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Vistagen Shares Fall Under $1 After Depression Drug Flunks Midstage Trial

Shanthi Rexaline

Vistagen Therapeutics Inc (NASDAQ: VTGN) shares were nearly cut in half Thursday following adverse results from a Phase 2 study evaluating its treatment-resistant depression (TRD) drug candidate.

What Happened

Vistagen, a thinly traded nanocap, said Thursday after the market open that topline results from an exploratory Phase 2 study of its investigational drug AV-101 did not demonstrate significant difference from placebo on the primary outcome measure.

The drug, which is being evaluated as a monotherapy in patients with TRD, was studied for the change from baseline in the Hamilton Depression Rating Scale total score.

On the safety front, the company said that, consistent with Phase 1 studies, AV-101 was very well tolerated, with no ketamine-like psychological side effects; safety concerns; or treatment-related adverse events.

AV-101 is an oral NMDA receptor glycine site antagonist with the potential to be a treatment for multiple CNS indications with a high unmet need.

Why It's Important

Major Depressive Disorder, or MDD, becomes TRD when affected individuals have not responded to at least two different treatments with antidepressants in a moderate-to-severe depressive episode.

About one-third of the people with MDD who do not find relief with antidepressants are said to have TRD.

Incidentally, Johnson & Johnson (NYSE: JNJ)'s Janssen unit won FDA approval for its Spravato — chemically esketamine CIII nasal spray and a drug belonging to the same class as Vistagen's — in early March.

What's Next

Vistagen is also evaluating AV-101 in a study dubbed ELEVATE as an adjunctive therapy in a significantly different population of MDD patients — those whose current depressive episode is less than two years in duration. 

The pipeline asset has been granted Fast Track Designation for development as both as an adjunctive treatment for MDD and as a non-opioid treatment for neuropathic pain.

At last check, Vistagen shares were plummeting 44.91 percent to 58 cents on roughly 11 times their average volume.

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