VNDA Stock Fades After Hetlioz Sleep-Trial Win — Here’s Why

• In the trial, patients took 20 mg once daily for 28 days; treated patients fell asleep 42.5 minutes earlier versus 5.4 minutes on placebo — a 37-minute gap.
• The “pivotal” trial analyzed just 20 patients per arm after screening more than 260 people over five years.
• Investors also remember the FDA twice rejected Hetlioz for jet lag, citing how the studies were designed.

Shares of Vanda Pharmaceuticals (VNDA) opened 3% higher on Wednesday after a late Tuesday readout in delayed sleep-wake phase disorder, to eventually give up all gains as investors focused on the small trial population and generic competition to the drug.

The stock was down 1% at the time of writing, despite a two-digit after-hours surge on Tuesday.  

What The VNDA Trial Showed

Vanda said a late-stage study of Hetlioz (tasimelteon), already sold for two rare body-clock disorders, met its main goal in delayed sleep-wake phase disorder (DSWPD). In DSWPD, the internal clock is locked late: people cannot fall asleep at a normal hour and struggle to wake for work or school. The company estimates that 0.5 million to 4.1 million U.S. adults may be affected.

In the trial, patients took 20 mg once daily for 28 days. Treated patients fell asleep 42.5 minutes earlier versus 5.4 minutes on placebo — a 37-minute gap. Sixty percent of the drug group advanced sleep by at least 30 minutes, versus 15% on placebo. Safety matched the existing label. Vanda plans to discuss the data with the U.S. Food and Drug Administration and file for a new use. If approved, Hetlioz would be the first medicine specifically cleared for DSWPD.

Why The Stock Did Not Rally

The “pivotal” trial analyzed just 20 patients per arm after screening more than 260 people over five years. The main measure was a diary, not an objective sleep tracker. Investors also remember the FDA twice rejected Hetlioz for jet lag, citing how the studies were designed.

Further, generic versions have already slashed Hetlioz sales — down 66% year over year to $5.6 million in the latest reported quarter. A new label on a product already facing cheap copies may add little revenue. Vanda is also burning cash while Fanapt, its approved drug for schizophrenia and acute manic or mixed episodes of bipolar I disorder, grows, and other pipeline bets remain unproven.

Vanda is also awaiting an FDA decision on Quimilza in the treatment of generalized pustular psoriasis. The FDA is slated to decide on the drug by December 12.

How Did VNDA Retail Traders React?

On Stocktwits, retail sentiment around VNDA stock rose from bearish to extremely bullish territory over the past 24 hours, while message volume rose from normal to extremely high levels.

A Stocktwits user highlighted that the company is currently unprofitable. The stock is doomed until it can turn a profit again, they said.

Another user highlighted the small nature of the study, which they said will not suffice for FDA approval.

VNDA stock has fallen 43% year-to-date. 

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