Hi, good afternoon, everyone. Thanks for joining us for our 45th Annual Healthcare Conference. I'm Vishwesh Shah, an associate on the biotech team here at TD Cowen. It is our pleasure to introduce Shawn Singh, CEO of VistaGen Therapeutics.
Thanks, Vish. Appreciate it. Great to see you again, and thank you, everybody, for joining us today. As always, I'll be making some forward-looking statements, so I encourage you to take a look at our SEC filings for more information about the risks and uncertainties of our business. Taking it forward, we'll be speaking a lot today about an entirely new class of drugs that we are looking to transform multiple different indications and standards of care that have been really in the same spot for quite a long time without innovation. These are a drug class that we call pherines. They are focused on neurocircuitry. We'll talk a lot about the nose as a portal to different regions of the brain associated with different therapeutic outcomes. Vish, can you get that? So far, we have shown positive clinical data with five distinct assets, five pherines.
We will be reading out, by the end of this year, under current guidance, in two more phase III studies for the lead asset drug called Fasedienol, which is in a U.S. registration-directed phase III program for the acute treatment of social anxiety disorder. These are very large markets. As you'll see with the pipeline that we've got, a lot of opportunities to partner in the U.S., possibly, but certainly outside the U.S. Talk a little bit about pherines, because what we're doing here, we're trying to harness the power that neurocircuitry from the nasal cavity to different regions of the brain can help us to achieve therapeutic outcomes across a range of different indications. I'll tell you a little bit more about this specifically as to the lead asset a little bit later in the presentation today.
Fundamentally, what we're talking about are chemosensory neurons that are located solely in the nasal cavity. With our intranasal formulations of pherines, we're able to activate those neurons within about 25 milliseconds. There is propagation and projection to, at the base of our brains, olfactory bulb neurons. Those olfactory bulb neurons are sort of a relay station, if you will, mapped to different regions of the brain that affect different therapeutic outcomes. These are done in a microgram-level dosed way. All of them are achieving these outcomes nonsystemically. The reason we formulate these drugs as intranasal formulations is because we're dropping them directly on the neurons that are in the nasal cavity. If you were to drink a bottle of these drugs, it's not going to affect you. These are neurons that are only in the nasal cavity.
Our goal is, within a very short period of time, to activate that sequence of neural circuits that project to different regions of the brain to deal with different therapeutic outcomes. One area of the brain for social anxiety disorder, that'll be the amygdala. For depression, four different regions of the brain. For menopausal hot flashes, you'll see the hypothalamus is involved. Different regions of the brain to generate different outcomes, but with highly differentiated safety profiles from anything that you've seen approved by the agency. Why? Nonsystemically, we're not dealing with many of the same challenges that you see with current medications. No drug-to-drug interaction. We don't need you cannot detect these drugs in plasma. We know from radiolabeling that we don't see systemic absorption in the brain. We know we haven't seen potentiation of GABA.
Many of the things that saddle current medications, especially in anxiety and depression, why we have seen remarkably differentiated safety. No sexual side effects, no weight gain, no abuse liability, things that have seriously limited downstream potential of current medications. Pipeline, very robust. We'll spend most of our time today with the top three programs: social anxiety disorder, major depressive disorder, and vasomotor symptoms or hot flashes associated with menopause. Each of these therapeutic areas is long overdue for transformative change. Changes in the way that the time to onset, changes in the side effect and safety profiles that are associated with trying to get to that therapeutic outcome. The overall risk-benefit profile for at least anxiety, depression, and hot flashes programs, I think, should be clear based on the clinical success we've achieved.
Each of these assets to date has at least one positive phase II study in the patient populations that we're trying to impact. The lead asset has had a positive phase III study, first time ever achieved, in a public speaking challenge study design using the Subjective Units of Distress Scale as the primary endpoint. Fasedienol is the name of our lead asset focused on social anxiety disorder, highly prevalent indication characterized by the fear and anxiety around being judged or humiliated or embarrassed in what many people consider common everyday social and performance situations. Its typical onset is in adolescence. Mean duration of the disorder is about 20 years. People certainly go through different phases in their journey with the disorder. What affects them as an adolescent is certainly different in many cases as they get much older.
As we keep seeing, unfortunately, the prevalence is increasing. Pre-COVID, it was bad. Post-COVID, it's gotten even a little bit worse, especially as we've seen re-engagement. We see a lot of it affected by social media, team orientation in the workplace, team orientation in classroom settings. What's very common is people have a hard time talking to people. Problem from terms of dealing with it, certainly talk therapy is critical. Anything in neuropsychiatric drug development that doesn't have talk therapy as a component, you're missing half the puzzle because we're trying to find a way to improve on what the treatment alternatives are today to complement the talk therapy. If you look at the three approved drugs for social anxiety disorder, none of them work in the acute setting. There are three old-school antidepressants that are approved.
As we all well know, they have a series of side effects and safety concerns that are very well established over decades. There has not ever been an FDA-approved drug for the acute treatment of social anxiety disorder. That's what we're looking at. Fasedienol is a drug with, as I told you, very rapid onset effect, so milliseconds to achieve neurocircuitry activity to the olfactory bulb neuron. The focus is on the limbic amygdala, which I'll tell you about in a minute. First observed with some radiolabeled studies that there was no systemic absorption. We also assessed that this is not a benzo, so there's no potentiation of GABA in studies that we've looked at. We've assessed whether or not the drug binds to the abuse liability receptors. Answer to that was no, same as to the serotonin hormonal receptor.
All of the problem spots that typically relate to abuse liability or drug-drug interaction or other issues, we do not have to embrace to the same degree every other drug developed in this space has historically. That's all about the mechanism of action. Let's see a little bit more about that. First is, again, this is all we're dealing with here. Very simple vial with a very low-dose spray, microgram levels, 3.2 micrograms in the case of social anxiety disorder, because we're dropping it right onto the receptors of the neurons we need to activate to start the neurocircuitry that ultimately allows us to first get to the chemosensory neurons, then the olfactory bulb neurons, and then to the area of the brain associated with fear and anxiety, the limbic amygdala. There is their GABAergic activity where we see fear-off activity.
Ultimately, we have seen also autonomic responses such as reduction of skin conductance or sweating, reduction of blood pressure, reduction of heart rate. It is a combination of what we see in terms of sympathetic system autonomic response, as well as what we see with the behavioral scales, the psychometric scales associated with assessing a benefit in an acute setting. Think about sort of a rescue inhaler for asthma, right? Use on demand, use when you need it, do not need it when you are not exposed to your stressors. That is how we see the use of this asset in a clinical setting down the road. The reason for that is it is a very episodic disorder where if you are not exposed to your stressor, then you do not need a medicine in your body.
If you're exposed to your stressor or you're thinking about your stressor or you're worrying about your stressor, that's where we see effect, the rapid onset anxiolytic effect. We see the duration of effect of about an hour. We also know that it can be used multiple times in a day. Some days, no stressors, no need. Other days, multiple stressors, multiple needs. We took this into a phase III program based on a solid phase II program. One of the key advisors to our team, Dr. Michael Liebowitz, sort of the Babe Ruth of social anxiety disorder, did in phase II a public speaking challenge where subjects come in and they are initially given a placebo. They perform a speech. If they're sufficiently stressed during that speech, they get back a week later and they're randomized to drug placebo on a double-blind basis.
You are assessing the benefit achieved from the second speech to the first. What we saw here at a group level in PALISADE II, which is our phase III program, initial positive study, was that there was a statistically significant difference in the treated group at a group level comparing how they did in their second speech versus how they did in their first speech when all were on placebo just at the baseline. We also asked the docs, how do you think the subject did? This again, blinded basis, second speech versus first. What you see here was the treated group significantly better assessed by the clinicians, very much less anxious or much less anxious. Very importantly, we asked the patients how they thought they did, second speech versus first. No subject knew what they were on during the randomized portion of the trial.
Again, more than 2x of the treated group did better than the placebo group. What this tells us is exactly what we want. What we're trying to achieve here is a case where the more people use it, the more confident they get. The more successes they have in an acute setting, we think the better that they will do over time. The confidence that's built, the resilience that's built. We've been able to assess in other studies over a longer period of time whether or not there's a reduction in avoidance, whether there's an increase in engagement in things that were previously stressful. These are all the kinds of things that mark the opportunity costs in the life of people that have to wrestle with this disorder sometimes for decades.
What we've seen, again, this is the safety data from the PALSADE II study, very placebo-like AE profile. What we're doing right now in phase III, our PALSADE program is focused on trying to replicate the results of the PALSADE II study. To have a second, ideally a third, a registrational study to support a new drug application, if positive, we think one or two of these studies complementing PALSADE II will give us substantial evidence of effectiveness to support an NDA in the first part of 2026. We're trying to, again, replicate same study design, same endpoint as we had in play in PALSADE II. The difference is this is a far different environment.
Not only is this not the time frame when we were under the black swan of the pandemic, but we're also in a mode now where we can enhance even further the kinds of execution efficiencies that are associated with a very normalized clinical development environment. The goal, again, is to have one of those studies, PALISADE III or PALISADE IV, at least complement PALISADE II. One of the big things is the masks are off. During the pandemic, when we ran the first two studies, masks for the most part were on.
At the beginning, a considerable portion of PALISADE II, the world got normal, meaning far less attrition at sites, far less turnover of staff, masks came down, a lot more in-person training, things that allowed the efficiencies in PALISADE II to be a lot more like the way phase II was run than the first study that was impacted, in our opinion, far more by the pandemic than PALISADE II. Okay. Moving just real quickly in the limited time left, two other assets that are in our lead program category, Itruvone is for major depressive disorder. I don't have to tell you much about the nature and scope of the problem. It's still there. It's getting bigger. Unfortunately, what we do not yet see is true innovation.
What we think we've got with Itruvone is the potential, again, with a non-systemic neurocircuitry-focused asset to be able to have not only differentiated onset, but also a completely different safety profile at the end of the day. Again, no sexual side effects, no abuse liability, no weight gain, sedation, things that really affect compliance. If you affect compliance, you could affect outcomes. It's all designed, again, to go through the nose to project to different regions of the brain, four different regions that we think are associated with antidepressant effects. We don't have to land on a single receptor in the brain with a specific dose of drug. It's much, much different than having to thread that needle.
We also know because these drugs are not directly active chemically on neurons in the brain, it's a significant difference in the reduction of the potential for the kinds of safety concerns and side effects that are associated with current medications, be they antidepressants, atypical antipsychotics, many of the things that are treatment alternatives in today's environment. We have had a positive phase II study that we're using to anchor our phase III go forward. Rapid onset was seen in about a week, mapped all the way through eight weeks. To a certain degree, we'll replicate this study design, same endpoint, HAMD17, as we move forward into a phase IIB mode. Our target for that would be sometime by the end of this year.
PHADE, just to wrap up with a few more minutes I've got left, PHADE is a sea change potential in the treatment of vasomotor symptoms, fancy way of saying hot flashes associated with menopause. This is an incredibly prevalent disorder or condition affecting lots of women around the world. What we are seeing is really a clarion call for something that's fundamentally different than the treatment alternatives that have been out and available for decades, hormonal therapy in particular. With PHADE, again, we're trying to get to an audience in a way that they have an alternative to knock down not only the number, but the severity of the hot flashes that women have to experience that are disruptive to their life. What we have not seen is a non-hormonal, non-systemic approach. There's a brand new class of drugs, NK3 receptor antagonists. This you know about well.
While they're non-hormonal, they are systemic. We have seen black box warnings related to liver liabilities and the like. The key, again, differentiation for us is not just on the safety side, but it's also on the efficacy side. This is a case where you have really, it's not like in neuropsychiatry. We have very objective endpoints here. We're looking at, is there a reduction in the number of hot flashes? Is there a reduction in the severity of hot flashes? What we know about this, again, is this is a distinct chemical entity from Itruvone and Fasedienol, and this has to be going to a different region of the brain, the area of the brain, the hypothalamus. It's associated with your body temperature. We've seen similar effects in other areas of the brain related to appetite, for example.
Each of these pherines is a distinct chemical entity with an objective to really target different regions of the brain associated with a cross-section of indications. We've landed on indications that we think are most in need of transformation in the standard of care. If women have the ability, as we envision it, to be able to take this vial of PHADE and use it when they expect to be in a situation where they do not want to be affected by hot flashes to the same degree they might be, for us, that would be an improvement in the quality of their life. That would be an improvement in the way they are able to manage without the risk of hormonal therapy and without the risk of potential liver liabilities of some of the oral systemic medications.
The objective that we will go forward with here is to try to replicate a phase IIa study to a later stage phase II setting where, again, what we were measuring here over a four-week period in a highly stat-sig way was, did the women in the trial experience a reduction in the number of hot flashes? As you can see here, they did. We also assessed the severity of the hot flashes experienced that were experienced. Again, here, significant separation between drug and placebo. What we're trying to bring here, PHADE, same thing with Itruvone and same thing with Fasedienol, is a sea change in the way these major disorders and major conditions are affecting the populations that have to lean into the current treatment alternatives. In the neuropsychiatric arena, there has to be a very close marriage with talk therapy.
We're seeing a lot of online marriage between telehealth and mental health. That helps. We think these drugs are significantly safer than other things that are prohibited from being recurring scripts online. The safety profile matters. It matters therapeutically. It matters commercially. The same thing, too, we got to be different in terms of time to effect. We cannot be waiting around in depression, for example, for six, eight, ten weeks to see if we're going to get a benefit therapeutically while enduring the side effects all along the way that are pretty predictable, at least as to the old-school antidepressants. As with most companies you're seeing today, we get to lean into the expertise of those that are really at the forefront, especially in depression and anxiety. These are the main indications that we spent the most time and attention to. We are grateful that we have these advisors in our court. I should think that's about it for the first part. Yes.
Thanks, Shawn, for the great presentation. Really exciting to see how far this new class of drugs have kind of come along. As we look towards the PALSADE III and IV readouts that are expected in the next half, you touched upon some of the points where patients, how COVID had impacted patient performance in previous trials, and PALSADE III and IV should benefit from a more normal kind of return to normalcy. There are also some other—can you touch on some of the other key learnings from the PALSADE II trial that you are also employing to ensure success of these trials?
Yeah, it's nice to be able to implement enhancements in a more normalized clinical environment overall. A lot of companies will say the same thing, and it's actually a significant benefit since we've moved now a couple of years past the black swan phase of the pandemic. Especially with a protocol like in the PALSADE studies, which really requires rigorous adherence, and the fact that this is a protocol now that's been in the research community, this is the third and the fourth lap with this study design and this endpoint. Combining that with the way you have to look at it really is get in person, have in-person investigators' meetings, have more internal site-facing surveillance. That's a main thing that we've unbundled a lot of reliance on CROs for many aspects, but in particular, surveillance of whether or not there's rigorous adherence to the protocol because it's part of the things that we saw variability.
You're always trying to control variability when you move into any study, especially when you're moving into a study where you have maybe 18, 20 sites. To be able to rigorously train upfront and screen before someone even signs informed consent, the ability to surveil differently in case of audio recordings during each of the speeches to make sure people don't go off track with the script, and making sure really you try to have a very sustained sequencing of each of the weeks in the four-week protocol that's associated with the public speaking challenge. All those things staying constant are really important. Of course, not having masks makes the PALISADE III and IV environment more like phase II, for sure, but also more like the back end of the PALISADE II study when things started to change in the spring of 2022. Right. Thanks.
Another aspect about Fasedienol that you touched on was the safety. Could you talk about some of the safety data that you have generated for long-term use?
Yeah, we had our open label study that we published had over 30,000 doses administered to about 500 patients, 481 subjects, and some of them as far into it as 10 months. What we've constantly seen in that study, the most common treatment emergent adverse effect was headache at 8.7%. No other TEAE was more prevalent than 5%. That is quite remarkable compared to any neuropsychiatric drug we've seen out there historically. In PALISADE II, there was nothing more prevalent than 2%, and that was pyrexia in the treatment or in the placebo side. Part of that, of course, and you'd scratch your head for a minute and say, wait, what? This neuropsychiatric drug, how's that possible?
Again, remember, we're going non-systemically. We're about three inches from the part of the brain that we need to affect the anxiolytic effect here. You're not going orally through the liver, through the kidney, through the bloodstream over the blood-brain barrier and trying to land a certain amount on a right spot and avoid other spots. The non-systemic MOA with this class is critical, not only in Fasedienol for SAD, but every one of the indications we're going at.
Right. I want to touch next on your further down the pipeline. On Itruvone in major depressive disorder, huge unmet need. You've had really good data in the phase IIA study. As you look towards the phase IIB study, how are you thinking about sort of minimizing bias and placebo response? What are some aspects of the successful phase IIA study that you would like to carry forward? How are you thinking about this?
The key, these are all odorless and tasteless drugs. That helps in the placebo context, for sure, to mitigate. It's not a case where we'd have sort of a disappointment bias, pretty obvious. In some other areas, that's the case. Really, to try to replicate, but at a shorter duration, we don't think we need to go out eight weeks. We'll go probably six weeks, is likely. We see benefits way earlier than that. From a regulatory perspective, the six-week makes sense. Again, using the same endpoint as we used, HAMD17 will be the driver. We think we see sometimes a benefit in anxious depression. That may be a subgroup analysis that we do, given that there's interplay with the amygdala in the depression context as well. Perfect.
Are you able to comment on some potential timeline for phase IIB initiation to the extent that you can talk about?
We're preparing and planning. That includes a regulatory component. It includes assessing site availability, capabilities. Those things are all underway right now. Ideal scenario, subject to additional funding, we'd be launching that in the back end of this year, second half of this year.
Thanks. On PHADE for vasomotor symptoms, you sort of touched on hormonal therapies, but can you talk a bit more about how PHADE and the pherine class could be differentiated there, what advantages that PHADE could have, and discuss the competitive landscape there?
Yeah. When we talk to companies from around the world, what we hear from their governments and we hear from those that are leading in women's health is that this is a major need all around the globe. Especially as women are simply saying, look, the current alternatives aren't acceptable, especially for what we need to do with our lives day to day in those age groups as well that are most affected by the disruptive effect of hot flashes. To have to lean into hormonal therapy is worrisome to a lot of women for reasons that have been established over the years. Now, even non-hormonal, the one option that's out there is still systemic. You have to worry about, okay, what we've seen, the systemic liabilities associated with that other asset is potential liver liabilities, liver toxicity.
There is a lot that has to go into play. It's inconvenient to be able to embrace that line of therapeutic approaches to reducing the number and severity of hot flashes. The fact that PHADE is non-hormonal and non-systemic and can be used, we believe, on a PRN basis as needed to knock down the hot flashes, that tailors to fit the lifestyle and the needs of the women that we think are affected by the disorder or the condition. It's not really a disorder. It's a disruptive condition that they have to manage in life circumstances. We want to provide the opportunity for, again, an as-needed, tailored to fit the life without the worries in the background of systemic liabilities and hormonal therapies. PHADE so far fits that product profile. Our target product profile, we think, fits into a major open area.
Same thing with Itruvone for depression and certainly the same thing for Fasedienol for SAD. There's just nothing. There has not a single drug ever been approved for the acute treatment of social anxiety disorder. All three of those major markets have major potential commercially and obviously also opportunistically on the partnering side.
Yeah, really great that you kind of talked about the commercial aspect. Maybe last question given the time. We know you've been doing a lot of work to understand the launch dynamics for social anxiety disorder. Given how late-stage these programs are, can you talk about what aspect you think is most underappreciated that maybe we haven't touched on yet?
Big difference pre-COVID, post-COVID. We've done some bring-down modeling of commercial launch scenarios and benchmarking against companies that have done it in the past and what we like and don't like. I think the sea change has been in the digital environment. Telehealth and mental health, we see a lot of convenience and a lot of improved compliance for follow-up visits.
Mostly, it's similar to the GLP-1 scenario where we see consumers and influencers having a major effect in the dialogue about anxiety that we see similar to the dialogue about weight and lifestyle impacts of new medications. Clearly, there's fundamental similarity in the past to be able to educate the practitioners. There's a lot more power from the consumer side and meeting the needs of the consumer digitally, in particular, also being able to go to consumer advertising in a mode where we don't expect that of a 60-second commercial, 45 seconds have to be focused on the worries.
We can get through the efficiency because what we're seeing is headache and not the kinds of things that are typically worrisome and you want to turn the volume down when you're hearing a commercial. Significant changes based on the consumer behavior and digital access has really changed the entire marketing mix in terms of headcount needed and cost to even execute through your launch phase.
That's perfect. Thank you so much, Shawn.
Appreciate it. My pleasure.