A federal court in Delaware has not only rejected Vanda's patent infringement claim against generic drugmakers Teva Pharmaceuticals and Apotex, but it has also ruled that four of Vanda Pharmaceuticals' patent claims for the sleep disorder drug Hetlioz are invalid.
Vanda's prospects are bleak in the face of impending generic competition. The pill accounted for 65% of the company's revenue last year, accounting for $173.5 million in sales.
Vanda's stock dropped 33% on Tuesday after the defeat was announced.
Vanda has stated that it will appeal the decision, requesting a "stay of market entry" by generics companies while the appeal is being processed.
Hetlioz, which was approved by the FDA in 2014, is the only treatment for non-24-hour sleep-wake disorder.
Circadian rhythm disorder affects roughly 70% of people who are completely blind.
According to the company, the patent decision has nothing to do with Hetlioz's oral suspension formula and will have no effect on its status in Europe.
The FDA issued a complete response letter to the company's bid for a label expansion to treat jet lag in 2019. Vanda's efforts to obtain a hearing to reconsider the decision were futile, and the company filed a lawsuit against the agency earlier this year.
Vanda and the FDA have a strained relationship. After the company challenged the FDA's partial clinical hold on its investigational gastroparesis treatment tradipitant, a U.S. district court in Washington, D.C., sided with the regulator in 2020.
The court ruled that the FDA could order Vanda to conduct animal tests to demonstrate that the drug was not toxic.