This year, Vanda Pharmaceuticals received Food and Drug Administration (FDA) approval for Hetlioz for the treatment of Non-24-Hour Sleep-Wake Disorder and launched the drug in the United States. However, the launch dramatically grew the company’s operating expenses, and the company reported a net loss of $26.5 million for the first quarter ended March 31, 2014.
Total revenues for the first quarter of 2014 were $9.1 million, compared to $8.1 million for the first quarter of 2013. First quarter 2014 revenues included $1.7 million in Fanapt royalties received from Novartis as compared to royalties of $1.5 million for the first quarter of 2013. Licensing revenues recognized from the amortization of the $200.0 million upfront payment received from Novartis for Fanapt US and Canadian rights were $7.5 million for the first quarter 2014, compared to $6.6 million for the first quarter of 2013. The higher amortization amount in the first quarter of 2014 resulted from a shortening of the expected patent life for Fanapt in the United States.
Total operating expenses for the first quarter of 2014 were $35.7 million, compared to $12.6 million for the first quarter of 2013. Selling, general, and administrative expenses of $27.9 million for the first quarter of 2014 were $23.7 million higher than for the same period in 2013 and reflect the increased commercial activity in preparation for the launch of Hetlioz in the United States.
First quarter 2014 financial results include $10.0 million for milestone payments associated with the FDA approval of the Hetlioz New Drug Application. An $8.0 million milestone payment was made to Bristol-Myers Squibb, which payment is treated as an intangible asset and will be amortized over the expected patent life of Hetlioz in the United States. A $2.0 million regulatory consulting milestone payment was expensed to research and development in the first quarter of 2014.
Vanda recorded a net loss of $26.5 million for the first quarter of 2014, compared to a net loss of $4.5 million for the first quarter of 2013. Diluted net loss per share for the first quarter of 2014 was $0.79, compared to a diluted net loss per share of $0.16 for the same period in 2013.
During the first quarter of 2014, the Non-24 Disease Awareness campaign was expanded with radio and television advertisements broadcast nationwide. The awareness campaign has resulted in over 7,000 responses by individuals who opted in to learn more about Non-24 and its treatment. The majority of responders are likely patients and friends and families of blind individuals. The company has begun identifying Patient Directed Physician (PDP) targets and, over the last few weeks, its field force has called upon approximately 500 PDPs, which the company believes will benefit patients as they seek appropriate treatment for their condition.
Vanda expects to file for European regulatory approval of Hetlioz during 2014. This begins the effort to expand the availability of Hetlioz to markets outside of the United States. Hetlioz was previously granted orphan drug designation by the European Commission for the treatment of Non-24.