** Shares of drugmaker Vanda Pharmaceuticals VNDA.O fall 12.65% to $7.46 premarket

** Co says it received a letter from the U.S. FDA declining to approve the use of its sleep drug Hetlioz to treat jet lag

** FDA noted trials used simulated time shifts, not real air travel - VNDA

** Co says it disagrees with FDA decision and plans further talks with agency

** Hetlioz is already approved for two rare sleep disorders

** As of last close, stock down ~3% over the past year

(Reporting by Sahil Pandey in Bengaluru)

((Sahil.Pandey@thomsonreuters.com))