Good afternoon, and welcome to the Quarter One 2025 Vanda Pharmaceuticals Incorporated Earnings Conference Call. I am Franz, and I will be the operator assisting you today. All lines have been placed on-mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Kevin Moran, Vanda's Chief Financial Officer. Please go ahead.

Thank you, Francis. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals' first quarter 2025 performance. Our first quarter 2025 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. Mihael Polymeropoulos, our President, Chief Executive Officer and Chairman of the Board; and Tim Williams, our General Counsel. Following my introductory remarks, Mihael will update you on our ongoing activities. I will then comment 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 10-K, 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 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. Mihael Polymeropoulos.

Thank you very much, Kevin, and good afternoon, everyone. Thank you for joining us to discuss Vanda's first quarter 2025 results. Vanda has entered a new growth phase with multiple commercialized products and a rich innovative pipeline. Fanapt's commercial growth has accelerated, reaching multi-year highs with weekly prescriptions surpassing 2,000 at the end of April, as an increasing number of prescribers are adding Fanapt to their therapeutic armamentarium. Our recent new drug application filings for Tradipitant and Bysanti are a testament to our productive research and development pipeline. The addition of Imsidolimab alongside PONVORY established an anti-inflammatory front size that we believe has significant growth potential. These accomplishments have been possible because of our talented employees who for the first time surpassed 400 in number, a 22-year high. Some of the key operational highlights starting with commercial activities. On Fanapt, Fanapt was approved in the second quarter of 2024 for the acute treatment of Bipolar I disorder. Vanda initiated the commercial launch of Fanapt's indication in the third quarter of 2024. In the first quarter of 2025, as compared to the first quarter of 2024, total prescriptions increased by approximately 14% and Fanapt net product sales increased by 14%. Additionally, new patient starts as reflected by new to brand prescriptions increased by nearly threefold in the same period of time. Fanapt total prescriptions for the week of April 25 reached the milestone of 2,000, making Fanapt one of the fastest growing atypical antipsychotics. Vanda has also announced an expansion of its psychiatry sales force to approximately 300 representatives. On HETLIOZ through the first quarter of 2025, HETLIOZ continues to retain the largest portion of market share, despite generic competition for over two years. On ponesimod, Vanda initiated a commercial launch of PONVORY for the treatment of relapsed in forms of…

Thank you, Mihael. I will begin by summarizing our first quarter 2025 financial results. Total revenues for the first quarter of 2025 were $50 million, a 5% increase compared to $47.5 million for the first quarter of 2024. The increase as compared to the first quarter of 2024 was primarily due to growth in Fanapt revenue as a result of the bipolar commercial launch. Let me now break this down by product. Fanapt net product sales were $23.5 million for the first quarter of 2025, a 14% increase compared to $20.6 million in the first quarter of 2024. The increase in Fanapt revenue between the first quarter of 2025 and the first quarter of 2024 was primarily attributable to an increase in volume, which was driven by increased total prescriptions or TRxs as reported by Acquia Exponent. Fanapt total prescriptions in the first quarter of 2025 increased by approximately 14% compared to the first quarter of 2024. And Fanapt's new patient starts in the first quarter of 2025 as reflected by new to brand prescriptions or NBRx increased by nearly threefold compared to the first quarter of 2024. Turning now to HETLIOZ. HETLIOZ net product sales were $20.9 million for the first quarter of 2025, a 4% increase compared to $20.1 million in the first quarter of 2024. The increase in net product sales relative to the first quarter of 2024 was attributable to an increase in price net of deductions partially offset by a decrease in volume. Of note, through the first quarter of 2025, HETLIOZ continues to retain the largest portion of market share, despite generic competition for over two years now. HETLIOZ net product sales continue to be impacted by changes in inventory stocking at specialty pharmacy customers from period-to-period. Going forward, HETLIOZ net product sales may…

Thank you very much, Kevin. At this point, we will be happy to answer any questions you may have.

[Operator Instructions] And your first question comes from Andrew Tsai from Jefferies.

Hey, thanks. Good afternoon. Thanks for taking my questions. I appreciate the updates. I wanted to stick on the theme of pipeline today. So, notice that the Phase III MDD data for milsaperidone or Bysanti could read out in 2026. So, I'm just curious what kind of placebo adjusted change on MADRS or HAMD would you want to see for a competitive profile?

Yes. Thank you, Andrew. We have not pre specified a margin. Of course, there are a number of antidepressant drugs and the variability on HAMD response or MADRS does not necessarily mean a drug is better than another, because you do know the tremendous degree of variability in major depression studies. But the primary endpoint will be change from baseline as compared to placebo.

And secondly, you're starting a social anxiety study Phase III for 765. Any color around the study design and how you power that study? And when could we get data for that?

Yes. I'm not going to be able to answer this time the question about when to get data. This study is set to begin sometime later this year, likely in Q3. In terms of design, I would refer you to the design of the study that we've conducted before and it is soon to be published. The paper has been accepted. And it is a classic design that you may have seen with others who develop similar drugs using the Trier test in Trier naive patients.

Great. And my last question is on Tradipitant for gastroparesis. It sounds like you do have correspondences with the FDA lately. What is your latest strategy and messaging around why this should be approved and when can we hear next steps? And then, lastly, lastly that is, in the best-case scenario, do you refile the drug for review again or is the FDA going to make another PDUFA type decision later this year when you meet with them?

Yes. Thanks, Andrew. So, the, it is still the same review cycle that we got the complete response letter in September of last year. And as specified within the statute, we were given the opportunity for a hearing. That process unfortunately is very complex, because an opportunity hearing by the FDA does not mean you get a hearing. It means that they're going to think about whether SEDAR, the review division will propose to the commissioner whether to have a hearing or not. And then, the commissioner will decide whether to have a hearing and if yes, the commissioner will conduct a hearing. It sounds complicated, it is, it should be. And also, it is not a path commonly taken. In fact, to our knowledge, the FDA has held no hearings for a long period of time for the approval of new drugs. So, new filing is not required. We have requested to begin this process. Hopefully, we're going to hear soon and answer whether SEDAR will propose to the commissioner to have a hearing or not, and then the commissioner will take that advice and make a decision.

And your next question comes from Charles Duncan from Cantor Fitzgerald.

Okay. Thanks, Kevin or Mihael and team. Congrats on a nice Fanapt number. I had a couple of questions on that and then for the pipeline. With regard to Fanapt, I've actually noticed some direct-to-consumer -- a direct-to-consumer campaign while catching the Stanley Cup playoffs. And I'm wondering if you could give us a sense of, first of all, how long that will run and kind of how do you measure a return on the investment? Are you gaining traction with that and is it primarily for bipolar or schizophrenia patients? I imagine the former.

Yes. Indeed, this quarter, I mean the first quarter, we initiated direct-to-consumer campaign that addresses bipolar disorder in one commercial and PONVORY in a second one. And we also have made a concerted effort to increase the awareness of the Vanda brand that helps a lot with recognition by prescribers, patients, key opinion leaders. We've been receiving very good feedback and it is validating what people in this field already know that this is a promotionally sensitive market, especially bipolar disorder and therefore, a direct-to-consumer awareness campaigns are fruitful.

Yes. It would seem to be the case with the new to brand key performance metrics. So, congrats on that. Second question is on Bysanti and the upcoming ASCP presentation. I guess I'm wondering what would you focus attention to on that? I don't believe we've seen any data yet on Bysanti or milsaperidone. So, what is it that you anticipate being able to take away from that presentation with regard to the call it bioequivalence?

Yes. So, as we described earlier, the discovery that Vanda made as we're studying this active metabolite of iloperidone, milsaperidone. We realized that surprisingly, we know almost no other example of a drug that behaves like that. There is a quick interconversion in the body, so that milsaperidone is metabolized to iloperidone and vice versa. So, we tested this hypothesis and eventually conducted these two critical studies that are really the core of the submission of this new drug application. We have discussed this with the FDA and these are the studies that will be published at the Scottsdale Conference. So, in these studies, you're going to see two designs. One of them is a single acute dose crossover study and the second one is multiples doses to steady state to the maximum dose and then a crossover study. So, with this, we complete the package that not only confirms that the two products are bioequivalent with each other at a low dose, but also it confirms that at the high dose, they are bioequivalent as well, which indirectly suggests also linearity.

Very helpful. Looking forward to that presentation. Last question is more strategy and that is I'm intrigued with the EMEA filings for both Fanapt, as well as HETLIOZ. And I guess, I'm kind of wondering, what -- how do you see the market opportunity in Europe for the antipsychotic market and I'll call it, unmet need and your ability to market the drug over there? And have you received 120 day questions that would, it's probably right on the edge, but have those come in yet?

So, I will answer the last first. Yes, as you know with the timing, the D120 questions have arrived and we're just actively working through them right now. Now, in terms of the expectation of market-to-market response in Europe. As you know already, the pricing and reimbursement in Europe is very tough for antipsychotics. However, there is a good appetite for the long acting injectables, but you can't get there without having first the approval in the indication with the oral. So, we see this as a two-step. Now, in terms of capabilities, I remind you that we have had a presence, strong presence in Germany with our own marketing and sales force for [hep] use in non-24 for the last 10 years. So, we have actually quite good understanding of Germany dynamics, although actually we interact with other countries as well, but of course, Germany is the focus, given the more favorable reimbursement environment there.

Got it. Very good. Thanks for the guidance as well. I'll hop back in the queue.

Thank you, Charles.

And your next question comes from Raghuram Selvaraju from H.C. Wainwright.

Good afternoon. This is Dan on for Ram. Congrats on the earnings beat and thanks for taking our questions. So, what is likely to be the total market opportunity for Bysanti in major depressive disorder? And do you think it would compete directly against Tradipitant successful? I'd like to ask a follow-up if I could.

Definitely, it is in the same space. And the designs of this study and the CAPLYTA studies are very close to each other. So, it is about resistance, treatment resistant depression and then adjunct treatment with Bysanti. Also to point out is that, we're testing a one dose a day. And I remind you that for bipolar and schizophrenia acute indications, we have used twice a day dosing. So, the population will be very similar to that of CAPLYTA and the once a day convenient dosing will be there as well. Of course, we think there may be advantages to the Fanapt profile of CAPLYTA and other competitors, especially on the tolerability regarding Akathisia that you see with drugs like [Bralor] or peripheral neuropathy that you may see with CAPLYTA.

Thank you. And next, for the follow-up, when might the lipid ester formulations of the Bysanti to the clinic as long acting injectable formulation?

Thanks. The first long acting injectable, which is now initiating the Phase III study is the Fanapt long acting injectable. The milsaperidone, the Bysanti long acting injectable is still in the formulation phase. But as we noted in the prior release, the fact that Bysanti has a terminal hydroxyl group. It makes it amenable to development of lipid esters. And as you know, various lengths of these lipid esters have translated to various lengths and duration of the drug in the blood, where you can make doses once a month, maybe three months, and we've seen with other drugs six months.

There are no further questions at this time. I would now like to turn the call back over to Vanda Management for the closing remarks. Please go ahead.

Yes. Thank you all for joining us and we'll see you at a future call.