Why Vanda Pharmaceuticals inc. Shares Jumped 10% Today

By Markets Fool.com

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What: After reporting second quarter financial results yesterday afternoon that beat Wall Street estimates, shares in Vanda Pharmaceuticals, soared higher by 10% earlier today.

So what: Vanda Pharmaceuticals results suggest that its making headway on building out its commercial opportunity for Hetlioz as a treatment for non-24, a sleep-wake disorder affecting approximately 80,000 blind people in the United States.

In the second quarter, Vanda's revenue from Hetlioz grew to $10 million, up from $7.5 million in the first quarter and $6 million in the fourth quarter.

Vanda also appears to be successfully increasing demand for its schizophrenia drug Fanapt, to which it acquired U.S. rights to from Novartis at the end of last year. Sales of Fanapt reached $17.6 million in the second quarter, up from $14.7 million in the first quarter and $15.8 million in the fourth quarter, when it was still being sold by Novartis.

Overall, Hetlioz and Fanapt sales led to Vanda reporting total quarter sales of $27.6 million, up 25% quarter-over-quarter. Although the company is still losing money, leveraging higher sales against fixed costs led to a GAAP net loss of $0.13 last quarter, a significant improvement from the $0.64 lost in the same quarter a year ago.

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Now what: In the second quarter, Vanda received marketing approval for Hetlioz in Europe and that could provide sales tailwinds later in the year after price negotiations wrap up with individual member countries. Vanda estimates that as many as 130,000 blind Europeans suffer from non-24. Vanda could also benefit down the road from its efforts to strengthen Fanapt's patent protection and to expand Fanapt's product label.

For now, Hetlioz and Fanapt's results have led the company to boost its revenue outlook to between $100 million and $115 million in 2015, up from prior estimates of between $95 million and $110 million.Delivering on that forecast should put Vanda one step closer to profitability, and that suggests this company is worth tracking.

The article Why Vanda Pharmaceuticals inc. Shares Jumped 10% Today originally appeared on Fool.com.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.