UPDATE 3-Future Pak sweetens take-private offer for Vanda Pharmaceuticals

(Adds Vanda's statement in paragraph 5, updates shares)

May 7 (Reuters) - Privately held contract manufacturer Future Pak said on Tuesday it will sweeten its buyout offer for Vanda Pharmaceuticals to include contingent value rights, in addition to the proposed offer price of $7.25 to $7.75 per share in cash.

The rights would provide additional benefits to Vanda shareholders if certain performance targets are met.

Future Pak said the revised offer includes up to $260 million of potential contingent value rights, or CVR payments, and represents up to $4.37 per share in additional value for Vanda.

The new offer forms "a reasonable basis for the company to engage in constructive dialogue with us," said Future Pak executive Tina Guilder, and added it remains committed to a deal with Vanda.

The Washington, D.C.-based drugmaker said it had received the revised offer and added its board "will carefully review and evaluate the revised unsolicited proposal, to determine the course of action that it believes is in the best interests of Vanda and its shareholders".

The rights-based targets from Future Pak consist of certain sales milestones for Vanda's antispsychotic drug Fanapt.

Targets also consist of milestones for Vanda's experimental stomach disorder drug, tradipitant, which is currently under regulatory review by the U.S. Food and Drug Administration.

Last month, Vanda rejected Future Pak's initial proposal and adopted a shareholder rights plan, known as a "poison pill", to prevent any entity from acquiring a stake of more than 10% without the board's approval.

The drugmaker had previously said the initial buyout offer from Future Pak significantly undervalued Vanda and was not in the best interest of the company or its shareholders.

Shares of the drugmaker rose 13.5% to $5.5 in morning trade. (Reporting by Bhanvi Satija in Bengaluru; Editing by Krishna Chandra Eluri)