William Blair analyst Tim Lugo initiated coverage of VistaGen Therapeutics with an Outperform and fair value estimate of $7. The stock in premarket trading is up 25%, or 16c, to 80c. VistaGen is a clinical-stage biopharmaceutical company focused on developing next-generation treatment options for major depressive disorder and social anxiety disorder, Lugo tells investors in a research note. He believes the company "remains an overlooked, undervalued name with differentiated assets in large mood disorder markets." At current valuation levels, VistaGen shares offer an "asymmetric" risk/reward profile, says Lugo. He points out the company's lead asset AV-101 will read out a proof-of-concept study with the placebo-controlled Phase II Elevate trial before year-end 2019. AV-101 is an oral prodrug of 7-Cl-KYNA and has a "strong rationale" to show efficacy in major depressive disorder patients, contends Lugo.

Vistagen announced results from a Phase 2A pilot study of PH15, an investigational pherine nasal spray, for improvement of psychomotor impairment caused by mental fatigue. PH15 demonstrated a statistically significant improvement in reaction time compared to placebo and caffeine in sleep-deprived study participants. The previously unreported randomized, double-blind, placebo-controlled, crossover Phase 2A pilot study of PH15 was designed to explore the efficacy, safety, and tolerability of intranasal administration of PH15 on psychomotor performance as measured by reaction time in sleep-deprived participants. Ten participants were randomly administered PH15, placebo, or caffeine in sequential sleep deprivation study sessions spaced one week apart. During each sleep deprivation session, participants received blinded treatments before the start of each of four testing periods, at 6:00 p.m., 9:00 p.m., midnight, and 3:00 a.m. The participants' reaction times to both isochronous and stochastic "flash" light stimuli were computer-measured during each testing period as participants responded to the luminous stimuli. During both isochronous and stochastic reaction time tests, administration of 1.6 microgram PH15 nasal spray induced a significantly faster mean reaction time compared to placebo nasal spray across all time points. PH15 also demonstrated a statistically significant improvement in reaction time compared to oral caffeine for both reaction time tests during the testing periods at midnight and 3:00 a.m. when subjects were most fatigued. PH15 was well-tolerated with no serious adverse events reported. The adverse event profiles of PH15 and placebo were comparable, with brief nasal itching in one PH15-dosed participant and three placebo-dosed subjects. Participants on oral caffeine, however, experienced palpitations, euphoria, dry mouth, stomachache, and polyuria. This previously unreported Phase 2A pilot study of PH15 was sponsored by Pherin Pharmaceuticals, now a wholly owned subsidiary of Vistagen, and conducted at the National Institute of Psychiatry, Sleep Disorders Clinic in Mexico City, Mexico in 2011. Vistagen gained access to the results of this study in connection with its acquisition of Pherin in February 2023. The late Jose Maria Calvo, MD, formerly Associate Professor, National Institute of Psychiatry in Mexico City, served as the Principal Investigator of the study.