Greetings and welcome to VistaGen Therapeutics’ Third Quarter of Fiscal Year 2022 Results Conference Call. [Operator instructions] And 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. Thank you. You may begin.

Thank you, John. Hello and welcome to VistaGen’s conference call covering our fiscal year 2022 third quarter 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 for this call will consists of prepared remarks from management, followed by a brief opportunity for questions. This call is being webcast 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 quarterly report on Form 10-Q 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 or 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 at VistaGen thank you for joining this call. We sincerely hope you and those who are important to you are doing well both physically and mentally. Taking care of your mental health is essential at every stage of life. And as we enter into the third year of the COVID-19 pandemic, it’s safe to say that at one point or another everyone’s mental well-being may have been impacted in some manner. And even before the pandemic, anxiety and depression disorders represented large and accretive global markets with unsatisfied medical needs. And now perhaps more so than ever before, innovative treatments for anxiety and depression disorders are needed to improve the lives of millions of individuals around the world who are suffering from these mental health conditions. Our team is on task and is working tirelessly to develop much needed novel treatments with the potential to deliver rapid onset beliefs or relief without the negative side effects and safety concerns of current medications. Our third quarter results reflect notable progress across our pipeline and all other aspects of our business. During calendar ‘22, we anticipate key top line Phase 3 data readouts with exciting potential to transform major aspects of mental healthcare. Our PALISADE Phase 3 program is designed to further demonstrate potential of PH94B as a rapid onset, as needed, acute treatment of anxiety in adults with social anxiety disorder or SAD. Our two ongoing Phase 3 studies in the program, PALISADE-1 and PALISADE-2 and our PALISADE long-term safety study are on track, where top line data readout is previously anticipated. Specifically, PALISADE-1 is expected to deliver top line results midyear this year and PALISADE-2 is expected to deliver top line results in the second half of…

Thank you, Shawn. As Shawn mentioned, I will highlight a few financial results from the third quarter of our fiscal year 2022. I would also encourage everyone to review our quarterly report on Form 10-Q filed with the SEC earlier this afternoon for additional details and disclosures. Our research and development expenses increased by $4.5 million from $3.5 million to $8 million for the third fiscal quarter ended December 31, 2020 and 2021 respectively. This increase results primarily from expenses related to preparing for and conducting our PALISADE Phase 3 program for PH94B in SAD, including the continuation of our PALISADE-1 and PALISADE-2 clinical trials as well as initiating our PALISADE long-term safety study and our Phase 2a study of PH94B for treatment of adjustment disorder with anxiety. These studies and the continuation of non-clinical and preclinical development and outsourced manufacturing activities for both PH94B and PH10 accounted for increased expenses of approximately $3.1 million during the quarter ended December 31, 2021 compared to the same quarter of the previous fiscal year. Salaries and benefits expense for the quarter ended December 31, 2021 increased by approximately $0.8 million versus expense for the comparable prior year quarter, primarily due to the addition of new senior management and other personnel across multiple R&D disciplines. Our general and administrative expenses increased to approximately $2.9 million for the quarter ended December 31, 2021 compared to approximately $2.1 million for the quarter ended December 31, 2020. That increase was primarily due to continuing initiatives related to phase appropriate PH94B pre-launch commercialization activities. Our net loss for the third quarter of fiscal 2022 ended December 31, 2021 was approximately $10.5 million versus a net loss of $5.3 million for the comparable quarter of fiscal year 2021. At December 31, 2021, the company had cash and cash equivalents of approximately $83.7 million. Again, please refer to our quarterly report on Form 10-Q that we filed earlier today for additional details and disclosures. I will now turn the call back to Shawn.

Thanks, Jerry. So, our experienced team is well-positioned to advance our programs through important late stage clinical and regulatory milestones and also navigate a responsible path towards the potential commercialization of PH94B. Our team is comprised of amazing individuals who not only possess vast knowledge and experience within our industry, but who also share our passion for social change and align with our corporate values. As we forge forward as change-makers, we are confident and we are very excited about the potential for our CNS pipeline to make meaningful transformations in mental health care and improve the daily lives of those impacted by anxiety and depression disorders everyday. On behalf of our entire team at VistaGen, again, thank you for your continued support.

Thank you, Shawn. This concludes our prepared remarks. Operator, we would now like to open up the call for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Andrew Tsai with Jefferies. You may proceed with your question.

Thanks and good afternoon. Hope you guys are doing well. First question is on the Phase 3 PALISADE program, I am curious how are the rollovers to the open label I guess, long-term safety portion looking? What percentage of patients who have completed PALISADE are moving over? And maybe talk about whether – how does that compare your expectations? We will start off with that. Thanks.

Thanks, Andrew. Great to talk to you. Good question. I can just say we are pleased with the way that we are seeing the rollover from PAL-1, PAL-2 into long-term safety, on track as we had expected, and we see it continuing that way.

Yes. And remind us one more time; just what the powering assumption for PALISADEs are and how should besides efficacy reduction in the PH94B arm change as we go from Phase 2, Phase 3, if at all? And feel free to talk about, how placebo might change, but I believe you mentioned how responses are pretty consistent in the past maybe, but can you just talk about that remind us the powering assumptions as well?

Well, the sample size for PAL-1, PAL-2 was based on what we observed as the main difference between the average suds for the 94B and the placebo arms in Phase 2, which was 12 points. So, the varying testament that’s used for the sample size calculation was increased, as you would expect when you move from a smaller number of sites as in Phase 2 to a larger number of sites as we have in Phase 3 to allow for potentially higher expected variability when you go up to the higher number of sites. So, we are – we took that into account and the way you do that is to increase the standard deviation from Phase 2 to Phase 3, which we did by about 6 points and that may or may not occur, but it was the right way to go. And we, as you would expect, also got a 90% power to detect the difference between the two independent groups under those assumptions.

Yes, thanks. And maybe the final question before I hop in the queue, Phase 3 timing of PALISADE-1 maybe talk about your confidence in generating data in mid-2022 given the COVID situation, I would love just to hear about some color around how that’s going and is it – are you ready to kind of talk about whether it’s looking like closer to Q2 or Q3? Yes, I will stop there. Thanks.

I think we are still expecting the top line data in mid ‘22. So I think we are going to stick with that, Andrew. That’s on target as previously anticipated and PALISADE-2 in the second half of ‘22. So we do get a lot of questions about COVID and the Omicron variant and how it’s impacted enrollment during the ongoing trial. So, we just – we remain comfortable with the estimated timelines for top line data that I have just noted. And should somebody develop COVID during the trial period, there are procedures already in place that allow that individual to return to the trial when it’s safe resulting typically if at all and only a minor delay in their trial period. So although we are not able to predict the future of the pandemic and its potential impacts going forward, we believe that we are doing our best to minimize any potential disruptions in these studies and we will continue to monitor that situation very closely, obviously, always prioritizing health and safety of both the subjects and the studies and the site staff members.

Great. Thanks a lot for taking my questions.

You bet.

Our next question comes from the line of Tim Lugo with William Blair. You may proceed with your question.

Hey, guys. This is Lachlan on for Tim. Thanks for taking the question. So I was wondering also on the same topic of PALISADE and COVID, have you had to expand site numbers at all because of COVID disruptions or anything? And then secondly, do any of the sort of more local restrictions like mask mandates change anything in the study? I mean, does it change if patients or site members or anything masked or not during the trial?

Yes. So, the trial site numbers remain constant, haven’t had any dramatic shift in what we laid out upfront, so that which isn’t surprising. And then as to consistency, the local, the local mandates are one thing, but the protocols that the sites have for safety that were implemented really early on in COVID in ‘20, still pretty much remain in place. So, in our study, all the subjects and the audience members in the public speaking challenge are masked.

Okay, great. Thanks. And do you – is there any reason to think that could sort of change the experience of the public speaking challenge compared to the Phase 2?

Mark, you can address that? Mark Smith?

Yes, I, good question, don’t know for sure. But we have seen pretty high scores throughout this study and other high scores that they are pretty stressed out by the procedure. So I don’t think they are hiding behind their math, but the most important thing is, whatever they do in the baseline visit is the same as the randomization visit. And so we keep things consistent for each individual patient. And I think that ensures some consistency. But in answer your question now, I don’t think it’s reducing the overall stress of the procedure, but these patients are pretty stressed out by it.

Awesome. Thank you.

Our next question comes from the line of Brian Skorney with Baird. You may proceed with your question.

Hi, this is Luke Herrmann on for Brian. Thanks for taking our questions. First, for the social anxiety opportunity, just looking beyond the PALISADE program, I was wondering if you could remind us of the scope of the additional small study is still required and then granularity on the timelines for those? And then just also if you could talk a little bit about PH10 and MDB and provide any color on the Phase 2b study design at this point? Thanks.

Thanks for questions, Luke. So, couple of things. The other NDA enabling studies beyond long-term safety and the two PALISADE studies, PALISADE-1, 2, there is a small dose response study FDA wants us to do that has two different dose levels that we haven’t assessed, so that’s only about 90 subjects, 45 in each dose level, 0.8 and 6.4 micrograms. Remember we are dosing in microgram levels. And then there is a dosing interval study which we are still working with the agency around what exactly they want to see, but again, pretty small study, very short handful of subjects, maybe two dozen at tops that will – won’t take too long to complete it, probably within the quarter that we initiated. So, those are studies that we will be initiating in the second half of ‘22. As to PH10, what we have been doing with that, and I don’t really want to go into it yet, but obviously the focus is on major depressive disorder. And the focus is on what the world needs today, which are rapid onset decisions, whether something is going to work or not work and a considerable differentiation in side effects and safety profiles, given the alternatives that are delivering rapid onset effects. So, we have had several meetings with KOLs and in our internal team, and we have – we were huddling around the design that we think we want to go forward with. And we will give guidance on that as we get a little closer to the study launch.

Alright. Thank you so much.

Our focus for sure, is using PH10 as a standalone agent for major depressive disorder, one that we think can be inserted very early upfront into the treatment paradigm, possibly even frontline, but at a minimum second line. And we think the characteristics of PH10 that we have seen, and the study that was done, the POC study gives us a lot of confidence that the direction we are headed is the right way to go and as we see things evolving in the depression market over the coming years.

[Operator Instructions] Our next question comes from the line of Jason McCarthy with Maxim Group. You may proceed with your question.

Hi, good afternoon. This is Joanne Lee on the call for Jason McCarthy. Thanks for taking the questions. Congrats on all the progress in the quarter, glad to hear that the PALISADE program is on track to be out this year. On to the partnership side with AffaMed, I would just want to see if you could provide some color on the progress of that partnership in China? And as a follow-up, maybe if you could provide any details related to company intend to launch a global policy trial and if we should anticipate further partnering opportunities outside of the US. Thank you.

Alright. Thanks for the question. So, the partnership with AffaMed is covers China, South Korea and Southeast Asia. And we are very pleased we have been making very steady progress in advancing 94B closer to the start of a global clinical trial, which we will call PALISADE global, to include China and the other territories. So, we will plan at the moment for that trial to be held in five different territories, with China being one of those five. And we would expect that we have an opportunity to launch that study sometime in the second half of ‘22. So, we will give further guidance as we get the kind of regulatory clearance that we need, in order for that study to be green lighted and launch sometime in the second half of this year. It’s not a necessary study for our NDA enabling program in the U.S., of course, it’s important for our ex-U.S. partnering activities. And we would expect to have additional partnering opportunities beyond those territories in due course, later this year.

Great. That was helpful. Thank you so much.

Our next question comes from the line of Andrew Tsai with Jefferies. You may proceed with your question.

Okay. Thanks. Two follow-ups, and then I will leave it to that as just, because PALISADEs 1 and 2 are staggered a little. So, let’s just say the first Phase 3 was positive. How would that affect the second Phase 3, because maybe there is some expectation bias. So, how do you guys think about that? How do you control for that?

Well, it goes, you can’t be 100 – you will see it in disclosure documents, it’s the way it works. One study is one study and the second study, ideally you want to see the same results achieved to replicate design. We just have to continue to forge forward in the study the same way we had in that study up to the point of data. So, there really isn’t a shift change or a course change. I am not saying that there won’t be different awareness, but this study is designed to be able to call out anything that seems to be extraordinary, but I think it’s be a champagne challenge. So, we will see how it goes. Mark, do you have anything further you want to add to that?

Yes. I mean they are identical studies. So, I mean those procedures and all are not going to change regardless of what happens in the first one. But it is possible. I suppose if our statistical calculations are off, we could continue that study a while longer or even end it earlier. So, but that’s the main thing that could change. But the protocols themselves are virtually identical.

Thanks. And second question. Maybe talk about the pace of cash burn over the next 12 months. That would be very helpful. Thanks.

Thanks, Andrew. So well, you just might have seen we just last reported cash position at 12/31/21 was $83.7 million was Jerry noted. So, our current cash position is sufficient to advance the CNS pipeline through the very exciting stream of potential milestones that we laid out this calendar year. So, namely the top line data readout, so it’s PALISADE-1, PALISADE-2 and also the adjustment disorder study in Phase 2a. So, we expect the burn to continue around current levels and we will closely monitor and reassess this after PALISADE-1 reads out. That readout will of course impact the direction of cash spent beyond that.

Thanks.

At this time, there are no further questions.

Thank you, John. If you have any additional questions, please do not hesitate to get in touch with us at IR@vistagen.com or you can call any of the phone numbers listed on our press release issued today. Thank you for tuning in and we appreciate everyone’s attention and support. We look forward to keeping you current on our continuing progress. This concludes our call. Have a great day. And you may all disconnect now.