Vanda Pharmaceuticals Inc. (NASDAQ: VNDA)

Sector: Healthcare Industry: Biotechnology CIK: 0001347178
Market Cap 432.18 Mn
P/B 0.93
P/E -5.13
P/S 2.04
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...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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.

Product and Service Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,446.17 Bn -1,569.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 439.23 Bn 6,407.40 88.33 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 120.62 Bn 32.82 10.29 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 84.40 Bn 18.44 5.92 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 56.13 Bn 1,288.39 17.49 3.21 Bn
6 ARGX Argenx Se 47.89 Bn 31.79 24,973.95 -
7 BNTC Benitec Biopharma Inc. 42.45 Bn -1,015.00 0.00 0.00 Bn
8 INSM INSMED Inc 32.67 Bn -27.60 73.08 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.60 12.96
EV to Cash from Ops. EV/CFO -4.38 23.73
EV to Debt EV to Debt 57.52 772.65
EV to EBIT EV/EBIT -3.34 -11.30
EV to EBITDA EV/EBITDA -3.17 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -4.32 22.12
EV to Market Cap EV to Market Cap 0.83 68.89
EV to Revenue EV/Rev 1.69 199.70
Price to Book Value [P/B] P/B 0.93 22.62
Price to Earnings [P/E] P/E -5.13 -12.30
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.02
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.17
Dividend per Basic Share Div per Share (Qtr) 0.00 0.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.15
Interest Coverage Interest Coverage 0.00 857.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -109.83 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -30.32 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -413.78 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -274.92 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) -492.44 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) -492.44 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) -393.10 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) -355.76 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.09 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.35 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.59 3.79
Current Ratio Curr Ratio (Qtr) 3.12 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.42
Interest Cover Ratio Interest Cover Ratio 0.00 857.11
Times Interest Earned Times Interest Earned 0.00 857.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -46.70 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) -50.52 -18,862.18
EBT Margin % EBT Margin % (Qtr) -50.52 -19,783.19
Gross Margin % Gross Margin % (Qtr) 94.40 -8.62
Net Profit Margin % Net Margin % (Qtr) -39.70 -19,732.60