f4693prec14a.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant
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Filed
by a Party other than the
Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §
240.14a-12
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VANDA
PHARMACEUTICALS INC.
(Name of
Registrant as Specified In Its Charter)
TANG
CAPITAL PARTNERS, LP
TANG
CAPITAL MANAGEMENT, LLC
KEVIN
C. TANG
ANDREW
D. LEVIN, M.D., Ph.D.
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(Name
of Person(s) Filing Proxy Statement if Other Than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box)
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1.
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Title
of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction applies:
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3.
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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4.
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Proposed
maximum aggregate value of transaction:
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5.
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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6.
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Amount
Previously Paid:
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7.
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Form,
Schedule or Registration Statement No.:
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Filing
Party:
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Date
Filed:
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PRELIMINARY
COPY — SUBJECT TO COMPLETION
April •, 2009
2009
ANNUAL MEETING OF STOCKHOLDERS
OF
VANDA
PHARMACEUTICALS INC.
PROXY
STATEMENT OF TANG CAPITAL PARTNERS, LP
To Our
Fellow Vanda Pharmaceuticals Inc. Stockholders:
This Proxy Statement and the
accompanying WHITE proxy card are being furnished to stockholders of Vanda
Pharmaceuticals Inc. (the “Company” or “Vanda”) in connection with the
solicitation by Tang Capital Partners, LP (“Tang Capital,” “us” or “we”) of
proxies to be used at the Company’s 2009 Annual Meeting of Stockholders, which
is to be held on [June 5, 2009] at • (local
time), at • ,
and at any adjournments, postponements or continuations thereof (the “Annual
Meeting”). The Company has set the record date for determining
stockholders entitled to notice of and to vote at the Annual Meeting as •, 2009
(the “Record Date”). Stockholders of record as of the close of
business on the Record Date are entitled to vote at the Annual
Meeting. This proxy statement and the accompanying WHITE proxy card
are first being furnished to Vanda stockholders on or about April • , 2009.
At the Annual Meeting, the Participants
(as hereinafter defined) will seek to elect to the board of directors of the
Company (the “Board”) a slate of two nominees— Kevin C. Tang and Andrew D.
Levin, M.D., Ph.D. (each a “Nominee” and, collectively, the
“Nominees”). Each of the Nominees has consented to being named in
this proxy statement, and to serve as a director if elected. Pursuant to this
proxy statement, Tang Capital is soliciting proxies from holders of the
Company’s common stock, par value
$0.001 per share (the “Common Stock”) to vote for the
Nominees.
PLEASE
VOTE FOR KEVIN C. TANG AND ANDREW D. LEVIN, M.D., Ph.D.
AS
DIRECTORS OF THE COMPANY USING THE ENCLOSED WHITE PROXY CARD.
Additionally, at the Annual Meeting,
Tang Capital will propose a stockholder resolution whereby the stockholders of
the Company request that the Board promptly take all necessary action to swiftly
and orderly liquidate the Company’s remaining assets and return all remaining
capital to the Company’s stockholders.
PLEASE
VOTE FOR PROPOSAL 2 AND HELP US ENCOURAGE THE BOARD TO TAKE ALL ACTION NECESSARY
TO MAXIMIZE THE VALUE OF THE STOCKHOLDERS’ INVESTMENTS IN THE COMPANY AND
PREVENT FURTHER EROSION OF STOCKHOLDER VALUE.
Tang Capital intends to deliver a proxy
statement and form of proxy to holders of, in the case of Proposal 2, at least
the percentage of the Company's voting shares required to carry Proposal 2 and,
in the case of the Nominees, a sufficient number of holders of the Company's
voting shares to elect the Nominees.
What
you need to do now
Your vote is extremely important,
regardless of whether you own one share or many shares. Tang Capital urges you
to complete, sign, date and return the enclosed WHITE proxy card
today!
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If
your shares are registered in your own name, please sign and date the
enclosed WHITE proxy card and return it to Tang Capital, c/o The Altman
Group, in the enclosed postage-paid envelope
today.
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If
you have previously signed and returned a [BLUE] proxy card to the
Company, you have the right to change your vote. Only your latest dated
proxy card will count at the Annual Meeting. To revoke any [BLUE] proxy
card you have already sent to the Company, please sign, date, and mail the
enclosed WHITE proxy card to Tang Capital, c/o The Altman Group, in the
enclosed postage-paid envelope today. Any proxy may be revoked at any time
prior to the Annual Meeting by delivering a written notice of revocation
or a later dated proxy for the Annual Meeting to The Altman Group at the
address below, or by voting in person at the Annual
Meeting.
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If
your shares are held in the name of a brokerage firm, bank, bank nominee
or other institution, only it can vote such
shares. Accordingly, please contact the person responsible for
your account and instruct that person to execute the WHITE proxy card on
your behalf. Tang Capital urges you to confirm your
instructions in writing to the person responsible for your account and to
provide a copy of those instructions to Tang Capital, c/o The Altman
Group, at the address set forth below and on the back cover of this Proxy
Statement, so that we are aware of your instructions and can attempt to
ensure that they are followed.
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If
you have any questions, require assistance in voting your WHITE proxy card
or need additional copies of our proxy materials, please call The Altman
Group at the phone numbers listed
below.
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The
Altman Group, Inc.
1200 Wall
Street West, 3rd
Floor
Lyndhurst,
NJ 07071
Banks
& Brokers call: (201) 806-2214
Shareholders
call: (866) 620-8437
BACKGROUND
AND REASONS FOR THE SOLICITATION
Tang Capital has engaged in discussions
with the Company and the Board with regards to the strategic direction of the
Company. We believe that in order to maximize value for all
stockholders, the Company must cease operations immediately, liquidate the
Company’s assets and distribute all remaining capital to the Company’s
stockholders.
Since the Company continues to operate
as of the date of this Proxy Statement and has not publicly announced any plan
of liquidation and dissolution, we believe the Board has rejected our proposal
to immediately cease all operations, liquidate the Company’s assets and
distribute all remaining capital to the Company’s stockholders. In
light of the foregoing, and in order to preserve and maximize the diminishing
value of the Company’s assets for the benefit of all stockholders, Tang Capital
has nominated Kevin C. Tang and Andrew D. Levin, M.D., Ph.D. for election to the
Board at the Annual Meeting and proposed a stockholder resolution to be voted on
at the Annual Meeting whereby the stockholders will request that the Company
cease operations immediately, liquidate the Company’s assets and distribute all
remaining capital to the Company’s stockholders.
On February 13, 2009, Tang Capital
delivered a letter (the “Letter”) to the Nominating and Governance Committee of
the Company recommending Mr. Tang and Dr. Levin as nominees for election to the
Board at the Annual Meeting. On the same date, Tang Capital also delivered a
notice (the “Notice”) to the Company of its intention to, among other things,
nominate Mr. Tang and Dr. Levin for election to the Board and propose the
stockholder resolution described herein.
Since delivery of the Letter and
Notice, the Board has failed to engage with Tang Capital in a dialogue on the
merits of its recommendations. Tang Capital therefore decided to embark on this
solicitation of proxies to elect the Nominees and approve the resolution
described herein. See the information under the heading “Proposal 1 –
Election of Directors” beginning on page • for additional information about the
Nominees. Further, Tang Capital believes that the proposed resolution
is the best way for the stockholders to let the Board know what the stockholders
consider to be the best direction for the future of the Company in a manner that
is quantitative, clear and indisputable.
SHARES
OUTSTANDING AND VOTING RIGHTS
Only holders of Common Stock of record
at the close of business on • (the “Record Date”) are entitled to notice of and
to vote at the Annual Meeting. Stockholders who sell shares of Common Stock
before the Record Date may not vote such shares at the Annual
Meeting. In addition, stockholders who acquire shares of Common Stock
after the Record Date may not vote such shares at the Annual Meeting, unless
those stockholders obtain a proxy to vote such shares from the stockholder of
record on the Record Date. Stockholders of record on the Record Date
will retain their voting rights in connection with the Annual Meeting even if
they sell such shares after the Record Date. Holders of record of the Company’s
Common Stock on the Record Date are entitled to one vote per share at the Annual
Meeting on each proposal.
As of the
date of this proxy statement, Tang Capital and its affiliates beneficially own
an aggregate of 3,965,852 shares of Common Stock, representing approximately
14.9% of the Company’s outstanding shares of Common Stock. According
to the Company’s Annual Report on Form 10-K for the period ending December 31,
2008 there were 26,653,478 shares of the Company’s Common Stock outstanding as
of March 11, 2009. Tang Capital intends to vote all of the shares it
beneficially owns FOR the election of the Nominees and FOR Proposal
2.
VOTING
AND PROXY PROCEDURE
Quorum
The conduct of business at the Annual
Meeting requires a quorum. According to the bylaws of the Company, the holders
of a majority of all of the shares of stock entitled to vote at the Annual
Meeting, present in person or by proxy, shall constitute a quorum for all
purposes. Under applicable law, abstentions and “broker non-votes” count toward
the quorum. A “broker non-vote” occurs when shares held of record by a bank,
broker or other holders of record for a beneficial owner are deemed present at
the meeting for purposes of a quorum, but are not voted on a particular proposal
because that record holder does not have discretionary voting power for that
particular proposal and has not received voting instructions from the beneficial
owner on how to vote on such proposal.
Proposal
1: Election of Directors
The two nominees for election to the
Board who receive the most votes cast in favor of their election at the Annual
Meeting (also known as a “plurality” of the votes) will be elected. Abstentions,
broker non-votes and withheld votes will have no effect on the outcome of
director elections.
With respect to Proposal 1, the
accompanying WHITE proxy card will be voted in accordance with the stockholder’s
instructions on such WHITE proxy card. Stockholders may vote for the
Nominees by marking the proper boxes on the WHITE proxy card. If no
instructions are given with respect to this item, the WHITE proxy card will be
voted FOR all Nominees.
Proposal
2: Approval of Stockholder Resolution
Proposal 2 will be approved by the
stockholders if the votes cast FOR Proposal 2 exceed the votes cast AGAINST
Proposal 2. Abstentions and broker non-votes will have no effect on
the outcome of the vote on Proposal 2.
With respect to Proposal 2, the
accompanying WHITE proxy card will be voted in accordance with the stockholder’s
instructions on such WHITE proxy card. Stockholders may vote on the
approval of the stockholder resolution by marking the proper box on the WHITE
proxy card. If no instructions are given with respect to this item,
the WHITE proxy card will be voted FOR the stockholder resolution.
Proposal
3: Ratification of Selection of Auditors
Based on information contained in the
Company’s proxy statement for the 2008 annual meeting of stockholders, filed
with the Securities and Exchange Commission (the “Commission”) on April 2, 2008
(the “2008 Proxy Statement”), it is expected that at the Annual Meeting
stockholders will be asked to ratify the appointment by the Board of
PricewaterhouseCoopers LLP as the independent auditors of the Company for the
year 2009. We are not making any recommendation on this
proposal. Please refer to the Company’s proxy statement for the
Annual Meeting, when available, for a more detailed discussion of this
proposal.
Proposal 3 will be approved by the
stockholders if the votes cast FOR Proposal 3 exceed the votes cast AGAINST
Proposal 3. Abstentions and broker non-votes will have no effect on
the outcome of the vote on Proposal 3.
With respect to Proposal 3, the
accompanying WHITE proxy card will be voted in accordance with the stockholder’s
instructions on such WHITE proxy card. Stockholders may vote on the ratification
of the appointment of PricewaterhouseCoopers LLP by marking the proper box on
the WHITE proxy card. If no instructions are given with respect to
this item, you will be deemed to have given a direction to ABSTAIN from voting
the shares represented by the WHITE proxy card with respect to the ratification
of the appointment of PricewaterhouseCoopers LLP.
Revocation
of Proxies
Stockholders of the Company may revoke
their proxies at any time prior to the vote at the Annual Meeting by attending
the Annual Meeting and voting the shares held in their name, or by voting shares
pursuant to a “legal proxy” from their nominee holder, in person (although
attendance at the Annual Meeting will not in and of itself constitute revocation
of a proxy) or by delivering a written notice of revocation. The delivery of a
properly completed and subsequently dated proxy will also constitute a
revocation of any earlier dated proxy. Written notices of revocation
may be delivered either to Tang Capital, c/o The Altman Group, its proxy
solicitor, at its address set forth on the back cover of this Proxy Statement,
or to the Company at Vanda Pharmaceuticals Inc., 9605 Medical Center Drive,
Suite 300, Rockville, MD 20850 or any other address provided for the purpose of
revoking proxies by the Company. Although a written notice of
revocation is effective if delivered to the Company, Tang Capital requests that
either the original or photostatic copies of all written notices of revocation
be mailed to Tang Capital in care of their proxy solicitor at the address set
forth on the back cover of the Proxy Statement so that Tang Capital will be
aware of all revocations. Additionally, The Altman Group may use this
information to contact stockholders who have revoked their proxies in order to
solicit later dated WHITE proxies for the election of the Nominees and the other
proposals set forth herein.
Other
Matters To Be Considered At The Annual Meeting
Except as set forth above, we are not
aware of any matters to be brought before the Annual Meeting. Should other
matters properly be brought before the Annual Meeting, the attached WHITE proxy
card, when duly executed, will give the proxies named therein discretionary
authority to vote on all such other matters and on all matters incident to the
conduct of the Annual Meeting.
Execution and delivery of a proxy by a
record holder of shares of Common Stock will be presumed to be a proxy with
respect to all shares held by such record holder unless the proxy specifies
otherwise.
INFORMATION
ABOUT PARTICIPANTS IN THE SOLICITATION
Tang Capital, Tang Capital Management,
LLC, Kevin C. Tang and Andrew D. Levin, M.D., Ph.D. are participants
(collectively, the “Participants”) in the solicitation of proxies for the Annual
Meeting. Information concerning the Participants, including
information related to all transactions by the Participants in the Company’s
securities within the past two years, is set forth in Annex A to this proxy
statement.
Except
as set forth in this Proxy Statement (including the Annexes hereto), to the best
of Tang Capital’s knowledge:
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during
the past 10 years, no Participant has been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors);
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no
Participant directly or indirectly beneficially owns any securities of the
Company;
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no
Participant owns any securities of the Company which are owned of record
but not beneficially;
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no
Participant has purchased or sold any securities of the Company during the
past two years;
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no
part of the purchase price or market value of the securities of the
Company owned by any Participant is represented by funds borrowed or
otherwise obtained for the purpose of acquiring or holding such
securities;
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no
Participant is, or within the past year was, a party to any contract,
arrangement or understanding with any persons with respect to any
securities of the Company, including, but not limited to, joint ventures,
loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profits, divisions of losses or profits, or the giving or
withholding of proxies;
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no
associate of any Participant owns beneficially, directly or indirectly,
any securities of the Company;
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no
Participant owns beneficially, directly or indirectly, any securities of a
parent or subsidiary of the Company;
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no
Participant or any of its immediate family members, associates or
associates’ immediate family members were a party to any transaction, or
series of similar transactions, since the beginning of the Company’s last
fiscal year, or is a party to any currently proposed transaction, or
series of similar transactions, to which the Company or any of its
subsidiaries was or is a party, in which the amount involved exceeds
$120,000;
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no
Participant or any associate of a Participant is a party adverse to the
Company or any of its subsidiaries or has a material interest adverse to
the Company or any of its subsidiaries;
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no
Participant or any of its immediate family members, associates or
associates’ immediate family member have any arrangement or understanding
with any person with respect to any future employment by the Company or
its affiliates, or with respect to any future transactions to which the
Company or any of its affiliates will or may be a party; and
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no
person, including the Participants, who is a party to an arrangement or
understanding pursuant to which the Nominees are proposed to be elected,
has a substantial interest, direct or indirect, by security holdings or
otherwise, in any manner to be acted on at the Annual
Meeting.
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PROPOSAL
1 – ELECTION OF DIRECTORS
Tang Capital is seeking your support at
the Annual Meeting to elect the Nominees. The Board currently
consists of seven members who are divided into three classes. We are
seeking your support at the Annual Meeting to elect the Nominees in opposition
to the two individuals nominated by the Company. If elected, each
Nominee would hold office for a term expiring at the 2012 annual meeting of
stockholders and will remain in office until his successor has been duly elected
and qualified (or until the director’s death, resignation or
removal).
Set forth below are the name, age,
business address, present principal occupation, employment history and
directorships of publicly held companies of each Nominee for at least the past
five years. Each of the Nominees is a citizen of the United States of
America. Each of the Nominees is independent under the independence
standards applicable to the Company under paragraph (a)(1) of Item 407 of
Regulation S-K.
Kevin C. Tang. Kevin C.
Tang, is the Managing Director of Tang Capital Management, LLC, an investment
firm focused on the health care industry that he founded in August
2002. From September 1993 to July 2001, Mr. Tang held various
positions at Deutsche Banc Alex. Brown, Inc., an investment banking firm, most
recently serving as Managing Director and head of the firm’s life sciences
research group. Mr. Tang currently serves as a director of Ardea
Biosciences, Inc. and A.P. Pharma, Inc. and serves on the board of two privately
held companies. Mr. Tang received his B.S. degree in Psychology from
Duke University. Mr. Tang’s business address is 4401 Eastgate Mall,
San Diego, CA 92121. Mr. Tang is 42 years old.
Andrew D. Levin, M.D., Ph.D.
Andrew D. Levin, M.D., Ph.D. has served as a Principal at Tang
Capital Management, LLC, an investment firm focused on the health care industry,
since April 2008. From July 2007 to April 2008, Dr. Levin served as a
Business Development Manager at Genzyme Corporation, a pharmaceutical
company. Dr. Levin received a B.S.E. degree in Mechanical Engineering
from Princeton University, a Ph.D. in Bioengineering from the Massachusetts
Institute of Technology and an M.D. from Harvard Medical School. Dr.
Levin’s business address is 4401 Eastgate Mall, San Diego, CA
92121. Dr. Levin is 32 years old.
Under Delaware corporate law, the Board
is charged with the management of the Company, including determining its
strategic direction. Tang Capital believes, therefore, that if the
Nominees are elected they would be in a position, as directors of the Company,
to influence the strategic direction of the Company in accordance with their
fiduciary duties.
The Nominees will constitute a minority
of the Board if they are elected and, therefore, even if they vote in a
coordinated manner, will not be able to cause the adoption of any measure
without the support of other members of the Board. Depending on the
responsiveness of the Board to any proposals or initiatives presented by the
Nominees, Tang Capital may seek to nominate additional directors to the Board at
the 2010 annual meeting if Tang Capital believes that additional representation
on the Board would make its efforts more effective.
The beneficial ownership of Common
Stock of the Nominees is set forth on Annex A under the heading “Information
Regarding the Participants in the Solicitation.” None of the Nominees
have any contract, arrangement or understanding with the Company, or any
financial interest concerning the Company other than their financial interests
in the value of the Common Stock as set forth on Annex A.
Tang Capital reserves the right to
nominate additional persons if the Company increases the size of the Board above
its existing size or increases the number of directors whose terms expire at the
Annual Meeting. Additional nominations made pursuant to this
paragraph are without prejudice to the position of Tang Capital that any attempt
to increase the size of the current Board or to reconstitute or reconfigure the
classes on which the current directors serve would be
inappropriate. In the event that any additional person is nominated
by us as a result of any increase in the size of the current Board or increase
in the number of directors whose terms expire at the Annual Meeting, then such
person will be named and information regarding such person will be provided to
stockholders in a proxy supplement and revised proxy card disseminated at that
time.
WE
STRONGLY URGE YOU TO VOTE FOR THE ABOVE NOMINEES BY SIGNING, DATING AND
RETURNING THE ENCLOSED WHITE PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE PROVIDED
WITH THIS PROXY STATEMENT. IF YOU SIGN THE ENCLOSED WHITE PROXY CARD WITHOUT
INDICATING YOUR VOTE, YOU WILL BE DEEMED TO HAVE DIRECTED THE APPOINTED PROXIES
TO VOTE YOUR SHARES FOR THE ELECTION OF ALL OF THE NOMINEES. IF YOU
HAVE ALREADY RETURNED A PROXY CARD FURNISHED BY COMPANY MANAGEMENT TO THE
COMPANY, SUBMITTING A WHITE PROXY WITH A LATER DATE WILL REVOKE THE EARLIER
PROXY.
PROPOSAL
2 – STOCKHOLDER RESOLUTION
Tang Capital is seeking your support at
the Annual Meeting to approve the following resolution of the
stockholders:
Now, Therefore, Be It
Resolved, that the stockholders of the Company hereby request that the
Board of Directors of the Company promptly take all necessary action to swiftly
and orderly liquidate the Company’s remaining assets and return all remaining
capital to the Company’s stockholders.
By approving this Proposal 2, the
stockholders can send a message to the Board that the equity owners of the
Company favor its liquidation. However, this Proposal 2 is an
advisory vote. The Board will not be required to take the actions
urged in the proposal even if it is approved by the required vote of
stockholders.
None of the Participants has any
contract, arrangement or understanding with the Company, or any financial
interest concerning the Company other than their financial interests in the
value of the Common Stock as set forth on Annex A.
WE
STRONGLY URGE YOU TO VOTE FOR THE ABOVE STOCKHOLDER RESOLUTION BY SIGNING,
DATING AND RETURNING THE ENCLOSED WHITE PROXY CARD IN THE POSTAGE-PREPAID
ENVELOPE PROVIDED WITH THIS PROXY STATEMENT. IF YOU SIGN THE ENCLOSED
WHITE PROXY CARD WITHOUT INDICATING YOUR VOTE, YOU WILL BE DEEMED TO HAVE
DIRECTED THE APPOINTED PROXIES TO VOTE YOUR SHARES FOR THE
PROPOSAL. IF YOU HAVE ALREADY RETURNED A PROXY CARD FURNISHED BY
COMPANY MANAGEMENT TO THE COMPANY, SUBMITTING A WHITE PROXY WITH A LATER DATE
WILL REVOKE THE EARLIER PROXY.
SOLICITATION
OF PROXIES
Proxies may be solicited from
individuals, banks, brokers, custodians, nominees, other institutional holders
and other fiduciaries in person and by mail, phone, publication and electronic
means.
Tang Capital has entered into an
agreement with The Altman Group for solicitation and advisory services in
connection with this solicitation, for which The Altman Group will receive a fee
not to exceed $25,000, together with reimbursement for its reasonable
out-of-pocket expenses, and will be indemnified against certain liabilities and
expenses, including certain liabilities under the federal securities laws. The
Altman Group will solicit proxies from individuals, brokers, banks, bank
nominees and other institutional holders. Tang Capital will request
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward all solicitation materials to the beneficial owners of the shares of
Common Stock they hold of record. Tang Capital will reimburse these
record holders for their reasonable out-of-pocket expenses in so
doing. It is anticipated that The Altman Group will employ
approximately • persons to solicit the Company’s stockholders for the Annual
Meeting.
Tang Capital and its affiliates will
pay the cost of its solicitation of proxies at the Annual Meeting, including the
cost of preparing, assembling and mailing this proxy material to
stockholders. If its solicitation is successful and any or all
Nominees are elected to the Board, Tang Capital may, without seeking further
approval by the Company’s stockholders, seek reimbursement of its solicitation
expenses from the Company. Tang Capital’s regular full-time employees
may solicit proxies during the course of their ordinary employment and will not
receive any additional compensation.
Tang Capital has incurred costs for
legal counsel and other services related to this solicitation. The
total cost of Tang Capital’s solicitation as of •, 2009 was
approximately $•; Tang Capital estimates that the final cost of the
solicitation will be approximately $•.
INFORMATION
CONTAINED IN THE COMPANY PROXY STATEMENT
Tang
Capital has omitted from this proxy statement certain information regarding the
Company that may be deemed to be required by applicable law and that is included
in the Company’s proxy statement for the Annual Meeting. This information
includes, among other things:
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Information
relating to the ownership of Company securities by certain beneficial
owners and management;
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Information
regarding the procedures for submitting stockholder proposals and director
nominations and for consideration of stockholder proposals for inclusion
in the Company’s proxy materials;
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Information
required under Item 407 of Regulation S-K of the Securities Act of 1933,
as amended, regarding Director Independence, Board Meetings, Committees,
Annual Meeting attendance, and Shareholder Communications;
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Information
regarding the Company’s directors, including its nominees for election at
the Annual Meeting; and
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Information
regarding the Company’s compensation policies and compensation paid or
payable to directors and executive
officers.
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Stockholders
should refer to the Company’s proxy statement to review the Company’s
disclosures with respect to these matters. Except as otherwise noted
herein, the information concerning the Company has been taken from or is based
upon documents and records on file with the SEC and other publicly available
information. Because Tang Capital did not prepare the Company’s proxy
statement or the Company’s other SEC filings and does not have first hand
knowledge of, or any way to independently verify the accuracy or completeness
of, the information contained therein, Tang Capital takes no responsibility for
the accuracy or completeness of any such documents or filings.
The Company is subject to the periodic
reporting requirements of the Exchange Act and in accordance therewith is
required to file reports, proxy statements and other information with the
SEC. Reports, registration statements, proxy statements and other
information filed by the Company with the SEC can be inspected and copied at the
public reference facilities maintained by the SEC at 100 F Street, N.E.,
Washington, DC 20549. Documents filed electronically by the Company are also
available at the SEC’s Website
(http://www.sec.gov).
ADDITIONAL
INFORMATION
The principal business address of the
Company is 9605 Medical Center Drive, Suite 300, Rockville, MD 20850. The
Company’s telephone number is (240) 599 - 4500.
PLEASE
VOTE FOR OUR NOMINEES AND PROPOSAL BY SIGNING, DATING AND RETURNING A WHITE
PROXY CARD TODAY!
Sincerely,
Tang
Capital Partners, lp
by: Tang
Capital Management, LLC, its general partner
/s/
Kevin C.
Tang
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Kevin
C. Tang
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Managing
Director
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ANNEX
A
INFORMATION
REGARDING THE PARTICIPANTS IN THE SOLICITATION
Tang
Capital and its Affiliates
Tang Capital is a participant in this
solicitation. As of the Record Date and as of April •, 2009, the
approximate date on which this Proxy Statement and the WHITE proxy card are
being mailed to stockholders, Tang Capital is the beneficial owner of 3,665,852
shares of Common Stock, 100 of which are held of record by Tang Capital, which
represents approximately 13.75% of the shares of Common Stock issued and
outstanding.
Tang Capital Management, LLC, as the
general partner of Tang Capital, may be deemed to beneficially own
the 3,665,852 shares held by Tang Capital. Tang Capital Management, LLC
shares voting and dispositive power over such shares with Tang Capital and Kevin
C. Tang.
In the past, Tang Capital has held some
of its shares in commingled margin accounts, which extended margin credit to
Tang Capital, as and when required, to open or carry positions in the margin
accounts, subject to applicable federal margin regulations, stock exchange rules
and credit policies. In such instances, the positions held in the
margin accounts were pledged as collateral security for the repayment of debit
balances in the accounts. The margin accounts may have from time to
time had debit balances. Since other securities were held in the margin
accounts, it is not possible to determine the amounts, if any, of margin used to
purchase the shares of Common Stock reported herein. As of the date
of this Proxy Statement no shares of Common Stock are held in margin accounts or
otherwise pledged as security.
Tang Capital Management, LLC is the
general partner of Tang Capital. Kevin C. Tang is the Managing
Director of Tang Capital Management, LLC. Andrew D. Levin, M.D.,
Ph.D. is a Principal at Tang Capital Management, LLC. Tang Capital is
primarily engaged in the business of investing. The principal
business of the Tang Capital Management, LLC is acting as general partner of
Tang Capital. Because Tang Capital Management, LLC and Kevin C. Tang
may directly or indirectly exercise control over Tang Capital, they may be
deemed to beneficially own the shares of Common Stock held by Tang Capital and,
together with Tang Capital, also may be deemed to be participants in the
solicitation of WHITE proxies for the Annual Meeting.
The principal executive office of Tang
Capital, Tang Capital Management, LLC and Kevin C. Tang is 4401 Eastgate Mall,
San Diego, California 92121.
The foregoing percentages were
calculated based on the 26,653,478 shares of Common Stock outstanding as of
March 11, 2009, as reflected in the Company’s Annual Report for the period
ending on December 31, 2008 and filed with the SEC on Form 10-K on March 13,
2009.
For information regarding purchases and
sales of securities of Company during the past two years by Tang Capital and its
affiliates, see the information below under the heading “The Participants’
Transactions in the Company’s Securities.”
Other
Participants in the Solicitation
As Nominees, Kevin C. Tang and Andrew
D. Levin, M.D., Ph.D. are also considered participants in this solicitation.
Additional information concerning these individuals is set forth
below.
Kevin
C. Tang
The principal occupation of Mr. Tang is
acting as the Managing Director of Tang Capital Management, LLC, the general
partner of Tang Capital. Mr. Tang’s business address is c/o Tang
Capital Management, LLC, 4401 Eastgate Mall, San Diego,
California 92121.
Kevin C. Tang is the beneficial owner
of 3,965,852 shares of Common Stock, comprising 3,665,852 shares beneficially
owned by Tang Capital Partners, LP, 217,584 shares beneficially owned by the
Haeyoung and Kevin Tang Foundation, Inc., 41,208 shares beneficially owned by
the Individual Retirement Account for the benefit of Chang L. Kong (the “Chang
IRA”) and 41,208 shares beneficially owned by the Individual Retirement Account
for the benefit of Chung W. Kong (the “Chung IRA”). The
Haeyoung and Kevin Tang Foundation, Inc. is a private foundation, for which
Kevin C. Tang serves as President and Treasurer. Mr. Tang shares voting and
dispositive power over the shares held by this foundation with his wife,
Haeyoung K. Tang. Chang L. and Chung W. Kong are Kevin C. Tang’s in-laws and Mr.
Tang may be deemed to have shared dispositive power over the shares held in the
Chang IRA and the Chung IRA. Kevin C. Tang disclaims beneficial
ownership of all shares reported herein except to the extent of his pecuniary
interest therein. The mailing address of all of the foregoing persons
and entities is c/o Tang Capital Management, LLC, 4401 Eastgate Mall, San Diego,
CA 92121.
In the past, Tang Capital has held some
of its shares in commingled margin accounts, which extended margin credit to
Tang Capital, as and when required, to open or carry positions in the margin
accounts, subject to applicable federal margin regulations, stock exchange rules
and credit policies. In such instances, the positions held in the margin
accounts were pledged as collateral security for the repayment of debit balances
in the accounts. The margin accounts may have from time to time had
debit balances. Since other securities were held in the margin accounts, it is
not possible to determine the amounts, if any, of margin used to purchase the
shares of Common Stock reported herein. As of the date of this Proxy
Statement no shares of Common Stock are held in margin accounts or otherwise
pledged as security.
For information regarding purchases and
sales of securities of Company during the past two years by Mr. Tang and his
affiliates, see the information below under the heading “The Participants’
Transactions in the Company’s Securities.”
Andrew
D. Levin, M.D., Ph.D.
The principal occupation of Dr. Levin
is as a Principal at Tang Capital Management, LLC. Dr. Levin’s
business address is c/o Tang Capital Management, LLC, 4401 Eastgate Mall, San
Diego, California 92121.
Mr. Levin does not beneficially own any
Vanda securities. Pursuant to his employment by Tang Capital
Management, LLC, Dr. Levin is a participant in a deferred compensation plan, and
the value of his plan account is indexed to the performance of Tang Capital,
which includes shares of Common Stock.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
With the exception of the Form 4
filed December 2, 2008, with respect to a purchase of 145,000 shares of Common
Stock by Tang Capital, which was inadvertently filed late, all reports which
were required to be filed pursuant to Section 16(a) of the Securities Exchange
Act by the Participants during the fiscal year ended December 31, 2008 were
filed on a timely basis.
THE
PARTICIPANTS’ TRANSACTIONS IN THE COMPANY’S SECURITIES
Set forth below are the dates and
amounts of purchases of shares of Common Stock within the last two years by the
Participants:
Entity
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Transaction
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Security
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Trade
Date
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Shares
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Tang
Capital
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Purchase
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Common
Stock
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7/28/2008
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100,000
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Tang
Capital
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Purchase
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Common
Stock
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7/29/2008
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740,600
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Tang
Capital
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Purchase
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Common
Stock
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7/30/2008
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735,800
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Tang
Capital
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Purchase
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Common
Stock
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7/31/2008
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115,726
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Tang
Capital
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Purchase
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Common
Stock
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8/1/2008
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5,714
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Tang
Capital
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Purchase
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Common
Stock
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8/4/2008
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5,360
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Tang
Capital
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Purchase
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Common
Stock
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8/5/2008
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145,583
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Tang
Capital
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Purchase
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Common
Stock
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8/6/2008
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100,000
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Tang
Capital
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Purchase
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Common
Stock
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8/7/2008
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413,000
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Tang
Capital
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Sale
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Common
Stock
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8/13/2008
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(31,703)
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Tang
Capital
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Sale
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Common
Stock
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8/14/2008
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(33,353)
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Tang
Capital
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Purchase
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Common
Stock
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8/18/2008
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1,479
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Tang
Capital
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Purchase
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Common
Stock
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8/19/2008
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182,900
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Tang
Capital
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Purchase
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Common
Stock
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8/20/2008
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177,100
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Tang
Capital
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Purchase
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Common
Stock
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9/9/2008
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1,100,000
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The
Haeyoung and Kevin Tang Foundation, Inc.
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Purchase
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Common
Stock
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9/10/2008
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52,000
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The
Haeyoung and Kevin Tang Foundation, Inc.
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Purchase
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Common
Stock
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9/11/2008
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22,900
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The
Haeyoung and Kevin Tang Foundation, Inc.
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Purchase
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Common
Stock
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9/12/2008
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56,484
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The
Haeyoung and Kevin Tang Foundation, Inc.
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Purchase
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Common
Stock
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9/15/2008
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86,200
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Chang
L. Kong
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Purchase
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Common
Stock
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9/16/2008
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41,208
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Chung
W. Kong
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Purchase
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Common
Stock
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9/16/2008
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41,208
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Tang
Capital
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Purchase
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Common
Stock
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9/19/2008
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1,080,852
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Tang
Capital
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Purchase
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Common
Stock
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9/22/2008
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100,000
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Tang
Capital
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Purchase
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Common
Stock
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9/23/2008
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80,000
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Tang
Capital
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Purchase
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Common
Stock
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9/25/2008
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600,000
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Tang
Capital
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Purchase
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Common
Stock
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11/7/2008
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560,000
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Tang
Capital
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Purchase
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Common
Stock
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11/20/2008
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145,000
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Tang
Capital
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Disposal1
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Common
Stock
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9/15/2008
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(2,658,206)
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Except as
set forth above, none of the Participants have purchased or sold securities of
the Company in the last two years. None of the Participants has ever
traded in options, puts, calls, swaps or other derivative instruments relating
to shares of Common Stock.
1 Tang Capital
held 2,658,206 shares of Common Stock in an account at Lehman Brothers
International (Europe) (“LBIE”). On September 15, 2008 LBIE was
placed into administration under United Kingdom law and four partners of
PriceWaterhouseCoopers LLP were appointed as joint administrators (the “Joint
Administrators”). The Joint Administrators have advised us that most of Tang
Capital’s shares were rehypothecated. The Joint Administrators and UK
counsel have further advised that LBIE’s customers will not be able to recover
hypothecated shares, but instead will be entitled to a general unsecured claim
with respect to such shares. Accordingly, Tang Capital does not
currently have beneficial ownership of such shares and has reduced the number of
shares of the Company held by Tang Capital to the extent such shares were held
at LBIE. Tang Capital does not waive any argument that it is entitled to recover
such shares and expressly reserves such argument.
PRELIMINARY
COPY — SUBJECT TO COMPLETION
[FORM
OF PROXY CARD]
PROXY
FOR THE ANNUAL MEETING
OF
STOCKHOLDERS OF
VANDA
PHARMACEUTICALS INC.
TO
BE HELD [JUNE 5, 2009]
SOLICITED
ON BEHALF OF TANG CAPITAL PARTNERS, LP
AND
THE NOMINEES LISTED BELOW.
The
undersigned hereby appoints and constitutes each of Kevin C. Tang and • (acting
alone or together) as proxies, with full power of substitution in each, to
represent the undersigned at the Annual Meeting of Stockholders of Vanda
Pharmaceuticals Inc. (the “Company”) to be held on [June 5, 2009] at • (local
time) at • ,
and at any adjournments, postponements or continuations thereof, to vote all
shares of Common Stock of the Company held or owned by the undersigned as
directed below, and in their discretion upon such other matters as may come
before the meeting, including to vote for the election of a substitute nominee
for director as such person or persons may select in the event a nominee becomes
unable or is unwilling to serve as director or for one or more additional
nominees for director as such person or persons may select in the event the
number of directors to be elected at the meeting is increased.
THIS
PROXY, WHEN PROPERLY EXECUTED, WILL CAUSE YOUR SHARES TO BE VOTED AS YOU DIRECT.
IF YOU RETURN THIS PROXY, PROPERLY EXECUTED, WITHOUT SPECIFYING A CHOICE, YOUR
SHARES WILL BE VOTED “FOR” ALL NOMINEES LISTED IN PROPOSAL 1 AND “FOR” THE
STOCKHOLDER RESOLUTION INCLUDED AS PROPOSAL 2 AND YOU WILL BE DEEMED TO HAVE
GIVEN A DIRECTION TO “ABSTAIN” FROM VOTING WITH RESPECT TO PROPOSAL
3.
This
proxy will be valid until the sooner of one year from the date
indicated on the reverse side hereof or the completion of the Annual
Meeting.
IMPORTANT:
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD TODAY!
(CONTINUED
AND TO BE SIGNED ON THE REVERSE SIDE)
PLEASE
MARK WITH AN (X) THE BOX INDICATING YOUR CHOICE.
TANG
CAPITAL PARTNERS, LP RECOMMENDS A VOTE “FOR” ALL OF THE DIRECTOR NOMINEES LISTED
BELOW IN PROPOSAL 1.
Proposal
No. 1 – Proposal to elect Kevin C. Tang and Andrew D. Levin, M.D., Ph.D. as
directors of the Company.
To
elect Kevin C. Tang and
Andrew
D. Levin, M.D., Ph.D.
as
directors of the Company
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FOR o
all
nominees
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WITHHOLD o
AUTHORITY
for
all nominees
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FOR
ALL EXCEPT
NOMINEE(S)
WRITTEN
BELOW† o
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†INSTRUCTIONS. If you do not wish
your shares voted “For” a particular nominee, mark the “FOR ALL EXCEPT” box and
write the name(s) of the nominee(s) you do not support on the line in the box
above. Your shares will be voted for the remaining
nominee(s).
TANG
CAPITAL PARTNERS, LP RECOMMENDS A VOTE “FOR” PROPOSAL 2.
Proposal
No. 2 – Proposal to approve the following stockholder
resolution:
Now, Therefore, Be It
Resolved, that the stockholders of the Company hereby request that the
Board of Directors of the Company promptly take all necessary action to swiftly
and orderly liquidate the Company’s remaining assets and return all remaining
capital to the Company’s stockholders.
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FOR o
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AGAINST o
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ABSTAIN
o
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TANG
CAPITAL PARTNERS, LP TAKES NO POSITION ON PROPOSAL 3.
Proposal
No. 3 – Proposal to ratify the appointment of PricewaterhouseCoopers LLP as
the Company’s independent registered public accounting firm for the year ending
December 31, 2009.
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FOR o
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AGAINST o
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ABSTAIN
o
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If the
undersigned has previously submitted one or more proxies with respect to the
aforementioned annual meeting, this proxy is intended to and shall revoke each
such previously submitted proxy.
ADDRESS
AREA
Please
sign exactly as your name or names appear on this proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator,
attorney, trustee or guardian, please give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized officer,
giving full title as such. If the signer is a partnership, please sign in
partnership name by authorized person.
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Date:_________________, 2009
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Signature:
__________________
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Sign,
Date and Return the Proxy Card Promptly Using the Enclosed Envelope. Votes MUST
be indicated (x) in BLACK or BLUE ink.
16