Vanda Shares Rise as Court Overturns FDA Rejection of Jet Lag Treatment Drug Hetlioz

Vanda Pharmaceuticals' shares rose 6.5% to $4.65 after a federal appeals court overturned the FDA's rejection of its jet lag drug Hetlioz. The court ruled that Vanda provided meaningful evidence of the drug's effectiveness in improving sleep disturbance. The company now expects the FDA to either approve the application or grant a hearing.

Vanda Pharmaceuticals' shares surged 6.5% to $4.65 following a federal appeals court's decision to overturn the FDA's rejection of its jet lag disorder treatment, Hetlioz. The court ruled that Vanda provided meaningful evidence of the drug's effectiveness in improving sleep disturbance, remanding the case back to the FDA for further action.

The decision marks a significant victory for Vanda, which has been engaged in a lengthy legal battle with the FDA over the drug's approval for jet lag disorder. Vanda first submitted its supplemental New Drug Application (sNDA) for Hetlioz in October 2018, but the FDA issued a Complete Response Letter (CRL) in August 2019, citing concerns about the drug's efficacy in improving sleep. Vanda challenged the FDA's decision in court, arguing that the agency had not adequately considered its evidence.

The court's ruling, which was issued on August 18, 2025, found that the FDA's treatment of Vanda's evidence was "cursory" and that the agency had violated the Food, Drug, and Cosmetic Act by not engaging meaningfully with the evidence presented. The court ordered the FDA to either approve the sNDA or grant a hearing to Vanda.

Vanda Pharmaceuticals anticipates that the FDA will now either approve the sNDA or schedule a hearing to discuss the drug's approvability. The company has been vocal about its dissatisfaction with the FDA's handling of its drug approval processes, citing delays and institutional inefficiencies.

This ruling is a significant development for Vanda and the broader pharmaceutical industry, as it sets a precedent for how the FDA must engage with evidence presented by drug innovators. It also highlights the importance of judicial oversight in ensuring that regulatory agencies act fairly and transparently.

References:
[1] https://www.pharmexec.com/view/court-overturns-fda-decision-reject-vanda-pharmaceutical-jet-lag-disorder-treatment
[2] https://www.nasdaq.com/articles/vanda-pharmaceuticals-appeals-court-overturns-fdas-order-hetlioz
[3] https://www.prnewswire.com/news-releases/in-a-major-win-for-vanda-a-federal-appeals-court-overturns-fdas-order-denying-approval-of-hetlioz-for-the-treatment-of-jet-lag-disorder-302531842.html