Vanda's shares jump 52% on 1st trading day

BUSINESS DIGEST

November 16, 2006|By Bloomberg News

WASHINGTON -- Vanda Pharmaceuticals Inc.'s stock soared 52.7 percent yesterday after the Rockville company said its experimental insomnia drug successfully treats jet lag and sleep disturbed by odd work shifts.

The shares finished the trading session up $5.14 to $14.90 after earlier surging 74 percent to $17, the most since Vanda went public in April. They had fallen 2.4 percent through Monday.

People taking the drug, VEC-162, showed statistically significant improvement on several measures of sleep, compared with patients taking a placebo, Vanda said. The company focused its research on disturbances in normal, or circadian, sleep cycles.

The findings may move Vanda, which has no drug on the market and three in clinical development, closer to seeking U.S. regulatory approval for its first product.

"This is the only drug today fitted to address circadian-rhythm sleep disorders," Chief Executive Officer Mihael H. Polymeropoulos said in an interview.

Investors see Vanda's announcement "as a positive catalyst for Vanda shares following a significant pullback in recent days," David Maris, an analyst with Banc of America Securities in New York, said in a note to clients.

Vanda will apply for U.S. marketing approval for VEC-162 in late 2008 or early 2009, Polymeropoulos said. The company first needs to complete two additional six-month studies that will be focused on chronic insomnia. Vanda said it has begun to design the studies.

People most prone to circadian-rhythm sleep disorders are those who work abnormal hours and frequently travel. The company says VEC-162 enables such patients to wake up refreshed and is not addictive.

Worldwide sales of drugs to combat insomnia totaled $4.3 billion last year, according to Spectra Intelligence, a London research company.

Vanda aims to capture 25 percent or more of the market in an unspecified time, Polymeropoulos said. Of 70 million people that suffer from sleep disorders, 15 million have circadian-rhythm disturbances, he said.

Vanda is looking to form a partnership with a major pharmaceutical company to help it promote, sell and distribute the drug worldwide, Polymeropoulos said.

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