A beaten down micro-cap biotech company, Vistagen Therapeutics Inc., notched its best day ever, surging by as many as four digits after its experimental nasal spray for social anxiety disorder hit targets in a late-stage trial.
The drug developer’s stock soared a record 1,370% intraday — before paring gains to close up 677% at $13.05, the highest level in over a year. The unexpected success pushed the stock’s market value to $104 million, a level it had been trading below for the better part of a year amid a broad market selloff in risky assets and a prior trial setback.
Vistagen said the study of fasedienol nasal spray met its main goal, showing improvements on patients’ reported distress in a public speaking challenge while a secondary goal was also met with no severe or serious adverse events reported.
The new result “is supportive of the company’s hypothesis that Covid negatively impacted the first trial, and increases our confidence that fasedienol can be successful” in the next study, Jason McCarthy, a Maxim Group analyst wrote in a note.
McCarthy, the lone analyst tracked by Bloomberg that covers the stock, upgraded his rating to a buy from hold, and set a price target of $30.
Vistagen had four analysts covering it with a buy rating as of last July, just before the stock plunged after a prior late-stage trial of the drug failed to reach its main goal using the same scale measuring patient distress, dubbed SUDS. Shares had been setting record lows this year.
“Fasedienol demonstrated a rapid and very clinically meaningful reduction in SUDS score, indicating a single administration has the potential to reduce anxiety symptoms during an anxiety-provoking situation,” Michael Liebowitz, a founder of the Anxiety Disorders Clinic at the New York State Psychiatric Institute and a member of Vistagen’s advisory board, said in a statement.
An additional late-stage study is planned. That will include multiple administrations of the spray over several weeks on what the company said will be “a patient-tailored, as-needed basis.”
US-listed shares of Australian peer Bionomics Ltd. surged as much as 69% before paring gains to close down 13%. Bionomics is also developing a social anxiety drug.
--With assistance from Jeremy R. Cooke.
(Updates with analyst comments in fourth and fifth paragraph and closing prices throughout.)
