April 2 (Reuters) - The U.S. FDA approved Vanda Pharmaceuticals' drug to treat manic and mixed episodes associated with a type of bipolar disorder, the company said on Tuesday, marking the second approval for the treatment.

Shares of the Washington, D.C.-based company rose 7% after the bell.

Fanapt, which was initially


in 2009 as a treatment for schizophrenia, faces a potential loss of exclusivity in 2027.

The decision could help revive prescriptions for Fanapt, revenue from which has declined in recent quarters due to increased competition.

With the approval, the drug can be used to treat adults with Bipolar I disorder, in which patients experience manic episodes that last at least seven days or severe manic symptoms like extreme mood swings. (Reporting by Christy Santhosh and Vaibhav Sadhamta in Bengaluru; Editing by Maju Samuel)