Shares of Vistagen (NASDAQ:VTGN) plunged 78.8% on Wednesday after the biopharmaceutical company disclosed that its Phase 3 clinical trial of fasedienol for social anxiety disorder failed to achieve its primary endpoint.
The late-stage drug developer said the PALISADE-3 study did not show a statistically meaningful reduction in anxiety symptoms compared with placebo. Results indicated a least squares mean improvement from baseline on the Subjective Units of Distress Scale (SUDS) of 13.6 for patients treated with fasedienol, compared with 14.0 for those receiving placebo, producing a non-significant difference of just 0.4.
The outcome contrasts with earlier data from both Phase 2 trials and the company’s PALISADE-2 Phase 3 study, which had previously delivered encouraging results. In the latest trial, secondary endpoints also failed to show a treatment benefit versus placebo, although the safety profile of fasedienol remained consistent with earlier studies.
“We are disappointed by the unexpected results of this public speaking challenge trial, which are inconsistent with positive outcomes observed in Phase 2 and our PALISADE-2 Phase 3 study,” said Shawn Singh, President and Chief Executive Officer of Vistagen.
Following the trial failure, Vistagen said it is rolling out company-wide cost containment and cash preservation measures designed to extend its financial runway into 2027. The company plans to conduct a detailed review of the trial data and engage with the U.S. Food and Drug Administration, while continuing to evaluate strategic alternatives across its pherine-based drug pipeline.
Fasedienol, which previously received Fast Track designation from the FDA, is intended to modulate olfactory-limbic amygdala fear and anxiety neural pathways without requiring systemic absorption into the bloodstream or direct penetration into the brain.