FDA shock turnaround sees Vanda's strategy pay off

The US Food and Drug Administration has granted Vanda Pharmaceuticals marketing approval of its first product, the mixed dopamine D2/serotonin  5HT2A receptor antagonist Fanapt (iloperidone) for the acute treatment  of adult patients with schizophrenia, despite having previously rejected  the drug (Marketletter August 4, 2008).

The out-of-character turnaround by the FDA sent shares in Vanda  sky-rocketing by 800% to $9.89 each in a single after-hours trading  session on May 6. The company's stock price has dropped 81% over the  last 12 months.

Vanda's New Drug Application was originally turned down by the agency in  July 2008 with a "not approvable" letter. However, the firm chose to  take the risky move of resubmitting the application in November that  year, without undertaking a new trial, but rather adding further data to  the submission.