Vanda Pharmaceuticals Inc. (VNDA) Stock Analysis and Metrics

Sector: Healthcare Industry: Biotechnology CIK: 0001347178

P/B 0.79

P/E -4.36

P/S 1.73

Market Cap 366.83 Mn

ROIC (Qtr) -19.96

Div Yield % 0.00

Rev 1y % (Qtr) 18.06

Total Debt (Qtr) 6.23 Mn

Debt/Equity (Qtr) 0.01

About

Vanda Pharmaceuticals Inc., a prominent player in the global biopharmaceutical industry, is dedicated to developing and commercializing groundbreaking therapies that address significant unmet medical needs and enhance the quality of life for patients. The company's portfolio includes three commercial products, HETLIOZ, Fanapt, and PONVORY, as well as a pipeline of products in various stages of development. This essay will provide an overview of Vanda Pharmaceuticals' main business activities, its revenue generation, competitive position, and a selection...

Vanda Pharmaceuticals Inc., a prominent player in the global biopharmaceutical industry, is dedicated to developing and commercializing groundbreaking therapies that address significant unmet medical needs and enhance the quality of life for patients. The company's portfolio includes three commercial products, HETLIOZ, Fanapt, and PONVORY, as well as a pipeline of products in various stages of development. This essay will provide an overview of Vanda Pharmaceuticals' main business activities, its revenue generation, competitive position, and a selection of its brand names and trade names of products and services.

Vanda Pharmaceuticals operates in the biopharmaceutical industry, with a primary focus on developing and commercializing innovative therapies. The company's operations span across various countries and regions, with its headquarters located in Washington, D.C., United States. The company's portfolio consists of three commercial products: HETLIOZ, Fanapt, and PONVORY. HETLIOZ is a melatonin agonist approved for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and nighttime sleep disturbances in Smith-Magenis Syndrome (SMS). Fanapt is an atypical antipsychotic used for treating schizophrenia and bipolar I disorder. PONVORY is a sphingosine 1-phosphate receptor modulator for treating relapsing forms of multiple sclerosis (RMS).

The company generates revenue through the development, production, and marketing of its pharmaceutical products, targeting a wide range of customers such as pharmaceutical companies, hospitals, clinics, patients, and healthcare providers. Vanda Pharmaceuticals' revenue generation primarily comes from the sales of its three commercial products: HETLIOZ, Fanapt, and PONVORY. Additionally, the company generates revenue from its development pipeline, which includes products such as HETLIOZ for jet lag disorder, insomnia, and pediatric Non-24; Fanapt for bipolar I disorder; and PONVORY for inflammatory/autoimmune disorders.

Within the biopharmaceutical industry, Vanda Pharmaceuticals maintains a strong competitive position, characterized by its portfolio of products that address significant unmet medical needs. The company's products have demonstrated efficacy in clinical trials, and the company boasts a robust pipeline of products in development. Notable competitors within the industry include other pharmaceutical companies that develop and market products for the same indications, such as Merck, Pfizer, and Johnson & Johnson.

Vanda Pharmaceuticals has a wide range of patents and patent applications related to its products, including HETLIOZ and Fanapt, aimed at protecting its intellectual property and preserving market exclusivity. The company has filed Hatch-Waxman lawsuits against several generic manufacturers to further secure its patents. In addition to its patented products, Vanda Pharmaceuticals relies on trade secret protection and confidentiality agreements to protect its proprietary know-how and technology.

Stock Price Chart

Analysis

Pros

Strong tangible asset base of 492.30M provides 79.06x coverage of total debt 6.23M, indicating robust asset backing and low credit risk.
Short-term investments of 223.73M provide solid 3.18x coverage of other current liabilities 70.25M, indicating strong liquidity.
Tangible assets of 492.30M provide robust 7.01x coverage of other current liabilities 70.25M, indicating strong asset backing.
Cash reserves of 70.02M provide solid 6.34x coverage of other non-current liabilities 11.04M, indicating strong liquidity.
Robust R&D investment of 100.11M at 0.47x of SG&A 214.25M demonstrates strong commitment to innovation and future growth.

Cons

Operating cash flow of (81.84M) barely covers its investment activities of 53.99M, with a coverage ratio of -1.52, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of 53.99M provide weak support for R&D spending of 100.11M, which is 0.54x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Short-term investments of 223.73M significantly exceed cash reserves of 70.02M, which is 3.20x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
The company's operating cash flow of (81.84M) shows concerning coverage of stock compensation expenses of 10.05M, with a -8.14 ratio indicating potential earnings quality issues.
High receivables of 50.54M relative to inventory of 11.87M (4.26 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer Comparison

Companies in the Biotechnology

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SMMT	Summit Therapeutics Inc.	1,349.40 Bn	-1,464.17	0.00	0.01 Bn
2	ONC	BeOne Medicines Ltd.	437.43 Bn	6,381.20	87.97	1.90 Bn
3	VRTX	Vertex Pharmaceuticals Inc / Ma	116.09 Bn	31.59	9.90	1.83 Bn
4	REGN	Regeneron Pharmaceuticals, Inc.	78.10 Bn	17.06	5.48	2.71 Bn
5	ALNY	Alnylam Pharmaceuticals, Inc.	55.87 Bn	1,282.42	17.40	3.21 Bn
6	ARGX	Argenx Se	52.85 Bn	35.08	27,559.65	-
7	BNTC	Benitec Biopharma Inc.	41.75 Bn	-998.33	0.00	0.00 Bn
8	INSM	INSMED Inc	37.80 Bn	-31.93	84.56	0.74 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	0.49	12.31
EV to Cash from Ops.	-3.58	23.25
EV to Debt	47.02	738.44
EV to EBIT	-2.73	-9.16
EV to EBITDA	-2.59	6.95
EV to Free Cash Flow [EV/FCF]	-3.53	21.90
EV to Market Cap	0.80	65.67
EV to Revenue	1.38	227.32
Price to Book Value [P/B]	0.79	22.34
Price to Earnings [P/E]	-4.36	-11.77

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-11.94
Dividend Payout Ratio %	0.00	0.16
Dividend per Basic Share	0.00	0.01
FCF Dividend Payout Ratio %	0.00	-0.14
Interest Coverage	0.00	841.00

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-109.83	-27.13
Cash and Equivalents Growth (1y) %	-30.32	734.65
Dividend Growth (1y) %	0.00	0.01
EBIAT Growth (1y) %	-413.78	-46.93
EBITDA Growth (1y) %	-274.92	-1.68
EBIT Growth (1y) %	-492.44	-56.45
EBT Growth (1y) %	-492.44	-12.70
EPS Growth (1y) %	-393.10	-28.31
FCF Growth (1y) %	-355.76	-31.90
Gross Profit Growth (1y) %	12.09	226.84

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.35	0.14
Cash Payout Ratio	0.00	0.00
Cash Ratio	0.59	3.85
Current Ratio	3.12	7.27
Debt to Equity Ratio	0.01	0.40
Interest Cover Ratio	0.00	841.00
Times Interest Earned	0.00	841.00

Profitability

Metric	Value	Industry
EBITDA Margin %	-46.70	-18,234.31
EBIT Margin %	-50.52	-18,580.80
EBT Margin %	-50.52	-19,488.74
Gross Margin %	94.40	-7.59
Net Profit Margin %	-39.70	-19,439.22

Vanda Pharmaceuticals Inc. (NASDAQ: VNDA)