Should You Invest in This Under-the-Radar Weight Loss Stock?

• Vanda reported beardown signifier 2 results for a campaigner that could beryllium utilized with GLP-1 drugs.

• However, this medicine's imaginable people marketplace appears tiny and whitethorn shrink further.

• Even with immoderate upcoming imaginable catalysts, Vanda's shares look excessively risky.

• 10 stocks we similar amended than Vanda Pharmaceuticals ›

The value nonaccomplishment marketplace has go 1 of the hottest areas successful the pharmaceutical industry. Investors looking to capitalize connected it whitethorn see stocks similar Eli Lilly and Novo Nordisk, which are presently leaders.

Though that attack is fine, it mightiness besides beryllium worthy considering smaller, little-known corporations whose objective enactment could wage disconnected successful the coming years. The vantage of opting for smaller companies is that they whitethorn person adjacent much upside than the much established ones. On the different hand, they besides travel with importantly much risks.

With that successful mind, let's see a small-cap biotech that precocious made immoderate sound successful the value nonaccomplishment space: Vanda Pharmaceuticals (NASDAQ: VNDA). The company's caller developments enactment it connected the representation for immoderate biotech investors, but is the banal a buy?

Vanda Pharmaceuticals' strategy successful the weight-loss marketplace is somewhat unconventional. The company's starring campaigner successful this abstraction is called tradipitant, but it isn't being developed to assistance patients suffer weight. Instead, it could beryllium utilized arsenic an adjunct therapy to assistance mitigate immoderate of the main broadside effects of GLP-1 medicines, specified arsenic nausea and vomiting.

Although GLP-1 therapies person proven effectual successful helping patients shed weight, gastrointestinal broadside effects stay comparatively common, not lone for approved medicines but besides for immoderate of the starring mid- and late-stage candidates. GLP-1 income proceed to turn rapidly, though, suggesting that patients are consenting to marque the trade-off: accelerated value nonaccomplishment successful speech for imaginable adverse reactions. But what if they didn't person to?

That's what Vanda is betting on. Its tradipitant precocious posted coagulated signifier 2 results. Only 17 retired of 58 patients treated with tradipitant and Wegovy successful the proceedings experienced vomiting, compared to 35 retired of 58 successful those taking Wegovy and a placebo. These results sent the banal terms soaring. Vanda Pharmaceuticals plans to initiate a signifier 3 survey for tradipitant successful this denotation aboriginal adjacent year.

It's worthy noting that Vanda antecedently submitted an exertion to the U.S. Food and Drug Administration (FDA) for tradipitant successful the attraction of gastroparesis. This tummy information affects digestion and causes a scope of symptoms, including cramps, pain, and vomiting. However, the FDA issued a implicit effect letter, stating that Vanda Pharmaceuticals did not sufficiently show efficacy, and regulators privation much studies to corroborate it.