Vistagen Therapeutics, Inc.

Good afternoon, ladies and gentlemen, and welcome to the VistaGen Therapeutics Fiscal Year 2025 Second Quarter Corporate Update Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, November 7, 2024. I would now like to turn the call over to Mr. Mark McCartland, Senior Vice President in Investor Relations at VistaGen. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to VistaGen's Fiscal Year 2025 Second Quarter Corporate Update Conference Call webcast. Earlier this afternoon, we filed our quarterly report with the Securities Exchange Commission on the SEC Form 10Q for our second quarter that ended September 30, 2024. And we also issued a press release providing an overview of our progress across our lead neuroscience programs. We encourage you to review the release and our 10Q, 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 our current expectations and information. These forward-looking statements speak only as of today, except as required by law, we do not assume any duty to update any forward-looking statements made today or in the future. Of course, forward-looking statements involve risk 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 our fiscal year 2025 Second Quarter Form 10Q for the period ending September 30, 2024, and in future filings that we make with the SEC from time to time, all of which, again, are on our website in the Investor section on the SEC website. With the formalities completed, I would like to warmly welcome our stockholders, Cellsight Analysts, and others interested in our programs in progress. I'm joined on our call today by Sean Singh, our Chief Executive Officer, Cindy Anderson, our Chief Financial Officer, and Josh Prince, our Chief Operating Officer. Sean will discuss our recent highlights in our lead neuroscience programs, and Cindy will discuss our Second Quarter financial results. At the conclusion of our prepared remarks, as the operator has already noted, there will be a brief opportunity for questions from the Cellsight Analysts. As a reminder, this call is being webcast and will be available for replay after completion. The replay link, again, can be found on our website event section.

Sean? Thank

you, Mark. Good afternoon, everyone, and thank you for joining our call today. As the neuroscience renaissance continues, we are advancing at Visigen, a neuroscience pipeline that's unlike any other in the industry. With multiple clinical stage product candidates in Phase II and Phase III development, each from a new class of potential intranasal therapies that we call pharynx. Each has a differentiated mechanism of action and differentiated safety. So we're up, we are with this pipeline advancing multiple opportunities to set new standards of care in several high prevalence pharmaceutical markets. Distinguished from all systemic medications that are currently approved by the FDA, each intranasal pharynx product candidate in our lead programs, and that includes facadienol for social anxiety disorder, itruvone for major depressive disorder, and PH80 for menopausal hot flashes. Each is designed and formulated to activate key nose to brain neurocircuitry within milliseconds to achieve the desired therapeutic effects, and all without requiring systemic absorption or binding to neurons in the brain. We have observed statistically significant efficacy and favorable safety data in each of our lead intranasal pharynx development programs. For facadienol in a Phase III trial for the acute treatment of social anxiety disorder, for itruvone in a Phase IIa trial for the treatment of major depressive disorder, and for PH80 in a Phase IIa trial for menopausal hot flashes. It is these successes seen with multiple pharynx product candidates across multiple indications that drive our confidence in the power and the elegance of nose to brain neurocircuitry and the enormous potential of our intranasal pharynx platform. Currently there is no FDA approved medication for the acute treatment of social anxiety disorder, which is a mental health disorder affecting over 30 million adults in the US. And our goal is to fill a major acute treatment gap in SAD with facadienol and deliver new hope and new optimism to the millions of individuals who are anxious and fear embarrassment, humiliation, and judgment when facing anxiety provoking social and performance situations in their daily life. Last year we reported positive results from our Palisade II Phase III trial of facadienol for the acute treatment of SAD. This year with the goal of complementing the success of Palisade II, we've initiated our replicate Palisade III and Palisade IV Phase III trials on time and as planned. With those milestones now completed, we are now laser focused on efficient execution toward top line results from both studies next year. And if successful, we believe either Palisade III or Palisade IV together with Palisade II could provide sufficient evidence of safety and efficacy to support the submission of an NDA to the FDA for facadienol for the acute treatment of anxiety in adults with SAD. Our i-true bone program has shown exciting potential as a new non-systemic standalone treatment for major depressive disorder and we are preparing for planned Phase IIb development in the US. Based on the Phase IIa clinical data, i-true bones has the potential to relieve MDD symptoms rapidly and without many of the unwanted side effects associated with current systemic antidepressants, especially weight gain and sexual dysfunction. Our PHAD program for menopausal hot flashes is also progressing. Based on positive Phase IIa clinical data, our non-systemic hormone-free ferrine product candidate has game-changing potential in this major women's health market in which women are faced with a very limited opportunity for treatment options. We're advancing PHAD through the remaining non-clinical programs and CMC requirements to support our submission of a US IND next year. The intent for that is to facilitate our plans for further Phase II development of PHAD for treatment of menopausal hot flashes in the US. I'll now hand the call over to Cindy Anderson, our CFO, to summarize our financials from the last quarter. Cindy?

Thank you, Sean. As Sean mentioned, I will highlight a few financial results from our fiscal year 2025 second quarter. Research and development expenses were $10.2 million for the quarter ended September 30th, 2024, compared to $3.9 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 our Palisade Phase III program for pathinidol for the acute treatment of SAD, an increase in head count, and an increase in consulting professional services. General administrative expenses were $4.2 million for the quarter ended September 30th, 2024, compared to $3.2 million for the same period last year. The increase in G&A expenses was primarily due to an increase in head count and professional services fees. Our net loss attributable to common stockholders was $13 million for the quarter ended September 30th, 2024, compared to $6.6 million for the same period last year. As of September 30th, 2024, we had $97.6 million in cash, cash equivalents, and marketable securities. As a reminder, please refer to our quarterly report on Form 10Q, filed with the SEC this afternoon for additional details and disclosures. I will now hand the call back over to Sean.

Thanks, Cindy. Leveraging our pioneering neuroscience, our deep understanding of -to-brain neurosurgery and multiple positive clinical trials to date, our faring pipeline has the power and the potential to improve millions of lives who are affected by debilitating effects of neuroscience disorders. To do that by replacing inadequate therapies and setting entirely new standards of care. Our broad and our diverse neuroscience pipeline offers multiple shots at that core goal. And our team is motivated and it's driven by the opportunities to disrupt treatment paradigms, improve lives, and in turn create potential value for our stockholders. So on behalf of everyone at Vistagin, once again, I want to thank you for your continued interest in our efforts and for your support. And we look forward to keeping you informed of our continuing progress.

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

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speaker phone, please lift the handset before pressing any keys. One moment, please, for your first question. First question will be coming from Paul Mattis from Stifo.

Hi there. This is Julian on for Paul. Thanks so much for taking my question and congrats on the progress. Just wondering if you could provide a little bit of color on the pace of enrollment so far. What are you hearing from investigators about the demand and enrolling in the study and was wondering if these parallel studies share trial sites or anything else that you could share about, you know, the sites that you've chosen for each study. And then lastly, a quick one. Can you just remind us on the timing of when you expect to have data here. Previously, you've said you're targeting mid 25 for PAL 3 and, you know, towards the end of 2025 for PAL 4. Just curious if you're still tracking towards that goal. Thank you.

Hey, thanks, Julian. Appreciate the question. Couple things there. I'll try to do them sort of in reverse order in terms of timelines still sticking with the guidance that we had previously laid out as you just articulated for PAL 3 and PAL 4 respectively. So we're happy that we were able to initiate both of the studies on time, as I noted, middle of the first half of this year for PAL 3 in the middle of the second half of this year for PAL 4. So, you know, there's tremendous excitement across the PIs and the site staffs that we've been able now to bring together for PAL 3 and PAL 4, as you can imagine, on the other side of the PAL 2 success. We've got 16 sites now that are activated for PAL 3 and another in a dozen for PAL 4. So the you know, the color I can give you is again, we, this is a very important indication. It's very clear throughout the research community and a lot of these sites, of course, have psychiatrists that have been treating patients for a very long time and they just haven't seen anything new in a very long time, let alone something for the acute treatment of social anxiety disorder, which is so important with this disorder is enabling people to engage and not have fear of engaging in the things that stress them in their life, that create anxiety and opportunity costs in their life because they're self isolating or withholding from engaging. So it's a really exciting time across all both studies. There's no overlap in the sites from in either of the two studies. Of course, we've got sites from PALS8-1 and PALS8-2 that we've been very happy with from the past. So I'd say overall, you know, we are really excited to work with our CRO, with the sites, with our internal team. We've really enhanced surveillance with our own owned assets, as well as augmenting that with what we've got as resources from the CRO. So there's a lot of intense training. There's very close surveillance and adherence to the protocols. Which is a very important, obviously, to control variability. So I think overall, we're happy with how things are going. Josh, do you want to add anything to that?

Yeah, I would just, I'd love to add a little bit of color to the PI excitement that you mentioned. You know, we've now had in-person investigator meetings for both PALS8-3 and PALS8-4. And what really comes out there is we have the opportunity to speak with PIs that are there and really express their excitement and enthusiasm to participate in a study like this. That's really unlike any other study that they've done before or kind of have come across their plates now. So just want to add that color that we really do see that excitement, enthusiasm, engagement from the PIs and the desire to do these studies.

It's a good point. And that just came out. We had a recent town hall with the sites. It's something that we do from time to time, where it's sort of like a fireside chat with me and with the rest of the team. So keeping the momentum is always key when you're trying to execute efficiently a program, especially with parallel studies in motion. And it always helps when what you're working on is at the leading edge of trying to treat people who have been dealing with this disorder for decades. But thanks for the question, Julie. I appreciate it.

Next in line will be coming from

Andrew from Jeffrey.

Hey, good afternoon. Thanks for the updates. Appreciate you taking my questions. Maybe a tangential question from before that was just asked, but for these phase three studies, both of them that are underway, what are you seeing on the front lines that gives you the confidence? It's definitely different this time for FASDIN or maybe talk about how sites are operating, the rigor of these study protocols, whether public speaking challenges being done correctly and so forth. Thanks.

Thanks, Andrew. Appreciate the question. You know, one thing, of course, is significantly different now than where we were even during Palisade II, let alone earlier in that, during the pandemic. It's just the ability to have -to-person contact, to have in-person training, like Josh mentioned, in-person investigators meetings mean a tremendous amount. To be able to regularly and predictably have site visits and also have subjects schedule each phase and each visit during their challenge sequence, it is all different. It is just fundamentally different. The attrition rates that we typically saw before at sites with site staff, we're just not seeing. Same thing with CROs. You're not seeing the kinds of things that would have been frustrating variability coming into a protocol that the recipe is pretty clear and when it's followed, it helps tremendously. So that plus things that we've talked about before, no masks involved, no COVID related potential with the subjects in the study. So there's just fundamental things that are different on a macro basis and then site by site on a micro basis. And just having the ability for the protocol to not be novel. This is something, of course, now that's on the third and the fourth lapse within the research community. So the study design isn't new. The end point isn't new. So all the things that really helped, I think, with the pace of play and with the ability really to surveil and to hopefully make sure that we've got rigorous adherence to the protocol across all the sites.

And

that said, okay, go ahead. Sorry. No, I just want to give Josh a sense to add to it. Josh oversees the program primarily. So I want to give you a chance. Josh, anything I missed?

Sure, we could add to what you said and it kind of builds on the in-person piece. In addition to the in-person investigator meetings, we've had an in-person site initiation visit for every site. So it's kind of the double reinforcement of training an investigator meeting and then a good three to four hours with the study staff in their site location, again, hitting all the key details and pieces and components of what it takes to properly execute a public speaking challenge. And then through the monitoring that Sean mentioned, there have been specific examples where we've identified something that wasn't being done quite right and the next day there's an intervention or a discussion or a retraining or a reminder. So those are the kinds of things that could not happen in our prior Palisades studies and are happening now, which gives us, again, that confidence that we're getting the right patients and that we're reducing variability as much as possible across sites for the public speaking challenge.

Makes sense. And, you know, in the unfortunate circumstance, should Palisade 3 not hit status, do you still, would you still plan to move forward and complete Palisade 4, just given the turn of events that happened last time with Palisade 1 and 2?

Yeah, 100%. No question about it, Andrew. The whole program continues. That's what's the benefit of having a fully funded program. So we're in a spot now where, in the very short order here, we will have initiated everything in 24 that we think we need to read out in 25 and that if positive would support our NDA in the early part of 26 for facet dienal. So yes, absolutely 100%, regardless, both studies will be run to completion. Thank you again.

Thank you, Beth. Our next question will be coming from Miles

Minter from William Blair.

Hey, everyone. Thanks for taking the questions. I've got three, if I may, so bear with me. The first one is just on, I think previously you've guided towards submitting the phase 2b protocol in MDD by year end. Are we still on track for that or is that slightly, you know, maybe looking into next year? Second one is, in that particular MDD study, have you thought about whether like maybe a caregiver or physician would be administering the drug versus self-administration? As I know that that's a consideration between PEL 3 and PEL 4 or are you just relying on the fact that multiple doses in that trial probably met that exposure out? And then finally, I'm wondering in the healthy subject data that you just presented at NEI on the depolarisation of the electrograms there, did you actually do dosing self-administering or a combination of self-administering versus physician administered to show that there was actually differences in those electrograms and the exposure of the drug? I know there's a lot there, but would appreciate any thoughts. Thanks.

Sure. Appreciate the questions, Miles. So as the first one, we're working very closely with our KOLs and our internal team for that, the phase 2b protocol. It still is the intention. We're well down the road with it. We've got some pretty key thoughts already under our belts as to how we want to see that study proceed. A lot of it's simply based on what we saw in the phase 2a study and what we think are the unique attributes of i-Truvone in MDD, and especially as it relates to folks with anxious depression. So I think that is a target we likely will hit. If not, it'll just creep maybe a little bit into January. But I think right now we've had a very substantial bit of discussions across all the folks that we want to provide some input, and that protocol is well down the road. So in terms of self-administration during the study, we don't see that. This is different. This is likely to be a six-week study with twice daily administration. So on an outpatient basis by the folks. So it'll be self-administering and on an outpatient basis. And then as to the last question, Josh, I'll let you jump on that one.

Sure, yeah, the studies that we do in the lab with Dr. Monte, kind of our inventor of pharynx, they're based on physician administration, and they really have to be because of the equipment that people are hooked up to. And so, you know, sensors on the frontal lobe or receptors kind of in the nasal cavity, those things require a lot of precision to do the measurements and to reduce noise in those capture of data. And so for that reason, it has to be physician administered.

Those studies are conducted here in our headquarters in South San Francisco, and so the subjects are laying down and the electrodes are placed inside and up by the bridge of their nose, right where the olfactory bulbs are. So as Josh noted, they're very sensitive and you have to, it's the best way to do it is just to have the IP administered by Dr. Monte and the team.

Thanks a ton of sense. Thanks for the questions. Congrats on the progress.

Thanks. Again, if you have any questions, please press star

one and your hand will be raised. Our last question for today will be coming from Madison from B Riley securities.

Hey, guys, congrats on all the progress and appreciate you taking my question. I guess, could you remind us what's dating to the hot flash study as well as a bit of a follow up to the prior question? What's really dating to that place to be? And then, secondly, I know it's in the PR, you mentioned an increase in headcount. So I was just wondering if this was just kind of related to general activities across the enterprise or if that was more related to one specific program. Thanks.

Great. Thanks for the questions. Really appreciate it. So a couple things. So as to the gating for the pH 80 study in vessel motor symptoms or hot flashes due to menopause, what we're doing now is a USI and enabling program. So to bring that study, the initial study was done in Mexico and to bring the program into the United States. We're doing just the typical requisite non clinical studies, CMC related studies, talk studies that bridge some of the older work and then and get of course the CMC because we had to make an entirely new supply of pH 80 for the clinical program. So that's what's in motion in order to put us in a position to then submit an ID that would leap us right back into phase two development in the US. So phase likely phase for the phase two development and but just in hot flashes, we have positive data and PMDD, but hot flashes is the main direction given what we see is the tremendous opportunity there for really nothing that we see that is non systemic and what's hormone free. The NK3 antagonists do have some limitations. So that seems to work non clinical work puts the regulatory package in place and that should be sometime in the second quarter. I think is our target for that at this point. And then as to the the MDD study in finalizing the protocols, really what's left there and then we have an idea that's already open. We've got phase one support for the supply that we built that we produced. And again, with these when we acquired these, we had to really go back to the beginning and do the CMC work necessary to enable the clinical work and the regulatory packages. So all those boxes have been checked. And so I think we're on the final lap of the preparations up front of the MDD study and then headcount wise. We're about 50 right now. And as you can imagine, as we have expanded clinical work and we've got a little bit of additional GNA support that's needed. But most of it's R&D related. A lot of it relates to owning, especially the surveillance and the training that's associated with the Pellis III program, trying to decouple some of that reliance that was a little bit more variable than we wanted to see during the pandemic. So that allows us to really have own competence and own consistent surveillance, especially for the Pellis III program. And of course, other things related to some of the pre-commercial activities on the CMC side, especially. So a little bit in headcount on the GNA side on finance, but for the most part, it's an R&D increase that's enabling us to do quite a bit more across each of the lead development programs that we've got.

Got it. Very helpful. Thanks, Max.

Operator, I believe that's all the time we have for questions today. Thank you, everyone. At this time, if you have any additional questions, please do not hesitate to contact us via email at IR at VistaGen or via the contact section of our website. We also encourage you to register email updates on our website to stay connected to the latest news. Again, thank you for participating on the call today. We appreciate everyone's interest and support. We look forward to keeping everyone updated on our ongoing progress. This concludes our

call. Have a great day. This concludes our conference

call for today. We thank you for participating and ask that you please disconnect your lines. Have a great one, everyone.