Vanda Pharmaceuticals (VNDA) Q4 2025 earnings call transcript

Thank you, Jordan. Good afternoon, and thank you for joining us to discuss Vanda Pharmaceuticals' fourth quarter and full year 2025 performance. Our fourth quarter and full year 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. 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 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. Mahalas Palmyropoulos.

Thank you very much, Kevin. Good afternoon, everyone, and thank you for joining Vanda Pharmaceuticals' fourth quarter and full year 2025 financial results conference call. 2025 was a year of strong commercial execution and significant regulatory and clinical advancements for Vanda. I will briefly address some of the key highlights. Our lead product, FNAF, drove impressive growth. Full-year net product sales increased 24% to $117.3 million versus 2024, supported by a 28% rise in total prescriptions and a remarkable 149% surge in new-to-brand prescriptions. This reflects accelerating momentum, broader prescriber adoption, and the impact of our target commercial investments, including direct-to-consumer campaigns that boosted brand awareness. Our full commercial franchise, Fanapt, Hetlios, Hetlios LQ, and Ponvoy generate total revenues of $216.1 million for the year, up 9% year-over-year, demonstrating solid performance across our marketed products.

Clinical and regulatory milestone highlights. We achieved a major regulatory win with the FDA approval of Nereus, Trediptant, in late 2025 for the prevention of vomiting induced by motion, the first new oral pharmacologic option in this space in over 40 years. This approval opens a substantial market opportunity in motion sickness. Motion sickness is a common condition with prevalence estimates indicating that approximately 25 to 30 percent of U. S. adults, roughly 65 to 78 million people, experience symptoms during travel or motion exposure. Tens of millions seek pharmacologic relief annually, yet current options are often limited by adverse events or inconsistent efficacy.

Nereus addresses this unmet need as well-tolerated, targeted neurocangin-1 receptor antagonists, and we are actively preparing for its commercial launch to bring this innovation to patients facing this common issue. Separately, we see strong adjunct potential for NIRUs in the rapidly expanding GLP-1 agonist market. These therapies used for diabetes and obesity management have seen explosive growth with market projections in tens of billions annually, and vomiting remains a frequent side effect, impacting up to 50% of patients on agents like semaglutide. Nereus demonstrated positive clinical results in preventing vomiting induced by the GLP-1 analog semaglutide in our study.

To capitalize on this, we plan to initiate a dedicated Phase III program in the first half of 2026, pursuing label expansion in this high-potential area where better tolerability could significantly improve patient adherence and outcomes. The Bisanti-Milseperidon NDA for Bipolar I Disorder and Schizophrenia is under FDA review, with a PDUFA target action date of February 21, 2026. Approval would further strengthen our growing psychiatry franchise alongside FNAP in the global antipsychotic category. This category had a total addressable market estimated at approximately 20 billion in 2025.

We submitted the Imsidolimab BLA in the fourth quarter of 2025 for generalized pustular psoriasis, advancing us toward potential approval for this serious unmet need. Ipsidolimab is a fully humanized IgG4 monoclonal antibody that inhibits IL-36 receptor signaling and is being developed for GPP, a rare orphan indication. Regulatory and patent exclusivity for Ipsidolimab is expected to extend into the late 2030s. Vanda holds an exclusive global license for the development and commercialization of Ipsidolimab from anaptist bio.

CPP flares involve painful prustules over large skin areas accompanied by redness, itching, and systemic symptoms, and can be life-threatening if untreated. Late-stage clinical development programs include a Phase III study of Bisanti as a once-a-day adjunct treatment for major depression, which is ongoing and results expected by end of the year. Major depressive disorder is the most common psychiatric disorder in the United States, affecting more than 20 million American adults in any given year, according to estimates from the National List of Mental Health and large-scale surgeons. It is characterized by persistent feelings of sadness, loss of interest, or pleasure, fatigue, changes in appetite or sleep, feelings of worthlessness, and impaired concentration or decision-making, often leading to significant functional impairment in work, relationships, and daily life.

MDD exhibits highly variable clinical expression, a natural course ranging from single episodic events to recurrent or chronic forms with episodes varying severity, duration, and response to triggers. Despite the availability of multiple evidence-based treatments, a substantial and met medical need remains. Approximately 30 to 50% of patients achieve only partial response or remission with first-line therapies. Many experience treatment-resistant depression. Relapse rates are high even after initial improvement, and side attacks or delayed onset of action limit tolerability and adherence for a significant percentage of individuals.

This persistent gap underscores the need for novel, more effective, and better tolerated adjunctive or alternative treatments to address the full spectrum of MDD. The Phase III study of the long-acting injectable, LAI, formulation of iloperidone, continues to enroll patients for schizophrenia and lapse prevention, representing a key enhancement to FANAP's long-term utility in psychiatric care. The long-acting injectable LAI antipsychotics market represents a significant and growing opportunity within the broader antipsychotic and psychiatric treatment landscape, driven by the need for improved adherence in chronic conditions like schizophrenia and bipolar 1 disorder, where non-adherence to oral meds contributes to high relapse rates, hospitalizations, and costs. Estimates for the global LAI and psychotic-specific market vary across reports, but consensus points to a 2025 size in the 6 to 7 billion range with strong growth projected.

A Phase III study of VQW-765, our Alpha-7, Nicotinic Acetylcholine Receptor, Parcel Agonist, in adults with social anxiety disorder, has been initiated with results expected by end of 2026. Social anxiety disorder, SAD, affects approximately 30 million American adults, according to the 2023 National Health and Wellness Survey, with onset typically in the mid-teens or earlier and slightly higher diagnosis rates in females than males. It manifests as excessive fear of embarrassment, humiliation, scrutiny, evaluation, or rejection in social or performance situations leading to avoidance or intense distress that significantly impairs daily routine, occupational functioning, social life, and overall quality of life, though individuals are generally asymptomatic, absent such triggers. Standard treatments include cognitive behavioral therapy, but many patients struggle to initiate or tolerate exposure due to the severity of anxiety.

Off-label options like benzodiazepines offer rapid calming effects that carry risks of abuse, misuse, addiction, and black box warnings for interactions and dependency. Beta blockers provide situation relief, but limited broader efficacy. This highlights the need for novel, on-demand therapies like VQW-765 to address acute episodes more effectively. Our clinical development programs for ponvori, ponesimote, insuriasis, and ulcerative colitis are ongoing, building on its established profile as a selective S1-P1 receptor modulator approved for relapsing multiple sclerosis. For psoriasis Convoy has already demonstrated strong efficacy in earlier studies including a Phase II randomized double placebo trial showing significant positive 75 responses that is greater than 75 reduction in psoriasis area and severity index at week 16 across tested doses of 10 20 and 40 milligrams with sustained improvements in symptoms of moderate to severe chronic plaque psoriasis in a favorable time course of response Recent updates indicate advancement over phase 3 evaluation, positioning Ponvori as a potential oral option in this large inflammatory dermatology market.

For ulcerative colitis, the S1P mechanism has been robustly validated by the successful commercialization approvals of other modulators, Ziposia and Velocity, which have shown efficacy in phase 3 trials for moderate to severe ulcerative colitis, achieving clinical remission and mucosal healing superior to placebo. PON4 may be particularly well-suited for this indication due to its pharmacological advantages of rapid onset of action, faster lymphocyte sequestration compared to some class members, and rapid lymphocyte recovery upon discontinuation. This profile offers greater flexibility for managing infections, vaccination, surgery, pregnancy planning, or therapy switches, key considerations in chronic IBD where treatment interruptions or adjustments are common. These expansions will significantly broaden for VORI's addressable patient population and leverage its differentiated pharmacokinetics to address unmet needs in autoimmune inflammatory diseases beyond multiple sclerosis.

We look forward to progressing these programs and sharing updates as they advance. Looking forward, we expect 2026 total revenues of $230 to $260 million from our current marketed products only, that is FNAB, HETLIOS, HETLIOS, LQ, and Porvoy, establishing a strong baseline. We anticipate continued growth from this portfolio with further contributions from the nearest launch and potential approvals of Bisanti and Ibsidolimab, plus progress across our late-stage programs. We believe that our growing psychiatry franchise is well positioned for expansion, anchored by FNAF on the market for schizophrenia and bipolar I disorder, with Bisanti, Milisaperidone, currently under FTA review for bipolar I and schizophrenia, with Epidufo February 21, 2026, And in ongoing, phase 3 clinical development as an adjunctive treatment for major depressive disorder.

Long-acting injectable formulation of aloperidin, advance in phase 3 for schizophrenia relapse prevention, and VQW 765 in a phase 3 study for social anxiety disorder with results expected by the end of 2026. Collectively strengthening our portfolio across key psychiatric indications.

In summary, 2025 showcased our ability to drive revenue while building a diversified, high-potential pipeline. We remain committed to delivering innovative therapies and long-term value for patients and shareholders. With that, I'll turn over to Kevin.

Thank you, Miles. I will begin by summarizing our financial results for the full year 2025 before turning to discuss the fourth quarter of 2025. Total revenues for the full year 2025 were $216.1 million, a 9% increase compared to $198.8 million for the full year 2024. The increase was primarily due to growth in FNAP revenue as a result of the bipolar commercial launch, partially offset by decreased Hetlius revenue as a result of generic competition.

Let me break this down now by product. FNAP net product sales were $117.3 million for the full year 2025, a 24% increase compared to $94.3 million for the full year 2024. This increase in net product sales relative to the full year 2024 was attributable to an increase in volume. FINAP total prescriptions, or TRX, as reported by Equivia Exponent for the full year 2025 increased by 28% compared to the full year 2024.

FINAP new patient starts for the full year 2025, as reflected by new-to-brand prescriptions, or NBRX, increased by 149% compared to the full year 2024. Turning to Hetlios. Hetlios net product sales were $71.4 million for the full year 2025, a 7% decrease compared to $76.7 million in the full year 2024, as a result of continued generic competition in the U. S. The decrease to net product sales relative to the full year 2024 was attributable to a decrease in volume and price net of deductions.

Of note, for the full year 2025, Hetlios continued to retain the majority of market share despite generic competition now for over three years.

And finally, turning to Pombori. Pombori net product sales were $27.4 million for the full year 2025, a 2% decrease compared to $27.8 million for the full year 2024. Of note, an amount of variable consideration related to Pombori net product sales is subject to dispute, of which approximately $3 million was recognized for the three months ended December 31, 2024.

For the full year 2025, Vanda recorded a net loss of $220.5 million compared to a net loss of $18.9 million for the full year 2024. The net loss for the full year 2025 included income tax expense of $81.8 million as compared to an income tax benefit of $4 million for the full year 2024, The Vanda Pharmaceuticals are a non-cash income tax charge. The provision for income taxes for the full year 2025 includes the impact of the recording of a valuation allowance of $113.7 million against all of Vanda's deferred tax assets. To reiterate, the recording of this valuation allowance is one-time in nature and is a non-cash charge. The company assessed the need for evaluation allowance against its deferred tax asset each quarter through the review of all available positive and negative evidence.

Deferred tax assets are reduced by evaluation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. This analysis is highly dependent upon historical and projected pre-tax income. Projected pre-tax income includes significant assumptions related to revenue, which could be affected by the trajectory of the commercial launches of phenapton bipolar disorder, Pomvorium multiple sclerosis, and Nereus in the prevention of vomiting induced by motion, which was approved on December 30th of 2025, and Hetliost generic competition, as well as commercial and research and development activities, including spend on our commercial launches and late-stage clinical activities, and our ability to obtain regulatory approval from the FDA for products or new indications in development, among other factors.

In the fourth quarter of 2025, after considering all available positive and negative evidence, including, but not limited to, historical, current, and future projected results, and significant risks and uncertainties related to forecasts, the company concluded that it is more likely than not that substantially all of its deferred tax assets are realizable in future periods and recorded a valuation allowance against all net deferred tax assets, resulting in a non-cash income tax expense of $113.7 million for the year ended December 31, 2025.

Operating expenses for the full year 2025 were $367.3 million compared to $239.4 million for the full year 2024. The $127.8 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 Phenaptin bipolar disorder and Pomvorium multiple sclerosis. Expenses associated with the preparation for future commercial launches and higher R&D expenses primarily related to the exclusive global license agreement with Anaptis for the development and commercialization of Imsidolimab, which was entered into during the first quarter of 2025, and our Phenapt Long Act Injectable and Basanti Major Depressive Disorder clinical development programs. On the commercial side, during 2024 and 2025, we commenced a host of activities as a result of the commercial launches of Phenaptin Bipolar Disorder and Pomvorian Multiple Sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs.

Additionally, in the first quarter of 2025, we launched our direct-to-consumer campaign, which has driven meaningful gains in brand awareness for the company and our products, Phnaft and Pomvori. We maintain strategic investments in our commercial infrastructure, including increased brand visibility through targeted sponsorships with the goal of supporting long-term market leadership and future commercial launches.

Vanda's cash, cash equivalents, and marketable securities, referred to as cash, as of December 31, 2025, The changes in cash during the full year 2025 and the fourth quarter 2025 were driven by the net loss in those periods, excluding the impact of the one-time non-cash charge related to the tax valuation allowance, as well as timing of cash received from customers for revenue, and the next year. and related payments of rebates to payers, and the timing of cash paid to third parties for services related to operating expenses.

Turning now to our quarterly results. Total revenues were $57.2 million for the fourth quarter of 2025, an 8% increase compared to $53.2 million for the fourth quarter of 2024, and a 2% increase compared to $56.3 million in the third quarter of 2025. The increases as compared to the fourth quarter of 2024 and the third quarter of 2025 were primarily due to growth in FNAF revenue as a result of the bipolar commercial launch.

Let me break this down now by product. FNAF net product sales were $33.2 million for the fourth quarter of 2025, a 25% increase compared to $26.6 million in the fourth quarter of 2024, and a 6% increase compared to $31.2 million in the third quarter of 2025. FNAP total prescriptions, or TRX, as reported by Equivia Exponent, in the fourth quarter of 2025 increased by 36% compared to the fourth quarter of 2024 and 8% compared to the third quarter of 2025.

FNAP new patient starts in the fourth quarter of 2025, as reflected by new-to-brand prescriptions, or NBRX, increased by 108% compared to the fourth quarter of 2024 and by 7% compared to the third quarter of 2025. The increase in FNAPT revenue between the fourth quarter of 2024 and the fourth quarter of 2025 was primarily attributable to an increase in volume.

The increase in FNAPT revenue between the third quarter of 2025 and the fourth quarter of 2025 was also attributable to an increase in volume. These increases in volume were primarily driven by increased total prescription demand. 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 2025, FNAF inventory at wholesalers was slightly above four weeks on hand, which was generally consistent with the level of inventory weeks on hand as of the fourth quarter of 2024 and the third quarter of 2025, but slightly above the historic range.

Turning to Hetlios. Hetlios net product sales were $16.4 million for the fourth quarter of 2025, an 18% decrease compared to $20 million in the fourth quarter of 2024, and a 9% decrease compared to $18 million in the third quarter of 2025. The decrease in net product sales relative to the fourth quarter of 2024 was primarily attributable to a decrease in price net of deductions, as well as a decrease in volume sold.

The decrease in net product sales relative to the third quarter of 2025 was primarily attributable to a decrease in price net of deductions, partially offset by an increase in volume.

Hetlios net product sales continue to be impacted by changes in inventory stocking at specialty pharmacy customers from period to period. Going forward Hetlios net product sales may reflect lower unit sales as a result of the 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 Hetlios net product sales may decline in future periods potentially significantly related to continued generic competition in the U And finally, turning to Ponvori. Ponvori net product sales were $7.6 million for the fourth quarter of 2025, an increase of 17% compared to $6.5 million in the fourth quarter of 2024, and an increase of 8% compared to $7 million in the third quarter of 2025.

The increase in net product sales as compared to the fourth quarter of 2024 was attributable to an increase in price net of deductions partially offset by volume. The increase in net product sales as compared to the third quarter of 2025 was attributable to an increase in price net of deductions partially offset by volume. The specialty distributor and specialty pharmacy inventory on hand levels during these periods were in line with normal ranges. Of note, underlying patient demand is increased, albeit modestly, on a sequential quarter basis for the last three quarters.

Additionally, as previously noted, an amount of variable consideration related upon boarding net product sales is subject to dispute, of which approximately $3 million is recognized for the three months ended December 31, 2024. For the fourth quarter of 2025, Vanda recorded a net loss of $141.2 million compared to a net loss of $4.9 million for the fourth quarter of 2024. From an income tax perspective, the net loss for the fourth quarter of 2025 included an income tax expense of $103.2 million as compared to an income tax benefit of $1.6 million for the fourth quarter of 2024, primarily driven, again, by the one-time non-cash income tax charge of $113.7 million for the tax valuation allowance. operating expenses in the fourth quarter of 2025 were $97.6 million compared to $63.5 million in the fourth quarter of 2024.

The $34.1 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 in bipolar 1 disorder and Pombori in multiple sclerosis, expenses associated with the preparation for future commercial launches, and higher R&D expenses. During 2024 and 2025, we commenced a host of activities as a result of the commercial launches of Phenaptin Bipolar 1 Disorder and Pomvorian Multiple Sclerosis, including expansions of our sales force and the development of prescriber awareness and comprehensive marketing programs. Additionally, in the first quarter of 2025, we launched our direct-to-consumer campaign, which has driven meaningful gains in brand awareness for the company and our products, Phenaptin Pomvorian. We maintain strategic investments in our commercial infrastructure, including increased brand visibility through targeted sponsorships with the goal of supporting long-term market leadership and future commercial launches.

With regards to the launches of Phenaptin Bipolar I disorder and Pomborium Multiple Sclerosis, as I mentioned, the launches were initiated in 2024, and we continue to enhance our commercial infrastructure in 2025, with the impact of these commercial efforts contributing to revenue growth in 2025 and expected to continue to contribute to revenue growth in 2026 and beyond. We have already seen significant growth in our commercial activities. Several lead indicators suggest a strong market response to our commercial activities related to FNAF. Total prescriptions increased by 36% in the fourth quarter of 2025 as compared to the fourth quarter of 2024. New patient starts, or MBRX, increased by 108% in the fourth quarter of 2025 as compared to the fourth quarter of 2024.

And of particular note, FNAF was one of the fastest-growing atypical antipsychotics in the market throughout 2025 based on numerous prescription metrics. Our FNAF sales force numbered approximately 160 representatives at the end of 2024 and increased to approximately 300 representatives at the end of 2025.

These sales force expansions have allowed us to significantly increase our reach and frequency with prescribers. To that end, the number of face-to-face calls in the fourth quarter of 2025 was more than twice the number of face-to-face calls in the fourth quarter of 2024. In addition to our FNAF sales force, we've established a specialty sales force to market Ponvorie to neurology prescribers around the country. We've grown this sales force to approximately 50 representatives at the end of 2025.

FNAF performance remains the focus of our commercial initiatives and encourages us to continue to invest in this differentiated medicine and if approved, the franchise extending launch of Basanti. Before turning to our financial guidance, I would like to remind folks that with FNAPT, Hetlios, and Pomvori already commercially available, and with the nearest NDA recently approved for motion sickness, and the Basanti NDA for Bipolar I Disorder and Schizophrenia under review by the FDA, and a biologic license application, BLA, for imcidolimab now submitted to the FDA, Vanda could have six products commercially available in 2026. Turning now to our financial guidance. Due to the recent and upcoming regulatory and commercial milestones, Vanda's 2026 financial guidance is limited to revenue guidance for currently commercialized products, which includes FNAFT, Hetlios, and Pombori.

Vanda expects to achieve the following financial objectives in 2026. Total revenues from FNAPT, Hetlios, and Pombori of between $230 and $260 million. The midpoint of this revenue range would imply revenue growth in 2026 of approximately 13% as compared to full-year 2025 revenue. FNAPT net product sales of between $150 and $170 million. The midpoint of this revenue range would imply FNAPT revenue growth in 2026 of approximately 36% as compared to full-year 2025 FNAPT revenue. Assuming consistent growth to net dynamics between 2025 and 2026, the bottom end of this range assumes mid to high single-digit quarterly TRX growth for FNAF in 2026. The top end of this range assumes low double-digit to mid-team quarterly TRX growth for FNAF in 2026.

Other net product sales of between $80 million and $90 million. This range assumes a further decline of the Hetlios business due to the generic competition and modest growth in the Pomvori business where we are seeking to significantly improve market access to the product. Depending on our success in these efforts, we could see meaningful improvement in patients on therapy, prescriptions filled, and prescriptions written by prescribers. It is worth commenting that the quarterization of revenue in 2026 will be impacted by several items, including insurance plan transitions. As patients adjust to new insurance plans at the start of the year, there may be some disruptions in the first quarter. This is typical industry-wide occurrence and consistent with our own historical trends.

As I previously mentioned, as of December 31, 2025, Hetlios inventory at specialty pharmacy customers was elevated, which may result in fewer specialty pharmacy customers ordering or specialty pharmacy customers ordering smaller amounts in the first quarter of 2026. Vanda is currently making conditional investments to facilitate future revenue growth, both in the form of R&D investments, commercial inventory production, and potentially outsized commercial investments, which could vary moving forward depending on the success of these commercial strategies.

Vanda is not providing 2026 cash guidance at this time. However, it is likely that Vanda's 2026 cash burn will be greater than the cash burn in 2025. It is also worth noting that the quarterization of cash balances will be impacted by several items. The first quarter cash balance will be impacted by a milestone payment of $10 million made to Eli Lilly in the first quarter of 2026 for the approval of NERIUS in the U. S. The $10 million was accrued in the fourth quarter of 2025 and capitalized as an intangible asset but was not paid as of year-end 2025. The impact of revenue quarterization previously noted, and the standard timing of certain items paid in the first quarter of each year.

The full-year cash balance will also be impacted by the potential of a $5 million milestone payment to a NAPTIS if the Imsidolamab DLA is approved by the FDA, and the timing of payments associated with commercial inventory production for our upcoming and potential commercial launches.

With that, I'll now turn the call back to Mahalis.

Thank you very much, Kevin. At this point, we'll be happy to address your questions. As a reminder, if you'd like to ask a question during the question and answer session, you may press star followed by one on your telephone keypad. We'll take a brief moment to compile the Q&A roster. Your first question comes from the line of Madison Elcedi from B. Riley Securities. Your line is live. Hi, guys. Thanks for taking our question. Maybe I'll start with Basanti. Given the 505B2 pathway and the bioequivalence to FNAPs you've shown, I'm just curious if you could characterize any FDA communication on outstanding issues that came up during the review cycle. If there are any requests related to CMC or labeling scope questions that you could discuss.

And then, assuming approval, is there a day one commercial strategy you could walk us through, just recognizing it's really about transitioning patients from FNAP to Basanti? Thanks. Yes, sir. Thanks, Patterson. So, first of all, this is a NDA, and it is not a bioequivalence like a genetic. Well, bioequivalence data are important. So, think of it as a completely new drug application. In terms of how the review is going, of course, we don't give incrementals, but I would say we remain optimistic for end-on-time approval. Now, your question on commercial plan. First of all, the commercialization, if approved later this month, will have to wait for some time in Q3 when commercial supplies will be ready. And between this time and then, we'll have more color we can give on the launch strategy of Byzantium and also the interplay with FANAP.

Thank you.

Hi, Ram. Thank you very much. So, as you know, GPP is a quite rare dermatological condition that most likely would be addressed with a small sales force visiting dermatologists and any advocacy organizations around this disorder. And there is better awareness than it used to be since the 2021 approval of Spesolumab from Berger Ingelheim. So we believe that a dedicated small specialty sales force will be the key commercial asset that is needed.

Yeah at this time we don have a Bisanti campaign planned The direct campaign that Kevin alluded to is consisting of a brand awareness of Vanda overall through sponsorships and a direct campaign on product that is FNAB and Ponnvore We expect that to continue in similar cadence like the past year and with the commercial launch of Byzantium we expect to have a dedicated campaign for that, but no concrete plans at this time.

Of course. On commercial availability, we're working in preparing now commercial materials, and we expect available commercial materials either by late Q2 or beginning of Q3. In terms of the regulatory path on gastroparesis, we are now preparing for a hearing at the FDA.

That hearing was in abeyance for a little while, but now we have resumed, and we expect to hear from the FDA in the near future whether or not they're going to grant the hearing, And we'll take it from there. In terms of the new use study for GLP-1 analog, remind everyone we had a very strong Phase II study in prevention of vomiting.

And we are now in the process of initiating a Phase III study, which we believe could produce results by late Q3, Q4 for this new Phase III study.

Yes, it is enrolling. However, we're not satisfied much with the speed, and that is primarily because of the delays in launching this study in Europe. And it's not delays the company can control. It is more resistance in conducting placebo control studies in Europe and other considerations. So that is definitely a slowdown. At the rate of recruitment we have now, it is encouraging that things are picking up and moving in the U. S. alone, but I would say I don't have good visibility whether we'll be able to reach the recruitment goals by year end.

Yep. Thanks, Sam. Yeah, so what we saw on a year-over-year basis, and I think what you're highlighting is that the script growth outpaced the overall revenue growth. And what we've seen on a year-over-year basis is a relatively small reduction in net price, and that's due to a couple of, you know, gross-to-night items, some of which we highlighted during last year's earnings call, which was primarily related to the introduction of the Medicare benefit redesign as part of the So that began at the beginning of this year. So that was a gross net differential between 2025 and 2024. And then additionally, in the Q3 call, we commented on that we'd seen an increased gross net item, an unfavorable gross net item related to commercial copay support, which to some extent should be expected as with the bipolar indication, you would expect to see a higher proportion of commercial patients relative to governmental.

And copay support would then increase in terms of a gross to net item. So that's the bridge kind of between the TRX growth and the revenue growth where there was a relatively small difference between the two percentage-wise.

Thank you.

Well, so the Medicare piece has a phase-in on existing products, a five-year phase-in. So there was a 1% fee in 2025 that increases to 2% this year. But in general, we would expect the gross net to be consistent, absent there being some significant change in the underlying business or payer dynamics. The one thing that I would flag for you that we've highlighted previously, especially with the Basanti-Pidufa date right in front of us, is that the gross-to-net dynamics on Basanti are significantly different and favorable relative to FNAF, and that's because Basanti will get a new Medicaid URA calculation, a reset there. And so, as you might remember, 30% to 40% of our FNAF business is Medicaid, and currently that contributes negative revenue, meaning the gross-to-net adjustment exceeds the gross revenue for us.

It's actually a negative revenue contribution. And with Basanti, you'll get a complete reset on that so that you'll be subject to the statutory 23.1% discount, but none of the other adjustments that come with having a product on the market over time. And so whereas our gross to net we've previously communicated is in the neighborhood of 50% on FNAP, we'd expect it to be more like in the mid-30s on Basanti.

Thank you. Thanks, Sam.

Yep. So, Andrew, first, on the first point there, so our revenue guidance range, the $150 to $170, right? It's a midpoint of 160. I think what you're referencing is I, in the prepared remarks, commented that the lower end of the range would have, you know, mid to high single-digit TRX growth, and then the higher end of the range would have low double-digit to mid-teen. That's sequential quarter growth, so quarterly growth of those numbers. So the revenue getting to 160 would be almost entirely TRX-driven, volume-driven. With Medicaid and now the Medicare redesign as part of IRA, price increases are somewhat capped if your business is not significantly driven by commercial markets.

And so, yeah, that revenue growth is almost entirely volume-driven. And then on your second question, you know, on Basanti, again, we are very excited about the Padufa date coming up very quickly here. But as Mahalas mentioned, you know, it will be in the back half of the year by the time that a launch would occur, And there's zero dollars of revenue contribution in the revenue guidance that we've provided.

Yep. Thanks, Andrew. So we haven't communicated a price on Nereus yet, But what we have noted is that in terms of some, you know, data points drawn in the market, the NK1 class, which you typically see there, is that for a dose of one of the other NK1s that's approved in the market, those can range from between $200 to as high as $600 a dose. And, you know, what we also have commented on is that for the available treatments in the market that are used for motion sickness, you know, namely Dramamine or Scopolamine patches, we expect our price to have a premium relative to those prices. So hopefully those are some data points that can kind of help frame the kind of pricing dynamic there.

And then, as Mahalas mentioned, with the launch likely happening in late Q2 or early Q3, we didn't provide guidance at this time, but obviously we think it's a very large market given the numbers Mahalas quoted in his prepared remarks around the prevalence of motion sickness and the proportion of those people seeking treatment. And so we're excited about the possibilities there, although we haven't provided specific guidance.

On the first question, Andrew, yes, the design is going to be very similar to the prior study. And we will use, again, as the challenge, a one milligram Wagovi in a Wagovi-naive patient. I am not sure I understood your second question. Would you mind clarifying?

Well, it is a logical design. If the drug works at a higher challenge, then you expect it to work in a lower challenge. And the challenge patients are facing is usually with rapid titration in higher doses. You are correct if you are implying that with GOVI guidance now on the label is to start low and go slow. You start with 0.25 milligrams, and you only reach the one milligram dose we're using at week nine. So, while it is true that the titration is different, we don't expect that the drug will work less at a lower challenge.

Thank you.

Of course.

Thank you very much all for joining us. We'll see you at the next call.