April 29 Madison Williams downgraded Vanda Pharmaceuticals Inc (VNDA.O) to "reduce" from "buy," saying its physician survey indicated that the company's schizophrenia drug Fanapt "is having a tough time commercially."
"Our conversations and survey responses from psychiatrists suggest that Novartis NOVN.VX is doing an abysmal job on Fanapt's U.S. launch thus far," analyst David Moskowitz wrote in a note.
The Swiss drugmaker paid $200 million last October to acquire the rights to sell Vanda's Fanapt in the United States and Canada.
Side effect issues may be limiting the use of Fanapt and competition from Merck & Co's (MRK.N) drug Saphris soaking up demand for new alternative treatments, the analyst said and cut his price target on the stock to $7 from $19.
Shares of Vanda were down about 7 percent at $8.96 in morning trade Thursday on Nasdaq. (Reporting by Jennifer Robin Raj in Bangalore; Editing by Aradhana Aravindan)