VistaGen Therapeutics - Earnings Call - Q4 2025

Transcript

Operator (participant)

Good day, everyone, and thank you for standing by. Welcome to the Vistagen Therapeutics fiscal year-end 2025 corporate update conference call and webcast. Please note that today's call is being recorded at this time. I'd like to turn the call over to your host, Mark McPartland, Senior Vice President, investor relations at Vistagen. Mark, please go ahead.

Mark McPartland (SVP of Investor Relations)

Thank you, Victor. Good afternoon, everyone, and welcome to Vistagen'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 10-K, which can be found in our website's investor 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 10-K for the period ending March 31st, 2025, and in future filings we will 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 those interested in our program and progress. I'm joined on our call today by Shawn Singh, our President and Chief Executive Officer, and Cindy Anderson, our Chief Financial Officer. Shawn 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. The 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, Shawn Singh. Shawn, the field is yours.

Shawn Singh (President and CEO)

Thank you, Mark, and good afternoon, everyone. Thank you for joining us. As some of you know, our team here at Vistagen is at the leading edge of neuroscience that involves the therapeutic potential of nose-to-brain neurocircuitry. We're developing a new class of non-systemic intranasal product candidates called pherines. We now have five clinical stage pherine 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 pherine product candidates in phase II or phase III development, we are advancing our mission to deliver transformative treatment options for patients and build value for our stockholders.

Our lead pherine product candidate, fasedienol, is in phase III development for the acute treatment of social anxiety disorder, or SAD. There is no FDA-approved acute treatment for SAD, a condition that now is estimated to affect over 31 million U.S. 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 fasedienol is for it to become the first FDA-approved acute treatment of SAD 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 III trials in our U.S.

Registration-directed Palisade program for fasedienol for the acute treatment of SAD, Palisade 3 and Palisade 4, are designed to complement our success in our Palisade 2 phase III trial that we reported during the second half of 2023. Our Palisade 3 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 4 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 very rigorous operational execution. If successful, we believe either Palisade 3 or Palisade 4, in combination with the positive results from Palisade 2, could provide the substantial evidence of effectiveness needed to support a new drug application for fasedienol and its potential to be the first FDA-approved acute treatment for SAD.

We are also advancing itruvone, our pherine product candidate for standalone treatment of major depressive disorder, or MDD. Following the promising results from a controlled exploratory phase II-A 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 pherine product candidate focused on women's health indications, PH80, also continues to generate interest as we advance its development as a potential hormone-free treatment for menopausal hot flashes. PH80 also demonstrated positive signals in a controlled exploratory phase II-A study in premenstrual dysphoric disorder, or PMDD, further validating its broad utility in women's health. We are also encouraged by PH80's potential to treat the disruptive and painful effects of dysmenorrhea.

We've made substantial progress preparing our U.S. IND for PH80 to support additional phase II 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 pherine pipeline has potential for future development to improve cognitive and psychomotor impairment due to mental fatigue, as well as appetite-enhancing effects in patients with cancer cachexia, often overlooked conditions with limited treatment options. Across all five of our clinical stage pherine product candidates, potential therapeutic benefit has been observed with favorable safety, a testament to the power and the promise of nose-to-brain neurocircuitry. On the U.S. 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 Makary and CBER Director Dr. Vinay Prasad and their support staff members. The forum was impressive and very productive, which allowed for essential 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. I applaud Commissioner Makary 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 conversations with the FDA, as always, about policies that speed up innovation, that 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 pherine product candidates, and with our primary focus on delivering top-line data from Palisade 3 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?

Cindy Anderson (CFO)

As Shawn 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 non-clinical development, contract manufacturing expenses, and headcount related to our U.S. registrational Palisade program for fasedienol and SAD and our U.S. IND enabling program for PH80 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 was 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 marketable securities. I will now hand the call back over to Shawn.

Shawn Singh (President and CEO)

Thank you, Cindy. Once again, everyone, at Vistagen, 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 nose-to-brain neurocircuitry, unlike any pharmaceutical product ever before them. With five promising clinical stage pherine product candidates and a U.S. registration-directed phase III 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. On behalf of the entire Vistagen team, we're honored to be on this journey with you, and we look forward to keeping you closely updated on our continuing progress.

Mark McPartland (SVP of Investor Relations)

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

Operator (participant)

Thank you. To ask a question, you will need to press star one one on your telephone and wait for a name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Paul Matteis from Stifel. Your line is open.

Hey there, this is Julian Anfripal. 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 sell-side and investors? Then just with respect to Palisade 4 quickly, you talked about patient demand being quite strong. What led to the modest slipback of timing for P4? Was it something operational, or any color that you could provide on that would be super helpful? Thanks so much.

Shawn Singh (President and CEO)

Great. You bet, Julian. 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, it was interesting because it was a bit opposite of the tone and tenor that we'd heard a week before in the open forum at the Jefferies Conference. It was very encouraging, especially on this particular point. Not only did Dr. Makary say this, but also Dr. Prasad 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. 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'd 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. We'll see if they act on that. 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. I think they appreciate that and recognize it, and I think we can expect some changes. That's encouraging on that side.

Back to the Palisade 4, I think overall, 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 Palisade 3, Palisade 4, 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. Some of the original projections that we had were based on observations from Palisade 2 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 Palisade 2.

The impact of those positive enhancements that we made to Palisade 3 and 4 was not really fully understood at the beginning, but is now very apparent. 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. Bottom line, we have 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 Palisade 2. I think we have got a pretty good rhythm now, and we have been able to eliminate subjects who we think may be less likely to demonstrate a benefit through that more rigorous eligibility criteria that we have applied and the secondary review of subject eligibility and psych conduct that is ongoing and very specific.

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, Shawn.

Operator (participant)

One moment for our next question. Our next question will come from the line of Andrew Tsai from Jefferies. Your line is open.

Andrew Tsai (SVP)

Hey, good afternoon. Thanks for taking my question. Appreciate the updates. Looking ahead, heading into the Palisade 3 data readout, can we expect you to announce enrollment completion in that study? If so, from there, how many weeks can we expect you to take before reporting the top-line data?

Shawn Singh (President and CEO)

Thanks for the question, Andrew. Yeah, we will report when we have, remember, it's a four-visit study paradigm. 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. From that point forward, again, it always depends on sort of 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.

Andrew Tsai (SVP)

Understood. Earlier, speaking of variability, back in the successful Palisade 2 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 Palisade 3 and 4, or with these more enhanced controls, could the placebo be lower?

Shawn Singh (President and CEO)

What we've certainly done, Andrew, is intended to design Palisade 3 and 4 in a manner to replicate the success we saw in Palisade 2. 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 the Palisade 1 and Palisade 2 studies, which were the first two studies, as you know, with this design and this endpoint for the acute treatment of SAD. A lot has been learned, and the rigor matters. 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. Hopefully that falls in the direction that we saw things land with Palisade 2.

Andrew Tsai (SVP)

Great. And then my last question is in terms of psych conduct and as well as your overall surveillance, are you making sure these PIs are disqualifying patients appropriately when these patients are taking their SUDS test? And are you looking at these SUDS ratings somehow for each patient to make sure all time points make sense with the scoring?

Shawn Singh (President and CEO)

The last question, again, whether it makes sense, they are what they are in terms of the scoring. What I can tell you in the first hand, I mean, the whole purpose of what we did majorly differently with Palisade 3 and 4 was to develop and have internally what we call our secondary eligibility review team. This is a team that internal Vistagen 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 the proper execution.

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 rater training upfront across all the endpoints, not just the SUDS, but the CGIC 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.

Andrew Tsai (SVP)

Thanks, Shawn.

Shawn Singh (President and CEO)

You bet.

Operator (participant)

Thank you. One moment for our next question. Once again, that is star one one for questions. Our next question will come from the line of Myles Minter from William Blair. Your line is open.

Myles Minter (Research Analyst)

Hey, thanks for the question. I've got one on the CEO forum and maybe conversations that you had with Marty Makary. 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 U.S., the 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. When we read the MAHA 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 fasedienol 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 MAHA report? I'd love your thoughts on that dynamic. Secondly, it's a question on Palisade 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 Liebowitz 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.

Shawn Singh (President and CEO)

Thanks, Myles. It'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 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 REMS, 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. 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 benzo epidemic. 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 kind of the intro hour of that event. 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." 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 Palisade 3 and 4, 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 upfront 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 2022 said we did not have to do a human abuse liability study at that time, and all we have seen since is concordant safety data in studies completed.

It is 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 have got folks that are sufficiently affected by the disorder, are not associated with any other comorbidities that would be exclusions associated with enrollment, and obviously making sure that they are screened out very rigorously for any con meds. It is mostly, again, from at the pre-visit one screening where we have seen a little bit of a slowdown, but that itself is also starting to pick up.

Myles Minter (Research Analyst)

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

Shawn Singh (President and CEO)

That's all right. Appreciate it.

Mark McPartland (SVP of Investor Relations)

Operator, I believe that's all the time we have for questions today. If you have those participating on the call have additional questions, please don't hesitate to contact us by emailing [email protected] 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. Thank you 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.

Operator (participant)

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