VistaGen Therapeutics, Inc. (VTGN) Q4 2021 Earnings Report, Transcript and Summary

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 levels. Early in the year, our regulatory and clinical teams successfully forged a very important consensus with the FDA regarding the key design elements of our PALISADE-1 study, the first of our two U.S. multicenter, randomized, double-blind, placebo-controlled clinical studies of PH94B, which is our rapid-onset nasal spray for the acute treatment of anxiety in adults with social anxiety disorder, as well as all the other studies in our PALISADE Phase 3 program that we believe are necessary to enable a U.S. new drug application or an NDA for PH90B should – 94B should our PALISADE Phase 3 program be successful. We also started the fiscal year by entering a strategic collaboration for clinical development and commercialization of PH94B in Greater China, South Korea and Southeast Asia, all very large markets. Under that collaboration, we received a non-dilutive upfront payment of $5 million and we’ve got the potential under that collaboration for another $172 million in additional development and commercial milestone payments on top of tiered royalties on sales of PH94B in those countries if Phase 3 development efforts there are successful. As we’ve noted, we retained exclusive rights to develop and commercialize PH94B and all of our other assets in our CNS pipeline in all other markets worldwide. Should our PALISADE Phase 3 program be successful, we will commercialize PH94B on our own in the U.S. and enter into additional commercial collaborations in ex U.S. markets. In December of last year, we significantly strengthened our balance sheet, as well as our institutional shareholder base by successfully completing a $100 million capital raise that was led by teams at Jefferies and William Blair and involved numerous leading long buy healthcare investors. That capital raise created a very important value inflection point for the company. It removed the need to go back to the market near-term and provides us with capital to advance execution on all of our clinical development programs on multiple parallel tracks across our entire CNS pipeline. We believe our current cash position is sufficient to advance our CNS pipeline through a very exciting stream of potential clinical development milestones in the coming months and the coming years with the initiation of PALISADE-1 in SAD last month as the first of what we expect to be exciting series of value adding catalyst for the company. Before the end of calendar 2021, we also expect to advance the PALISADE Phase 3 program by initiating PALISADE-2 as a replicate of PALISADE-1 and as well as complementary clinical and certain non-clinical studies in the PALISADE Phase 3 program necessary to support the NDA submission should the program be successful. And then in addition, throughout the remainder of calendar 2021, and during the first half of calendar 2022, we expect to initiate multiple Phase 2a studies involving PH94B, a Phase 2b study of PH10 in major depressive disorder and a Phase 1b study of AV-101 in combination with probenecid. I’ll highlight some of these studies shortly during the product updates. As we all know, to advance groundbreaking treatments, you need great people and we have continued to enhance our internal team by adding key personnel with extensive experience in CNS drug development, clinical operations, commercial operations, CMC and regulatory affairs. Our experienced team will be driving our programs through very important late-stage clinical and regulatory milestones, as well as be responsible and appropriately time pre-commercial and commercial launch activities. Notably, the recent addition of Ann Cunningham as our Chief Commercial Officer has been tremendously helpful in support of our pre-commercial planning for PH94B in the multiple SAD market segments that we are targeting in the U.S. and globally. We also added pharmaceutical industry veteran Dr. Joanne Curley to our Board of Directors. Dr. Curley brings extensive experience in product development, operations and commercialization to the Board. So, overall, I have tremendous confidence in our teams’ ability to deliver remarkable outcomes across all the key functional areas and across our entire pipeline. So, now I’ll give you a brief update on each of the three drug candidates in our current CNS pipeline. I’ll briefly describe each product’s MOA or the way we believe it works and its potential indications and I’ll detail then the expected next steps in each of our development programs for these candidates. So first, PH94B, it gets a little technical, but hopefully I’ll give you some understanding to why we are so excited and confident about its game-changing potential. PH94B is a synthetic investigational neurosteroid that was developed from proprietary compounds called pherines. With its novel MOA, PH94B is an odorless nasal spray that designed to be administered at microgram-level doses, not milligrams, microgram-level doses to achieve its rapid-onset anti-anxiety or anxiolytic effects within about 10 to 15 minutes. PH94B’s MOA is fundamentally differentiated from the MOA of all FDA-approved anti-anxiety drugs, including the three antidepressants that are approved by the FDA for the treatment of SAD or Social Anxiety Disorder, and all the benzodiazepines and beta blockers that are prescribed on an off-label basis to treat SAD. PH94B engages peripheral chemosensory receptors in the nasal passages. These trigger a subset of neurons in the main olfactory bulb or OB at the base of the brain. The OB neurons then stimulate inhibitory GABAergic neurons in the limbic amygdala, decreasing the activity of the sympathetic nervous system, and facilitating fear extinction activity of the limbic-hypothalamic system, which is the main fear and anxiety center of the brain, as well as in other parts of the brain. And importantly, unlike oral drugs, PH94B does not require systemic uptake and distribution to produce its rapid-onset anti-anxiety effects. You’ve got with PH94B, the very unique MOA using the nose as a portal to achieve neuropsychiatric benefits in a very rapid onset way and with an exceptional side effect and safety profile that is nothing like what we see with today’s approved antidepressants or benzodiazepines or beta blockers. And as a result of our confidence in the work that we’ve done so far with PH94B, our ongoing PALISADE Phase 3 program for PH94B is designed to further demonstrate its potential as a fast-acting, non-sedating, non-addictive, acute treatment of anxiety in adults with SAD and later in pediatric populations with SAD. SAD is a very prevalent indication. Over 23 million Americans are affected by its mean duration of the illness is about 20 years and the mean age of onset is only age 16. We believe 94B also has the potential to be developed as a novel treatment for adjustment disorder with anxiety, postpartum anxiety, especially given the fact that it’s non-systemic, post-traumatic stress disorder, procedural anxiety, panic and several other anxiety disorders. And importantly to note PH94B has been granted Fast Track designation status by the FDA for treatment of SAD. As I noted earlier, after our positive meeting with the FDA last summer, we reached a consensus with the agency on the key aspects of the design of what has now become PALISADE-1 initial Phase 3 clinical trial in our PALISADE Phase 3 program for the developments of PH94B as an acute treatment of anxiety in adults with SAD. And as a result of that meeting, PALISADE-1 and PALISADE-2 will substantially mirror a public speaking challenge of the statistically significant p=0.002 Phase 2 study of PH94B in SAD. And that meeting provided us in that decision, in that consensus, really provided us with substantial overall time, cost and execution efficiencies for the PALISADE Phase 3 program which are now underway. So for a little more information on that PALISADE Phase 3 program, PALISADE-1 as I noted is a U.S. multicenter, randomized, double-blind, placebo-controlled Phase 3 clinical study designed to evaluate the efficacy, safety and tolerability of the administration of 3.2 micrograms of PH94B for the acute treatment of anxiety in adults with SAD during induced public speaking challenge. We initiated that study in May and we currently anticipate the top-line data to readout in the middle of 2022. PALISADE-2, another U.S. Phase 3 study of PH94B in SAD will replicate PALISADE-1 with the same overall design and objectives. We expect to initiate PALISADE-2 in the second half of calendar 2021 and to receive top-line data readout from this study in the second half of calendar 2022. In addition to PALISADE-2, during the second half of 2021, we will initiate in label long-term safety study of PH94B. Currently, we anticipate initiating a global study of PH94B PALISADE Global later this year to facilitate registration of PH94B in ex U.S. markets. We’ll provide more information on PALISADE Global once we are closer to that study launch. In late 2021 or early 2022, we also anticipate initiating the dose response and minimal time re-dosing studies requested by the FDA, all of this in line with our plan drive towards a potential U.S. NDA for PH94B in the first half of calendar 2023. Again in addition to social anxiety disorder, we are exploring PH94B’s potential in preparing for several exploratory Phase 2a clinical studies of this asset in other anxiety indications. We believe that it may also be developed as a novel treatment for adjustment disorder for anxiety, postpartum anxiety, PTSD, procedural anxiety, panic and others as I’ve noted. And we expect to begin two of these studies, adjustment disorder with anxiety and procedural anxiety and FMRI study of PH94B’s effects in the second half of this calendar year and two more postpartum anxiety and PTSD are anticipated in mid-2022. Provide more information on these studies once we are closer to study launch. Now moving on to our second CNS product candidate PH10. PH10 is a synthetic investigational neurosteroid, which also was developed from proprietary compounds called pherines. It’s got a novel, and rapid-onset MOA and is fundamentally differentiated from the MOA of all current treatments for depression disorders. It’s also an odorless nasal spray and is designed to be administered at microgram-level doses – microgram-level doses to produce a rapid-onset effects and one that we have seen in Phase 2a that’s been sustained over eight weeks. PH10 activates nasal chemosensory cells in the nasal passage. These are connected again to neural circuits in the brain that produce antidepressant effects. Specifically, PH10 engages peripheral chemosensory receptors in the nasal passages that trigger a subset of neurons in the main OB that then stimulate neurons in the limbic amygdala. This is turn increases activity of the limbic-hypothalamic sympathetic nervous system and increases the release of catecholamines. Importantly, and unlike any of the approved oral antidepressants, PH10 also does not require systemic uptake and distribution to produce rapid-onset antidepressant effects. In all the clinical studies to-date, PH10 has not caused any psychological side-effects such as dissociation, hallucinations or any safety concerns that may be associated with other rapid-onset ketamine-based therapy, including IV ketamine or intranasal ketamine. So our successful exploratory Phase 2a clinical development of PH10 for major depressive disorder has been completed and we are now preparing for a U.S. multicenter, randomized, placebo-controlled Phase 2b clinical study to evaluate the efficacy, safety and tolerability of PH10 as the standalone treatment for major depressive disorder. We expect to initiate that study in mid-2022. PH10 also has potential as a novel rapid onset treatment for TRD, postpartum depression, and suicidal ideation. I am very excited about PH10 and its novel MOA to rapid-onset potential, sustained anti-depressant effects and the very positive safety profile so far exhibited and demonstrated in Phase 2a development to-date. The MDD space is – as many of you know is in need of continued innovation as never one size fits all and we believe that PH10’s differentiated profile has very exciting potential in multiple large and growing depression markets worldwide and importantly, as a standalone therapy. Finally, our third CNS product candidate, this is AV-101. AV-101 is an oral prodrug of 7-chloro-kynurenic acid and it targets the NMDA receptor, which is an ionotropic glutamate receptor in the brain. Abnormal NMDA receptor function is associated with numerous CNS diseases and disorders. And AV-101 is a potent and selective full antagonist of the glycine co-agonist site of the NMDA receptor that inhibits its function. Unlike ketamine and other NMDA receptor antagonists, AV-101’s active metabolite is not an ion channel blocker. At doses administered in all clinical studies to-date, AV-101 has been observed to be well-tolerated and has not exhibited any sedation or dissociative or hallucinogenic psychological side effects or other safety concerns. In light of these findings and data from some recent preclinical studies, we believe AV-101, in combination with FDA-approved probenecid has very exciting potential to become a new oral treatment alternative for depression and several neurological indication. We expect to initiate a Phase 1b study to evaluate AV-101 in combination with probenecid in the second half of this year. FDA has granted Fast Track designation for AV-101 as a potential adjunctive treatment for MDD and as a potential non-opioid treatment for neuropathic pain. We believe it also has potential for developments as a treatment for epilepsy, levodopa-induced dyskinesia associated with Parkinson’s therapies and suicidal ideation. With our innovative CNS pipeline, very strong balance sheet and a world-class team, I am confident that VistaGen is now in its strongest position ever to drive shareholder value going forward. Like to now turn it over to our CFO, Jerry Dotson to provide you with the summary of some of the highlights from our fiscal 2021 financial results. Jerry?

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.