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Vanda puts anxiety drug’s development on ice after Phase III fail 

This comes as many pharma companies fail to crack the SAD indication, with little innovation seen in the space in recent years.

Annabel Kartal Allen October 15 2026

Vanda Pharmaceuticals has hit pause on a late-stage programme evaluating its small molecule drug, VQW-765, after it failed to demonstrate a significant impact in patients with social anxiety disorder (SAD). 

Through the Phase III VP-VQW-765-3201 study (NCT07221578), Vanda set out to explore the potential of VQW-765, an oral alpha-7 nicotinic acetylcholine receptor (α7-nAChR) partial agonist, against placebo for the on-demand treatment of SAD. The Washington-based biopharma primarily investigated VQW-765’s impact on a patient’s perceived stress levels during a set of standardised tests via the subjective units of distress scale (SUDS) – a common endpoint used in SAD trials. 

During the trial, a subgroup of female patients receiving VQW-765 reported a SUDS value of 65.6 versus 66.0 in the placebo group, meaning the drug did not offer significant improvements to acute SAD symptoms and thus missed its primary endpoint. 

VQW-765 also failed to meet its key secondary endpoint, as the drug demonstrated no significant anxiety-quelling effect on the general study population – including men and women – with SUDS scores sitting at 64.7 in the treatment arm and 63.8 in the placebo group.  

Vanda licensed VQW-765 from Swiss pharma giant Novartis back in 2014, which was originally conducting mid-stage trials on the drug to ascertain its potential value as a therapy for schizophrenia.  

With the study not panning out the way that Vanda had hoped, the company has placed VQW-765’s clinical programme on hold, as it looks to conduct further analysis on the full dataset from this trial. Vanda is not currently exploring VQW-765's potential in any other indication, as per the company's website.

These results mark a notable setback for Vanda’s pipeline, as Jefferies analysts previously named this SAD readout for VQW-765 as a key upcoming catalyst for the company. 

SAD proves challenging as an indication 

While there are multiple therapies available for the treatment of SAD, most target either the uptake of serotonin or norepinephrine reuptake, and there has been little progress in getting new drugs to market in recent years. 

Last October, Neuphoria, formerly Bionomics, scrapped the development of BNC210 in SAD after a Phase III trial failure. It is still in trials in post-traumatic stress disorder (PTSD). 

However, there are drugs now showing promise in the late-stage pipeline, with Vistagen’s fasedienol nasal spray recently demonstrating positive results in the open-label extension portion of the PALISADE-4 study in SAD.  

AtaiBeckley’s MDMA-based medicine, EMP-01, also demonstrated notable efficacy in a recent Phase IIa trial. 

According to GlobalData’s Pharmaceutical Intelligence Center, there are currently 22 drugs being explored in ongoing clinical trials for the treatment of SAD. 

GlobalData is the parent company of Clinical Trials Arena. 

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