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 our Board of Directors (the 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 research and development efforts by us and our third-party collaborators; 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; current and potential future healthcare reforms; our ability to obtain, maintain and enforce patents on our products if or when we receive regulatory approval of any of our products; 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

Moreover, the biopharmaceutical industry in which we operate is a very competitive and rapidly changing environment. New challenges and risks emerge frequently. It is not possible for our management or Board to predict all challenges and risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Report or otherwise. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Current wording

Moreover, the biopharmaceutical industry in which we operate is very competitive and rapidly changing. New challenges and risks emerge frequently. It is not possible for our management or Board to predict all challenges and risks we will face, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Report or otherwise. In light of these risks, challenges, uncertainties and assumptions, the future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Previous wording

Accordingly, you should not rely upon forward-looking statements in this Report as predictions of future events. The events and circumstances reflected in the forward-looking statements in this Report may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements in this Report are reasonable as of the date of this Report, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of these forward-looking statements after the date of this Report or to conform these statements to actual results or revised expectations. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Current wording

Accordingly, you should not rely upon the forward-looking statements in this Report as predictions of future events. The events and circumstances reflected in the forward-looking statements in this Report may not be achieved or occur in part of at all. Although we believe that the expectations reflected in the forward-looking statements in this Report are reasonable as of the date of this Report, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements in this Report after the date of this Report or to conform the forward-looking statements to actual results or revised expectations. If we do update one or more of the forward-looking statements in this Report, no inference should be drawn that we will make additional updates with respect to those or any other forward-looking statements.

Previous wording

We are a late clinical-stage biopharmaceutical company leveraging a deep understanding of nose-to-brain neurocircuitry to develop and commercialize a broad and diverse pipeline of product candidates from a new class of intranasal therapies called pherines. Each pherine product candidate in our neuroscience pipeline is designed to rapidly activate peripheral chemosensory neurons in the nasal cavity, impacting neural circuits in the olfactory system and brain to achieve desired therapeutic benefits and differentiated safety, without requiring systemic absorption or binding to neurons in the brain. Our neuroscience pipeline also includes an oral prodrug, AV-101, with potential to impact certain neurological conditions involving the NMDA receptor. We are passionate about developing transformative treatment options to improve the lives of individuals underserved by the current standard of care for multiple highly prevalent disorders, including social anxiety disorder, major depressive disorder, and vasomotor symptoms (hot flashes) associated with menopause.

Current wording

We are a biopharmaceutical company leveraging a deep understanding of nose-to-brain neurocircuitry to develop and commercialize a broad and diverse pipeline of clinical-stage product candidates from a new class of intranasal therapies called pherines. Pherines specifically and selectively bind to peripheral receptors in human nasal chemosensory neurons, which activate olfactory bulb-to-brain neurocircuits without requiring systemic absorption or uptake into the brain to achieve desired therapeutic benefits and differentiated safety. Our neuroscience pipeline also includes an oral prodrug, AV-101, with potential to impact certain neurological conditions involving the NMDA receptor. We are passionate about developing transformative treatment options to improve the lives of individuals underserved by the current standard of care for multiple highly prevalent indications, including social anxiety disorder, major depressive disorder, and vasomotor symptoms (hot flashes) associated with menopause.

Previous 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.

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 mechanism(s) of action (MOA) conducive to achieving 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 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.

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 regarding this drug class. 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 off-label acute treatment of SAD 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, 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.

Current wording

Fasedienol, our lead clinical-stage 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

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.

Current wording

There is no FDA-approved pharmacological therapy for the acute 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 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.

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, an ongoing small Phase 2 repeat dose study (Repeat Dose Study), certain standard preclinical studies, and a small human factor study.

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 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.

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 initiated the Repeat Dose Study in January 2025. This study is a small U.S. 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 also includes an open-label extension study for a period of up to 12 months.

Previous 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.

Current wording

Itruvone is our investigational non-systemic pherine product candidate with a novel, rapid-onset neurocircuitry-focused proposed MOA. Itruvone’s potential for rapid-onset activity in nasal chemosensory receptors at a low microgram-level dose without requiring systemic absorption and distribution to achieve antidepressant effects, and its favorable safety data observed in all studies completed to date, is fundamentally differentiated from all current pharmacological therapies for depression. Unlike other antidepressants which rely on single or double-receptor occupancy in the brain, itruvone activates neural circuits that regulate the amygdala, hypothalamus, entorhinal area and hippocampus, prefrontal cortex, locus coeruleus, and raphe nucleus, all involved in the pathophysiology of depression. The scope of itruvone's neural circuit activation, and potential impact on the brain, appears, in studies completed to date, to be wider, faster and safer than can be achieved with current therapies targeting binding to any specific brain receptor. We believe itruvone has transformative potential as an innovative stand-alone treatment for MDD 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

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.

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 in 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 completed 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 potential 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

A randomized, double-blind, placebo-controlled exploratory Phase 2A clinical study of PH80 that was designed to explore the efficacy, safety, and tolerability of intranasal administration of PH80 for the management of menopausal hot flashes in women was conducted in a real-world setting in Mexico and was sponsored by Pherin prior to our acquisition of Pherin in February 2023. In the study, PH80 (0.8 µg/50 µL) was self-administered by subjects intranasally, with two sprays in each nostril (total dose = 3.2µg) up to four times daily, as-needed for four consecutive weeks. One additional dose was allowed at night if subjects were awakened by hot flashes. Through the course of the study, subjects recorded the number, severity, disruption in function, and sweating related to hot flashes. PH80 induced a significant reduction in the daily number of hot flashes compared to placebo at the end of the first week of treatment, and the improvement was maintained through each treatment week until the end of the treatment period. At baseline, subjects reported a mean daily number of hot flashes of 7.7 (PH80, n=18) and 8.0 (placebo, n=18). After one week of treatment, the number of hot flashes dropped to 2.8 (PH80) and 6.4 (placebo) (p<.001), and after four weeks of treatment, the number of hot flashes dropped to 1.5 (PH80) and 5.1 (placebo) (p<.001).

Current wording

We are developing PH80 as a novel, non-hormonal, non-systemic, as-needed treatment of moderate to severe VMS (hot flashes) due to menopause. A randomized, double-blind, placebo-controlled exploratory Phase 2A clinical study of PH80 that was designed to explore the efficacy, safety, and tolerability of intranasal administration of PH80 for the management of menopausal hot flashes in women was conducted in a real-world setting in Mexico and was sponsored by Pherin prior to our acquisition of Pherin in February 2023. In the study, PH80 (0.8 µg/50 µL) was self-administered by subjects intranasally, with two sprays in each nostril (total dose = 3.2µg) up to four times daily, as-needed for four consecutive weeks. One additional dose was allowed at night if subjects were awakened by hot flashes. Through the course of the study, subjects recorded the number, severity, disruption in function, and sweating related to hot flashes. PH80 induced a significant reduction in the daily number of hot flashes compared to placebo at the end of the first week of treatment, and the improvement was maintained through each treatment week until the end of the treatment period. At baseline, subjects reported a mean daily number of hot flashes of 7.7 (PH80, n=18) and 8.0 (placebo, n=18). After one week of treatment, the number of hot flashes dropped to 2.8 (PH80) and 6.4 (placebo) (p<.001), and after four weeks of treatment, the number of hot flashes dropped to 1.5 (PH80) and 5.1 (placebo) (p<.001). PH80 treatment also significantly reduced the severity, disruption in function, and sweating related to hot flashes during the treatment period, as compared with placebo.

Previous wording

We are currently conducting customary nonclinical studies necessary to support our planned submission of our U.S. IND to facilitate further Phase 2 clinical development of PH80 in the U.S. as a novel non-systemic, non-hormonal treatment of vasomotor symptoms (hot flashes) due to menopause.

Current wording

We are currently conducting customary nonclinical studies necessary to support our planned submission of our U.S. IND to facilitate further Phase 2 clinical development of PH80 in the U.S. as a novel non-hormonal, non-systemic treatment of moderate to severe VMS (hot flashes) due to menopause.

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

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 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.

Previous 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.

Current wording

PH15 is our investigational pherine product candidate with a novel, rapid-onset neurocircuitry-focused 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

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.

Current wording

We are currently evaluating the potential Phase 2 development path forward for PH15 and the manufacturing, nonclinical and clinical 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

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.

Current wording

PH284 is our investigational pherine product candidate with a novel, rapid-onset, neurocircuitry-focused proposed 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. PH284 is thought to act by regulating olfactory to mediobasal-hypothalamus neural circuits involved in appetite control.

Previous wording

Based on observations and findings from preclinical studies, we believe AV-101 has the potential to become a new oral treatment alternative for multiple neuroscience disorders, including levodopa-induced dyskinesia (LID) and neuropathic pain (NP) among others. We are currently assessing whether there is a path forward for potential Phase 2A clinical development of AV-101 with one or more collaborators, as a treatment for LID associated with Parkinson’s disease therapy and possibly one or more additional neurological disorders involving the NMDAR receptor. The U.S. FDA has granted Fast Track designation for the investigation of AV-101 for the treatment of neuropathic pain and for the adjunctive treatment of MDD.

Current wording

Based on observations and findings from preclinical studies, we believe AV-101 has the potential to become a new oral treatment alternative for multiple neuroscience disorders, including levodopa-induced dyskinesia (LID) and neuropathic pain (NP) among others. We are currently assessing whether there is a path forward for potential collaborative Phase 2A clinical development of AV-101 for one or more additional neurological disorders involving the NMDAR receptor. The U.S. FDA has granted Fast Track designation for the investigation of AV-101 for the treatment of neuropathic pain and for the adjunctive treatment of MDD.

Previous wording

Our wholly-owned subsidiaries consist of Pherin Pharmaceuticals, Inc, a Delaware corporation (Pherin), and Vistastem, Inc., a California corporation founded in 1998 (Vistastem).

Current wording

Our wholly-owned subsidiaries consist of Pherin Pharmaceuticals, Inc, a Delaware corporation (Pherin), which we acquired in February 2023, and Vistastem, Inc., a California corporation founded in 1998 (Vistastem).

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 six months ended September 30, 2024, since those disclosed in our Annual Report.

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 nine months ended December 31, 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 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.

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. At the end of our fiscal year ended March 31, 2024, we launched our PALISADE-3 Phase 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 nine months ended December 31, 2024, we initiated our PALISADE-4 Phase 3 clinical trial for the same indication, and incurred costs to plan and prepare for the initiation the Repeat Dose Study, which we initiated in January 2025. In addition, we are continuing to conduct various nonclinical studies and contract manufacturing activities involving other clinical-stage 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.

Previous wording

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

Current wording

The following table summarizes the results of our operations for the three and nine months ended December 31, 2024 and 2023 (in thousands):

Previous 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.

Current wording

We recognized $0.2 million and $0.5 million in sublicense and other revenue for the three and nine months ended December 31, 2024, as compared to $0.4 million and $0.9 million for the three and nine months ended December 31, 2023, respectively.

Previous wording

Research and development expense was $10.2 million and $17.9 million for the three and six months ended September 30, 2024, as compared to $3.9 million and $8.0 million for the three and six months ended September 30, 2023, respectively. The increase of $6.4 million in research and development expense for the three 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 $4.7 million, related to our PALISADE-3 and PALISADE-4 Phase 3 clinical trials of fasedienol in SAD and an increase of $1.2 million in connection with increased headcount.

Current wording

The increase of $6.8 million in research and development expense for the three months ended December 31, 2024 as compared to the same period in Fiscal 2023 was primarily due to an increase in clinical development expense of $6.6 million, primarily due to an increase in research, development, and contract manufacturing expenses related to our PALISADE Phase 3 Program for fasedienol in SAD and U.S. IND-enabling programs for itruvone in MDD and PH80 for the treatment of VMS due to menopause.

Previous 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.

Current wording

The increase of $16.6 million in research and development expense for the nine months ended December 31, 2024 as compared to the same period in Fiscal 2023 was primarily due to an increase in clinical development expense of $13.4 million, related to our PALISADE-3, PALISADE-4 Phase 3 clinical trials of fasedienol in SAD, the Repeat Dose Study, and Phase 2 programs for PH80 for the treatment of VMS due to menopause, an increase of $2.5 million in connection with increased headcount, an increase of $0.3 million in consulting and professional expense, and an increase in occupancy and other costs of $0.4 million.

Previous 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.

Current wording

We expect that our research and development expense will increase over the next several years as we continue to advance our pherine 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 expense was $4.2 million and $8.8 million for the three and six months ended September 30, 2024, as compared to $3.2 million and $6.2 million for the three and six months ended September 30, 2023, respectively. The increase of $1.0 million in general and administrative expense for the three months ended September 30, 2024, as compared to the same period in Fiscal 2023, was primarily due to an increase of $1.1 million in connection with increased headcount.

Current wording

General and administrative expense was $4.0 million and $12.8 million for the three and nine months ended December 31, 2024, as compared to $3.8 million and $9.9 million for the three and nine months ended December 31, 2023, respectively. The increase of $0.2 million in general and administrative expense for the three months ended December 31, 2024, as compared to the same period in Fiscal 2023, was primarily due to increased headcount.

Previous 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.

Current wording

The increase of $2.9 million in general and administrative expense for the nine months ended December 31, 2024, as compared to the same period in Fiscal 2023, was primarily due to an increase of $1.9 million in connection with increased headcount, and an increase of $0.9 million in consulting and professional fees.

Previous 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.

Current 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 development and commercialization of our product candidates and the growth of our business.

Previous 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.

Current wording

Interest income, net, increased for the nine months ended December 31, 2024 as compared to the same period in Fiscal 2023 due to increases in interest rates and larger average cash balances when compared to the prior period.

Previous 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.

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. In February 2024, the aggregate gross proceeds available under the Sales Agreement was increased to $100 million. From May 2021 through the date of this Report, we have sold 5,672,208 shares of common stock in at-the-market transactions under the terms of our Sales Agreement for net cash proceeds of approximately $38.9 million, and approximately $97.3 million of common stock remained available for sale under the Sales Agreement.

Previous 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.

Current wording

We had cash and cash equivalents and marketable securities of approximately $88.6 million at December 31, 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 clinical studies in our PALISADE Phase 3 development program, as well as contract manufacturing, clinical and nonclinical studies of our other pherine 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 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.

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 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

Net cash used in operating activities for the six months ended September 30, 2024 was $21.8 million, consisting primarily of our net loss of $23.7 million, adjusted for $2.4 million of non-cash charges primarily related to stock-based compensation expense and amortization of our operating lease right-of-use asset, and $0.5 million in net changes in operating assets and liabilities.

Current wording

Net cash used in operating activities for the nine months ended December 31, 2024 was $32.0 million, consisting primarily of our net loss of $37.8 million, adjusted for $3.6 million of non-cash charges primarily related to stock-based compensation expense and amortization of our operating lease right-of-use asset, and $2.2 million in net changes in operating assets and liabilities.

Previous wording

Net cash used in operating activities for the six months ended September 30, 2023 was $14.1 million, consisting primarily of our net loss of $13.5 million, adjusted for $1.4 million of non-cash charges primarily related to stock-based compensation expense and amortization of our operating lease right-of-use asset, and $2.0 million in net changes in operating assets and liabilities.

Current wording

Net cash used in operating activities for the nine months ended December 31, 2023 was $18.8 million, consisting primarily of our net loss of $19.8 million, adjusted for $2.1 million of non-cash charges primarily related to stock-based compensation expense and amortization of our operating lease right-of-use asset, and $1.1 million in net changes in operating assets and liabilities.

Previous wording

Net cash used in investing activities for the six months ended September 30, 2024 was $13.3 million, consisting of purchases of marketable securities and property and equipment, partially offset by the sale and maturity of marketable securities.

Current wording

Net cash used in investing activities for the nine months ended December 31, 2024 was $13.7 million, consisting of purchases of marketable securities and property and equipment, partially offset by the sale and maturity of marketable securities.

Previous wording

Net cash used in investing activities for the six months ended September 30, 2023 was immaterial.

Current wording

Net cash used in investing activities for the nine months ended December 31, 2023 was immaterial.

Previous wording

Net cash provided by financing activities during the six months ended September 30, 2024 was immaterial.

Current wording

Net cash provided by financing activities during the nine months ended December 31, 2024 consisted primarily of net proceeds from the sale of common stock in at-the-market transactions under the Sales Agreement of $1.1 million.

Previous wording

Net cash provided by financing activities during the six months ended September 30, 2023 was $35.1 million. This consisted primarily of proceeds from issuance of common stock under the Sales Agreement of $36.0 million, partially offset by a repayment of notes payable of $1.0 million.

Current wording

Net cash provided by financing activities during the nine months ended December 31, 2023 was $128.8 million. This consisted primarily of net proceeds of $93.5 million resulting from the October 2023 Public Offering, net proceeds from the sale of common stock in at-the-market transactions under the Sales Agreement of $36.0 million, partially offset by a repayment of notes payable of $1.0 million.