Vanda stock falls precipitously on FDA not approvable letter

NEW YORK The Food and Drug Administration rejected Vanda Pharmaceuticals’ application for a drug to treat schizophrenia Monday.

The FDA said it would require tests comparing the drug to Johnson & Johnson’s Risperdal (risperidone) or Eli Lilly’s Zyprexa (olanzapine) before it would reconsider it for approval. Vanda has already done comparison studies with Pfizer’s Geodon (ziprasidone HCL), showing similar effectiveness and side effects.

The FDA’s decision caused Vanda’s stock to fall by 73.2 percent, closing at 90 cents. It has lost more than 95 percent of its value since closing at $18.57 a year ago.