Vanda Pharmaceuticals Inc. Q3 FY2024 Earnings Call

Hello, and thank you for being here. I would like to welcome you to the Q3 2024 Vanda Pharmaceuticals Inc. Earnings Conference Call. All lines are muted to avoid background noise. After the speaker's remarks, we will have a question-and-answer session. I will now turn the conference over to Kevin Moran, Vanda’s Chief Financial Officer. Please proceed.

Thank you, Jericho. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals third quarter 2024 performance. Our third quarter 2024 results were released this afternoon and are available on the SEC’s EDGAR system and on our website, www.vandapharma.com. In addition, we are providing live and archived versions of this conference call on our website. Joining me on today’s call is Dr. Mihael Polymeropoulos, our President, Chief Executive Officer and Chairman of the Board; and Tim Williams, our General Counsel. Following my introductory remarks, Mihael will update you on our ongoing activities. I will then comment on our financial results before we open the lines for your questions. Before we proceed, I would like to remind everyone that various statements that we make on this call will be forward-looking statements within the meaning of federal securities laws. Our forward-looking statements are based upon current expectations and assumptions that involve risks, changes in circumstances and uncertainties. These risks are described in the cautionary note regarding forward-looking statements, risk factors and management’s discussion and analysis of financial condition and results of operations sections of our most recent annual report on Form 10-K as updated by our subsequent quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC, which are available on the SEC’s EDGAR system and on our website. We encourage all investors to read these reports and our other filings. The information we provide on this call is provided only as of today and we undertake no obligation to update or revise publicly any forward-looking statements we may make on this call on account of new information, future events or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Dr. Mihael Polymeropoulos.

Thank you very much, Kevin, and good afternoon everyone. Thank you for joining us to discuss Vanda’s third quarter 2024 results. During the last quarter, we have been focused on building and strengthening our commercial organization to support the new launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis. In Q3, we completed the first phase of our sales force build-out to support the Fanapt launch with approximately 150 representatives marketing the product to psychiatry prescribers around the country. This launch has been supported by the Fanapt speakers program, creating awareness of the product among prescribers. The early indicators of commercial progress are encouraging and include more than a 90% increase compared to Q3 of 2023 in new patient starts as captured by the IQVIA NBRx metric. This large increase is followed by observed increases in the NRx and TRx IQVIA metrics of new and total weekly prescriptions. We are observing a steady and continuous growth in the adoption of the product with only a few months of operation of our enhanced national sales force. We have now initiated the second phase of sales force expansion that will bring the sales force to approximately 200 representatives by year-end. We’re excited about the commercial prospects of Fanapt and we believe that significant growth can be accomplished in the near future. Fanapt is the flagship product of our psychiatry portfolio, which now also includes milsaperidone, an active metabolite of Fanapt, and Fanapt LAI, long-acting injectable. A new drug application is planned for early 2025 for the indications of schizophrenia and bipolar I disorder for milsaperidone after a successful pre-NDA meeting with the FDA earlier this year. Additionally, we plan to initiate the Phase 3 program for milsaperidone in major depressive disorder this quarter. Success in this program is expected to significantly expand the potential of the franchise with the inclusion of the much more prevalent indication of depression. In addition, the pivotal long-term relapse prevention study with the once-monthly LAI, Fanapt, is planned to start this quarter. We recently met with the FDA to discuss the potential NDA packets for Fanapt LAI and we’re in agreement that a successful completion of this upcoming study may be sufficient to support a new drug application for this product. I will now switch to PONVORY and our commercial efforts in multiple sclerosis as well as our development plans for indication expansion. PONVORY, as a sphingosine-1-phosphate analog, approved for the treatment of multiple sclerosis, was acquired last year from Janssen. In this last quarter we built and launched our commercial sales team along with the PONVORY speakers program. The transition from Janssen was substantially completed in the third quarter after the transition of the marketing authorization was completed late in the second quarter. Our sales force has received an enthusiastic reception from many multiple sclerosis experts, some of whom were already familiar, while others are new to the product. PONVORY is one of four products in this class and is differentiated by its receptor specificity and the quick onset and offset of action. In two recent publications, clinician and patient preferences for sphingosine-1-phosphate analogs were examined in a discrete choice experiment design. PONVORY rose to the first choice position both in the 200 U.S. neurology study and the 400 multiple sclerosis patients study. The prescribers preferred ponesimod over siponimod, fingolimod, and ozanimod primarily because of the fewer drug-drug interactions, while the multiple sclerosis patients chose ponesimod because of the shorter immune system recovery time in addition to the fewer drug-drug interactions. We look forward to increasing awareness of PONVORY among prescribers and patients over the coming quarters. Beyond multiple sclerosis, PONVORY has potential utility in the treatment of other autoimmune disorders. In plaque psoriasis, PONVORY has shown significant efficacy in achieving PASI 75, a measurement of improvement of psoriasis score by week 16 in a large 326 patient study that included two doses of PONVORY and placebo. Both doses of PONVORY achieved the primary endpoint and showed highly significant results with a p-value of less than 0.0001 for both doses tested. We expect to file an IND application for psoriasis with the FDA shortly. Successful completion of the program could result in a once-daily oral treatment for patients with psoriasis that may offer a convenient and effective option beyond the available injectable drugs. Separately, we have recently submitted an IND application to initiate a PONVORY program in ulcerative colitis. Again here we believe that the successful completion of this program may bring a useful and differentiated option to patients with ulcerative colitis. On tradipitant, our neurokinin-1 receptor antagonist, we recently reported that the FDA denied approval for the treatment of symptoms of gastroparesis. We’re disappointed with this decision as we believe that our application, the most expensive ever to be submitted to the FDA for this indication, has already demonstrated substantial evidence of efficacy to warrant approval. The FDA’s reasoning was mostly conclusive and not supported by the facts presented. This negative decision is especially disappointing for many patients with gastroparesis and especially for those that experience significant improvements in their condition where other treatments have failed for years. Dozens of patients are currently participating in the expanded access program and many more have either applied or expressed interest in accessing tradipitant. We’re committed to continuing to pursue approval for this condition and support patients requesting expanded access. We believe that the best path forward would be for the FDA to convene a scientific advisory committee to independently evaluate the evidence and offer their advice. In addition, we plan to initiate a clinical trial to study the effect of tradipitant in preventing vomiting in people treated with GLP-1 analogs like semaglutide. Millions of patients are treated with GLP-1 analogs for diabetes and weight reduction and a large portion of them experience nausea and vomiting, especially during the titration phase. We believe that tradipitant, because of its mechanism of action, has the potential to improve tolerability of these agents and permit more rapid titration, thereby improving the efficacy and safety profile of these useful agents. We have already shown in three adequate and well-controlled studies that tradipitant can be used to prevent vomiting induced by motion sickness. Tradipitant has been shown to be effective at both doses tested during actual sea travel off the coastal waters of the United States. We plan to submit a new drug application for this indication by the end of this year. While we highlight these programs, we continue our work to expand the indications for our approved products. Recently we met with the FDA and agreed on a clinical program that could support the approval of Hetlioz in pediatric insomnia. Pediatric insomnia is a large unmet medical need with very few options and a significant burden to patients and their families. We believe that Hetlioz could have a significant public health impact in treating this very common pediatric condition; a clinical study in pediatric insomnia is underway. In our press release today we briefly mentioned two other programs, the first with the CFTR Activator VSJ-110 which has shown encouraging results in dry eye disorder in an ongoing study. The second is a groundbreaking program in Charcot-Marie-Tooth disease using antisense oligonucleotide VCA-894A, where this cost of developed drug is expected to be evaluated in a patient with this ultra-rare mutation later this year. In summary, we’re excited about our Fanapt launch and the revenue growth opportunities through all three of our commercial programs and look forward to providing updates on this as well as our promising pipeline in the future. With that, I’ll turn now to Kevin to discuss our financial results. Kevin?

Thank you, Mihael. I’ll begin by summarizing our financial results for the first nine months of 2024 before turning to discuss the third quarter of 2024. Total revenues for the first nine months of 2024 were $145.6 million, a 1% decrease compared to $147.4 million for the same period in 2023. This slight decrease was primarily due to decreased Hetlioz revenue due to the launch of generic versions of Hetlioz, largely offset by the introduction of PONVORY revenue following our acquisition of the product in December 2023. Let me further break this down by product. Fanapt net product sales were $67.6 million for the first nine months of 2024, a 1% decrease compared to $68.3 million from the same period in 2023. The decrease in net product sales relative to the first nine months of 2023 was attributable to a decrease in volume partially offset by an increase in price net of deductions. Hetlioz net product sales were $56.6 million for the first nine months of 2024, a 28% decrease compared to $79.1 million in the same period in 2023. The decrease in net product sales relative to the first nine months of 2023 was attributable to a decrease in volume partially offset by an increase in price net of deductions. The decrease relative to the first nine months of 2023 was a result of continued generic competition in the United States. Hetlioz net product sales as reported for the first quarter of 2023 reflected higher unit sales as compared to recent prior periods. The higher unit sales during the first quarter of 2023 resulted in a significant increase of inventory stocking at specialty pharmacy customers at March 31, 2023. During the remainder of 2023, although there was continued destocking at specialty pharmacy customers, inventory levels at December 31, 2023 remained elevated relative to inventory levels prior to the entrance of generic competition and continued to remain elevated at March 31, 2024, June 30, 2024, and September 30, 2024. Going forward, Hetlioz net product sales may reflect lower unit sales as a result of the reduction of the elevated inventory levels as specialty pharmacy customers or may be variable depending on when specialty pharmacy customers need to purchase again. Further, Hetlioz net product sales will likely decline in future periods, potentially significantly, related to generic competition in the United States. Additionally, the company constrained Hetlioz net product sales for the year ended December 31, 2023, and the first nine months of 2024 to an amount not probable of significant revenue reversal. As a result, Hetlioz net product sales could experience variability in future periods as the remaining uncertainties associated with variable consideration are resolved. PONVORY net product sales were $21.3 million for the first nine months of 2024; as a reminder, we completed the acquisition of the U.S. and Canadian rights to PONVORY in December of 2023. As such, this represents the third full quarter of PONVORY revenue recognition at Vanda and a positive step in diversifying our product mix with innovative and value-generating products. One additional item to note, as we head into the fourth quarter of 2024 and soon thereafter into 2025, the Medicare benefit redesign portion of the Inflation Reduction Act goes into effect as of January 1, 2025. The implementation of the benefit redesign is expected to negatively impact gross-to-net for the Medicare payer segment of our products. This change is not specific to Vanda but is an industry-wide change that will have varying impacts on pharmaceutical manufacturers. For the first nine months of 2024, Vanda recorded a net loss of $14 million compared to net income of $4.9 million for the same period in 2023. The net loss for the first nine months of 2024 included an income tax benefit of $2.4 million as compared to an income tax provision of $3.1 million for the same period in 2023. Operating expenses for the first nine months of 2024 were $176 million compared to $154.2 million for the same period in 2023. The $21.7 million increase was primarily driven by higher SG&A expenses related to spending on Vanda's commercial products as a result of the commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, as well as legal and other corporate activities, and higher intangible asset amortization expense due to the amortization recorded on the PONVORY intangible asset. During the first nine months of 2024, we commenced a host of activities as part of our commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs. SG&A expenses may increase in future periods as a result of the ongoing commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, which were initiated in the third quarter of 2024. Vanda's cash, cash equivalents, and marketable securities, referred to as cash, as of September 30, 2024, was $376.3 million, representing a decrease of $12 million compared to December 31, 2023, and a decrease of $11.4 million compared to June 30, 2024. The cash balance of $376.3 million as of September 30, 2024, does not include a payment from Janssen for $8.1 million primarily related to second quarter 2024 PONVORY revenue receivables, which was received in the fourth quarter of 2024. If this payment had been received prior to September 30, 2024, the cash balance would have been $384.4 million and the decrease to cash since December 31, 2023, would have been $3.9 million, and the decrease to cash since June 30, 2024, would have been $3.3 million. Turning now to our quarterly results. Total revenues for the third quarter of 2024 were $47.7 million, a 23% increase compared to $38.8 million for the third quarter of 2023 and a 6% decrease compared to $50.5 million in the second quarter of 2024. The increase as compared to the third quarter of 2023 was primarily due to the introduction of PONVORY revenue following our acquisition of the product in December 2023 and an increase in Fanapt revenue. Fanapt net product sales were $23.9 million for the third quarter of 2024, a 12% increase compared to $21.3 million in the third quarter of 2023. Fanapt net product sales in the third quarter of 2024 increased by 3% as compared to $23.2 million in the second quarter of 2024. Fanapt prescriptions in the third quarter of 2024, as reported by IQVIA Xponent, increased by approximately 1% compared to the second quarter of 2024. Turning now to HETLIOZ. HETLIOZ net product sales were $17.9 million for the third quarter of 2024, a 2% increase compared to $17.5 million in the third quarter of 2023. HETLIOZ net product sales in the third quarter decreased by 4% as compared to $18.7 million in the second quarter of 2024. The decrease in net product sales relative to the second quarter of 2024 was attributable to a decrease in volume partially offset by an increase in price net of deductions. And finally, turning to PONVORY. PONVORY net product sales were $5.9 million for the third quarter of 2024, a decrease of 32% compared to $8.6 million in the second quarter of 2024. The decrease in net product sales was attributable to a decrease in volume of units sold and a decrease in price net of deductions. The decrease in the volume of units sold in the third quarter of 2024 was partially attributable to a temporary inventory destocking at the specialty distributors and pharmacies due to the final transition of distribution from Janssen to Vanda. The decrease in price net of deductions in the third quarter of 2024 was partially attributable to a true-up of prior period gross to net estimates. As a reminder, we completed the acquisition of the U.S. and Canadian rights to PONVORY in December of 2023. For the third quarter of 2024, Vanda recorded a net loss of $5.3 million compared to net income of $0.1 million for the third quarter of 2023. The net loss for the third quarter of 2024 included an income tax benefit of $0.9 million as compared to an income tax benefit of $0.3 million for the third quarter of 2023. Operating expenses in the third quarter of 2024 were $58.7 million compared to $44.8 million in the third quarter of 2023. The $13.8 million increase was primarily driven by higher SG&A expenses related to spending on Vanda’s commercial products as a result of the commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis and legal and other corporate activities. Operating expenses in the third quarter of 2024 decreased by $2 million as compared to $60.6 million in the second quarter of 2024. This decrease is primarily driven by lower SG&A expenses related to legal and other corporate activities, partially offset by increased spending on Vanda’s commercial products as a result of the commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis. During the first nine months of 2024, we commenced a host of activities as a result of the commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, including an expansion of our sales force and the development of prescriber awareness and comprehensive marketing programs. SG&A expenses may increase in future periods as a result of the ongoing commercial launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, which were initiated in the third quarter of 2024. With regards to the launches of Fanapt in bipolar I disorder and PONVORY in multiple sclerosis, as I mentioned, those launches were initiated this quarter the third quarter of 2024 and we expect our full commercial infrastructure to be in place by the end of this year. With the impact of these commercial efforts expected to begin to grow revenue later this year. We have already seen significant progress in our commercial activities. Several lead indicators suggest a strong initial market response, including new patient starts as reflected by new to brand prescriptions or NBRx as reported by IQVIA increased by over 90% in the third quarter of 2024 as compared to the third quarter of 2023. Our Fanapt sales force continues to expand. As of the end of the first quarter of 2024, our sales force numbered approximately 50 representatives. Currently our sales force has grown to over 150 representatives, and we have now initiated a second phase of expansion, which will increase our sales force to approximately 200 representatives by the end of this year. In addition to our Fanapt sales force, we’ve established a specialty sales force to market PONVORY to neurology prescribers around the country. The expansion has allowed us to significantly increase our reach and frequency with Fanapt prescribers. The number of Fanapt prescriber awareness programs completed in the third quarter of 2024 was nearly three times larger than the number of programs completed in the second quarter of 2024. Turning now to our financial guidance. Vanda is providing an update to its prior 2024 financial guidance. Vanda expects to achieve the following financial objectives in 2024. Total net product sales from Fanapt, HETLIOZ, and PONVORY of between $190 million and $210 million. This compares to prior guidance of between $180 million and $210 million. Year-end 2024 cash of between $370 million and $390 million. This compares to prior guidance of between $360 million and $390 million. The revision upwards in our revenue guidance reflects the momentum we are seeing across our product portfolio including the lead indicators referenced on our Fanapt bipolar I launch, progress on the PONVORY launch, which was initiated in the third quarter, and the continued durability of our HETLIOZ business. With that, I’ll now turn the call back to Mihael.

Thank you very much, Kevin. At this point we will be happy to answer your questions.

Thank you. Our first question comes from Charles Duncan from Cantor. Your line is now open.

Hey, good afternoon, Mihael and Kevin. Congrats on a nice quarter. Definitely seeing the new patient start increase for Fanapt and also bumping up the low end of revenue guidance. I wanted to ask you for a little bit more color on what your sales reps are seeing or hearing from these early days on the Fanapt relaunch, if you will, with the bipolar indication. I’m wondering if you feel like your 150 reps are optimized and the 50 or so more are going to be necessary to drive. And if you are seeing a bump in TRx as well as NRx. Thanks.

Yes, maybe. Charles, I’ll take the first part of the answer to this question. Thank you for joining us and thanks for the question. You’re correct that we mentioned this very large increase on NBRxs, which is a very lead indicator. These are people that have not been on Fanapt for at least on a look-back of two years. And there we see this 90% increase. But we also see following that the increase on NRxs, which is both new starts and refills and TRxs with the total number of prescriptions. And the way it works is that the NBRx are the first indicator to see followed by the NRx and followed by the TRx. And when we look at them at a four-week or a three-month rolling average, we see very substantial growth and that is continuing. So to answer the question about whether we are optimized in size with the sales force, the answer is no, because the more reps we’re putting in, the more growth we see. So we feel very good about that. We think that is a very good sign of the adoption of the program and identifying patients that benefit from it. But also we’re excited about a potentially very positive ROI on investments we can continue to make in this category. Now, this will not come as a surprise because other products before us and currently are experiencing the same promotional sensitivity of antipsychotics in this space. So we feel very good that ours is responding, but we believe that continuous growth is to be had not only with the current sales force that is just in place, but with further expansion as well. I don’t know, Kevin, if you want to add.

The only other thing I would add to what Mihael said there, Charles, is just in terms of what we’re seeing from the sales force in terms of their interactions is that we’ve seen a three to four-fold increase in the number of interactions that our sales force has been able to have with potential Fanapt prescribers between the third quarter of this year and the first quarter of this year. So we’ve seen a fairly significant and dramatic increase in the number of interactions that we’re having with prescribers, which obviously we believe is leading to the very significant growth that we’re seeing in new patient starts and hopefully will continue to translate to growth in the NRx and TRx metrics and ultimately revenue.

Okay, if I can sneak in another question on Fanapt and then I had a quick question on the pipeline on Fanapt. Do you anticipate any impact of Bristol’s launch of COBENFY in terms of the interest, the broadening interest in prescribing Fanapt?

Yes, we are excited to see new programs and new mechanisms of action introduced for the development of mental disorders. Specifically about Bristol’s COBENFY product for schizophrenia only, and our focus now is primarily on bipolar I disorder. Therefore, we do not expect a direct negative effect, but rather we believe investments that will be made in the space will renew the interest for many of the products in the class.

Okay. And then with regard to the pipeline, just really quickly, if considering the LAI for Fanapt versus milsaperidone, what do you see as being most important in terms of being able to grow the franchise over time? And then given the pre-NDA meeting for milsaperidone earlier this year, is there any data that you’re expecting to enable the filing of that NDA in the first part of next year or what is really the rate-limiting step on that milsaperidone NDA filing? Thanks.

Yes, and I will start from that. I would say very little is guarding the NDA filing. In fact, it is primarily guarded by the availability of the stability data, which will occur sometime in the first quarter. Based on this data, we have sufficient information for filing. In terms of clinical, we are conducting a pharmacokinetic study examining a high dose of iloperidone versus a high dose of milsaperidone. This study will be concluded shortly and we don’t expect it to impact the timing of the NDA filing. You asked a question about the relationship; I think about the opportunity with the LAI and milsaperidone. I think always the most exciting thing with these drugs is the expansion of an indication and certainly going from the smaller schizophrenia opportunity to larger bipolar I disorder to massive market for major depression, certainly that is a very significant opportunity expansion. But I will not underestimate the value of a well-tolerated and effective long-acting injectable like Fanapt, especially in the face of the very robust relapse prevention data that we have even with the oral Fanapt and that is already on the U.S. label.

Thanks very much for taking my questions. Can you hear me?

Yes, Ram.

So firstly I was wondering, maybe this is a question for Kevin. Can you provide us with a breakdown of the percentage of overall prescriptions for your three marketed products that are constituted by Medicare so that we can get a sense of what the differential impact across these three products of the Medicare benefit redesign might be?

Yep, thanks for the question Ram. So across the three products, maybe I’ll just start with PONVORY, which is the one that we most recently acquired. What you tend to see across the class is that most of the payer mix there tends to lean towards the commercial side, with a much smaller portion being governmental. So we haven’t disclosed specifics in terms of actual percentages, but it’s safe to assume that for PONVORY and for the rest of the class that the majority of those prescriptions are going to be commercial with a smaller portion being Medicare and Medicaid. On the Fanapt side, again, what you see in the class is that there’s a stronger tilt towards the governmental payers there than there is in a product like PONVORY. And in the products that have a label beyond schizophrenia, you tend to see that to a little bit of a lesser extent. So for products that might have bipolar or depression, those have a stronger commercial element to them than products that only have schizophrenia, which may be more concentrated in the governmental payer space. But it’s safe to assume there that a significant portion of potentially beyond half are going to be coming from Medicare and Medicaid. And then finally on HETLIOZ, it’s kind of a similar pattern on that side to what you would see in the Fanapt day typical class where a good portion, more than half, is also coming from your governmental payers. So smaller portion on the PONVORY side, larger portion on the HETLIOZ and Fanapt side.

Okay. And then with respect to your plan timeline for the Fanapt LAI Phase 3 program, can you just remind me when you expect that to start? What are the remaining gating items to the initiation of enrollment in that program, and when you anticipate we might see top-line data?

Yes. So I can tell you that we’ve recently met with the FDA and agreed on the design of the pivotal study and the fact that if successful, it can be adequate for the efficacy portion of the FDA. This study is expected to be initiated shortly in the fourth quarter of 2024. It’s a bit hard to anticipate the length of the study, but certainly these are studies that can extend beyond two years from start to finish, given that they are very duration can span a period of about 52 weeks. That includes the stabilization and then treatment phase.

Okay. Can you also comment on the future potential applications of milsaperidone outside of schizophrenia and bipolar disorder? In particular, I was curious to know whether you think there might be applicability of milsaperidone in the mixed population of patients who exhibit symptoms of both depression and schizophrenia, much as has already been seen with lumateperone.

Yes. So two things there. First of all, I’ll take the part of the mixed, and we know very well that this is a classification within the group of bipolar I disorders that can be manic only, can have mixed features, or can have predominantly depressed features. Now, for Fanapt, the U.S. label is indeed for both manic and mixed features of bipolar I disorder. So this part of mixed, which means that the presence of manic and depressed symptoms being present, is already on the U.S. label for the indication. Now, what we’re initiating shortly is the evaluation of milsaperidone as an adjunctive treatment to major depression. As you know, a very large opportunity given the unmet medical need in what is known as a partial response to existing agents. What we have seen from the history of application of atypical antipsychotics in the market is that it is that portion of patients that constitutes usually the largest portion of the commercial opportunity. Again, this pivotal study will be starting this quarter.

Great. And then just very quickly, with respect to the future potential indications and applications for PONVORY, can you give us some granularity regarding when you might look to initiate an investigative clinical development program in ulcerative colitis? Or for that matter any other indication that you think is particularly of interest?

Yes. So you’re correct in suspecting that there is a very large opportunity to use sphingosine-1-phosphate as an autoimmune regulator for a number of disorders. For ulcerative colitis, we have just recently submitted an IND application and a protocol to the U.S. FDA, and we expect to get their feedback and potentially initiate work there next year. For psoriasis, we are actually about to submit an IND and certainly, as I mentioned in our script, we have a lot of excitement about the probability of technical success because a large 326 patient study has already been conducted with very persuasive efficacy on the primary endpoints of PASI 75 at week 16. So there we think we’re in good shape potentially with just one additional study to confirm the efficacy and safety of the product and develop PONVORY as a very attractive once-a-day oral medication for psoriasis. Remind your audience that there are drugs in psoriasis, many of them are antibodies against certain cytokines being TNF-alpha, IL-17, etc., and therefore there is a need and an appetite for treating especially psoriasis flares with a convenient once-a-day oral medication like PONVORY.

Thank you. There are no further questions at this time. I’ll turn the call back over to Vanda’s management.

Thank you very much for joining us this quarter, and we look forward to seeing you next time. Thank you.

This concludes today’s call. Thank you for joining. You may now disconnect.