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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

More Trouble for Vanda's Sleep Disorder Drug

As this story was being published, Vanda announced a follow-on stock offering of 4 million shares.

WASHINGTON, DC (TheStreet) -- In June, I uncovered a long list of deficiencies and shortcuts taken by Vanda Pharmaceuticals (VNDA) in the development of tasimelteon, a melatonin receptor agonist, for the treatment of a rare sleep-pattern disorder that affects blind people.

My conclusion: The odds of FDA approving Vanda's tasimelteon for non-24 sleep-wake disorder were exceedingly small.

I based my last analysis primarily on the larger of two phase III studies Vanda conducted on tasimelteon -- the so-called "SET" study. Vanda's second phase III study -- known as "RESET -- is equally troublesome.

Let's take a closer look.

RESET was a randomized withdrawal study, meaning all patients diagnosed with non-24 entered first into a run-in stage in which they were treated with daily tasimelteon for three months. After three months of receiving tasimelteon, patients were randomized to one of two groups: 1) continued tasimelteon treatment for two months; or 2) a switch to placebo for two months.

At the end of the two-month withdrawal phase, patients were measured for response, defined as maintenance of entrainment, or adherence, to a normal 24-hour circadian rhythm.

Vanda declared victory in the RESET study, claiming 90 percent of tasimelteon-treated patients maintained entrainment of their circadian rhythm after two months compared to 20 percent of placebo-treated patients. The difference in entrainment maintenance was statistically significant.

Here's a chart describing the RESET primary endpoint, taken from a poster presented at the Endocrine Society (ENDO) meeting in June.

Was the tasimelteon benefit clinically meaningful or relevant at all for getting the drug approved? I don't believe so.

Vanda chose to measure maintenance of entrainment at a fixed and arbitrary point in time, defined in RESET as two months. A non-24 patient was deemed a responder in RESET if he/she maintained entrainment at two months.

Of the 10 patients treated with tasimelteon, 9 maintained entrainment after two months. Ten patients were treated with placebo but only two maintained entrainment for two months. [I'll address the issue of only having 20 patients to analyze in what is supposed to a pivotal, phase III study later.]

Why is this claimed success irrelevant? Because it doesn't matter if non-24 patients maintain entrainment for two months if they continue to suffer from sleep problems.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs