Greetings, welcome to the VistaGen Therapeutics' 2022 Fiscal Year-End Results 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 that this conference is being recorded. I will now turn the conference over to your host, Mark Flather, Vice President of Investor Relations for VistaGen. You may begin.

Thank you, Kyle. Hello, and welcome to VistaGen's conference call covering our fiscal year 2022 financial results, recent accomplishments and anticipated milestones. I am Mark Flather, Vice President of Investor Relations at VistaGen. Thank you for joining us today and welcome to our stockholders, analysts, and anyone taking an interest in VistaGen. Joining me today are Shawn Singh, our Chief Executive Officer; Jerry Dotson, our Chief Financial Officer; and Dr. Mark Smith, our Chief Medical Officer. Format of this call as Kyle mentioned will consist of prepared remarks from management, followed by a brief opportunity for questions. This call is being webcasted and will be available for replay. The link to access the replay 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. 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 may 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 future filings that we make with the SEC from time-to-time, all of which will be available on our website and the SEC's website. Now, I'd like to turn the call over to our Chief Executive Officer, Shawn Singh.

Thank you, Mark, and good afternoon, everyone. On behalf of our entire team here at VistaGen, thanks for joining the call today. We sincerely hope that you and those who are very important to you are doing well both mentally and physically. As the prevalence of anxiety and depression disorders has grown considerably since the beginning of the pandemic, it's crystal clear to us that currently approved treatments are under serving millions of individuals who are living with anxiety, depression and many other CNS disorders. Individuals across a broad range of demographics need new faster-acting treatment options without having to worry about the negative side effects and safety concerns that are often associated with currently approved meds. We are committed to developing and commercializing new differentiated treatments with potential to improve lives. Our fiscal year 2022 was defined by progress in all areas of our business, further enhancing our confidence about the potential of our CNS pipeline. We have advanced through our past fiscal year and into the current year with momentum and anticipation for several key milestones. During the second half of calendar 2022, we anticipate reporting key topline data readouts in our PALISADE Phase III program for PH94B in Social Anxiety Disorder, or SAD as well as the expansion of other important clinical programs moving us closer to our goal of transforming the way that anxiety and depression are understood and treated One Mind at a Time. Several recent advancements provide opportunities to unlock shareholder value and our PALISADE Phase III program for PH94B in SAD, we reported a major clinical milestone yesterday with the last patient's completion of the study protocol in our PALISADE-1 trial. This Phase III clinical trial as we've reported is a U.S. multi-center, randomized, double-blind, placebo-controlled, parallel design, clinical study in adults who…

Thank you, Shawn. As Shawn mentioned, I'd like to highlight a few of the financial results from our fiscal year 2022 ended March 31, 2022. I also would encourage everyone to review our annual report on Form 10-K, which we filed with the SEC earlier this afternoon for additional details and disclosures. Our research and development expenses increased by $23.5 million from about $11.9 million to $35.4 million for the fiscal year ended March 31, 2021 and 2022, respectively. This increase is primarily due to the preparation, initiation and continuation of the various clinical trials in our PALISADE Phase III program for PH94B in SAD as Shawn just described as well as the preparation and advancement of our exploratory Phase IIA study of PH94B for treatment of adjustment disorder with anxiety and the continuing non-clinical and pre-clinical development and outsourced manufacturing activities for both PH94B and PH10, as well as the hiring of multiple senior management personnel during fiscal 2022. Our general and administrative expenses increased to approximately $13.5 million for the fiscal year ended March 31, 2022 compared to approximately $7.1 million for the fiscal year ended March 31, 2021. This increase was largely due to the commencement of initiatives related to phase-appropriate PH94B pre-launch commercialization activities and hiring of additional management personnel during fiscal 2022. Our net loss attributable to common stockholders for fiscal year ended March 31, 2022 was approximately $48.7 million compared to a net loss attributable to common stockholders of $42.3 million for fiscal 2021. At March 31, 2022, we had cash and cash equivalents of approximately $68.1 million. Again, I would refer you to our annual report on Form 10-K that we filed earlier today for additional details and disclosures. I'll now turn the call back over to Shawn.

Thanks, Jerry. As we continue on our journey to achieve our goal of becoming a top tier biopharmaceutical company with innovative solutions for those who are facing challenging mental health disorders everyday. We continue to put forth relentless effort into creating life changing value for patients and for our stockholders. Our team of change-makers consists of amazing individuals, people with deep industry knowledge and experience in CNS drug development and a passion for improving the lives of those who are battling mental illness. We've led the company to its strongest position in history to the brink of our first Phase III data readout. And this would certainly not have been possible nor will our future success be possible without the commitment and the steady endurance of the entire VistaGen team, our collaborators and our stockholders. So on behalf of our entire team at VistaGen, I want to thank you for the privilege and for the opportunity to make a difference. Mark?

Thanks, Shawn. This concludes our prepared remarks. Operator, Kyle, it's okay, we'd like to now open up the call for questions.

At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is from Andrew Tsai with Jefferies. Please proceed with your question.

Thanks, and good afternoon. Thanks for taking my questions. So as you mentioned the last patient of PALISADE-1 finished the study earlier this week. So how long would you say it will take you to scrub, clean the data? At this juncture, is it safe to assume topline data comes August or September rather than July? Thanks.

Andrew thanks for the question. So yes, as you noted, we announced yesterday that the last patient's completed the study protocol in PALISADE-1. So we're now in the process of going through the steps to lock down the database, clear the queries and the normal course actions that you take when you complete a study. And then that moves into assessment by statisticians, and then obviously internal assessment of what data come out of that effort. But [that most] usually takes about six to eight weeks, so from the last patient out milestone. So at this time, I'd anticipate topline data sometime by mid-August at the latest, certainly not into September.

Okay. Thanks. That's really good color. And from time-to-time, we'll ask you about what you're thinking about planning to share basically in the topline release. So at this juncture, what exactly do you think you plan to share? How much will you share? Is it going to be on a more straightforward side or could it be a little bit more detailed? Just a little bit more color. Thanks.

Well, remember we have a mirror-image study ongoing PALISADE-2. So there's typically when that's the case, you are limited to a few key things that are important to know. So we'll certainly report on the primary endpoint. As you remember, it's a change in the Subjective Units of Distress Scale, the mean group difference between visit two and visit three in the public speaking challenge. So certainly we'll report on the primary SUDS endpoint. That's the sole endpoint and the primary endpoint in the PALISADE-1 study. We'll also announce obviously data about adverse events and the like. So primary endpoint with P value plus safety data.

Very good. And I guess last one for now is as we think about gauging the study success, one thing is ensuring site-to-site consistency, minimizing variability, but one thing you've done from the get-go is getting Dr. Liebowitz onboard. So how instrumental has he been in terms of executing these studies properly? Can you give us a little bit more color here? Thanks.

Yes. Well, it's always a privilege when you have the [Babe Ruth] of anything to be able to be involved in anything you do. And I think Michael is the Babe Ruth of SAD. No question, he is the world leader I think in SAD and obviously he was involved in the Phase II program, but to have Michael's input and guidance and wisdom and experience augmenting our team's experience, it's just been terrific. And Michael isn't just a nominal PI, Michael has personally interacted with each of the PIs in the study and that's been very valuable not only for the PIs, but certainly gives us a lot of confidence that the things that we've done in terms of setting up and designing and executing this study as the – really the most appropriate study for a drug with the unique properties that we think PH94B has in the acute treatment setting. And that's very helpful. So he innovated the Liebowitz Social Anxiety Scale, as you certainly know, that's a very important tool in the clinical assessment of SAD. It's also a very key piece of our ability to make sure we have a population that's suitably affected by the disorder being randomized into the study. So having Michael's involvement is just – it's been fantastic.

Okay. Very good. Fingers crossed. Best of luck.

Thanks, Andrew.

Our next question is from Tim Lugo with William Blair. Please proceed with your question.

Hey guys. This is Lachlan on for Tim. Thanks for taking the questions. I guess, Shawn, could you just remind us on the IP situation for PH94B. I know the molecules been around for a while, so can you just remind us of what your expectations of exclusivity there? And then in terms of AV-101 + probenecid study, is there any more granularity you can provide on either when we can expect an update or data there and maybe what you would be looking for and what you'd consider good beyond obviously just increased CSF exposures?

Sure. I’ll give you less guidance on the last point. We'll have to see how things go. But the IP for PH94B based on our current assessment runs with [PTE] all the way through March of 2033, possibly a little bit longer with [Peds]. One of our key objectives on the other side of – if we see some positive results from the PALISADE program is to move right into peds development. So that's an important piece as well of the commercial picture. In terms of AV-101 and probenecid, that study is underway. It's a drug-drug interaction study of the combination following some of the preclinical work we saw when the two were put together and the brain concentration of 7-chlorokynurenic acid was increased multiple folds in both species that we assessed the combination. And so now putting the two together in a DDI study gives us a little bit additional comfort about the two drugs together and we'll see, we'll take some CSF reads. And at the end of that assess whether we think there's sufficient basis to move forward, and we'll just have to see what the data show and have some further discussion about whether it makes sense to move into – there's multiple different neurological indications, where that might be appropriate based on preclinical work we've done in levodopa-induced dyskinesia in pain, in even possibly epilepsy, MDD. So have to see.

Got it. Thanks.

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

Hi. This is Luke Herrmann on for Brian. Congrats on the recent progress and thanks for the questions. Looking to the PALISADE data, can you provide any additional clarity on the degree of difference on SUDS that you think would be a home run scenario and what is the minimum difference that you'd view is clinically meaningful? And then secondly, given the FDA's current stance regarding the HAP study, does this give you any additional confidence about potential interactions with the DEA moving forward? Thanks.

Sure. Well, a homerun stats sig, so that's what we powered for, that's what we want to see. But Mark Smith, why don't you go ahead and give a few comments about the – what we think is clinically relevant as we move into the data readout zone.

Sure. So for an individual patient, we're hoping for a SUD score change of 20 from their individual baseline so themselves as their own control, and that's based on the Phase II data, and how those SUD scores correlated with what the physician saw. If the physician said, well they're doing much, much better on this public speaking, they have much less anxiety compared to the last time on placebo. So a SUD score of 20, we would consider really clinically obvious. And we'll see if that's – can be verified in this larger patient sample. But yes, that's sort of what we're seeing – what we're hoping to see as somebody who's really responding very, very well to the drug.

Mark, talk a little bit about the Phase II data, the difference between the group means not a…

Yes. So now if you look, what we're interested, of course is, is in significance between placebo and drug and with the drug and Phase II, we saw about a – I think it was about a 26 point difference. On placebo, there was a 14 point difference and that's to be expected that there would be some placebo response since they go through the public speaking challenge twice. So they kind of know what to expect the next time. So whether you call that placebo effect or just familiarity with the procedure, but yes, we're looking for about a 12 point change. That's what we power to 90% powered. But we also powered for – or anticipated, there could be more variance because we have 20 sites now compared to the smaller Phase II study. But – so yes, that's what we're looking for.

And what was the last question, Luke?

The second one was on the HAP study, given that FDA's isn't required at this point. Does that give you additional confidence about interacting with the DEA moving forward?

Yes, look, we were very happy with the interactions we've had with the agency. Not saying DEA and FDA always think alike, but the more important part of this is when we compositely frame everything that we know to date that everything that was submitted to the agency, all preclinical work, all clinical work in addition to the things that really drive our confidence from the very beginning, when we first started working with the drugs, no binding to opiate or dopamine or nicotine receptors, no androgen affinity. But then when we layer on top of that, the studies that we did last year on GABA-A and the radiolabeled – C-14 radiolabeled study all that together. And then on top of that, no clinical signal in any study to date of an aid that's associated with abuse liability that provides a tremendous amount of confidence. So – yes, the confidence has always increased. When you have concordant thoughts from the agency that's associated with your drug development, DEA will also as will FDA, and we will be looking to add if there's any reason to have any concern about anything that happens in the ongoing studies, long-term safety study and any other study. Remember, in the Phase III studies, there's one dose administered to those who are randomized to drug in the Phase III study at visit three. So pretty confident in the context of that situation. But yes, overall, I think it gives a tremendous amount of comfort if we enter into a similar dialogue with DEA.

Great. Thank you

Our next question is from Jason McCarthy with Maxim Group. Please proceed with your question.

Hey guys. This is Michael Okunewitch on the line for Jason. Thank you for taking my questions. I think just one for me. [I'd like to seem] to provide a bit more color on the commercialization strategy now that we're fast about approaching that pivotal data. In particular, I guess, how much of a marketing effort and patient education is required in this indication, given that there's – there are relatively limited options out there for SAD patients?

Yes. Great. We got a strong lineup of pinch hitters today. It's good to see. So thanks for the question. It's an exciting time that the awareness of SAD isn't like migraine, right? So it's a different commercial effort. If you have an indication that is – others have already blazed the trail and you have a whole bunch of competition. In our case here, with respect to where we would be if we're successful with this program, there isn't a giant pharmaceutical company sitting next to what we'd be bringing into the market. So certainly, we will have efforts under – we already have them underway now associated with raising awareness. The fact that over 25 million people in America are affected with this disorder means there's pretty broad awareness. Anyway, we're seeing an increased prevalence of diagnosed people with SAD even though that diagnose and untreated population seems to be increasing. But it's important to go to physicians already, go to nurse practitioners already, go to psychiatrists already. We have a couple slides on our website deck that reflects some of the outreach that the team's already done associated with blind based – blind profile-based market attribute study. And it's been tremendous feedback, 251 psychiatrists and PCPs involved in that study that we did. There's also been some really strong work with market access folks with some of the payers. So we will certainly want to make sure this is a case where both the KOLs, the medical practitioners and patients have an equal and robust knowledge base about the drug, about its pharmacology, about how it ought to be dosed and the way that we think it can fit the life that they have, and they're trying to reorient it away from the kind of fear and…

Thank you. I really appreciate that. Very comprehensive answer.

You bet.

[Operator Instructions] It looks like we have reached the end of the question-and-answer session. And I'll now turn the call over to Mark Flather for closing remarks.

Thanks so much for all your help today, Kyle. If you have any additional questions from any of our listeners, please do not hesitate to get in touch with us by e-mailing ir@vistagen.com or contacting the individuals listed in our press release issued today. We also encourage you to sign-up on our website to stay connected with the latest news from VistaGen. Thank you for tuning-in, and we appreciate everyone's attention and support. We look forward to keeping you current on all of our continuing progress. This concludes our call. Have a great day. You may all disconnect now. Thanks again.