Vanda Pharmaceuticals Inc.

Hello and thank you for standing by. This time I would like to welcome you to the Q4 2024 Vander Pharmaceuticals Inc. earnings conference call. All lines has been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the conference over to Mr. Kevin Moran, Vanda's Chief Financial Officer. Please go ahead, sir.

Thank you, Jerica. Good afternoon and thank you for joining us to discuss Vander Pharmaceuticals fourth quarter and full year 2024 performance. Our fourth quarter and full year 2024 results were released this afternoon and are available on the SEC's Edgar system and on our website, .vandafarma.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. Mahalas Polymeropoulos, our President, Chief Executive Officer and Chairman of the Board and Tim Williams, our General Counsel. Following my introductory remarks, Mahalas will update you on our ongoing activities. I will then come in on our financial results before we open 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 most recent annual report on form 10K as updated by our subsequent quarterly reports on form 10Q, 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 Polymeropoulos.

Thank you very much, Kevin, and good afternoon, everyone. Thank you for joining us to discuss BAND-S fourth quarter and full year 2024 results. As we discussed in our press release earlier this afternoon, strong revenue growth for FNAPT is putting us on a significant growth trajectory for 2025 and beyond, supported also by the commercial performance of Hedlius and Bonvori. The FNAPT long-acting injectable program, the new drug application for Bisanti, middle subteridone for bipolar disorder, and schizophrenia, along with its development for major depressive disorder, have the potential to drive future growth in our psychiatry portfolio for many years to come. Tridipidam's new drug application for motion sickness was filed with a potential approval this year while we're pursuing approval in gastroparesis and the development of Tridipidam to improve tolerability of GLT-1 analog, WeGovV. Our anti-inflammatory portfolio anchored by Bonvori was strengthened with the addition of Imcidolimab from Anaptis, an IL-36 receptor inhibitor for the treatment of generalized hostular psoriasis. We plan to file a BLA later this year while we're exploring registration in Europe and Japan, as well as the development of this novel drug for other inflammatory disorders with an unopposed action of the IL-36 system. In 2024, we return to revenue growth driven by the commercial launches in bipolar disorder and multiple sclerosis and advance our development pipeline with a number of products at or near marketing applications. All this was achieved by the hard work, ingenuity, and efficiency of our organization and its wonderful people. I will now turn to FNAPT. FNAPT was approved in the second quarter of 2024 for the acute treatment of bipolar one disorder. Then they initiated the commercial launch of FNAPT in this indication in the third quarter of 2024. In the fourth quarter, as compared to the fourth quarter of 23, new patients starts as reflected by new to brand prescriptions or NBRX increased by over 160% and FNAPT net product sales increased by 18%. A dedicated specialty sales force of approximately 200 persons has been promoting FNAPT supported by speaking program to improve -to-peer awareness. Given the successful trajectory consistent with other peers, we're currently in the process of further expanding our sales force to 300 representatives, which will allow for increase in both reach and frequency. In January of 2025, we began our direct to consumer advertising to increase general consumer awareness of FNAPT. We expect product adoption to continue as more prescribers develop different experiences and identify candidate patients. Banda also initiated a phase three program for the long acting injectable LAI formulation of FNAPT in the fourth quarter of 2024. The long acting injectable once a month FNAPT is evaluated in relapse prevention for schizophrenia, where the oral formulation has already been shown to be successful and is already included in the FNAPT prescribing information. While all products so far have been developed in double blind placebo control studies and while Banda and FDA have agreed on this design an IRB, Institutional Review Board has objected to a placebo control design for schizophrenia maintenance. We're evaluating with the FDA ways to proceed outside of a placebo control study, which could include a bridging study with the oral formulation. This evaluation is not specific to Banda and the outcome of this design will likely be required of others. Banda plans to initiate a study for the FNAPT long acting injectable as a once a month injectable for the treatment of hypertension to address both treatment resistance and treatment compliance. In the course of our extensive clinical program with FNAPT for over 20 years, we have now identified an unexpected but robust benefit in treating hypertension with FNAPT. Specifically, in a large meta analysis of placebo control studies, we have identified a rapid and sustainable effect in reducing systolic and diastolic blood pressure, especially among people with baseline hypertension. The effect size is comparable to effective antihypertensives. While the exact mechanism is not known, we believe that this effect is likely due to the mixed alpha, serotonin, and dopamine receptor antagonism observed with FNAPT. We plan to initiate a study to evaluate this effect with the once a month injectable FNAPT-LAI in people with treatment resistant hypertension. It has been reported that medication not adherence in hypertension is a significant public health risk and as such, if we're successful in our studies, FNAPT-LAI could become the first medication to address this large public health need. Additionally, Banda submitted a marketing authorization application in Europe in the fourth quarter of 2024 for FNAPT, and that is the European Medicine Agency for bipolar one disorder and schizophrenia. I will now turn to Bisanti, known as Miltz-Saperidon. Banda expects to submit a new drug application for Bisanti for the treatments of acute bipolar one disorder and schizophrenia to the US Food and Drug Administration in the first quarter of 2025. Exclusivity, including pending patent applications, could extend into the 2040s. Bisanti is an active metabolite of alloperidone and has been extensively studied. In the last year, we have met with the FDA and agreed upon the clinical and manufacturing requirements and were now prepared to submit a new drug application in the coming weeks. Banda initiated a phase three clinical study for Bisanti as a once a day adjunctive treatment for major depressive disorder in the fourth quarter of 2024. Results are expected in 2026. I will now move on to Hetlius, that is Melkin. Banda has initiated clinical programs in pediatric insomnia and delayed sleep phase disorder, and these programs are ongoing. Banda's MAA for Hetlius and Hetlius LQ for Smith-Mongenius syndrome is now pending with the European Medicines Agency. In addition, Banda is continuing to pursue the approval of Hetlius in sleep onset insomnia and the treatment of jet lag. Banda has completed successfully multiple studies in these indications that have demonstrated substantial evidence of efficacy and a positive benefit risk profile. Banda has requested an FDA hearing on the insomnia indication and an appeals court is expected to rule in the coming months on the jet lag application. Poonvori, Poonasimod. Banda initiated a commercial launch of Poonvori for the treatment of relapsing forms of multiple sclerosis in the third quarter of 2024. A new specialty sales force is now promoting Poonvori for this indication across the United States. We believe that Poonvori's profile, when appreciated, will drive the preferences of prescribers and patients. The sales force supported by a new speakers program for -to-peer awareness. Investigational new drug applications for Poonvori in the treatments of psoriasis and ulcerative colitis were accepted by the FDA in the fourth quarter of 2024. Poonvori has been previously shown to be effective in treating acute episodes of psoriasis as well as preventing relapse. This study was contacted by Actilion before Banda's acquisition of the product and the results have been published. Banda is now finalizing the development program that could lead to a new drug application filing in this indication. Tredipitant. The new drug application for Tredipitant for the treatment of motion sickness was submitted to the FDA in the fourth quarter of 2024. This application is supported by three positive studies in prevention of motion-induced vomiting in actual sea travel conditions. We expect an FDA decision later this year. Banda has recently initiated a clinical trial to study Tredipitant in the prevention of vomiting induced by a GLP-1 analog, Wegovi, that is semaglutide, in the fourth quarter of 2024. A frequent and at times severe treatment emerging adverse event with GLP-1 analogs is nausea and vomiting, which requires slow retitration and delayed onset of effect. We're evaluating whether Tredipitant can prevent Wegovi-induced nausea and vomiting and if it does, it could become a very useful product during GLP-1 analog treatment initiation. Banda has now accepted the opportunity for a hearing with the FDA on the approvability of the NDA for Tredipitant for the treatment of symptoms of gastroparesis. Banda has identified a number of faults in the FDA review that led to a complete response letter and we believe that if allowed to be reviewed by experts, they would also reach the conclusion that Tredipitant can be a useful product in treating symptoms of gastroparesis. In the meantime, more than 50 patients are currently treated with Tredipitant through the expanded access program and many additional ones are being evaluated to initiate treatment. IMC-Dolimab. In February 2025, Banda announced it entered into an exclusive global license agreement with Anaptis Bio, Anaptis, for the development and commercialization of IMC-Dolimab, that is an IL-36 receptor antagonist monoclonal antibody. Banda expects to initiate and complete the technology transfer experience and the biologic license application BLA and MAA for generalized postular psoriasis, GPP, for the US and European Union. Generalized postular psoriasis, or GPP, is a rare, severe skin disorder that is often caused by recessive mutations in the IL-36 receptor. IL-36RN gene, a regulator of the IL-36 activity. The role of such mutations in heterozygous state, which are far more common, is not yet appreciated, but it may play a significant role in the pathogenesis and progression of other inflammatory skin conditions. We plan to file a BLA later this year while we're exploring registration in Europe and Japan, and as well as the development of this novel drug in other inflammatory disorders, with an unopposed action of the IL-36 cytokine system. Finally, on early stage program highlights, VQW765 and alpha-7 nicotinic acetylcholine receptor and alpha-7 acetylcholine partial agonist is currently in clinical development for the treatment of acute performance anxiety in social situations. We have previously reported results from a phase two study with encouraging outcomes in a model of acute performance anxiety. We plan to meet with the FDA in the coming months at the end of phase two meeting, and plan to initiate phase three program in social anxiety disorder in 2025. The IND application for VCA894A, an antisense oligonucleotide in the treatment of -Marie-Tooth disease, axonal type 2S, an inherited peripheral neuropathy for which there is no available treatment was accepted by the FDA in 2024. The phase one clinical study for VCA894A is expected to enroll this single patient by mid-2025. In December 2024, Vanda announced that the FDA has granted orphan drug designation for VGT1849A, a selective antisense oligonucleotide-based JAK2 inhibitor for the treatment of polycythemia vera, a form of a rare hematologic malignancy that is estimated to affect one in 2,000 Americans. I will just review the key regulatory milestones. Tredipitan NDA for motion sickness submitted in Q4, 2018. Phenapt MAA in Europe for bipolar 1 disorder in schizophrenia submitted in Q4, 2024. Hetlius MAA in Europe for Smith-Moggaini syndrome submitted in Q4, 2024. Bisanti new drug application for bipolar 1 disorder in schizophrenia expected to be submitted in Q1, 2025. And IMC-Dolimab VLA in generalized post-lipidosis expect to be submitted in 2025. With that, I'll turn now to Kevin to discuss our financial results. Kevin.

Thank you, Mahales. I'll first discuss the results for the full year 2024 before turning to the fourth quarter of 2024. Total revenues for the full year 2024 were 198.8 million, a 3% increase compared to 192.6 million for the full year of 2023. As Mahales mentioned, this increase was primarily due to increased FNAP revenue as a result of the bipolar commercial launch and the introduction of PONVORI revenue following our acquisition of the product in December of 2023, partially offset by decreased Hetlius revenue as a result of generic competition. Let me now break this down by product. FNAP net product sales were 94.3 million for the full year 2024, a 4% increase compared to 90.9 million for the full year 2023. The increase in net product sales relative to the full year 2023 was attributable to increased volume and increased price net of deductions. Hetlius net product sales were 76.7 million for the full year 2024, a 23% decrease compared to 100.2 million for the full year 2023. The decrease relative to the full year 2023 was the result of continued generic competition in the US. Hetlius net product sales as reported for the first quarter of 2023 reflected higher unit sales as compared to recent prior periods. The higher unit sales during the first quarter of 2023 resulted in a significant increase of inventory stocking at specialty pharmacy customers at March 31st, 2023. During the remainder of 2023, although there was continued de-stocking at specialty pharmacy customers, inventory levels remained elevated relative to inventory levels prior to the entrance of generic competition and continue to remain elevated throughout 2024. Going forward, Hetlius net product sales may reflect lower unit sales as a result of reduction of the elevated inventory levels at specialty pharmacy customers or may be variable depending on when specialty pharmacy customers need to purchase again. Further, Hetlius net product sales will likely decline in future periods, potentially significantly, related to continued generic competition in the US. Additionally, the company constrained Hetlius net product sales for the years from December 31st, 2024 and 2023 to an amount not probable of significant revenue reversal. As a result, Hetlius net product sales could experience variability in future periods as the remaining uncertainties associated with variable consideration related to inventory stocking by specialty pharmacy customers are resolved. Ponvori net product sales were 27.8 million for the full year 2024 and include approximately three million of variable consideration that may be subject to dispute but that the company believes is not probable of significant revenue reversal. As a reminder, we completed the acquisition of the US and Canadian rights to Ponvori in December of 2023. As such, this represents the fourth full quarter of Ponvori revenue recognition at Vanda and significant progress in diversifying our product mix with innovative and value generating products. For the full year 2024, Vanda recorded a net loss of 18.9 million compared to net income of 2.5 million for the full year 2023. The net loss for the full year 2024 included an income tax benefit of 4 million as compared to an income tax provision of 3.8 million for the full year 2024. Of note on the tax side, the company assesses the need for evaluation allowance against its deferred tax asset each quarter through the review of all available positive and negative evidence. The company generated a pre-tax loss for the year end of December 31st, 2024. If the company continues to generate pre-tax losses and or if the company's projections indicate pre-tax losses in future periods, the conclusion about the appropriateness of the valuation allowance could change in a future period. An increase in the valuation allowance would result in a non-cash income tax expense during the period of change. Operating expenses for the full year 2024 were 239.4 million compared to 206.6 million for the full year 2023. The 32.8 million increase was primarily driven by higher SG&A expenses related to spending on Vanda's commercial products as a result of the commercial launches of FNAPT and bipolar I disorder and POMVORI and multiple sclerosis. And legal and other corporate activities as well as higher and tangible asset amortization expense due to the amortization recorded on the POMVORI and tangible asset. During 2024, we commenced a host of activities as part of our commercial launches of FNAPT and bipolar I disorder and POMVORI and multiple sclerosis including an expansion of our sales force and the development of prescriber awareness in comprehensive marketing programs. SG&A expenses may increase in future periods as a result of the continued ongoing commercial efforts around FNAPT and bipolar I disorder and POMVORI and multiple sclerosis. Vanda's cash, cash equivalents and marketable securities referred to as cash as of December 31st, 2024 was 374.6 million representing a decrease of 1.6 million compared to September 30th, 2024 and a decrease of 13.6 million compared to December 31st, 2023. Turning now to our quarterly results. Total revenues for the fourth quarter of 2024 were 53.2 million, a 17% increase compared to 45.3 million for the fourth quarter of 2023 and a 12% increase compared to 47.7 million in the third quarter of 2024. The increase as compared to the fourth quarter of 2023 was primarily due to the introduction of POMVORI revenue following our acquisition of the product in December of 2023 and increased FNAPT revenue. FNAPT net product sales were 26.6 million for the fourth quarter of 2024, an 18% increase compared to 22.6 million in the fourth quarter of 2023. The increase in FNAPT revenue between the fourth quarter of 2024 and the fourth quarter of 2023 was primarily attributable to an increase in volume, which was driven by increased prescription demand or TRXs as reported by Equivia Exponent and inventory stocking at the wholesalers. Historically, FNAPT inventory at wholesalers has ranged between three and four weeks on hand as calculated based off trailing demand. As of the end of the fourth quarter of 2024, FNAPT inventory at wholesalers was just above four weeks on hand. FNAPT prescriptions in the fourth quarter of 2024 increased by approximately 9% compared to the fourth quarter of 2023 and FNAPT new patient starts in the fourth quarter of 2024 as reflected by new to brand prescriptions or NBRX increased by over 160% compared to the fourth quarter of 2023. FNAPT net product sales in the fourth quarter of 2024 increased by 11% as compared to 23.9 million in the third quarter of 2024. FNAPT prescriptions in the fourth quarter of 2024 increased by approximately 7% compared to the third quarter of 2024. Turning now to Hetlios. Hetlios net product sales were 20 million for the fourth quarter of 2024, a 5% decrease compared to 21.1 million in the fourth quarter of 2023. The decrease in net product sales relative to the fourth quarter of 2023 was attributable to a decrease in price net deductions, partially offset by an increase in volume. Hetlios net product sales in the fourth quarter increased by 12% as compared to 17.9 million in the third quarter of 2024. And finally turning to Ponvori. Ponvori net product sales were 6.5 million in the fourth quarter of 2024, an increase of 11% compared to 5.9 million in the third quarter of 2024. The increase in net product sales was attributable to an increase in volume of units sold, partially offset by a decrease in price net deductions. The increase in volume in the fourth quarter of 2024 was partially attributable to a temporary inventory destocking in the third quarter at the specialty distributors and pharmacies due to the transition of distribution from Janssen to Vanda. As a reminder, we completed the acquisition of the US and Canadian rights to Ponvori in December of 2023. For the fourth quarter of 2024, Vanda recorded a net loss of 4.9 million compared to a net loss of 2.4 million for the fourth quarter of 2023. The net loss for the fourth quarter of 2024 included an income tax benefit of 1.6 million as compared to an income tax provision of 0.7 million for the fourth quarter of 2023. Operating expenses in the fourth quarter of 2024 were 63.5 million compared to 52.4 million in the fourth quarter of 2023. The 11.1 million increase was primarily driven by higher SGA expenses related to spending on Vanda's commercial products as a result of the commercial launches of Phenaptin Bipolar I Disorder and Ponvori Immolable Sclerosis and legal and other corporate activities, partially offset by a decrease in R&D expense primarily driven by lower spend on our triptan development programs. Operating expenses in the fourth quarter of 2024 increased by 4.8 million as compared to 58.7 million in the third quarter of 2024. This increase is primarily driven by higher R&D spend due in large part to increased expenses on our psychiatry programs and increased spending on Vanda's commercial products as a result of the commercial launches of Phenaptin Bipolar I Disorder and Ponvori Immolable Sclerosis. During 2024, we commenced a host of activities as a result of the commercial launches of Phenaptin Bipolar I Disorder and Ponvori Immolable Sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs. SG&A expenses may increase in future periods as a result of the continued ongoing commercial efforts around Phenaptin Bipolar I Disorder and Ponvori Immolable Sclerosis. With regards to the launches of Phenaptin Bipolar I Disorder and Ponvori Immolable Sclerosis, as I mentioned, the launches were initiated in 2024, and we expect to continue to build out our full commercial infrastructure with the impact of these commercial efforts expected to contribute to revenue growth in 2025 and beyond. We have already seen significant progress in our commercial activities. Several lead indicators suggest a strong initial market response to our commercial launch of Phenaptin Bipolar I Disorder, including new patient starts as reflected by NBRX increasing by over 160% in the fourth quarter of 2024 as compared to the fourth quarter of 2023. Our Phenapt sales force continues to expand. Currently, our sales force has grown to over 200 persons, and we have now initiated a further expansion, as Mahalas mentioned. In addition to our Phenapt sales force, we have established a specialty sales force to market Ponvori, the neurology prescribers around the country. The expansion has allowed us to significantly increase our reach and frequency with prescribers, and we've now had over 700 Phenapt prescriber awareness programs completed in 2024, and the Ponvori prescriber awareness program continues to expand with over four times as many programs completed in the fourth quarter of 2024 as compared to the third quarter of 2024. Before turning to our financial guidance, I would like to remind folks that with Phenapt, Hetlius, and Ponvori already commercially available, the Trinitpidin NDA for motion sickness submitted to the FDA, the Basanti NDA for bipolar I disorder and schizophrenia expected to be submitted in the coming weeks, and a BLA for IMSA dolomob expected to be submitted later this year, Vanda could have six products commercially available in 2026. Turning now to our financial guidance, Vanda expects to achieve the following financial objectives in 2025. Total revenues from Phenapt, Hetlius, and Ponvori of between 210 and 250 million. This revenue range would imply revenue growth in 2025 of between six and 26% as compared to full year 2024 revenue. It is worth commenting that the quarterization of revenue in 2025 will be impacted by several items, including the Medicare benefit redesign portion of the Inflation Reduction Act, which went into effect as of January 1st, 2025. The implementation of the benefit redesign is expected to negatively impact gross to net for the Medicare payer segment of our products, more significantly on Phenapt and Hetlius. Note that this change is not linked specifically to Vanda, but it's an industry wide change, which will have varying impacts on pharmaceutical companies. Insurance plan transitions. As patients adjust to new insurance plans to start the year, there may be some disruption in the first quarter. This is also a typical industry wide occurrence. And as I previously mentioned, Phenapt inventory levels as of December 31st, 2024 were higher than typical levels based on trailing demand. If wholesalers adjust their inventory to historical levels, this could have a short term negative impact on revenue in the period in which the de-stocking occurs. Given the conditional investments that Vanda is currently making to facilitate future revenue growth, both in the form of R&D investments and potentially outsized commercial investments, which could increase depending on the success of these commercial strategies, Vanda is not providing 2025 cash guidance at this time. Vanda will continue to evaluate its ability to provide cash guidance in future periods. It is worth noting that the quarterization of cash balances will be impacted by several items, including payments totaling 15 million, which were made to a nap this in the first quarter of 2025 upon entering into the global license agreement for IMSA Dolemab, fees and costs associated with the filing of our applications with regulatory agencies in the US and Europe, including the Basanti NDA for bipolar one disorder and schizophrenia, and the standard timing of certain items paid in the first quarter each year. Given the significant progress made during 2024 on establishing our commercial infrastructure and the commercial investments we expect to make in coming periods, Vanda is providing 2030 revenue targets. For the psychiatry portfolio alone, Vanda is targeting annual revenue in excess of 750 million in 2030, assuming the potential approval of Basanti for the treatments of acute bipolar one disorder and schizophrenia in early 2026, the potential approval of Basanti for the treatment of MDD, and the potential approval of FNAPT LAI. Vanda is also targeting total annual revenue in excess of 1 billion in 2030. It is worth noting that the revenue economics for Basanti are expected to be significantly favorable relative to the current revenue economics for FNAPT. The potential market opportunity for our growing psychiatry portfolio is significant and necessitates the increased investments we are currently making to enhance the commercial profile of FNAPT, bring Basanti and FNAPT LAI to market and expand the Basanti label to include major depressive disorder. With that, I'll now turn the call back to Mahalas.

Thank you, Kevin. At this time, we'd like to answer any questions you may have.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. And our first question comes from the line of Charles Duncan from Cantor Fitzgerald. Please go ahead.

Hey, good afternoon, Mahalas and team. Congrats on a good year of seeing the commercial turn as well as a ton of things going on with the pipeline, so lots of productivity. I had a question first on commercialization. And then pipeline. With regard to FNAPT, I guess I'm wondering, as you see that queue on queue growth, where do you think you're picking up traction and what types of prescribers? And then I wanted to ask you about that 300 reps, the 50% growth in the Salesforce. I'm wondering if you think that'll be sufficient to, you know, I guess, compete with potentially larger pharma companies coming in in marketing, you know, obviously, Kobempi, but also perhaps J&J in the future with CapLata.

Yeah, thank you very much, Charles. So in terms of where the growth is coming from, the prescribers that are coming to FNAPT are prescribers that have patients with bipolar disorder. And this is a difference from the smaller group of psychiatrists and psychiatric nurses that show schizophrenia patients. So it seems that the growth is exclusively coming outside of schizophrenia. In terms of the size of the Salesforce, as you know very well, this is a highly promotionally sensitive class of drugs. And we have very recent examples of successful commercialization from some of our peers. Whether this is the right size Salesforce, I would venture to say likely it's gonna be on the lower side, but certainly you want to build rapidly, but at the same time don't jeopardize the quality and very important training of the Salesforce. Now we do see the potential competition by more deep pocketed big pharma, of course, BMS with Kobempi. At this time, they will be primarily focused on the only indication that they have schizophrenia. And that is not our main focus now. And in terms of J&J, if they complete the acquisition of intracellular, certainly there's gonna be a lot of strength, but it seems that the people there will be in patients with major depression if they succeed in securing the approval in that indication, which seems quite possible given their very nice data they have.

Very good, Mahalas, that's helpful, it makes sense. With regard to the DTC that you started in January, I assume that's targeting then the bipolar patients. And do you think that those patients are amenable to picking up the messaging of the DTC and perhaps bringing that to their scribers and talking about phonetics?

Yeah, thank you. Yes, the target is specifically for people with bipolar one disorder. And certainly we don't have to guess on the effectiveness in that before us there have been others, almost every other drug recently in the category. They have advertised the DTC, which increased not just awareness, but also confidence of support of the drug among patients. But we're also finding it is actually intriguing to prescribers themselves. So we believe that is a very effective way to increase awareness. And I would point out that Vanda has a significant track record in efficiently launching a DTC campaign and by media. And I think that's gonna become very important in the coming months. I would like to underscore, Kevin suggested that at this time, we did not give a cost guidance. And this is primarily driven by trying to gauge what is the right size direct to consumer and you buy as you go. So we, unlike some large companies, we're not doing pre-buys at this time. We buy on demand and we're very carefully evaluating the return or our investment. So it is a measured approach, but we are prepared to make a significant investment provided a good ROI on the other side.

Thank you for that information. On by Santi, if I could ask a quick question, I'm intrigued with the one per day MDD study that you started towards the end of last year. I'm wondering if you have specific information on either FNAPT or Milsaparadone that suggests that it may have activity in MDD as well as perhaps depressed patients with bipolar. What is the kind of rationale behind that phase three?

Yeah, so of course, you know that we have a lot of experience on FNAPT, Gala Peridone with twice a day, but we also have experience in the utilization across different doses. So our studies have been primarily done on the higher dose side, 12 milligrams a day divided dose or 24 milligrams a day as a divided dose. But our observation so far suggests that a large number of patients have been prescribed a monthly doses which reflect a total in the day of approximately 12 milligrams on average. And we know that based on the pharmacokinetics and steady state levels that once a day, 12 milligrams does not present any significant issues of peak to trough and tolerability. And the combination of all this suggested to us that a once a day administration of this dose will be a good approach in major depressive disorder. And as you can guess, it happens also to be likely more convenient than a twice a day dose.

For sure, I look forward to that. Final question, Imcedolumab, congrats on the recent in licensing, I'm intrigued with that program. BLA in later on this year, but I think inaptis and I'm not gonna ask you to defend anaptis, but I think they spoke about a BLA as early as October 20th in 2023 as having already been filed. So I'm wondering if you have a sense of what the delay I'm filing and if a pre-BLA has been conducted or is that all the kind of stuff that you'll do once you fully accept all the information from them?

Yeah, I cannot comment on the first part of the question, but a pre-BLA for meeting with the FDA on the GPP indication has been conducted and upon review of this information, we're confident that we have in hand what needs to be had for filing. So of course, we're only a few days away that I would say anaptis is a great partner of this. Transition is ongoing quickly of materials. So we're confident we'll be able to file this BLA within this year. And I have to say, Charles, that maybe we get an opportunity at a future call. We're intrigued by the mechanism of action and we believe that the IL-36 cytokine system is a perhaps not fully explored therapeutic in a number of autoimmune inflammatory conditions. And of course, we understand the role in keratinocytes and generalized post-larsoriasis. As I pointed out in my discussion, GPP is caused by two bad genes, a recessive disorder. But of course, there is a much larger portion of the population that they're heterozygous carriers of an all mutation, which under some circumstances, it may lead to a relatively unopposed action of IL-36. And there are theories of what this population may be. There may be a class of people with atopic dermatitis or psoriasis or actually other inflammatory conditions where IL-36 is important in monitoring intruders at barrier tissues. But more to be discussed in the future.

Big pipe fine, lots going on. Thanks for taking the questions. Congrats on the progress.

Thank you, Charles. Our next question comes

from Raghuram Silvaraju from H.E. Wainwright. Please go ahead.

Hi, thanks very much for taking my questions and congrats on all the recent progress. First of all, I wanted to start with a question around your anticipated timing for the development of the aloperidone long acting injectable. So specifically, I wanted to ask when you anticipate enrolling the first patient in that pivotal program and how long you expect enrollment to take, as well as if you can provide any kind of updated outlook on the competitive landscape, given the fact that this appears to be changing quite rapidly, although it obviously is also reflective of a steadily expanding, broader, total addressable market. Thank you.

Yeah. Thank you very much for the question. And at the bottom, I would say we agree with you that there appears to be a lot of need and large commercial opportunity around injectable antipsychotics and especially new entrance of molecules that have not been translated from oral to a long acting injectable like FNAP. In terms of the program, we are ready to go. And in fact, the program can be initiated imminently. The initial treatment period is about 12 week period of stabilization before we lead to the rerandomization relapse prevention. And what I mentioned Ram is that the question from the IRB was that they felt no one should be running placebo control studies on a relapse prevention mode. And they offer that placebo people may be at some risk. We disagree with that, but nonetheless, it is the IRB. And we are in total agreement with the FDA on what protocol is needed. And in fact, we are in agreement that this study if successful, which we expect it to be, is the pivotal study required for registration. So we are actually waiting. We've launched this question to the FDA and they're working, I guess, on their policy side to see what this shift in the IRB means and what type of study may be required. But be it as it may, the placebo is the most involved study and we could end up with a more simple design where there is a bridging of sorts with the oral formulation. So no matter what it is, we can start the study very quickly. Now in terms of time into enrollment, as you know, that's hard to evaluate given the difficulty recruiting in general. But this study is a long study. Recruitment enlarged could take up to one year. And that means, I think we've discussed before, that we will not expect results, but in some time in 27, 2027.

Okay, and then with respect to the guidance that you provided today on potential revenue in 2025, can you confirm that even the upper end of that guidance range does not actually include projected contribution from Tredipitant in any indication or in Sedolimab, is that correct?

That is correct. The range guidance we're giving is solely based on the commercialized products today in the commercialized indications. And of course, we could be pleasantly surprised towards the upper end, depending on the FNAP trajectory and Poonvori gaining speed. On HETLU, given the generic contribution, we have more tamed expectations.

To what extent do you anticipate there to be a significantly larger number of generic competitors, generic purveyors of Tazimeltion by the end of 2025 versus the end of 2024?

At this time, we do not expect that field to change outside of the three approved ones.

Okay, and then the last question is with respect to broader reimbursement changes, any specific developments of note that you anticipate taking effect in 2025 that could significantly impact growth to NEPs?

Yep. Hey, Rob, it's Kevin. So on the main one, which we talked about in the scripted portion of it, is the introduction of the Medicare benefit redesign, which went into effect at the beginning of January. And the reminder there is previously where there was the donut hole concept and the manufacturer had a portion of that contribution until the patient had moved through the donut hole for the year. The benefit redesign has a different structure where for the catastrophic portion of the coverage, the manufacturer has a either 10 or 20% contribution to that with some exceptions for different types of manufacturers and different types of patient populations. So that went into effect at the beginning of January, as I mentioned, and was factored into our projections for 2025.

Okay, thank you. Thanks, Rob. Thank you. Our next question comes from the line of Andrew

Desai

from

Jefferies. Please go ahead.

Hey, thanks. Good afternoon. Appreciate all the updates. First question is about the 2030 guidance. What exactly compelled you guys to provide that guidance today? And then within that $1 billion guidance, of course, 750 is coming from psychiatry. How much of that 750 is based on products or indications that have yet to be approved as opposed to currently approved products? Thanks.

Thanks, Andrew. Yeah, so maybe starting with the psychiatry portfolio first. Obviously with FNAP, currently on the market, doing about 100 million this year. And with the commercial investments we're making, hoping to see growth as we actually head into next year and beyond. But then even beyond that, we noted that included in that 2030 projection is the approval of Basanti for bipolar one disorder and schizophrenia, hopefully next year. And then potentially a label expansion there and MDD beyond that, as well as the approval of FNAP in LAI. So, you know, the one thing I also made note of in the script that's an important piece to that is that MILSA Peridone is expected to have, or Basanti rather, is expected to have very different economics than FNAP currently has. And at a minimum, that's due to the price reset that we would experience under Medicaid with a new drug application being approved. So all of those, you know, obviously we didn't provide kind of a breakout of the contributions of those individual factors, but hopefully that gives you a sense of what contributions would go into the 750 from existing product indications, future product indications. And then on the balance, obviously with Hetlios and Palm Bori on the market, Hetlios, you know, as Mahalas mentioned, where our expectations are a bit more tamed, at least on the short term, and with Palm Bori, you know, growing and hopefully even more so in the years to come. And also the possibility that we mentioned of an additional three products being on the market next year, including MILSA Peridone, but also Tridipidin and Imcedolibab. Those products also provide some of the bridge between the 750 and the billion.

Thanks. And when we think about your overall business, where or when should we think the trough year is in terms of revenue and your total cash balance? Said another way, do you think the trough year already happened or could it be somewhere in 2025 or a little bit later?

Yeah, no, thanks for the question there, Andrew. So obviously with our reported revenue for this year being growth from the year before, so, you know, we saw growth from about 193 million up to about 199 million in the most recent year and our midpoint of our guidance being 230, which would imply about a 15% growth on 2024. You know, I would say that the trough year, as you kind of expressed it, is over the shoulder and our expectation is that we're growing revenue from here, both with the existing products and indications, but obviously all the products and indications that we're planning on bringing to the market in the short term and the long term.

Okay, thanks. And the last question is for Hetlios, if we stripped out the indications where generics, you're facing generics, you know, how much sales are you generating from the other formulations or indications where Hetlios is not facing genericization? So I guess the liquid formulation and the EU component, how much are those sales currently? Thank you.

Yeah, so Andrew, we haven't gotten into a breakout by geography or by indication, so I can't provide any further kind of color to that.

Very good, thank you.

Thanks, Andrew.

There are no further questions at this time. I'll turn the call back over to the team.

Well, thank you very much for joining us on this call. We'll see you on a future air news call. Thank you.

This concludes today's call. Thank you for joining. You may now disconnect.