Vanda Pharmaceuticals Inc.

Well we are looking at yet another small pharma company, These companies are fairly immune to economic slowdowns, therefore a large number of investors are wanting to buy call options. This results in driving up the price on the options we want to sell. The thing to keep in mind is that these stock prices are very Susceptible to FDA rulings on their drugs as they go through trials. All types of investing carry risk. Please do not invest money you cannot afford to loose.

Vanda Pharmaceuticals Inc. (Vanda) is a biopharmaceutical company focused on the development and commercialization of clinical-stage drug candidates, with exclusive worldwide commercial rights to three product candidates in clinical development for various central nervous system disorders. VandaGÇÖs lead product candidate, iloperidone, is a compound for the treatment of schizophrenia and bipolar disorder. Its second product candidate, VEC-162, is a compound for the treatment of sleep and mood disorders. In November 2006, Vanda announced positive top-line results from its Phase III trial of VEC-162 in transient insomnia. VEC-162 demonstrated significant improvement in several parameters used to measure the efficacy of insomnia therapies, including reduced duration of wake after sleep onset, improved sleep efficiency and shortened time to persistent sleep. VandaGÇÖs third product candidate, VSF-173, is a compound for the treatment of excessive sleepiness and is ready for a Phase II trial.

Vanda Pharmaceuticals Inc: Stock Rating Summary
5
Vanda Pharmaceuticals Inc, a small-cap company in the health care sector, is expected to match the market over the next six months with above average risk.
10 is the best possible rating.

FundamentalGrade: B
•The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
•Earnings growth information is unavailable or inconsistent.
•Earnings estimate revision information is unavailable or inconsistent.

OwnershipGrade: C
•Insider trading information is unavailable or inconsistent.
•Shares are under heavy accumulation by financial institutions. Positive for a small company like VNDA

ValuationGrade: D
•The price-to-earnings multiple is a negative number. No effect
•Price-to-sales information is unavailable or inconsistent.
•The ratio of VNDA's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.

TechnicalGrade: F
•The StockScouter measure of relative price change and consistency is very low. Very negative
•Previous day’s closing price for VNDA was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive



Average brokerage recommendation is Moderate Buy.


Trades:
Covered call
Buy stock @ 4.91
Sell March 5 covered call @ 0.70
14.3% return in 38 days

Hedge Wrap
Buy stock @ 4.91
Sell March 5 covered call @ 0.70
Buy March 2.50 put @ 0.10
12.3% return in 38 days

Talk to you tomorrow.