Monday, July 28, 2008

Iloperidone: Vanda Shareholder Train Wreck

Many months back, when shares of Vanda Pharmaceuticals were going for 29 bucks, I warned y'all: Their main product, iloperidone, showed all the signs of being a dud. It has been in the clinical trials stage of development for about a decade and it had yet to receive FDA approval. Um, if a drug was of significant benefit, do you really think it would have been in late-stage development for 10 years? In December 2006, I wrote:

As for iloperidone, one article forecasted that it would hit the market in 2001! Further digging indicated that Titan, which holds the license for iloperidone (to some extent, anyway), was in a spot of trouble for allegedly hiding the drug’s side effect profile. In 1997, according to a report filed with the SEC, “the Company does not have the funds necessary to complete the clinical development of Iloperidone and is currently pursuing several financing alternatives including corporate partnering arrangements and off balance sheet financing to complete development of Iloperidone.” I assume this is where Vanda got involved. I could find not a single published trial of ilopderidone in either PubMed or If anybody can direct me to clinical trials data for this product, I’d love to see it! So this drug has been in the clinical trials phase of development for nearly a decade, and there is no published data to show its efficacy. I’m not impressed.

My personal opinion is that you are better off burning your money than investing in Vanda after the huge jump earlier this week.
Now, according to Reuters, Vanda received a not approvable letter from the FDA "over concerns of efficacy" regarding iloperidone in the treatment of schizophrenia. Ouch. This after the drug was ludicrously named "Fiapta," then "Fanapta." Hello?? Vanda shares can now be had at about a dollar per share -- down about 95% from when I initially warned everyone to steer clear of the company's stock.

There is always a chance that the FDA has a change of heart; it's possibly even worth buying at this point, as even obvious dogs have their day on the market occasionally, such as Corcept Therapeutics. I have no faith that any of Vanda's products are worth anything clinically, but I think they might be able to BS enough analysts and investors to help drive up the price up a few bucks per share. Note that this is not official investment advice.


Anonymous said...

you should share this with Dan Carlat, if you haven't already, as he wrote about it in one of his Reports earlier this year, if memory serves well.

In using your train wreck analogy, the ride of atypicals as multipurpose vehicles for nearly every mental health disorder is about to run out of track. For anyone on this vehicle, do you have your seatbelts on and have insurance?

Aside from this, you posting more often again now?

CL Psych said...

I'll pass it along.

Let's hope the magical mystery tour of atypicals for everything is coming to an end, though I think that train will keep rolling for a while, unfortunately.

As for posting more often, I don't know. I've got a lot on my plate, so I am not sure how much I'll be posting. We'll see what happens.

Anonymous said...

looks like you were wrong as could be