Shares of our Buzz Stock of the Day — Vanda Pharmaceuticals, Inc. (Nasdaq: VNDA) — were up as much as 800 percent today on news that the drug maker’s atypical antipsychotic drug, Fanapt was approved by the Food and Drug Administration.

The FDA rejected the drug in July 2008. The letter issued by the FDA at that time raised concerns about the efficacy of Fanapt and urged Vanda to conduct a new clinical trial and collect additional safety data.

Vanda instead chose to resubmit the drug to the FDA last November with additional data from its existing clinical trials. Most investors considered this strategy a long shot. Many analysts either dropped coverage of VNDA or downgraded the stock, and shares of VNDA dropped well below $1, which valued the company at less than its cash on hand.

The FDA’s approval of the drug was based on two studies in which Fanapt performed better than placebo, but the drug doesn’t stack up as well against existing schizophrenia treatments, including Johnson & Johnson’s Risperdal and Pfizer’s Geodon, according to a recent article.

Also benefitting from today’s news was Titan Pharmaceuticals (Pink Sheets: TTNP), which is entitled to receive royalties on global net sales of Fanapt equal to 8% on annual net sales up to $200 million, and 10 percent on annual net sales above $200 million. Shares of TTNP were up as much as 1400 percent at mid-day trading today.

Global sales from the class of atypical antipsychotics exceeded U.S. $20 billion in 2007.

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