Vanda Pharmaceuticals Inc. (VNDA Quick QuoteVNDA - Free Report) announced that its board of directors has unanimously rejected a potential acquisition bid by Future Pak, LLC wherein the latter proposed to acquire all the outstanding shares of VNDA.

Shares of Vanda were up 29.4% on Apr 17 following the announcement of the news.

VNDA has been receiving several voluntary takeover proposals from Future Pak, the latest being offered on Apr 1 for $7.25-$7.75 per share, subject to certain terms and conditions.

Following thorough discussions with its independent financial and legal advisors, Vanda’s board of directors carefully reviewed the proposed takeover interest and concluded that it significantly undervalues the company and is not in its best interests and that of the shareholders.

Per management, the proposed takeover interest is likely to create significant value for Future Pak at the expense of Vanda’s shareholders and would not likely create reasonable value for the company and its stockholders.

Vanda shareholders will not have to take any immediate action related to the unsolicited takeover proposal from Future Pak.

Shares of Vanda have rallied 24.2% so far this year against the industry’s decline of 9.8%.

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In a separate press release, Vanda announced that in response to the takeover proposal from Future Pak made on Apr 1, 2024, its board of directors had adopted a limited duration stockholder rights plan with immediate effect to protect and maximize shareholders' value.

The Rights Plan is valid for a one-year term and will expire on Apr 16, 2025. However, the company may decide to terminate the Rights Plan before the said timeframe, depending on the circumstances.

Vanda’s board believes that the proposed takeover bid significantly undervalues the company, which has a robust portfolio of drugs and will not create long-term value for its shareholders.

The company currently markets Fanapt (iloperidone), which is approved in the United States for the acute treatment of patients with schizophrenia. Earlier this month, the FDA approved Fanapt for the acute treatment of manic or mixed episodes associated with bipolar I disorder in adults.

Vanda’s other product, Hetlioz (tasimelteon), is approved for the treatment of non-24-hour sleep-wake disorder and nighttime sleep disturbances in Smith-Magenis syndrome.

The FDA issued a complete response letter to the supplemental new drug application (“sNDA”) for Hetlioz in March 2024.

The sNDA had sought approval for Hetlioz for the treatment of insomnia, which is characterized by difficulties with sleep initiation.

Zacks Rank & Stocks to Consider

Vanda currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the healthcare sector are ADMA Biologics, Inc. (ADMA Quick QuoteADMA - Free Report) , Ligand Pharmaceuticals Incorporated and ANI Pharmaceuticals, Inc. (ANIP Quick QuoteANIP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for ADMA Biologics’ 2024 earnings per share have improved from 22 cents to 30 cents. Year to date, shares of ADMA have rallied 33.6%.

ADMA’s earnings beat estimates in three of the trailing four quarters and met the same once, the average surprise being 85.00%.

In the past 60 days, estimates for Ligand’s 2024 earnings per share have improved from $4.42 to $4.56. Year to date, shares of LGND have gained 10.4%.

Earnings of LGND beat estimates in each of the trailing four quarters, the average surprise being 84.81%.

In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 earnings per share have improved from $4.12 to $4.43. Year to date, shares of ANIP have jumped 18.8%.

Earnings of ANIP beat estimates in each of the trailing four quarters, the average surprise being 109.06%.