This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Surprising Approval for Vanda's Fanapt

Vanda has been resisting Tang's efforts, but after Wednesday, the proxy fight seems moot. Vanda has an approved drug for schizophrenia that will compete in a $23 billion market for antipsychotic drugs, according to IMS Health.

And Tang, instead of fighting for Vanda table scraps, gets to enjoy the whole meal with an extra dessert now that its stake in the company has risen in value exponentially.

Also benefiting from Wednesday's Fanapt approval was RA Capital. The Boston-based hedge fund owns 1.54 million shares of Vanda, or 5.8% of the company, according to Securities and Exchange Commission filings. RA Capital was hit hard last week by the steep drop in the value of genetic test maker Sequenom (SQNM - Get Report).

It will be interesting to see if Vanda can sustain the stunning gains made in its stock price Wednesday night given what might be a tough competitive sales environment for Fanapt.

The FDA's approval of the drug was based on two studies in which Fanapt performed better than placebo, but the drug doesn't stack up as well against existing schizophrenia treatments, including Johnson & Johnson's (JNJ - Get Report) Risperdal and Pfizer's (PFE - Get Report) Geodon.

Risperdal is now sold in a generic form, which means Fanapt faces a low-priced competitor at a time when the recession is forcing patients to cut back on drug spending. And the drug was never compared against AstraZeneca's (AZN - Get Report) Seroquel, the leading antipsychotic drug used to treat schizophrenia.

Vanda shares rose 625.9% to $7.84 in Thursday trading.
At the time of publication, Feuerstein's Biotech Select model portfolio had no positions in any stocks mentioned.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AZN $33.92 0.53%
JNJ $100.47 0.63%
PFE $36.40 1.90%
SQNM $2.80 0.00%
VNDA $12.17 0.83%

Markets

Chart of I:DJI
DOW 17,759.34 +13.36 0.08%
S&P 500 2,112.75 +4.12 0.20%
NASDAQ 5,148.3890 +19.6040 0.38%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs