Good afternoon, ladies and gentlemen, and welcome to the Vistagen Therapeutics Fiscal Year 2025 Second Quarter Corporate Update Conference Call. This call is being recorded on Thursday, November 7, 2024. I would now like to turn the call over to Mr. Mark McPartland, Senior Vice President, Investor Relations at Vistagen. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Vistagen's fiscal year 2025 second quarter corporate update conference call and webcast. Earlier this afternoon, we filed our quarterly report with the Securities and Exchange Commission on the SEC Form 10-Q for our second quarter that ended September 30, 2024, and we also issued a press release providing an overview of our progress across our lead neuroscience programs. We encourage you to review the release and our 10-Q, which can be found in the Investors section of our website. We will make forward-looking statements regarding our business during today's call based on our current expectations and information. These forward-looking statements speak only as of today, except as required by law. We do not assume any duty to update any forward-looking statements made today or in the future. Of course, forward-looking statements involve risks and uncertainties, and our actual results could differ materially from those anticipated by any forward-looking statements we make today. Additional information concerning risk factors that could affect our business and financial results is included in our fiscal year 2025 second quarter Form 10-Q for the period ending September 30, 2024, and in future filings that we make with the SEC from time to time, all of which, again, are on our website in the Investors section on the SEC website. With the formalities completed, I would like to warmly welcome our stockholders, sell-side analysts, and others interested in our programs and progress. I'm joined on our call today by Shawn Singh, our Chief Executive Officer; Cynthia Anderson, our Chief Financial Officer; and Josh Prince, our Chief Operating Officer. Shawn will discuss our recent highlights in our lead neuroscience programs, and Cindy will discuss our second quarter financial results. At the conclusion of our prepared remarks, as the operator has already noted, there will be a brief opportunity for questions from the sell-side analysts. As a reminder, this call is being webcast and will be available for replay after completion. The replay link again, can be found on our website's Events section. Shawn?

Thank you, Mark. Good afternoon, everyone, and thank you for joining our call today. As the neuroscience renaissance continues, we are advancing at Vistagen a neuroscience pipeline that's unlike any other in the industry. With multiple clinical stage product candidates in Phase 2 and Phase 3 development, each from a new class of potential intranasal therapies that we call pherines, each has a differentiated mechanism of action and differentiated safety. So we are, with this pipeline, advancing multiple opportunities to set new standards of care in several high-prevalence pharmaceutical markets. Distinguished from all systemic medications that are currently approved by the FDA, each intranasal pherine product candidate in our lead programs, and that includes fasedienol for social anxiety disorder, itruvone for major depressive disorder, and PH80 for menopausal hot flashes, each is designed and formulated to activate key nose-to-brain neurocircuitry within milliseconds to achieve the desired therapeutic effects all without requiring systemic absorption or binding to neurons in the brain. We have observed statistically significant efficacy and favorable safety data in each of our lead intranasal pherine development programs, for fasedienol in a Phase 3 trial for the acute treatment of social anxiety disorder, for itruvone in a Phase 2a trial for the treatment of major depressive disorder, and for PH80 in a Phase 2a trial for menopausal hot flashes. It is these successes seen with multiple pherine product candidates across multiple indications that drive our confidence in the power and elegance of nose-to-brain neurocircuitry and the enormous potential of our intranasal pherine platform. Currently, there is no FDA-approved medication for the acute treatment of social anxiety disorder, which is a mental health disorder affecting over 30 million adults in the U.S. Our goal is to fill a major acute treatment gap in SAD with fasedienol and deliver new hope and new optimism to millions of individuals who are anxious and fear embarrassment, humiliation, and judgment when facing anxiety-provoking social and performance situations in their daily lives. Last year, we reported positive results from our PALISADE-2 Phase 3 trial of fasedienol for the acute treatment of SAD. This year, with the goal of complementing the success of PALISADE-2, we've initiated our replicate PALISADE-3 and PALISADE-4 Phase 3 trials on time and as planned. With those milestones now completed, we are now laser-focused on efficient execution toward top line results from both studies next year. If successful, we believe either PALISADE-3 or PALISADE-4, together with PALISADE-2 could provide sufficient evidence of safety and efficacy to support the submission of an NDA to the FDA for fasedienol for the acute treatment of anxiety in adults with SAD. Our itruvone program has shown exciting potential as a new nonsystemic stand-alone treatment for major depressive disorder, and we are preparing for planned Phase 2b development in the U.S. Based on the Phase 2a clinical data, itruvone has the potential to relieve MDD symptoms rapidly and without many of the unwanted side effects associated with current systemic antidepressants, especially weight gain and sexual dysfunction. The PH80 program for menopausal hot flashes is also progressing. Based on positive Phase 2a clinical data, our nonsystemic hormone-free pherine product candidate has game-changing potential in this major women's health market in which women are faced with very limited opportunities for treatment options. We're advancing PH80 through the remaining nonclinical programs and CMC requirements to support our submission of a U.S. IND next year. The intent for that is to facilitate our plans for further Phase 2 development of PH80 for treatment of menopausal hot flashes in the U.S. I'll now hand the call over to Cindy Anderson, our CFO, to summarize our financials from the quarter. Cindy?

Thank you, Shawn. As Shawn mentioned, I will highlight a few financial results from our fiscal year 2025 second quarter. Research and development expenses were $10.2 million for the quarter ended September 30, 2024, compared to $3.9 million for the same period last year. The increase in R&D expenses was primarily due to an increase in clinical and development expenses related to our PALISADE Phase 3 program for fasedienol for the acute treatment of SAD, an increase in headcount, and an increase in consulting and professional services. General and administrative expenses were $4.2 million for the quarter ended September 30, 2024, compared to $3.2 million for the same period last year. The increase in G&A expenses was primarily due to an increase in headcount and professional services fees. Our net loss attributable to common stockholders was $13 million for the quarter ended September 30, 2024, compared to $6.6 million for the same period last year. As of September 30, 2024, we had $97.6 million in cash, cash equivalents, and marketable securities. As a reminder, please refer to our quarterly report on Form 10-Q filed with the SEC this afternoon for additional details and disclosures. I will now hand the call back over to Shawn.

Thanks, Cindy. Leveraging our pioneering neuroscience, our deep understanding of nose-to-brain neurocircuitry, and multiple positive clinical trials to date, our pherine pipeline has the power and the potential to improve millions of lives who are affected by debilitating effects of neuroscience disorders, to do that by replacing inadequate therapies and setting entirely new standards of care. Our broad and diverse neuroscience pipeline offers multiple shots at that core goal. Our team is motivated, and it's driven by the opportunities to disrupt treatment paradigms, improve lives, and in turn, create potential value for our stockholders. So on behalf of everyone at Vistagen, once again, I want to thank you for your continued interest in our efforts and for your support, and we look forward to keeping you informed of our continuing progress.

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

First question will be coming from Paul Matteis from Stifel.

Hi there. This is Julian on for Paul. Thanks so much for taking my question and congrats on the progress. Just wondering if you could provide a little bit of color on the pace of enrollment so far. What are you hearing from investigators about the demand in enrolling in the study? And I was wondering if these parallel studies share trial sites or anything else that you could share about the sites that you've chosen for each study? And then lastly, a quick one. Can you just remind us on the timing of when you expect to have data here? Previously, you've said you're targeting mid-'25 for PAL-3 and towards the end of 2025 for PAL-4. Just curious if you're still tracking towards that goal. Thank you.

Thanks, Julian. Appreciate the question. A couple of things there. I'll try to do them sort of in reverse order. In terms of timelines, still sticking with the guidance that we had previously laid out as you just articulated for PAL-3 and PAL-4 respectively. So we're happy that we were able to initiate both of the studies on time, as I noted, middle of the first half of this year for PAL-3 and the middle of the second half of this year for PAL-4. So there's tremendous excitement across the PIs and the site staff that we've been able now to bring together for PALISADE-3 and PALISADE-4, as you can imagine, on the other side of the PALISADE-2 success. We've got 16 sites now that are activated for PALISADE-3 and another dozen for PALISADE-4. So, the color I can give you is, again, this is a very important indication. It's very clear throughout the research community and a lot of these sites, of course, have psychiatrists that have been treating patients for a very long time, and they just haven't seen anything new in a very long time, let alone something for the acute treatment of social anxiety disorder, which is so important to this disorder is enabling people to engage and not have fear of engaging in the things that stress them in their life, that create anxiety and opportunity costs in their life because they're self-isolating or withholding from engaging. So it's a really exciting time across both studies. There's no overlap in the sites from either of the two studies. Of course, we've got sites from PALISADE-1 and PALISADE-2 that we've been very happy with from the past. So I'd say, overall, we are really excited to work with our CRO, with the sites, and with our internal team. We've really enhanced surveillance with our owned assets as well as augmenting that with what we've got as resources from the CRO. So there's a lot of intense training, with very close surveillance and adherence to the protocols, which is very important, obviously, to control variability. So I think overall, we're happy with how things are going. Josh, do you want to add anything to that?

Yes. I would just love to add a little bit of color to the PI excitement that you mentioned. We've now had in-person investigator meetings for both PALISADE-3 and PALISADE-4. What really comes out there is we have the opportunity to speak with PIs that are there and really express their excitement and enthusiasm to participate in a study like this that's really unlike any other study that they've done before or kind of have come across their plates now. So I just want to add that color that we really do see that excitement, enthusiasm, engagement from the PIs, and the desire to do these studies.

It's a good point, and that just came out. We had a recent town hall with the sites. It's something that we do from time to time where it's sort of like a fireside chat with me and the rest of the team. So keeping the momentum is always key when you're trying to execute efficiently a program, especially with parallel studies in motion. It always helps when what you're working on is at the leading edge of trying to treat people who've been dealing with this disorder for decades. But thanks for the question, Julian. Appreciate it.

Next in line will be coming from Andrew Tsai from Jefferies.

Hi, good afternoon. Thanks for the updates. Appreciate you taking my questions. Maybe a tangential question from before that was just asked. But for these Phase 3 studies, both of them that are underway, what are you seeing on the front lines that gives you the confidence it's definitely different this time for fasedienol? Maybe talk about how sites are operating, the rigor of these study protocols, whether public speaking challenge is being done correctly and so forth.

Thanks, Andrew. Appreciate the question. One thing, of course, is significantly different now than where we were even during PALISADE-2, let alone earlier than that during the pandemic, is just the ability to have person-to-person contact, to have in-person training, like Josh mentioned. In-person investigators meetings mean a tremendous amount to be able to regularly and predictably have site visits and also have subjects schedule each phase and each visit during their challenge sequence. It is all different. It is just fundamentally different. The attrition rates that we typically saw before at sites with site staff, we're just not seeing. Same thing with CROs. You're not seeing the kinds of things that would have been frustrating variability coming into a protocol that the recipe is pretty clear. When it's followed, it helps tremendously. So that plus things that you that we've talked about before, right? No masks involved, no COVID-related potential with the subjects in the study. So there are just fundamental things that are different on a macro basis and then site by site on a micro basis. Having the ability for the protocol to not be novel. This is something, of course, now that's on the third and fourth lapse within the research community. So the study design isn't new, the endpoint isn't new. So all those things have really helped, I think, with the pace of play and with the ability really to surveil and to hopefully make sure that we've got rigorous adherence to the protocol across all the sites. Josh...

And that said - go ahead, sorry.

No, I just want to give Josh a sense to add to it. Josh oversees the program primarily. So I want to give you a chance, Josh. Anything I missed?

Sure. We could add to what you said, and it kind of builds on the in-person piece. In addition to the in-person investigator meetings, we've had an in-person site initiation visit for every site, right? So it's kind of the double reinforcement of training at an investigator meeting and then a good three to four hours with the study staff in their site location, again, hitting all the key details and pieces and components of what it takes to properly execute a public speaking challenge. Through the monitoring that Shawn mentioned, there have been specific examples where we've identified something that wasn't being done quite right. The next day, there's an intervention, discussion, retraining, or reminder. Those are the kinds of things that could not happen in our prior PALISADE studies and are happening now, which gives us, again, that confidence that we're getting the right patients and that we're reducing variability across sites for the public speaking challenge.

Makes sense. In the unfortunate event that PALISADE-3 does not meet the statistics, do you still plan to proceed with and complete PALISADE-4, considering the experiences from PALISADE-1 and 2?

Yes, 100%. No question about it, Andrew. The whole program continues. That's what's the benefit of having a fully-funded program. We're in a spot now where in the very short order here, we will have initiated everything in '24 that we think we need to read out in '25 and that if positive, would support our NDA in the early part of '26 for fasedienol. So yes, absolutely 100%, regardless, both studies will be run to completion.

Thank you, again.

Our next question will be coming from Myles Minter from William Blair.

Hi everyone, thanks for taking my questions. I have three, so please bear with me. The first one is about the Phase 2b protocol in major depressive disorder. Are we still on track to submit it by the end of the year, or is it looking more like next year? The second question is regarding that MDD study; have you considered whether a caregiver or physician would administer the drug instead of self-administration, as I understand that's a consideration between PAL-3 and PAL-4? Or are you relying on multiple doses in the trial to balance that exposure? Lastly, in the healthy subject data presented at NEI regarding the electrogram depolarization, did you conduct self-administration dosing, or was it a mix with physician administration to show differences in those electrograms and drug exposure? I know that's a lot, but I would appreciate any thoughts.

Sure. Appreciate the questions, Myles. So as to the first one, we're working very closely with our KOLs and our internal team for the Phase 2b protocol. It still is the intention, and we're well down the road with it. We've got some key thoughts already under our belt as to how we want to see that study proceed. A lot of it is simply based on what we saw in the Phase 2a study and what we think are the unique attributes of itruvone in MDD, especially as it relates to folks with anxious depression. I think that is a target we likely will hit. If not, it will just creep maybe a little bit into January. But I think right now, we've had a very substantial bit of discussion across all the folks that we want to provide some input, and that protocol is well down the road. In terms of self-administration during the study, we don't see that. This is different. This is likely to be a 6-week study with twice daily administration. So on an outpatient basis by the folks, so they'll be self-administering it on an outpatient basis. As to the last question, Josh, I'll let you jump on that one.

Sure. Yes. The studies that we do in the lab with Dr. Monti, kind of our inventor of pherines, they're based on physician administration, and they really have to be because of the equipment that people are hooked up to. Sensors on the frontal lobe or receptors kind of in the nasal cavity, those things require a lot of precision to do the measurements and to reduce noise in those data capture. That's for that reason it has to be physician administered.

The studies are carried out at our headquarters in South San Francisco, where the subjects are lying down and the electrodes are positioned near the bridge of their nose, right at the location of the olfactory bulbs. As Josh mentioned, they are very sensitive, and the best approach is for Dr. Monti and the team to administer the IP.

Makes a ton of sense. Thanks for the questions. Congrats on the progress.

Our last question for today will be coming from Madison El-Saadi from B. Riley Securities.

Hi guys. Congrats on all the progress, and appreciate you taking my question. I guess, could you remind us what's gating to the hot flash study as well as a bit of a follow-up to the prior question? What's really gating to that Phase 2b? Then I noticed in the press release, you mentioned an increase in headcount. So I was just wondering if this was just kind of related to general activities across the enterprise or if that was more related to one specific program?

Thank you for the questions. I appreciate it. Regarding the gating for the PH80 study on vasomotor symptoms or hot flashes due to menopause, we are currently working on a U.S. IND-enabling program. The initial study was conducted in Mexico, and now we are performing the necessary nonclinical studies, CMC-related studies, and toxicology studies to bridge some of the earlier work to bring the program into the U.S. We're creating a completely new supply of PH80 for the clinical program, which is currently underway. Our goal is to submit an IND that will allow us to return to Phase 2 development in the U.S. Our future Phase 2 development will focus on hot flashes, as we see a significant opportunity there with no available nonsystemic and hormone-free options; the NK3 antagonists have certain limitations. The CMC and nonclinical work will help us prepare a regulatory package, which we aim to complete by the second quarter. On the MDD study, we are finishing up the protocol. We already have an open IND and Phase 1 support for the supply we developed. When we acquired these, we needed to start from scratch to complete the necessary CMC work and regulatory packages, and all those tasks have been completed. We are in the final stages of preparation for the MDD study. Currently, we have about 50 employees. As we expand clinical work, we've needed some additional general and administrative support, but most of this increase is related to research and development. A significant portion is due to owning the surveillance and training associated with the PALISADE-3 program, which allows us to enhance our confidence and ensure consistent surveillance, particularly for the PALISADE Phase 3 program, as well as for some pre-commercial activities on the CMC side. There's been a slight increase in G&A headcount related to finance. However, the majority of the increase is in R&D, which enables us to advance significantly across our lead development programs.

Operator, I believe that's all the time we have for questions today. Thank you, everyone. At this time, if you have any additional questions, please do not hesitate to contact us via e-mail at [email protected] or via the contact section of our website. We also encourage you to register for e-mail updates on our website to stay connected to the latest news. Again, thank you for participating on the call today. We appreciate everyone's interest and support. We look forward to keeping everyone updated on our ongoing progress. This concludes our call. Have a great day.

This concludes our conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great one, everyone.