Vanda Shares Climb as FDA Begins Label Talks for Key Drug
Positive regulatory step for motion sickness treatment tradipitant comes after the drugmaker successfully fended off a hostile takeover bid earlier this year.
Shares of Vanda Pharmaceuticals Inc. (NASDAQ: VNDA) gained on Friday after the company announced it has entered into formal labeling discussions with the U.S. Food and Drug Administration for its motion sickness drug, tradipitant. The stock rose as much as 1.5% in morning trading before settling to trade up 0.84% at $5.34.
The initiation of label negotiations is a significant milestone in the drug approval process, often indicating that the regulator is moving toward a potential approval. Vanda confirmed the development in a recent regulatory update, noting that the FDA has provided comments on the proposed labeling for the drug, which is aimed at preventing vomiting induced by motion.
This positive signal from the FDA provides a potential vindication for Vanda's leadership following a contentious year. The company spent several months fending off an unsolicited takeover bid from Future Pak, a privately held contract manufacturer. Vanda's board repeatedly rejected offers, arguing they significantly undervalued the company and its pipeline. Future Pak ultimately withdrew its final offer in June, allowing Vanda to continue its strategy as a standalone entity. Progress with a key asset like tradipitant could bolster the board's assertion that its long-term value was greater than what was offered.
According to the company's announcement, the New Drug Application (NDA) for tradipitant is progressing, with the FDA's Prescription Drug User Fee Act (PDUFA) target action date set for December 30, 2025. "We are pleased with the progress in our discussions with the FDA and are committed to working closely with the agency to bring this novel therapy to patients," the company stated in a press release.
If approved, tradipitant would enter a market with significant unmet needs, offering a new mechanism of action for preventing motion-induced nausea and vomiting. Its approval would provide Vanda with a major new revenue stream, diversifying its portfolio beyond its current commercial products, which include treatments for sleep disorders and schizophrenia.
Wall Street analysts have set a consensus 12-month price target of $11.75 for Vanda's stock, suggesting a potential upside of over 120% from its current levels. The company currently has a market capitalization of approximately $313 million.
Separately, Vanda noted that the FDA requested a slight extension, to December 5, 2025, for its re-review of a partial clinical hold on long-term studies of the drug. The company clarified this delay was due to internal FDA personnel transitions and does not impact the primary NDA review timeline for tradipitant's motion sickness indication.
Investors will now be closely watching for the PDUFA date at the end of next year, which stands as the next major catalyst for the company. The ongoing label discussions, however, provide a strong signal that Vanda's strategy to develop its pipeline may be nearing a significant payoff.