilibrium between P88 and alloperidone itself. And therefore, there is a likelihood that P88 may be bioequivalent to alloperidone. where you can understand that this may lead to much faster programmer registration. If it did, we can substitute one for the other. And, you know, if P88 was to show some pharmacokinetic and tolerability advantages, you would have actually a very interesting quick extension of the franchise itself. Any follow-up questions on that before Kevin addresses your question?
spk13: Yeah. No, I mean, first of all, thank you, Mahas. That's very clear. For the, I guess, would be, you know, with respect to the pharmacokinetic features, is that kind of like speculation at this point, or is that supported by evidence that your team has generated?
spk06: Yeah, we have some initial data. But, of course, we need to have direct study of that before, you know, we can make any definitive claims. And another interesting part about P88 is that, as you know, we're developing a long-acting injectable alloperidone, which actually is based on a crystal formulation that we're injecting directly. And that allows actually the depo behavior in the muscle. For P88, P88's chemistry is such that potentially allows for a lipid conjugate, which would be a more classic way of developing a long-acting infectable. So that can be an additional opportunity to develop a long-acting infectable with different properties from alloperidone itself.
spk13: Got it. Yeah, I mean, actually, that was one of the questions in the back of my mind was just, you know, if there were advantages for P88 along both the clinical path and then certainly for sustainable growth, as you say, does it make sense to continue to invest on the long-acting injectable formulation for alloperidone as well?
spk06: It absolutely does. We're actually very late in that development. We have surprising results of being able to achieve great pharmacokinetic profiles with the crystals. And you understand having crystals is actually the most straightforward manufacturing you can possibly have. It's actually crystals of allopurin that you will go through the process and then inject them. The other big advantage of starting with alloperidone is that we know how alloperidone itself behaves on efficacy. So the phase three study that we're designing now and the initial thinking around efficacy is to run a short four to six week acute schizophrenia phase three study where then the injectable of alloperidone will first be applied to the short-term treatment of schizophrenia in an acute phase. And there are not a lot of examples of that, and we think it will have a unique commercial advantage as well. So many reasons why to proceed. One, we know that this formulation works for P88. We don't know the pharmacokinetics and we don't fully understand the potential of a lipid conjugate.
spk13: Okay. Okay. Well, very good. And, well, I mean, like I said, that's a very interesting and potentially very exciting advance of the pipeline. So I guess we'll just stay tuned for that. And I guess the other question that I had was just related to the guidance.
spk06: Yes. In fact, the, you know, breaking out SMS. Kevin, please go ahead.
spk10: Yep, and just as a reminder, our financial guidance for the year included $180 to $200 million of Hetlios revenue. We didn't provide any detail around the breakout of that between, you know, Hetlios non-24 in the U.S. or Hetlios non-24 in Germany or Hetlios SMS here in the U.S. So what I can tell you, though, is that we're very excited about the early progress that Mahalis noted with, you know, patient family engagement continuing to increase in the prescription generation that we're seeing. There was revenue included in the first quarter related to SMS, but given the timing of the approval and launch, you know, we expect to see this continue to build through future quarters.
spk13: Okay. Okay. Well, maybe I'll just hop back in the queue then, and I appreciate you taking the questions.
spk05: So, thank you, Chris.
spk11: There are no further questions at this time. I will now turn the call back to Vanda Management for closing remarks.
spk06: Thank you very much. In fact, Chris, if you have any follow-up, we'll be happy to take any questions. Okay. If there are no more questions, I would like to thank you all for participating in this call. We look forward to a successful and exciting year, both on the commercial side and the clinical pipeline. Thank you very much.
spk11: This concludes the base conference call. Thank you for joining. You may now disconnect. Thank you. Thank you. Thank you. Thank you. Thank you. you Thank you.
spk12: Thank you. you
spk11: Good day and thank you for standing by. Welcome to the Q1 2021 Evanda Pharmaceuticals, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Kevin Moran, Vanda's Chief Financial Officer. Please go ahead.
spk10: Great. Thanks, Ashley. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceutical's first quarter 2021 performance. Our first quarter 2021 results were released this afternoon and are available on the SEC's EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mahalis Polymeropoulos, our president and CEO. Following my introductory remarks, Mahalis will update you on our ongoing activities. I will then comment on our financial results before opening the lines for your questions. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances, and uncertainties. These risks are described in the cautionary note regarding forward-looking statements, risk factors, and management's discussion and analysis of financial condition and results of operations sections of our annual report on Form 10-K for the fiscal year ended December 31, 2020, as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8K and other filings with the SEC, which are available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other filings. The information we provide on this call is provided only as of today, and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events, or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mahalas Pai-Maropoulos.
spk06: Thank you very much, Kevin. Good afternoon, everyone. Following a challenging year as the world faced the COVID-19 pandemic, Vanda entered 2021 with our focus on value creation from both our pipeline and the continuous value creation from our commercial products. The potential future value creation and innovation in our pipeline can be seen intradipendent for the treatment of gastroparesis, with results from our ongoing phase III study expected later this year and then anticipated launch in 2022. The emerging DSPD, delayed sleep phase disorder program in Hetlius, which we believe can advance quickly. And finally, our late-stage FNAP evaluations in bipolar disorder, a long-acting injectable formulation, and in Parkinson's disease psychosis. In the first quarter, we also launched HETLIOS and HETLIOS-LQ for Smith-McGain syndrome nighttime sleep disturbances, and we're excited about its anticipated contribution to our value creation story. On commercial performance, we see continued growth year over year. In the first quarter, of 2021. Total net product revenue for Hetlios and Fanapt was 62.7 million, an 8% increase compared to the first quarter of 2020. Net product revenue on Hetlios saw an 11% increase in the first quarter of 2021 compared to the first quarter of 2020, and net product revenue for Fanapt saw a 3% increase compared to the first quarter of 2020. While during the first quarter of every year, patients navigate insurance changes which can temporarily impact patients on therapy, we are pleased with the performance on both HETLIOS and FENAPT despite these challenges. I will later discuss our late-stage lifecycle management programs, which can present us with a number of additional revenue growth opportunities in the near term. I will now turn to the Smith-Mageni syndrome nighttime sleep disturbances approval by the FDA and launch of the product. In December, the FDA approved the oral capsule formulation of Hetlius and the new liquid formulation, Hetlius LQ, for the treatment of nighttime sleep disturbances in adults and children with Smith-Mageni syndrome, respectively. is a neurodevelopmental disorder caused by genetic mutation of chromosome 17, which is a microdeletion in about 90% of the patients and a point mutation in the RAI gene, which is included in this microdeletion region in the remaining 10% of the patients. SMS affects 1 in 15 to 25,000 births with an estimated US prevalence of approximately 15,000 patients. The most common and most disruptive clinical expression of SMS is a sleep disorder that impacts the function of patients and consequently their families. During the first quarter of 2021, we launched HETLIOS and HETLIOS-LQ for SMS. As part of the early launch, we have reached out to our existing database of SMS patients, family members, and caregivers and in collaboration with the patient advocacy organization PRISMS, expanded our outreach to a broader group of patients and their families. While we're still in the beginning stage of the commercial launch of the HETLIOS capsule and the HETLIOS LQ liquid formulations, we're encouraged by the early results. We continue to connect with new SMS families, and these families are now at different stages of discussing the treatment option with their physicians. At the same time, already more than 50 patients have already received prescriptions and are navigating the insurance approval process. We're in the midst of finalizing the second phase of our commercial launch, which will reach out to a larger number of diagnosed and undiagnosed individuals. While it is difficult at this time to estimate an exact growth trajectory for the adoption of hetliums by SMS patients, we're excited about the emerging opportunity as we continue to deploy a number of strategies to reach and inform the community of approximately 15,000 SMS patients in the U.S. Given the genetic testing available for SMS, a significant number of patients are already diagnosed, and these are expected to be the first to come to treatment. It is estimated that between 80 to 100% of patients with SMS suffer from nighttime sleep disturbances for which hetlios is the only approved treatment. We expect that the number of SMS patients on treatment with hetlios will continue to increase throughout the year and that greater awareness will lead to adoption. As we resume an activity in most of our clinical programs, I would like to highlight our progress in some key clinical programs. First of all, we're excited about the upcoming completion of the gastroparesis study leading to an expected NDA filing either later this year or early next. The phase three study in gastroparesis is ongoing with 85% of the study now enrolled. On track to complete enrollment over the summer, and report results later in 2021. Following the results of the study, we plan to meet with the FDA for a pre-MDA meeting. Depending on the timing of that meeting, our MDA filing may occur at the end of 2021 or early 2022. As we have previously communicated, we believe that the current Phase III study can be the last effective study required for MDA filing. As a reminder, The ongoing phase three study aims to enroll a total of 200 patients with gastroparesis with either idiopathic or diabetic etiology. The study is a 12-week double-blind placebo-controlled study, which will measure the effect of tridipedant in improving the symptoms of gastroparesis. This phase three study follows the successful completion of the four-week phase two randomized study in the same population. The results of that study were published in the journal Gastroenterology in January of 2021. Several study participants have requested to continue treatment with tradipitin post completion of the clinical study through an expanded access program. We have worked in collaboration with these patients, their doctors, and the FDA to ensure they can receive further treatment with tradipitin. These patients have been approved for up to six months of expanded access treatment of tradipitin with one patient already approved for up to 12 months of expanded access treatment. Patients with gastroparesis suffer from chronic, severe, and debilitating nausea as well as other GI symptoms. Many patients with gastroparesis also experience vomiting, which can lead to weight loss and in severe cases, hospitalizations due to nutritional deficiencies. The debilitating nausea and other GI symptoms makes it difficult for patients with gastroparesis to function day to day. Gastroparesis is a severe, unmet medical condition with only one approved treatment option in the last 40 years. As a testament to the significant unmet need for this disorder, The response to our television campaign for recruitment in the Phase 3 study has been overwhelming, with thousands of patients already expressing interest since late December. Our estimates for the opportunity for a gastroparesis therapy are based on several key assumptions. One, the estimated prevalence of gastroparesis in the U.S. is about 6 million patients, the majority of whom remain undiagnosed. Second, At present, there are more than 600,000 patients estimated to have a confirmed diagnosis of gastroparesis. And finally, based on IQVIA data, there are 300,000 prescriptions of oral metoclopramide per month in the United States. Metoclopramide is currently the only FDA-approved treatment for gastroparesis approved in 1979. And due to its potential of severe side effects, It carries a black box warning and limitations of use of no more than three months. Given the highly limited treatment options, we believe that the new therapy could achieve significant market share. We're excited about traditional gastroparesis as this phase three program represents a transformational opportunity for Vanda to address an important unmet medical need and create a substantial revenue opportunity. I will now turn to Hetlios. The emerging clinical program for hetlias is in delayed sleep phase disorder or DSPD. It is progressing quickly and represents what we believe to be an important value creation opportunity for BANDA with a high probability of technical success. DSPD is likely the most prevalent circadian rhythm sleep disorder affecting approximately 1% of the population and 7% to 10% of patients with disorders of initiating or maintaining sleep. The defining feature of individuals with DSPD is delayed sleep onset. Individuals with DSPD habitually go to bed and wake up significantly later than the typical or desired times and have an inability to fall asleep at an appropriate time. In addition to the delayed sleep onset, Patients with DSPD suffer from insufficient sleep and daytime impairment. Their delayed bedtime combined with conventional schoolwork start times that require early waking can cause significant reductions in total sleep time for DSPD patients. Circadian desynchronization in DSPD is similar to that of jet lag, where individuals may have low energy in the daytime because they tend to stay awake, while the propensity for sleep is high. Comorbid depression is common among patients with DSPD, and a delayed circadian preference has been described in adults with bipolar I disorder, in some cases correlating with higher relapse rates. The prevalence of delayed sleep-wake phase disorder is highest in adolescents and young adults, with rates estimated between 3.3 and 4.6 percent, and some as high as 7 percent. The prevalence of DSPD in adults is lower, with estimates between 0.2 and 1.7%. DSPD is less prevalent in adults, likely due to the changes in a person's circadian timing as they get older. DSPD is the most common circadian rhythm sleep disorder. In a study of patients seen for circadian rhythm sleep disorders, 83% were diagnosed with DSPD. In the same study, 90% of those patients diagnosed with DSPD reported an onset of their symptoms during childhood or adolescence. Taken together, the consensus in the literature is that the prevalence of adults with DSPD is about 1% of US population or over 3 million people. DSPD represents a large commercial opportunity for Vanda with prevalence assessments varying across different groups. We believe a circadian regulator like Hetlios has a significant probability of technical success in treating patients with delayed sleep phase disorder. We also believe that Hetlios could have a significant benefit over classic insomnia drugs to treat this condition by addressing the underlying cause and aligning the internal clock and therefore improving sleep at the appropriate time. Classic insomnia drugs provide a small sleep benefit with a number of side effects while not addressing the underlying issue of a misaligned circadian clock. The DSPD study is expected to begin randomizing patients imminently in a number of clinical sites across the United States. Finally, on FNAPT. The ongoing clinical development programs for FNAPT, including bipolar disorder, Parkinson's disease psychosis, and the long-acting injectable formulation schizophrenia are also in various stages of preparation and execution. The four-week Phase III study of bipolar I disorder includes sites in both the United States and Europe. The study recently began randomizing patients in the U.S., and we plan to begin randomizing patients in Europe later this summer. On Parkinson's disease psychosis, we're applying two studies, a Phase II open-label study of two cohorts, followed by a larger randomized placebo-controlled Phase III study. Both studies are designed to evaluate the efficacy of FNAPT in the treatment of psychosis in Parkinson's disease. Twenty to 40% of people with Parkinson's disease are reported to experience varying degrees of psychosis. There are almost a million people in the U.S. with Parkinson's disease, with only one other approved treatment, for Parkinson's disease psychosis and the significant burden the condition has on the patients and their caregivers, this remains an important unmet medical need. The phase two cohort open label study of 24 patients has received approval to proceed by the FDA and is expected to commence soon. The pharmacokinetic study of the FANAT long-acting infectable is ongoing and we're in the process of understanding and optimizing the dosing, and administration. Upon completion of this repeat dose PK study, we're planning the phase three study of the long-acting injectable for acute schizophrenia treatment. In addition to our FNAP programs, the investigation new drug for P88, the active metabolite of alloperidone, recently received clearance from the FDA to proceed. We plan to begin a bioequivalent study of an aptin P88 in healthy volunteers in the near term. We believe that P88 has the potential to improve on the clinical profile of alloperidone and create sustained long-term value in Vanda's treatment portfolio for psychiatric disorders. In conclusion, the first quarter of 2021 was a strong quarter for Vanda, and we're optimistic that the positive momentum will continue for the rest of 2021. The approval of hetlias for nighttime sleep disturbances in Smith-Mageni syndrome patients provides an opportunity to continue our innovative and successful approach to identifying and treating patients with orphan disorders. We also continue to look forward to the results of our Tridyptan gastroparesis study and the number of lifecycle management programs in our pipeline that are poised to continue vendors' value creation well into the future. I will now turn the call back to Kevin to discuss our financial results for the first quarter, and after that, I would be happy to address any questions you may have. Kevin?
spk10: Thank you, Mahal. I will begin by summarizing our first quarter 2021 financial results. Total revenues for the first quarter of 2021 were 62.7 million, an 8% increase compared to 58 million for the first quarter of 2020. Ketlios net product sales were 39.3 million for the first quarter of 2021, an 11% increase compared to 35.3 million for the first quarter of 2020. Ketlios net product sales in the first quarter of 2021 decreased by 11% as compared to 44.2 million in the fourth quarter of 2020. Consistent with prior years and expectations, in early first quarter 2021, we saw a decline in our Hetlios patients on therapy attributable to the annual payer disruption linked to new plan years, plan changes, and reauthorizations. As expected, this early first quarter decline reversed, and patient demand subsequently grew during the remainder of the first quarter.
spk01: Turning to FNAPT.
spk10: FNAPT net product sales in the first quarter of 2021 were $23.3 million, a 3% increase compared to $22.7 million in the first quarter of 2020. FNAP net product sales in the first quarter of 2021 decreased by 1% as compared to $23.5 million in the fourth quarter of 2020. FNAP prescriptions in the first quarter of 2021, as reported by Equivia Exponent, decreased by 5% compared to the fourth quarter of 2020. This decrease is consistent with the performance of FNAP during the first quarter of 2020. For the first quarter of 2021, BANDA recorded net income of $8.7 million compared to net income of $500,000 for the first quarter of 2020. Net income for the first quarter of 2021 included an income tax provision of $1.8 million as compared to an income tax provision of $800,000 for the same period in 2020. Operating expenses in the first quarter of 2021 were $52.3 million compared to operating expenses of $58.1 million in the first quarter of 2020. The $5.8 million decrease was primarily driven by lower SG&A expenses related to awareness in branded DTC campaigns. Vanda expects to achieve the following financial objectives in 2021. Net product sales from both Hetlios and FNAPT of between $270 and $300 million. Hetlios net product sales of between $180 and $200 million. FNAPT net product sales of between $90 and $100 million. and year-end 2021 cash of greater than $400 million. Of note, our Hetlios Net Product Sales Guidance is based on our currently approved FDA indications for non-24 and nighttime sleep disturbances in SMS. I'll now turn the call back to Mahal.
spk06: Thank you very much, Kevin. At this point, I will be happy to answer any questions you may have.
spk11: As a reminder, to ask a question, you will need to press star 1 on your telephone. To review our question, press the pound key. Your first question comes from the line of Chris Haverton with Jefferies. Your line is now open.
spk13: Great. Thank you so much for taking the questions. Congratulations on the progress despite the pandemic. So I guess maybe a few questions from me for, first of all, on the gastroparesis program and the submission. You know, outside obviously of completing the efficacy study that you described, what other steps need to be taken by the team to kind of get that package ready to go and be submitted in the timeline that you described? So that's one question. The second question would be, you know, I'm very interested in thinking about the opportunity for, I think you said it was P88, the active.
spk16: Yes.
spk13: So what specifically are the potential advantages that that metabolite would have over the parent molecule? And then maybe just a last one for Kevin. With respect to the guidance, you know, is it possible for you to give us some relative contribution of SMS within the HET-LEOS revenue guidance? Thank you.
spk06: Okay. Thank you very much, Chris. I'll take the first one, the last one for Kevin. So the question is preparedness for NDA filings. As you know, there are three main components. The preclinical package, which we have just discussed, and it is complete. The clinical package, which has been completed along this phase three clinical study, we're conducting a pharmacokinetic clinical pharmacology study, understanding the food effect, if there is any. These are labeling studies. Otherwise, the manufacturing preparedness is there. Of course, we've scaled up for some time now. And we'll have all the necessary stability data for filing by the end of the year. So really what is in the critical path here are the results of the study. and subsequent a meeting with the FDA to make sure that we're all on the same page. Your second question was on P88 and what could be potential advantages over alloperidone. As you know, alloperidone, because it's alpha-1 adrenergic receptor blocking effect, it does have orthostatic hypertension at the beginning of treatment leading to titration requirement. And then it's administered twice a day. Of course, we don't know the answer, but there is a likelihood among other potentials for P88 is to decrease this pick-to-drop change and decrease the need for both titration and the twice a day, making the administration of P88 over aloperidone more tolerable, and of course, the dosing more flexible. Of course, there could be other things we learned along the way. What is interesting, Chris, also, is that you noticed we're conducting a bioequivalent study. And that is because we know from metabolism that Alloperidone, when administered, quickly comes into an equilibrium between P88 and alloperidone itself. And therefore, there is a likelihood that P88 may be bioequivalent to alloperidone, where you can understand that this may lead to much faster programmer registration. If indeed, we can substitute one for the other. and if P88 was to show some pharmacokinetic and tolerability advantages, you would have actually a very interesting quick extension of the franchise itself. Any follow-up questions on that before Kevin addresses your question?
spk13: Yeah. No, I mean, first of all, thank you, Mahos. That's very clear. For the, I guess, would be, you know, with respect to the pharmacokinetic features, is that kind of like speculation at this point, or is that supported by evidence that your team has generated?
spk06: Yeah, we have some initial data, but of course we need to have direct studying of that before, you know, we can make any definitive claims. And in other... interesting part about P88 is that, as you know, we're developing a long-acting injectable alloperidone, which actually is based on a crystal formulation that we're injecting directly. And that allows actually the depo behavior in the muscle. For P88, P88's chemistry is such that potentially allows for a lipid conjugate, which would be a more classic way of developing a long-acting infectable. So that can be an additional opportunity to develop a long-acting infectable with different properties from alloperidone itself.
spk13: Got it. Yeah, I mean, actually, that was one of the questions in the back of my mind was just, you know, if there were advantages for P88 along both the clinical path and then certainly for sustainable growth, as you say, does it make sense to continue to invest on the long-acting injectable formulation for iloperidone as well?
spk06: It absolutely does. We're actually very late in that development. You know, we have surprising results of being able to achieve great pharmacokinetic profiles with the crystals. And you understand having crystals is actually the more straightforward manufacturing you can possibly have. It's actually crystals of allopurin that you will go through the process and then inject them. The other big advantage of starting with allopurin is that we know how alloperidone itself behaves on efficacy. So the phase three study that we're designing now and the initial thinking around efficacy is to run a short four to six week acute schizophrenia phase three study where then the injectable of alloperidone will first be applied to the short term treatment of schizophrenia. in an acute phase. And there are not a lot of examples of that and we think it would have a unique commercial advantage as well. So many reasons why to proceed. One, we know that this formulation works for P88. We don't know the pharmacokinetics and we don't fully understand the potential of a lipid conjugate.
spk13: Okay. Okay, well, very good. And, well, I mean, like I said, that's a very interesting and potentially very exciting advance of the pipeline. So I guess we'll just stay tuned for that. And I guess the other question that I had was just related to the guidance.
spk06: Yes, in terms of the, you know, breaking out SMS. Kevin, please go ahead.
spk10: Yep, and just as a reminder, our financial guidance for the year included $180 to $200 million of Hetlios revenue. We didn't provide any detail around the breakout of that between, you know, Hetlios non-24 in the U.S. or Hetlios non-24 in Germany or Hetlios SMS here in the U.S. So what I can tell you, though, is that we're very excited about the early progress that Mahalis noted with, you know, patient family engagement continuing to increase and the prescription generation that we're seeing. There was revenue included in the first quarter related to SMS, but given the timing of the approval and launch, you know, we expect to see this continue to build through future quarters.
spk13: Okay. Okay. Well, maybe I'll just hop back in the queue then, and I appreciate you taking the questions.
spk05: So, thank you, Chris.
spk11: There are no further questions at this time. I will now turn the call back to Vanda Management for closing remarks.
spk06: Thank you very much. In fact, Chris, if you have any follow-up, we'll be happy to take any questions. Okay. If there are no more questions, I would like to thank you all for participating in this call. We look forward to a successful and exciting year. both on the commercial side and the clinical pipeline. Thank you very much.
spk11: This concludes the base conference call. Thank you for joining. You may now disconnect.
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