Vanda Pharmaceuticals Inc. Faces FDA Rejection of HETLIOZ® Supplemental New Drug Application

The biopharmaceutical firm Vanda Pharmaceuticals Inc. (Nasdaq: VNDA) has received an unfavorable decision from the U.S. Food and Drug Administration (FDA) regarding its supplemental New Drug Application (sNDA) for HETLIOZ® (tasimelteon) in the treatment of jet‑lag disorder. The decision, issued on January 8, 2026, follows a collaborative framework agreement entered into in October 2025 that had set an expedited review deadline of January 7, 2026.

Key Points of the FDA Letter

  • Positive Efficacy, Insufficient Evidence for Effectiveness – The FDA acknowledged that Vanda’s controlled clinical trials demonstrated positive efficacy outcomes but concluded that the data do not provide “substantial evidence of effectiveness” for jet‑lag disorder.
  • Critique of Phase‑Advance Protocols – The agency argued that the controlled phase‑advance models (shifting bedtimes by 5 hours and 8 hours) employed in the trials are not sufficiently analogous to actual jet travel. The FDA cited additional factors inherent to real travel—reduced oxygen pressure, physical constraints, noise, and lighting changes—as essential components that were absent in the study design.
  • Vanda’s Counter‑Argument – The company maintains that phase‑advance protocols are “widely accepted in circadian rhythm research as valid and reliable surrogates” for the core misalignment seen in eastward jet lag. Vanda also highlighted convergent evidence from both simulated and actual trans‑Atlantic travel studies, showing benefits in sleep duration, latency, and next‑day alertness.
  • Safety Profile – Vanda reiterated that tasimelteon’s safety record is well‑established, with predominantly mild adverse events and more than a decade of use in other approved indications.
  • August 2025 D.C. Circuit Ruling – A federal appeals court set aside a previous FDA refusal to approve HETLIOZ® for jet‑lag disorder, describing Vanda’s evidence as “specific, reasoned, and rooted in evidence.” The court noted statistically significant improvements on primary endpoints across trials and criticized the prior FDA review as “cursory.”
  • Collaborative Framework Agreement – In response to the court’s ruling, Vanda and the FDA agreed to a collaborative framework in October 2025, wherein the FDA committed to an expedited re‑review of the sNDA by January 7, 2026. The agreement also allowed for narrowed, sleep‑focused indications if warranted.

Market Reaction

Shares of Vanda Pharmaceuticals fell sharply following the announcement. As of January 6, 2026, the stock closed at $8.54, below its 52‑week low of $3.81 and just shy of the 52‑week high of $9.60. The company’s market capitalization stands at $504 million, and its price‑earnings ratio is –5.61, reflecting ongoing challenges in translating clinical milestones into shareholder value.

Company Response

Vanda stated that it remains committed to working constructively with the FDA to address the concerns raised in the decision letter. The company emphasized its willingness to pursue all appropriate avenues—including additional data generation and potential adjustments to the application—to secure approval for HETLIOZ® in the jet‑lag indication. Vanda also reaffirmed its focus on developing innovative therapies for central nervous system disorders, underscoring its broader pipeline of clinical‑stage small‑molecule candidates.

Outlook

The FDA’s rejection marks a setback for Vanda Pharmaceuticals, yet the company’s previous court victory and ongoing dialogue with the agency suggest that the door remains open for further negotiations. Investors and industry watchers will likely monitor any subsequent filings or supplementary data that Vanda may submit in an effort to overcome the current hurdle.