Greetings. Welcome to VistaGen Therapeutics Fiscal Year 2021 Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. A Question-And-Answer Session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Mark Flather, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Sherry. Hello and welcome to the VistaGen Therapeutics 2021 fiscal year end financial results and corporate update conference call. I am Mark Flather, Vice President of Investor Relations of VistaGen. Thank you for joining us today for this business update and welcome to our shareholders, analysts and anyone taking an interest in VistaGen. Joining me today is Shawn Singh, our Chief Executive Officer; Jerry Dotson, our Chief Financial Officer; and Dr. Mark Smith, our Chief Medical Officer. The format for this call will consist of prepared remarks from the management, followed by an opportunity for questions. This call is being webcast and will be available for replay. The link can be found in the Investors IR Calendar section of our website vistagen.com. On today’s call we will make forward-looking statements regarding our business based on our current expectations and current information. The forward-looking statements speak only as of today and except as required by law, we do not assume any duty to update in the future any forward-looking statement made today. Of course, forward-looking statements involve risks and uncertainties and our actual results could differ materially from those anticipated by any forward-looking statements that we make today. Additional information concerning risks and factors that could affect our business and financial results is included in our most recent annual report on Form 10-K filed earlier today with the Securities and Exchange Commission or SEC and in future filings that we make with the SEC from time to time. All of which are will be available on the SEC’s website. Now, with the formalities out of the way, I’d like to turn the call over to our Chief Executive Officer, Shawn Singh.

Okay. Thank you, Mark, and good afternoon, everyone. On behalf of our entire team here at VistaGen I just want to thank you for joining our call today. And as I said to many of you before independently, we are all change makers. Not only our team here at VistaGen, but also all of you who support our efforts and together we are 100% committed to changing the lives of people all over the world by improving mental health, by developing medicines that have the potential to go well beyond the currently undesirable or inadequate standard of care for anxiety and depression disorders, disorders that are disrupting the lives of millions of people all around the world, not only patients who face these challenges with inadequate treatment alternatives, but their caregivers, their families, their friends and their colleagues, people they come across all day in their daily lives. And even before the pandemic, we know that the prevalence of anxiety and depression disorders was alarming and in today’s world, it’s certainly no secret that the pandemic has exacerbated what was already a challenging situation. And the lingering effects of the pandemic on mental health are likely to be very long-term. So, now more than ever perhaps those suffering from anxiety and depression disorders need new and safe and tolerable alternatives to current medicines. As we forge forward through this pandemic, and as we forge forward as change makers, more so than at any other time in our company’s history, we are confident and we are excited about the potential of our CNS pipeline to do just that to make meaningful changes in the lives of those impacted by mental illness. And despite the challenges of the COVID-19 pandemic, as we’ve reported, our fiscal 2021 was very positive, transformative on many…

Thank you, Shawn. As Shawn mentioned, I want to highlight a few items from our fiscal year end 2021 financial results. I would also encourage everyone to review the annual report on Form 10-K which we filed with the Securities and Exchange Commission a little earlier this afternoon for additional details and disclosures. We recognized $1.1 million in sublicense revenue pursuant to our PH94B development and commercialization agreement with EverInsight Therapeutics, now referred to as AffaMed Therapeutics during our fiscal year ended March 31, 2021, compared to no revenue in the year ended March 31, 2020. Our research and development expenses decreased from $13.4 million to $12.5 million for the years ended March 31, 2020 and 2021, respectively. This decrease is primarily due to the completion of our Phase 2 study of AV-101 in Major Depressive Disorder in fiscal 2020, noticeably offset by increased development expenses for our PH94B and PH10 programs during fiscal 2021. General and administrative expense also decreased to approximately $6.5 million from approximately $7.4 million for the years ended March 31, 2021 and 2020, respectively. The decrease in fiscal 2021 was primarily due to the absence of non-cash warrant modification expense of approximately $0.8 million incurred in the previous fiscal year. Our net loss for the fiscal year ended March 31, 2021 was approximately $17.9 million versus a net loss of $20.8 million for the fiscal year ended March 31, 2020. At March 31, 2021, the company had cash and cash equivalents of approximately $103.1 million. I would also note that during the period from April 1 through the present, we’ve received additional cash proceeds of approximately $1.1 million from the exercise of outstanding warrants. As I stated earlier, please refer to our annual report on Form 10-K for additional detail and disclosure. I’ll turn the call back to Shawn now.

Thanks, Jerry. We’ve come a very long way through the years, most significantly during this past fiscal year despite far reaching and diverse impacts of the COVID-19 pandemic. Fiscal 2021 and early months of fiscal 2022 have generated and accelerated a tremendous amount of progress at VistaGen. Ideas that is now moved from opportunity to execution. And I have the privilege of speaking on behalf with everyone on our laser-focused and hard working teams here at VistaGen. It’s a privilege I am grateful for every day and I can assure you that we are all committed. We are all confident and we are all very excited about the company’s future. And importantly, we are grateful for your continuing interests and your support of our efforts to improve the lives of those battling mental health challenges all over the planet. We wish all of you the best of health, especially mental health to you and to all of those who are important to you. Thank you for joining us today.

Thanks, Shawn. This concludes our prepared remarks. Sherry, we would like to now open the call up to questions please.

Great. Thank you. [Operator Instructions] Our first question is from Tim Lugo with William Blair. Please proceed.

Thanks for the question and congratulations to the whole team on all the progress. And I apologize if you are repeating yourself and I know you touched a bit upon this on the prepared commentary, but it sounds like you are going to start the adjustment disorder and procedural anxiety exploratory studies by year end. Is that correct? And then, should we expect a readout in 2022 as well?

Yes, on both of those, Tim. Thanks for the question and certainly thanks for your long-term focus on what we are doing here. But yes, the answer is we expect to initiate the adjustment disorder study before the end of the year and the same thing with the FMRI study that we’ll study the effects of PH94B, again by the end of the year and readouts for both of those will be in 2022.

Okay. And then, the PTSD and the postpartum, those will start in 2022 and are those expected kind of readout kind of 2023 event?

Right. Somewhere around a year for each of those.

Okay. Great. Thanks for clearing that up. And for …

The goal is to have..

Yes.

Sorry, well, no, I just wanted to note obviously, we’ve talked about this before and noted it. But the goal is to really have – we think that 94B has got potential in a broad base of populations and so we want to certainly before – well before we would launch for PH94B and SAD, but we want to build out as much potential for the drug in multiple different anxiety-related disorders. So these exploratory Phase 2a studies that are relatively small, 25 to 50 subjects where we have $1.5 million to $2 million apiece. Just to give us some ideally and controlled settings and some peer review publications associated with the potential that we can then build on for Phase 2b developments while we are moving forward with 94B and SAD.

Okay. That makes sense. And for PALISADE-2, I assume you are waiting for PALISADE-1 enrollment to be complete before kicking that off. Is that true? And then, also maybe briefly could you talk about the patient population, how many of those patients are expected to already kind of try beta blockers and benzos in the past for their anxiety disorder and kind of how – I guess of – how much of a kind of treatment failure type of population is this?

Yes. I’ll let Mark handle the second half. But the first half of that is, no it’s not the case these are proceeding serially. There is a staggered start, but the PALISADE-2 will start well before we get a readout of PALISADE-1. So, that will start sometime again by the end of 2021. And PALISADE-1 reads out in the middle of 2022.

Yes. Okay.

Mark Smith, do you want to talk a little bit about the inclusion criteria of background…?

Sure. So, this is a monotherapy study, number one. And we are actually excluding people who have failed on two FDA approved medicines for SAD. So we don’t want treatment-resistant folks to enter this file. Now how many have taken drugs off-label like Propranolol or benzodiazepines, we are gathering that information as we go along in the trial. I suspect a number of people will have tried it occasionally. But I think our understanding is that, while benzo may certainly work their – the problems are such that the – they are not really preferred for this patient population. So, many of them will not be taking benzos chronically and we think obviously 94B as a much better alternative. But we’ll be gathering that information throughout the trial.

Sounds good. Thank you for all the clarity.

Thanks, Tim.

Our next question is from Brian Skorney with Robert W. Baird. Please proceed.

Hey. Good afternoon, everyone. Thanks for taking my questions. Can you just walk us through the long-term safety study that’s been done with PH94B? I think last time I talked to you, you had said you are redoing six month animal toxic and that was sort of a gating factor to initiating that. Is that still ongoing? Anything to speak of there or when you will be able to enroll patients in that study? And then, I think you had mentioned that even patients who screen out of PALISADE will be able to enroll in the safety study. Could you just kind of talk through how patients will be given PH94B and followed?

Yes. Thanks, Brian. As I noted, we are launching the long-term safety study before the end of 2021, sometime in the fall. And that’s an open-label, 12 months treatment period that will follow use of PH94B at 3.2 micrograms per dose, around four doses a day. And some people will be diverted from the PALISADE-1 and PALISADE-2 studies on an open-label basis even completers and as well as people that are screening out. So, we want to get people the opportunity even if they are randomized the drug. Coming to placebo in the PALISADE studies, that will be an opportunity to be in the open-label safety study. Mark Smith, do you have anything to add?

Yes, that’s right. We expect the criteria to get into the long-term [study period] (ph), a little bit looser also in that we will in that study allow background medications like SSRIs. So, we want to establish that it’s safe to add on 94B to SSRIs in this study will help us do that even though we are developing it as a monotherapy in our Phase 3 placebo-controlled studies.

Got it. And then, is there any patient year target for that study in terms of FDA feedback, just in terms of what sort of the threshold they want to see in terms of exposure as for filing?

Typical [Indiscernible] guidelines Brian, 100 for 12 months and 300 for six months.

Okay. And then, on the adjustment disorder with anxiety study, I see that’s a post [ongoing] (ph) trials now. I am just wondering now, what is a reasonable benchmark on the Hamilton anxiety scale to sort of compare to here and I don’t know how we should kind of think about that scale versus the SUDS or the CGI from the SAD studies. There is sort of a target you are hoping to achieve here.

Sure. Mark?

Yes, let me address that. So, yes, for lack of a better scale, we are using the Hamilton anxiety scale. There haven’t been too many studies at adjustment disorders. So, we’re going to paving a new territory here. But we expect these patients to probably average in the mid-20s or so, maybe some in the high 20s on the Hamilton anxiety scale. And we certainly want to see a change from placebo that’s at least four or five points different would be fantastic. And I think it would be a successful outcome for the study. So these people aren’t quite as affected as generalized anxiety disorder. So their scores aren’t quite as high in the Hamilton anxiety. But we still see – or hope to see a change from placebo.

Okay. Great. Thanks. I’ll hop back into the queue.

Our next question is from Andrew Tsai with Jefferies. Please proceed.

Okay. Very good. Good evening and thanks for taking my questions. Big congrats especially on getting the Phase 3 program underway. So, as investors think about potential risks to the study, I mean, a higher than expected placebo response naturally comes to mind. So, can you talk about what you know about placebo responses for social anxiety in particular? And I guess, what steps are you taking to mitigate a high placebo response?

Sure. Mark, go ahead and address that.

Yes. Sure. So, first of all, as you may know, traditionally, historically, in the social anxiety disorder studies, the placebo rate is lower for that patient population compared to generalizing this anxiety disorder or major depressive disorder for that, as well. And those recently, gosh, placebo rates have been 45%, 50%. It’s hard to distinguish drug from placebo. Historically, social anxiety disorder has a placebo rate more like 30%, 35% and that reflects the fact that this is a really a chronic kind of stable lifelong disorder. And so, it’s then very – it hasn’t been that hard to separate drug from placebo in the historical SSRI studies. So I think that bodes well for our studies. Now it should be a note we are looking at public speaking here and the stress level that they experience during the public speaking challenge. But in the Phase 2 as well, the placebo rates were well within reason.

Great.

And Andrew, we’ve built in some – we’ve built in some important gates just in the first couple of steps of the study design to make sure that we’ve got sufficiently that patients coming into the study.

Yes. That’s right. And it’s important that to get patients with a high level of social anxiety disorder symptoms based on their Leibovich scale and the fact that we are requiring them to get pretty stress help which they do by the public safety challenge. So that level of severity, I think also helps us differentiate from placebo.

Great. And my second question is, my understanding is the FDA has not required to doing [Indiscernible] that’s built off of Brian’s long-term safety question. And I acknowledge you’ve generated some preclinical data differentiating PH94B versus benzos, but I guess, my question is do you still plan to do one? And down the road, let’s say it was all positive. All these preclinical data that you are generating are all positive. I guess, what kind of scheduling do you think PH94B would obtain? Would it be a scheduled drug or do you believe it’s a non-scheduled drug? Thanks.

Well, you have to look – thanks for the question, Andrew. It’s a good question, because safety is a very key aspect of this product profile that differentiates it from anything else we’ve ever seen. And if we took a look at the collect of how these works to-date, and including some very important studies that you saw we’ve noted that PH94B does not potentiate GABA. We know it doesn’t bind to the typical addiction associated receptors open to opioid or dopamine or nicotine, which is all very important. We’ll be doing some additional carbon radiolabeled study C14 studies to see whether it even – this requires to distribute into the brain to achieve its neuropsych benefits and we’ll do some FMRI cell imaging study. But thinking together what we know now from what’s been done non-clinically, as well as all the behavioral signals from the clinical studies, we don’t see any basis for DEA to make a recommendation to FDA couple months before a future PDUFA date that it should be scheduled. We’ll continue to do additional work. Obviously, we’ll continue to see what occurs in the context if anything in the context of the Phase 3 – the PALISADE Phase 3 program, the long-term safety study in particular. But right now, just this the uniqueness of this MOA is really the hallmark of the drug and the fact that we can achieve phenomenal benefits within a short period of time, without possibly even having to act directly on CNS neurons is a tremendous breakthrough. And that’s the hallmark of the pherine technology. So, using the nose as a portal to the brain to achieve these neuropsychiatric benefits of course makes you think about it whether it should be scheduled. But I guess, we had to make – to weave an opinion today based on the work that’s been done today in the clinic and in the labs. We don’t see any basis for it to be scheduled. So, we’ll just continue to track it closely. As you noted, FDA hasn’t requested the abuse liability study, but it’s something that we’ll continue to consider we think we need to do it.

Great. May I ask a final question?

Sure.

Thanks. So, I mean, just tying it all together, I mean, I would think about – I guess, the market opportunity for PH94B for social anxiety alone, I mean can you talk about why you think this could ultimately become a primary care drug as opposed to specialty tier? And I guess, what are you doing in the mean time to educate the market? Thanks.

Yes. Well, there are lot of – it’s one of the great benefits of having an industry veteran like Ann Cunningham on our team leading this effort in the pre-commercial activity. There are multiple journeys that we are benchmarking now and a lot of work that seems doing because there are a lot of different patient journeys here. There is – there are a lot of patients that in this under-recognized and under-diagnosed and undertreated and under-detailed market for many years now really since about the time that the Paxil came out for SAD. That’s a new time and it’s a new day and it requires us to make very careful research endeavors into all these various market segments. But it’s large no matter how you slice and dice it. But this shouldn’t be a product that’s priced at a level that requires prior authorization. We think this is something that is going to be very – the high level of awareness at the consumer level. We will continue to educate about the neurobiology’s fear medical education is going to be very important. We’ll be doing quite a bit of work to educate the market about the MOA or how the drug works, how it’s differentiated from benzos and beta blockers and antidepressants. So, it’s – again it’s, we are in the early innings of doing a lot of that work, but what we can see already is that this is a market that it’s only got about 20% treatment rate today for SAD. And it’s going to – we think it will respond very nicely to the kind of attention and – that we will apply as we go forward here. That get to your question? Andrew, did I lose you?

We did. Our next question is from c. Please proceed.

Thanks for taking my questions. A lot of questions on the trials have been answered. And this is one of a broad topic perhaps. Can you talk a little bit about what your feedback or census of market has been in terms of its focus on PH94B versus PH10 or both in that pherine class of drugs. That it seems like much of the focus are on PH94B. So you may add a lot of value in pricing for PH10 and what maybe the company may be doing to really promote more of a work around these going forward?

Well, Jason, thanks for the questions. Great to speak with you. Awareness around PH10 absolutely will grow in the coming months. We are very excited about its potential to fit. There really is so much to be excited about. There is potential for rapid-onset, there is potential for an opportunity of sustained benefits. There is potential for it to not have - side effects and safety concerns like other rapid-onset therapies. There is potential for us to not have to have an adjunctive SSRI or an atypical. So, we see a lot of flexibility given what we’ve seen so far in terms of its safety profile and its tolerability profile in the clinic. So, the key for us is to get the Phase 2b program up and running and there is some tox studies that we need to complete in order to get that in motion and that’s all underway. But it’s no less important and certainly no less valuable than PH94B. I think as we’ve introduced the pherines and we’ve introduced the unique MOA associated with both of these drug candidates by just status of developments most of the emphasis so far has been on PH94B and really only on SAD and really only on a neuro indication which is one of what we think will be many in terms of social anxiety disorder and even they are only in adult population. So, we think the drug’s safety profile it gives us tremendous opportunity in pediatric population, as well. And maybe as you know, the co-morbidity of anxiety and depression is – that rate is quite high. So, I think as you see in the months coming ahead as we continue to track towards actually initiating a Phase 2b study, we’ll see the interest in awareness around PH10 as it fits in with some of the other new generation anti-depressants in development by our peers as we find a very nice slot for PH10 to fit into that that future treatment paradigm for a lot of depression disorders, not just MDD.

Great. Sounds good. Lots of stuff coming up for VistaGen. Looking forward to it, Shawn.

Alright. Thanks, Jason.

And our next question is from Brian Skorney with Robert W. Baird. Please proceed.

Hey. Thank you for taking the follow-up. Since you are talking about PH10, I did want to get a question on that, as well. One of the challenges that we’ve seen sort of repeat in MDD is sort of the progress through development and kind of loss of placebo. That was notably in the recent WATERFALL readout of Zuranolone I guess, how do you guys think about the challenges of trial design in MDD as you prepare to move into Phase 2b and how do you kind of ensure that what you got out of a Phase 2b study to signal that can get repeated in Phase 3?

Mark, why don’t you go ahead and address that?

Sure. Well, it’s challenging obviously. And but I think you – I think one way, I guess is to stick to your guns. We have a number of go to sites that we commonly use for our Phase 2 studies. These are very good performing sites and we have pretty strict criteria for who gets in that site. I think we’ve talked about that we want patients that are really ill and have a high degree of depression and I think it’s easier to find a signal with this. So I think it begins with the site you select and the patients you select for the study. Now we have used and other people used designs that do help mitigate the placebo response like the sequential parallel comparison design. And we’ll certainly consider things like that. But I think for our purpose of PH10, we are going to be looking for a rapid-onset. And I think in today’s market, you need to demonstrate a rapid effect and so, we’ll be focusing on that as part of that study. But these are all challenges that everyone faces. I think we have – VistaGen acquired a number of people with a lot of experience in this field. And so, I think we can face these challenges.

Great. Thanks.

A lot of it goes, just into the screening and the work that’s done even in the early levels of outreach for subjects and the type of sites are certainly important but also the way that those subjects come to the sites and the quality of those screens and leads and ultimately that results in better enrollment.

Great. Thanks, Shawn. That’s helpful.

And it looks like that the end of the questions at this time. So I’ll turn the call back over to Shawn to provide the closing statements.

Well, again, thank you everyone. I can’t emphasize enough how important it is to have the support of all of our stakeholders, shareholders and everybody in the capital markets. Well, it’s important to the people who do the work on a day-to-day basis. But it’s certainly important to all of the groups that we work with. There are a lot of patient advocacy groups out there that are clamoring for new medications to really help people get unstuck and we know that COVID is making things worse and that’s likely to not change for quite a long time. But we are proud to be in the fight and we are going to continue to stay committed and with your support, we’ll continue to advance on all the objectives that we’ve laid out in this call and through collateral meetings. So, again, thank you for your support and best of health to everyone.

Thank you. This does conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.