On August 1, 2018 Vanda Pharmaceuticals Inc. (Vanda) (Nasdaq: VNDA) reported financial and operational results for the second quarter ended June 30, 2018 (Press release, Vanda Pharmaceuticals, AUG 1, 2018, View Source;p=RssLanding&cat=news&id=2361415 [SID1234528307]).

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"We are excited with the year to date HETLIOZ sales performance, which demonstrates continued strength, and our HETLIOZ life cycle management program, which positions the product well for additional future growth," said Mihael H. Polymeropoulos, M.D., Vanda’s President and CEO. "We are focused on our upcoming clinical milestones from the tradipitant gastroparesis study and the HETLIOZ Smith-Magenis Syndrome study."

Key Highlights:

Total net product sales from HETLIOZ and Fanapt were $47.4 million during the second quarter of 2018, a 9% increase compared to $43.6 million in the first quarter of 2018 and a 13% increase compared to $42.1 million in the second quarter of 2017.
HETLIOZ (tasimelteon)

HETLIOZ net product sales were $28.0 million in the second quarter of 2018, a 10% increase compared to $25.4 million in the first quarter of 2018 and a 25% increase compared to $22.5 million in the second quarter of 2017.
Fanapt (iloperidone)

Fanapt net product sales were $19.3 million in the second quarter of 2018, a 6% increase compared to $18.2 million in the first quarter of 2018 and a 1% decrease compared to $19.5 million in the second quarter of 2017.
Research and Development

HETLIOZ

Results from the JET study, a 3-night transatlantic Phase II study of the effects of tasimelteon on jet lag disorder showed effectiveness in treating travelers who flew from the US to the UK. Vanda expects to submit a supplemental New Drug Application to the U.S. Food and Drug Administration for HETLIOZ for the treatment of jet lag disorder by the end of 2018.
Enrollment in the Smith-Magenis Syndrome clinical study is ongoing. Results are expected by the end of 2018.
Tradipitant

In June 2018, Vanda initiated EPIONE, a Phase III study of tradipitant for chronic pruritus in atopic dermatitis.
A tradipitant clinical study for the treatment of gastroparesis is ongoing. Results are expected by the end of 2018.
VTR-297 (histone deacetylase (HDAC) inhibitor)

A VTR-297 Phase I study (1101) in patients with hematologic malignancies is expected to begin by the end of 2018.
Cash, cash equivalents and marketable securities (Cash) were $231.2 million as of June 30, 2018. During the second quarter of 2018, Cash decreased by $17.6 million and included a $25.0 million milestone payment based on cumulative HETLIOZ net product sales.

Non-GAAP Financial Results

For the second quarter of 2018, Non-GAAP net income was $7.7 million, or $0.15 per share, compared to Non-GAAP net income of $1.6 million, or $0.03 per share, for the second quarter of 2017.

Vanda provides Non-GAAP financial information, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the sections of this press release entitled "Non-GAAP Financial Information" and "Reconciliation of GAAP to Non-GAAP Financial Information."

2018 Financial Guidance

Vanda reiterates its prior 2018 net product sales guidance and provides an update to Non-GAAP Operating Expenses and Year-End 2018 Cash guidance and expects to achieve the following financial objectives in 2018

Vanda has scheduled a conference call for today, Wednesday, August 1, 2018, at 4:30 PM ET. During the call, Vanda’s management will discuss the second quarter 2018 financial results and other corporate activities. Investors can call 1-800-708-4539 (domestic) or 1-847-619-6396 (international) and use passcode 47289344. A replay of the call will be available on Wednesday, August 1, 2018, beginning at 7:00 PM ET and will be accessible until Wednesday, August 8, 2018, at 11:59 PM ET. The replay call-in number is 1-888-843-7419 for domestic callers and 1-630-652-3042 for international callers. The passcode number is 47289344.

The conference call will be broadcast simultaneously on Vanda’s website,
www.vandapharma.com
. Investors should click on the Investor Relations tab and are advised to go to the website at least 15 minutes early to register, download, and install any necessary software or presentations. The call will also be archived on Vanda’s website for a period of 30 days.

Non-GAAP Financial Information

Vanda believes that the Non-GAAP financial information provided in this press release can assist investors in understanding and assessing the ongoing economics of Vanda’s business and reflect how it manages the business internally and sets operational goals. Vanda’s "Non-GAAP Selling, general and administrative expenses" and "Non-GAAP Research and development expenses" exclude stock-based compensation. Vanda’s "Non-GAAP Net income (loss)," "Non-GAAP Net income (loss) per share" and "Non-GAAP Operating expenses excluding Cost of goods sold" exclude stock-based compensation and intangible asset amortization.

Vanda believes that excluding the impact of these items better reflects the recurring economic characteristics of its business, as well as Vanda’s use of financial resources and its long-term performance.

This press release includes a projection of 2018 Non-GAAP Operating expenses, excluding Cost of goods sold, a forward-looking Non-GAAP financial measure under the heading "2018 Financial Guidance." This Non-GAAP financial measure is determined by excluding cost of goods sold, stock-based compensation and intangible asset amortization. Vanda is unable to reconcile this Non-GAAP guidance to GAAP because it is difficult to predict the future impact of these adjustments.

These Non-GAAP financial measures, as presented, may not be comparable to similarly titled measures reported by other companies since not all companies may calculate these measures in an identical manner and, therefore, they are not necessarily an accurate measure of comparison between companies.

The presentation of these Non-GAAP financial measures is not intended to be considered in isolation or as a substitute for guidance prepared in accordance with GAAP. The principal limitation of these Non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Vanda’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these Non-GAAP financial measures. In order to compensate for these limitations, Vanda presents its Non-GAAP financial guidance in connection with its GAAP guidance. Investors are encouraged to review the reconciliation of our Non-GAAP financial measures to their most directly comparable GAAP financial measure.