Updated from 2:19 p.m. EDT

Vanda Pharmaceuticals ( VNDA - Get Report) is up a spectacular 800% since the surprise approval last week of the company's schizophrenia drug Fanapt. Is there an investment case to be made to buy the stock today?

Fanapt isn't a breakthrough or best-in-class schizophrenia drug but then, it may not matter. Most docs will tell you that patients cycle through all the so-called antipsychotics at one time or another. When a patient stops responding to one, they move to the next, etc. The lowest-selling antipsychotic drug today is Pfizer's ( PFE - Get Report) Geodon and it does about $1 billion in sales annually.

The FDA refused to approve Fanapt last summer because the drug's efficacy didn't match that of Geodon or other leading schizophrenia drugs. The agency apparently changed its mind, however, after Vanda convinced regulators to compare Fanapt to placebo and not its competitors.

So, can Fanapt manage to sell $500 million? How about $250 million? Vanda's current valuation makes even the latter sales prediction compelling.

Vanda is up 20.7% to $10.20 Monday, so apparently, some investors believe Fanapt is a big drug.

Once the excitement over last week's approval fades away, Vanda's valuation will depend a great deal on how the company's management team decides to commercialize Fanapt. To be successful, Vanda probably needs to sell the company and/or create a partnership with a larger company that can market Fanapt correctly and compete with Johnson & Johnson ( JNJ - Get Report), AstraZeneca ( AZN - Get Report) and Pfizer -- all of which have strong antipsychotics in the market.

If Vanda tries to go it alone, the company will have a hard time.

At this point, the route Vanda takes to sell Fanapt remains a mystery. If the company starts to raise money and set plans to build its own sales force, the stock will have a hard time. That's doubly true if Vanda continues to pour money into a lackluster insomnia drug, the only other significant drug in the company's pipeline.

Vanda management should be on the phone right now with every significant mid-sized drug and specialty pharmaceutical company seeking takeout or partnership offers. If a deal emerges that helps Fanapt compete in a tough schizophrenia treatment market, Vanda's stock price could still do very well even after surging 800%.

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.