Vistagen Therapeutics, Inc.

Greetings, and welcome to Vistage and Therapeutics Fiscal Year-End 2023 Corporate Update 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 a conference, please press star zero on your telephone keypad. 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 VisiGen'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 investor 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 accept 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 maturely 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 2023 Form 10-K, which again will be filed later today, which can also be found on our website or the Securities Exchange Commission website, sec.gov. In future filings we make with the SEC from time to time, all of which will be available on our website and MSCC 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 investor section of the website, visigen.com. Now, with that done, I would like to turn the call over to Sean Singh, our Chief Executive Officer. Sean?

Thank you, Mark, and good afternoon, everyone. Thank you for joining our call. As we've discussed many times, Visigen's core mission is to radically improve the mental health and the well-being of the millions of individuals worldwide who 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 continue to advance our core programs for treatment of social anxiety disorder with Fasadinol, major depressive disorder with Ytruvone. 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 four 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 US IND enabling development to facilitate Phase 2B 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 Caxachia, a 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 Fasadienol, formerly 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 Fasadienol. Self-administered by patients as they needed it up to four times a day to manage their anxiety-provoking situations in a real-world setting was well-tolerated, with no new safety findings or trends identified regardless of the number of doses administered by each subject. Overall in that study, patients self-administered over 30,000 doses of Fasadinol with a mean duration of four months and a maximum study duration of over 10 months. Key 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 Leibowitz Social Anxiety Scale, or LSAS. We believe the continued improvement in LSAS observed in hundreds of the 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 Fasadionol over time. Fasadionol helps patients build their confidence to engage in these 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 Fasadionol, along with the previous safety and LSAS efficacy results, from multiple placebo-controlled Phase II studies, including a placebo-controlled study conducted in the real-world setting, built support for a meeting with the FDA to discuss the next steps in our fearless Phase III development plan for Fasadionil and SAD. The plan that is centered on the potential new drug application enabling Phase III studies of Fasadionil in a real-world setting using the LSAS as the primary efficacy outcome measure in a manner similar to the registration studies for all three of the FDA-approved treatments for SAD. Results from the placebo-controlled phase two studies demonstrate that self-administration of vasodilinol 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 of those situations as measured by the LSAS. Notably, the amount of separation between facet-ionol and placebo as measured by the LSAS at the end of the first two weeks in the placebo-controlled phase two study conducted in a real-world setting was comparable to LSAS results observed after 12 weeks in the registration trials for the three 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 for the treatment of SAD, again, in line with all three of the previously approved SAD products. Our Freelance Phase III program and SAD will align with the LSAS-based study design, supporting the precedent-setting, NDA-enabling programs for all three antidepressants currently approved for the treatment of SAD. The fearless phase three studies will be designed to assess multiple administrations of facet dienol on a patient-tailored, as-needed basis in their daily lives up to six 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 fastidionol for SAD, we're now positioned to finalize our full NDA-enabling, fearless Phase III development program for fastidionol, a plan for a large market program that is well-suited for late-stage partnering to complete Phase III development and, if successful, commercialize fastidionol in the U.S. and 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, formerly PH10, our varying 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 build on previous successful Phase I studies and a published positive placebo-controlled Phase IIa study by Truvone and MBD 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 by Truvone in the U.S. as an innovative standalone rapid onset product candidate for the treatment of MBD. During the past year, the FDA also granted Fast-Track designation for development of itruvone for the treatment of MDD. So, like Fasadienol for SAD, itruvone is now states 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 2A clinical study for the acute treatment of vasomotor symptoms that are known as hot flashes that are due to menopause. In the study, PHAD 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 to the end of the four-week treatment period. PHAD treatment also significantly reduced the severity, disruption, and function and sweating related to hot flashes during the treatment period as compared with placebo. As we've seen with all fairings in our pipeline, PH80 was well-tolerated with no serious adverse events and an adverse event profile comparable to placebo in all the clinical trials of that drug candidate to date. The 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 disrupted impact of menopausal hot flashes in their daily lives. Also, with its novel rapid onset mechanism of action, PHAD 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 oral 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 a European patent. So, we look forward to preparing for potential future development of PH15 and PH284 as well. These are two varying candidates that are also in Phase 2 development, and we're assessing the results of previously unreported exploratory Phase 2A studies, placebo-controlled Phase 2A studies that involve PH15 for improvement of cognition, especially in sleep-deprived populations, and PH284 for improvement in subjective feelings of hunger in late-stage cancer patients in particular, those with Caxachia. As to AV101, our oral NMDA receptor antagonist, based on observations and findings from several preclinical studies and successful Phase I studies, we believe AV101 has potential to become a new oral treatment alternative for certain CNS indications that involve the NMDA receptor. Recently, we strengthened our AV101 intellectual property portfolio after receiving a new patent granted by the European Patent Office that's related to the synthesis of AV101 and certain chemical intermediaries. That enhances the attractiveness of AB101 as a valuable asset for potential strategic development and commercialization partnerships. So we are currently pursuing partnering and non-dilutive grant opportunities for Phase IIa clinical development of AB101 as a treatment for one or more of those neurological disorders involving the NMDA receptor, likely with emphasis on dyskinesia associated with Parkinson's therapy. 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 to reestablish 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 enabled us to increase awareness of Visagen and the therapeutic and market potential of our six clinical stage drug candidates, both in the capital markets, among prospective strategic partners, and among healthcare-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 healthcare-focused self-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 timelines 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 Vistagen team, thank you for the privilege and for the opportunity to make a difference, one mind at a time.

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

Thank you. Our first question comes from the line of Jason McCarthy with Maxim Group. Please proceed with your question.

Hey, guys. Thanks for taking the question. Sounds like you've made a tremendous amount of progress this year so far. Looking forward to what comes next. But, Sean, can you explain a bit further why you think the multiple-dose assessment real-world study design with the LTAS 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 you're confident in the new phase three study design.

Sure. Thanks, Jason. Great to talk to you. Well, as you know, Dr. Leibowitz is, Dr. Michael Leibowitz is the innovator of the LSAS and a clinical investigator who was involved in the registration trials for the three approved drugs for the treatment of SAD and the published placebo-controlled phase two studies of Fastidionol and SAD. And he will be the principal investigator in our fearless phase three program. So that matters. His prior experience, not just with Fastidionol, but obviously with the LSATs over the last 50 years is incredibly important. And we have developed with him a proprietary multi-step LSATs training program that all the potential sites have to pass to his and to our satisfaction before they can be included in a fearless study. So those are key advantages unique to our Phase 3 programs. 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 and a single anxiety-provoking situation to public speech. So we and Dr. Leibowitz and all the KOLs that we lean into believe the LSAS is by far the most appropriate endpoint to measure the efficacy of potential of Fasadienol 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 the LSAS as the primary endpoint in our Fearless Choice III program is consistent with 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 three studies. 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. It was okay to do, obviously, because we had a highly-statistic Phase II study. I think what we didn't all understand at the time was, and nor did many others, the impact that 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 fast dial and SAD. Very important point when we're discussing prospective partnering arrangements for potential support and commercialization through phase three 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, use a great analogy for fasted dienol 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?

Yeah, I'm glad you brought that up. 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 builds the confidence, builds 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. So patients 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 afacidinol, 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 have 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 it's, again, that's just an 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 in need because of the way their lives are impacted by SAD.

Thank you, Sean. Thanks for taking the questions. Looking forward to the continued progress over the rest of the year.

Thanks, Jason.

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

Hey, thanks for taking my questions. Good afternoon. Appreciate the updates. 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, you know, for Palisade 1 and 2, the prior studies, are there plans to share detailed data on either or both of the studies? Thanks.

Hey, 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 as a lot of opportunities for Phase III development and 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 types of financing arrangements or partnering arrangements, more likely, that we can put together in order to to underwrite that program. So the important piece that moved things forward, what 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, 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 three that are associated with large CNS markets. So we'll continue to advance on that. In terms of Palcid 1, Palcid 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. Patients were just a bit different. You know, 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 two studies, yes, we'd like to put them together. of the appropriate context. We'll be releasing the results of Pal State 2 once we're in a position to do that sometime during the second half of this year. And when the two 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 and a lot to be assessed.

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

Yeah, great that you asked that. So at Truvone, we know there's nothing but a growing need for innovations in terms of treatment of depression, especially anything that can act on a standalone 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 be Phase 2B staged 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. I&D enabling studies to put it into a point where we could skip back over 2A and go right into Phase 2B. So, like Pasadena, 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. Ideal situation, as 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 a collaborator. Great. And then also, go ahead. Sorry, I didn't answer the rest of your question, which is that study, again, will be developing it as a potentially rapid-onset standalone treatment candidate for major depressive disorders. Okay. more on the protocol, but basically it's daily as opposed to as needed, and the study will likely be multiple weeks, four to six 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?

Yeah, again, that's a rapid-onset neuroactive ferrine 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, there was an NK3 inhibitor that you saw recently approved by Stellis. 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 among companies focused on women's health. We know that it's a large market. We know it's underserved. We know it's the most common symptom of menopausal transition that 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. some IND enabling work, we did get a US IND in place and we skipped back over phase two right into phase two B. And that phase two B program can be supportive then of our pathway into phase three and then support marketing around the world if we get that benefit.

Makes sense. And then you do have additional variants of PH15 and 284, seems pretty attractive. So can you talk a little bit more about those two 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 Farron, we have not only the clinical stage assets, six assets that are in clinical stage. And the capability or the potential to advance additional preclinical candidates into clinical development. So, the fairing 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 two 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 tachycephalia. 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 sarin. Hopefully, we'll have some more to say in the near term in terms of the phase 2a data. with those two 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 will be doing with PH80 to move it into the U.S. Then overall, ultimately, each of the U.S. dossiers supports leverage in multiple markets outside the U.S.

Very clear. All right. Thank you so much. Congrats on the progress. Thanks, Andrew.

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 emailing ir.vistagen.com 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 for 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.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.