Vanda Pharmaceuticals Surges 26.53% on Historic FDA Approval: A New Era for Motion Sickness Treatment?

Summary
• Vanda Pharmaceuticals (VNDA) shares surged 26.53% intraday on Dec. 31, 2025, closing at $8.8953 after FDA approval of its motion sickness drug NEREUS.
• The stock hit a 52-week high of $9.60 and traded as low as $8.50, reflecting intense volatility.
• The approval marks the first new pharmacologic therapy for motion sickness in over 40 years, with robust clinical trial data supporting its efficacy.

Vanda Pharmaceuticals’ stock exploded higher following the FDA’s landmark approval of NEREUS (tradipitant) for motion sickness, a condition affecting 65–78 million Americans. The surge reflects investor optimism over the drug’s commercial potential and Vanda’s expanding pipeline, including trials for gastroparesis and GLP-1 side effect mitigation. With a 38.6% gain in the past three months, VNDA’s rally underscores the market’s appetite for innovation in rare disease treatments.

FDA Approval of NEREUS Ignites Investor Optimism
Vanda Pharmaceuticals’ historic 26.53% intraday surge was directly triggered by the FDA’s approval of NEREUS (tradipitant) for motion sickness, a condition with no new pharmacologic treatments in over four decades. The drug demonstrated over 50% risk reduction in vomiting incidence in pivotal trials, including two Phase III studies conducted at sea. This regulatory milestone not only validates Vanda’s clinical development strategy but also positions NEREUS as a first-line therapy for a large patient population. The approval also accelerates Vanda’s pipeline for tradipitant in gastroparesis and GLP-1-induced nausea, with ongoing discussions with the FDA to resolve regulatory disputes and expedite reviews. The market’s enthusiastic response reflects confidence in the drug’s commercial viability and the company’s ability to capitalize on unmet medical needs.

Options and ETF Strategies for Capitalizing on VNDA's Volatility
• MACD: 0.498 (above signal line 0.477), RSI: 66.01 (neutral), Bollinger Bands: Upper $7.79, Middle $6.41, Lower $5.02
• 200-day MA: $4.82 (well below current price), 30-day MA: $5.94

VNDA’s technicals suggest a strong short-term bullish trend, with the RSI hovering near overbought territory and the MACD histogram expanding. The stock is trading above all key moving averages, indicating momentum. For options traders, the most compelling contracts are those with moderate delta, high gamma, and reasonable implied volatility. Two top picks from the options chain are:

• VNDA20260116C9 (Call, Strike $9, Expiry 2026-01-16):
- IV: 85.69% (high volatility)
- Leverage Ratio: 14.77% (moderate)
- Delta: 0.508 (moderate sensitivity)
- Theta: -0.0287 (high time decay)
- Gamma: 0.243 (high sensitivity to price movement)
- Turnover: 183,076 (high liquidity)
- Payoff at 5% upside: $0.445 per share
This contract offers a balance of leverage and liquidity, ideal for capitalizing on continued momentum while managing time decay.

• VNDA20260116C10 (Call, Strike $10, Expiry 2026-01-16):
- IV: 30.00% (reasonable)
- Leverage Ratio: 30.57% (high)
- Delta: 0.036 (low sensitivity)
- Theta: -0.0021 (low time decay)
- Gamma: 0.138 (moderate sensitivity)
- Turnover: 108,764 (high liquidity)
- Payoff at 5% upside: $0.445 per share
This high-leverage contract is suitable for aggressive bulls expecting a sharp move, though its low delta requires a larger price shift to realize gains.

Action Insight: Aggressive bulls may consider VNDA20260116C9 into a breakout above $9.60, while conservative traders might use VNDA20260116C10 for a leveraged play on sustained momentum.

Backtest Vanda Pharmaceuticals Stock Performance
The backtest of VNDA's performance after a 27% intraday surge from 2022 to the present shows mixed results. While the stock experienced a maximum return of -0.28% over a 30-day period, with a 3-day win rate of 45.69% and a 10-day win rate of 45.92%, the overall trend was negative, with an average return of -1.95% over 30 days. These results suggest that while VNDA may have had short-term gains, it also faced significant volatility and losses in the longer term.

Positioning for a Breakout: Immediate Action Steps for VNDA Investors
Vanda Pharmaceuticals’ historic FDA approval of NEREUS has ignited a surge in investor sentiment, with the stock trading near its 52-week high. The technicals and options activity suggest continued upward momentum, particularly if the stock breaks above $9.60. Key levels to watch include the 200-day MA at $4.82 and the 30-day MA at $5.94. For context, sector leader Johnson & Johnson (JNJ) rose 0.11% intraday, underscoring VNDA’s outperformance. Investors should monitor the FDA’s re-review of tradipitant for gastroparesis and the BLA submission for imsidolimab in generalized pustular psoriasis. Act now: Buy calls at $9 strike or accumulate shares ahead of the $9.60 breakout to capitalize on the next phase of this rare disease story.