With a late-stage miss reported for its prospective social anxiety disorder (SAD) treatment fasedienol, Vistagen’s chances at an FDA approval in the indication are looking slimmer. That said, the company still has one more key trial to read out in 2026 that could give its candidate a fighting chance at success.
On Wednesday, Vistagen announced that its Palisade-3 study of intranasal fasedienol for acute SAD treatment failed to demonstrate statistically significant improvements over placebo on a self-reported measure of distress, causing the trial to miss its primary endpoint.
Further, there was “no treatment difference between fasedienol and placebo for the secondary endpoints,” Vistagen said in a Dec. 17 press release. In a small silver lining for the company, Vistagen noted that safety data on fasedienol were “favorable” and on par with the profile observed in previous clinical trials.
Taking a closer look at the data, patients on fasedienol achieved a least squares mean change from baseline of 13.6 points on the Subjective Units of Distress Scale (SUDS) tool, compared with a 14-point change in the trial’s placebo group, analysts at William Blair wrote in a note to clients this week.
In a previous study, Palisade-2, fasedienol helped patients achieve a 13.8-point improvement on the self-reported distress scale versus an 8-point change for placebo, the analysts pointed out.
“We note the magnitude of efficacy in the fasedienol arm is similar across the studies, but an elevated placebo response eliminates a detectable treatment effect in PALISADE-3,” the Willaim Blair team wrote Wednesday.
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Vistagen is disappointed in the trial’s outcome, naturally, and its chief executive sounded slightly thrown by the Palisade-3 results as well.
“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,” President and CEO Shawn Singh said in a statement. “We are thoroughly reviewing the results of the study, evaluating the potential impact of the results on our ongoing studies and plan to seek feedback from the FDA.”
In light of the trial fumble, Vistagen will, in parallel, roll out “company-wide cash preservation measures” intended to pave a cash runway into 2027, Singh said.
Myles Minter, Ph.D., and his team of analysts at William Blair were also discouraged by the news but noted that “we had always viewed the study as high risk.”
Vistagen does have another fasedienol anxiety trial, Palisade-4, due to read out in the first half of 2026, which provides “an additional shot on goal for a confirmatory study supportive of a fasedienol NDA filing, alongside the positive PALISADE-2 results released in 2023,” the William Blair team wrote in a note to clients Wednesday.
Still, Wednesday’s Palisade-3 readout has put a damper on the industry watchers’ expectations, with Minter’s team singling out the lack of separation from placebo on the study’s primary endpoint and “no secondary endpoints indicating a signal favoring treatment in PALISADE-3.”
In turn, the William Blair team is “now uncertain if fasedienol is an active agent for the acute treatment of SAD, and we now view PALISADE-4 as a substantially higher-risk profile.”
Fasedienol, part of a new class of yet-unapproved intranasal assets dubbed pherines, works by modulating the olfactory-limbic amygdala fear/anxiety neurocircuits, specifically and selectively binding as an agonist on peripheral receptors on human nasal chemosensory neurons, Vistagen explained in its release. The drug has been designed to trigger quick olfactory bulb-to-brain neurocircuits that are thought to regulate brain areas involved in behavior and autonomic nervous system activity.
The biotech has developed its candidate to trigger therapeutic effects without the need for absorption into the blood or uptake into the brain, which Vistagen figures could make fasedienol “a safer alternative to other pharmacological options if successfully developed and approved.”
In a conversation with the William Blair team, Vistagen management explained that data from Palisade-4 remains on track to be released in the first half of next year, the analysts told clients. In the meantime, the biotech is combing through the Palisade-3 results to “identify any potential sources of the high placebo response observed,” the analysts wrote.
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Back in 2023, Vistagen’s stock soared a heady 1,272% when it reported a phase 3 anxiety win for fasedienol in its late-stage Palisade-2 trial.
In that readout, fasedienol’s performance allowed the study to meet its primary endpoint and also scored on a secondary endpoint, showing statistically significant change in clinician-determined improvements between SAD patients on fasedienol and those on placebo.
Wednesday afternoon, the company’s stock was down nearly 80%.
