Vistagen Therapeutics Inc

Previous wording

This Quarterly Report on Form 10-Q (Report) includes forward-looking statements. All statements contained in this Report other than statements of historical fact, including statements regarding our future outcomes and results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Our business is subject to significant risks including, but not limited to, our ability to obtain substantial additional financing, the results of our research and development efforts, the results of nonclinical and clinical testing, the effect of regulation by the U.S. Food and Drug Administration (the FDA) and other domestic and foreign regulatory agencies, our ability to obtain, maintain and enforce patents on our products once approved for marketing, the impact of competitive products, product development, commercialization potential and technological difficulties, the effect of our accounting policies, and other risks as detailed in the section entitled “Risk Factors” in this Report. Further, even if our product candidates appear promising at various stages of development, our share price may decrease such that we are unable to raise additional capital without significant dilution or other terms that may be unacceptable to our management and Board or disadvantageous to our stockholders.

Current wording

This Quarterly Report on Form 10-Q (Report) includes forward-looking statements. All statements contained in this Report other than statements of historical fact, including statements regarding our future outcomes and results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Our business is subject to significant risks including, but not limited to, our ability to obtain substantial additional financing, the results of our research and development efforts, the results of nonclinical and clinical testing, the effect of regulation by the U.S. Food and Drug Administration (the FDA) and other domestic and foreign regulatory agencies, our ability to obtain, maintain and enforce patents on our products once approved for marketing, the impact of competitive products, product development, commercialization potential and technological difficulties, the effect of our accounting policies, and other risks as detailed in the section entitled “Risk Factors” in this Report. Further, even if our product candidates appear promising at various stages of development, our share price may decrease such that we are unable to raise additional capital without significant dilution or other terms that may be unacceptable to our management and our Board of Directors (the Board) or disadvantageous to our stockholders.

Previous wording

Social anxiety disorder (SAD) is a highly prevalent serious and life-threatening psychiatric mental health disorder affecting approximately 12% of adults in the U.S. SAD often begins early in life, usually during adolescenceand persists for many years thereafter, with areported mean duration of about 20 years. Although a long-term disorder often arising during adolescence, SAD presents acutely when triggered by fear and anxiety of social and performance stressors in everyday life. When individuals are affected acutely by SAD in what most others consider non-threatening social and performance situations in everyday life, they experience extreme distress, fear, and impairment. People with SAD fear and are anxious about being embarrassed, judged, humiliated, negatively evaluated, and scrutinized by others. The disorder can disrupt family and social life, reduce self-esteem, and limit work efficiency. People with SAD may have few or no social or romantic relationships, making them feel powerless and ashamed. Their significant anxiety and distress often lead to avoidance of everyday social interactions and academic and vocational opportunities, resulting in loneliness, lack of personal and professional achievements and relationships, as well as economic hardships that potentially diminish a wide range of important aspects of a SAD patient’s daily life and add to societal burden. SAD has a lifetime comorbidity rate of approximately 81% with other serious psychiatric disorders. The pervasive effects of SAD often lead to depression and a sense of hopelessness, escalating what is sometimes perceived as extreme shyness to a life-altering mental illness. Those with SAD are at an increased risk of serious and life-threatening co-morbid depression, alcohol and substance abuse, suicidal ideation and suicide.

Current wording

Social anxiety disorder (SAD) is a highly prevalent, serious, and life-threatening psychiatric mental health disorder affecting over 30 million adults in the U.S. With onset typically early in life, usually during adolescence, SADpersists for many years thereafter, with areported mean duration of about 20 years. While often a long-term disorder, SAD can manifest acutely when triggered by anxiety-provoking social and performance situations. In those situations, individuals with SAD experience extreme anxiety, distress, fear, and impairment due to their fear of embarrassment, judgment, humiliation, negative evaluation, and scrutiny. The disorder can significantly disrupt family and social life, diminish self-esteem, and hinder work performance. People with SAD may struggle to form social or vocational relationships, which can lead to feelings of powerlessness and shame. The profound anxiety associated with SAD often results in avoidance of everyday interactions and opportunities in academic, social and vocational settings. This avoidance can lead to loneliness, a lack of personal and professional achievements and relationships, as well as economic difficulties, ultimately impacting various aspects of daily life and adding to societal burden. The pervasive effects of SAD often lead to depression and a sense of hopelessness, transforming what is sometimes perceived as extreme shyness into a debilitating mental illness. SAD has a lifetime comorbidity rate of approximately 81% with other serious psychiatric disorders, and individuals with SAD face an increased risk of serious and life-threatening co-morbid depression, substance abuse, suicidal ideation and suicide.

Previous wording

The three FDA-approved pharmacological therapies for SAD (two selective serotonin reuptake inhibitors (SSRIs), sertraline and paroxetine, and the serotonin and norepinephrine reuptake inhibitor (SNRI)), venlafaxine, have not been evaluated in controlled Phase 3 studies for the acute treatment of SAD, are not indicated for the acute treatment of SAD, and do not have a MOA conducive to producing a rapid-onset therapeutic benefit in an acute anxiety-provoking situation. Rather, the three FDA-approved treatments usually take several weeks following the start of daily systemic oral dosing to begin to produce a potential therapeutic benefit. Each treatment requires systemic uptake and long-term daily maintenance dosing, associated with well-documented unwanted side effects, such as gastrointestinal symptoms, agitation, sedation, sleep disturbances, weight changes, and sexual dysfunction, regardless of whether the SAD patient actually experiences social anxiety on a given day or is asymptomatic as to their SAD on that day and not in need of anti-anxiety medication.

Current wording

There is currently no FDA-approved pharmacological therapy for the acute treatment of SAD. While three medications are FDA-approved for treatment of SAD (two selective serotonin reuptake inhibitors (SSRIs), sertraline and paroxetine, and the serotonin and norepinephrine reuptake inhibitor (SNRI) venlafaxine) none has been evaluated in controlled Phase 3 studies or approved specifically for the acute treatment of SAD. These SSRI/SNRI medications lack MOAs conducive to rapid-onset therapeutic benefits in acute anxiety-provoking social and performance scenarios. Instead, they typically require several weeks of daily oral dosing to provide potential therapeutic effects. This long-term approach necessitates systemic absorption and ongoing maintenance dosing, which comes with well-documented side effects, including gastrointestinal issues, agitation, sedation, sleep disturbances, weight changes, and sexual dysfunction. These side effects persist regardless of whether an individual affected by SAD is experiencing anxiety-provoking social or performance situations on a given day.

Previous wording

FDA-approved pharmacological therapies that may be prescribed off-label for the acute treatment of SAD, including, beta blockers, tricyclic antidepressants, monoamine oxidase inhibitors (MAOIs), benzodiazepines, and modulators of GABAergic neurotransmission, require systemic uptake, and consequently, the potential neuropsychiatric and other safety risks related to systemic MOAs. Beta blockers can cause bradycardia, exacerbation of cardiac and/or pulmonary conditions, sleep disorder, dizziness, gastrointestinal symptoms, and fatigue. Tricyclic antidepressants commonly cause cardiac effects, anticholinergic effects, decreased seizure threshold, and can be life-threatening in overdose. MAOIs have severe drug-drug interactions that can cause serotonin syndrome and hypertensive crisis. As was well-documented by the FDA in its September 2020 Drug Safety Communication, the use of benzodiazepines is associated with considerable risk of abuse, misuse (including overdose), addiction, physical dependence, withdrawal effects, and mortality. The societal cost of benzodiazepine use is also high, given the need to treat the misuse and dependence problems, as well as serious complications related to withdrawal. Overall, significant limitations to the recurring acute treatment with these medication classes, each requiring systemic uptake, include numerous side effects, increased risk of mortality with overdose, potential drug-drug interactions, risks of misuse and dependence, and cognitive impairment. SAD patients may experience multiple distinct acute anxiety-provoking social or performance situations at different times during a single day. In those instances, there would be considerable safety concerns for SAD patients from repeated same-day acute use of these off-label pharmacological therapies.

Current wording

FDA-approved pharmacological therapies that may be prescribed off-label for the acute treatment of SAD, including benzodiazepines, beta blockers, tricyclic antidepressants, monoamine oxidase inhibitors (MAOIs), and modulators of GABAergic neurotransmission, require systemic absorption, and consequently, the potential neuropsychiatric and other safety risks related to systemic MOAs. Benzodiazepines, GABA-A receptor agonists, have a significant risk of abuse, addiction, and dependence, with serious complications related to withdrawal, as highlighted in the FDA’s September 2020 Drug Safety Communication. The societal cost of benzodiazepine use is also high, given the need to treat the misuse and dependence problems, as well as serious complications related to withdrawal. Beta blockers can lead to bradycardia, exacerbation of cardiac and/or pulmonary conditions, sleep disorder, dizziness, gastrointestinal symptoms, and fatigue. Tricyclic antidepressants commonly cause cardiac effects, anticholinergic effects, decreased seizure threshold, and can be life-threatening in overdose. MAOIs pose severe risks due to drug interactions that could result in serotonin syndrome or hypertensive crises. Overall, significant limitations to the recurring acute treatment with these pharmacological therapies, each requiring systemic uptake, include numerous side effects, increased risk of mortality with overdose, potential drug-drug interactions, risks of abuse, misuse and dependence, and cognitive impairment. Additionally, as individuals with SAD may encounter multiple anxiety-provoking situations during any given day, there are substantial safety concerns regarding the repeated same-day use of these therapies.

Previous wording

Fasedienol is a synthetic investigational neuroactive pherine nasal spray from the androstane family currently in Phase 3 clinical development for the acute treatment of SAD. The proposed MOA of fasedienol is fundamentally differentiated from all currently approved anti-anxiety medications. When administered intranasally in microgram-level doses, odorless and tasteless fasedienol activates receptors of peripheral nasal chemosensory neurons connected to subsets of neurons in the olfactory bulbs that, in turn, connect to neurons in the limbic amygdala involved in the pathophysiology of SAD, and potentially other acute anxiety and mood disorders. Fasedienol is pharmacologically active without requiring apparent systemic absorption or direct binding on neurons in the brain to achieve its rapid-onset and short-duration anxiolytic effects. Fasedienol does not exert effects on certain cellular receptors that are associated with known drug abuse liability potential (for example, dopamine and opiate receptors) when activated by certain other pharmaceutical compounds for neuropsychiatric and neurological disorders. Fasedienol also does not modulate GABA-A receptors. Because of its innovative non-systemic neurocircuitry-focused MOA, we believe fasedienol has the potential to achieve these rapid-onset anxiolytic effects on an as-needed basis rather than chronic daily dosing, and with a significantly reduced risk of unwanted side effects and safety concerns, such as potential drug-drug interactions, abuse, misuse, and addiction, associated with current oral and certain other systemically absorbed neuropsychiatric pharmaceuticals that act directly on neurons in the brain and are sometimes prescribed for acute treatment of SAD.

Current wording

Fasedienol, our lead product candidate, is a synthetic neuroactive intranasal pherine in an ongoing U.S. registration-directed Phase 3 clinical development program for the acute treatment of anxiety in adults with SAD. The proposed MOA of fasedienol is fundamentally differentiated from all FDA-approved anti-anxiety medications. When administered intranasally in microgram-level doses, neurocircuitry-focused fasedienol activates receptors of peripheral nasal chemosensory neurons connected to subsets of neurons in the olfactory bulbs that, in turn, connect to neural circuits in the limbic amygdala involved in the pathophysiology of SAD, and potentially other acute anxiety disorders. Neurocircuitry-focused fasedienol is pharmacologically active without requiring apparent systemic absorption or direct binding on neurons in the brain to achieve its rapid-onset anxiolytic effects. Fasedienol does not exert effects on certain cellular receptors that are associated with known drug abuse liability potential (for example, dopamine and opiate receptors) when activated by certain other pharmaceutical compounds for neuropsychiatric and neurological disorders. Unlike benzodiazepines, fasedienol does not potentiate GABA-A receptors. Because of its innovative non-systemic neurocircuitry-focused MOA, we believe fasedienol has the potential to achieve rapid-onset anxiolytic effects for individuals with SAD on an acute, as-needed basis, with a significantly reduced risk of unwanted side effects and safety concerns, such as potential drug-drug interactions, abuse, misuse, and addiction, associated with certain current oral and other systemically absorbed neuropsychiatric pharmaceuticals that act directly on neurons in the brain and are sometimes prescribed off-label for the acute treatment of SAD.

Previous wording

We believe fasedienol allows individuals affected by SAD to engage in stressful or previously avoided social or performance situations with fewer or less severe symptoms. Because of its rapid-onset non-systemic proposed MOA and pharmacological effect, a key and substantial difference between fasedienol and each of the three oral antidepressants approved by the FDA for the treatment of SAD is that fasedienol is being developed for the acute treatment of SAD. Acute treatment with fasedienol has the potential to reduce the wave of anxiety usually experienced by SAD patients before engaging in or during a feared social or performance situation.

Current wording

There is no FDA-approved pharmacological therapy for theacute treatment of SAD. We believe fasedienol has the potential to allow individuals affected by SAD to engage in stressful or previously avoided social or performance situations with fewer or less severe symptoms. Because of its rapid-onset non-systemic proposed MOA and pharmacological effect, a key and substantial difference between fasedienol and all other available therapies approved by the FDA is that fasedienol is being developed with potential to be the first FDA-approved acute treatment of SAD. Acute treatment with fasedienol has the potential to reduce the wave of anxiety usually experienced by SAD patients before engaging in and during a feared and anxiety-provoking social or performance situation.

Previous wording

We have aligned with the FDA that a clinic-based public speaking challenge and the Subjective Units of Distress Scale (SUDS) are the appropriate study design and primary efficacy endpoint, respectively, to measure anxiety immediately related to the specific stressor, and is the most appropriate and efficient path for our registration-directed PALISADE Phase 3 Program, which is focused on fasedienol’s potential to become the first FDA-approved acute treatment of SAD. Accordingly, the Phase 3 clinical trials in our PALISADE Phase 3 Program are randomized, double-blind, placebo-controlled, multi-center clinical trials designed to evaluate the efficacy, safety, and tolerability of a single dose of fasedienol to relieve anxiety symptoms in adult patients with SAD during a simulated, anxiety-provoking public speaking challenge conducted in a clinical setting, as measured using the patient-reported SUDS as the primary efficacy endpoint. Two of the Phase 3 trials in our PALISADE Phase 3 Program were previously concluded; PALISADE-1, concluded in 2022 and did not meet its primary endpoint, and PALISADE-2, concluded in 2023 and successfully met its primary endpoint, and as further described below, two Phase 3 trials, PALISADE-3 and PALISADE-4, are ongoing or will be initiated in 2024. Our PALISADE Phase 3 Program also includes open-label extension safety studies, a small Phase 2 repeat dose study (Repeat Dose Study), certain standard preclinical studies, and a small human factor study.

Current wording

We have aligned with the FDA that a clinic-based public speaking challenge and the Subjective Units of Distress Scale (SUDS) are the appropriate study design and primary efficacy endpoint, respectively, to measure anxiety immediately related to the specific stressor, and is the most appropriate and efficient path for our U.S. registration-directed PALISADE Phase 3 Program, which is focused on fasedienol’s potential to become the first FDA-approved acute treatment of anxiety for adults with SAD. The Phase 3 clinical trials in our PALISADE Phase 3 Program are randomized, double-blind, placebo-controlled, U.S. multi-center clinical trials designed to evaluate the efficacy, safety, and tolerability of a single dose of fasedienol to relieve anxiety symptoms in adult patients with SAD during a simulated, anxiety-provoking public speaking challenge conducted in a clinical setting, as measured using the patient-rated SUDS as the primary efficacy endpoint. Two of the Phase 3 trials in our PALISADE Phase 3 Program were previously concluded; PALISADE-1, reported in 2022 did not meet its primary endpoint, and PALISADE-2, reported in 2023 successfully met its primary efficacy endpoint, and as further described below, two Phase 3 trials, PALISADE-3 and PALISADE-4, are ongoing. Our PALISADE Phase 3 Program also includes open-label extension safety studies, a small Phase 2 repeat dose study (Repeat Dose Study), certain standard preclinical studies, and a small human factor study.

Previous wording

In early August 2023, we received and reported positive topline results from our PALISADE-2 Phase 3 trial of fasedienol for the acute treatment of SAD. Our PALISADE-2 Phase 3 trial met its primary efficacy endpoint, which was the difference in mean SUDS scores during the public speaking challenge at baseline (Visit 2) and treatment (Visit 3) for subjects treated with fasedienol versus placebo at Visit 3. Fasedienol-treated patients demonstrated a greater mean change from baseline (least-squares (LS) mean = -13.8) compared to placebo (LS mean = -8.0), for a statistically significant, and we believe clinically relevant, difference between groups of -5.8 (p=0.015). The trial also met its secondary endpoint, demonstrating a statistically significant difference in the proportion of clinician-assessed responders between fasedienol and placebo as measured by the Clinical Global Impressions – Improvement (CGI-I) scale. Responders were identified as those who were rated ‘very much less anxious’ or ‘much less anxious’ and 37.7% of fasedienol-treated patients were rated as responders, as compared to 21.4% of those treated with placebo (p=0.033). The trial also met an important exploratory patient-reported endpoint focused on the difference in the proportion of patient-assessed responders between fasedienol and placebo as measured by the Patient’s Global Impression of Change (PGI-C) scale. Responders were identified as those who self-rated ‘very much less anxious’ or ‘much less anxious’ and 40.6% of fasedienol-treated patients were rated as responders, as compared to 18.6% of those treated with placebo (p=0.003). Our PALISADE-2 trial also met an additional exploratory endpoint, the difference in the proportion of patients in each treatment group with a 20-point or greater improvement in patient-assessed SUDS score from baseline (Visit 2) to treatment (Visit 3). Of the fasedienol-treated patients, 35.7% demonstrated this statistically significant and clinically meaningful improvement in SUDS score, as compared to 18.6% in the placebo-treated group (p=0.020). Fasedienol was observed to be well-tolerated with no serious adverse events (SAEs), and the treatment-emergent adverse event (TEAE) profiles were comparable between fasedienol and placebo. Overall, no TEAEs, except for pyrexia in the placebo group (2.49%), was more prevalent than 2.0%.

Current wording

In early August 2023, we received and reported positive topline results from our PALISADE-2 Phase 3 trial of fasedienol for the acute treatment of anxiety in adults with SAD. Our PALISADE-2 Phase 3 trial met its primary efficacy endpoint, which was the difference in mean SUDS scores during the public speaking challenge at baseline (Visit 2) and treatment (Visit 3) for subjects treated with fasedienol versus placebo at Visit 3. Fasedienol-treated patients demonstrated a greater mean change from baseline (least-squares (LS) mean = -13.8) compared to placebo (LS mean = -8.0), for a statistically significant, and we believe clinically relevant, difference between groups of -5.8 (p=0.015). The trial also met its secondary endpoint, demonstrating a statistically significant difference in the proportion of clinician-assessed responders between fasedienol and placebo as measured by the Clinical Global Impressions – Improvement (CGI-I) scale. Responders were identified as those who were rated ‘very much less anxious’ or ‘much less anxious’ and 37.7% of fasedienol-treated patients were rated as responders, as compared to 21.4% of those treated with placebo (p=0.033). The trial also met an important exploratory patient-reported endpoint with a statistically significant difference in the proportion of patient-assessed responders between fasedienol and placebo as measured by the Patient’s Global Impression of Change (PGI-C) scale. Responders were identified as those who self-rated ‘very much less anxious’ or ‘much less anxious’ on the PGI-C and 40.6% of fasedienol-treated patients were rated as responders, as compared to 18.6% of those treated with placebo (p=0.003). Our PALISADE-2 trial also met an additional exploratory endpoint with a statistically significant difference in the proportion of patients in each treatment group with a 20-point or greater improvement in patient-assessed SUDS score from baseline (Visit 2) to treatment (Visit 3). Of the fasedienol-treated patients, 35.7% demonstrated this statistically significant improvement in SUDS score, as compared to 18.6% in the placebo-treated group (p=0.020). Fasedienol was observed to be well-tolerated with no serious adverse events (SAEs), and the treatment-emergent adverse event (TEAE) profiles were comparable between fasedienol and placebo. Overall, no TEAEs, except for pyrexia in the placebo group (2.49%), was more prevalent than 2.0%.

Previous wording

To complement our successful PALISADE-2 Phase 3 trial, we launched our PALISADE-3 Phase 3 trial at the end of March 2024 and we are on track to launch our PALISADE-4 Phase 3 trial in the second half of 2024. Like PALISADE-2 and PALISADE-3, PALISADE-4 will be, a multi-center, randomized, double-blind, placebo-controlled study designed to evaluate the efficacy, safety, and tolerability of the acute administration of fasedienol to relieve anxiety symptoms in adult patients with SAD after a single dose of fasedienol during a simulated, anxiety-provoking public speaking challenge conducted in a clinical setting, as measured using the patient-reported SUDS as the primary efficacy endpoint. In addition, both PALISADE-3 and PALISADE-4 will have an open-label extension for a period of up to 12 months. We are also planning to initiate the Repeat Dose Study in the second half of 2024. This study will be a small multi-center, randomized, double-blind, placebo-controlled, three-arm Phase 2 clinical trial designed to evaluate repeated dosing (up to two doses within ten minutes) of fasedienol in adult patients with SAD during a single, simulated, anxiety-provoking public speaking challenge in a clinical setting. The Repeat Dose Study will also have an open-label extension for a period of up to 12 months.

Current wording

To complement our successful PALISADE-2 Phase 3 trial, we launched our PALISADE-3 Phase 3 trial at the end of March 2024 and launched our PALISADE-4 Phase 3 trial in September 2024. Like PALISADE-2, PALISADE-3 and PALISADE-4 are U.S. multi-center, randomized, double-blind, placebo-controlled Phase 3 studies designed to evaluate the efficacy, safety, and tolerability of the acute administration of fasedienol to relieve anxiety symptoms in adults with SAD after a single dose of fasedienol during a simulated, anxiety-provoking public speaking challenge conducted in a clinical setting, as measured using the patient-reported SUDS as the primary efficacy endpoint. In addition, both PALISADE-3 and PALISADE-4 have an open-label extension for a period of up to 12 months. We are planning to initiate the Repeat Dose Study during the second half of 2024. This study will be a small multi-center, randomized, double-blind, placebo-controlled, three-arm Phase 2 clinical trial designed to evaluate repeated dosing (up to two doses within ten minutes) of fasedienol in adult patients with SAD during a single, simulated, anxiety-provoking public speaking challenge in a clinical setting. The Repeat Dose Study will also have an open-label extension for a period of up to 12 months.

Previous wording

We believe either PALISADE-3 or PALISADE-4, if successful, together with PALISADE-2, may establish substantial evidence of the effectiveness of fasedienol in support of a potential fasedienol New Drug Application (NDA) submission to the FDA for the acute treatment of SAD. The FDA has designated fasedienol as a Fast Track product candidate.

Current wording

We believe either PALISADE-3 or PALISADE-4, if successful, together with PALISADE-2, may establish substantial evidence of the effectiveness of fasedienol in support of a potential fasedienol New Drug Application (NDA) submission to the FDA for the acute treatment of anxiety in adults with SAD.

Previous wording

Depression is a serious medical illness and a global public health concern that can occur at any time during a person's life. According to the World Health Organization (WHO), depression is the leading cause of disability worldwide, affecting over 250 million people. Statistics reported by the U.S. National Institute of Mental Health (NIMH) indicate that approximately 21 million adults in the U.S., or approximately 8.4% of all adults in the U.S., had at least one major depressive episode in 2020. While most people will experience a depressed mood at some point during their lifetime, MDD is different. MDD is the chronic, pervasive feeling of utter unhappiness and suffering, which impairs daily functioning. In typical depressive episodes, an individual experiences depressed mood, loss of interest and enjoyment, and reduced energy leading to diminished activity and impaired daily functioning for at least two weeks and often much longer. Symptoms of MDD also may include diminished pleasure in activities, changes in appetite that result in weight changes, insomnia or oversleeping, psychomotor agitation, loss of energy or increased fatigue, feelings of worthlessness or inappropriate guilt, difficulty thinking, concentrating or making decisions, and thoughts of death or suicide and attempts at suicide. MDD is the psychiatric diagnosis most commonly associated with suicide.

Current wording

Depression is a serious medical condition and a global public health concern that can arise at any time during a person's life. According to the World Health Organization (WHO), depression is the leading cause of disability worldwide, affecting over 250 million people. Statistics reported by the U.S. National Institute of Mental Health (NIMH) indicate that approximately 21 million adults in the U.S., or approximately 8.4% of all adults in the U.S., experienced at least one major depressive episode in 2020. While many individuals will experience a depressed mood at some point during their lifetime, MDD is different. MDD is the chronic, pervasive feeling of utter unhappiness and suffering, which impairs daily functioning. During a typical depressive episode, an individual experiences depressed mood, loss of interest and enjoyment, and reduced energy leading to diminished activity and impaired daily functioning for at least two weeks and often much longer. Symptoms of MDD can include a lack of pleasure in activities, changes in appetite resulting in weight fluctuations, insomnia or excessive sleeping, psychomotor agitation, loss of energy or increased fatigue, feelings of worthlessness or inappropriate guilt, difficulty thinking, concentrating or making decisions, and thoughts of death or suicide and attempts at suicide. MDD is the psychiatric diagnosis most commonly associated with suicide.

Previous wording

For many people, depression cannot be controlled for any length of time without treatment. However, approximately two out of every three depression sufferers do not receive adequate therapeutic benefits from their initial treatment with a standard antidepressant, and the likelihood of achieving remission of depressive symptoms declines with each successive treatment attempt. Even after multiple treatment attempts with current antidepressants, approximately one-third of depression sufferers still fail to find an adequately effective therapy.

Current wording

For many people, depression cannot be controlled for any length of time without treatment. However, approximately two out of every three people with depression do not experience adequate therapeutic benefits from their initial treatment with a standard antidepressant. Furthermore, the likelihood of achieving remission of depressive symptoms decreases with each successive treatment attempt. Even after multiple treatment attempts with current antidepressants, about one-third of individuals with depression still do not find a sufficiently effective therapy.

Previous wording

Inadequate response to current treatments is among the key reasons MDD is one of the leading public health concerns in the U.S., creating a significant unmet medical need for new agents with fundamentally differentiated MOAs and safety profiles.

Current wording

Inadequate response to current treatments is among the key reasons MDD is one of the leading public health concerns in the U.S., creating a significant unmet medical need for new agents with fundamentally differentiated MOAs and differentiated safety.

Previous wording

Itruvone is an odorless, tasteless synthetic investigational neuroactive pherine from the pregnane family with a novel, rapid-onset proposed neurocircuitry-focused MOA that is fundamentally differentiated from the MOA of all currently approved treatments for depression disorders. Itruvone is administered intranasally at low microgram-level doses and is designed to engage and activate chemosensory neurons in the nasal cavity, which are connected to neural circuits in the brain that produce antidepressant effects. Specifically, in a manner similar to fasedienol, itruvone’s proposed MOA involves the regulation of the olfactory-to-amygdala neural circuitry, but, unlike fasdienol, itruvone is believed to increase the activity of the limbic-hypothalamic sympathetic nervous system and increase the release of catecholamines. Unlike all currently approved antidepressant therapies, we believe itruvone does not require systemic absorption or binding to neurons in the brain to produce antidepressant effects and achieve those antidepressant effects without the side effects and safety concerns that may be associated with current antidepressant therapies, including, among others, sexual side effects, sedation, weight gain and suicidal ideation.

Current wording

Itruvone is our synthetic neuroactive pherine product candidate with a novel, rapid-onset neurocircuitry-focused proposed MOA that is fundamentally differentiated from the MOA of all currently approved treatments for depression disorders. Itruvone is administered intranasally at low microgram-level doses and is designed to engage and activate chemosensory neurons in the nasal cavity, which are connected to neural circuits in the brain that produce antidepressant effects. Specifically, in a manner similar to fasedienol, itruvone’s proposed MOA involves the regulation of the olfactory-to-amygdala neural circuitry, but, unlike fasedienol, itruvone is believed to increase the activity of the limbic-hypothalamic sympathetic nervous system and increase the release of catecholamines. Unlike all currently approved antidepressant therapies, we believe itruvone does not require systemic absorption or binding to neurons in the brain to produce antidepressant effects and achieve those antidepressant effects without the side effects and safety concerns that may be associated with current systemic antidepressant therapies, including, among others, drug-drug interactions, sexual side effects, sedation, weight gain and suicidal ideation.

Previous wording

With its potential for rapid-onset activity at a microgram-level dose that we believe does not require systemic absorption and distribution to achieve sustained antidepressant effects, as well as a favorable safety profile observed in all studies completed to date that is differentiated from current pharmacological therapies for depression, we believe itruvone has transformative potential as an innovative stand-alone treatment for MDD and presents potential opportunities for development in multiple additional depression disorders, including postpartum depression, treatment-resistant depression, and suicidal ideation.

Current wording

With its potential for rapid-onset activity at a microgram-level dose without requiring systemic absorption and distribution to achieve antidepressant effects, and favorable safety data observed in all studies completed to date that is differentiated from current pharmacological therapies for depression, we believe itruvone has transformative potential as an innovative stand-alone treatment for MDD.

Previous wording

In a randomized, double-blind, placebo-controlled parallel design exploratory Phase 2A clinical trial of itruvone in MDD, the results of which were published in the peer-reviewed British Journal of Pharmaceutical and Medical Research, at a 6.4 μg dose administered intranasally twice daily for eight weeks, itruvone significantly reduced depressive symptoms as early as one week based on the 17-item Hamilton Depression Scale (HAM-D-17) scores compared to placebo (p=0.022). Itruvone was well-tolerated and did not cause psychological side effects (such as dissociation or hallucinations), sexual side effects, weight gain, or other safety concerns that may be associated with other approved pharmacological therapies for MDD. The trial was sponsored by Pherin Pharmaceuticals, Inc (Pherin), now our wholly-owned subsidiary, and was conducted in Mexico prior to our acquisition of Pherin in February 2023. Positive data from our recent U.S. Investigational New Drug (IND) enabling Phase 1 trial of itruvone demonstrated that there were no reported treatment-related SAEs or discontinuations due to adverse events in the trial. Overall, itruvone was well-tolerated and continued to demonstrate the favorable safety profile seen in all clinical trials to date. As a result, building on the positive results from Phase 2A development of itruvone in MDD, we are currently preparing and planning for U.S. Phase 2B clinical development of itruvone under our U.S. IND as a novel, non-systemic stand-alone treatment for MDD.

Current wording

In a randomized, double-blind, placebo-controlled parallel design exploratory Phase 2A clinical trial of itruvone as a stand-alone treatment for MDD, the results of which were published in the peer-reviewed British Journal of Pharmaceutical and Medical Research, at a 6.4 microgram dose administered intranasally twice daily for eight weeks, itruvone significantly reduced depressive symptoms as early as one week based on the 17-item Hamilton Depression Scale (HAM-D-17) scores compared to placebo (p=0.022). Itruvone was well-tolerated and did not cause psychological side effects (such as dissociation or hallucinations), sexual side effects, weight gain, or other safety concerns that may be associated with other approved pharmacological therapies for MDD. The trial was sponsored by Pherin Pharmaceuticals, Inc (Pherin), now our wholly-owned subsidiary, and was conducted in Mexico prior to our acquisition of Pherin in February 2023. Positive data from our recent U.S. Investigational New Drug (IND) enabling Phase 1 trial of itruvone demonstrated that there were no reported treatment-related SAEs or discontinuations due to adverse events in the trial. Overall, itruvone was well-tolerated and continued to demonstrate the favorable safety data in all clinical trials to date. As a result, building on the positive results from Phase 2A clinical development of itruvone in MDD, we are currently preparing and planning for U.S. Phase 2B clinical development of itruvone under our U.S. IND as a novel, non-systemic stand-alone treatment for MDD.

Previous wording

Vasomotor symptoms are sudden feelings of warmth in the face, neck, and chest, or sudden intense feelings of heat and sweating (hot flashes) commonly experienced by women in menopause. Presentation of hot flashes is directly linked to changes in hormone levels due to menopause, or menopause induced by other medical treatments or co-existing conditions, and the causal mechanism is unclear. Hot flashes are the most common symptom of the menopausal transition, affecting about 75% of menopausal women and about 40% of women in perimenopause. Prevalence of hot flashes is estimated to be about 20 million women in the U.S. with nine million women estimated to be suffering from severe hot flashes. Current pharmacotherapies to treat hot flashes include hormonal therapy (estrogen with or without progesterone, or a synthetic progestin), gabapentins, certain antidepressants, clonidine, and fezolinetant, a neurokinin 3 (NK3) receptor antagonist, all of which require systemic absorption and are associated with certain potentially serious side effects and safety concerns.

Current wording

Vasomotor symptoms are sudden feelings of warmth in the face, neck, and chest, or sudden intense feelings of heat and sweating (hot flashes) commonly experienced by women in menopause. Presentation of hot flashes is directly linked to changes in hormone levels due to menopause, or menopause induced by other medical treatments or co-existing conditions, and the causal mechanism is unclear. Hot flashes are the most common symptom of the menopausal transition, affecting about 75% of menopausal women and about 40% of women in perimenopause. Prevalence of hot flashes is estimated to be about 20 million women in the U.S. with nine million women estimated to be suffering from severe hot flashes. Current pharmacotherapies to treat hot flashes include hormonal therapy (estrogen with or without progesterone, or a synthetic progestin), gabapentin, certain antidepressants, clonidine, and fezolinetant, a neurokinin 3 (NK3) receptor antagonist, all of which require systemic absorption and are associated with certain potentially serious side effects and safety concerns.

Previous wording

PH80 is a hormone-free, odorless, tasteless synthetic investigational neuroactive pherine nasal spray with a novel, rapid-onset potential MOA that is fundamentally differentiated from all currently approved treatments for vasomotor symptoms (hot flashes) due to menopause and other women’s health indications. Microgram-level doses of PH80, administered as a nasal spray, engage and activate chemosensory neurons in the nasal cavity connected to neural circuits in the basal forebrain associated with the control of body temperature.

Current wording

PH80 is our hormone-free synthetic neuroactive intranasal pherine product candidate with a novel, rapid-onset proposed MOA that is fundamentally differentiated from all currently approved treatments for vasomotor symptoms (hot flashes) due to menopause. Microgram-level doses of PH80, administered as a nasal spray, engage and activate chemosensory neurons in the nasal cavity connected to neural circuits in the basal forebrain associated with the control of body temperature.

Previous wording

According to the National Institutes of Health (NIH), 5% to 8% of menarcheal individuals have moderate-to-severe symptoms that can cause significant distress and functional impairment, suggestive of premenstrual dysphoric disorder (PMDD), a severe, sometimes disabling extension of premenstrual syndrome (PMS). PMDD symptoms usually begin in the luteal phase (approximately seven to ten days before a person’s period starts) and continue for the first few days of the period. Like PMS, PMDD can cause bloating, breast tenderness, fatigue, and changes in sleep and eating habits, but distinctively, it can also cause extreme mood shifts that can disrupt daily life and damage relationships. The cause of PMDD is not clearly understood, but it is thought that neurotransmitter systems may trigger PMDD. Brain areas that regulate emotion and behavior are studded with receptors for estrogen, progesterone, and other sex hormones. These hormones affect the functioning of neurotransmitter systems that influence mood and thinking, possibly triggering PMDD. Treatment of PMDD is aimed at preventing or minimizing symptomology.

Current wording

According to the National Institutes of Health (NIH), 5% to 8% of menarcheal individuals have moderate-to-severe symptoms that can cause significant distress and functional impairment, suggestive of premenstrual dysphoric disorder (PMDD), a severe, sometimes disabling extension of premenstrual syndrome (PMS). PMDD symptoms usually begin in the luteal phase (approximately seven to ten days before a person’s period starts) and continue for the first few days of the period. Like PMS, PMDD can cause bloating, breast tenderness, fatigue, and changes in sleep and eating habits, but distinctively, it can also cause extreme mood shifts that can disrupt daily life and damage relationships. The cause of

Previous wording

PH15 is an odorless, tasteless synthetic investigational neuroactive pherine with a novel, rapid-onset proposed MOA that is differentiated from the MOA of all currently approved treatments to improve psychomotor or cognitive impairment caused by mental fatigue. PH15’s proposed MOA targets nasal receptors that activate olfactory-amygdala and olfactory hippocampus neural circuits in the limbic system that are known to be associated with psychomotor activity and cognition, without requiring systemic absorption or direct action on neurons in the brain. PH15 has demonstrated an excellent safety profile in all clinical trials completed to date.

Current wording

PH15 is our synthetic neuroactive intranasal pherine product candidate with a novel, rapid-onset proposed MOA that is differentiated from the MOA of all currently approved treatments to improve psychomotor or cognitive impairment caused by mental fatigue. PH15’s proposed MOA targets nasal receptors that activate olfactory-to-amygdala and olfactory-to-hippocampus neural circuits in the limbic system that are known to be associated with psychomotor activity and cognition, without requiring systemic absorption or direct action on neurons in the brain. PH15 has demonstrated excellent safety data in all clinical trials completed to date.

Previous wording

In a randomized, double-blind, placebo-controlled, crossover Phase 2A pilot study designed to explore the efficacy, safety, and tolerability of intranasal administration of PH15 on psychomotor performance as measured by reaction time in sleep-deprived participants, PH15 demonstrated a statistically significant improvement in reaction time compared to placebo and caffeine in the sleep-deprived study participants. This study of PH15 was sponsored by Pherin and conducted at the

Current wording

In a randomized, double-blind, placebo-controlled, crossover Phase 2A pilot study designed to explore the efficacy, safety, and tolerability of intranasal administration of PH15 on psychomotor performance as measured by reaction time in sleep-deprived participants, PH15 demonstrated a statistically significant improvement in reaction time compared to placebo and caffeine in the sleep-deprived study participants. This study of PH15 was sponsored by Pherin and conducted at the National Institute of Psychiatry, Sleep Disorders Clinic in Mexico City, Mexico prior to our acquisition of Pherin in February 2023.

Previous wording

We are currently evaluating the potential Phase 2 development path forward for PH15 and a nonclinical program required to support our submission of a U.S. IND to facilitate further potential Phase 2 development of PH15 in the U.S.

Current wording

We are currently evaluating the potential Phase 2 development path forward for PH15 and the nonclinical program required to support submission of a U.S. IND to facilitate further potential Phase 2 development of PH15 in the U.S.

Previous wording

Cachexia (also known as wasting syndrome) is a serious but under-recognized and complex syndrome associated with asymmetric energy supply from food and metabolism. It is characterized by significant fatigue, lack of hunger, and loss of appetite, weight, and muscle mass, most often affecting individuals with a severe chronic condition, such as cancer and or heart disease. It is estimated that cachexia from any disease affects more than five million people in the U.S. The prevalence of cachexia is growing and is estimated at 1% of the U.S. population. Currently, there is no specific treatment for cachexia. Current appetite stimulant medications such as stimulants and cannabinoids are used to treat cachexia to increase food intake, and steroids are sometimes used to stop muscle wasting, but all current options may have detrimental side effects.

Current wording

Cachexia (also known as wasting syndrome) is a serious but under-recognized and complex syndrome associated with asymmetric energy supply from food and metabolism, often a consequence of many chronic diseases with body mass loss of >10%. It is characterized by significant fatigue, lack of hunger, and loss of appetite, weight, and muscle mass, most often affecting individuals with a severe chronic condition, such as cancer and or heart disease. It is estimated that cachexia from any disease affects more than five million people in the U.S. The prevalence of cachexia is growing and is estimated at 1% of the U.S. population. Currently, there is no specific treatment for cachexia. Current appetite stimulant medications such as stimulants and cannabinoids are used to treat cachexia to increase food intake, and steroids are sometimes used to stop muscle wasting, but all current options may have detrimental side effects.

Previous wording

PH284 is an odorless, tasteless synthetic investigational neuroactive pherine nasal spray with a novel, rapid-onset potential MOA that is fundamentally differentiated from the MOA of all current treatments for the loss of appetite associated with chronic disorders, such as cancer or heart disease. Cachexia is a serious but under-recognized consequence of many chronic diseases with body mass loss of >10% and a prevalence of 5 to 15 %. We believe PH284 may have therapeutic potential for improving subjective feelings of hunger in patients with cachexia. We are currently evaluating the potential path forward for PH284, including an assessment of completed studies and studies we believe are necessary to support a U.S. IND for potential further Phase 2 clinical development of PH284 for the treatment of cachexia, including the appropriate patient populations for demonstrating an increase in appetite and weight gain.

Current wording

PH284 is an odorless, tasteless synthetic investigational neuroactive pherine nasal spray with a novel, rapid-onset potential MOA that is fundamentally differentiated from the MOA of all current treatments for the loss of appetite associated with chronic disorders, such as cancer or heart disease. We believe PH284 may have therapeutic potential for improving subjective feelings of hunger in patients with cachexia. We are currently evaluating the potential path forward for PH284, including an assessment of completed studies and studies we believe are necessary to support a U.S. IND for potential further Phase 2 clinical development of PH284 for the treatment of cachexia, including the appropriate patient populations for demonstrating an increase in appetite and weight gain.

Previous wording

AV-101 (4-Cl-KYN) is a novel, oral prodrug that targets the NMDAR (N-methyl-D-aspartate receptor), an ionotropic glutamate receptor in the brain. Abnormal NMDAR function is associated with numerous neurological diseases and disorders. The active metabolite of AV-101, 7-chloro-kynurenic acid (7-Cl-KYNA), is a potent and selective full antagonist of the glycine binding site of the NMDAR that inhibits the function of the NMDAR. Unlike ketamine and many other NMDAR antagonists, 7-Cl-KYNA is not an ion channel blocker. In clinical and nonclinical testing completed to date, AV-101 has demonstrated good oral bioavailability and an excellent pharmacokinetic (PK) profile. No binding of AV-101 or 7-Cl-KYNA to off-site targets was identified by an extensive receptor screening study. Moreover, in all clinical trials completed to date, AV-101 has been safe and very well-tolerated with no psychological side effects or safety concerns and no treatment-related SAEs that are often observed with classic channel-blocking NMDAR antagonists such as ketamine and amantadine. Nonclinical results also indicate that chronic administration of 4-Cl-KYN induces hippocampal neurogenesis, a hallmark of drugs that have anti-depressive effects, and increases endogenous levels of KYNA, which also is a functional NMDAR glycine site antagonist.

Current wording

AV-101 (4-Cl-KYN) is our novel, oral prodrug candidate that targets the NMDAR (N-methyl-D-aspartate receptor), an ionotropic glutamate receptor in the brain. Abnormal NMDAR function is associated with numerous neurological diseases and disorders. The active metabolite of AV-101, 7-chloro-kynurenic acid (7-Cl-KYNA), is a potent and selective full antagonist of the glycine binding site of the NMDAR that inhibits the function of the NMDAR. Unlike ketamine and many other NMDAR antagonists, 7-Cl-KYNA is not an ion channel blocker. In clinical and nonclinical testing completed to date, AV-101 has demonstrated good oral bioavailability and an excellent pharmacokinetic (PK) profile. No binding of AV-101 or 7-Cl-KYNA to off-site targets was identified by an extensive receptor screening study. Moreover, in all clinical trials completed to date, AV-101 has been safe and very well-tolerated with no psychological side effects or safety concerns and no treatment-related SAEs that are often observed with classic channel-blocking NMDAR antagonists such as ketamine and amantadine. Nonclinical results also indicate that chronic administration of 4-Cl-KYN induces hippocampal neurogenesis, a hallmark of drugs that have anti-depressive effects, and increases endogenous levels of KYNA, which also is a functional NMDAR glycine site antagonist.

Previous wording

Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (Annual Report), as filed with the SEC on June 11, 2024. There have been no changes in significant accounting estimates during the three months ended June 30, 2024, since those disclosed in our Form 10-K.

Current wording

Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (Annual Report), as filed with the SEC on June 11, 2024. There have been no changes in significant accounting estimates during the six months ended September 30, 2024, since those disclosed in our Annual Report.

Previous wording

Since inception, we have devoted substantial resources to advancing initiatives related to research, development, and contract manufacturing of our neuroscience pipeline, including initiatives related to manufacturing processes, analytical methods and production programs for drug substance and finished drug product, as well as for preclinical studies and clinical studies focused on potential commercialization of these product candidates, with substantial recent emphasis on fasedienol and itruvone for neuropsychiatric indications. During the year ended March 31, 2024, we launched our PALISADE-3 clinical trial as part of our PALISADE Phase 3 Program evaluating fasedienol for the acute treatment of anxiety in adults with SAD. In the first quarter of our fiscal year ending March 31, 2025, we continued to focus our efforts substantially on fasedienol, advancing our registration-directed PALISADE Phase 3 program for fasedienol in SAD, including initiating our PALISADE-3 Phase 3 clinical trial, and preparing to initiate our PALISADE-4 Phase 3 clinical trial. In addition, we are continuing to conduct various preclinical and clinical studies and manufacturing activities for other investigational pherine product candidates. We also have ongoing initiatives for creating, protecting and patenting intellectual property (IP) related to our neuroscience product candidates and technologies and raising sufficient working capital to fund these studies, initiatives, and other activities. At June 30, 2024, we had an accumulated deficit of approximately $366.9 million. Our net loss for the year ended March 31, 2024 (Fiscal 2024) and the year ended March 31, 2023 (Fiscal 2023) was approximately $29.4 million and $59.2 million, respectively, and we incurred a net loss of approximately $10.7 million for the three months ended June 30, 2024. We expect losses to continue for the foreseeable future as we engage in further research, development, manufacturing and regulatory activities related to fasedienol, itruvone, PH80 and potentially our other neuroscience product candidates. We have not yet achieved revenue-generating status from any of our product candidates or technologies in amounts sufficient to sustain our operations and enable our strategic business plans.

Current wording

Since inception, we have devoted substantial resources to advancing initiatives related to research, development, and contract manufacturing of our neuroscience pipeline, including initiatives related to manufacturing processes, analytical methods and production programs for drug substance and finished drug product, as well as for preclinical studies and clinical studies focused on potential commercialization of our product candidates, with substantial recent emphasis on fasedienol, itruvone, and PH80. During the year ended March 31, 2024, we launched our PALISADE-3 clinical trial as part of our PALISADE Phase 3 Program evaluating fasedienol for the acute treatment of anxiety in adults with SAD, and during the six months ended September 30, 2024, we initiated our PALISADE-4 Phase 3 clinical trial for the same indication. In addition, we are continuing to conduct various nonclinical studies and contract manufacturing activities involving other product candidates in our neuroscience pipeline. We also have ongoing initiatives for creating, protecting and patenting intellectual property (IP) related to our neuroscience product candidates and technologies. At September 30, 2024, we had an accumulated deficit of approximately $379.9 million. Our net loss for the year ended March 31, 2024 (Fiscal 2024) and the year ended March 31, 2023 (Fiscal 2023) was approximately $29.4 million and $59.2 million, respectively, and we incurred a net loss of approximately $23.7 million for the six months ended September 30, 2024. We expect losses to continue for the foreseeable future as we engage in further research, clinical development, contract manufacturing and regulatory activities related to fasedienol, itruvone, PH80 and our other neuroscience product candidates. We have not yet achieved revenue-generating status from any of our product candidates or technologies in amounts sufficient to sustain our operations and enable our strategic business plans.

Previous wording

The following table summarizes the results of our operations for the three months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes the results of our operations for the three and six months ended September 30, 2024 and 2023 (in thousands):

Previous wording

We recognized $0.1 million in sublicense and other revenue for the three months ended June 30, 2024, as compared to $0.2 million for the three months ended June 30, 2023.

Current wording

We recognized $0.2 million and $0.3 million in sublicense and other revenue for the three and six months ended September 30, 2024, as compared to $0.3 million and $0.5 million for the three and six months ended September 30, 2023, respectively.

Previous wording

Absent the achievement of milestones under the existing collaboration and other revenue arrangements, or the execution of similar agreements in the future, if any, we expect sublicense and other revenue to stay consistent in future periods.

Current wording

Absent the achievement of milestones under the existing collaboration and other revenue arrangements, including our agreements with AffaMed Therapeutics, Inc. and/or Fuji Pharma Co., Ltd., or the execution of similar agreements in the future, if any, we expect sublicense and other revenue to stay consistent in future periods.

Previous wording

2023 was primarily due to an increase in clinical and development expense of $2.0 million, primarily related to the commencement of our PALISADE-3 Phase 3 clinical trial of fasedienol in SAD and costs related to preparations for the initiation of our PALISADE-4 Phase 3 trial of fasedienol in SAD, an increase in headcount costs of $1.1 million, and an increase in consulting and professional fees of $0.2 million.

Current wording

The increase of $9.8 million in research and development expense for the six months ended September 30, 2024 as compared to the same period in Fiscal 2023 was primarily due to an increase in clinical development expense of $6.7 million, related to our PALISADE-3 and PALISADE-4 Phase 3 clinical trials of fasedienol in SAD, an increase of $2.4 million in connection with increased headcount, and an increase of $0.4 million in consulting and professional expense.

Previous wording

We expect that our research and development expense will increase substantially over the next several years as we advance our broad an diverse pipeline of pherine product candidates through IND-enabling non-clinical studies. clinical trials, and manufacturing activities required to facilitate further development of our current pherine product candidates, expand our pherine pipeline, maintain, expand, protect and enforce our intellectual property portfolio, and hire additional personnel.

Current wording

We expect that our research and development expense will increase over the next several years as we continue to advance our broad and diverse neuroscience pipeline through IND-enabling non-clinical studies, clinical trials, and contract manufacturing and regulatory activities required to facilitate further research and development of our current pherine product candidates and additional pherine product candidates, maintain, expand, protect and enforce our intellectual property portfolio, and hire additional headcount.

Previous wording

General and administrative expenses were $4.6 million and $3.0 million for the three months ended June 30, 2024 and 2023, respectively. The increase in general and administrative expense of $1.6 million, as compared to the same period in 2023, was primarily due to an increase in headcount costs of $0.8 million in connection with the increased headcount to support development operations, and an increase in consulting and professional fees of $0.7 million.

Current wording

The increase of $2.6 million in general and administrative expense for the six months ended September 30, 2024, as compared to the same period in Fiscal 2023, was primarily due to an increase of $1.6 million in connection with increased headcount, and an increase of $0.7 million in consulting and professional fees.

Previous wording

We expect that our general and administrative expense will increase substantially over the next several years as we hire additional personnel to support the growth of our business and incur additional expenses associated with being a public company.

Current wording

We expect that our general and administrative expense will increase over the next several years as we hire additional personnel to support the development of our drug candidates and the growth of our business.

Previous wording

Interest income, net, increased in the three months ended June 30, 2024 as compared with the same period in 2023 due to increases in interest rates as well as larger cash balances when compared to prior periods.

Current wording

Interest income, net, increased in the three and six months ended September 30, 2024 as compared with the same periods in Fiscal 2023 due to increases in interest rates and larger cash balances when compared to prior periods.

Previous wording

In May 2021, we entered into an Open Market Sale Agreement (the Sales Agreement) with Jefferies LLC (Jefferies) as sales agent, with respect to an at-the-market offering program (the ATM) under which we were permitted, at our option, to offer and sell, from time to time, shares of our common stock (the Shares) having an aggregate offering price of up to $75.0 million. During the fiscal year ended March 31, 2024, we sold 4,698,495 Shares under the terms of our Sales Agreement for net cash proceeds of approximately $36.2 million. In February 2024, increased the remaining available aggregate offering price of our common stock under the Sales Agreement to $100 million.

Current wording

In May 2021, we entered into an Open Market Sale Agreement (the Sales Agreement) with Jefferies LLC (Jefferies) which enabled us, in our sole discretion, to offer and sell, from time to time, shares of our common stock for aggregate gross proceeds of up to $75.0 million. To date, we have sold 4,698,495 Shares under the terms of our Sales Agreement for net cash proceeds of approximately $36.2 million. In February 2024, the aggregate gross proceeds available under the Sales Agreement was increased to $100 million. As of September 30, 2024, $100.0 million of common stock remained available for sale under the Sales Agreement.

Previous wording

In addition, we received net proceeds of approximately $93.5 million from an underwritten public offering of securities in October 2023 (October 2023 Public Offering), and $1.5 million in connection with the execution of the Exclusive Negotiation Agreement with Fuji Pharma Co., Ltd. in September 2023.

Current wording

In addition, we received net proceeds of approximately $93.5 million from an underwritten public offering of our securities in October 2023 (October 2023 Public Offering), and $1.5 million in connection with the execution of the Exclusive Negotiation Agreement with Fuji Pharma Co., Ltd. in September 2023.

Previous wording

We had cash and cash equivalents and marketable securities of approximately $108.4 million at June 30, 2024, which we believe is sufficient to fund our planned operations for more than twelve months following the issuance of the unaudited condensed consolidated financial statements appearing elsewhere in this Report. We are continuing to manage our cash resources as we progress our registration-directed PALISADE Phase 3 Program for fasedienol as a potential new acute treatment of anxiety in adults with SAD, including our ongoing PALISADE-3 Phase 3 clinical trial and prepare to initiate our PALISADE-4 Phase 3 clinical trial, as well as clinical and nonclinical studies of our other pherine candidates, and strategies for the further development and potential commercialization, on our own or with collaborators, of all of our product candidates. However, as we have not yet developed products that generate recurring revenue and, in the event we successfully complete future clinical and/or nonclinical programs, we will need to obtain and invest substantial additional capital resources to develop and commercialize any of our product candidates. We may satisfy our future cash needs through sale of equity or debt securities, partnering collaborations, license agreements or other non-dilutive arrangements..

Current wording

We had cash and cash equivalents and marketable securities of approximately $97.6 million at September 30, 2024, which we believe is sufficient to fund our planned operations for more than twelve months following the issuance of the unaudited condensed consolidated financial statements appearing elsewhere in this Report. We are continuing to manage our cash resources as we progress our U.S. registration-directed PALISADE Phase 3 Program for fasedienol as a potential new acute treatment of anxiety in adults with SAD, including our ongoing PALISADE-3 and PALISADE-4 Phase 3 clinical trials, as well as clinical and nonclinical studies of our other neuroscience product candidates, and strategies for the further development and potential commercialization, on our own or with collaborators, of all of our product candidates. However, as we have not yet developed products that generate recurring revenue and, in the event we successfully complete future clinical and/or nonclinical programs, we will need to obtain and invest substantial additional capital resources to develop and commercialize any of our product candidates. We may satisfy our future cash needs through sale of equity or debt securities, partnering collaborations, license agreements or other non-dilutive arrangements.

Previous wording

When necessary and/or advantageous, we will seek additional capital to fund our planned operations through sales of our equity and/or debt securities in one or more public offerings and/or private placements, including sales of our securities under the Sales Agreement, or non-dilutive debt-related financing arrangements, strategic partnering collaborations or other funding-focused transactions to advance development and commercialization of our product candidates. However, no assurance can be provided that any such sales of our securities, awards, agreements, arrangements or collaborations will occur in the future. While we may make additional sales of our equity securities, we do not have any obligation to do so.

Current wording

When necessary and/or advantageous, we will seek additional capital to fund our planned operations through sales of our equity and/or debt securities in one or more public offerings and/or private placements, including sales of our securities under the Sales Agreement, or non-dilutive debt-related financing arrangements, strategic partnering collaborations or other financial transactions to advance research, development and commercialization of our neuroscience product candidates. However, no assurance can be provided that any such sales of our securities, awards, agreements, arrangements or collaborations will occur in the future. While we may make additional sales of our equity securities, we do not have any obligation to do so.

Previous wording

Our future working capital requirements will depend on many factors, including, without limitation, potential impacts related to adjustments in the size of our staff, the scope and nature of opportunities related to our success or failure and the success or failure of certain other companies in nonclinical and clinical trials, including the development and commercialization of our current product candidates, and the availability of, and our ability to enter into financing transactions and research, development and commercialization collaborations on terms acceptable to us. In the future, to further advance the clinical development of our product candidates, as well as support our operating activities, we plan to seek additional financing, including both equity-based capital and funding from non-dilutive sources, and continue to carefully manage our operating costs, including, but not limited to, our clinical, nonclinical, and pre-commercialization programs.

Current wording

Our future working capital requirements will depend on many factors, including, without limitation, potential impacts related to adjustments in the size of our staff, the scope and nature of opportunities related to our success or failure and the success or failure of certain other companies in nonclinical and clinical trials, including the development and commercialization of our current product candidates, and the availability of, and our ability to enter into financing transactions and research, development and commercialization collaborations on terms acceptable to us. In the future, to further advance the research, clinical development, and contract manufacturing of our product candidates, as well as support our operating activities, we plan to seek additional financing, including potentially from both equity-based and debt-based capital sources and potentially from non-dilutive sources other than debt-based capital, and continue to carefully manage our operating costs, including, but not limited to, our clinical, nonclinical, and pre-commercialization programs.