Vanda ahead of schedule in iloperidone trial, outside factors could prevent early results

By Jennifer Lanning Drey

Eugene, Ore., May 18 - Vanda Pharmaceuticals Inc. is ahead of schedule for enrolling patients in what it believes could be its final clinical trial for iloperidone, a product candidate being evaluated for treatment of patients with schizophrenia, but the company cautioned that factors outside of its control could prevent an earlier-than-anticipated announcement of the results.

As of April 30, Vanda had enrolled 372 of the 600 patients it needs for a randomized, double-blind, placebo- and active-controlled phase 3 trial planned to begin in the second quarter. The test will take place at up to 37 sites in the United States and up to 10 sites in India, according to Mihael Polymeropoulos, president and chief executive officer of Vanda.

However, iloperidone is now competing with another phase 3 compound for patients at many of its investigation sites, which was not the case during the previous six months, according to Polymeropoulos.

"We have observed slowed-down enrollment at some of the sites and had planned for it in our enrollment forecast," he said during a company conference call held on Thursday.

Vanda also expects warm weather to reduce the rate of enrollment since the company has found that schizophrenia patients often avoid in-patient trials during periods of the year when they can be comfortably outside, he said.

With consideration given to those factors, Vanda said it expects to report top-line results from the phase 3 study sometime in the first half of 2007 and, if successful, will file a New Drug Application with the Food and Drug Administration for iloperidone by the end of next year, according to a company press release.

"We're excited about moving our product candidate further through clinical development and closer to commercialization," said Polymeropoulos during Thursday's conference call.

Vanda is simultaneously running another phase 3 trial to evaluate the safety and efficacy of its product candidate VEC-162 for the treatment of insomnia, and enrollment for that trial is on schedule, according to Polymeropoulos.

Vanda also expects to report top-line results from that trial in the first of 2007.

IPO will fund near-term goals

As of March 31, Vanda's cash, cash equivalents and short-term investments totaled more than $20 million.

In April, the company completed an initial public offering of 5.75 million shares at $10 each and announced that its underwriters had exercised an over-allotment option to purchase an additional 214,188 shares. Including the over-allotment shares, the offering resulted in net proceeds of approximately $53.1 million for the company.

"We believe the proceeds from this financing will allow us to achieve the following near-term milestones: the completion and reporting of the current iloperidone phase 3 trial, the completion and reporting of the current VEC-162 phase 3 trial and the initiation of a phase 2 trial for VSF-173," said Polymeropoulos during the call.

Vanda reported a net loss of $18.1 million for the first quarter, compared to a net loss of $5.9 million in the first quarter of 2005.

Located in Rockville, Md., Vanda is a biopharmaceutical company developing clinical-stage product candidates for central nervous system disorders.

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