Vanda's social anxiety pill fails its Phase III test, and the company puts it on hold

Vanda Pharmaceuticals' experimental pill for social anxiety did no better than a placebo in a 546-person Phase III trial, and the company has put the drug, VQW-765, on hold.

What Vanda tested

Vanda Pharmaceuticals said Wednesday after the market close that its Phase III study of VQW-765 in social anxiety disorder failed its main goal, and that it has put the drug's development program on hold pending further analysis of the full dataset.

The trial, known as Study 3201, randomized 546 adults aged 18 to 65 at about 30 U.S. sites. Each participant took a single oral dose of VQW-765 or a placebo and then went through the Trier Social Stress Test, a standard lab exercise in which people prepare and then deliver an interview-style talk to a panel that offers no feedback or encouragement. The idea was to test an on-demand pill for the moment anxiety strikes, rather than a daily medicine.

VQW-765 is a partial agonist of the alpha 7 nicotinic acetylcholine receptor. Vanda licensed it from Novartis, where it was known as AQW-051.

How far short it fell

In Vanda's release, the primary endpoint was how distressed women in the study felt during the speaking portion of the test, rated on a 0-to-100 scale. Women on the drug had a least-squares mean score of 65.6 (standard error 1.90), against 66.0 (standard error 1.96) on placebo, a gap far from statistical significance (p=0.8899).

The key secondary measure, covering men and women together, also missed: 64.7 for the drug versus 63.8 for placebo (p=0.6605). On that measure the drug group reported numerically slightly more distress, not less. Vanda said the drug was safe and well tolerated, consistent with earlier studies.

The public trial registry describes the setup a little differently. Its entry, last updated Aug. 17, lists the speaking-phase distress score as the primary outcome without limiting it to women, and names a distress score during the preparation phase and a state anxiety scale as secondary outcomes. Neither of those secondary measures appeared in Vanda's results table. The registry still shows the trial as active but not recruiting, with an estimated enrollment of about 500 and primary completion estimated for December 2026.

Study 3201 was meant to confirm an earlier Phase II trial in which people with a history of performance anxiety reported numerically lower stress during the same test after taking VQW-765. "We are disappointed that Study 3201 did not confirm the earlier Phase II findings for VQW-765 in patients with social anxiety disorder," Chief Executive Mihael Polymeropoulos said in the release.

Why it matters for Vanda

The result knocks out one of three late-stage readouts Vanda had told investors to expect by the end of 2026. In its second-quarter report in August, the company listed VQW-765 alongside a Phase III study of tradipitant for prevention of vomiting in patients receiving GLP-1 receptor agonist therapies and a Phase III study of Hetlioz in delayed sleep phase disorder. On Sept. 29, Vanda reported that the Hetlioz study, in what it called delayed sleep-wake phase disorder, met its main goal, and said it plans to file a supplemental application with the FDA. The tradipitant study is still expected to read out this year.

Beyond that study, Vanda's near-term catalysts are mostly commercial and regulatory: the expected Bysanti launch, the Dec. 12 FDA target action date for Quimilza, and the planned Hetlioz filing. Bysanti was approved earlier this year for bipolar I disorder and schizophrenia, and in August Vanda said it expected to launch it in the second half of 2026. Quimilza is its experimental treatment for the rare skin disease generalized pustular psoriasis.

Fanapt, its biggest seller, posted $36.0 million in second-quarter net product sales, up 23% from a year earlier. Total net product sales were $50.5 million, down 4% from $52.6 million, a figure that excludes about $7.0 million of Hetlioz revenue from June 29 shipments the company said it will recognize in the third quarter. Vanda guided to $240 million to $290 million in 2026 revenue and reported $170.0 million in cash, cash equivalents and marketable securities at June 30, which it said would fund operations through at least the end of 2027.

Vanda's shares closed Wednesday at $4.22, before the release, and changed hands around $4 in after-hours trading.