VTGN - NASDAQ

Greetings, and welcome to Vistagen Therapeutic's Fiscal Year End 2023 Corporate Update Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark McPartland Senior Vice President of Investor Relations. Thank you. You may begin.

Thank you, Doug. Good afternoon, everyone, and welcome to Vistagen's fiscal year-end 2023 corporate update conference call and webcast. This afternoon, we issued a press release providing an overview of our progress last year and future milestones, and we expect to file our fiscal year-end 10-K later this afternoon. We would encourage you to review both, which can be found under the Investors section of our website. Now before we start today's call, I want to remind you that we may make forward-looking statements regarding our business based on our current expectations and information. The forward-looking statements speak only as of today, and except as required by law, we do not assume any duty to update in the future any forward-looking statements made today. Of course, forward-looking statements involve risks and uncertainties, and our actual results could differ materially from those anticipated by any forward-looking statements we make today. Additional information concerning risk factors that could affect our business and financial results is included in the fiscal year-end 2023 Form 10-K, which, again, will be filed later today, which can also be found on our website or at the Securities and Exchange Commission website, sec.gov, and the future filings we make with the SEC from time to time, all of which will be available on our website and on the SEC website. With that taken care of, I'd like to thank and welcome all of our stockholders, analysts and all of you taking an interest in Vistagen. I'm joined on the call today by Shawn Singh, our Chief Executive Officer. Shawn will provide an overview of the company's progress made in 2023, upcoming milestones, followed by a brief opportunity for questions from our sell-side analysts. We want to remind you again that this call is being webcast and recorded and will be available for replay. The replay link can be found in the Investors section of the website, vistagen.com. Now with that done, I would like to turn the call over to Shawn Singh, our Chief Executive Officer. Shawn?

Thank you, Mark, and good afternoon, everyone. Thank you for joining our call. As we've discussed many times, Vistagen's core mission is to radically improve the mental health and the well-being of the millions of individuals worldwide who suffer from a variety of anxiety, depression and other CNS disorders that severely disrupt their daily lives. To that end, each of our innovative clinical-stage CNS product candidates is designed with the potential to establish new standards of care, make meaningful differences in how patients manage their disorders and improve their lives. Throughout the year, we continued to advance our core programs for treatment of social anxiety disorder with Fasedienol, major depressive disorder with Itruvone. We achieved multiple clinical and regulatory milestones that are necessary to stage what we see as key advances in those programs this year and beyond. We also advanced strategic planning for our other 4 clinical-stage product candidates, specifically PH80 for the treatment of menopausal hot flashes, which is a large and unsatisfied market. We are also advancing planning for further U.S. IND-enabling development to facilitate Phase IIb development of PH15 for rapid onset improvement of attention and learning in subjects with cognitive impairment that's caused by mental fatigue and of PH284 for enhancement of subjective feelings of appetite and weight gain in subjects with Cachexia or wasting syndrome that's associated with cancer or other disorders related to appetite loss. With the depth in our collective body of positive safety and efficacy studies supporting our clinical stage pipeline, now is the opportune time to amplify our internal efforts to secure multiple global and regional strategic development and commercialization partnerships across our entire portfolio to accelerate achievement of key clinical, regulatory and commercial milestones within each program, and deliver meaningful value to our stockholders and to the millions of patients who are affected by these disorders, affecting both their mental health and their physical well-being. I'll begin with a brief update on Fasedienol, formally called PH94B in our Phase III program in social anxiety disorder, or SAD. Earlier this year, we reported a long-term intranasal administration of 3.2 micrograms of Fasedienol self-administered by patients as they needed it up to 4 times a day to manage their anxiety provoking situations in a real-world setting was well tolerated with no new safety findings with trends identified regardless of the number of doses administered by each subject. Overall, in that study, patients self-administered over 30,000 doses of Fasedienol with the main duration of 4 months in a maximum study duration of over 10 months. The exploratory efficacy results from that study demonstrated clinically meaningful reductions in fear, anxiety and avoidance of anxiety provoking social and performance situations in the daily lives of the patients involved as measured by the Liebowitz Social Anxiety Scale, or LSAS. We believe the continued improvement in LSAS observed in hundreds of these SAD patients in this large study, including patients from both PALISADE 1 and PALISADE 2, indicates the therapeutic potential of multiple patient-tailored as needed administrations of Fasedienol over time, as Fasedienol helps patients build their confidence to engage in this anxiety provoking social situations in their daily lives more frequently and with less fear and anxiety. Further, the safety and exploratory results of the Phase III open label study of Fasedienol, along with the previous safety and LSAS efficacy results for multiple placebo-controlled Phase II studies, including a placebo-controlled study conducted in the real-world setting, build support for a meeting with the FDA to discuss the next steps in our FEARLESS Phase III development plan for Fasedienol in SAD. The plan that is centered on the potential new drug application-enabling Phase III studies of Fasedienol in a real-world setting using the LSAS as the primary efficacy outcome measure in a manner similar to the registration studies for all 3 of the FDA-approved treatments for SAD. Results from the placebo-controlled Phase III studies demonstrate that self-administration of Fasedienol on an as-needed basis prior to anxiety provoking situations has exciting potential to achieve fast-acting and persistent change in overall SAD symptoms, reduce fear and anxiety about social and performance situations and enable less frequent avoidance for those situations as measured by the LSAS. Notably, the amount of separation between Fasedienol and placebo as measured by the LSAS at the end of the first 2 weeks in the placebo-controlled Phase II study conducted in a real-world setting was comparable to LSAS results observed after 12 weeks in the registration trials for the 3 antidepressants approved by the FDA for the treatment of SAD. Positive feedback from the FDA earlier this year confirmed the acceptability of our preferred use of the LSAS as the primary efficacy endpoint in our future Phase III studies of Fasedienol for the treatment of SAD. Again, in line with all 3 of the previously approved SAD products. Our FEARLESS Phase III program in SAD will align with the LSAS-based study design, supporting the precedent-setting NDA-enabling programs for all 3 antidepressants currently approved for the treatment of SAD. The FEARLESS Phase III studies will be designed to assess multiple administrations of Fasedienol on a patient-tailored as-needed basis in their daily lives up to 6 times per day in a real-world outpatient setting over a multiple week period, with the clinician-administered LSAS as the primary efficacy endpoint. So with clarity from positive regulatory feedback on the path forward and the FDA's previous grant of Fast Track designation for development of Fasedienol for SAD, we're now positioned to finalize our full NDA-enabling FEARLESS Phase III development program for Fasedienol and plan for a large market program that is well suited for late-stage partnering to complete Phase III development and if successful, commercialize Fasedienol in the U.S. in multiple markets worldwide for a disorder that is increasingly impacting the lives of tens of millions of patients in the U.S. and around the world. Moving next to Itruvone, formally PH10, our pherine nasal spray candidate for potential rapid onset treatment of major depressive disorder, or MDD. We recently reported favorable safety and tolerability data from our U.S. Phase I clinical trial of Itruvone. Itruvone was well tolerated and consistently continued to demonstrate a favorable safety profile. Importantly, results from this study built on previous successful Phase I studies and a published positive placebo-controlled Phase IIa study of Itruvone in MDD that was conducted outside the U.S. So the collective body of successful clinical studies now enable us to focus on next step Phase IIb development of Itruvone in the U.S. as an innovative stand-alone rapid onset product candidate for the treatment of MDD. During the past year, the FDA also granted Fast Track designation for development of Itruvone for the treatment of MDD. So like Fasedienol for SAD, Itruvone is now staged for strategic partnering in the U.S. and multiple large depression markets outside the U.S. We also recently reported that PH80 demonstrated statistically significant efficacy versus placebo in a previously unreported exploratory Phase IIa clinical study for the treatment of vasomotor symptoms that are known as hot flashes that is due to menopause. In the study, PH80 induced a statistically significant reduction in the daily number of hot flashes compared to placebo at the end of the first week of treatment, and that improvement was maintained through the end of the 4-week treatment period. PH80 treatment also significantly reduced the severity, disruption in function and sweating related to hot flashes during the treatment period as compared with placebo. As we've seen with all pherines in our pipeline, PH80 was well tolerated with no serious adverse events and an adverse event profile comparable to placebo in all of the clinical trials of that drug candidate to date. Prevalence of menopausal hot flashes is estimated to be about 20 million women in the U.S., with 9 million more women estimated to be suffering from severe hot flashes. Current treatments are associated with certain side effects and significant safety concerns. So the pressing need for improved treatment options is evident when considering the millions of women who endure the disruptive impact of menopausal hot flashes in their daily lives. Also with its novel rapid onset mechanism of action, PH80 is designed to initiate neural impulses in the olfactory bulb transmitted by pathways that rapidly affect the function of multiple structures in the brain, including the amygdala and the hypothalamus. Due to its mechanism of action, we also believe PH80 has therapeutic potential to relieve premonitory and aura symptoms of migraine. We recently expanded the intellectual property portfolio of PH80 to include treatment of migraine, the U.S. patent issuance and an intention to grant the European patent. And we look forward to preparing for potential future development of PH15 and PH284 as well. These are 2 pherine candidates that are also in Phase II development, and we're assessing a previously unreported exploratory Phase IIa studies, placebo-controlled Phase IIa studies, that involve PH15 for improvement of cognition, especially in sleep-deprived populations, and PH284 for improvement of subjective feeling of hunger in late-stage cancer patients, in particular, those with cachexia. As to AV-101, our oral NMDA receptor antagonist, based on observations and findings from several preclinical studies and successful Phase I studies, we believe AV-101 has potential to become a new oral treatment alternative for certain CNS indications that involve the NMDA receptor. Recently, we strengthened our AV-101 intellectual property portfolio after receiving a new patent granted by the European Patent Office that's related to the synthesis of AV-101 and certain chemical intermediaries. That enhances the attractiveness of AV-101 as a valuable asset for potential strategic development and commercialization partnerships. We are currently pursuing partnering and nondilutive grant opportunities for Phase IIa clinical development of AV-101 as a treatment for one or more of those neurological disorders involving the NMDA receptor. Likely with emphasis on dyskinesia associated with Parkinson's therapies. We believe our robust CNS pipeline puts us in a place of scientific strength in the field. We have a broad range of positive clinical studies across multiple product candidates and multiple indications with potential for long-term value creation and meaningful impact on the treatment landscape for millions of individuals affected by anxiety, depression, hot flashes and several other large-market CNS disorders. Moving to our business strategy. Earlier this month, our Board of Directors authorized the stockholder-approved reverse split of our common stock. Our primary corporate and strategic objectives for implementing that stockholder-approved reverse split, included the following: First and foremost, we implemented the reverse split through established compliance with NASDAQ's minimum bid price requirement to help ensure that we maintain the numerous benefits of listing our common stock on the Nasdaq Capital Market. We recently announced regaining full compliance with the continued listing standards of the Nasdaq Capital Market. So together with our stockholders, we achieved that objective. Second, the reverse split enables us to increase awareness of Vistagen and the therapeutic and market potential of our 6 clinical-stage drug candidates, both in the capital markets, among prospective strategic partners and among health care-focused media. And finally, the split may broaden our capital market base through enhanced access to institutional investors, mutual funds, family offices, general investing public and health care-focused sell-side research analysts, all are key components of our ongoing efforts to advance awareness, understanding and the potential value of our CNS pipeline with our key stakeholders. Given the depth of our CNS pipeline and the robust body of successful safety and efficacy studies achieved to date, we are now pursuing multiple strategic development and commercialization partnerships, both global and regional, to efficiently unlock the full value of our product candidate portfolio. We believe global and regional partnerships amplify our internal activities and can accelerate key development milestones and time lines and enhance overall our ongoing efforts to deliver differentiated treatment options and significant value to our stockholders. In closing, we remain unwavering in our core mission to improve mental health and well-being worldwide. As we continue advancing the next stages of our corporate development, we move forward with a strong team, a strong pipeline and a strong purpose that drives us to innovate better solutions for CNS disorders in large markets with significant unmet needs. On behalf of our entire business and team, thank you for the privilege and for the opportunity to make a difference, One Mind at a Time.

Thank you, Shawn. Operator, we would now like to open up the call for questions from the sell-side analysts participating on the call today.

Our first question comes from the line of Jason McCarthy with Maxim Group.

It sounds like you've made a tremendous amount of progress this year so far and looking forward to what comes next. But Shawn, can you explain a bit further why you think the multiple dose assessment real-world study design with the LSAS as the primary endpoint is a better approach than the single dose assessment public speaking challenge with SUDS as the primary. I know you touched on it a little bit earlier, if you can just elaborate a bit further and why your confident in the new Phase III study designed.

Sure. Thanks, Jason. Great to talk to you. Well, as you know, Dr. Liebowitz is -- Dr. Michael Liebowitz is the innovator of the LSAS and the clinical investigator who was involved in the registration trials for the 3 approved drugs for the treatment of SAD and the published placebo-controlled Phase II studies of Fasedienol and SAD. And he will be the principal investigator in our FEARLESS Phase III program. So that matters. His prior experience, not just with Fasedienol, but obviously with the LSAS over the last 50 years is incredibly important. And we have developed with him a proprietary multistep LSAS training program that all the potential sites have to pass to his and to our satisfaction before they can be included in the FEARLESS study. So those are key advantages unique to our Phase III program. But the LSAS, it measures the overall improvement in disease severity by measuring both reduction in fear and anxiety over time about social situations, but also the reduction in avoidance of those anxiety provoking situations. So you're looking at patient-related dynamics over time over multiple administrations, whereas in the public speaking challenge with the SUDS, that was a single dose in a single anxiety provoking situation in the public speech. So we and Dr. Liebowitz and all the KOLs that we lean into believe the LSAS is by far the most appropriate endpoint to measure the efficacy potential of Fasedienol and really any other potential treatments for SAD because it reflects the true impact of the treatment on the patient's daily lives over time in a real-world setting. And again, using LSAS is the primary endpoint in our FEARLESS Phase III program is consistent with the design of all the registration trials that supported the FDA's precedent-setting approvals for treatments of SAD. So we met with the FDA in the first quarter because when we met with the FDA in '20, it wasn't possible because of COVID-related restrictions and the world being sheltered in place, it really wasn't possible to do the precedent-based real-world LSAS-driven Phase III study. We could, however, as we all know, we did do the clinic-based public speaking challenge using the SUDS, which is a different endpoint that hasn't supported any prior approvals but at the time, that was the type of study that could be done. And it was okay to do, obviously, because we had a highly static Phase II study. I think what we didn't all understand at the time was and nor did many others, the impact of COVID might have brought to bear on executing studies like that and on the patients involved in the studies. But we met with the FDA mainly, and this was in the first quarter of this year to confirm that the LSAS, even though a drug hasn't been approved for SAD for 20 years, that the LSAS remains a valid and a reliable primary efficacy endpoint for potential NDA-enabling Phase III studies of Fasedienol in SAD. A very important point when we're discussing prospective partnering arrangements for potential support and commercialization through Phase III and beyond with prospective partners, we need to know what the FDA thinks and what the FDA regards as the go-to endpoint for treatments for SAD. So as we reported, we were very encouraged by those discussions with the FDA and again, because the LSAS captures effects over time, the ability for subjects to build confidence, build resilience and show through the administration of that clinician-administered scale that they're fearing things less and they're avoiding things less often.

Great. And can you I guess, help everybody understand, you used a great analogy for Fasedienol as like a rescue inhaler would be used for asthma. I think that really helps people understand how this drug can work in the real-world setting. Can you just talk a little bit about that?

Yes, I'm glad you brought that up. It is -- it's really important to give patients control. Because sometimes the stressors are predictable, sometimes they're not. But regardless, what they need is something at hand that they can decide when they need to use it can knock down the symptoms of anxiety that arise in the context of those situations. And so it's a drug candidate that we've long held needs to be used acutely to knock down situations when they arise but also over time, similar to cognitive behavioral therapy, where consistent success when exposed to those stressors build the confidence, build the resilience to engage in those situations more frequently and then to do so with less fear and anxiety. So it's very important, again, to be able to use our drug candidate multiple times in any given day, and some days not have to use it because when you are an SAD patient, if you're not exposed to your stressors, you're asymptomatic. You don't really want to put drugs in their body, even super safe drugs, when they think -- when they don't think they need it. In the case of Fasedienol, having that drug in your pocket, in your purse, in your backpack, and being able to have something with onset in about 15 minutes, help you through that stressful situation. And having that duration of that effect last about an hour, to be able to go back to it if the same situation arises or a different situation arises within the same day. It's a very important flexible tool, again, all intended to build the confidence of the patient over time, which is exactly what the LSAS captures. And you can't capture that as well at all with the SUDS because that's -- again, that's just in the moment, minute-by-minute assessment of that acute effect. Now, again, use it -- using it acutely over time is the way we see this drug will be used if approved in the real-world setting by millions of people who have access to it and in need because of the way their lives are impacted by SAD.

Our next question comes from the line of Andrew Tsai with Jefferies.

Appreciate the update. So the first question is on the FEARLESS program actually. So now you've met with the FDA, you're ready to kind of start up the studies. When exactly could those studies start specifically? And then for PALISADE 1 and 2, the prior studies, are there plans to share detailed data on either or both of those studies?

Andrew, thanks. So it depends, right? So fortunately, these are not really expensive studies. Each of them is about $15 million. And right now, the cost to get the program all the way through to an NDA, relatively speaking, is actually pretty modest for a Phase III candidate. So what that does is it puts out in front of us what we see is a lot of opportunities for Phase III development in collaboration with capable partners in the space, either globally or multiple regional deals, that have commercial capabilities that we think can optimize the commercial potential of the drug as well. So it will depend. It depends on technically we can be in as early as the first quarter of '24. We'll see how things go in terms of the types of financing arrangements or partnering arrangements more likely that we can put together in order to underwrite that program. So the important piece that moved things forward that was very critical was to make sure we had the kind of clarity and confidence from the agency that the LSAS was still and is still the go-to valid and reliable endpoint for a Phase III program. And again, because now COVID's not controlling anyone's lives anywhere near the degree was the case during the PALISADE studies, it's, in large part, during the acute phase of the pandemic, that clarity is in hand. So we are -- as you might expect, we're on a lot of radars, and no one has any trouble figuring out what drugs are in Phase III that are associated with large CNS markets. So we'll continue to advance on that. In terms of PALISADE-1, PALISADE-2, I think what we see downstream is when we have a context to put both of those studies together, and we have the ability to understand some of the impacts that really affected a lot of companies, not just us, in terms of pandemic-related impacts, not only on just staffing and surveillance, but really even on the patients, the types of patients that were in studies. I'm sure you've heard this -- I know you've heard this from other sponsors. They seem to be just a bit different. There were cases, clearly, where people might have met the criteria for, say, SAD or the diagnostic criteria for SAD, for MDD, for other neuropsychiatric disorders during the pandemic, but may not really have had outside the context of a pandemic, the kind of long-term chronic pathophysiology associated with those disorders. So we'll see. But I think in terms of the 2 studies, yes, we'd like to put them together and the appropriate context. We'll be releasing the results of PALISADE-2 once we're in a position to do that sometime during the second half of this year. And when the 2 are together, we'd certainly want to put them in front of peers and into conference presentations at a minimum, if not a publication. So a lot of lessons learned from both of those studies. So a lot to be looked at, a lot to be assessed.

Great. And then shifting to your other pherines, PH10 for depression. Can you give us a brief update where this asset stands and the next steps? What would the next design of the next study look like, for instance?

Yes. Great that you asked that. So Itruvone, we know there's nothing but a growing need for innovations in terms of treatment of depression, especially anything that can act on a stand-alone basis and even a relatively rapid onset manner, weeks, even better than months. And so what we needed to do with Itruvone was to get it back to the Phase IIb stage for U.S. development, either by us or in collaboration with a partner focused on depression, and with large market commercial capabilities. And now it's in that spot. And we had several successful studies that were conducted outside the U.S. We had to do U.S. IND-enabling studies to put it into a point where we could skip back over IIa and go right into Phase IIb. So like Fasedienol, we'll be aggressively pursuing strategic development and commercialization partnerships for that asset, not just in the U.S., but in multiple markets, and many of those dialogues are already ongoing. So ideal situation is we'd like to see sometime around the middle of next year the ability to get that back into U.S. clinical development, again, alone or with collaborators.

Great. And then also can you -- go ahead.

Sorry, I didn't answer the rest of the question, which is that study, again, we'll be developing it as a potentially rapid onset stand-alone treatment candidate for major depressive disorders. So more on the protocol, but basically, it's daily as opposed to as needed, and the study will likely be multiple weeks, 4 to 6 weeks.

Got it. Got it. And then PH80 for menopausal hot flashes you announced some data. So what exactly did you see in the data to kind of make you excited about this asset? And I guess, again, what are the possible next steps from here?

Yes. Again, that's a rapid-onset neuroactive pherine that's demonstrated positive Phase IIa results in reducing the frequency and the severity of hot flashes that are due to menopause. So right now, we're -- like every other asset in the pipeline, we're exploring opportunities to advance that program through Phase IIb and beyond in concert with multiple collaborators in multiple markets. As you can imagine, I mean, there was an NK3 inhibitor that you saw recently approved by Astellas. So that one is systemic oral. We know there's safety issues concerned with that one. We don't see any of those attributes in the potential for PH80. And that is a space that has an incredible need and a lot of interest amongst companies focused on women's health. So we know that it's a large market. We know it's underserved. We know it's the most common symptom of menopausal transition. It affects about 75% of menopausal women and about 40% of women in premenopause, so it's 20 million-or-so women in the U.S. and 9 million-or-so that suffer from severe hot flashes. So we will put this into a position where, again, like PH10 and Itruvone, it's a similar path. We do some IND-enabling work. We did get a U.S. IND in place, and we skip back over Phase II right into Phase IIb. And that Phase IIb program can be supportive then of our pathway into Phase III and then support and market it around the world if we get that benefit.

Makes sense. And then you do have additional pherines, PH15 and 284 seems pretty attractive. So can you talk a little bit more about those 2 drugs and when they can get into the clinic? And are you also considering a partner for those assets as well?

Yes. And we're at a spot now where, especially after acquiring Pherin, we have not only the clinical-stage assets, 6 assets that are in clinical stage, and the capability or the potential to advance additional preclinical candidates into clinical development. So the Pherin platform is robust. And given the depth of the pipeline and the broad nature of the positive safety and efficacy studies we've got, every one of those assets can be supported by either internal development or collaborative development or really a combination of both. So those 2 assets in particular, PH15 and PH284, together and independently represent very large markets in cognition impairment for PH15 and subjective feelings of hunger and the like, especially in late-stage cancer patients with cachexia. So we'll be doing the same thing with those. Right now, we're assessing some of the data that we've got in the context of the acquisition of Pherin. Hopefully, we'll have more to say in the near term in terms of the Phase IIa data with those 2 programs, and then they would follow a similar path to what we have done with PH10, to move it into the U.S., and also, we'll be dealing with PH80 to move it into the U.S., and overall, ultimately, each of the U.S. dossier supports leverage in multiple markets outside the U.S.

Operator, I believe that's all the time we have for questions today. If there's any additional questions, please don't hesitate to contact us by e-mailing [email protected] or contacting the individuals listed on the bottom of our press release. The information is also available on our website. We also encourage you to sign up our website to stay connected about news updates about Vistagen. Again, thank you for participating on the call today. We appreciate everyone's attention and support. We look forward to keeping you current on our continued progress. This concludes our call. Have a fantastic day.