A second phase II failure to differentiate from placebo in a test of benefits for people with depression has put AV-101, an NMDA receptor antagonist developed by Vistagen Therapeutics Inc., in uncertain territory. As the company began investigating reasons for the outcome, its shares (NASDAQ:VTGN) fell 72% to 30 cents Thursday on disappointment over results of the most recent study, called Elevate, which tested AV-101 as an adjunctive treatment for major depressive disorder (MDD). It followed a readout in May of a trial finding no separation of AV-101 from placebo for people with treatment-resistant depression.

In an initial appraisal, Vistagen CEO Shawn Singh said it's possible that AV-101's efficacy might have been compromised by either insufficient transport of the drug across the blood-brain barrier or subsequent inadequate concentrations of its active metabolite, 7-chlorokynurenic acid (7-Cl-KYNA), in the brain. But in speaking with BioWorld Thursday, he said he remained confident that the company is on the right track to potentially overcome the issue.

Recent preclinical studies have shown that the anion transport inhibitor probenecid led to substantial increases in the concentrations of AV-101 and 7-Cl-KYNA in rodent brains. Encouraged by those results, Singh now sees a potential ability to "create a better concentration that could generate better efficacy" in MDD without adding substantial regulatory risk, given probenecid's long use and prior FDA approval.

The double-blind Elevate trial used a sequential parallel comparison design to evaluate the safety, tolerability, and efficacy of AV-101 as an adjunctive treatment in patients with MDD who had an inadequate response to a stable dose of standard antidepressant therapy. The primary endpoint was change from baseline in the Montgomery-Åsberg Depression Rating Scale (MADRS-10) total score. Investigators randomized 199 patients in a 1-to-3 ratio to either AV-101 1,440 mg/day or placebo in stage 1 of the study. Placebo nonresponders (defined as a <50% reduction from baseline in MADRS-10 total score at the end of stage 1) were then re-randomized, in a 1-to-1 ratio, in stage 2 to receive either AV-101 1,440 mg/day or placebo for two weeks.

The AV-101 treatment arm did not differentiate from placebo on the MADRS-10 total score compared to baseline, but it did prove well-tolerated, with no psychotomimetic side effects or serious adverse events, Vistagen said.

AV-101, also known as L-4-chlorokynurenine, is a prodrug of 7-Cl-KYNA. By inhibiting NMDA receptor function rather than blocking it, the candidate has demonstrated a strong safety profile, avoiding the psychotomimetic effects of ketamine, while also bypassing locomotor sensitization or stereotypical behaviors associated with that drug. For that reason, should it eventually succeed in the clinic, Singh said Vistagen's team sees a role for it in the at-home treatment of MDD, perhaps following treatment with Spravato (esketamine, Janssen Pharmaceuticals Inc.). (See BioWorld, Feb. 14, 2019.)

Given that AV-101 "has always been more of a platform molecule," Singh said, "that something doesn't work in depression doesn't mean it won't work in pain, or levodopa-induced dyskinesia, epilepsy" or other indications the company has explored. But in the bigger picture, the program's fate is likely to rest on an evaluation of the "total body of preclinical and clinical work" across all indications, the company said. That review, slated for 2020, will include the outcome of a U.S. Department of Veterans Affairs-sponsored study of AV-101's target engagement currently underway at Baylor College of Medicine, further evaluation of the probenecid data and other preclinical work.

Chardan Capital Markets analyst Jessica Schmerler reserved judgment on the program's fate, noting that her team would await "further transparency on the precise efficacy outcomes of the trial before making any assumptions on the utility of AV-101." But with a price target of 20 cents, she said Chardan is valuing the company at cash plus the combined acquisition prices of its pherine assets, PH-94B and PH-10, which Chardan values at about $4.3 million.

A phase IIb study of the Pherin Pharmaceuticals Inc.-licensed PH-10 in MDD is in the works, while a phase III study of PH-94B, also from Pherin, for social anxiety disorder is also planned. Both studies are expected to be underway by 2020.

At Sept. 30, Vistagen had cash and cash equivalents of $4.1 million.

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