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.