VistaGen can't puff out phase 3 success for social anxiety nasal spray

The second half of 2022 was always going to be a high-stakes moment for VistaGen Therapeutics as it awaited data from two phase 3 trials for a social anxiety disorder nasal spray. And the stakes just got even higher, after the results of the first of the two found that the company swung and missed.

VistaGen announced Friday that the spray, PH94B, failed to improve social anxiety symptoms during public speaking challenges in the phase 3 Palisade-1 trial. The flunk puts significantly more pressure on VistaGen’s second phase 3 trial, Palisade-2, which is slated to read out later this year. 

Wall Street pummeled the company for its clinical failure. As of 10 a.m. ET Friday, shares were down 84%, from $1.07 to $0.17.

The spray—bought by VistaGen from Pherin in 2018—has been designed as an on-the-spot treatment for social anxiety. To test this in the trial, the company set up two, five-minute public speaking challenges 20 minutes after self-administering the spray. During the challenge, trial participants were asked their anxiety score. The drug made no significant difference in improving that score compared to placebo in the patient-reported outcomes. 

Yet CEO Shawn Singh remains bullish on the potential for the drug, saying in a statement that the company will “continue to pursue” PH94B’s development as a treatment for anxiety. The company also highlighted the safety and tolerability results, which revealed no severe or serious adverse events. 

All eyes are now on the second phase 3 trial, Palisade-2, although the study protocol basically mirrors Palisade-1. The company also has a global phase 3 trial underway—Palisade Global—alongside partner AffaMed. 

The results are an even tougher gut punch after the company posted positive preliminary phase 3 data in April 2019 showing that the spray reduced average peak anxiety scores versus placebo. The company is also awaiting phase 2b data of the spray to treat adjustment disorder with anxiety, also slated for late 2022. 

Beyond PH94B, VistaGen is working on a nasal spray to treat major depressive disorder (MDD), PH10, with the hope of asking regulators sometime this year for the green light to launch into trials. The company is considering developing the med for “several distinct depression disorders” beyond MDD. 

Clinical development for the troubled spray has come at a hefty price tag. According to the company’s annual report, R&D spending nearly tripled from $11.9 million in the fiscal year ending March 31, 2021 compared to $35.4 million in 2022. As of the end of March, VistaGen had $68.1 million in cash on hand.