SecProbe.io

December 30 , 2014

Via E -mail
James P. Kelly
Senior Vice President, Chief Financial Officer, Secretary and Treasurer
Vanda Pharmaceuticals Inc.
2200 Pennsylvania Avenue, N.W., Suite 300 E
Washington, D.C. 20037

Re: Vanda  Pharmaceuticals Inc .
 Form 10 -K for the Fiscal Year Ended December  31, 2013
 Filed February 25 , 2014
 Form 10 -Q for the  Quarterly  Period Ended September  30, 2014
 Filed October 27 , 2014
 File No. 001-34186

Dear Mr. Kelly :

We have limited our review of your filings  to your financial statements and related
disclosures and do not intend to expand our review to other portions of your document s.   In our
comment s, we ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within 10 business days by  providing the requested
information  or by advising us when you will provide the requested response.  If you do not
believe a comment  applies to your facts and circ umstances, please tell us why in your response.
Please furnish us a letter on EDGAR under the form type label CORRESP that keys your
response s to our comment s.

After reviewing the information provided, we may raise additional comments and/or
request that  you amend your filings .

Form 10 -Q for the Quarterly Period E nded September 30, 2014

Notes to Condensed Consolidated Financial Stat ements (unaudited)
2.  Summary of Significant Accounting Policies
Net Product Revenue, page 9

1. In light of your recent launch of HETLIOZ, please provide us an analysis of each condition
in ASC 605 -15-25-1 that supports that you  met each condition .  Also, provide us an analysis
of each of factor in ASC 605 -15-25-3 to demonstrate you had the ability to make a
reasonable estimate of future returns.  Further, provide us an analysis supporting that you

Jame s P. Kelly
Vanda Pharmaceuticals Inc .
December 30 , 2014
Page 2

 were able to reasonably estimate provisions for re bates, chargebacks, Medicare Part  D
Coverage Gap, and co -pay assistance.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations, page 26

2. You disclose on page s 27 and 28 that you expensed the cost o f HETLIOZ manufactured prior
to FDA approval and that you expect that your cost of goods sold as a percentage of sales
will increase in future periods as product manufactured prior to FDA approval is consumed.
Please provide us proposed disclosure to be i ncluded in future periodic reports that includes
the following:
 the estimated selling price or range of reduced -cost inventory you have at the latest
balance sheet date presented and an indication as to the time period you expect to sell this
inventory; an d
 the estimated cost of goods sold or range, if determinable, as a percentage of sales that
you expect to incur after the reduced -cost inventory has been consumed.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filings  to be certain that the filings  include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure,  they are responsible for the accuracy
and adequacy of the disclosures they have made.

In responding to our comment s, please provide a written statement from the company
acknowledging that:
 the company is responsible for the adequacy and accuracy of the  disclosure in the filings ;
 staff comment s or changes to disclosure in response to staff comment s do not foreclose
the Commission from taking any action with respect to the filings ; and
 the company may not assert staff commen ts as a defense in any proceedi ng initia ted by
the Commission or any person under the federal securities laws of the United States.

You may contact  Christine Torney, Senior Staff Accountant, at (202) 551 -3652 or Joel
Parker, Accounting Branch Chief , at (202) 551 -3651 if you have any questions regarding the
comment s. In this regard, do not hesitate to contact me at (202) 551 -3679.

Sincerely,

  /s/ Jim B. Rosenberg

Jim B. Rosenberg
Senior Assistant Chief Accountant