VistaGen Therapeutics, Inc. (VSTA) Taps the Turnaround

The idea of a turnaround is often associated with dysfunctional companies being purchased by outsiders or otherwise given new management, and then being transformed with a change in product, structure, or philosophy, providing a fresh and profitable direction for what had been a losing asset. If coming from the outside, the process can be extremely lucrative, allowing a purchase or major stake at bargain basement prices, and then rapidly growing that investment through the application of proven principles. Individuals and companies who have taught themselves how to identify and resolve corporate weaknesses stand to profit handsomely once they have the resources to get in on the action.

VistaGen Therapeutics seeks to apply the turnaround concept in a creative new way that could end up turning millions and perhaps billions of dollars in lost pharmaceutical development into positive revenue. Using their proprietary stem cell technology, VistaGen has been able to develop a revolutionary bioassay platform that allows drug developers to accurately test for things like heart toxicity right in the laboratory, prior to lengthy clinical testing and well before going to the huge expense and risk of taking a drug to market. Such early in-lab testing allows developers to carefully guide the initial formulation of drug candidates, providing an effective new way to develop drugs and even rescue previously shelved drug candidates.

VistaGen’s stated goal is to use their advanced stem cell technology to build a diverse drug pipeline consisting of new, proprietary small molecule “drug rescue variants” which are as effective as once promising drug candidates but without the heart or liver toxicity that caused them to be put on the shelf. They are, in effect, looking to identify and then turn around approaches that had been considered largely lost. They believe each lead drug rescue variant will have the potential to be a new drug candidate in which they plan to have economic participation rights (up front and development milestone payments and royalties on commercial sales).

Considering that it can easily take on average investment of $800 million to $1.7 billion, plus 12 to 15 years, before a new drug candidate reaches the market, all of which can be lost due to unexpected and often late-discovered heart or liver toxicity problems, the value of a novel in vitro technology, a Clinical Trial in a Test Tube™, that can help rescue part or the entirety of that large investment is clear.

For additional information, visit www.VistaGen.com

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