Vanda Pharmaceuticals Inc.

Good day and thank you for standing by. Welcome to the Vanda Pharmaceuticals, Inc. Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Kevin Moran, Vanda's Chief Financial Officer. Please go ahead.

Thank you, Joelle. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' second quarter 2021 performance. Our second 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, Chief Executive Officer, and Chairman of the Board. 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 8-K, and other filings with the SEC, which are available on the SEC's EDGAR system and 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 Palamarapulas.

Thank you very much, Kevin. Good afternoon, everyone, and thank you for joining us. We're excited to share our second quarter 2021 performance and our upcoming clinical milestones. 2021 is supposed to be an exciting year for Vanda with several late-stage clinical programs that have potential for significant short-term value creation, as well as long-term advancement of the gold souvenir. In addition to our ongoing commercial launch of Hetlias for Smith-Mageni syndrome, we're looking forward to the completion of our Phase III gastroparesis study and reporting the top-line results by the end of the year. On commercial performance, we see continued growth year over year. In the second quarter of 2021, net product revenue for Tetlius and Fanapt was 67.9 million, a 9% increase compared to the second quarter of 2020. Net product revenue for set-use saw a 7% increase in the second quarter of 2021 compared to the second quarter of 2020, and net product revenue for FNAPT saw a 15% increase compared to the second quarter of 2020. Set-use demand by descriptions received continues to par-exceed the description field. But keen to improve access to patients and to present, we have engaged with a number of payers to discuss ways to improve patient access. Now, on the Smith-McManus syndrome nighttime sleep disturbances approval and launch. In December 2020, the FDA approved the oral calf emulation of hip years and they knew formulation, Hetlios-LQ, for the treatment of adults and children, respectively, with nighttime sleep disturbances in Smith-Mageni syndrome. While we're still in the early stages of the commercial launch of Hetlios-Capsulin, Ketlios-LQ liquid formulation, we're encouraged by the early results. We continue to connect with SMS families who are at various stages of discussing the treatment option with their physicians. We're now implementing the second phase of our commercial loan, which is intended to reach a larger number of diagnosed and undiagnosed individuals in a similar fashion to our non-24 efforts. We plan to reach patients and doctors with a combination of direct-to-consumer advertising and are specialized in personal health scores. While it is difficult at this time to estimate the trajectory for the adoption of head layers by SMS patients, we're excited about the urgent 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 HEC-US is the only approved treatment. We expect that the number of SMS patients on treatment with HEC-US will continue to increase in the second half of the year, and that greater awareness will lead to adoption. The paper describing our study in Smith-Mageni syndrome, the largest of its kind, was published this week in the journal Genetics in Medicine. This study, the largest ever conducted in patients with SMS, enrolled genetically confirmed patients with SMS in a double-blind, two-period crossover study and demonstrated favorable effects of tazimeltin over placebo in a number of primary and secondary endpoints, including sleep quality and sleep duration measures. The results presented in this paper consisted of the mechanism of action of tazimeltin as a circadian regulator. As we're resuming activity in most of our clinical programs, I would like to highlight our progress in some of these key programs. First, the phase three study of Cladipta and Gastroparesis nearing completion with 95% of the target of 200 patients already enrolled. We expect results of this study by the end of the year. Following the completion of the study, we plan to meet with the FDA for a pre-MDA meeting and discuss our coming application. As we have previously communicated, we believe the current Phase III study will be the last efficacy study required for NDA filing. As a reminder, the ongoing Phase III study aims to enroll gastrointestinal patients with either idiopathic or diabetic etiology. The study is a 12-week double-line placebo-controlled study which will measure the effects of Tredipitin in improving the symptoms of cancer. This Phase III study follows the successful completion of a four-week Phase II randomized study in the same population. The results of that study were published in the journal Gastroenterology in January of 2021. Additionally, more than a dozen study participants are going to continue treatment with tradipitin post-completion of the clinical study through a expanded access program. We have worked in collaboration with these patients, their doctors, and the FDA to ensure that they can receive treatment with tradipitin. gastroparesis is a severe and medical condition with only one approved treatment option in the last few years. Our estimates for the size of the commercial opportunity for gastroparesis therapy are based on several key assumptions. One, the estimated prevalence of gastroparesis in the US is about 6 million patients, the majority of whom remain untapped. Second, At present, there are more than 600,000 patients estimated to have a confirmed diagnosis of gastroparesis. And finally, based on IQV data, there are 300,000 prescriptions of oral metoclopramide per month in the U.S. Given highly limited treatment options and the early response, as we witness the recruitment through direct-to-consumer advertising, to a dividend in gastroparesis, can achieve a significant market share, which we believe will create an opportunity for Vanda to address an important and medical need, and represents a potentially transformational commercial opportunity for the company. Going into the second half of the year, the completion of the gastropares study represents our most imminent and significant clinical milestone, however, There are a number of additional programs that present near-term value creation, and I will briefly discuss. First, on the headlifts. We have previously discussed our clinical programs with headlifts. We studied in delayed sleep phase disorder, or DSPD, autism spectrum disorder, and pediatric non-24-hour sleep-wake disorder, all of which are ongoing. The most advanced of these programs is the DSPD, which represents what is believed to be an important value creation opportunity for Uganda with a high probability of technical success. DSPD is likely the most prevalent sleep disorder affecting approximately 1% of the population and 7% of patients with disorders of initiating or maintaining sleep. The prevalence of delayed phase disorder is highest in adolescents and young adults, with rates estimated between 3% and 4% and some as high as 7%. We believe that head loss 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. Tragic insomnia drugs provide a small sleep benefit with a number of side effects not addressing the underlying issue or initial line of skin and clock. The DSPD study has started randomizing patients in a number of clinical sites across the United States, and we will be able to provide greater detail on timelines as we understand the rate of recruitment over the next few months. An observational open-label treatment study of the effects of headlamps in patients with autism spectrum disorder and sleep disorders is scheduled to begin imminently. Sleep disruption is commonly seen in people with autism and is associated with increased burden of disease and impact on functioning. There is currently no FDA-approved treatment for sleep disturbance in autism. I will now turn 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 of the study of bipolar I disorder with alloperidone includes sites in both the United States and Europe. The study has quickly started to randomize patients in the U.S., and we plan to begin randomized 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. These studies are trying to evaluate the efficacy and tolerability of FANAPT in the treatment of psychosis in Parkinson's disease. 20 to 40% of people with Parkinson's disease are reported to have brain disease or psychosis. There are almost a million people in the U.S. with Parkinson's disease. With only one approved treatment for Parkinson's disease or psychosis and the significant burden that these patients have on their caregivers, this remains an important unmet medical need. The phase two two-cohort open-label study of 24 patients has received approval to proceed by the FDA and is expected to commence soon. Studies with the long-acting injectable formulation Panapt are ongoing. They are expected to lead into 18 cases starting schizophrenia in 2022. In addition, the clinical pharmacology study of the active metabolite P88 of alloperidone is ongoing as well. On tradipitin and beyond the gastroparesis program, the Odyssey study for tradipitin based with COVID-19 pneumonia is growing, while the tradipitin motion sickness study is on hold due to pandemic-related travel restrictions. VQW-765. VQW-765 is an alpha-7 nicotinic albinist, which is currently in a program to be tested for the effects on performance anxiety. And that study is currently recruiting patients. The primary objective of the study is to evaluate the effect of a single autodose of 10 milligrams VTW65 relative to placebo in change of anxiety as measured by the destructive units of the stress scale, SODS, during a three-year social stress test, or PSST. The PSST is the standard for inducing acute psychosocial stress in a lab setting and has been accepted by the FDA for developing acute treatments for anxiety-related disorders. Subjective units of Distript-Cal or SADS, which is clinically validated self-assessment for acute anxiety, the score from 0 to 100, is used to measure the intensity of the stress during the TSS-T assessment. We'll be talking more about W765 and the performance anxiety study in future discussions. In conclusion, the second quarter of 2021 was another strong quarter for Vanda, and we're looking forward to a number of important milestones in the second half of the year. Lots of years where nighttime sleep disturbance in SMS is progressing well, and we're pursuing collaborations with payers to further facilitate access to shutters for our patients. We also continue to look forward to the results of our three different gastroparesis study later this year, and a number of life cycle management programs in our pipeline that are to continue value creation well into the future. I've come across these results that are approaching what we believe to be a transformational milestone with a significant revenue opportunity. I will now turn the call back to Kevin to discuss financial results for the second quarter. And after that, I'd be happy to address any questions you may have. Kevin?