Vanda's shares halve on US iloperidone setback

Shares in Vanda Pharmaceuticals lost half their value after US regulators rejected its schizophrenia drug iloperidone. The Food and Drug Administration issued a "not approvable" letter for the atypical antipsychotic, expressing concern about its efficacy relative to the active comparator in a trial, Johnson & Johnson's Risperdal (risperidone). On the day of the news, July 28, shares in the US drugmaker lost $1.71 to $1.65 before the opening bell.

"We are disappointed by this response, but will meet with the FDA to discuss this decision further," said Vanda chief executive Michael Polymeropoulos.

The US firm said that the agency indicated that it would require an additional trial comparing iloperidone to placebo and including an active comparator such as Eli Lilly's Zypreza (olanzapine) or Risperdal to demonstrate the compound's efficacy further. The FDA also stated that it would require Vanda to obtain additional safety data for patients at a dose range of 20mg/day to 24mg/day. The company acquired global rights to iloperidone from Swiss drug major Novartis in 2004 (Marketletters passim).