Vanda Pharma Soars on FDA Approval for First New Motion Sickness Drug in 40 Years
NEREUS™ (tradipitant) approval marks a major milestone, targeting a market estimated at $670 million, though shares dip in a 'sell the news' reaction.
Vanda Pharmaceuticals Inc. (NASDAQ: VNDA) has secured a landmark FDA approval for NEREUS™ (tradipitant), the first new prescription drug to prevent vomiting from motion sickness in over four decades, a move set to disrupt a long-stagnant market. The news, announced Tuesday, represents a pivotal scientific and commercial achievement for the Washington, D.C.-based biopharmaceutical company.
Despite the milestone, Vanda's stock experienced a modest 'sell the news' reaction, closing down 2.36% at $7.03 in Tuesday trading. The dip follows a significant run-up of approximately 62% since mid-November, as investors anticipated a favorable regulatory decision. The stock touched its 52-week high of $7.47 in the run-up to the announcement.
NEREUS™, a neurokinin-1 (NK-1) receptor antagonist, offers a modern pharmacological approach to a condition that affects an estimated 65 to 78 million adults in the U.S. The current market, valued at around $670 million and projected to reach $781 million by 2030, has been dominated for decades by older, over-the-counter antihistamines known for causing drowsiness.
"For the first time in over 40 years, patients have access to a novel therapy grounded in modern neuropharmacology, offering effective prevention without the limitations of existing options," said Mihael H. Polymeropoulos, M.D., President and CEO of Vanda Pharmaceuticals, in a press release.
The approval is supported by robust data from three pivotal trials. In two real-world studies conducted on boats, NEREUS™ demonstrated a 50% to 70% reduction in the risk of vomiting compared to a placebo. In one study, vomiting incidence was between 10.4% and 18.3% for patients on NEREUS™, starkly contrasting with 37.7% for the placebo group.
Analysts see a significant commercial opportunity for the drug. H.C. Wainwright analyst Raghuram Selvaraju projects that NEREUS™ sales for motion sickness alone could surpass $100 million annually at its peak in the U.S. market, according to reports. The consensus analyst target price for VNDA shares sits at $11.75, implying substantial upside from its current level.
This approval does more than just open a new revenue stream; it validates Vanda's scientific platform centered on the NK-1 receptor. The company is also developing tradipitant for gastroparesis and for preventing nausea and vomiting induced by popular GLP-1 receptor agonists used for diabetes and weight loss, potentially expanding its market footprint significantly in the future.
Vanda, with a market capitalization of approximately $425 million, plans to launch NEREUS™ in the coming months. While the drug was generally well-tolerated in studies, its most common adverse reactions included somnolence and fatigue. The label notes that it may impair mental and physical abilities, advising caution when driving or operating heavy machinery.
The successful development and approval of NEREUS™ marks a critical inflection point for Vanda Pharmaceuticals, transitioning it into a commercial-stage company with a highly differentiated product entering a market ripe for innovation.