Q3 2024 Vistagen Therapeutics Inc Earnings Call

Participants

Mark McPartland; SVP, IR; Vistagen Therapeutics Inc

Shawn Singh; CEO and Director; Vistagen Therapeutics Inc

Cynthia Anderson; Chief Financial Officer; Vistagen Therapeutics Inc

Josh Prince; COO; Vistagen Therapeutics Inc

Andrew Tsai; Analyst; Jefferies LLC

Tim Lugo; Analyst; William Blair & Company LLC

Presentation

Operator

Welcome to Vasogen therapeutics fiscal year 2024 Third Quarter Financial Results and Corporate Update. At this time, all participants are in a listen only mode and question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Mark McPartland Senior Vice President, Investor Relations of Visium. Craig, you may begin.

Mark McPartland

Thank you, Doug, and good afternoon, everyone, and welcome to this region's fiscal year 2020 for third quarter Corporate Update Conference Call and Webcast. This afternoon, we filed our quarterly report and issued a press release providing an overview of our recent third quarter results and our neuroscience pipeline development. We encourage you to review the release, which can be found in the Investor Relations section of the VISTA gene website.
During today's call, we will make forward-looking statements regarding our business based on our current expectations and information. The forward-looking statements speak only as of today and except as required by law, we do not assume any duty to update in the future any forward-looking statement made today.
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 make today. Additional information concerning risks and factors that could affect our business and financial results are included in our fiscal year 2024 third quarter Form 10-Q for the period ending December 31, 2023 and in future filings that we make with the SEC from time to time, all of which are or will be available on our website and the SEC's website.
Now with that taken care of, I'd like to thank and welcome our stockholders, analysts and everyone taking an interest in Vista.
Jim.
I'm joined on the call today by Shawn Singh, our Chief Executive Officer; Cindy Anderson, our Chief Financial Officer; and Josh Prince, our Chief Operating Officer. Shawn will provide an overview of our recent results and our progress across our key pipeline programs. A brief opportunity for questions from sell-side analysts will follow the prepared remarks. I'd like to remind everyone this call is being webcast and will be available for replay after completion within the replay can be found in the Investor Events section of the Vista gin website.
I would now like to turn the call over to our Chief Executive Officer, Sean saying, Shawn.

Shawn Singh

Thank you, Mark, and good afternoon, everyone. Thank you for joining our call today. Here decision, we are pioneering neuroscience with an intention to deliver first-in-class therapies for psychiatric and neurological disorders where there are few, if any, adequate and differentiated FDA approved treatment options to satisfy the widespread needs of patients whose mental health and his well-being are adversely affected by their disorders. Each of our clinical stage neuroscience product candidates is designed with the potential to establish new standards of care and make meaningful differences in how patients manage their disorders to improve their daily lives. Within the last few months, we've seen a renaissance in neuroscience marked, notably by pharma, M&A in the neuropsychiatry space valued at about [$23 billion]. We are encouraged that novel late-stage neuroscience derived product candidates with differentiated safety profiles have stimulated renewed interest in large market neuropsychiatry programs with the potential to change lives. We believe each of our clinical neuro active variants led by faster Diana for the acute treatment of social anxiety disorder is anchored in novel neuroscience and has the potential to produce differentiated product profiles across multiple and diverse large market therapeutic areas with high need for innovation and high need to transform the standard of care, including anxiety, depression, women's health and other disorders.
Today, we'll briefly discuss our progress and plans for three of these three of our five faring assets in our clinical stage neuroscience pipeline invested Dino approval to vote and PHAD. As noted, our lead clinical stage program involves faster, Dino, and it's aimed at transforming the treatment paradigm for adults affected by social anxiety disorder or SAD, which currently affects the lives of about 10% of the US adult population with very high opportunity cost in the daily life. While the prevalence of SAD. continues to grow, there's still no FDA approved patient tailored acute treatment option to help individuals with SAD. rapidly and safely address their anxiety when their stressors are upon them in their daily life.
With the positive results from our PALISADE two Phase three trial reported last year and a strong balance sheet. We're fully focused on advancing our PALISADE Phase three development program and SAD. with preparations to initiate this year, all key remaining studies planned for that program. Since our last conference call in November, our team has been diligently focused on the preparations necessary to initiate PALISADE three will be our next Phase three clinical trial of Pasadena for the acute treatment of anxiety in adults with social anxiety disorder. It remains on track to begin in the first half of 2024. That will be followed by PALISADE floor to be initiated in the second half of this year 23, and PALISADE four will be similar to our successful PALISADE two Phase three trial. Both trials will involve the public speaking challenge in a clinical setting with patient reported outcomes on the subjective units of distress scale or sites as the primary efficacy endpoint, we believe either PALISADE three or PALISADE for If successful, together with the positive results from PALISADE too may establish substantial evidence of effectiveness Professor Dino in support of a potential NDA submission for the acute treatment of anxiety in adults with SAD. last year. We accomplished something that to our knowledge have never been achieved, and that has to demonstrate positive Phase three results in an anxiety study with a drug candidate that does not need to be taken up systemically or act directly on neurons in the brain. We look forward to getting back into the clinic soon, the PALISADE three, to continue driving on our mission to deliver a first-in-class therapy in a large neuropsychiatry market in need of differentiated fast acting therapies without the risk of sexual side effects, weight gain or abuse liability concerns beyond faster diet, all in our Phase three program in SAD., we are continuing to explore various ways to unlock the significant potential of our a trivalent asset as a differentiated new therapy for major depressive disorder or MDD preparations and planning for potential U.S. Phase IIb trial by adjuvant monotherapy in MDD are ongoing. Again, our mission in this large and unfortunately, increasing neuropsychiatry market is to deliver a differentiated therapy to transform the standard of care without the risk of sexual side effects, weight gain or abuse liability concern. We also see great potential in our rapid onset hormone-free THAT nasal spray. Its potential is anchored in the previously unreported positive results from two trials in women's health indications that we announced last year. First as a treatment for vasomotor symptoms or hot flashes due to menopause and next for the management of payments for Dysport disorder or PMDD. THAT showed statistically significant results in both studies. We are preparing to conduct nonclinical studies necessary to submit a USIND. to facilitate further Phase two clinical development of PHAD. for women's health indications, including the treatment of patients with moderate to severe vasomotor symptoms or hot flashes that are due to menopause.
I'll now turn the call over to our CFO, Cindy Anderson, to summarize some of the highlights from our financial results for the third quarter of fiscal 20 for Cindy.

Cynthia Anderson

Thank you, Sean. As Sean mentioned, I will review financial results from our fiscal year 2024 third quarter. I also encourage everyone to review our quarterly report on Form 10-Q filed with the SEC earlier this afternoon for additional details and disclosures. Research and development expense was $4.5 million and $6.9 million for the three months ended December 31, 2023 and 2022, respectively. The decrease in R&D expense was primarily due to a decrease in clinical and development expenses related to the timing of such expenses incurred in our Phase 3 trials of fasedienol in SAD.
General and administrative expense was $3.8 million for the three month period ended December 31, 2023, compared to $3.1 million for the prior year period. The increase was primarily due to the increase in compensation related expenses. Our net loss attributable to [common stockholders] was $6.3 million and $9.8 million for the three months ended December 31, 2023 and 2022 respectively. At December 31st, 2023, we had cash and cash equivalents of approximately $126.6 million.
I will also note that this afternoon as customary for development stage companies in our sector, we filed a new shelf registration statement on Form S-3 with the SEC to renew our previous S-3, which was set to expire next month. Shelf registration statements on form S-3 are standard in our industry and are intended to provide us with broad flexibility to improve our balance sheet in the future as may be needed. As a reminder, please refer to our quarterly report on Form 10-Q filed today with the SEC for additional details and disclosures.
I will now turn the call back over to Shawn.

Shawn Singh

Thanks, Cindy. So as we wrap up today's call, I want to emphasize that we are very proud and very excited to be focused on reaching another key corporate milestone in the near term. That's the initiation of our PALISADE three Phase three trial of fast today and all for the acute treatment of anxiety adults with SAD. we will progress through the next phases of our core corporate development strategies with confidence in our team's expertise to execute our PALISADE Phase three clinical program of asset Dynal and SAD., the potential of our robust pipeline for multiple and diverse psychiatric and neurological disorders and our steadfast commitment to pioneering neuroscience to develop and commercialize truly differentiated treatment solutions on behalf of our whole team here at Vista gin, I want to thank you for your continued support.

Mark McPartland

Thank you, Sean. And operator, we would now like to turn the call over for questions from the sell-side analysts participating on the call today.

Question and Answer Session

Operator

(Operator Instructions)
Paul Matteis, Stifel

This is Julian on for Paul. Thanks so much for taking our question. And just a quick one for me.And are you still planning on doing a repeat dose study for Factive, Dino and at the time? And if so, would you be able to provide any color on that in summer You bet.

Shawn Singh

Thanks, Julian. Yes, we are going to do a repeat dose study. It will be similar in design to PALISADE three and deposit four and thus obviously by extension policy to it will be smaller and it will assess the safety and potential benefit of a second dose of faster die. And all that is administered within 10 minutes after the first dose and prior to public speaking challenge. So similar study design, similar endpoint, obviously much smaller and the results of that study, part of it too, is in agreement with FDA and especially as to from any potential safety issue, which we don't anticipate any with repeat dosing, but it really could inform the labeling and provide some guidance as to whether or not a second dose administered within 10 minutes, which might be the case in a real-world setting. It is safe as we anticipated could be again could provide any potential benefit for some patients. So we'll prepare to initiate that study in the second half of this year as we've guided.

Thanks so much.

Operator

Our next question comes from the line of Andrew Tsai with Jefferies. Please proceed with your question.

Andrew Tsai

Hey, thanks. Good afternoon. Appreciate you taking my questions. So maybe the first one on PALISADE three four, you're employing obviously some exciting improvements to this program. So could it be fair to assume that the site's separation and those studies could be even greater than what you saw in PALISADE two because as you're mitigating for placebo effect, could you be further maximizing it dried up?

Shawn Singh

Well, thanks, Andrew. As you mentioned, I mean, we've done quite a few things to do further derisk the Phase three program and a lot of lessons learned on the other side of the prior studies. And obviously, this is not now a study design and an endpoint that sites and investigators are seeing after a pretty long hiatus in the space of a couple of decades. So the things that we've done to improve surveillance improve further derisk execution of the program.
Yes, certainly that's a possibility. But there are a lot of things if you compare the world in 2020 to where we are today in 24, just at a minimum, taking masks out of the equation is a big difference and having the ability to have in-person investigator meetings have the ability to do things that ensure rigorous adherence to the protocol, very exacting requirements of that protocol consistently across sites. All of those things combined have the potential, of course, to improve even on what we've seen in the past in Phase two and in policy too Josh Prince, you want to add anything to that?

Josh Prince

Sure on, and thank you.
Yes, I think we're very optimistic about our ability to execute a well-controlled study post pandemic. And it's everything that you've talked about. But it's also the things that we're able to do in terms of how we work with us with our CRO and we are putting feet on the ground in terms of our own monitors go into sites in addition to CRO monitors. And we have some additional exclusion criteria to make sure that the subjects that are coming into the study, we have the best chance to have a positive results are an opportunity to have positive results with Pasadena and even things such as eligibility reviews, making sure that subjects are appropriate subjects before they go into the visit two and visit three public speaking challenge is how do you put all those things together and it does it does give us a fair amount of optimism moving into Part three and Part four compared to what we had when you're executing PALISADE one in PALISADE.

Andrew Tsai

Thanks.
And on maybe a follow-up on the repeat dose study that you're initiating in second half as we think about the three arms, what are you and the FDA? I was looking for or said in another way what is positive data?

Shawn Singh

Josh is going to address that.

Josh Prince

Yes, we expect it to be a smaller study, so it's not at this point. We don't expect to see powered for statistical significance like you wouldn't know PALISADE three or PALISADE for now, but it would give us is, is there any is there any indication that for some patients an additional dose within 10 minutes could provide some benefit and that essentially can inform the label so that the minutes at the end of the day for us positive study is we there see that there is some indication that it could be a benefit for we don't, but either way, there's benefit from first dose.

Shawn Singh

And again, it's really in the discussions have been circled around informing labeling downstream and also real-world understanding and some of that taken from from open label activity where people might think more is better within a short period of time.
So first and foremost, we have to check the box on safety, which again, we don't think there's much of, if any risk there associated with a second dose within a 10-minute window. For those who don't know it's there's three arms and before a public speaking challenge a placebo placebo, drug placebo, drug drug, each of the second doses within 10 minutes of the first, and that's upfront of public speaking challenge. And so again, taking into account possibilities in the real world that people will use the drug a couple of times rather than staggered as as the 15 minute study paradigm required or showed. So we'll see how it goes. Again, it's it's a dialog. It's nice to be knowing we're talking about potential labeling labeling benefits. So that's how we took in these are these remember, these receptors are activated in milliseconds. So it's a does it take much time to get them moving in the first instance.

Andrew Tsai

Thank you very much.

Operator

Tim Lugo, William Blair & Company.

Tim Lugo

Thanks for the question and congratulations on the progress on the progress for of the given a non-systemic not abusable profile and with the positive pTau two trials. Could you looked again breakthrough status with the agency?
Is it something you're exploring? Will this if you were to get breakthrough status is something that could impact your development path at all and your discussions with the agency, do you have enough and maybe just preclinical data around the visibility of animal data around visibility to them, you have that included in the label.

Shawn Singh

Thanks, Tim. Appreciate those questions. So first, as to EBITDA breakthrough, well, that's always an aspiration of any company that's got something in a space that we've got. It's always an efficacy matter with the agency. I think like I said, we just got done doing something. We don't think anybody has ever done that we've seen and we've certainly got a product profile potential that is different than anything that we see out there. We know the agencies worried about the potential high use of benzodiazepines given their drug safety communication on that in the during COVID. We also know that unfortunately social anxiety disorder and other anxiety disorders lead to depression and then lead, unfortunately, with increasing prevalence that we are seeing to suicidal ideation. So it's we already know we have fast track. Does it mean that you necessarily fall into breakthrough? But certainly something on our mind, and you're right to that, it is important whether or not we see this drug as potentially being scheduled. And as we addressed a while back, especially with a drug that is administered intranasally, one might think well, is it is there's some abuse potential there. As we know from the preclinical work we've done and we submitted to the FDA and also clinical work, a large body of work including the open label study, about 500 subjects with over 30,000 doses we just were not seeing on the YTEA.s or any.
Certainly no SAEs that are usually associated with abuse liability even in the longer term open label. Mechanistically, it makes sense because the drug isn't taken up systemically. And most importantly, based on the Gavis study that we did preclinically and the C 14 studies that we did not tissue distribution, direct activity on the abuse liability receptors in the brain, opiate nicotine, dopamine and the like. And and not potentiating Gabba like say events would also worked in our favor. So I think we're very confident as we continue to see clinical data support, the preclinical data and the whole package that says this is a differentiated safety profile because of the MOA, we're confident in a go forward where patients could have the ability to access the drug online on a recurring basis with the drug potentially not being scheduled, no REMS. So we'll see how that continues to go. But what we saw in PALISADE to, again, no TA more prevalent than than 2% in the large open-label study, nothing more prevalent than 5% other than headache at 8.7%. So that's remarkably different than what we often hear when we're listening to commercials and side effects that are associated with particular therapeutic options.

Tim Lugo

Great, thank you.

Operator

There are no further questions in the queue. I'd like to hand the call back to Mark McPartland for closing remarks.

Mark McPartland

Thank you again, everyone for participating on the call today. Again, if you have any additional questions, please do not hesitate to contact us by e-mail at ir at Vista gin.com for contacting the individuals listed in our press release issued earlier today for the contact section of our website. Again, we also encourage you to register for email updates on our website. Stay connected with the latest news from this agenda and any future events.
Thank you for participating on the call today. We appreciate everyone's interest and support. We look forward to keeping you current on our continued progress. This concludes the call. Have a tremendous day.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.