Vistagen Therapeutics, Inc.

And Chairman, greetings and welcome to Vistarjan Therapeutics Fiscal Year 2025 First Quarter Corporate Update Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark McPartland, SVP, Investor Relations at Vistagen. Please go ahead.

Thank you, Ryan, and good afternoon, everyone, and welcome to Vistagen's fiscal year 2025 first quarter corporate update conference call and webcast. This afternoon, we filed our quarterly report with the Securities Exchange Commission on SEC Form 10Q, for our quarter-ended June 30th, 2024, and issued a press release providing an overview of our continued progress. We encourage you to review the release and our 10-Q, which can be found in the investor section of our website. We will make forward-looking statements regarding our business during today's call based on current expectations and information. These forelooking statements speak only as of today, except as required by law. We do not assume any duty to update any forelooking statements made today or in the future. Of course, forelooking statements involve risks and uncertainties, and our actual results could differ materially from those anticipated by any forelooking statements we make today. Additional information concerning risks and factors that could affect our business and financial results is included in our fiscal year 2025 first quarter 10-Q for the period ending June 30th, 2024, and will be made in the future filings that we make with the SEC from time to time, all of which will be available in the investor section of our website and, of course, on the SEC's website. With the formalities completed, we warmly welcome our stockholders, sell-side analysts, and others interested in Vistagen. I'm joined on our call today by Sean Singh, our Chief Executive Officer, Cindy Anderson, our Chief Financial Officer, and Joss Prince, our Chief Operating Officer. Sean will provide an update on the lead programs in our novel class of neurocircuitry-focused sparing drug candidates in our clinical stage pipeline. After that, the conclusion of our prepared remarks, there will be a brief opportunity for questions from the cell site analysts participating on the call. As a reminder, this call is being webcast and will be available for replay after completion. The replay link can also be found in the investor section of our website. I will now turn the call over to our Chief Executive Officer, Sean Singh.

Thank you, Mark, and good afternoon, everyone. Thank you for joining our call today. For those of you who are joining us for the first time, we're a neuroscience company with a diverse pipeline that includes multiple clinical stage product candidates in phase two and phase three development. And each of these is a novel, non-systemic, neurocircuitry-focused product candidate. Our three lead clinical development programs target large markets with stale standards of care that leave millions of individuals with unsatisfied medical needs, specifically individuals affected by the profound fear and anxiety associated with social anxiety disorder. the serious and potentially life-threatening impacts of depression, and the disruptive effects of menopausal hot flashes. For decades, the standard of care in these markets, these very large indications, has been anchored in oral medications that require systemic uptake and are associated with a bundle of worrisome side effects and safety concerns, prolonged onset of action, and limited efficacy. And our mission is to change that. to change that with our pioneering neuroscience and our new class of clinical stage product candidates called pharynx. Distinguished from all systemic oral medications approved by the FDA, our lead neuroactive pharynx, facidinol for social anxiety, ytruvone for depression, and PH80 for menopausal hot flashes, are intentionally formulated as nasal sprays to rapidly activate unique nose-to-brain neural circuits to achieve therapeutic effects without requiring systemic uptake or direct action on neurons in the brain, and to do so with favorably differentiated safety profiles that we've observed in all clinical studies of our Farian product candidates that have been completed to date. Farians use the nose and key neurons located in the olfactory epithelium as a portal to activate neural circuitry in different regions of the brain that impact multiple medical conditions, And again, they do that without having to travel through the whole body or even into the brain. Those fundamental differences have enabled us to achieve historic clinical success in a Phase III trial for the acute treatment of social anxiety disorder, or SAD, that we reported last year, as well as also see positive results in exploratory Phase II trials involving patients with major depressive disorder, menopausal hot flashes, and premenstrual dysphoric disorder, and psychomotor impairment due to mental fatigue. Our top priority, the lead neuroscience program in which the vast majority of our team and our capital are focused on, is our U.S. registration-directed Palisade Phase III program for facidinol. That is our investigational fairy nasal spray for the acute treatment of SAD. There's no FDA-approved medication for the acute treatment of SAD, which is a very large growing and underserved market that affects 12% of adults in the U.S. As I noted many times, our principal goal is to change that. Last year with our Palisade II Phase III trial of Fasadienol, we reported the first ever positive Phase III trial of a drug candidate for the acute treatment of SAD. Earlier this year, we launched another Phase III trial, Palisade III, designed similarly to Palisade 2 with the objective of replicating the success of that study. Enrollment in the Palisade 3 study is on track, and we're also on track to initiate our Palisade 4 Phase 3 study in the second half of this year, as we've previously guided. That study will have the same design as Palisade 3 and the same objective of replicating the positive results from Palisade 2. Both of these Phase 3 studies, as well as an exploratory Phase 2A repeat dose study, will read out next year. We believe either Palisade 3 or Palisade 4, if successful, and together with Palisade 2, may establish the substantial evidence of the effectiveness of Fasadino in support of a potential U.S. new drug application submission to the FDA, which, if approved, could establish Fasadino as the first-ever FDA-approved acute treatment of SED. A new treatment option with the potential to be used on demand as needed by millions of Americans whose serious and sometimes life-threatening anxiety and fear of embarrassment, judgment, humiliation, and a wide range of social and performance situations affect their daily lives over many years, and potentially, and unfortunately, sometimes lead to depression and even suicide. So again, our U.S. Registration-Directed Palisade Phase III Program for Fasodinol for the acute treatment of SAD is our top priority. and we are on track and well-funded to do what's necessary to put us in a position with the potential to achieve that important and very valuable goal for patients and for our stockholders. We are also staging our other two lead fairing clinical stage programs in depression and hot flashes for further Phase II development in the U.S., building on positive results in exploratory Phase IIa studies in each of these large market indications, each of which has stale standards of care and no non-systemic pharmacological treatment alternative. We've seen and what we've seen in phase two from non-systemic Truvone for MDD and non-systemic hormone-free PH80 for menopausal hot flashes so far as to both efficacy and safety is driving our confidence in the potential of these product candidates to improve lives. iTruvone holds the potential to emerge as a novel and fundamentally distinct standalone treatment for major depressive disorder. We're preparing and strategizing for a Phase IIb development of iTruvone in the U.S. as a product candidate with the potential to help individuals who suffer from depression gain relief from their MDD symptoms swiftly and without many side effects of currently available systemic treatment options. Our TrueBone is distinguished by its favorable safety profile that's been observed in studies that have been completed to date, which is not associated with unwanted sexual side effects, for example, or weight gain, or potential for abuse. And finally, our non-systemic hormone-free farine product candidate for menopausal hot flashes, PH80, holds considerable medical and commercial promise in multiple women's health conditions, but most notably menopausal hot flashes that affect millions of women around the world. Similar to what we've accomplished to enable further Phase II development of vitruvone for MDD in the U.S., our ongoing non-clinical program for PH80 aims to enable our U.S. IND to further Phase II clinical development of PH80 in the U.S. as well, and to do that for menopausal hot flashes. We are confident that millions of women who are affected by menopausal hot flashes would prefer a novel, non-systemic, hormone-free treatment option over the current therapies. With that, I'll turn the call over to Cindy, our CFO, to summarize some of the financial highlights from the last quarter. Cindy?

Thank you, Sean. As Sean mentioned, I will highlight a few financial results from our fiscal year 2025 first quarter. I also encourage everyone to review our report on Form 10-Q filed at the SEC earlier this afternoon. for additional details and disclosures. Research and development expenses were $7.6 million for the quarter ending June 30, 2024, compared to $4.2 million for the same period last year. The increase in R&D expenses was primarily due to an increase in clinical and development expenses related to the commencement of Palisade 3 and costs related to preparation for the initiation of Palisade 4, Phase 3 trials of Fasinado and SAD, an increase in headcount costs, an increase in consulting and professional fees. General and administrative expenses were $4.6 million for the quarter ending June 30, 2024, compared to $3 million for the same period last year. The increase in G&A expenses is primarily due to an increase in headcount costs and professional service expenses to support the continued expansion of our administrative activities. Our net loss attributable to common shareholders was $10.7 million for the quarter ended June 30, 2024, compared to $6.9 million for the same period last year. As of June 30, 2024, we had cash, cash equivalents, and markable securities of $108.4 million. As a reminder, please refer to our quarterly report on Form 10-Q filed today with the SEC for additional details and disclosures. I will now turn the call back over to Sean.

Thanks, Cindy. What drives our team day in and day out is the opportunity to improve patient lives with our pioneering neuroscience, along with the potential value for stockholders that often accompanies that type of accomplishment. With our on-track progress in our U.S. registration-directed Palisade Phase III program for facidinol that's aimed at the acute treatment of SADs, which is a mental health disorder that's growing in prevalence. It's now affecting over 30 million Americans on the other side of the pandemic, and none of them have yet an FDA-approved, flexible, patient-tailored acute treatment option. So we're confident in advancing on our goal to secure that first FDA approval, and it's a very serious and a very life-threatening and highly prevalent indication that requires the kind of serious attention and effort that our team's putting on driving this Palisade Phase 3 program forward, building on the success we've achieved last year from the Palisade 2 study. So on behalf of everybody at Vistagen, I just want to thank you all for your continued interest and your continued support on our mission.

Thank you, Sean. Operator, we would now like to open the call for questions from the cell site analysts participating today.

Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question is from the line of Paul Mattis with Stifel. Please go ahead.

Hey, thanks for taking our question. This is Mark on for Paul. You know, we were curious in just hearing if you can provide any color on, you know, the types of patients that are currently enrolling for the Phase III trials for Fasadienol. That would be great. Thank you.

Sure. Mark, thanks a lot. Josh, you want to address that? Josh is on top, primarily on top of our execution of the Palisade program. Any just brief insights, Josh?

Yes. So, I mean, it's very similar patients to those that were enrolled in our Palisade 2 study. So, from an inclusion-exclusion criteria, LSAS scores greater than 70, for example, and no other kind of primary health disorders, no other primary mental health disorders. It has to be, SAD would have to be primary, those types of things. In addition, some of the exclusion criteria that we had incorporated were elimination of excessive smoking or vaping, for instance. But it's typically primary SAD diagnosis with high enough severity with the typical patients that are coming in.

Thank you.

Thanks, Josh. It's important. Obviously, we do quite a bit to ensure that we've got folks that properly meet the IE criteria. And we also obviously are focusing on people with a disorder that's chronic. The typical onset with this disorder, as many people know, is in adolescence. And the duration is typically about 20 years. So you have people that obviously you want to get people involved who can be impacted by the medication. So we have specific levels set up to make sure that there's appropriate chronicity and severity. We also make sure that they haven't had any more recent medical issues that would have caused them to be ineligible for the study. But very high scrutiny and upfront in recruitment and lead generation and pre-screening as well as making sure people are perfectly aligned with our IE criteria.

Thanks. Thank you. Our next question comes from the line of Andrew Tsai with Jefferies. Please go ahead.

Hey, good afternoon. Thanks for the updates and thanks for taking my questions. So, first one, for Palisade 3, are you by chance seeing higher screen failure rates compared to Palisade 1 and 2? And is there anything else that you might be seeing in real time that gives you that extra boost of confidence you are doing the right thing, you know, enrolling the right patients and executing the study even more rigorously than last time?

Josh, you want to give a little further insight on that? Yes, absolutely.

Thank you for the question. I think at this point what we've seen in terms of, green failure rates in terms of those that have a high enough score in the first public speaking challenge in terms of an anxiety score to move on to the second public speaking challenge, we've been pleasantly surprised that those rates have come in consistent with our projections. So we're seeing, you know, again, progress of the study that's in line with expectations towards the targets that we've established. And so I think in general, There are really things going as expected there.

And then can you remind us how long it took for you to start and end Palisade 1 and 2, I guess maybe Palisade 1, and whether the enrollment cadence for Palisade 3 is looking stronger or faster than the first study?

Andrew, thanks for the question. The question, the enrollment cadence is on track with what we've guided. I mean, looking, you know, obviously the black swan of the pandemic impacted a lot of activity in one and two. What we've been so pleasantly surprised by, not really surprised, but expected and happy to see is how normative the clinical development environment is now and how we are able to have a lot more predictability on the things that caused fits and starts in prior studies during the pandemic, especially PALSID 1. So I can tell you that we're comfortable with the cadence and we're on track. Josh, anything else you want to add to that?

I think that captures it. The one thing I should have mentioned before was just the reminder that we have two public speaking challenges, right? So a key part of this study is the screen out at visit two in the first public speaking challenge. of those subjects who don't have a high enough anxiety level to really show improvement. It's one of the things that differentiates our study. And it's not inclusion and exclusion, but it's a key piece of making sure that we have the right subjects moving forward to the randomization portion of the study. And those rates, those are critical for study execution. Those rates have been similar to what we observed in Palisade 1 and Palisade 2.

Great. Last question is, What's the latest on the Palisade 2 publication as well as a potential breakthrough designation filing? Thank you.

Andrew, look, we know obviously what we achieved in Palisade 2 is historic. No one's ever done it. And so that's given rise to interest in terms of manuscript that we will be submitting to a journal that we believe is the best fit for that. That's in A very nice, mature stage of development. The other part of it is, look, as you know, we've achieved fast track designation already. It's a serious and life-threatening indication. There's no question about that. What we achieved in Palisade 2 is a very significant differentiator. So we'll see how it goes. There's never any guarantee you can make about any activity with the agency, but I like the chances that we have in fitting the profile that's typically associated with moving beyond fast track. So we'll have to see.

Perfect. Perfect. Thanks so much for the call there. Thanks.

Thank you. Our next question is from the line of Tim Lugo with William Blair. Please go ahead.

Thanks for the question and congratulations on the progress in the quarter. Can you remind us If you had discussions with the FDA about self-administration in PAL 1 and 2 versus HCP administration in PAL 3 and 4, and how you expect that to impact any dosing language in the label?

Sure. Thanks, Tim. Sure. We've obviously submitted the protocols to the agency, and they understand both of them. It's more consistent with what occurred in Phase 2. the HCP administration of the single dose. So again, you're trying to ensure that you've got no variability site to site. So we don't think it'll impact anything associated with what we see at the end of the day if we're successful in three and four combined with two, three or four combined with two. And that is for the acute treatment of SAD, full stop. And up to multiple times a day, four to possibly even six times a day given, as you know, people have some days no stressor events, and some days they have multiple different stressor events. So we see the ability for patients to be able to use the drug on demand, and that's consistent with the kind of discussions we've had with the agency in the past. So we want it to be an opportunity for people to have this drug in their backpack, in their pocket, to be able to especially when they anticipate and predict stressors coming upon them, to be able to use it to knock down those symptoms that flare and cause them to not be able to either engage or to engage with all kinds of fear and disruptive anxiety and fearing embarrassment or humiliation. So we really do like, and I think that's part of why we're so comfortable with the patient-reported outcomes that are associated with the study design, both PGIC as well as the SUDs on the front end. We want patients to be in control, and what will be shown in PALS-A2 is that they can be in control. And the same thing now to replicate the efficacy of the drug, just to ensure that you've got no potential variability with the use. We'll still do also a pretty normal human factor test downstream, but we don't see any issues.

Okay. And can you... I think maybe I missed this in the prepared commentary, but was there any granularity on the phase 2B and NDD when that's going to be kicked off? Is that by year end?

No, it won't be by year end. Right now we are working with some really good KOLs around the hoop on that program, and so we're finalizing. Got a solid protocol synopsis that's developed. We're now moving that into the full protocol, which we'll submit to the agency before the end of the year. And so we'll see how things progress on the other side of that.

Okay, thank you. Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, please press star and one. Our next question is from the line of Madison L. Sari with B Riley Securities. Please go ahead.

Hey, guys. Congrats on the progress you made, and thanks for taking on the question. So a couple from me. Can you remind us if Palisade 4 will be performed at the same clinical sites as Palisade 3? And will we see top-line data from Palisade 3 before dosing starts in Palisade 4?

So the first question was, will there be distinct sites in the studies? And the answer to that is yes. We'll have about 15, 16 sites per study, and we're not anticipating any overlap in the sites from the two studies. And then I'm not quite sure I heard the last part of the question, but if it was associated with when we'll initiate Palisade 4, is that what it was?

If we'll see top-line data from Palisade 3 before dosing starts in Palisade 4?

No. No, Palisade 3, top-line data, both those studies we'll read out in 25. So currently a target for Pal 3 is mid-25, and for Pal 4 will be near the end of 25. Every aspect of the Palisade Phase 3 program, every single component of it, that remains associated with this US-directed, registration-directed program will be started this year and completed next year.

Got it, that's helpful. And then if I could ask, what are, I guess, the gating steps to the MDD Phase IIb trial? And it looks like you guys have kind of reached the top of the dose efficacy curve. with the current 6.4 microgram dose. Is that how you're looking at it, or could that dose change?

No, we think that's where we'll land. We saw some very nice success in the Phase IIa study at two different dose levels. And where I think we're landing on that one, again, we're trying to finalize the protocol, working with some of the KOLs you all have seen on our SAB, Maurizio Fava, Jerry Santacora, Sanjay Matthew, Michael Lieblitz, all with long-term success. experienced in depression. And what we see, again, with this drug, similar to, obviously, the way that we've achieved clinical success with the other pharynx, is to be able to get there through neurocircuitry-focused MOAs that do not drive onto the same side effect and safety profile lane as we've typically seen every single drug that's out there. And so what we think we can do here In a standalone monotherapy study, we'll probably shoot it over six weeks with the 6.4 dose, double-blind, placebo-controlled, one-to-one randomization. We'll lean into Hamilton. HAMD17 is the primary endpoint, just like we did in Phase II. A lot of that has to do with what we've seen with anxious depression and the benefits that we've seen there with this asset. So it'll be a fairly conventional approach from an endpoint standpoint. And I think a six-week program is what we're looking at by twice a day dosing over six weeks at the 6.4 microgram level.

Got it. Thank you.

Thank you. Ladies and gentlemen, there are no further questions. I would now hand the conference over to Mark McPartland for his closing comments. Mark?

Thank you, Operator, and thank you, everyone, for participating on the call today. If you have any other questions, please do not hesitate to contact us by email at ir.vistagen.com or the Contact Us section of the website. We also encourage you to register for email updates on the website to stay connected to the latest news and events for Vistagen. Thank you all again for participating on the call. We appreciate everyone's interest and support. We look forward to keeping you updated on our ongoing progress. This concludes the call. Have a magnificent day.

Thank you. Ladies and gentlemen, the conference of Vestogen Therapeutics has now concluded. Thank you for your participation. You may now disconnect your lines.