Future Pak Increases Bid for Vanda Pharmaceuticals to Include CVRs in Addition to $7.25 to $7.75 Per Share in Cash

Increased offer now includes CVRs, providing up to $260 million in potential value beyond the current cash consideration to stockholders

Offer represents $11.62 to $12.12 per share, for a 187% to 199% unaffected premium, when combining the proposed cash consideration and potential value of the CVRs

Future Pak remains committed to a transaction despite actions by Vanda to limit stockholder influence and its refusal to engage constructively

Future Pak LLC (“Future Pak”) confirms it increased its offer for all outstanding shares of common stock of Vanda Pharmaceuticals (“Vanda” or “the Company”) (NYSE: VNDA) to include Contingent Value Rights (“CVRs”) in addition to the cash consideration of $7.25 to $7.75 per share (the “Revised Proposal”), representing a potential increase of approximately $4.37 per share from the prior proposal announced on April 17, 2024. This increased offer, assuming full triggering of the CVRs, represents a premium of 140% to 150% to Vanda’s closing share price of $4.84 on May 6, 2024 and a premium of 187% to 199% to the Company’s unaffected share price of $4.05 on April 16, 2024, the last trading day prior to Future Pak’s previous public announcement regarding its offers to acquire Vanda.

“In an effort to make progress, we have again increased our consideration for Vanda to provide a potential framework for CVRs that could bring total consideration significantly higher. This increase comes despite the uncertainty of further cash burn in the coming quarters,” stated Tina Guilder, Head of Transactions of Future Pak. “We have tried to be constructive and offered incremental value if the commercial business performs well, in addition to adding significant value attributable to the monetization of the pipeline. We’ve added value linked to Fanapt as well as Tradipitant, and we believe these additional components offer significant value for Vanda stockholders via upside participation and more than form a reasonable basis for the company to engage in constructive dialogue with us.”

Specifically, the increased offer includes up to $260 million of potential CVR payments, consisting of:

• $60 million in payments based on Fanapt net sales, approximating $1.01 per share, via an annual $20 million milestone payment if Fanapt net sales reach $120 million in any of the next 3 calendar years
• The first $200 million of any license or monetization proceeds of Tradipitant in any of the next 3 calendar years approximating $3.36 per share. The FDA has set September 18, 2024 as the target date for its decision under the Prescription Drug User Fee Act (PDUFA) for Tradipitant’s potential approval

With the combination of the cash consideration of $7.25 to $7.75 per share and CVRs representing up to approximately $4.37 per share in additional value, our Revised Proposal represents $11.62 to $12.12 in potential total value to stockholders, resulting in an implied premium of 140% to 150% to Vanda’s current share price.

Despite multiple actions by Vanda to limit stockholder influence, Future Pak remains staunchly committed to consummating a transaction with Vanda. Future Pak’s current proposal ascribes meaningful value to the Company’s platform, with the Revised Proposal delivering at least $4.37 per share in excess of the Company’s current cash value. This is despite the fact that Vanda’s current value of $288 million implies a market perspective that Vanda’s current platform creates a drag on cash value of $6.75 per share.

“We have invested considerable time and resources and remain fully committed to completing this transaction. It is our sincere hope that Vanda’s Board will view this revised offer favorably and engage with us in a constructive dialogue, while delivering additional information to enable us to refine our offer,” stated Tina Guilder.

Future Pak believes it is in the best interest of both Vanda’s stockholders and management to take the Company private, thereby giving stockholders the ability to realize near-term and additional substantial value through the CVRs, while potentially providing the opportunity to develop its current clinical product pipeline without public market scrutiny.

As noted previously, with full access to information necessary to perform due diligence, Future Pak believes it could reach a definitive agreement with Vanda and announce a transaction in four to six weeks. Furthermore, Future Pak reiterates it would not require a financing contingency in connection with a transaction and has the full support of its strategic financial partner, Colbeck Capital Management.

Future Pak has engaged Moelis & Company LLC as financial advisor, Honigman LLP as legal advisor, and MacKenzie Partners, Inc. as investor engagement advisor.

About Future Pak

Future Pak is a privately-held contract manufacturer and packager of pharmaceutical and nutraceutical products. The company has access to retail, specialty and institutional customers through its expansive partner network. Leveraging its existing infrastructure, Future Pak seeks to make a positive impact on patients by utilizing its reliable supply chain and its quality-first approach. The company was incorporated in 1977 and is based in Wixom, Michigan.

Additional Information

This press release is provided for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any securities.

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