With the market assuming that the chances of adult schizophrenia treatment, Fanapt, getting approved were about as slim as a snowball surviving the night in hell, Vanda Pharmaceuticals had the last laugh yesterday when the FDA gave the drug a green light for marketing authorisation. Approval, which came after the market closed, was enough to push Vanda’s shares up by a massive nine-fold from $1.08 to $9.84 in post-market trading, as investors scrambled to get on board.

When the markets opened in New York the shares were trading at $9.78. The surprise decision has shocked industry observers, who had almost universally predicted failure following the decision by the FDA in July 2008 to post the group an unapprovable letter, over concerns that the drug looked too much like existing treatments in the market and would have to undergo more trials to establish a clear benefit (Vanda left reeling by FDA's rejection of Fanapta, July 28, 2008).