VNDA (2021 - Q4)

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2021 Vanda Pharmaceuticals Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Kevin Moran, Vanda's Chief Financial Officer. Thank you, please go ahead. Kevin Mo

Thank you, Cherry. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals' fourth quarter and full year 2021 performance. Our fourth quarter and full year 2021 results were released this afternoon and are available on the SEC's EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today's call is Dr. Mihales Polymeropoulos, our President, Chief Executive Officer and Chairman of the Board; Tim Williams, our General Counsel and Secretary; Gunther Birznieks, our Senior Vice President of Business Development and R&D Committee Member; and Independent Expert, Dr. Thomas Abell, from the University of Louisville. Following my introductory remarks, Mihales will update you on our ongoing activities. I will then comment on our financial results before opening the lines for your questions. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances and uncertainties. These risks are described in the cautionary note regarding forward-looking statements, risk factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our annual report on Form 10-K for the fiscal year ended December 31, 2020, as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC which are available on the SEC's EDGAR system and on our website. Additional factors may be set forth in those sections of our annual report on Form 10-K for the fiscal year ended December 31, 2021, to be filed with the SEC in the first quarter of 2022. We encourage all investors to read these reports and our other filings. The information we provide on this call is provided only as of today and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihales Polymeropoulos.

Thank you very much, Kevin. Good afternoon, everyone. I appreciate you joining us to discuss our fourth quarter and full year 2021 results as well as our Phase III gastroparesis results and proposed next steps in our development program for tradipitant. As usual, I will discuss our commercial performance and the highlights of our clinical development programs and then I will turn specifically to the gastroparesis study in tradipitant. On HETLIOZ, we continue to see strong interest with new patient prescriptions, especially for sighted patients with Non-24. However, we also saw a significant increase in the rates of payer denial for sighted patients with Non-24 that led to a net decline of Non-24 patients in treatment. We will discuss in more detail our significant efforts to support patients with Non-24 and the progress we're beginning to make, especially for Medicaid-insured patients. We launched HETLIOZ and HETLIOZ LQ for the indication of night-time sleep disturbances in patients with Smith-Magenis Syndrome. More than 50 patients with SMS are currently on treatment and more are awaiting payer approval. We're working closely with advocacy organizations in direct-to-consumer campaigns to increase awareness around Smith-Magenis Syndrome. We recognize that many patients with SMS remain undiagnosed and are currently treated for various new developmental disorders. Through our genetics platform, we have recently discovered that up to 100,000 patients diagnosed with autism actually carry potential pathogenic mutations in the RAI1 gene which is often deleted or mutated in patients with SMS. We believe that this discovery will aid in the molecular identification of patients with SMS among the autism population of patients and offer them a new therapeutic solution. We look forward to beginning to resolve the access hurdles for sighted patients with Non-24, expanding our SMS population of treated patients and advancing HETLIOZ through the clinical program of delayed sleep-wake phase disorder. We are pleased with the settlement with one of our HETLIOZ Vanda Defendants and look forward to ascertain our HETLIOZ franchise against the remaining defendants in the upcoming trial. On Fanapt, we're making progress in our Phase III study of bipolar disorder which is now over 50% enrolled and expected to complete enrollment by the end of 2022 while the iloperidone, the long-acting injectable program, is advancing. I will now turn to our recently announced completion and results of our tradipitant gastroparesis study and offer some more insights and discuss our planned future direction for this program. We recently reported initial results from the tradipitant clinical study in gastroparesis. In a prior Phase II clinical study, tradipitant was shown to improve a host of symptoms in patients with gastroparesis, including nausea and vomiting. The prior Phase II study had a 4-week duration and enrolled approximately 150 idiopathic and diabetic gastroparesis patients with moderate to severe nausea. These patients were randomized 1:1 on tradipitant or placebo. The recently completed Phase III study enrolled the same patient population and featured two study design differences from the Phase II study. Because we observed a large effect size of response among patients with at least one vomiting episode in the prior Phase II study, patients with no reported vomiting episodes during screening were excluded from this Phase III study. Additionally, to meet FDA guidance, we increased the study duration from 4 to 12 weeks. The Phase III study enrolled approximately 200 patients who were randomized 1:1, have received tradipitant or placebo. The study had a prespecified primary statistical endpoint of daily diary-reported subjective nausea severity changed at week 12 from baseline. Beyond the primary endpoint, other outcomes included the evaluation of other symptoms of gastroparesis, including vomiting, retching, bloating, fullness and abdominal pain. In addition to the daily diary evaluation, patients also reported at regular intervals their overall impression of improvement in a 6-point scale, ranging from very much improved, to no change, to very much worsened. The scale acronym is PGIC or Patient Global Impression of Change. Patients also reported similar changes for each of the core gastroparesis symptoms and a weighted overall improvement score was calculated according to baseline reported ranking of symptoms at baseline, referred to as overall patient benefit. Patients were allowed to use certain rescue medications during the course of the 12-week study, a common study design option and similar to the prior study. Upon unblinding, we observed, first, an imbalance of baseline use of rescue medication, with more rescue medication used in patients who eventually randomized to tradipitant. We also observed the much higher use of rescue medication at baseline in this study as compared to the prior study. An imbalance of baseline severity was also observed, with higher baseline nausea severity in the tradipitant group. A regular pharmacokinetic analysis sampling also revealed that a number of tradipitant patients were not compliant with therapy. When restricting the study analysis to the population of patients who used no rescue medication and were compliant with treatment, we observed a significant and meaningful effect across most of the core symptoms of gastroparesis, confirming the results of the prior 4-week study. We have continued to analyze the data and identified a host of factors pointing to a large placebo response that has confounded the data overall. Placebo response is the therapeutic response to an inert treatment in the course of the clinical study. Placebo response has been observed in almost every clinical study setting and in particular, in those studies where the therapeutic outcome is subjective. As such, large placebo responses are common in clinical studies of psychiatric conditions, including depression, pain studies and studies of therapeutics of gastrointestinal disorders. The observed placebo response has plagued clinical studies for decades and it reportedly appears to be getting larger over time. A growing scientific literature is attempting to address and understand the issue by characterizing the common and potential confounders leading to placebo response. Placebo response has been attributed to a host of factors that include trial design, population selection and study endpoint issues. A well-understood factor contributing to placebo response is the baseline symptom severity inflation, where the reported baseline symptom severity is inflated, leading to subsequent improvements, while pacing symptoms actually just return to the undisturbed baseline. Another factor is related to patient's expectancy or anticipation of a much desired symptom improvement. Study site variability such as the possibility of site encouragement, also may contribute to improved placebo responses during the trial. Trial design issues, including length of screening period and length of study, are also correlated with placebo responses. In a study of response rates in nausea studies, a significant increase in placebo response rates was correlated with length of study, with studies longer than two weeks, so the extraordinary rates of placebo response is as high as 70% to 80%. Given these observations, demonstrating the therapeutic effect above and beyond that of placebo becomes exceedingly difficult. Moreover, "negative" studies of new therapeutics can simply be false negatives, where the tested therapeutic has a therapeutic effect but not significantly larger than the placebo response. This issue constitutes a major question of large public health significance. If placebo response is masking the effectiveness of drugs during clinical studies, important new therapeutics may be precluded from coming to the market, harming patients and leading to tremendous social and economic costs. During this initial evaluation of our Phase III study results and in response to the large placebo effect seen in the study, Vanda has developed an analysis approach that aims to reduce the placebo effect and allow a better estimate of the true treatment effect. A baseline severity inflation is a common factor cited as a driver of placebo response. This study would be particularly susceptible because the severity threshold was prespecified for nausea as well as the minimal threshold for vomiting. While these thresholds are meant to enroll patients with adequate severity, who are less prone to spontaneous improvement during the study, we can also inflate the reported baseline severity. According to the principle of migration to the mean, patients with inflated baseline severity are likely to experience improvement regardless of treatment assignment, leading to a significant placebo effect. We have developed an effort to adjust for possible baseline severity inflation. When adjusting for baseline severity inflation or BSI and introducing BSI as a parameter in the statistical model, we observed a significant interaction between baseline severity inflation in treatment so that the decrease of treatment on clinical outcomes is different between different groups of patients according to their BSI status. Patients were classified in two classes, of high or low BSI. Patients with low BSI showed a robust treatment effect across most of the clinical outcomes, including the baseline reported core symptoms of gastroparesis in the prespecified endpoint of nausea severity at week 12. Significant improvement was also observed across the Global Impression scale, the Patient-reported Global Impression of Change and the overall patient benefit evaluation. While we're continuing the evaluation of the study data, we believe that the evidence produced so far constitutes a substantial evidence of efficacy to support an efficacy claim for tradipitant in the treatment of patients with gastroparesis. The statutory substantial evidence standard is inherently flexible. It generally requires sufficient evidence that a reasonable mind, considering the record as a whole, might accept as adequate to support a conclusion even though other reasonable persons may disagree. This is less demanding than the other evidentiary standards such as preponderance of the evidence. It is important for the FDA, industry and academia to work constructively with drive innovators to ensure that tools like placebo control are employed thoughtfully with consideration and development of new designs and analytic tools to account for the placebo response rate and do not cause the abandonment of effective therapeutics. Treatment for gastroparesis is an unmet medical need which has not seen any significant therapeutic innovation in 40 years. It is important that we acknowledge and overcome methodological challenges and bring new drugs to patients as soon as possible. We believe that the current clinical study designs required by the FDA for regulatory approval in gastroparesis are especially prone to large placebo responses which can effectively impede the discovery of any new therapeutic. This has been true for a number of promising drugs in gastroparesis which have shown initial effects in 4-week studies but failed to separate from placebo in longer 12-week studies, where a very large placebo response rate were seen. Besides the placebo response effect, it is important to recognize that these clinical programs are not experiments that can be easily repeated given extraordinary recruitment challenges. Despite diligent and large advertisement efforts, the tradipitant program has taken over six years to recruit approximately 350 patients in two randomized placebo-controlled studies. We believe it is imperative that we use the existing evidence to inform the regulatory approval of new drugs, including tradipitant. For the community of patients with gastroparesis, we believe that our proposed approach may bring in a host of new innovative treatments forward which have been already tested in adequate and well-controlled studies which, however, failed to meet their regulatory prespecified endpoint for the reasons discussed above but for which the totality of the evidence would satisfy the regulatory standard of substantial evidence of efficacy. Moreover, we believe that the adoption of our analytic approach could usher a new era of therapeutics, especially in disorders that depend on subjective patient reporting and where placebo response rates are exceedingly high, including depression, pain and other gastrointestinal disorders. Beyond novel analytic tools, research in new trial designs should be investigated and FDA guidance for the development of drugs in these indications should be revisited. Vanda intends to collaborate with the FDA, underscoring the need for review of tradipitant in accord with the calibrated standard that Congress purposefully enacted. We hope that the FDA will work cooperatively in assessing the proper application of the substantial evidence standard in this context. I will now turn the call over to Gunther Birznieks to introduce Dr. Abell? Gunther?

Thank you, Mihales. With that, I want to introduce Dr. Thomas Abell, a Professor of Medicine at the University of Louisville and the Arthur M. Schoen, M.D., Chair in Gastroenterology. Dr. Abell has expertise in gastrointestinal motility, gastroparesis and endoscopic device development. He was an investigator in both of Vanda's Phase II and Phase III gastroparesis studies and is a co-author on the Phase II manuscript published in 2020 titled, Efficacy and Safety of Tradipitant in Patients With Diabetic and Idiopathic Gastroparesis in a Randomized, Placebo-Controlled Trial. He is joining us today to discuss why increasing the length of studies in gastroparesis to a 12-week period may affect outcomes in gastroparesis studies and the impact on the placebo effect. Dr. Abell, I will now turn the call over to you. Thank you.

Thank you, Gunther. This is Tom Abell, a GI doctor in Kentucky, at the University of Louisville. As mentioned earlier, I was in the two previous spans of studies as an investigator. I want to mention again, I'm not a consultant and have no stock in Vanda and the opinions here are my own based on 40 years of research and practice. Our clinic here in Kentucky specializes in patients that were like those in the past two Vanda studies and our teams see several hundred new patients like this every year. These patients are often quite ill. They suffer from GI complaints, including chronic nausea and vomiting and often have disorder of gastric emptying. Sometimes, we think we know the reason for the symptoms, including disorders like diabetes. Other times, we don't know and we call those idiopathic gastroparesis. The patient symptoms are recorded by a standardized scale called patient reported outcomes or PROs. And one of those was used for this study. What was discussed today was the latest study from Vanda on tradipitant, a drug that involves blocking the NK1 receptors. This newest study and the previous study compared the active drug to placebo or an active drug. This newest study differed from the previous study and it was for 12 weeks which was much longer than the previous study. As with the first study, the primary endpoint was severity of nausea using a standardized patient outcome and there were additional symptom measures as other endpoints that have been mentioned. One of the issues is on length of the study. In our experience, it does not take 12 weeks to know if a medication will work in this population. Often a matter of weeks, for example, 4 weeks is enough to see an effect. A related issue is the patients in the study were moderately to severely ill and many patients depend on rescue medications to enable them to stay in the study. I wish I could convey how ill these people are. Many patients and -- have poor quality of life and are often desperate. Most individuals have experienced nausea and vomiting briefly with a flu-like illness but imagine living like that every day. There are not a lot of options for these patients. A study of 12-week duration may make it hard for some of these patients to continue, especially if they're receiving a placebo. This concern about length of studies has been previously mentioned by several of my colleagues nationwide and communicated to groups involved in designing studies for this population. While 12 weeks may be satisfactory with patients for some GI disorders, such as irritable bowel syndrome, it may not be the optimal duration for patients with gastroparesis and related disorders. While it was concerning that the study did not meet endpoints as described, we were interested in the role that excluding some areas like rescue medication and compliance may have when reanalyzing the data. There may be other factors which we've heard which will emerge on further analysis of the data from this study. The need for effective and safe medications for this group of gastroparetic patients and for patients with folate conditions remains high. The study presented today shows promise but the results presented raised questions as to what is the most effective study design, including the duration of the study. Those of us who see these patients are hoping that this and other medications can move forward towards FDA approval. Thank you.

Thank you very much, Dr. Abell. I will now turn to discuss our financial results for the fourth quarter and full year 2021. I'll begin by summarizing our full year 2021 financial results before turning to discuss the fourth quarter of 2021. Total revenues for the full year 2021 were $268.7 million, an 8% increase compared to $248.2 million for the same period in 2020. HETLIOZ net product sales of $173.5 million were the primary contributor and driver of our 2021 revenues and saw 8% growth compared to 2020. The year-over-year growth of the HETLIOZ business was driven by net price favorability, partially offset by lower unit sales, primarily as a result of increased payer resistance to HETLIOZ coverage. Fanapt net product sales of $95.1 million for the full year 2021 reflect 9% growth compared to 2020. For the full year 2021, Vanda recorded net income of $33.2 million compared to net income of $23.3 million for 2020. Net income for the full year 2021 included an income tax provision of $9.2 million as compared to an income tax provision of $8.3 million for 2020. Vanda's cash, cash equivalents and marketable securities, referred to as cash, as of December 31, 2021, were $432.8 million, representing an increase of $65.1 million compared to December 31, 2020. Turning now to our quarterly results. Total revenues for the fourth quarter of 2021 were $68 million, a 1% increase compared to $67.7 million for the fourth quarter of 2020. HETLIOZ net product sales were $44.1 million for the fourth quarter of 2021 compared to $44.2 million for the fourth quarter of 2020. Fanapt net product sales in the fourth quarter of 2021 were $24 million, a 2% increase compared to $23.5 million in the fourth quarter of 2020. Fanapt net product sales in the fourth quarter of 2021 decreased by 2% as compared to $24.5 million in the third quarter of 2021. Fanapt prescriptions in the fourth quarter of 2021, as reported by IQVIA Xponent, decreased by approximately 2% compared to the third quarter of 2021. For the fourth quarter of 2021, Vanda recorded net income of $7.1 million compared to net income of $8.2 million for the fourth quarter of 2020. Net income for the fourth quarter of 2021 and included an income tax provision of $1.5 million as compared to an income tax provision of $2.7 million for the same period in 2020. Operating expenses in the fourth quarter of 2021 were $59.4 million compared to $57.2 million in the fourth quarter of 2020. The $2.2 million increase was primarily driven by higher R&D expenses related to the late-stage Fanapt development program, partially offset by lower SG&A expenses, primarily related to awareness and branded DTC campaigns. Operating expenses in the fourth quarter of 2021 were essentially flat as compared to $59.3 million in the third quarter of 2021. Vanda expects to achieve the following financial objectives in 2022: net product sales from both HETLIOZ and Fanapt of between $240 million and $280 million; HETLIOZ net product sales of between $150 million and $180 million; Fanapt net product sales of between $90 million and $100 million; year-end 2022 cash of greater than $440 million. Our 2021 HETLIOZ net product sales performance and our 2022 HETLIOZ net product sales guidance reflect the continued and significant increase of reimbursement challenges from payers to fill HETLIOZ prescriptions for patients with Non-24. However, HETLIOZ demand continues to far exceed the prescriptions filled and Vanda continues to work with patients in an effort to improve their access, the only FDA-approved treatment for their condition. While we expect these reimbursement challenges to impact the near-term performance of HETLIOZ, we remain optimistic and excited about the longer-term forecast. As Tim will detail in a moment, we have made significant progress in the past quarter on beginning to resolve payer challenges, in particular, with state Medicaid programs and we are looking to develop and deploy strategies that we are hopeful will lead to similar improvements with Medicare and commercial plans. We are in the early stages of commercial launch for HETLIOZ in SMS and the payer reception to patients with this indication has been much more positive. The lower end of the HETLIOZ net product sales guidance range assumes a continuing net decrease in patients on therapy, primarily due to payer challenges. The upper end of the guidance range assumes a net increase in the patients on therapy driven by resolution on some of the payer challenges and growth tied to the continued launch of HETLIOZ in SMS. We expect first quarter 2022 HETLIOZ revenue to be impacted by the annual Medicare manufacturer contribution and the annual payer disruption linked to new plan years, plan changes and reauthorizations which we have seen in prior years. While we don't provide quarterly revenue guidance, we want to highlight that, typically, the first quarter of the year is the most challenging quarter and historically represents approximately 22% of annual HETLIOZ net product sales. While we acknowledge the continued payer challenges heading into 2022, we are optimistic about the future for HETLIOZ in both current and future indications. We expect both R&D and SG&A operating expenses to rise in 2022 as compared to 2021 spending levels. The primary contributors to the expected 2022 growth in spend include R&D activities related to our late-stage clinical programs and commercial programs for Fanapt and HETLIOZ. We expect to continue our trend of adding to our cash balance while advancing our portfolio investments in support of patients. With that, I will now turn the call over to Tim for an update on payer challenges.

Great. Thanks, Kevin. As Mihales and Kevin both mentioned, we're continuing to address reimbursement delays in improper denials for HETLIOZ patients and we've made significant progress in the past quarter, particularly with state Medicaid programs. In November of last year, a HETLIOZ patient filed a federal lawsuit challenging Colorado Medicaid's prior authorization criteria which limited HETLIOZ coverage to totally blind patients. In response to this lawsuit, Colorado promptly changed it's criteria to cover HETLIOZ for all Non-24 patients and to no longer restrict HETLIOZ coverage on the basis of vision status. Following this lawsuit, Vanda recognized 18 other states with a similar restriction and requested immediate coverage changes in those states. Since that time, 10 of those 18 states have revised their criteria to eliminate the blindness requirement, including Florida, Pennsylvania, Ohio, North Carolina, Michigan, Maryland, Oklahoma, Iowa, West Virginia and most recently, Wisconsin. Of the remaining 8 states, 4 more states have agreed to discuss their criteria in upcoming Drug Review Committees. These include New York, Minnesota, Nevada and Alaska. And the remaining 4 states are actively reviewing our request and these include Georgia, New Jersey, Mississippi and Vermont. In addition to this Medicaid activity, we're continuing to develop strategies to challenge the similar payer criteria with Medicare and commercial plans in hopes of securing HETLIOZ access for all Non-24 patients, regardless of vision status. With that, I will turn the call back to Mihales.

Thank you very much, Tim. At this point, we will be happy to answer any questions you may have.

Your first question comes from the line of Chris Howerton from Jefferies. Your line is now open.

Hey, thanks so much for taking the questions. I guess the two for me would be with respect to the revenue guidance that you provide for next year, do you anticipate any more price increases in calendar year 2022? I'm sorry if I missed that if you already said something, Kevin. I apologize. And then the second question that I would have is, maybe for Mihales, is that what would be kind of the expectation of palatability of kind of the baseline adjustments that you're kind of proposing here? Has this been discussed in the past? Would there be certain kind of champions internally at the FDA that share this viewpoint that it's very important to control for these things?

Sure. Thanks, Chris. Kevin, do you want to take the first question? I'll take the second.

Yes. Yes. No problem. So yes, Chris, just to clarify, you've said any more price increases in 2022, so we haven't taken any price increases in 2022. And it's something that we obviously continually monitor and evaluate based on facts and circumstances but nothing that we've communicated as planned at this point.

That's clear.

Okay. And Chris, I understand your question to be if we propose to adjust for these baseline severity inflation and then look at the results under that prism, who would be receptive to that. Well, first of all, the -- a large community of experts has discussed in the literature these approaches, especially in the context of failed studies, "failed studies in depression" and have recognized that baseline severity inflation is something very real. It is something that's been repeated in clinical studies and something that must be adjusted and controlled. Specifics on adjustments and cut-offs have been discussed in major depression, where a lot more therapeutics and large studies are being developed. However, this is not a new proposal. The proposal that when you specify on your inclusion criteria a certain degree of severity, that this may lead to baseline inflation, is actually well established across many indications. Our proposal is to correct for that if there is a true interaction between baseline severity and treatment effect. Well, that concept of statistical interaction is not new at all. It's been described in the statistical literature for over 50 years. So the concept there is that the expectation of the plain statistical models is that the effect of the treatment would be linear across a severity continuum. But that is not always true and there will be circumstances where at the bottom or at the very top of the baseline severity, because of inflationary pressures, the effect may be looking different. So what I discussed and of course, we're going to put all this in publications, in peer review channels, is that we observed a statistically significant interaction between baseline severity inflation and treatment effect. This actually gives the license and the obligation to look for subpopulations that would have benefited. And the subpopulation, of course, is the one with the low baseline inflation. When we look in that population of patients, then the study shows very significant evidence across a number of symptoms, as I said, including the primary endpoint and also across the entire set of patient reported outcomes of overall benefit but also individual symptom severity. Another part of your question was would there be champions at the FDA. Well, we hope so, right? Of course, we don't know that. And we hope so for the benefit of patients. And as I was discussing in my script, this is a major issue of public health significance, in that the FDA, over many years, has done a great job weeding out false positives, drugs that may appear to have an effect but actually don't have the effect. And while they have optimized their tools of review to do that, this, many times, is being done at the expense of the false negative. We know of no FDA guidance that actually discusses how to deal with placebo effect while the placebo effect is real and it is confounding many trial results. And many folks like yourself, like you have covered companies that develop psychiatric drugs, like drugs in major depression, you will know that there is a common theme that you need to run two or three studies to get one positive, right? But that should not be happening. This is not a situation where we should be gambling to find an effect of the drug.

Yes. I mean I hear you. I guess my -- whatever, I don't have to respond. Yes. No, that totally makes sense. And I guess, one other question that I would ask with respect to the tradipitant kind of program moving forward, would you wait for kind of feedback from regulators on kind of the status of the current clinical package? Or are you planning on embarking on additional clinical studies prior to that?

Yes. Certainly, it is too early to answer this question. All I can say, we're committed to bring tradipitant to the market. And of course, we cannot do that ourselves. They have to be very involved discussions with regulators but also with experts because the experts are the ones who bring this information to the regulatory agencies. Now in terms of can we do additional clinical experiments where actually we can advance and confirm the thesis that we're developing. Potentially, yes but of course, we need to develop these designs. So the design, as I said, that the FDA has in their guidance for development of drugs of gastroparesis requires a 12-week study. And also, it requires that you prespecify one of the symptoms as a primary endpoint. Well, you heard from Dr. Abell today about the concerns across an entire set of experts in the literature and actually voiced to the FDA that the 12-week study is not very workable for many reasons. But also, there are other elements, as I said, specifying the primary endpoint as one symptom, change of nausea severity from the baseline, may not be reflective of exactly how these drugs work and what the patients need. And I don't think the simple answer is prespecify an endpoint, get the p value less than 0.05 and only then we have a drug. I think this kind of monolithic approach may be actually hurting the development of many drugs, including drugs for gastroparesis and affecting many, many patients. Recently, another company's drug failed to meet the primary endpoint in the 12-week study, where it had succeeded in the 4-week study for gastroparesis. This drug was discontinued and so was another one. So it is very likely, as I said and that's my hope, on behalf of the patients and developments in this field, that all these drugs are being revisited and the approach that Vanda is taking becomes a license to take another look and for the FDA and regulators to actually rethink what I call a monolithic approach and drive development of this very, very much in-need patient population.

Okay, all right. That's very clear and I appreciate it. Okay. Well, thank you, Mihael, and thank you for taking the questions.

Of course. Thanks, Chris.

I am showing no further questions at this time. I would now like to turn the conference back to Vanda management.

Yes. Thank you very much all for joining us and your interest in Vanda and we'll talk to you soon. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect.