VistaGen Therapeutics - Earnings Call - Q3 2025

Executive Summary

• Fiscal Q3 2025 (quarter ended Dec 31, 2024) showed disciplined R&D execution and accelerating spend as Phase 3 programs advance; net loss widened to $14.1M on R&D ramp, cash and securities ended at $88.6M, positioning the company for 2025 catalysts.
• Clinical execution on fasedienol remained on track: PALISADE-3 and PALISADE-4 Phase 3 trials “advancing towards expected top-line results later this year,” reiterating 2025 readout timing; a repeat-dose study was initiated to inform potential labeling on second dosing within 10 minutes.
• Management emphasized protocol rigor (reduced CRO reliance, greater site surveillance, clinician administration) to minimize variability and increase probability of success versus prior pandemic-era trials.
• No financial guidance or product revenue guidance provided; near-term stock catalysts are binary clinical readouts (PALISADE-3/4 toplines) and repeat-dose exploratory data; S&P Global consensus EPS and revenue comparisons were unavailable at time of analysis (request limit).

What Went Well and What Went Wrong

What Went Well

• Phase 3 execution on fasedienol: both PALISADE-3 and PALISADE-4 remain on track for top-line data in 2025; CEO reiterated “no change in that guidance” in Q&A.
• Operational enhancements to improve data quality: increased site surveillance, frequent training, clinician-administered dosing to reduce variability; “easier to sleep at night now… with masks down… rigorous public speaking challenge script… retraining with sites”.
• Pipeline breadth reinforced: PH284 (cancer cachexia) positive exploratory Phase 2A results highlighted; five pherine product candidates now show positive clinical efficacy signals, supporting platform validation narrative.

What Went Wrong

• Losses widened as R&D ramped: net loss for Q3 increased to $14.1M from $6.4M YoY; operating loss rose with Phase 3 and IND-enabling spend.
• No commercial revenue trajectory: revenues remain minimal (primarily sublicense/other), reinforcing reliance on clinical milestones rather than operating leverage near term.
• Estimate benchmarking unavailable: S&P Global consensus EPS/revenue not retrievable (request limit), limiting beat/miss context for the quarter; investors must anchor on clinical catalysts rather than quarterly P&L vs Street.

Transcript

Operator (participant)

Good day. Thank you for standing by. Welcome to Vistagen Therapeutics' Q3 Fiscal Year 2025 Corporate Update Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Mark McPartland. Please go ahead.

Mark McPartland (Head of Investor Relations)

Thank you, Operator. Good afternoon, everyone, and welcome to Vistagen's fiscal year 2025 Q3 corporate update conference call and webcast. Earlier this afternoon, we issued a press release for the Q3 of our fiscal year 2025 ended December 31, 2024, providing an overview of our progress across our lead clinical neuroscience programs. We encourage you to review the release, which can be found in the investor section of our website. Based on the current expectations and information, we will make forward-looking statements regarding our business during today's call. 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 include risks and uncertainties, and our actual results could differ materially from those anticipated by any forward-looking statements that we make today.

Additional information concerning risks and factors that could affect our business and financial results will be included in our fiscal year 2025 Q3 Form 10-Q for the period ending December 31, 2024, and in future filings we will make with the SEC from time to time, all of which are or will be available in the investor section of our website and on the SEC's website. Now, with the formalities complete, we warmly welcome our stockholders, sell-side analysts, and others interested in our programs and progress. I'm joined on our call today by Shawn Singh, our President, Chief Executive Officer; Cindy Anderson, our Chief Financial Officer; Josh Prince, our Chief Operating Officer. Shawn will discuss recent highlights in our lead neuroscience programs, and Cindy will discuss our fiscal Q3 financial results.

After our prepared remarks, as the operator has already noted, there will be a brief opportunity for questions from the sell-side analysts participating on the call today. As a reminder, this call is being webcast and will be available for replay after completion. The replay link can also be found on our website's investor section under events. I will now turn the call over to our President and Chief Executive Officer, Shawn Singh. Shawn.

Shawn Singh (President, CEO, and Director)

Thank you, Mark, and good afternoon, everyone. Thank you for joining our call. We had a very productive quarter. As many of you know, we are developing a new class of intranasal product candidates that are called pherines. These are designed to harness the power and the potential of nose-to-brain neurocircuitry to achieve a broad and diverse range of therapeutic benefits without requiring systemic absorption or binding to neurons in the brain. Let me start by discussing our most advanced pherine, fasedienol, and our ongoing registration-directed PALISADE Phase 3 program for that asset for the acute treatment of social anxiety disorder, or SAD.

Currently, as I've mentioned before, there is no FDA-approved medication for the acute treatment of SAD, which is a very serious and a potentially life-threatening condition that's recognized by the FDA and one that, post-COVID, is estimated to affect over 30 million adults in the U.S. who struggle with intense and debilitating anxiety and fear of embarrassment, humiliation, judgment when they're dealing with stressful social and performance situations. With fasedienol, our goal is to address this critical and very long-neglected treatment gap by providing a novel, convenient, safe, and rapid-onset, as-needed solution to help individuals who are affected by SAD face the challenges in their everyday lives. In 2023, we reported positive results from our PALISADE-2 Phase 3 trial of fasedienol for the acute treatment of SAD.

In 2024, to build on the success of PALISADE-2 in our registration-directed Phase 3 program for fasedienol, we initiated PALISADE-3 and PALISADE-4 as Phase 3 trials, each designed as a replicate public speaking challenge with the same primary endpoint and, in each case, an open-label extension. Today, I'm pleased to report that both PALISADE-3 and PALISADE-4 are currently continuing to advance towards expected top-line results later this year. In addition, we recently announced the initiation and enrollment of the first subjects in an exploratory Phase 2 repeat-dose study of fasedienol and SAD. Besides the addition of a repeat-dose arm, it is similar in design to our Phase 3 PALISADE-3 and PALISADE-4 studies for the acute treatment of adults with SAD, again, including an open-label extension.

With these studies advancing, we believe either PALISADE-3 or PALISADE-4, if successful together with PALISADE-2, may establish substantial evidence of the effectiveness of fasedienol in support of a potential new drug application submission to the U.S. FDA for the acute treatment of SAD in adults. In addition to advancing our fasedienol Phase 3 program in SAD, we made progress in our development programs for itruvone as a standalone treatment for major depressive disorder and PH80 as a non-hormonal, non-systemic treatment of vasomotor symptoms or hot flashes that are due to menopause.

Currently, we are preparing and planning for potential Phase 2B clinical development of itruvone in the U.S., and we are conducting customary non-clinical studies that we need to support our planned submission of an investigational new drug application, or IND, to the U.S. FDA to facilitate further Phase 2 clinical development of PH80 for menopausal hot flashes. I'm now going to turn to some other corporate highlights. We recently reported positive results from an exploratory Phase 2A trial of PH284 in cancer cachexia. PH284 is our fifth clinical stage neurocircuitry-focused intranasal pherine product candidate with a positive efficacy signal and differentiated safety in all the studies that have been completed to date.

This recent announcement underscores the breadth and diversity of our clinical stage pherine pipeline with five innovative non-systemic investigational intranasal pherine product candidates, all supported by positive Phase 2 and, in the case of fasedienol, Phase 3 positive clinical study. The clinical data and the placebo-like tolerability that we've seen across all these studies gives us tremendous confidence in the range and the diversity and the therapeutic potential of our neuroscience pipeline. The positive studies from our five pherines with clinical data across various indications drive our optimism and our confidence in the power and the promise of nose-to-brain neurocircuitry and the enormous potential of our intranasal pherine pipeline. As always, we are optimistic about the potential of our product candidates to address multiple significant treatment gaps and to transform standards of care to improve lives.

I'll now hand it over to Cindy Anderson, our CFO, to summarize our financials from the last quarter. Cindy.

Cindy Anderson (CFO)

Thank you, Shawn. As Shawn mentioned, I will highlight a few financial results from our fiscal year 2025 Q3. Research and development expenses were $11.3 million for the quarter ending December 31, 2024, compared to $4.5 million for the same period last year. The increase in R&D expenses is primarily due to an increase in research, development, and contract manufacturing expenses related to our PALISADE Phase 3 program for fasedienol and SAD, as well as IND enabling programs for itruvone and MDD and PH80 for the treatment of menopausal hot flashes. General and administrative expenses were $4.0 million for the quarter ended December 31, 2024, compared to $3.8 million for the same period last year. The increase in G&A expenses was primarily due to increased headcount.

Our net loss attributable to common stockholders was $14.1 million for the quarter ending December 31, 2024, compared to $6.4 million for the same period last year. As of December 31, 2024, we had $88.6 million in cash, cash equivalents, and marketable securities. I'll now hand the call back over to Shawn.

Shawn Singh (President, CEO, and Director)

Thanks, Cindy. We are more optimistic than ever here at Vistagen with five clinical stage pherine product candidates, each with positive patient data and differentiated safety. We have now multiple opportunities to disrupt treatment paradigms, enhance patient outcomes, and create value for our stockholders. I would like to thank you all once again for your continued interest and support in what we are doing here at Vistagen. On behalf of everyone on our team, we look forward to keeping you updated on our progress. Operator, we would like to now open the call to questions from the sell-side analysts who are participating today.

Operator (participant)

Definitely. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the candidate roster. Our first question coming from the lineup, Andrew Tsai with Jefferies. The line is now open.

Hey, thanks. Congrats on the quarter. This is Matt on for Andrew. I just wanted to ask real quick if you were confident that the data from PALISADE-3 and PALISADE-4 will still be in the second half of this year, or are you expecting any delays? I have got a follow-on to that after this.

Shawn Singh (President, CEO, and Director)

Hey, thanks, Matt. Good to talk to you. As we've guided, we're confident that we'll see data from both PAL-3 and PAL-4 in 2025. No change in that guidance.

Okay, perfect. I guess, is there anything that keeps you up at night in terms of what more could be done on these studies in terms of execution?

Interesting question. No, it doesn't keep me up at night because the enhancements and the team that we've got executing on these studies, especially surveillance associated with rigorous adherence to the protocol, these are all very important execution-related initiatives that we've got in place to reduce reliance on CRO surveillance, expansion of our internal team, and just the way that we've been seeing the conduct of the studies with rigorous training, even upfront of any enrollment at any of the sites. It's just actually been significantly different than what we've seen in the past in a very positive way. Josh Prince is on the line with me. Josh, why don't you go ahead and say a few things? You are driving a lot of the execution.

Josh Prince (COO)

Sure. Thanks, Shawn. It is a very interesting question. Actually, to your point, we have more visibility into what's happening with these studies than we did before running PALISADE 1 and PALISADE-2 in the pandemic and with the enhancements that we've put in place. If anything, I would say it's easier to sleep at night now than it was back then without COVID in place, with masks down, with the review that we have of subject eligibility, making sure that scales are administered properly, making sure that the rigorous public speaking challenge script is followed to the T, and then having the ability to do quick interaction and retraining with sites if they start to deviate from that protocol. I feel like we're giving these studies the best chance we could at success with those changes.

Fantastic. You are starting to see a little bit, we are starting to see a little bit more competition in terms of novel drugs for social anxiety disorder. Can you talk about how you think about the competition and how fasedienol is immune to this competition? Thanks.

Shawn Singh (President, CEO, and Director)

Thanks for the question, Matt. Unfortunately, we've got a robust market here in the U.S. in terms of the number of people affected by the disorder, over 30 million. It's a lot of adults that struggle from time to time with what most people consider everyday social and performance situations. One thing always is the case with neuropsychiatry. There's no one-size-fits-all. It's also the case, certainly, that there's plenty of room for a lot of treatments to come into play to try to make a difference. One very major difference with this pipeline, and this is not just as to fasedienol for SAD, but it's for up and down the pipeline in each of the standards of care and the treatment paradigms currently that we're trying to disrupt, whether it's depression, whether it's menopausal hot flashes, or certainly SAD, is that it's the mechanistic difference.

Being able to rely on nose-to-brain neurocircuitry and having a pipeline of drugs that do not have to go through your whole body, that are activating neurons in your nose within milliseconds that project to neurons at the olfactory bulb, neurons at the base of the brain, and then project to different regions of the brain to achieve their different therapeutic outcomes, is a critical distinction.

There is no other drug approved that has this kind of mechanism of action. What is important about that is it does not rely on the case, like, say, an oral systemic where you have to occupy and thread the needle just right of receptors in the brain, one or two, that are associated with different indications, depression, for example. We think we have a very unique mechanistic approach to a broad range of therapeutic areas where we have just not seen much of anything.

There has not been a single drug approved in SAD for a long time. The same thing in terms of menopausal hot flashes, depression, nothing with the kind of non-systemic and rapid onset approaches that we are trying to achieve in the clinical studies we have seen. Certainly, there are oral systemic approaches with different receptors in the brain that are targeted at different doses and different time frames to onset. I think we are very confident where we stand in terms of time to onset and the ability to avoid a lot of the issues you typically see pop up in REMS or in black boxes or even things that are more commonly associated with, say, drug-drug interactions.

Not having to go through the liver, not having to go through the kidney, not have to really go across the brain into the brain, it's a big, big difference compared to what we see in the field and have seen in the field for decades. We think we're in pretty good shape if we can get to the point where we can provide this product candidate to people who have been struggling with this disorder for most of their lives. Remember, the mean duration is about 20 years with onset in adolescence. I think there's a lot of room for improvement based on where the market sits today.

All right. Thank you.

Operator (participant)

Thank you. Now, next question coming from the lineup, John Boyle with William Blair, your line is now open.

Hey, team. This is John on for Myles. Thanks so much for taking our questions. A few from us. To start, can you give us some color on the potential paths forward for AV-101 in neuropathic pain now that you've received a patent for the indication? What gives you confidence for 101 in the indication given the prior failures of Aptinyx's NMDA modulators and DPN? Maybe on the PALISADE program, could you remind us of the rationale for the clinician administration in PAL-3 and PAL-4? Specifically, is there any expected difference on the placebo response for clinician versus self-administering?

Shawn Singh (President, CEO, and Director)

Okay. Any other ones? Just those two?

I've got some more if you want, after.

Always happy to talk to you, John. Look, with respect to AV-101, as we've announced, that's a candidate for partnering, and our confidence drives not just in pain but also in dyskinesia associated with L-Dopa therapy for Parkinson's. We've got not only phase one data telling us that this is a compound that we think is pretty safe, but also one that we've seen in preclinical models, not yet in any patient-based studies, but in preclinical models, the MPTP monkey model in terms of the Parkinson's-related dyskinesia, and then in some conventional pain models that have been published, that we see it's a different approach. These are NMDA receptor at the glycine site, 7-Chlorokynurenic acid, which is what the prodrug produces when astrocytes take it up in the brain.

That is a very selective and potent glycine site antagonist, but not so much so, say, like a ketamine or an amantadine where it's blocking the ion channel. We think it's got modulatory capabilities at that site, both NR1 and NR2. We're in a spot with this one where, while it's not in line with the pherine assets that we've got with clinical stage and phase two or later positive data, this is one that we think there is some potential for those who are focused on those neurological indications. I would refer you to the publications that are in pain that we can send to you that will give you a little bit more comfort on the preclinical data.

In terms of the clinician administration of the test drug in the context of PAL-3, PAL-4, Josh, why don't you go ahead and address that one?

Josh Prince (COO)

Sure. Yeah, I'm about to. With these studies compared to the prior ones, we were really focused on reducing any potential variability. When you think about a single-dose public speaking challenge or single dose at visit two, single dose at visit three, we really wanted to make sure that we reduce variability. Rather than have to train each subject each time, you think about just having to train the raters or the clinicians at the site, and then they administer consistently throughout the duration. That really drove that decision, again, just reducing variability. We really don't think there's any impact to the label or projected use because the open label that we have in place for all these studies has patients using it on their own every day, multiple times a day as needed. We don't expect any issues there.

Shawn Singh (President, CEO, and Director)

Similar to the masks coming down, obviously, we want to this drug needs to be pointed right at the mid-septum, not up into the sinuses in any way where it just would get in the respiratory system. Again, it just ensures that the drug's got the best opportunity to work in those that are in the treatment side. It shouldn't affect placebo, but to be determined, I suspect.

Very helpful. I mean, I guess maybe just one more from us. How are you viewing your need to hit on both SUDS and CGI-I in PALISADE-3, PALISADE-4? Kind of just wondering if there's any sense that you might need to show some independent anchoring of the SUDS to the CGIC.

The SUDS is group level, right, and CGI-I is individual level. You have seen in the past, and we've seen in the past, how people do on their SUDS from time to time. That will tell you whether they are going to be a one or a two on the CGII, but they are really distinct assessments where we're focused as the primary input on the group-level change between treatment and placebo. CGII stands, as does PGIC, which is now a secondary input in PALISADE-3 and PALISADE-4. Those are all important to provide context as to what we've seen as the clinical meaningfulness at the group level.

Appreciate it. Thanks. Congrats on the quarter.

Thanks.

Operator (participant)

Thank you. As a reminder, to ask a question, please press star one, one. Our next question coming from the lineup, Paul Matteis with Stifel, your line is now open.

Hi. This is Emily on for Paul. We were wondering if you could talk a little bit more about the ongoing repeat dose study and kind of what are you hoping to see in the rationale behind that? Also, if there would be any regulatory risk if fasedienol is safe, but it kind of turns out two doses look a bit more efficacious than one. Thank you.

Shawn Singh (President, CEO, and Director)

Sure. Josh, go ahead and hit this one.

Josh Prince (COO)

Sure. For the repeat dose study, as we've noted before, it's really essentially identical to what we're doing in PALISADE-3 and PALISADE-4, just with an additional arm so that we can see if a dose administered 10 minutes after the first dose would have an impact on the public speaking challenge. The FDA asked for that essentially because they felt in the real world, there's a good possibility that a subject may go ahead and, if they still feel nervous, take another dose. The thinking there is, is there any safety impact? We think there likely is not based on other higher doses that we've measured. Is there a potential efficacy benefit? There could be for some patients, but you also have to keep in mind that once those receptors are saturated with the spray, you don't really get any additional benefit.

It is to be seen as to whether or not we would see additional benefit in that arm. At the end of the day, if PALISADE-3 or PALISADE-4 are positive on that primary endpoint with one dose, we do not think that it would create any issues for approval to see potential benefit of a second dose. What it would do is likely inform the label so that physicians are able to let patients know that they could dose again within that 10-minute timeframe if they felt it might be beneficial. Beyond that, we really do not see impact. It is a smaller study as well. It is not powered or sized like our Phase 3 studies are.

Shawn Singh (President, CEO, and Director)

That's a good point, Josh. Emily, it's key that we align with the agency on this study. I think the key takeaway for us is that it could inform labeling. It could help docs. The question is, how are you going to tell people to take it? It could inform the labeling and guide whether the second dose within 10 minutes is safe. As Josh noted, as we expect it, it would be. I think the anticipation is in the real world, people may think more is better. To know that it's okay and safe, there's only so much volume the nose can handle anyway. As Josh noted, once you occupy and activate those nasal-canal sensory neurons, which happens in about 25 milliseconds, you're on your way to what we're trying to achieve when the neurocircuitry projects to the amygdala.

Great. Thank you so much.

Mark McPartland (Head of Investor Relations)

Thank you, everyone. This is all the time we have for questions today. If you have additional questions, please do not hesitate to contact us by emailing [email protected], or you can log into the website via the Contact Us section and submit questions through that portal. We also encourage you to register for email updates on our website to stay connected with the latest news from Vistagen. Again, thanks for participating on the call today. We appreciate everyone's interest and continued support. We look forward to keeping you updated on our ongoing progress. This concludes the call. Have a wonderful day.