News of an update from the U.S. Food and Drug Administration (FDA) pushed Vanda Pharmaceuticals Inc. (NASDAQ: VNDA) shares sharply higher early Wednesday. Essentially, the agency approved Vanda’s treatment for nighttime sleep disturbances associated with Smith-Magenis syndrome (SMS).
Specifically, the FDA approved Hetlioz (tasimelteon) capsule for the treatment of adults and children with nighttime sleep disturbances associated with SMS.
Note that SMS is a rare neurodevelopmental disorder, a defining feature of which is an “inverted” circadian rhythm, making it extremely difficult for patients with SMS to sleep during the night. Hetlioz is the first FDA-approved medication for patients with SMS.
The approval was based on a single placebo-controlled efficacy study in this rare disorder, which studied both adults with SMS taking the Hetlioz capsule and children with SMS taking the liquid formulation.
Management commented that this approval would not have been accomplished without the heroic efforts of SMS patients and the efforts of their families and advocates supporting the recruitment, design and conduct of the study.
Excluding Wednesday’s move, Vanda has underperformed the broad markets, with its stock down about 25% year to date. In the past 52 weeks, the share price is down closer to 28%.
Vanda Pharmaceuticals stock closed Tuesday at $12.34, in a 52-week range of $7.12 to $17.85. The consensus price target is $18.33. Following the announcement, the stock was up about 9% at $13.47 in early trading indications Wednesday.