Vanda Pharmaceuticals placed development of its atypical antipsychotic iloperidone on hold July 28, after receiving a "not approvable" letter from FDA in response to an NDA filed last fall for treatment of schizophrenia.

During a same-day investor call, Vanda CEO Mihael H. Polymeropoulos conceded the Rockville, Md., firm could not afford to run the additional comparative Phase III trial requested by FDA in its letter. The agency also asked for additional safety data in patients receiving iloperidone at daily doses ranging from 20 mg to 24 mg.

"We will not be able to conduct both the additional efficacy study and safety additional exposures," Polymeropoulos said, noting an earlier Phase III trial cost about $25 million. "It will take at least a year and a half to conduct the efficacy study and maybe two years to complete the requirement for the chronic safety data," he said.

Vanda, slated to report its second-quarter 2008 financial data on Aug. 5, says it had cash and investments totaling $65.6 million as of June 30. For now, the company has not officially pulled the plug on iloperidone, saying it will seek discussions with FDA about why it requested the additional studies and to determine if there is a feasible alternative to the agency's recommendation.

The NDA is backed by a Phase III placebo-controlled trial in which iloperidone met the primary endpoint, efficacy versus placebo in Positive and Negative Symptom Scales using the Mixed Method Repeated Measures methodology (¹ Also see "Vanda Atypical Antipsychotic Shows Apparent Genetic Response In Phase III" - Pink Sheet, 8 December, 2006.).

FDA acknowledged those results and that the compound had demonstrated efficacy similar to an active comparator, ziprasidone (Pfizer's Geodon ). However, the agency suggested further efficacy demonstration would be necessary, from a trial using either risperidone (Johnson & Johnson's Risperdal ) or olanzapine (Lilly's Zyprexa ) as an active comparator.

During the call, Polymeropoulos noted Geodon was approved by FDA without similar comparative studies. Its basis for approval was superiority to placebo, he said.

Polymeropoulos also said the request for additional safety data on the 20 mg to 24 mg dose range was "inconsistent" with what Vanda was told during a pre-NDA meeting with FDA. At that meeting, FDA told the company the iloperidone safety database "appeared to be sufficient," he said.

FDA accepted the NDA for iloperidone last Nov. 26, setting a late July 2008 action date (² Also see "Encouraging Phase III Data Reported For Vanda’s Schizophrenia Candidate" - Pink Sheet, 13 December, 2007.).

All sale and partnership options to be considered

Vanda briefly addressed speculation during the investor call that it might be open to an acquisition or partnership now that iloperidone will not launch soon, if ever. The company has another Phase III candidate, tasimelteon (VEC-162) for sleep disorders, for which it had set a goal of finishing Phase III studies in 2010 (³ Also see "Vanda Reports Strong Phase III Data For Sleep Disorder Candidate In Chronic Insomnia" - Pink Sheet, 26 June, 2008.).

"We are going to have to examine a number of options including potential partnerships, asset divestitures, et cetera," Polymeropoulos said. "I would say first things first over the next few weeks; we need to understand the content of this letter and finalize what the impact is."

Vanda was seeking a developmental partner for tasimelteon, a novel melatonin receptor agonist that it plans to investigate for chronic primary insomnia in adults, circadian rhythm sleep disorders, transient insomnia and mood disorders related to sleep difficulties. It has another sleep disorder compound, VSF-173, in Phase II.

On iloperidone, Vanda is partnered with Titan Pharmaceuticals of South San Francisco, Calif. Vanda in-licensed the compound from Titan and Novartis in 2004 and would owe Titan royalties ranging from 8 percent to 10 percent of net sales if the drug reached the market.

In a July 28 analysis of Titan, Elemer Piros of Rodman & Renshaw predicted that Vanda will elect not to develop iloperidone any further. Focusing mainly on Titan's positive Phase III data for Probuphine , a subcutaneous implant that delivers six months supply of opioid-addiction treatment buprenorphine, Piros said the failure of iloperidone would not be a major setback for Titan.

"This royalty stream was likely to be relatively modest and the consensus opinion on iloperidone was that the likelihood of an approval by the FDA was low," he wrote.

FDA's action, however, was at least a temporary setback for Vanda, as its stock price ended the day at $0.90 July 28, having opened at $1.40. Share price had closed at $3.36 on July 25, with a 52-week high of $19.62 and 52-week low of $2.70.

-Joseph Haas (j.haas@elsevier.com)

“Not Approvable” Letter Leaves Vanda’s Schizophrenia Drug With Cloudy Future

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