VistaGen Therapeutics (NASDAQ: VTGN) Featured Research Report

10 A EGIS C APITAL C ORP. PH94B: discussion As will be covered later in the ‘Indications’ section of this initiation report, Social Anxiety Disorder (SAD) is a major – pandemic level – health issue, involving 7.1% of US adults in the past year, and 12.1% of US adults in their lives, according to the National Institute of Mental Health. Many types of anxiety have early onset, for example 13 years old in SAD. 9 The treatment landscape for anxiety is likewise discussed in the ‘Indications’ section, however, our general view is that there are several treatment options, which include psychotherapeutic and pharmacologic treatments, and combinations thereof. In SAD, patients are afraid of situations in which they are the center of attention. There are a variety of feelings attached to that, according to researchers, such as fear of appearing clumsy, drawing criticism, embarrassing themselves, or being judged in a negative fashion. 9 Pharmacological treatments used in anxiety in adults may include: SSRIs, SNRIs, anti-depressants, calcium modulator, azapirone, and RIMA. The adverse effects (AEs) of these drug classes is well documented, and may include jitteriness, nausea, restlessness, headache, fatigue, weight changes, tremor, sweating, sexual dysfunction and others. 9 In particular, benzodiazepines are used in an estimated 55% to 94% of patients with anxiety disorders in the U.S. Side effects of “benzos” (e.g. Xanax, Valium, Klonopin, etc.) include fatigue, dizziness, increased reaction time, and cognitive impairment mainly in older patients. Additionally, use beyond 4-8 months may lead to dependency. 9 In “Effect of an Acute Intranasal Aerosol Dose of PH94B on Social and Performance Anxiety in Women With Social Anxiety Disorder” (Michael Liebowitz, M.D., et al) showed a greater decrease in mean Subjective Units of Distress (SUDS) in patients treated with PH94B than patients on placebo. In addition, importantly, PH94B’s side effects were found to be benign and the intranasal spray was administered just 15 minutes before laboratory stimulated public speaking and social interaction challenges. Taking all of this data, and reviewing the existing landscape, we believe PH94B is a highly differentiated asset which: (1) works very quickly (e.g. within 15 minutes of administration), (2) does not bear the same side effect profile seen with the benzos, and (3) will find itself, if approved, being commercialized in a backdrop characterized by no other approved treatment with quite the same safe and acute-use characteristics. Therefore, it’s not hard for us to imagine the light, small nasal applicator traveling around with SAD patients on their person, throughout their day, and being used on an as-needed basis. The fact that SUDS is the endpoint in the Phase 3, and that existing Phase 2 proof of concept data around SUDS was so positive, further reinforces our bull case. PH94B was licensed to EverInsight/CBC Group in June 2020 in Asian markets. There was a $5mm up-front payment, and potential milestones of $172mm and royalties on commercial sales. EverInsight will take responsibility for the Phase 3 and regulatory submission activities in Greater China, South Korea, and Southeast Asia. 2 VistaGen Therapeutics, Inc. October 8, 2020