Vanda Pharmaceuticals, Inc. (NASDAQ:VNDA)

CAPS Rating: 1 out of 5

A biopharmaceutical company focused on the development and commercialization of clinical-stage drug candidates, with exclusive worldwide commercial rights to three product candidates in clinical development for various central nervous system disorders.

Recs

12
Player Avatar TMFUltraLong (99.96) Submitted: 6/8/2009 3:27:16 AM : Underperform Start Price: $12.72 VNDA Score: +13.26

Good gosh.... where to begin?

Vanda Pharmaceuticals was dead, end of story, then someone at Vanda thought that the FDA made an error, submitted their clinical trial paperwork yet again with a few small tweaks, and wa la, you have what stands before you today, a fat man in a little coat!

How Vanda was able to get their drug approved despite being rejected with two thumbs whole-heartedly down in July of 2008 is beyond me but nevertheless the drug is approved and available to market... well I have a few words for you Vanda.... Welcome to the wonderful world of the pharamceutical business!

First I'd like you to meet your competitors... Johnson and Johnson with Risperdal, Pfizer with Geodon and AstraZeneca with SeroQuel. Notice something in common with these companies? Thats right, they sneeze more cash per day than you have in your entire cash pile! Does Vanda really expect to be able to compete with these juggernauts? Oh wait... I forgot the best part... there are already generic drugs out there of the aforementioned companies that make Fanapt look like the Evian water of drugs. Can we say being priced out of the market before even getting to market?

Take this into consideration, Vanda was losing LESS money when they had no conceived drug! The company now has to re-hire all the people it fired, market the living hell out of Fanapt, and will almost assuredly issue a TON of dilutive shares to continue their business practices. Loss projections have risen from just over $1 per share in 2010 to over $2 per share due to these unexpected costs of actually doing their job.

I can't believe this mickey mouse operation is trading at over 8 times book and sales projections in 2010. I mean I understand the schizophrenia market is a 23 billion dollar industry, give or take a billion here or there, but Vanda hasn't shown me any reason to believe they will make this a successful drug. Vanda could still potentially die before they even get this drug to a profitable stage.

Definitely too many unknowns here given the 1000% run we've seen over the past month. Vanda has $1.60 in cash per share and I'd be my butt they'll offer somewhere in the ballpark of 2-3 million shares in the low low low teens in the next few weeks diluting the hell out of the stock. Given the fact that I've seen too many of these pharma's come and go without turning a profit and having an approved drug, I can't really consider this a buy at any higher than $5.50 a share which makes this in my eyes about 60%+ overvalued right now.

UltraLong

Member Avatar Charlottean2 (< 20) Submitted: 6/12/2009 6:55:02 PM
Recs: 3

Pretty impressive post, although it seems more like emotions to substantiate the pre-defined opinion rather than a set of facts. Let's see:
1. I'm not a pharma industry expert, but as far as I remember, FDA approves only drugs that are more effective as of the date of the approval than its counterparts, i.e. FDA tries not to allow multiple drugs for the same condition with similar pharmacological characteristics to be on the market. So it's my guess VNDA's drug is somehow better
2. You're right that VNDA as a stand-alone business is not the most viable option. But if you read any annual reports it files with SEC, you will find that this Company's philosophy is not to proceed with a drug from start to finish. What this company does is acquires perspective drugs on development stage, completes this stage and then tries to make profit out of an approved drug. Speaking specifically of Fanapt, it was acquired by VNDA in 2004, 8 years after its development had started in 1996. Now all this company has to do it is to sell this drug to somebody for good money. Another option is to merge with someone. I think the Company has enough time and money to conceive either of these options within the next 12 months.

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