Maintaining Buy Rating on Vanda: Limited Impact from Tasimelteon Setback, Ongoing FDA Engagement, and Bysanti Catalyst Support $22 Target

Analyst Ram Selvaraju of H.C. Wainwright reiterated a Buy rating on Vanda, retaining the price target of $22.00.

Ram Selvaraju has given his Buy rating due to a combination of factors that, in his view, outweigh the recent regulatory setback. He emphasizes that the FDA’s rejection of tasimelteon for jet lag is based largely on the agency’s view of the trial design rather than on a lack of efficacy or safety, noting that the company’s studies showed meaningful improvements in sleep and next-day functioning with a well-characterized safety profile. He also underscores that the phase advance models used by Vanda are broadly accepted in circadian rhythm research as appropriate proxies for the biological disruption seen in eastward jet lag, and that supportive data from both simulated and real-world travel further reinforce the drug’s clinical benefit. Importantly, his valuation and price target did not assume any revenue contribution from a jet lag indication, so the current decision has little impact on his fundamental outlook.

Selvaraju further points to the legal and regulatory context as a reason for continued optimism. A previous ruling by the D.C. Circuit Court was critical of the FDA’s earlier review and characterized Vanda’s evidence as robust and statistically persuasive, suggesting that the company has a credible basis for continued engagement with regulators. He highlights that Vanda and the FDA recently established a collaborative framework for expedited re-review, including the possibility of refined, sleep-focused labeling, implying that dialogue and potential pathways to approval remain open. Finally, he notes that Vanda has an additional near-term catalyst in the upcoming regulatory decision for Bysanti (milsaperidone) in bipolar I disorder and schizophrenia, which could create incremental value irrespective of the outcome in jet lag. Collectively, these elements support his decision to maintain a Buy rating and a $22 twelve-month price target.

In another report released on December 31, B. Riley Securities also maintained a Buy rating on the stock with a $14.00 price target.