Welcome to the VistaGen Therapeutics First Quarter Fiscal Year 2023 Results Conference Call. [Operator Instructions] I’ll now turn the call over to your host, Mark Flather, Vice President of Investor Relations. Mr. Flather, you may begin.

Thank you, Erica. Hello, and welcome to VistaGen’s conference call covering our first quarter of fiscal year 2023 financial results and business update. I’m 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; and Jerry Dotson, our Chief Financial Officer. The format for this call 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. The 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 statements made today. Of course, forward-looking statements involve risks and uncertainties. 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 will be – which are and will be available on our website and the SEC’s website. Now, I’d like to turn the call over to our CEO, Shawn Singh.

Thank you, Mark, and good afternoon, everyone. And on behalf of our entire team here at VistaGen, thank you all for joining the call today. VistaGen’s working to address unmet mental health needs in communities all across the globe. We are focused on improving patient care in mental health, and our talented team is driving innovation to help patients live healthier and more enjoyable and productive lives. Our drug pipeline currently includes three central nervous system therapies that have the potential to fundamentally shift the treatment paradigm for anxiety and depression and other CNS disorders. The prevalence of these disorders has grown considerably since the beginning of the pandemic, and it is crystal clear that currently approved treatments are underserving people struggling with these conditions. 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 often associated with currently approved medicines. We know that we’ve had a recent setback, but we remain focused on getting PH94B back on track and maintaining our course of developing and commercializing new differentiated treatments with the potential to improve lives. In previous studies, PH94B has demonstrated potential efficacy as compared to placebo and a favorable safety profile when used acutely as needed before stressors at home, work or elsewhere. For this reason, we have decided to continue late-stage clinical development of PH94B as a potential treatment for social anxiety disorder, adjustment disorder with anxiety and potentially other anxiety disorders. As a result of the outcome of PALISADE-1, in addition to our interim analysis of PALISADE-2. We are currently assessing different study designs for submission to the FDA later this year. This includes study designs that may consist of multiple administration, multiple use assessments over an extended period of time as…

Thank you, Shawn. As Shawn mentioned, I’ll highlight a few of the financial results from our first – from the first quarter of our fiscal year 2023. I would also encourage everyone to review our quarterly report on Form 10-Q that we filed with the SEC earlier this afternoon for additional details and disclosures. Our research and development expenses increased by $9.8 million from $5.5 million to $15.3 million for the quarter ended June 30, 2021 and 2022, respectively. This increase is primarily due to expenses related to conducting our PALISADE Phase 3 program for PH94B, including PALISADE-1, PALISADE-2, the PALISADE open-label safety study and the PH94B Phase 2 study in adjustment disorder with anxiety as well as nonclinical development and outsourced manufacturing activities for both PH94B and PH10. Our general and administrative expenses increased to approximately $4.8 million for the quarter ended June 30, 2022, compared to approximately $2.6 million for the first quarter of the fiscal year ended June 30, 2021. That increase was primarily due to the addition of senior management and other personnel during calendar 2021 and the first half of calendar 2022 as well as PH94B prelaunch commercialization market research studies and analyses. Our net loss attributable to common stockholders for the quarter ended June 30, 2022, was approximately $19.8 million versus a net loss attributable to common stockholders of approximately $8.1 million for the quarter ended June 30, 2021. At June 30, 2022, the company had cash and cash equivalents of approximately $52 million as a result of the deferral of several research and development and pre-commercial activities involving PH94B, the company anticipates a considerable reduction in our external spending to conserve cash and extend our cash runway for at least the next 12 months. Again, please refer to our annual – our quarterly report on Form 10-Q filed today with the SEC for additional details and disclosures. I’ll now turn the call back to Shawn.

Thanks, Jerry. So, while we’d have hoped that PALISADE-1 would have been positive, we’ve long believed that the paramount potential benefit of PH94B to patients would come through acute as-needed use, but over time. The mean duration of SAD for most subjects is somewhere around 20 years. And the onset, as I’ve mentioned before, it’s typically in adolescents between the ages of eight and 15. But the use over time would allow patients to face anxiety-provoking situations and engage in the activities that they’ve long avoided in the past. And given what we’ve recently learned from PALISADE-1 and the PALISADE open-label study, we believe LSAS measurements over time may be better suited to demonstrate efficacy and the true impact of PH94B on patients lives. We’ve seen PH94B improved LSAS scores in both our Phase 2 study versus placebo, a published study after two weeks of use and in our recent open-label study of a cohort of nearly 200 subjects by capturing the monthly change from baseline on the LSAS. In both instances, we’ve seen rapid and robust improvement. And in the open – PALISADE open-label study, we’ve seen continued improvement over several months. All these studies reinforce our confidence in the potential of PH94B to help people, to help people in a world where SAD and other anxiety disorders are more and more prevalent every day. So again, our mission is clear, and I’m confident in the potential of our pipeline and our team to accomplish it. And that’s to radically change the trajectory of mental health care and improve the lives of millions of people around the world who battle mental health challenges, including anxiety and depression disorders every day. We’re thankful for that privilege, and we’re also thankful for that powerful opportunity to make a difference.

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

[Operator Instructions] Our first question comes from Tim Lugo from William Blair. Please state your question.

Hi, this is John on for Tim. Thanks so much for taking our questions. So I just wanted to get a little bit more clarity on these preliminary results that you’re seeing from the OLE. So as patients are using the drug over time as needed, are you seeing improvement in their acute response to the drug or just in their overall anxiety regardless if they’re just administered? And are you also evaluating sites in the open label or just Liebowitz scale. Sorry, as quick follow-up for your upcoming anxiety disorder study. I think that the endpoint you have is the Hamilton Anxiety Scale. Can you just give us some color on how that compares to SUDS and the Liebowitz scale? And how you’re thinking about that endpoint in light of your most up-to-date knowledge from PALISADE? Thanks.

Yes. I’ll work it back the adjustment disorder study has HAM-A as the primary endpoint. So a totally different disorder, totally different study design. In that study, the drug is given four times a day daily for 28 days. So it’s a different type of disorder and a different type of scale that’s necessary to assess potential benefit in that study – like looking for a signal in that study on HAM-A. In terms of what we’re seeing in the cohort that I mentioned, it’s nearly 200 subjects that have completed months of use of 94B and comparing their LSAS scores against baseline. We’re just looking at LSAS. And so we wouldn’t be looking at this case, these are just LSAS data, not SUDS-related data. But what we are seeing is, importantly a significant number even after one month are showing a 20-point plus reduction in SAD severity as measured by the LSAS. So that’s an important point, somewhere around one out of three of them is likely to see that kind of reduction based on this cohort’s data after only one month.

Okay, thanks for the additional color.

You bet.

Our next question comes from Andrew Tsai from Jefferies. Please state your question.

This is Vijay [ph] on for Andrew. Thanks for taking our question. I guess two questions on my part. Number one, the interim PALISADE-2 analysis, could you just give a little more detail on that. Like where is that? Have you seen any data from the analysis and what you’re looking to get out of the analysis? And second question about the PALISADE-1 trial. What is your leading hypothesis in terms of what happened that drove the difference in the result between the Phase 2 and the Phase 3? And was there any separation with PH94B at all in the sub stores across the time points?

I’ll answer the second one first. It sounds like this is like the San Francisco Giants lineup. We’ve got a lot of pinch hitters. So happy to talk to you. I didn’t catch your name. Sorry about that. As to PAL-1, it’s just – it’s still too early. There’s so much that we need to assess associated with that study. We also – with the fact that we have the PALISADE-2 study in an interim analysis mode. We’re just going to need more time to try to figure it out. There are obviously a lot of things that you can speculate about, but it would just be speculation, CMC related, methodology related, COVID related. There’s a lot of potential variables, that could have brought noise in to the study, especially a study that we had to scale up to 20 sites during the pandemic. So there’ll be more on that. We will certainly expect to give more details at a future date. Once we’ve been able to go through everything that is available as the data continue to come through. As to the interim analysis, again, that’s – it’s an independent biostatistician interim analysis. So we don’t get anything on that until the data are gathered by that statistician and then the interim analysis is generated. So sometime within the next, hopefully, in about a month or so, we’ll see some – maybe a little bit more than a month. We’ll see some of the data from that interim analysis, and I’ll give us some guidance and some additional guidance to provide to the FDA when we get in front of them, hopefully before the end of the year, that’s the goal to discuss the path forward, which in large part will depend on what we learn about PALISADE-1 between…

Got it. Got it. Thank you. Yes, thank you for the details and I understand like there’s still a lot going on with PALISADE-1 and you’re still figuring that out. But just wondering if you can share how the drug in placebo arms performed relative to Phase 2 at the primary end point? And like what’s there like a higher placebo response versus the Phase 2, for example?

Yes. We’ll get to that later. We’re not ready to put it out right now in the context of the interim analysis, and we need to see more data. But we’ll put more details out of that in a future date. It didn’t hit the primary endpoint, so simple as that at this point.

Got it. Thank you.

Our next question comes from Brian Skorney from Baird. Please state your question.

Hey good afternoon guys. Thanks for taking my question. On the open label extension and what you said about the 20-point reduction, just a couple of questions there. I guess at what point is the 20-point reduction from? I think, there’s a couple of different time points. Is it going into the challenge itself? Is it some average baseline leading up to the channel? Just trying to get a feel for – when you say a 20-point reduction that it’s not sort of at a peak anxiety portion of the study. And then I – since this open label, everyone sort of knows that they’re going on treatment. So there’s some placebo effect here. I guess, have you looked back historically initiation of something that a patient is being told as an active treatment, what sort of placebo effect you could have in sort of a three month period?

Yes, Brian, those are good points. There’s all solid, no question about it. Remember, this study design is different than the PALISADE study. So this is again more like what we saw in the Phase 2 study, where people took the drug and had at home, and they had the ability to take it up to four times a day over a two week period. Here, what happens, it’s the same thing. People over multiple months continues, are – they’re set up a baseline LSAS, right, at the visit where they’re to spend drug for the first time. And so the subsequent 20-point increase is at one month, it’s about 40%; to two months, a little bit over 40%; three months, over 50% of that cohort on the LSAS saw reduced anxiety on the LSAS, right? So each month, it’s compared against the baseline for that particular subject. So – and a 20-point drop anywhere on that Liebowitz Social Anxiety Scale, which for many of you, if you don’t know that scale that Dr. Liebowitz established, it provides a score across 24 different questions, both as to fear or anxiety and also as to avoidance. So that combined score. But a 20-point reduction really on any point of the scale where the subject is at baseline is a very significant change in that person’s ability to manage their SAD. So let’s say someone was a severe SAD subject and they dropped 20 points on that scale, they would drop down to somewhere in the moderate social anxiety scale, right? So we think 20 points is – it’s a big deal. In some cases, it’s been a little bit more than that, but what we saw is that basically, for every two patients in that cohort who were treated with 94B…

Great. Thanks, Shawn.

[Operator Instructions] At this time, we have no more questions.

Thank you, Erica. If you have any additional questions, 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 our continuing progress. This concludes our call. Have a great day. You may all disconnect now.