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Wednesday, January 11, 2017

JPM Meeting Notes - VistaGen Therapeutics (VTGN)


I think VistaGen Therapeutics' (VTGN) AV-101 is one of the more interesting small-cap biopharma assets in mid-stage development. I’ve written in the past that I think AV-101 has blockbuster sales potential. Heck, there was just a Reuters story out today talking about how large and open this market is. The drug is currently in a Phase 2a study at the NIH right now as a monotherapy for the treatment of depression. Results are expected around the middle of the year. This study is primarily designed to understand things like safety, dosing, pharmacokinetics, and receptor engagement rather than efficacy; but, I still think it is a meaningful catalyst for the shares. A Phase 2b examining AV-101 as an adjunctive therapy for depression is expected to begin in the next few months.

I see a lot of interest in VistaGen from investors. I get a lot of questions on the name over email and Twitter. I even had a CEO of a completely different company ask me about the drug in one of my meetings. That CEO will remain nameless, but he has experience in CNS and he thinks AV-101 will work.

One question I do seem to get often on AV-101 is on the intellectual property (IP) protection. Yes, the composition of matter patent on AV-101 has expired, but it is not unheard of for a pharmaceutical company to move forward in development with important assets that do not have CoM protection. Obviously, there are method of use patents, manufacturing protection, and label indications that can and will protect the drug. I spoke briefly with the company about its IP protection strategy and management seems confident this is not an area of concern. I know there are numerous applications in the U.S, Europe, and Japan under review right now.

VistaStem, the company’s wholly-owned subsidiary, offers additional upside to the AV-101 story. In December, VistaStem entered into a sub-licensing agreement with newly formed BlueRock Therapeutics. I wrote an entire article on the subject so I will rehash details here; but, I did spend a good deal of my time with VistaGen management talking about VistaStem and the potential for the company to enter into additional licensing agreements around the technology in the near-term. I think this is a very underappreciated part of VistaGen. VistaStem was able to pull in $1.25 million from the BlueRock deal. And, while this is not a tremendous amount of money, the back-end milestones are large and I think we will see additional transactions in 2017 that should start to add-up to a meaningful level.

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BioNap is long shares of VTGN.

2 comments:

  1. do you believe vtgn will have to access the equity market this year to do a capital raise?

    ReplyDelete
    Replies
    1. That's probably a safe assumption, but hopefully any financing comes after positive P2a data from the NIMH in the second quarter. The stock could be $10 by then and raising would be a lot less dilutive.

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