Vistagen Therapeutics, Inc.

Good afternoon everyone and welcome to Visigen's fiscal year end 2025 corporate update conference call and webcast. Earlier this afternoon we issued a press release for our fiscal year end 2025, which ended on March 31st, 2025, providing an overview of our progress across our lead clinical stage neuroscience programs. We encourage you to review the release and the 10K, which can be found in our website's professor section. Before we begin, please note that we will be making forward looking statements regarding our business during today's call based on current expectations and information. These forward looking statements speak only as of today, except as law requires. We do not assume any duty to update any forward looking statements made today or in the future. Of course, forward looking statements involve risks and uncertainties and our actual results could differ materially from those anticipated by any forward looking statements we may make today. Additional information concerning risks and factors that could affect our business and financial results are included in our fiscal year end 2025 form 10K for the period ending March 31st, 2025 and in future filings we'll make with the SEC from time to time, all of which are available in the investor section of our website and on the SEC's website. Now with the formalities out of the way, we warmly welcome our stockholders, sell side analysts and interested in our program and progress. I'm joined on our call today by Sean Singh, our president, chief executive officer and Cindy Anderson, our chief financial officer. Sean will discuss recent highlights in our lead neuroscience program and Cindy will discuss our fiscal year end 2025 financial results. After our prepared remarks, there will be a brief opportunity for questions from the sell side analysts on the call. As a reminder, this call is being webcast and will be available for replay upon completion. Replay link can also be found in our website's investor events section. I will now turn the call over to our president and chief executive officer, Sean Singh. Sean, the field is yours.

Thank you Mark and good afternoon everyone. Thank you for joining us. As some of you know, our team here at Visagen is at the leading edge of neuroscience that involves the therapeutic potential of nose to brain neurocircuitry. Developing a new class of non-systemic intranasal product candidates called Farines. We now have five clinical stage Farine product candidates, each with a mechanism of action or MOA that is differentiated from all approved drugs and positive results in a controlled trial. Together, they cover a broad and diverse range of large market conditions and disorders where underserved patients have needed new and better treatment options for many years. Fiscal 2025 was another significant year of progress across our neuroscience pipeline with multiple Farine product candidates in phase two or phase three development. We are advancing our mission to deliver transformative treatment options for patients and build value for our stockholders. Our lead Farine product candidate, facadienol, is in phase three development for the acute treatment of social anxiety disorder or SED. There is no FDA approved acute treatment for SED, a condition that now is estimated to affect over 31 million US adults who struggle with the intense stress and debilitating anxiety and fear of embarrassment, humiliation, and judgment in everyday social and performance situations. Our goal for facadienol is for it to become the first FDA approved acute treatment of SED and help improve the millions of Americans whose lives are affected by this serious and potentially life-threatening disorder that often begins in adolescence and occurs for decades beyond. The ongoing phase three trials in our US registration directed Palisade program for facadienol for the acute treatment of SED, Palisade III and Palisade IV, are designed to complement our success in our Palisade II phase three trial that we reported during the second half of 2023. Our Palisade III trial is on track for a top line data readout in the fourth quarter of this year, and we anticipate top line results from Palisade IV in the first half of 2026. The enthusiasm of patients and physicians participating in the Palisade program continues to be very strong, and we remain committed to rigorous operational execution. If successful, we believe either Palisade III or Palisade IV, in combination with the positive results from Palisade II, could provide the substantial evidence of effectiveness needed to support a new drug application for facadienol and its potential to be the first FDA approved acute treatment for SED. We are also advancing iTrueVone, our farine product candidate for standalone treatment of major depressive disorder, or MDD. Following the promising results from a controlled exploratory phase 2a study, we are encouraged by its differentiated non-systemic MOA and potential to treat MDD without the weight gain, sexual side effects or systemic safety concerns commonly seen with traditional antidepressants. Our farine product candidate focused on women's health indications, PH-80, also continues to generate interest as we advance its development as a potential hormone-free treatment for menopausal hot flashes. PH-80 also demonstrated positive signals in the controlled exploratory phase 2a study in premenstrual dysphoric disorder, or PMDD, further validating its broad utility in women's health. We are also encouraged by PH-80's potential to treat the disruptive and painful effects of dysmenorrhea. We've made substantial progress preparing our US IND for PH-80 to support additional phase 2 clinical development in women's health, and we anticipate submitting the IND in the second half of this year. Beyond these three lead programs, our diversified farine pipeline is potential for future development to improve cognitive and psychomotor impairment due to mental fatigue, as well as appetite enhancing effects in patients with cancer cocaxia, often overlooked conditions with limited treatment options. So across all five of our clinical stage farine product candidates, potential therapeutic benefit has been observed with favorable safety, a testament to the power and the promise of -to-brain neurocircuitry. On the US regulatory front, which is on most of our minds these days, we are encouraged by the evolving regulatory landscape. Last week I was privileged to participate in the FDA's CEO Listening Tour, which was hosted at the Stanford Medical School. This CEO-only forum was led by FDA Commissioner Dr. Marty McCary and CBER Director Dr. Vinay Prasad and their supported staff members. The forum was impressive and very productive. It was allowed for a central, direct interface between the new FDA leadership and my fellow industry CEOs to drive FDA initiatives that are designed to improve the ease and frequency of communication with the agency and provide clear and early guidance to support optimal capital allocation and enhance market confidence and predictability, while also modernizing the agency's regulatory framework and leveraging AI to bring innovative, safe and effective medications to underserved patient populations, both large and small. So I applaud Commissioner McCary for holding this unique forum in several cities across the country where industry expertise and perspectives can and will be openly shared with FDA leadership. It's a meaningful step toward fostering a far more collaborative, transparent and innovation-friendly regulatory environment where, very importantly to us, new mechanisms of action and emerging technologies require reevaluation of legacy registrational pathways. At Vistagen, we welcome the conversations with the FDA as always about policies that speed up innovation, make drug development more efficient and affordable, and most importantly, improve patient outcomes. Overall, we are energized by the potential of all five of our clinical stage fairing product candidates, and with our primary focus on delivering top-line data from Palisade III in the fourth quarter of this year, doing so has the near-term potential to transform lives and produce remarkable shareholder value. I'll now turn the call over to our Chief Financial Officer Cindy Anderson to highlight some of our financial results for the year. Cindy?

As Sean mentioned, I will highlight a few financial results from our fiscal year March 31, 2025. Research and development expenses were $39.4 million for the fiscal year ended March 31, 2025, compared to $20 million for the same period last year. The increase in R&D expenses was primarily due to increases in research, clinical and clinical development, contract manufacturing expenses, and headcount related to our U.S. Registrational Palisade Program for Paz and Ayadol and SAD and our U.S. I&D Enabling Program for PHAD and Women's Health. General and administrative expenses were $17.1 million for the fiscal year ended March 31, 2025, compared to $14.1 million for the same period last year. The increase in G&A expenses primarily due to increased headcount, consulting, and professional fees. Our net loss attributable to common shareholders was $51.4 million for the fiscal year ended March 31, 2025, compared to $29.4 million for the same period last year. As of March 31, 2025, we had $80.5 million cash, cash equivalents, and multiple securities. I will now hand the call back over to Sean.

Thank you, Cindy. Once again, everyone, at Visigen, our mission is to transform lives with pioneering neuroscience and an innovative pipeline of intranasal product candidates, non-systemic intranasal product candidates that harness the power of -to-brain neurosurgery unlike any pharmaceutical product ever before them. With five promising clinical stage fairing product candidates and a U.S. registration-directed program advancing, we're not just developing innovative potential treatments, but also working to restore hope, dignity, and the quality of life for millions of people facing underserved conditions every day. We thank you for your continued support and your belief in our mission. And on behalf of the entire Visigen team, we're honored to be on this journey with you, and we look forward to keeping you closely updated on our continuing progress.

Thank you, Sean. Operator, we would now like to open up the call for questions from the Southside Analyst participating today.

Thank you. To ask a question, you will need to press star 101 on your telephone and wait for a name to be announced. To withdraw your question, please press star 101 again. Please stand by. We'll compile the Q&A roster. One moment for our first question. Our first question will come from Paul Matisse from Stiefel. The line is open.

Hey there. This is Julian on for Paul. Thanks so much for taking our questions. You alluded to changes with FDA leadership, and there's been reports of turnover of staff and medical review teams. I guess in your interactions with the agency, have you noticed any changes or anything that's worth highlighting to Southside and investors? And then just with respect to Palisade IV quickly, you talk about patient demand being quite strong. What led to the modest slip back of timing for P4? Was it something operational or any color that you could provide on that would be super helpful? Thanks so much.

Great. You bet, Julian. So to the first question, it was a very common line of inquiry by a handful of us at that CEO listening forum. It was quite actually interesting because it was a bit opposite of the tone and tenor that we had heard a week before in the open forum at the Jefferies Conference. And it was very encouraging, especially on this particular point. Not only did Dr. McCarrie say this, but also Dr. Palisade said it from the CBER voice, which is that no FDA reviewer or inspector was involved with the reduction of force and that they are hiring additional reviewers and inspectors with domain expertise in the areas that they review. So we hope that will be the case. I think in our case, we haven't seen any changes in our review team, which is helpful. One of the things I mentioned to them is it would be nice and helpful to industry if at this point, given the kind of questions you just asked, that each company, each sponsor with an open IND or a program that's underway gets reconfirmed that the team that they have is the team that they have had, and especially as it relates to prior commitments and agreements. So we'll see if they act on that. But overall, I think we heard it not only at the Jefferies Conference, but again at our listening forum, which is that in terms of the muscle, the reviewers and the inspectors, there hadn't been any change. Most of the change associated with centralizing resources where there was tremendous overlap in fiefdoms and sort of a tribalism component where every aspect within the FDA had its own little universe, whereas none of us in the audience would really build the FDA or build a company like the FDA has been built today. So I think they appreciate that, recognize it, and I think we can expect some changes. So that's encouraging on that side. So back to the PALS AID-IV, I think overall, we as I think we've talked to you and Paul about in the past and others, the enhancements that we brought to the table related to PALS AID-III, PALS AID-IV from lessons learned and improvements that could be implemented to limit variability, to enhance subject selection, to improve study execution efficiency, those kinds of things in addition to the mask obviously coming off and eliminating some of the COVID related disorders. We really have been focused on very stringent subject eligibility requirements. And some of the original projections that we had were based on observations from PALS AID-II and the recruitment rates in those studies which steadily increased through the end of the studies, especially when the world got a little bit more normal at the end of PALS AID-II. And the impact of those positive enhancements that we made to PALS AID-III and 4 wasn't really fully understood at the beginning, but is now very apparent. And screening visits have continued to increase and the more stringent subject eligibility requirements and secondary subject eligibility review that we integrated with developing our own internal team in addition to increasing training and remediation. So bottom line, we've been very, very picky in the way that the study can be executed, the stringent inclusion exclusion criteria, all in an effort to of course replicate the success from PALS AID-II. So I think we've got a pretty good rhythm now and we've been able to eliminate subjects who we think may be less likely to demonstrate a benefit through that more rigorous eligibility criteria that we've applied and the secondary review of subject eligibility and site conduct that's ongoing and very specific. So overall, all that together has caused a little bit of an adjustment in timing, but we think that benefits the overall potential outcome of the study.

Great. Thanks, Sean. One moment for our next question. Our next question will come from the line of Andrew Tsai from Jeffries. Your line is open.

Hey, good afternoon. Thanks for taking my question. Appreciate the updates. So looking ahead, heading into the PALS AID-III data readout, can we expect you to announce enrollment completion in that study? And if so, from there, how many weeks can we expect you to take before reporting the top line data?

Thanks for the question, Andrew. So yeah, we will report when we have, remember it's a four-visit study paradigm. And so once the subjects have completed, the randomized subjects have completed their safety follow-up, that's when we'll be announcing, when the last patient's completed that. And from that point forward, again, it always depends on the number of queries needed to get to DBL, but anywhere from around six to top end would be eight weeks, but typically somewhere around six weeks to get to the top line from database lock.

Understood. And then earlier, speaking of variability, back in the successful PALS AID-II study, I think the placebo arm showed a SUDS reduction of eight points absolute basis. Would you expect that to be the same case for PALS AID-III and IV, or with these more enhanced controls, could the placebo be lower?

Well, what we've certainly done, Andrew, is intended to design PALS AID-III and IV in a manner to replicate the success we saw in PALS AID-II. Where that actually lands, we'll have to see how the cards flip, but everything that we've done has been intended to limit variability in any way we can conceive of it after taking a look at PALS AID-I and PALS AID-II studies, which were the first two studies, as you know, with this design and this endpoint for the acute treatment of SAD. So a lot has been learned, and the rigor matters. And so we'll see. The idea, obviously, is to increase visibility into all aspects of the study and its execution to ensure the highest possible potential to reduce variability. So hopefully that falls in the direction that we saw things land with PALS AID-II.

Great. My last question is in terms of site conduct, as well as your overall surveillance, are you making sure these PIs are disqualifying patients appropriately when these patients are taking their SUD tests? And are you looking at these SUDs rating somehow for each patient to make sure all time points make sense with the scoring?

Well, the last question, again, whether it makes sense, they are what they are in terms of the scoring. But what I can tell you on the first hand, I mean, the whole purpose of what we did majorly differently with PALS AID-III and PALS AID-IV was to develop and have internally what we call our secondary eligibility review team. This is a team that internal Visigen team, not a CRO team or a third party team, but an internal team that consists of very experienced psychometricians who review eligibility of each subject and they listen to screening assessments as well as each public speaking challenge to ensure in the proper execution. So we think, again, that those kinds of enhancements, and those are some of the things that take a little bit more time, especially with obviously a hyper focus on radar training up front across all the endpoints, not just the SUDs, but the CGI and the PGIC so that you have confidence that the study is being run the way it should be run and that we've done everything that we can through all the experience we've gained through the execution of two studies already to enhance the potential for success. Thanks,

Sean. You bet. Thank you. One moment for our next question. And once again, that's star 11 for questions. Our next question will come from Miles Minter from William Blair. Your line is open.

Hey, thanks for the question. I've got one on the CEO forum and maybe conversations that you had with Marty Makery. It seems pretty clear to me that the FDA is driven to try and expedite approvals of products that are addressing a health crisis in the US, innovative cures for American people, addressing unmet public health needs, given the voucher program announced today. It seems like your work in social anxiety disorder would point to matching those pillars there. But when we read the MAHR report that's coming from HHS, it paints a slightly different picture, at least in the preliminary stance there, and they potentially want to restrict the use of mood stabilizer drugs. I know you're a different mechanism of action here, but did you get any sort of alignment from Marty or higher-ups at the FDA that they're aligned with social anxiety disorder and facadeinol as meeting these pillars the FDA is mandated towards? Or is there an alignment with the FDA here on that unmet need? Or is it more falling into that sort of HHS opinion in that MAHR report? I'd love your thoughts on that dynamic. And then secondly, it's a question on Pell 3 and 4. It seems clear to me that patient demand into the trial is not the issue here. Things are going well, but maybe it's the screening and the inclusion-exclusion criteria. I'm wondering whether that is to do with the Leibowitz social anxiety scale and if it's more to do with the independent raters that you've got here that you didn't have before and whether they're screening out more patients. Thanks very much.

Well, thanks, Miles. That's quite a bit, and we could talk forever on that. The first question, I think it's really important. I'd say, look, we've got over 30 million people in this country that are affected by social anxiety. We've got a mechanism of action unlike anything that's ever been put out in the anxiety arena. It's not a drug candidate that we see causing addiction potential, sexual side effects, weight gain, requiring a REM, things that are just completely different than what the universe has seen before. That said, in the forum, one of the ground rules was no specific conversations about your particular program. Everybody got a minute to talk. Most people didn't adhere to the minute, but most people did adhere to not talking about their specific program. So I can't give you the answer directly on that one from that context. We do think, of course, we have fast-track designation from FDA, so we do know what they think of it. From a regulatory standpoint, serious and life-threatening, the prevalence continues to increase, yet there aren't any new options that don't seem to have a whole bunch of baggage. We certainly know about the benzoepidemic. So being able to deliver innovative MOAs certainly is on the mind of everybody in that room, FDA leadership, including some of the support team that I spoke with during the intro hour of that event. So I think we're confident for the place that we would be able to land in the universe associated with potential productivity, people getting back into the rhythm of life that they aspire to achieve. There's ways to do that, and we know a lot of people are on the sidelines with SAD, struggling with it mightily, but yet simply saying, look, we don't want to delve into any of the other things that people might use to try to manage the disorder. So I think, again, anything that's going to provide a beneficial patient outcome with a negligible risk on the safety side is something that the FDA is going to be open to looking at, and we've seen that consistently, regardless of who's the commissioner. I don't think that changes. In terms of your question about PAL-C3 and PAL-C4, really what's different is it's not the top of the funnel at all. We've seen incredible interest in our recruitment vehicles, but where we have seen things slow is the visit one, the screening up front of a visit one. The throughput rates from the screening visit through the end of the study have been very much what we saw in prior studies. We also have seen a remarkably good throughput rate from visit four into the open label. Those are the kinds of things that we like to see, and we tend to not see any of the kind of hockey stick utilization that worries folks about abuse liability either. Remember, FDA in 22 said we didn't have to do a human abuse liability study at that time, and all we've seen since is concordant safety data and studies completed. So it's really more about the scrutiny associated with eligibility, inclusion, exclusion, and the eligibility criteria at the very front end of the study to make sure that we've got folks that are sufficiently affected by the disorder, aren't associated with any other comorbidities that would be exclusions associated with enrollment, and obviously making sure that they're screened out very rigorously for any CONMEDs. So it's mostly, again, from at the pre-visit one screening where we've seen a little bit of a slowdown, but that itself is also starting to pick up.

Makes sense. Apologies for the long-winded question. Thanks.

That's all right. Appreciate it.

Operator, I believe that's all the time we have for questions today. If those participating on the call have additional questions, please don't hesitate to contact us by emailing IRVistogen.com or via the contact section of our website. We also encourage you to register for email updates on our website to stay connected with our latest news. Thanks for participating on the call today. We appreciate everyone's interest and support. We look forward to keeping you updated on our ongoing progress. This concludes our call. Have a tremendous day.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.