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Edited Transcript of VNDA earnings conference call or presentation 2-May-18 8:30pm GMT

Q1 2018 Vanda Pharmaceuticals Inc Earnings Call

ROCKVILLE May 16, 2018 (Thomson StreetEvents) -- Edited Transcript of Vanda Pharmaceuticals Inc earnings conference call or presentation Wednesday, May 2, 2018 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* James Patrick Kelly

Vanda Pharmaceuticals Inc. - Executive VP, CFO, Principal Accounting Officer & Treasurer

* Mihael H. Polymeropoulos

Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director

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Conference Call Participants

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* Corey George Davis

Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst

* Douglas Royal Buchanan

JMP Securities LLC, Research Division - Associate

* Matthew J. Andrews

Jefferies LLC, Research Division - Equity Analyst

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Presentation

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Operator [1]

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Hello, and welcome to the Q1 2018 Vanda Pharmaceuticals Inc. Earnings Conference Call. My name is Sheryl, and I will be your operator for today's call.

(Operator Instructions) Please note that this conference call is being recorded.

I will now turn the call over to Mr. Jim Kelly, Vanda's Executive Vice President and Chief Financial Officer. Mr. Kelly, you may begin.

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James Patrick Kelly, Vanda Pharmaceuticals Inc. - Executive VP, CFO, Principal Accounting Officer & Treasurer [2]

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All right. Great. Thank you, Sheryl. Good afternoon and thank you for joining us to discuss Vanda Pharmaceuticals' first quarter 2018 performance.

Our first quarter 2018 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. Mihales Polymeropoulos, our President and CEO. Following my introductory remarks, Mihales will update you on our ongoing activities, then I will comment on our financial results before opening 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 that involve risks, changes in circumstances, assumptions and uncertainties. These risks are described in the Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our annual report on Form 10-K for the fiscal year ended December 31, 2017, which is available on the SEC's EDGAR system and on our website. We encourage all investors to read these reports and our other SEC 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.

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [3]

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Thank you, Jim. Good afternoon, and thank you very much for joining us today.

We're pleased to share our first quarter 2018 performance. I will begin with an update on our HETLIOZ business. The HETLIOZ to Psychiatry Initiative, which was launched late last year, continues to drive an acceleration in new patient demand. In the first quarter of 2018, we achieved a new all-time high number of new HETLIOZ intakes, these are the prescriptions and patient starts, as well as a new all-time high number of patients on therapy. The positive response from the psychiatric community is a confirmation of the significant unmet medical need for patients with Non-24.

While our HPI strategy is delivering as expected, there are still many areas to optimize beyond what we have accomplished to-date and include opportunities to improve demand generation, script-to-fill metrics and refill metrics. That said, the results of the last 2 quarters leave us optimistic that these initiatives should have the potential to drive the growth of HETLIOZ for years to come.

In March, we announced the results from the JET8 Phase III clinical study to treat jet lag disorder. In this study, we saw significant and clinically meaningful effects of HETLIOZ on the primary endpoint of the study as well as multiple secondary endpoints in the treatment of jet lag disorder.

The completion of this study clears the way for a supplemental NDA filing. We're in the process of preparing an sNDA and plan to submit by end of year. This is consistent with our long-term vision of life cycle management of HETLIOZ, including ongoing activities for pediatric formulation development and Smith-Magenis Syndrome.

In Germany, the HETLIOZ full commercial launch is proceeding, including the initiation of a Non-24 awareness direct-to-consumer campaign. The DTC pilot will begin to inform our understanding of how this successful aspect of our U.S. go-to-market strategy can translate into other markets.

We continue to defend the intellectual property of our HETLIOZ franchise, including filing a lawsuit yesterday, April 30, 2018, against Teva Pharmaceuticals, a Paragraph 4 under filer.

I will now turn to tradipitant, a neurokinin-1 receptor antagonist in late-stage clinical development that has emerged as a significant driver of our clinical pipeline with 2 major indications pursued, pruritus in atopic dermatitis and gastroparesis. We recently held an end of Phase II meeting with the FDA dermatology division to discuss the pruritus in atopic dermatitis program. We have agreed on the indication pursued that is pruritus in atopic dermatitis and on the primary endpoint of Worst Itch Numeric Rating Scale. We believe that we'll design a clinical study protocol that will capture the important assessments relating to disease severity, although we have not yet agreed on the specific endpoints that will allow for such potential label claims. We're in the final stage of preparing our Phase III study, which we plan to begin by midyear.

We continue to develop a deep scientific understanding of what tradipitant does in pruritus in atopic dermatitis and in atopic dermatitis disease severity, including evaluating biomarkers, and we presented several studies at a number of international meetings.

We're also currently testing tradipitant for the treatment of patients with gastroparesis, that is a disorder of delayed gastric emptying, and we are now in the midst of enrolling patients in this Phase II study. Gastroparesis affects hundreds of thousands of Americans, carries a significant morbidity and mortality and represents a significant unmet medical need. As there are few treatment options for these patients, a demonstration of a therapeutic effect by tradipitant could represent a significant advance for patients with this disorder as well as a large commercial opportunity for Vanda.

Moving to Fanapt. Our sales team continues making progress in introducing Fanapt as an additional option in treating adult patients with schizophrenia.

On April 13, 2018, the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the Delaware District Court that West Ward Pharmaceuticals infringed Vanda's '610 Patent for Fanapt. The Court of Appeals win significantly de-risks the entire litigation path. This win further solidifies 9 years of remaining exclusivity and we plan to make investments in the life cycle management of Fanapt.

Manufacturing of an iloperidone depot, once a month injectable formulation is underway and we plan to enter the clinic later this year.

I will now turn the call over to Jim Kelly to discuss our first quarter 2018 financial results.

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James Patrick Kelly, Vanda Pharmaceuticals Inc. - Executive VP, CFO, Principal Accounting Officer & Treasurer [4]

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Thank you, Mihael.

Total revenue for the first quarter of 2018 was $43.6 million, a 2% decrease when compared to $44.3 million in the fourth quarter of 2017 and a 17% increase compared to $37.4 million in the first quarter of 2017. First quarter sales trends were impacted by trade inventory reductions totaling between $2 million and $2.5 million across both HETLIOZ and Fanapt.

HETLIOZ net product sales grew to $25.4 million in the first quarter of 2018, a 2% increase compared to $25 million in the fourth quarter of 2017 and a 26% increase compared to $20.2 million in the first quarter of 2017. HETLIOZ patients on therapy continue to grow quarter-over-quarter with monthly new patient growth rates consistent with our full year 2018 financial guidance.

As of March 31, 2018, the specialty pharmacy channel held approximately 2 weeks of inventory as calculated based on trailing demand. Units dispensed to patients by specialty pharmacies exceeded units sold by Vanda to the specialty channel. The impact of this inventory de-stocking is over $1.1 million.

Adjusting for the combined impact of Q1 2018 and Q4 2017 inventory changes, the sequential demand for HETLIOZ grew by over $2.5 million in the first quarter of 2018.

Fanapt net product sales of $18.2 million in the first quarter of 2018 reflect a 6% decrease compared to $19.3 million in the fourth quarter of 2017 and a 5% increase compared to $17.2 million in the first quarter of 2017.

Wholesalers have decreased inventory on hand when compared to the fourth quarter of 2017. The impact of this inventory de-stocking was over $900,000.

Fanapt prescriptions as reported by IQVIA were 27,372 in the first quarter of 2018, a 3% decrease compared to the fourth quarter of 2017. And this is consistent with the midpoint of our full year 2018 guidance expectations.

You will see in our press release that Vanda is offering non-GAAP financial information. We do so because we believe that the non-GAAP financial information can enhance an overall understanding of our financial performance when considered together with GAAP figures. Vanda non-GAAP net income and net loss exclude stock-based compensation and intangible asset amortization.

On a non-GAAP basis during the first quarter of 2018, Vanda recorded a non-GAAP net income of $6.6 million as compared to a non-GAAP net income of $1.4 million in the fourth quarter of 2017 and compared to a non-GAAP net loss of $4.9 million in the first quarter of 2017.

On a non-GAAP basis for the first quarter of 2018, non-GAAP -- Vanda recorded non-GAAP operating expenses, excluding cost of goods sold, stock-based compensation and intangible asset amortization, of $33.1 million compared to $38.4 million in the fourth quarter of 2017 and $38.6 million in the first quarter of 2017.

Non-GAAP research and development expenses in the first quarter were down slightly, decreasing by less than $1 million when compared to the fourth quarter of 2017. This decrease in spend was a result of the closeout of the jet lag disorder Phase III study, which was partially offset by a rise in spend associated with the tradipitant for gastroparesis clinical study which is ongoing.

Non-GAAP SG&A in the first quarter decreased by $4.5 million or 16% when compared to the fourth quarter of 2017. The primary driver of this sequential decline in spend was the reduced investment in DTC awareness programs for Non-24 as the commercial team placed increased emphasis on fully launching the HETLIOZ to Psychiatry Initiative.

Vanda's cash, cash equivalents and marketable securities, referred to as cash, as of March 31, 2018 were $248.8 million compared to $143.4 million as of December 31, 2017, representing an increase to cash of $105.4 million during the first quarter of 2018. In March 2018, Vanda completed a public offering of its common stock that resulted in net proceeds of $100.9 million.

Vanda reiterates its prior 2018 financial guidance, updates its year-end 2018 cash guidance to reflect the impact of the recent common stock offering and expects to achieve the following financial objectives in 2018: Net product sales for both HETLIOZ and Fanapt of between $180 million and $200 million; HETLIOZ net product sales of between $108 million and $118 million; Fanapt net product sales of between $72 million and $82 million; non-GAAP operating expenses, excluding cost of goods sold, of between $163 million and $173 million.

The primary drivers of the expected increase over prior year are clinical investments, including studies of tradipitant in atopic dermatitis and gastroparesis. Non-GAAP operating expenses excludes intangible asset amortization expense of $1.7 million and stock-based compensation of between $11 million and $15 million.

Year-end 2018 cash is expected to be between $215 million and $225 million as compared to prior guidance of $115 million to $125 million. This guidance includes the payment of a $25 million milestone obligation based on $250 million of cumulative HETLIOZ net product sales, which we expect to occur in the second quarter of 2018.

I'll now turn the call back over to Mihael.

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [5]

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Thank you, Jim. And now, we'll open the lines for your questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Jason Butler from JMP Securities.

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Douglas Royal Buchanan, JMP Securities LLC, Research Division - Associate [2]

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It's Roy in for Jason. Just a couple of quick ones. I guess, this serlopitant failure in atopic dermatitis was surprising, but I'm sure you don't want to discuss another program. I just wondered if you could discuss how you found success with tradipitant in this setting? Are the drugs different, different patient population or trial design? And I have another question after that.

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [3]

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Roy, of course, we don't know anything more than what is known in the public domain on that program. All we know is that they attempted to show an antipruritic effect in patients in atopic dermatitis and we understand that the company suggested that this attempt failed.

What is very important is to reiterate why we're convinced that tradipitant, a neurokinin-1 receptor antagonist, may be suited to treat pruritus in patients with atopic dermatitis. And to remind everybody, this conviction comes from 2 clinical studies: A small Phase II study, 2101, where a pharmacokinetic, pharmacodynamic analysis suggested a significant dose effect response for tradipitant to treat pruritus in AD; and then the larger Phase II study, 2102, that we reported last September where we showed significant and meaningful effects in measurements of clinical improvement of itch, alongside improvements of disease severity as measured by scales like the scoring atopic dermatitis, SCORAD , or EASI. Since then, we have conducted a very significant analysis and presented scientific in-depth data in a number of international meetings. So it is all these body of evidence that gives us conviction that tradipitant can be successful in treating pruritus and ending in the commercial space is an important treatment for patients with atopic dermatitis.

And just to suggest that the end of Phase II meeting with the FDA actually agreed on that point, that we're ready to go to Phase III with the dose proposed and that the data so far accumulated are consistent with the hypothesis that the drug will work to treat pruritus in AD.

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Douglas Royal Buchanan, JMP Securities LLC, Research Division - Associate [4]

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Okay. Great. And then, have you guys met with the FDA regarding the sNDA for jet lag or do you plan to?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [5]

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We have not met yet. We are actually in the process now of putting together the clinical study report and the sNDA and it is likely that we will communicate with the FDA prior to that sNDA filing, and whether that is a guidance or a pre-sNDA meeting will have to be defined. However, we believe that we should be in a position to file this sNDA by year-end.

And just to remind everyone, this sNDA in support of the efficacy of tasimelteon in treating jet lag will consist of 3 main studies: A small but significant proof-of-concept study that was conducted a few years ago; and then 2 Phase III studies, one in a 5-hour phase event and the second one in a 8-hour case event. All of them succeeded in the primary and several of the secondary endpoints.

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Douglas Royal Buchanan, JMP Securities LLC, Research Division - Associate [6]

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Great. I guess, I just have one more really quick follow-up. Just briefly, could you tell us what differentiates your HDAC inhibitor from the other ones that are out there?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [7]

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Well, I'm glad you said a quick question. Well, there's no quick answer. I will tell you that TSA or Trichostatin A is actually the prototypical HDAC inhibitor found in nature and it is considered a pan-HDAC contributor, that means it inhibits a number of histone deacetylases. And it is not just that approach of mechanism of action, but our approach in treating hematologic malignancies with HDAC inhibitor. HDAC inhibitors are, today, successfully approved for treatment of hematologic malignancies aimed to be cytotoxic agents.

What we want to evaluate is whether an HDAC inhibitor can achieve therapeutic effects in malignancies by inducing terminal differentiation. And the other angle of our product is the significant use of pharmacogenetics and pharmacogenomics to understand which patients with these hematologic malignancies will be more likely to respond to TSA.

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Operator [8]

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Our next question comes from Matthew Andrews from Jefferies.

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Matthew J. Andrews, Jefferies LLC, Research Division - Equity Analyst [9]

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Mihales, so on tradipitant, you guys recently presented some very interesting subgroup analyses suggesting that patients that have elevated IgE could derive a higher benefit from tradipitant or, conversely, placebo patients did worse. Can you talk about how -- what's FDA's view of these data and to what extent will you...

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [10]

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Yes. Absolutely. So there's a...

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Matthew J. Andrews, Jefferies LLC, Research Division - Equity Analyst [11]

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Could possibly include an enrichment strategy for the patient population?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [12]

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Absolutely, Matthew. So just to summarize. Our finding in the second Phase II study, 2102, was this not obvious and unexpected observation that patients who, at baseline, had above normal levels of IgE are the ones that experienced the largest difference between drug and placebo. And as you mentioned, patients with normal levels of IgE experienced about the same size of effect, change of baseline for the drug, but placebo had about the same effect, so as if saying that this IgE biomarker identifies patients on placebo that will perform as well as drug. So it may signify that they have different course of the disease with a relapse -- a remission rate within that period of observation.

So we did have the opportunity to begin the discussion with the FDA on IgE. Of course, it's the first time they encounter this biomarker. We did discuss the concept of enrichment and they do agree these enrichment strategies can be useful. And whether or not we should exclude from the next study people with normal IgE, that is the part we continue to debate. So in one of the designs, while we will continue to evaluate the value of the IgE biomarker, we may not exclude patients with normal IgE levels.

A different option which we're finalizing, of course, is to exclude these patients and ask this question in an enriched population. If we do that, however, the benefit is that you have a higher likelihood of showing a larger effect, but at the same time, you may miss the opportunity to show the validity of this biomarker.

So we're very close to starting this study and making the final decision. Where we're leaning now is not to exclude patients with normal IgE levels.

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Matthew J. Andrews, Jefferies LLC, Research Division - Equity Analyst [13]

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Terrific. And what remains on agreement relative to the endpoint for the AD component of the Phase III study? You have agreement on NRS, Worst Itch NRS. What about for the AD portion?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [14]

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Yes. We don't have an agreement of the following: What is the appropriate disease severity scale that, if successful as a secondary endpoint, can be claimed and in what manner on the label. So the agreement is that, pruritus being the most significant complaint of patients with atopic dermatitis worth treating, if the drug does show improvement in Worst Itch NRS and that is clinically meaningful, then you will have an indication of treating pruritus in patients with atopic dermatitis.

But as you recall, we had this, I would say, rather surprising and unexpected finding in the last Phase II study where not only Worst Itch improved, but also we start seeing that measurements of lesion severity by SCORAD and EASI showed significant improvement over placebo. So our discussion with the FDA is that if this happens again in the Phase III study and we confirm that not only we improve itch, but actually we have an effect on lesions, we would like to figure out a way how to claim that.

The FDA has been clear in their last 2 approvals in AD on crisaborole and dupilumab that they gave an indication of atopic dermatitis. They required a couple things. One is that the patients included had a certain degree of severity, which was an IGA scale greater than 2 points, and that in order to get the indication atopic dermatitis, they had to improve to clear skin. So you have to do the -- clear or almost clear. That means you have to have a score of 2 and go to 0.

The population we are pursuing is the same population we had the results in the last Phase II study, which is almost everybody from mild to moderate to severe disease and we excluded only the very severe. So this population will not meet the entry criteria of IGA greater than 2 and, therefore, a large number of patients are not going to be able to show improvement of more than 2 points. That is why this is a continued discussion.

The FDA has approved 2 drugs for people that met the severity threshold. They do not require us to have that severity threshold in patients with pruritus, understand that pruritus occurs from mild to severe. And the question is if we cannot really use IGA, of course, we're going to measure it, but we cannot say everybody has the opportunity to improve because they answered with a score less than 2.

So the discussion is what is an appropriate scale in this broader population than the other 2 drugs. We suggest it is SCORAD and it is EASI. I don't believe the FDA is in agreement with that now, but it is a bridge that we will cross maybe once we have more data.

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Matthew J. Andrews, Jefferies LLC, Research Division - Equity Analyst [15]

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Got it. And then, one for Jim. G&A ticked down quite a bit sequentially and you discussed some rationale for it. Is this Q1 number going to trend this way through the end of the year or should we see some sort of uptick as the year progresses? And if it's going to be flat, I guess R&D would tick up as you launch the Phase IIIs for CP. Is that correct?

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James Patrick Kelly, Vanda Pharmaceuticals Inc. - Executive VP, CFO, Principal Accounting Officer & Treasurer [16]

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So I'll start first with the SG&A characterization in the quarter, which is a meaningful decline, $4.5 million, and the majority of which is a decrease in the direct-to-consumer advertising for Non-24 awareness. As we have worked to launch the HPI program, we took a break here. And that, however, doesn't mean we're going to scale back for the entire year. Of course, we'll go back and continue that program. And so I would expect that this would be a low point for the year of SG&A. So you should expect it to rise.

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Operator [17]

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Our next question comes from Corey Davis from Seaport.

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Corey George Davis, Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst [18]

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I just want to go back to the Phase III design for tradipitant. And it still wasn't clear to me a few things. The first is I get what you're saying about segregating by IgE levels, but it sounds like the FDA is saying that you can't exclude patients with normal IgE. Is that putting words in your mouth and their mouth?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [19]

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Yes. It is putting words in my mouth and their mouth. They -- I believe they are starting understanding now IgE. They -- I don't think they have the full opportunity to review all the IgE data. They don't have yet the full clinical study report, which is in the works.

So the way I characterize it is that they do appreciate the use of enrichment strategies. However, given the novelty of these IgE markers, they would like to learn more because -- before they categorically suggest that you can exclude a certain population from the indication.

Now, on the other hand, we are significantly intrigued by the IgE finding and we would like, if possible, to confirm it. So that is why I said that we're leaning not to exclude patients with normal IgE so we'll have the opportunity to see if that difference, in effect, continues to be present.

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Corey George Davis, Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst [20]

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So the way you confirm it would be in your Phase III study?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [21]

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Correct. In the first one, yes.

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Corey George Davis, Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst [22]

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And so are you going to start Phase III midyear without finalizing these things? Or do you need to finalize again with the FDA a few more things before you'd be allowed to start it or before you chose to start it?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [23]

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We have finalized with the FDA all we need now to move forward and that is dose, the type of indication we're pursuing and the primary endpoint. The only thing that remains to be finalized internally is the inclusion or exclusion of patients with normal IgE and that decision, I would imagine, will happen within the next 30 days. So we will start this study by June of this year. No need to go back to the FDA.

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Corey George Davis, Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst [24]

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Okay. Got it. Now that you've got extra cash, why not do 2 studies in parallel? Do you want to wait and see the first results to help design a second Phase III sequentially?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [25]

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Of course, you can do things in parallel, sequential or it can be intensive. We continue to learn a lot of things in atopic dermatitis, even from the existing data. So I think the expectation for our conduct for the rest of the year would be that we'd begin this Phase III study. There are many things to learn in operations of a much larger study. And we do not exclude the potential of a tangential start of the second Phase III study.

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Corey George Davis, Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst [26]

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Now I see. Okay. And how long do you think it will take you to enroll? Is it unreasonable to expect this would be on the market as soon as 2021?

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [27]

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Actually, our longer-term plan for the product is -- I'm looking at Jim here.

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James Patrick Kelly, Vanda Pharmaceuticals Inc. - Executive VP, CFO, Principal Accounting Officer & Treasurer [28]

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Yes. We had spoken previously, and this is before we got our results and, of course, work to this point, of our desire to have a filing in 2020. Now, we're going to go and we're going to learn about our ability to ramp up this study this year that I think will further inform the timing to complete both and to get to that point.

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [29]

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Yes. So consistent, Corey, with what you said, a 2021 in the market is within the range of the plan we have today.

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Corey George Davis, Seaport Global Securities LLC, Research Division - MD of Equity Research & Senior Analyst [30]

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Okay. And then, last question for Jim. Can you remind us how much you have left in NOLs? Just trying to figure out if you're ever going to start paying taxes.

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James Patrick Kelly, Vanda Pharmaceuticals Inc. - Executive VP, CFO, Principal Accounting Officer & Treasurer [31]

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And, of course, our NOL number is also a function of the change in the 2017 tax law impact, but the overarching feedback is it's in the magnitude of $250 million.

Now, in addition to that, I've got R&D credits and working credits, which are in the range of $40 million.

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [32]

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And, of course, Corey, it is a function of our revenue. So we do intend to try to include the revenue. If we have to pay taxes, that's fine.

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Operator [33]

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And speakers, that was our final question.

I will now turn the call back over to Dr. Mihales Polymeropoulos.

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Mihael H. Polymeropoulos, Vanda Pharmaceuticals Inc. - Founder, President, CEO & Director [34]

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Thank you very much and thank you all for joining us. We'll see you soon in upcoming conference or our next quarter call. Thank you.

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Operator [35]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.