VistaGen Therapeutics Reports Fiscal 2021 First Quarter Financial Results and Highlights CNS Pipeline and Business Progress

SOUTH SAN FRANCISCO, Calif., Aug. 13, 2020 /PRNewswire/ -- VistaGen Therapeutics, Inc. (Nasdaq: VTGN), a biopharmaceutical company developing new generation medicines for anxiety, depression and other central nervous system (CNS) disorders, today reported financial results for its fiscal 2021 first quarter ended June 30, 2020.

"We accomplished several meaningful milestones thus far this fiscal year that positively impact our clinical development programs, including our PH94B Phase 3 program in social anxiety disorder. We reached consensus with the FDA on the key aspects of the design of our pivotal Phase 3 clinical studies of PH94B for acute treatment of anxiety in adults with social anxiety disorder. This design is similar to the design of the highly statistically significant Phase 2 study of PH94B in social anxiety disorder," said Shawn Singh, Chief Executive Officer of VistaGen. "Additionally, we received the $5 million upfront license payment from our partnering arrangement with EverInsight Therapeutics for Phase 3 development and commercialization of PH94B in key markets in Asia. We also completed a successful public offering of our common stock, resulting in gross proceeds to us of $14.29 million. These accomplishments significantly strengthen our go-forward development plans. We believe now more than ever; the global society needs new, safe, fast-acting treatments for anxiety and depression and we remain committed to achieving that goal."

Financial Highlights During and Subsequent to the Fiscal 2021 First Quarter:

    --  VistaGen received a $5 million non-dilutive upfront license payment from
        EverInsight Therapeutics, the Company's strategic partner for Phase 3
        development and commercialization of PH94B for anxiety-related disorders
        in multiple key markets in Asia.
    --  VistaGen completed an underwritten public offering of common stock
        resulting in gross proceeds of $14.29 million to the Company, before
        underwriting discounts and commissions and offering expenses.

CNS Pipeline Highlights:

    --  VistaGen reached consensus with the FDA on key aspects regarding the
        Company's initial pivotal Phase 3 study of PH94B for acute treatment of
        anxiety in adults with social anxiety disorder (SAD) that, among other
        details, may provide significant time- and cost-efficiencies for its
        Phase 3 program.
        --  As in the highly statistically significant (p=0.002) Phase 2 study
            of PH94B in SAD, VistaGen's Phase 3 study will involve a single
            laboratory-simulated anxiety-provoking public speaking challenge.
        --  The Phase 3 study will be a randomized, double-blind,
            placebo-controlled, parallel comparison study conducted at
            approximately 12 to 15 sites in North America.
        --  The Subjective Units of Distress Scale (SUDS) will be used to assess
            the primary efficacy endpoint in the study.
        --  Dr. Michael Liebowitz, Professor of Clinical Psychiatry at Columbia
            University, director of the Medical Research Network in New York
            City, and creator of the Liebowitz Social Anxiety Scale (LSAS), will
            be the Principal Investigator of the study.
        --  Target enrollment (completed patients) will be approximately 182
            adult patients with SAD.
    --  Through the FDA's Coronavirus Treatment Acceleration Program (CTAP),
        VistaGen submitted its preliminary protocol and development plan for an
        exploratory, open-label Phase 2A study of PH94B for acute treatment of
        adjustment disorder with anxiety (AjDA), including, but not limited to,
        anxiety-provoking stressors related to the diverse impact of the
        COVID-19 pandemic (e.g., fear and anxiety regarding health and safety,
        economic loss, unemployment, social isolation, distance-learning, etc.)
        and civil unrest.
        --  The Company is currently working closely with the FDA on plans for
            the Phase 2A study in AjDA, which, when study preparations are
            completed, will be conducted in New York City by Dr. Michael
            Liebowitz.

Financial Results for the Fiscal Quarter Ended June 30, 2020:

Net loss: Net loss attributable to common stockholders for the fiscal quarter ended June 30, 2020 decreased to approximately $3.5 million compared to $6.5 million for the fiscal quarter ended June 30, 2019.

Research and development (R&D) expense: R&D expense decreased to approximately $1.7 million from $4.3 million for the quarters ended June 30, 2020 and 2019, respectively, primarily due to the completion of our Phase 2 study of AV-101 in major depressive disorder in the fourth calendar quarter of 2019. Expenses related to that study and other AV-101 related nonclinical activities decreased by $2.5 million in the quarter ended June 30, 2020 compared to expense in the quarter ended June 30, 2019. Noncash research and development expenses, primarily stock-based compensation, and depreciation in both periods, accounted for approximately $249,000 and $416,000 in the quarters ended June 30, 2020 and 2019, respectively.

General and administrative (G&A) expense: G&A expense decreased to approximately $1.4 million from approximately $1.9 million for the quarters ended June 30, 2020 and 2019, respectively. Noncash G&A expense, $466,000 in the quarter ended June 30, 2020, decreased from $772,000 in the quarter ended June 30, 2019, primarily due to decreases in stock-based compensation and the noncash components of investor and public relations expense attributable to the amortization of the fair value of common stock or warrants granted to service providers.

Cash Position: At June 30, 2020, VistaGen had cash and cash equivalents of $1.5 million, compared to $1.4 million at March 31, 2020. After June 30, 2020, the Company received net proceeds totaling approximately $17.5 million from (i) the $5.0 million gross non-dilutive upfront license fee payment from EverInsight Therapeutics, Inc. pursuant our PH94B strategic collaboration agreement for development and commercialization of PH94B in key markets in Asia, and (ii) the gross proceeds of approximately $14.29 million from the sale of shares of common stock in the underwritten public offering.

As of August 13, 2020, there were 77,998,057 shares of common stock outstanding.

About PH94B
PH94B is a rapid-onset (within approximately 15 minutes) synthetic neurosteroid nasal spray with therapeutic potential across a broad range of anxiety-related disorders. Easily self-administered in microgram-level doses, PH94B does not require systemic uptake and distribution to produce its rapid-onset anti-anxiety effects.

VistaGen is preparing for Phase 3 clinical development of PH94B as a potential new generation fast-acting, non-sedating, non-addictive acute treatment of anxiety in adults with social anxiety disorder (SAD). The FDA has granted Fast Track designation for development of PH94B for this indication, believed to be the first such designation by the FDA for a drug candidate for SAD.

With its rapid-onset pharmacology, lack of systemic exposure and excellent safety profile in earlier studies, PH94B has potential as a novel treatment for multiple additional anxiety-related disorders. VistaGen is also preparing for exploratory Phase 2A development of PH94B for acute treatment of adjustment disorder. View more background information on SAD and a video on PH94B's mechanism of action.

About PH10
PH10 is an investigational synthetic neurosteroid with therapeutic potential in a wide range of neuropsychiatric indications involving depression and suicidal ideation. VistaGen is initially developing PH10 as a potential fast-acting, non-sedating, non-addictive new generation stand-alone treatment of major depressive disorder (MDD). Following successfully completed Phase 2A development for MDD, VistaGen is now preparing for Phase 2B clinical development of PH10 for MDD.

About AV-101
AV-101 (4-Cl-KYN) targets the NMDAR (N-methyl-D-aspartate receptor), an ionotropic glutamate receptor in the brain. Abnormal NMDAR function is associated with numerous CNS diseases and disorders. AV-101 is an oral prodrug of 7-chlorokynurenic acid (7-Cl-KYNA), which is a potent and selective full antagonist of the glycine co-agonist site of the NMDAR that inhibits the function of the NMDAR. Unlike ketamine and other NMDAR antagonists, 7-Cl-KYNA is not an ion channel blocker. In all studies to date, AV-101 has exhibited no dissociative or hallucinogenic psychological side effects or safety concerns similar to those that may be caused by amantadine, esketamine and ketamine. With its exceptionally few side effects and excellent safety profile, AV-101 has potential to be an oral new generation treatment for multiple CNS indications. The FDA has granted Fast Track designation for development of AV-101 as both a potential adjunctive treatment for MDD and as a non-opioid treatment for neuropathic pain.

About VistaGen Therapeutics, Inc.
VistaGen Therapeutics is a clinical-stage biopharmaceutical company developing new generation medicines for anxiety, depression and certain CNS disorders where current treatments are believed by VistaGen to be inadequate, resulting in high unmet need. Each of VistaGen's three drug candidates has a differentiated mechanism of action, an exceptional safety profile, and therapeutic potential in several large global CNS markets. For more information, please visit www.vistagen.com and connect with VistaGen on Twitter, LinkedIn and Facebook.

Forward Looking Statements
Various statements in this release are "forward-looking statements" concerning VistaGen's future expectations, plans and prospects, including the potential for successful Phase 3 development of PH94B for acute treatment of anxiety in adults with social anxiety disorder and Phase 2A development for acute treatment of adjustment disorder, as well as ongoing clinical development of PH10 for the potential treatment of MDD and AV-101 as a potential treatment in multiple CNS indications. These forward-looking statements are neither promises nor guarantees of future performance, and are subject to a variety of risks and uncertainties which could cause actual results to differ materially from those contemplated in these forward-looking statements, including the risks that: development and approval of PH94B, PH10 or AV-101 may not be achieved in any market; the FDA may decide that the results of any of the Company's clinical development programs, including its PH94B Phase 3 clinical program for acute treatment of anxiety in adult patients with SAD or any other anxiety-related disorder, are not sufficient for regulatory approval; development of PH94B, PH10 and/or AV-101 may not be successful in any indication; success in nonclinical studies or in earlier-stage clinical trials may not be repeated or observed in future studies which may not support further development or be sufficient to gain regulatory approval to market PH94B, PH10 and/or AV-101; adverse events may be encountered at any stage of development that negatively impact further development. Other risks and uncertainties include, but are not limited to, issues related to: adverse healthcare reforms and changes of laws and regulations; general industry and market conditions; manufacturing and marketing risks, which may include, but are not limited to, unavailability of or delays in delivery of raw materials for manufacture of PH94B, PH10 and/or AV-101; inadequate and/or untimely supply of PH94B, PH10 and/or AV-101 to meet demand; entry of competitive products; and other technical and unexpected hurdles in the development, manufacture and commercialization of PH94B, PH10 and/or AV-101, as well as those risks more fully discussed in the section entitled "Risk Factors" in VistaGen's most recent Annual Report on Form 10-K for the year ended March 31, 2020, and subsequent quarterly reports on Form 10-Q, as well as discussions of potential risks, uncertainties, and other important factors in the company's other filings with the Securities and Exchange Commission. In addition, any forward-looking statements represent the Company's views only as of today and should not be relied upon as representing its views as of any subsequent date. The Company explicitly disclaims any obligation to update any forward-looking statements.

Tables Follow


                                      
            
              VISTAGEN THERAPEUTICS, INC.


                                      
            
              CONSOLIDATED BALANCE SHEETS


                                    
            (Amounts in dollars, except share amounts)


                                                    
            (Unaudited)


                                              
            
              June 30,                
     
      March 31,


                                                                         2020                           2020







                                              
            
               ASSETS



     Current assets:


      Cash and cash equivalents                                    $1,545,900                     $1,355,100


      Prepaid expenses and other
       current assets                                                 633,000                        225,100



      Total current assets                                          2,178,900                      1,580,200


      Property and equipment,
       net                                                            184,200                        209,600


      Right of use asset -
       operating lease                                              3,492,100                      3,579,600


      Deferred offering costs                                         263,900                        355,100


      Security deposits and
       other assets                                                    47,800                         47,800




     Total assets                                                 $6,166,900                     $5,772,300

                                                                                                        ---



                               
            
               LIABILITIES AND STOCKHOLDERS' DEFICIT



     Current liabilities:



     Accounts payable                                             $1,307,300                     $1,836,600



     Accrued expenses                                                607,800                        561,500


      Current notes payable,
       including accrued
       interest                                                       428,900                         56,500


      Operating lease obligation
       -current portion                                               325,700                        313,400


      Financing lease obligation
       -current portion                                                 3,400                          3,300



      Total current liabilities                                     2,673,100                      2,771,300





     Non-current liabilities:


      Non-current portion of
       notes payable                                                  124,700                              -


      Accrued dividends on
       Series B Preferred Stock                                     5,347,600                      5,011,800


      Operating lease obligation
       - non-current portion                                        3,631,100                      3,715,600


      Financing lease obligation
       - non-current portion                                            2,100                          3,000



      Total non-current
       liabilities                                                  9,105,500                      8,730,400




     Total liabilities                                            11,778,600                     11,501,700






     Commitments and contingencies (Note 10)





     Stockholders' equity (deficit):


      Preferred stock, $0.001 par value; 10,000,000 shares
       authorized at June 30, 2020 and March 31, 2020:


      Series A Preferred,
       500,000 shares
       authorized, issued and
       outstanding at June 30,
       2020 and March 31, 2020                                            500                            500


      Series B Preferred;
       4,000,000 shares
       authorized at June 30,
       2020 and March 31, 2020;
       1,160,240 shares issued
       and outstanding at June
       30, 2020 and March 31,
       2020                                                             1,200                          1,200


      Series C Preferred;
       3,000,000 shares
       authorized at June 30,
       2020 and March 31, 2020;
       2,318,012 shares issued
       and outstanding at June
       30, 2020 and March 31,
       2020                                                             2,300                          2,300


      Common stock, $0.001 par
       value; 175,000,000 shares
       authorized at June 30,
       2020 and March 31, 2020;
       55,937,472 and 49,348,707
       shares issued and
       outstanding at June 30,
       2020 and March 31, 2020,
       respectively                                                    55,900                         49,300


      Additional paid-in
       capital                                                    203,330,700                    200,092,800


      Treasury stock, at cost,
       135,665 shares of common
       stock held at June 30,
       2020 and March 31, 2020                                    (3,968,100)                   (3,968,100)


      Accumulated deficit                                       (205,034,200)                 (201,907,400)



      Total stockholders'
       deficit                                                    (5,611,700)                   (5,729,400)



       Total liabilities and
        stockholders' deficit                                      $6,166,900                     $5,772,300

                                                                                                        ===


                                       
              
                VISTAGEN THERAPEUTICS


                    
              
                CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS


                                   
              (Amounts in Dollars, except share amounts)


                                                   
              (Unaudited)




                                                                                                                      Three Months Ended June 30,



                                                                                                                 2020                                      2019

                                                                                                                                                           ---


     Operating expenses:



      Research and development                                                                            $1,731,200                                $4,313,900



      General and administrative                                                                           1,390,600                                 1,910,100

                                                                                                                                                           ---


       Total operating expenses                                                                            3,121,800                                 6,224,000

                                                                                                                                                           ---


     Loss from operations                                                                                (3,121,800)                              (6,224,000)



     Other income (expenses), net:



      Interest income (expense), net                                                                         (3,200)                                   16,500



      Other income                                                                                               600

                                                                                                                                                           ---


     Loss before income taxes                                                                            (3,124,400)                              (6,207,500)



     Income taxes                                                                                            (2,400)                                  (2,400)

                                                                                                                                                           ---


     Net loss and comprehensive loss                                                                    $(3,126,800)                             $(6,209,900)





        Accrued dividends on Series B Preferred stock                                                      (335,800)                                (302,500)

                                                                                                                                                           ---




     Net loss attributable to common stockholders                                                       $(3,462,600)                             $(6,512,400)

                                                                                                                                                           ===






     Basic and diluted net loss attributable to common stockholders per common share                         $(0.07)                                  $(0.15)





      Weighted average shares used in computing basic and diluted net loss attributable to
       common stockholders per common share                                                                51,321,355                                42,622,965

                                                                                                                                                           ===

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SOURCE VistaGen Therapeutics