Vistagen Therapeutics, Inc.

Greetings. Welcome to Vistagen Therapeutics' third quarter fiscal year 2023 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Mark Blather, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Sherry. Hello, and welcome to Vistagen's conference call covering our third quarter of fiscal year 2023 financial results and a business update. Thank you for joining us today, and welcome to our stockholders, analysts, and anyone taking an interest in Vistagen. Joining me today are Sean Singh, our Chief Executive Officer, and Jerry Dotson, our Chief Financial Officer. The format for this call will consist of prepared remarks from management, followed by a brief opportunity for questions from sell-side analysts. This call is being webcasted and will be available for replay. The link to access the replay can be found in the Investors Events section of our website, vistagen.com. On today's call, we will make forward-looking statements regarding our business based on our current expectations and current information. The forward-looking statements speak only as of today and accept as required by law. We do not assume any duty to update in the future any forward-looking statement 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 that we may make today. Additional information concerning risks and factors that could affect our business and financial results is included in our most recent quarterly report on Form 10-Q, filed earlier today with the Securities and Exchange Commission, or SEC, and in future filings that we make with the SEC from time to time, all of which are or will be available on our website and the SEC's website. Now I'd like to turn the call over to our Chief Executive Officer, Sean Singh.

Thank you, Mark, and good afternoon, everyone. Thank you for joining the call. There is an active and growing need for new faster acting treatment options for anxiety and depression disorders. Treatment options without negative side effects and safety concerns that are often associated with the currently approved medicines. We remain focused on addressing the significant mental health care need for individuals across a broad range of demographics and in communities across the globe. Our team is committed to developing and commercializing multiple differentiated treatments that align with our mission to shift the treatment paradigm for anxiety and depression disorders and improve the trajectory of mental health care, one mind at a time. We'll start this call with a brief update on PH94B and our phase three program in social anxiety disorder, or SAD. During the quarter, we further analyzed Palisade 1 to obtain a better understanding of the unexpected results from that study. As a reminder, the study involved only a single dose of PH94B to subjects who were randomized to the treatment arm in the study. All subjects were given a highly provocative public speaking challenge conducted only in a clinical setting before a group of strangers and their change in the subjective units of distress or SUDS score was determined and measured as the primary endpoint. We move forward with this study methodology Following our discussions with the FDA back in mid-2020, during the early phase of the COVID-19 pandemic, when the world was sheltered in place and social interactions and even exposure to the outside world were not encouraged. Following are among the hypotheses we believe are potential explanations for the unexpected outcome in Palisade 1. The study was conducted through surges of the COVID-19 pandemic, introducing significant additional variability in terms of changing social dynamics, subject stress, study site and CRO personnel turnover, mask wearing, and scheduling and monitoring complexities. Also, the public speaking challenge study design may not have been scalable to a large phase three study, especially during the pandemic, given the various complexities of consistently administering the highly provocative challenge and requirements for rigorous adherence to the study protocol across numerous sites and over an extended period. And also, some subjects in the study may have had a reduced response to PH94B due to impaired olfactory cell function, potentially caused by the COVID-19 virus or even nasal swab testing for COVID-19 or influenza. After receiving the top line results from Palisade 1, we paused Palisade 2. which involves the same single-dose post-randomization public speaking challenge methodology as Palisade 1. We then engaged independent biostatisticians to conduct an interim analysis of available data from the 140 subjects randomized in the study at that time. Based on their independent review of the unblinded data from those 140 subjects, data we've not yet seen, independent statisticians recommended that we continue Palisade 2's plan. Accordingly, during the quarter, we submitted protocol amendments to the Palisade 2 study protocol to the FDA, amendments that are aimed at minimizing the potential issues that may have played a part in the unexpected results that we saw in Palisade 1. If we decide to resume Palisade 2, we believe these protocol changes could considerably increase the probability of favorable results in the remaining third of the trial subjects. However, a new and another important factor to note regarding our considerations for potentially resuming Palisade 2 is that in December 2022, only a couple of months ago, two of our peers announced top line results of their recently completed SAD studies using a single administration public speaking challenge study design, with SUDS as the primary endpoint. Neither study achieved its primary efficacy endpoint. So after reviewing the information and data available to us at this time, we believe it is not yet advisable to resume PALS A2 before discussing our broader phase three development plan for PH94B in SED with the FDA, and assessing the results of the other two recently completed SED public speaking challenges conducted during the pandemic that also did not achieve their primary efficacy endpoints. We remain confident in PH94B's potential to be a game changer for individuals affected by social anxiety disorder. We have been and will continue to explore all of our options for what we believe will be the best path forward with the highest probability of success for our Phase III program in SAD. We are currently preparing to meet with the FDA to discuss our broader Phase III development plan, which includes the possibility of conducting a multiple administration randomized double-blind placebo-controlled Phase III study of PH94B in adults using the Leibowitz Social Anxiety Scale, or LSAS, as the primary measure to evaluate the efficacy of PH94B over time in patients with SAD to support a potential PH94B NDA for treatment of SAD. Unlike the Palisade I and II Phase III studies, which involved assessment after only a single administration of PH94B and a clinic-based public speaking challenge with SUDS as the primary outcome measure, The phase three study contemplated as part of our broader plan would involve multiple administrations of PH94B on an ad needed basis up to four times a day in a real world setting over multiple weeks with the LSAS as the primary efficacy endpoint. Using the LSAS would be consistent with the design of all registration trials supporting the FDA's three precedent setting approvals of treatments for SAD. Given that the LSAS measures overall improvement in disease severity by measuring both the reduction in fear and anxiety over time about social and performance situations, as well as the reduction in avoidance of those anxiety-provoking situations, we believe the LSAS is appropriate to measure and reflect the true impact of PH94B on patients' daily lives. We expect to announce our plan for PALSY II concurrently with other updates to our broader PH94B Phase III Development Plan for SAD. Another important component of our Phase III program in SAD is the Palisade Open Label Study, which we initiated back in October 2021 to evaluate the safety and tolerability of PH94B in adult subjects with SAD taken as needed prior to anxiety-provoking social and performance situations in daily life over a period of up to 12 months. In addition to assessing safety and tolerability of PH94B in that study, we also included several exploratory objectives, including PH94B's potential to achieve overall symptom reduction and improvement in severity of SAD as measured by the LSATS. Again, it's the primary endpoint that's required by the FDA for all prior SAD approvals. In August 2022, we closed recruitment and enrollment in Palisades' open-label study The preliminary analysis of the final data set observing nearly 400 subjects in that study is encouraging. And although from an open-label study and considered with our prior placebo-controlled multiple assessment phase 2 study of PH94B in a real-world setting, that study has helped inform many important aspects of our broader phase 3 development plan for PH94B and SAD. The open-label study results reinforce our belief in the potential of PH94B used over time, as needed, up to four times per day in daily life to provide rapid onset, clinically meaningful, and sustained response with a favorable safety and tolerability profile. We expect to have the final data readout of observations from this study in the first quarter of calendar 2023. Moving next to our exploratory target indication for PH94B, adjustment disorder with anxiety. We've completed our small phase 2A double-blind, placebo-controlled clinical trial to evaluate the efficacy, safety, and tolerability of PH94B as a potential treatment of adults with adjustment disorder with anxiety. Subjects self-administered PH94B at prescribed intervals four times per day for 28 days. We anticipate announcing top-line data from this exploratory phase 2A trial by the end of the first quarter of calendar 2023. During the recent months, we achieved several milestones in our PH10 program in major depressive disorder, or MDD. We submitted our USIND and subsequently received the FDA's green light to conduct the phase one randomized double-blind placebo-controlled safety study in healthy volunteers. That study is now underway and is intended to both confirm the favorable safety profile of PH10 establishing three previous clinical studies conducted in Mexico, including positive published Phase 2A study of PH10 for the treatment of MBD, as well as to facilitate our plans for Phase 2B development of PH10 in the U.S. as a novel standalone treatment for MBD. We anticipate completing that study, Phase 1 study, by the end of the first quarter of 2023. In all clinical studies today, PH10, like PH94B, has been well tolerated, has not caused psychological side effects such as disassociation, hallucinations, and the like, or other safety concerns that may be associated with other rapid-onset depression therapies such as ketamine. Also of note, we recently received the FDA's Fast-Track designation for development of PH10 for MDD. Similar to the large and growing anxiety market, there is significant unmet need for patients with MDD, where the current treatments are either undesirable or inadequate. with a differentiated mechanism of action that is designed to be fast-acting, non-systemic, and non-sedating. We believe that PH10 has potential to shift the treatment paradigm for MBD considerably. Having PH10 in the clinic in the U.S. and under the FDA's fast-track designation are important recent milestones in our plan to bring PH10 to the many individuals battling MBD and potentially other depression disorders. As to AV101, Our phase 1B drug-drug interaction clinical study with oral probenicid is ongoing. We anticipate completing that study during the second quarter of calendar 2023. After its conclusion, assuming no unexpected safety issues, we will crystallize the final components of our plan for exploratory phase 2A development of AV101 alone or in combination with probenicid and on our own or with a collaborator as potential oral treatment for one or more CNS disorders involving the NMDA receptor. Finally, I'd like to make a few comments about our recent acquisition of Farron Pharmaceuticals. Now that this transaction has been completed, we have full ownership of worldwide intellectual property rights to PH94B and PH10, which previously were under exclusive licenses to us from Farron that included customary milestone and royalty payment obligations over time. As a result of the acquisition, we've eliminated all future royalty and milestone payment obligations for PH94B and PH10, which significantly improves the potential commercial profile of these late-stage assets, should they be approved downstream. In addition, we will retain all licensing revenues, including pre-commercial licensing revenues, should we enter into such transactions as we have in the past. Further, as a result of the fairing acquisition, we've added three early clinical stage fairing product candidates to our pipeline. H15 for cognition improvement, H80 for migraine and hot flashes, and PH-284 for appetite-related disorders. Also of note, Visigyn did not assume any debt as part of this transaction, any other liabilities from Farron, nor did we bring on any Farron employees or take on any Farron facilities. I would now like our CFO, Jerry Dodson, to summarize some highlights from our financial results for the third quarter of our fiscal year 2023. Jerry? Thank you, Sean.