Vistagen Therapeutics Inc (VTGN) 2022 Q4 法說會逐字稿

Greetings. Welcome to the VistaGen Therapeutics 2022 Fiscal Year End Results Conference Call. (Operator Instructions) A question-and-answer session will follow the formal presentation. (Operator Instructions) Please note that this conference is being recorded.

I will now turn the conference over to your host, Mark Flather, Vice President of Investor Relations for VistaGen. You may begin.

Thank you, Kyle. Hello, and welcome to VistaGen's conference call covering our fiscal year 2022 financial results, recent accomplishments and anticipated milestones. I'm Mark Flather, Vice President of Investor Relations at VistaGen. Thank you for joining us today, and welcome to our stockholders, analysts and anyone taking an interest in VistaGen.

Joining me today are Shawn Singh, our Chief Executive Officer; Jerry Dotson, our Chief Financial Officer; and Dr. Mark Smith, our Chief Medical Officer. Format of this call, as Kyle mentioned, will be -- will consist of prepared remarks from management, followed by a brief opportunity for questions. This call is being webcasted and will be available for replay. The link to access the replay can be found in the Investors IR Calendar section of our website, vistagen.com.

On today's call, we will make forward-looking statements regarding our business based on our current expectations and current 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 statements 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 that we may make today.

Additional information concerning risks and factors that could affect our business and financial results is included in our most recent annual report on Form 10-K filed earlier today with the Securities and Exchange Commission, or SEC, and future filings that we make with the SEC from time to time, all of which will be available on our website and the SEC's website.

Now I'd like to turn the call over to our Chief Executive Officer, Shawn Singh.

Thank you, Mark, and good afternoon, everyone. On behalf of our entire team here at VistaGen, thanks for joining the call today. We sincerely hope that you and those who are very important to you are doing well, both mentally and physically.

As the prevalence of anxiety and depression disorders has grown considerably since the beginning of the pandemic, it's crystal clear to us that currently approved treatments are underserving millions of individuals who are living with anxiety, depression and many other CNS disorders. Individuals across a broad range of demographics need new faster-acting treatment options without having to worry about the negative side effects and safety concerns that are often associated with currently approved meds. We are committed to developing and commercializing new differentiated treatments with potential to improve lives.

Our fiscal year 2022 was defined by progress in all areas of our business, further enhancing our confidence about the potential of our CNS pipeline. We have advanced through our past fiscal year and into the current year with momentum and anticipation for several key milestones. During the second half of calendar '22, we anticipate reporting key top line data readouts in our PALISADE Phase III program for PH94B in Social Anxiety Disorder, or SAD, as well as the expansion of other important clinical programs, moving us closer to our goal of transforming the way that anxiety and depression are understood and treated, one mind at a time.

Several recent advancements provide opportunities to unlock shareholder value. In our PALISADE Phase III program for PH94B in SAD, we reported a major clinical milestone yesterday with the last patient's completion of the study protocol in our PALISADE-1 trial. This Phase III clinical trial, as we've reported, is a U.S. multicenter, randomized, double-blind, placebo-controlled parallel design clinical study in adults who are diagnosed with SAD. The study is designed to evaluate the efficacy, the safety and the tolerability of the acute administration of PH94B to relieve symptoms of anxiety in adults living with SAD during a simulated public-speaking challenge, measured using the Subjective Units of Distressed Scale or SUDS.

We are grateful, as I noted in the press release yesterday to the many individuals diagnosed with SAD who participated in the study. Also, Dr. Michael Liebowitz, the principal investigator of the study and among the world's leading experts in SAD and our CRO, the clinical investigators and their staff, together with our team, everyone played a key role in completing the study, and we're very grateful for that. We're looking forward to evaluating the PALISADE-1 data when it's available. And we are expecting to announce the top line results as we noted, in mid-'22, consistent with our prior guidance.

VistaGen is also evaluating PH94B for SAD in a second Phase III clinical trial, PALISADE-2, which is the replicate of PALISADE-1. Top line results for PALISADE-2 are anticipated in late '22. These data readouts represent potential catalytic moments for this product candidate for our company and for the millions living with Social Anxiety Disorder. Should PALISADE-1 and PALISADE-2 be successful, they have the potential to anchor our U.S. New Drug Application for PH94B in SAD.

In May, we announced the key regulatory update on PH94B regarding abuse liability. We previously contacted the FDA to gather feedback on whether a human abuse potential study would be necessary for PH94B for the acute treatment of SAD. In a written response as we announced the FDA indicated that nonclinical and clinical data in studies completed to date provide no signal of abuse potential. Additionally, receptor binding data do not show that PH94B has affinity for abuse-related sites such as dopamine, opioid and GABA.

Also no additional nonclinical studies are needed to evaluate the abuse potential of PH94B and finally, while the need for a human abuse potential study with PH94B may be revisited by the FDA upon the completion of our current and our planned PH94B clinical trials, the studies completed to date provide no signal of abuse potential and at this time, conducting the human abuse potential study of PH94B is not necessary.

We are very encouraged by our consensus view with the FDA on this important dimension of abuse liability potential, which, of course, will be an important matter for health care providers and patients to consider hopefully in the future with respect to use of PH94B.

To further illustrate some of the unique benefits that we've seen with PH94B in studies to date, we shared additional details from previously reported Carbon-14 radio-labeled PH94B study at the Annual Meeting of the Society of Biological Psychiatry, the American Society of Clinical Psychopharmacology and the Medscape Live Psych Update Spring Meeting. The preclinical data from the tissue distribution study in laboratory rats demonstrated that a single intranasal administration of radio-labeled PH94B was largely combined to the nasal passages, with minimal or undetectable levels in most other tissues, including the CNS.

More importantly, no appreciable activity was observed in the brain. We believe these results further demonstrate the fundamental difference in PH94B's mechanism of action or MOA, compared to that of all current anxiety therapies. When the data from this radio-labeled PH94B tissue distribution study or combined with that from previous in vitro studies, demonstrating that the MOA of PH94B does not involve direct activation of GABA-A receptors, we see a growing body of evidence that PH94B has the potential to achieve rapid onset anti-anxiety effects without requiring systemic uptake or causing benzodiazepine-like side effects and safety concerns.

In another important step forward, we and our partner, AffaMed, have completed regulatory preparations to initiate PALISADE Global, a Phase III clinical trial to evaluate the efficacy, safety and tolerability of PH94B for the acute treatment of anxiety in adults with SAD. Modeled as a replicate of our PALISADE-1 and our PALISADE-2 Phase III studies, PALISADE Global is meant to support the commercialization of PH94B in markets outside the U.S. We anticipate initiating PALISADE Global in the U.S., China and likely Canada in the second half of 2022.

Should the trial be successful, PALISADE Global is an important component when combined with our activities in the U.S. PALISADE Phase III program to expand access globally for individuals with SAD who could potentially benefit from PH94B.

Beyond progress and expansion of the PALISADE Phase III program, we initiated an exploratory Phase IIa clinical study of PH94B in adjustment disorder with anxiety. This is the first study in our evaluation of PH94B's potential in an anxiety indication beyond SAD. We anticipate top line data from this adjustment disorder trial somewhere under the end of the year.

Regarding our other clinical stage drug candidates, we are preparing for Phase IIb clinical development of PH10 as a potential rapid onset stand-alone treatment in major depressive disorder. We will provide further guidance on our development plan for PH10 later in the year. For AV-101 in combination with probenecid, our Phase Ib trial is underway. Study follows 2 positive preclinical studies showing that the combination of AV-101 and probenecid, substantially increase the brain concentration of the important active metabolite of AV-101.

We believe these results can give us some evidence, some indication of what we might want to do in the future with that combination.

So I now like our CFO, Jerry Dotson, to summarize some of the highlights from our fiscal year '22. Jerry?

Thank you, Shawn. As Shawn mentioned, I'd like to highlight a few of the financial results from our fiscal year 2022 ended March 31, 2022. The I also would encourage everyone to review our annual report on Form 10-K, which we filed with the SEC earlier this afternoon for additional details and disclosures.

Our research and development expenses increased by $23.5 million from about $11.9 million to $35.4 million for the fiscal year ended March 31, 2021 and 2022, respectively. This increase is primarily due to the preparation initiation and continuation of the various clinical trials in our PALISADE Phase III program for PH94B in SAD, as Shawn has just described as well as the preparation and advancement of our exploratory Phase IIa study of PH94B for treatment of adjustment disorder with anxiety and the continuing nonclinical and preclinical development and outsourced manufacturing activities for both PH94B and PH10 as well as the hiring of multiple senior management personnel during fiscal 2022.

Our general and administrative expenses increased to approximately $13.5 million for the fiscal year ended March 31, 2022, compared to approximately $7.1 million for the fiscal year ended March 31, 2021. This increase was largely due to the commencement of initiatives related to phase appropriate PH94B prelaunch commercialization activities and hiring of additional management personnel during fiscal 2022.

Our net loss attributable to common stockholders for fiscal year ended March 31, 2022, was approximately $48.7 million compared to a net loss attributable to common stockholders of $42.3 million for fiscal 2021. At March 31, 2022, we had cash and cash equivalents of approximately $68.1 million. Again, I would refer you to our annual report on Form 10-K that we filed earlier today for additional details and disclosures.

I'll now turn the call back over to Shawn.

Thanks, Jerry. As we continue on our journey to achieve our goal of becoming a top-tier biopharmaceutical company with innovative solutions for those who are facing challenging mental health disorders every day, we continue to put forth relentless effort into creating life-changing value for patients and for our stockholders. Our team of changemakers consist of amazing individuals, people with deep industry knowledge and experience in CNS drug development and a passion for improving the lives of those who are battling mental illness.

We've led the company to its strongest position in history to the brink of our first Phase III data readout. And this would certainly not have been possible nor will our future success be possible without the commitment and the steady endurance of the entire VistaGen team, our collaborators and our stockholders. So on behalf of our entire team at VistaGen, I want to thank you for the privilege and for the opportunity to make a difference. Mark?

Thanks, Shawn. This concludes our prepared remarks. Operator, Kyle, it's okay, and we'd like to now open up the call for questions.

(Operator Instructions) Our first question is from Andrew Tsai with Jefferies.

So as you mentioned, the last patient of PALISADE-1 finished the study earlier this week. So how long would you say it will take you to scrub, clean the data at this juncture? Is it safe to assume top line data comes August or September rather than July?

Andrew, thanks for the question. So yes, as you noted, we announced yesterday that last patient has completed the study protocol in PALISADE-1. So we're now in the process of going through the steps to lock down the database, clear the queries and the normal course actions that you take when you've completed the study.

And then that moves into assessment by statisticians and then, obviously, internal assessment of what data come out of that effort. But that march usually takes about 6 to 8 weeks, so from the last patient out milestone. So at this time, I anticipate top line data sometime by mid-August at the latest, certainly not into September.

Okay. That's really good color. And from time to time, we'll ask you about what you're thinking about planning to share basically in the top line release. So at this juncture, what exactly do you think you plan to share? How much will you share? Is it going to be on a more straightforward side? Or could it be a little bit more detailed? Just a little bit more color.

Well, remember, we have a mirror image study ongoing, PALISADE-2. So there's -- typically, when that's the case, you're limited to few key things that are important to know. So we'll certainly report on the primary endpoint. Just remember, it's a change in the subjective units of distress scale, the mean group difference between visit 2 and visit 3 in the public speaking challenge.

So certainly, we'll report on the primary SUDS endpoint, that's the sole endpoint in -- the primary endpoint in the PALISADE-1 study. We'll also announce obviously, data about adverse events and the like. So primary endpoint with p-value plus safety data.

Very good. And I guess last one for now is, as we think about gauging the study success, one thing is ensuring site-to-site consistency, minimizing variability. But one thing you've done from the get-go is getting Dr. Liebowitz on board. So how instrumental has he been in terms of executing these studies properly? Can you give us a little bit more color here?

Yes. Well, it's always a privilege when you have the Babe Ruth of anything to be able to be involved in anything you do. And I think Michael is the Babe Ruth of SAD. No question. He's the world leader, I think, in SAD. And obviously, he was involved in the Phase II program. But to have Michael's input and guidance and wisdom and experience augmenting our team's experience, it's just been terrific. And Michael isn't just a nominal PI. Michael has personally interacted with each of the PIs in the study.

And that's been very valuable, not only for the PIs, but certainly, it gives us a lot of confidence that the things that we've done in terms of setting up and designing and executing this study as really the most appropriate study for a drug with the unique properties that we think PH94B has in the acute treatment setting, and that's very helpful.

So he innovated the Liebowitz Social Anxiety Scale, as you certainly know. That's a very important tool in the clinical assessment of SAD. It's also a very key piece of our ability to make sure we have a population that's suitably affected by the disorder being randomized into the study. So having Michael's involvement is just -- it's been fantastic.

Our next question is from Tim Lugo with William Blair.

This is Lachlan on for Tim. I guess, Shawn, could you just remind us on the IP situation for PH94B? I know the molecule has been around for a while. So can you just remind us what your expectations of exclusivity there are? And then in terms of AV-101 plus probenecid study, is there any more granularity you can provide on either when we can expect an update both data there? And maybe what you would be looking for and what you'd consider good beyond, obviously, just increased CSF exposures?

Sure. I'll give you less guidance on the last point. We'll have to see how things go. But the IP for PH94B, based on our current assessment runs with PTE all the way through March of '33, possibly a little bit longer with peds. One of our key objectives on the other side of, if we see some positive results from the PALISADE program is to move right into peds development. So that's an important piece as well of the commercial picture.

In terms of AV-101 and probenecid, that study is underway. It's a drug-drug interaction study of the combination following some of the preclinical work we saw when the 2 were put together and the ring concentration of 7 chloro-kynurenic acid was increased multiple fold in both species that we assess the combination. And so now putting the 2 together in a DDI study, it gives us a little bit additional comfort about the 2 drugs together. And we'll see. We'll take some CSF reads. And at the end of that, assess whether we think there is sufficient basis to move forward.

And we'll just have to see what the data show. And have some further discussion about whether it makes sense to move into -- there's multiple different neurological indications where that might be appropriate based on preclinical work we've done in L-DOPA induced dyskinesia, in pain and even possibly epilepsy, MDD. So have to see.

Our next question is from Brian Skorney with Robert W. Baird.

This is Luke Herrmann on for Brian. Congrats on the recent progress. Looking to the PALISADE data, can you provide any additional clarity on the degree of difference on SUDS that you think would be a home run scenario? And what is the minimum difference that you'd view as clinically meaningful?

And then secondly, given the FDA's current stance regarding the HAP study, does this give you any additional confidence about potential interactions with the DEA moving forward?

Sure. Well, a home run (inaudible), so that's what we're powered for, that's what we want to see. But Mark Smith, why don't you go and give a few comments about the -- what we think is clinically relevant as we move into the data readout zone?

Sure. So for an individual patient, we're hoping for a SUDS score change of 20 from their individual baseline, so themselves as their own control. And that's based on the Phase II data and how it -- those SUDS scores correlated with what the physicians saw if the physician said, well, they're doing much, much better on this public speaking, they have much less anxiety compared to the last time on placebo. So a SUDS score of 20, we would consider really clinically obvious.

Now we'll see if that can be verified in this larger patient sample. But yes, that's sort of what we're hoping to see as somebody who's really responding very, very well to the drug.

Mark, talk a little bit about the Phase II data, the difference between the group means not at 20 something.

Yes. So now if you look -- what we're interested, of course, is in significance between placebo and drug. And with the drug in Phase II, we saw about -- I think it was about a 26-point difference on placebo. There was a 14-point difference. And that's to be expected that there would be some placebo response as they go through the public speaking challenge twice. So they kind of know what to expect the next time. So whether you call that placebo effect or just familiarity with the procedure, but we're looking for about a 12-point change. That's what we powered to 90% powered.

With -- but we also powered for -- or anticipated there could be more variance because we have 20 sites now compared to the smaller Phase II study. But -- so yes, that's what we're looking for.

And what was the last question, Luke?

The second one was on the HAP study, given what the FDA requires at this point, does that give you additional confidence about interacting with the DEA moving forward?

Yes. Look, we are very happy with the interactions we've had with the agency, not saying DEA and FDA always think alike. But the more important part of this is when we compositely frame everything that we know to date, that everything that was submitted to the agency, all preclinical work, all clinical work in addition to things that really drive our confidence from the very beginning, when we first started working with the drug, no binding to opioid or dopamine or nicotine receptors, no androgen affinity.

But then when we layer on top of that, the studies that we did last year on GABA-A and the radio-labeled -- C14 radio-labeled study, all that together and then on top of that, no clinical signal in any study to date of an A that's associated with abuse liability, that provides a tremendous amount of confidence.

So yes, the confidence has always increased when you have concordant thoughts from the agency that's associated with your drug development. DEA will also, as will FDA, and we will be looking at if there's any reason to have any concern about anything that happens in the ongoing studies, Long-term safety study and any other study. Remember, in the Phase III studies, there's one dose administered to those who are randomized to drug in the Phase III study in visit 3. So pretty confident in the context of that situation. But yes, overall, I think it's -- it gives a tremendous amount of comfort if we enter into a similar dialogue with DEA.

Our next question is from Jason McCarthy with Maxim Group.

This is Michael Okunewitch on the line for Jason. I think just one for me. I'd like to see if you could provide a bit more color on the commercialization strategy. Now that we're fast approaching that pivotal data, in particular, I guess, how much of a marketing effort and patient education is required in this indication, given that there is -- there are relatively limited options out there for SAD patients?

Yes, great. We got a strong lineup of [pinchers] today. It's good to see. So thanks for the question. It's an exciting time. The awareness of SAD isn't like migraine, right? So it's a different commercial effort if you have an indication that others have already blazed the trail and you have a whole bunch of competition.

In our case here, with respect to where we would be if we're successful with this program, there isn't a giant pharmaceutical company sitting next to what we'd be bringing into the market. So certainly, we will have efforts, we already have them underway now associated with raising awareness. The fact that over 25 million people in America are affected with this disorder, means there's pretty broad awareness anyway. We're seeing an increased prevalence of diagnosed people with SAD even though the diagnosed and untreated population seems to be increasing.

But it's important to go to physicians already, go to nurse practitioners already, go to psychiatrists already. We have a couple of slides on our website that reflects some of the outreach that the team has already done associated with blind-based -- blind profile-based market attribute study. And it's been tremendous feedback, 251 psychiatrists and PCPs involved in that study that we did.

There's also been some really strong work with market access folks with some of the payers. So we will certainly want to make sure this is a case where both the KOLs, the medical practitioners and patients have an equal and robust knowledge base about the drug, about its pharmacology, about how it ought to be dosed and the way that we think it can fit the life that they have and they're trying to reorient it away from the kind of fear and anxiety that debilitates a lot of the effort that they put into their life and would love to change.

So it's an exciting time. Actually, it's not -- it's not a world we desired in that, having a pandemic overlay all that we're doing here in late-stage development. The silver lining of that though is that it's de-stigmatized mental illness to a very considerable degree. It's also enhanced the access to mental health care through telehealth, which has been important. That goes back to that abuse liability related question. If we have a drug that isn't scheduled, that can be prescribed online, that can be delivered by the mail, that's a very important feature in the commercial strategy as is the access to health care through private online means.

So we've got a Head of Commercial Operations, our Chief Commercial Officer, Ann Cunningham is just an absolute all-star, comes to us from Otsuka and Lilly and Teva days, and she and her team are well positioned as we stage gate the buildup of that capability based on our progress in the clinic and in the hallways at the FDA. So it's a stage-gated approach, but we don't want to be flat-footed. At the same time, we don't want to do too much too soon either. So it's a nice balance that we've drawn and it's a really exciting market. The potential to help people, the feedback that we get about the potential for this drug to change their lives, if it's successfully developed here in our Phase III program is just -- it's fabulous.

(Operator Instructions) It looks like we have reached the end of the question-and-answer session. I will now turn the call over to Mark Flather for closing remarks.

Thanks so much for all your help today, Kyle. If you have any additional questions from any of our listeners, please do not hesitate to get in touch with us by e-mailing ir@vistagen.com or contacting the individuals listed in our press release issued today. We also encourage you to sign up on our website to stay connected with the latest news from VistaGen.

Thank you for tuning in, and we appreciate everyone's attention and support. We look forward to keeping you current on all of our continuing progress. This concludes our call. Have a great day. You may all disconnect now. Thanks again.