Vistagen buys out Pherin more than 4 years after licensing now-lead social anxiety spray

Vistagen is doubling back to a familiar face, acquiring Pherin Pharmaceuticals in a bid to wipe out any future royalty payments in addition to nabbing three new assets. The deal comes more than four years after Vistagen licensed Pherin’s nasal spray to treat social anxiety, which sits atop the former’s pipeline.

The full amount of the deal was not disclosed in the announcement Wednesday, but Vistagen said it was handing over 12.4 million of its shares plus a “nominal amount of cash.” A spokesperson for the biotech didn't immediately have an answer regarding the total price of the acquisition.

The move is a homecoming for Vistagen, which has Pherin to thank for its lead asset, PH94B. The social anxiety spray arrived at Vistagen’s doorstep phase 3-ready in 2018 along with another phase 2 neuropsychiatry asset, PH10. Vistagen paid $2.25 million in common stock for the two therapies.

By buying Pherin outright, Vistagen no longer owes royalty or milestone payments to Pherin for those therapies. Vistagen also tacks on three new potential products to treat cognitive impairment, migraine and hot flashes, and appetite-related disorders, respectively. 

The deal makes Vistagen a “market leader” in the development and commercialization of small-molecule therapies for central nervous system disorders, CEO Shawn Singh claimed in the release. A bold proclamation for a company with no approved medicines.

Standing in the way of Singh’s pipeline bullishness are successful phase 3 data on PH94B that have so far eluded the company. In Vistagen’s PALISADE-1 trial, the drug was found to not improve social anxiety symptoms compared to placebo. Patients were given the spray 20 minutes before a public speaking challenge. 

Those results sent the company’s share price plummeting and threw into question whether it was worth the time and money to press on in a second phase 3 trial, PALISADE-2. After pausing enrollment in July, the company ultimately concluded that it will forge ahead. Data from the trial are expected in the first half of 2023. 

Wall Street was essentially mum following news of the Pherin purchase, with Vistagen’s shares up just more than one cent per share to 12 cents. The company remains firmly in the Nasdaq danger zone, having traded under $1.00 for almost five months now. 

Social anxiety remains a tricky indication—as demonstrated earlier this week when Bionomics' lead asset failed a phase 2 trial that also used a public speaking challenge assessment.