Wednesday, May 6, 2009

Some Old Friends are Back: VNDA and TTNP; The FDA Approves Fanapt (Iloperidone)

Almost a month ago I commented on Titan Pharmaceuticals ( as one of two pink sheet stocks that had excellent risk-reward profiles because they sold for mere pennies, yet had the potential to break out based on the outcome of ongoing clinical drug trials and/or FDA approval.

Today it looks like Titan may pay off for patient investors who have stuck with the stock through the roller coaster ride of the last few years (even longer for some).

After the market closed on May 6th, Vanda Pharmaceuticals Inc (VNDA) issued a press release stating that the US Food and Drug Administration has granted approval for Vanda's schizophrenia drug, Fanapt(Iloperidone). Fanapt had been denied by the FDA last year but reversed course with today's decision. VNDA, after closing the trading day at $1.08, spiked to ten dollars in after-hours trading on the news.

Due to an existing licensing agreement, Titan Pharmaceuticals will collect up to 10% in royalties on net sales of the drug and investors can also expect a significant increase in price from Titan closed the day at five cents, and because the company issued their own press release just hours following Vanda's, an initial spike to one dollar (maybe more) is not out of the question.

Fanapt has the potential to have an immediate impact on the schizophrenia market as patients treated for this condition switch medications often. Additionally, Vanda has developed their own genetic marker and they will be able to quickly identify patients who are most likely to benefit from the drug.

According to today's press release, Vanda plans on making Fanapt available in pharmacies later this year, which means a revenue flow for both companies is not far away at all.

Many investors of Vanda and Titan lost faith and ran from the stocks, including myself for a time, but both stocks prove that sometimes patience (and a tolerance for risk) pays off in the end.

Congratulations to longs of VNDA and The trading should be exciting (and upwards) for the forseeable future.

VFC is long VNDA and TTNP.PK

1 comment:

  1. VFC,

    Thanks for the great coverage. I just discovered your blog, and follow many of the same stocks. I'm curious where you see INSM going if the MMD Phase 2 results are positive. I understand those will be released before the end of June.

    Looking forward to your comments...


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