Vanda Pharmaceuticals Inc. (Vanda) (NASDAQ: VNDA), today announced financial and operational results for the second quarter ended June 30, 2016.

"Vanda's commercial business continues to demonstrate strong progress and growth," said Mihael H. Polymeropoulos, M.D., Vanda's President and CEO. "We look forward to our planned launch of HETLIOZ inGermany in the third quarter and the opportunity to bring an important therapy to Non-24 patients in Europe."

Key Highlights:

• Total net product sales from HETLIOZ® and Fanapt® were $36.0 million during the second quarter of 2016, an 8% increase compared to $33.3 million in the first quarter of 2016 and a 31% increase compared to $27.6 million in the second quarter of 2015.

HETLIOZ® (tasimelteon)

• HETLIOZ® net product sales grew to $17.5 million in the second quarter of 2016, an 8% increase compared to $16.2 million in the first quarter of 2016 and a 74% increase compared to $10.0 million in the second quarter of 2015.
• A HETLIOZ® product launch in Germany is planned for the third quarter of 2016.
• Enrollment in the Smith-Magenis Syndrome (SMS) open label interventional study is ongoing. An SMS placebo controlled Phase III study is expected to begin in the second half of 2016.
• The Pediatric Non-24 pharmacokinetic study of the HETLIOZ® liquid formulation is enrolling. A Phase III study is expected to begin in 2017.
• The screening of patients for a Jet Lag Disorder (JLD) Phase II proof of concept study began during the second quarter of 2016. Results from the JLD study are expected in the first half 2017.

Fanapt® (iloperidone)

• Fanapt® net product sales were $18.6 million for the second quarter of 2016, a 9% increase compared to$17.1 million in the first quarter of 2016 and a 6% increase compared to $17.6 million in the second quarter of 2015.
• In May 2016, the U.S. Food and Drug Administration (FDA) approved Vanda's supplemental New Drug Application (sNDA) for Fanapt®, modifying and expanding the prescribing information for the use of Fanapt® as a maintenance treatment for schizophrenia in adults. The FDA granted three years of marketing exclusivity for the changes related to the approval of the sNDA.
• A review of the Marketing Authorization Application for oral Fanaptum® tablets by the European Medicines Agency (EMA) for the treatment of schizophrenia in adults is ongoing. An opinion by the EMA's Committee for Medicinal Products for Human Use (CHMP) is expected in the first quarter of 2017.

Tradipitant

• Enrollment in a tradipitant Phase II proof of concept study for the treatment of chronic pruritus in patients with atopic dermatitis is ongoing. Results are expected in the first half of 2017.
• A tradipitant Phase II proof of concept study for the treatment of gastroparesis is expected to begin enrolling patients in the fourth quarter of 2016. Results are expected in the second half of 2017.

Cash, cash equivalents and marketable securities (Cash) were $136.0 million as of June 30, 2016, representing a decrease to Cash of $2.3 million in the second quarter of 2016.

2016 Financial Guidance

Vanda reiterates its prior 2016 financial guidance with an update to stock-based compensation guidance and expects to achieve the following financial objectives in 2016:

• Combined net product sales from both HETLIOZ® and Fanapt® of between $143 and $153 million.
• HETLIOZ® net product sales of between $73 and $78 million and Fanapt® net product sales of between$70 and $75 million.
• Non-GAAP Operating expenses, excluding Cost of goods sold, of between $125 and $135 million.
• Non-GAAP Operating expenses excludes intangible asset amortization expense of $10.9 million and stock-based compensation of between $8 and $10 million. Prior guidance for stock-based compensation was between $9 and $11 million.
• Year end 2016 Cash is expected to be between $123 and $143 million.

About Vanda Pharmaceuticals Inc.

Vanda is a specialty pharmaceutical company focused on the development and commercialization of novel therapies to address high unmet medical needs and improve the lives of patients. For more on Vanda Pharmaceuticals Inc., please visit www.vandapharma.com.