Bad news at Vanda hurts stock prices

FDA rejected Vanda's schizophrenia drug iloperidone, saying it must next go through a comparative study with other schizophrenia medications. The news caused the company's stock to drop nearly 73 percent. It closed at a mere 90 cents, down from a closing price of $18.57 last year on July 30. FDA recommended comparing the medication to current medications aimed at the treatment of schizophrenia; these include Risperdal and Zyprexa.

Vanda bought the drug from Novartis and paid a half-million dollars for it. CEO Mihael Polymeropoulos says he's "puzzled" at the lack of approval. Further development efforts for the medication are on hold for now.

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