Good day, everyone and welcome to today's Vistagen Fiscal Year 2024 Second Quarter Corporate Update Conference Call. [Operator Instructions] Please note this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mark McPartland. Please go ahead sir.

Thank you, Travis. Good afternoon, everyone and welcome to Vistagen's fiscal year 2024 second quarter corporate update conference call and webcast. This afternoon we filed our quarterly report and issued a press release providing an overview of our progress last quarter. We encourage you to review the release, which can be found on the Investors section of the Vistagen website. During today's call, we will make forward-looking statements regarding our business based on our current expectations and 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 we make today. Additional information concerning risks factors that could affect our business and financial results is included in our fiscal year 2024 second quarter Form 10-Q for the period ending September 30, 2023, and in future filings that we will make with the SEC from time to time, all of which are or will be available on our website and the SEC's website. With that taken care of I'd like to thank and welcome all of our stockholders, analysts and everyone taking an interest in Vistagen. I'm joined on the call today by Shawn Singh, our Chief Executive Officer; Cindy Anderson, our Chief Financial Officer; and Josh Prince, our Chief Operating Officer. Shawn will provide an overview on the recent results and our progress across our key pipeline programs. A brief opportunity for questions from our sell-side analysts will follow the prepared remarks. This call is being webcast and will be available for replay after completion. The replay link can be found in the Investor Events section of our website. I would now like to turn the call over to our Chief Executive Officer, Shawn Singh.

Thank you, Mark and good afternoon, everyone and thank you for joining our call. We achieved several milestones since our last call to establish a well-defined and fully funded Phase 3 development program of our lead pherine asset fasedienol with the potential to enable us to advance to appeal to a potential NDA submission for the acute treatment with social anxiety disorder. In the midst of the ongoing mental illness crisis, we are poised to transform the treatment paradigm for this widespread anxiety disorder that affects the lives of about 10% of our population. Social anxiety disorder or SAD is a disruptive, serious and potentially life-threatening anxiety disorder with high opportunity cost in daily life and no FDA approved patient tailored, as needed acute treatment option to help individuals rapidly and safely, address their anxiety when the stresses are upon them during what for many is their decades long journey with SAD. The hope of a revolutionary approach to treatment extends beyond fasedienol and SAD to our full pherine-based-portfolio and we remain fully focused on their development to create faster-acting, safer alternatives to address significant unmet needs in large CNS-related markets, where current treatment options fall short for patients. Since our last conference call in August, we've continued to build on the momentum created by our successful PALISADE-2, Phase 3 study of fasedienol for the treatment of anxiety in adults with social anxiety disorder. During the past few months, we've strengthened our balance sheet considerably, securing $137.7 million in gross proceeds from equity financings and exclusive negotiation agreement with Fuji Pharma regarding a potential license to develop and commercialize our PH80 in Japan. We expect this cash infusion will extend our corporate runway through several important clinical and corporate milestones as we advance our pipeline including our primary focus on…

Thank you, Shawn. It's great to be part of team. As Shawn mentioned, I'd like to highlight a few financial results for fiscal year 2024 second quarter. I also encourage everyone to review our quarterly report on Form 10-Q filed with the SEC earlier this afternoon for additional details and disclosures. Research and development expenses decreased by approximately $9 million from $12 million to $3.9 million for the quarter ended September 30, 2022 and 2023 respectively. The decrease in R&D expense, primarily due to the completing the initial studies of our PALISADE Phase 3 programs in SAD, as well as reduced non clinical development regulatory and outsource manufacturing activities for fasedienol and itruvone. Selling and administrative expenses decreased by approximately $0.5 million from $3.7 million for the quarter ended September 30, 2022 to $3.2 million for the quarter ended September 30, 2023, primarily due to decreased compensation, consulting fees and professional services. Our net loss attributed to common stockholders for the quarter ended September 30, 2023 was approximately $6.6 million versus a net loss of approximately $17.5 million for the quarter ended September 30, 2022. At September 30, 2023, Vistagen had cash and cash equivalents of approximately $37.6 million. From September 30, we received approximately $93.5 million in net proceeds from an underwritten equity financing and $1.5 million from Fuji Pharma under exclusive negotiation agreements. If our PALISADE Phase three program is successful, w believe that our current cash position will be sufficient to fund our operations through potential submission of a US new drug application for fasedienol for the acute treatment of anxiety in adults with SAD. As a reminder, please refer to our quarterly report on Form 10-Q filed today with the SEC for additional details and disclosures. I will now turn the call back over to Shawn.

Thank you, Cindy. So to wrap up, our dedication to enhancing global mental health and the overall well-being of individuals who are affected by a wide range of CNS disorders is unwavering. And as we are progressing through the next phases of our corporate development strategy, we're doing that with confidence in the potential of our PALISADE Phase 3 program for fasedienol in social anxiety disorder, as well as the clinical stage assets that are up and down our entire pipeline. We've got a capable team, got a robust pipeline and we've got a steadfast commitment to pioneer and differentiated solutions, totally different approaches to the current standard of care for multiple sizable CNS markets that have substantial unmet needs. So on behalf of our entire Vistagen team, once again, we're grateful for the privilege and for the opportunity to create meaningful impacts for patients not only in the US, but all around the world, who are impacted in their daily lives by these disruptive and often disabling serious CNS conditions.

Thank you, Shawn. Operator, we'd like to open up the call for questions from the sell-side analysts participating on the call today.

Yes, sir. [Operator Instructions] Our first question comes from Andrew Tsai, Jefferies.

Hey good afternoon. I appreciate taking the questions and congrats on the progress. Great to see you making strides here. So, obviously the next step for -- PH94B is to start the PALISADE-3 in first half of 2024. So, what needs to be done for you to start earlier in Q1, rather than Q2? What exactly are the bottlenecks there next? Thanks.

Thanks, Andrew. Appreciate the question. I agree, thanks to INN, it is easy to say PH94B than fasedienol. We hope the world will get used to that soon enough. The answer is we are targeting Q1 and so we are -- everything we're doing right now is in preparation to launch PALISADE-3 in the first quarter of 2024. So all the pregame work a lot of that's already been underway for several months now. And of course we bring a lot of knowledge from the prior studies to bear into that effort. So that's our target and we'd expect to be able to have PALISADE-4 follow hopefully early in the second quarter -- early in the second half of 2024.

Okay. Very good. And can you summarize for us just one more time, all the things you're going to do differently and PALISADEs 3 and 4 to ensure study execution, what removal/deletions or additions are you making to these studies relative to the prior two studies?

Yeah, great. Thank you for that question. It's important question. As you obviously know the macro world is fundamentally different as we move into the first part of 2024 as it is right now relative to 2022 or 2021, certainly 2021. And what's nice to see is the return to normal of a lot of the typical conventions that are associated with efficient execution, preparation and execution of clinical studies. As it relates to our particular protocol and the studies that we'll be initiating going forward with this public speaking challenge in the study design that's associated with SUDS, there are certain things that may or may not have been in effect, but we know that it's possible for COVID to disrupt the olfactory system a bit. So there will be no subjects enrolled that have had a nasal swab within a month for RSV, for COVID, for flu. They'll have to pass the smell test an olfactory -- clinical factory test in order to be eligible, to be no high-frequency vapors or smokers or drinkers of Red Bull and things of that nature. There's a high level of scrutiny that's associated with the front end with assessing patient eligibility, Josh Prince is on. Josh is our COO and oversees our team. Josh, you want to highlight a few other things?

Yeah. I think you captured a couple there Shawn. And it's important to think of essentially we're doing everything we can to ensure that we have the patience for this one-dose public speaking challenge make sure you have patients in there that can get the benefit from product. It's those things that Shawn mentioned that's also kind of do the oversight in terms of sites, in terms of changing the way that we monitor and work with our CRO over the sites to make sure that we're on top of things that we have data reviews, eligibility reviews those types of things. So those are the key is to make sure that we have a successful study. It's really all about the execution of that public speaking challenge with the right patients in there and that's where we're focused forward.

Some of the other things Andrew that are possible. Obviously, the surveillance is -- it's fundamentally changed since even PALISADE-2. So part of our operating model is to make sure we have our own people on sites in addition to the resources that are brought to bear by CROs in the sites themselves. Of course, no masks will be involved in PALISADE-3 or PALISADE-4 which is a big difference from the prior studies. So just trying to get back to a situation where the macro environment allows us to apply, a lot of the trade craft that's been historically successful when we're trying to not only plan for, let's say with an in-person investigators' meeting the likes of which weren't possible with some of the earlier studies. That starts things off and then the ability to interact more frequently with sites in person all that's important when you're trying to generate rigorous adherence to the study protocol. I think also what we'll see is better predictability about site staff in general. The depth of the set the staff's, the more consistent execution -- ability to execute between studies, study visits I should say or predictably planned them. So a lot of things that are essential to be able to execute a protocol such as we've got in place for the successful PAL-2 study. And as we bring that into PAL-3 and 4 even more confidence in the overall environment than was the case in 2022.

Thank you. And maybe last one for me. I want to be respectful of the other colleagues here. Can you give us a flavor of what additional data will be presented at your medical conferences tomorrow for those that are not diagnosed? And I think there's another asset that's where there's data being presented. So what would be the key takeaways that we should take home for these presentations? Thank you.

Thanks. Well, a key effort right now is to obviously raise awareness of what the clinical audience hasn't seen in many, many years in this indication. So to be able -- you'll see mostly from those presentations on the top line results from PALISADE-2 as well some data from our open-label study which is remarkable. Given the number of doses and the number of subjects exposed to the drug in an anxiety disorder, you still see it and then some data from our PH80 study. So key to what we are doing now, obviously, is to raise awareness of what's been achieved as well as to raise awareness of what's ahead not only in the markets, but also within the clinical communities that we know ultimately will be key pieces of the puzzle downstream.

Great. Thank you very much.

All right. Thanks Andrew.

Our next question comes from Tim Lugo with William Blair.

Thanks for taking the question. Can you update us on the lack of abuse potential for fasedienol? I think, I got that right. I know you have some preclinical data around that but I'm wondering if there's anything incremental coming out of PAL-2, and just maybe your interactions with the agency as well.

Yeah. Thanks Tim. Good to hear from you. Obviously the data that we teed up to the agency back in 2022 was focused on whether or not there were signals and had been any signals at that time of abuse liability potential given that this is a nasal spray and a lot of folks were wondering well what happens when you put something in the nose is it become addictive? And the uniqueness of this mechanism of action that we have with fasedienol and the rest of the variants is important to note, because what we're dealing with and we've done multiple studies not only on the clinical side, but some important preclinical ones associated with the reality that there's no potentiation of GABA for example as you see with benzodiazepines. Radio labeling the drug showed no systemic exposure. So the drugs these variants don't have to get into the brain and act directly on CNS neurons in the brain, including the abuse liability receptors that are typically out there. So we put a whole body of work to the agency at the time and asked the question what came back from as we reported was they didn't see any reason for us to have to do a human abuse liability study at that time. Since then what's been delivered is all of the data from the open-label study, which had 481 subjects and the adverse event profile in that study was remarkable especially again for drug and neuropsychiatry where the most common adverse effect was our adverse event was headache and that was reported and really only 17% overall, but 8.7% were drug-related and beyond COVID-19, which was 0% drug-related there was no other treatment emergent adverse effect in more than 5% of the participants. And in the PALISADE-2 study similar in PALISADE-1 similar safety profile although even less prevalent in terms of the treatment emergent adverse effects. So these are events. These data overall non-clinical and clinical really continue to reinforce our belief in why we don't see these safety concerns you typically see associated with benzones or antidepressants. These are not systemically absorbed drugs. You cannot detect them in the plasma. And so you're basically using the nose as a portal to achieve the effects from different regions of the brain that are associated with these different indications, not having to go in the mouth and might be metabolized by the liver, bump into other drugs through the bloodstream, other blood-brain barrier into the brain, all those are major factors that really distinguish this class from everything that's historically been approved or is even in development for these neuropsychiatric indications. So it's not a concern we've had in the past, it's not a concern the FDA had when we showed them the data and it's certainly not a concern that we have now after tens of thousands of more doses and hundreds of more subjects since we first got that read from the FDA.

That's great to hear. Thank you.

We have no further questions in the queue at this time. I would now like to turn the call back over to today's speakers for any additional or closing remarks.

Thank you, operator. If there are any additional questions that you might have please don't hesitate to contact us here Vistagen at ir@vistagen.com or contact me those listed on our press release issued earlier today as we noted, or on the contact section of our website. We also encourage you to register for email updates on our website to stay connected with the latest news from Vistagen. Again thank you for participating on the call today. We appreciate everyone's attention and continued support and look forward to keeping you current on our continued progress. This concludes the call. Have a tremendous day.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.