Walls close in on VistaGen’s PALISADE anxiety trial program in wake of phase 3 failure

Walls close in on VistaGen’s PALISADE anxiety trial program in wake of phase 3 failure

After announcing last month that a late-stage trial for a social anxiety nose spray was unsuccessful, VistaGen is pausing another phase 3 trial to see whether it’s worth continuing.

The mental-health-focused biotech will place enrollment on hold for the PALISADE-2 trial and bring in an independent biostatistician for an interim analysis in light of the news that PALISADE-1 failed, according to a Thursday after-market earnings release. The analysis will look at data collected to date in the second trial, and VistaGen will meet with the FDA to consider whether PH94B has a future in social anxiety disorder.

Last month, VistaGen reported that PH94B failed to improve social anxiety symptoms during public speaking challenges in the phase 3 PALISADE-1 trial. The miss put pressure on VistaGen to deliver in PALISADE-2.

CEO Shawn Singh expressed confidence in the therapy in the earnings report, pointing to preliminary data from an open-label trial where patients are using PH94B as needed to address their social anxiety. The therapy is also backed up by phase 2 data showing that PH94B can reduce the severity of social anxiety on an acute, as-needed basis and improve everyday functioning, according to Singh.

Shares of VistaGen over the past year peaked at $3.16 in September 2021 but have dwindled to just 17 cents as of Thursday’s close. The stock dropped another 9% to 15 cents as the markets opened Friday.

The company has already reduced new drug application-enabling activities to cut cash burn and reduced other spending for the next year to come. VistaGen is also developing a second nasal spray called PH10 for multiple depression disorders. The therapy has been through an exploratory phase 2a in Mexico, and VistaGen hopes to submit a request to the FDA to approve a study in the U.S. for major depressive disorder this year. If approved, the small study would get underway in 2023.

VistaGen reported $52 million on hand in cash and equivalents as of June 30, which should cover at least 12 months of operations.

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