VISTAGEN THERAPEUTIC (VSTA) Q2 2022 Earnings Call Transcript

VISTAGEN THERAPEUTIC (VSTA -0.27%)
Q2 2022 Earnings Call
Nov 10, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to VistaGen Therapeutics second quarter of fiscal year 2022 results conference call. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Flather, vice president of investor relations. Thank you.

You may begin.

Mark Flather -- Vice President, Investor Relations

Thank you, Doug. Hello, and welcome to VistaGen's conference call covering its fiscal year 2022 second quarter financial results and recent accomplishments. I'm Mark Flather, vice president, investor relations of VistaGen. Thank you for joining us today and welcome to our shareholders, analysts, and anyone taking an interest in VistaGen.

Joining me today are Shawn Singh, our chief executive officer; Jerry Dotson, our chief financial officer; Dr. Mark Smith, our chief medical officer. The format for this call consists of prepared remarks from management followed by an opportunity for questions. [Operator instructions] This call is being webcast and will be available for replay.

The link can be found in the Investors IR Calendar section of our website at vistagen.com. On today's call, we will make forward-looking statements regarding our business based on our current expectations and current information. The forward-looking statements speak only as of today and except as required by law, we do not assume any duty to update in the future any forward-looking statements made today. Of course, forward-looking statements involve risks and uncertainties, and our actual results could differ materially from those anticipated by any forward-looking statement that we may make today.

Additional information concerning risks and factors that could affect our business and financial results is included in our most recent quarterly report on Form 10-Q filed earlier today with the Securities and Exchange Commission or SEC and in future filings that we make with the SEC from time to time, all of which are or will be available on our website and the SEC's website. Now with the formalities out of the way, I'd like to turn the call over to our chief executive officer, Shawn Singh.

Shawn Singh -- Chief Executive Officer

Thank you, Mark. Good afternoon, everyone. On behalf of our entire team at VistaGen, thank you for joining this call today. We sincerely hope you are all safe, healthy, and doing well.

The current mental health treatment paradigm requires new faster-acting medicines. Medicines without the negative side effects and safety concerns that are often associated with currently approved options. As the prevalence of anxiety and depression disorders has grown considerably over the last 20 months both in the U.S. and across the globe, the unmet needs become more acute than ever.

During the second quarter of our fiscal '22, we continued our strong performance and continued to build momentum across all aspects of our business. As we head toward the end of '21 and into 2022, we are increasingly confident and excited about the potential of our CNS pipeline to mitigate many mental health challenges and make meaningful improvements in the lives of millions of individuals around the world who are suffering from the debilitating effects of anxiety and depression. Among the milestones we achieved during the second quarter of fiscal '22 was the initiation of PALISADE-2, the second major phase 3 trial in our PALISADE phase 3 program for PH94B in social anxiety disorder or SAD. Like PALISADE-1, PALISADE-2 is a U.S.

multicenter randomized double-blind placebo-controlled phase 3 clinical study designed to evaluate the efficacy, safety, and tolerability of our PH94B nasal spray for the acute treatment of anxiety in adults with SAD. As a reminder, according to the U.S. National Institutes of Health, SAD is the third-most common psychiatric condition in the U.S. after depression and substance abuse and now affects over 23 million Americans.

The initiation of PALISADE-2 is another important step forward in our efforts to confirm the positive efficacy and safety data we observed in phase 2 development of PH94B in SAD. Successfully developed in our PALISADE phase 3 program, PH94B has the potential to be the first FDA-approved fast-acting nonsedating acute treatment of anxiety for millions in the U.S. who suffer from the debilitating effects of SAD. PH94B is designed to be used as needed on-demand as an acute treatment of anxiety for adults with SAD, treating their anxiety and fear of embarrassment, judgment, or humiliation in the context of an anxiety-provoking interactions, situation, or event in a manner similar to how a rescue inhaler is used to prevent the onset of an asthma attack or as an acute migraine treatment is used to prevent the onset of a migraine episode.

The market approval of PH94B in the U.S. would also pave the way for potential regulatory approvals in numerous additional high-value markets around the world. All ongoing studies in our PALISADE phase 3 program for PH94B and SAD are progressing well, and we remain on track for top-line data from PALISADE-1 in mid-'22 and from PALISADE-2 in the second half of 2022. With this unique mechanism of action and safety profile we've observed in all clinical studies to date, we believe PH94B also has therapeutic potential across a broad range of anxiety disorders beyond SAD.

During the quarter, we launched our exploratory phase 2A clinical development program for PH94B with the initiation of a phase 2A clinical trial and adjustment disorder with anxiety. With emotional stress and impaired functioning brought on by sudden changes in health, safety, economic, and social circumstances that many have experienced at heightened levels since the beginning of the pandemic, the increasing prevalence of adjustment disorder with anxieties become very apparent to our team and the clinicians within our ecosystem. We believe PH94B has a potential to offer hope to the growing number of individuals, whose ability to function in their daily lives has been impaired by the onset of adjustment disorder. We expect top-line results for this phase 2A study in the second half of 2022.

In the coming quarters, we plan to initiate additional small exploratory phase 2A studies to assess PH94B's potential in populations suffering from anxiety disorders beyond SAD and adjustment disorder where we believe the current treatment alternatives are inadequate. During the quarter, we also reported important new preclinical data on PH94B's potential mechanism of action. Data from a tissue distribution study and laboratory rats demonstrate that a single intranasal administration of radiolabeled PH94B was largely confined to the nasal passages with minimal or undetectable levels in most other tissues including the CNS. And importantly, no appreciable activity was observed in the brain.

We believe these results further highlight how the mechanism of action of PH94B is fundamentally differentiated from that of all current anxiety therapies. Because PH94B administered intranasally involves binding to peripheral neurons in the nasal passages, we believe there's limited transport of PH94B molecules to the circulatory system, thereby minimizing systemic exposure. When this radiolabeled PH94B data is combined with previously announced preclinical electrophysiology data demonstrating that the mechanism of action of PH94B does not involve direct activation of GABA-A receptors, which is in distinct contrast to the mechanism of action of benzodiazepines, we see a growing body of evidence suggesting that PH94B has potential to achieve anti-anxiety effects without requiring systemic uptake and distribution and without causing benzodiazepine-like side effects and safety concerns. Regarding our other clinical-stage drug candidates, PH10 nasal spray and our oral prodrug AV-101, we are on plan to initiate a phase 2B study for PH10 as a potential stand-alone rapid-onset treatment of major depressive disorder in mid-'22 and to initiate our drug-drug interaction study of the combination of AV-101 with probenecid near the end of this calendar year.

We believe our current cash position is sufficient to advance our CNS pipeline well beyond the steady stream of potential data and regulatory catalysts from our PALISADE phase 3 program for PH94B in SAD, not only in calendar '22 but into calendar 2023, as well as other important clinical opportunities across our pipeline. We believe we have the flexibility and options to further strengthen our balance sheet beyond the multiple key data readouts with potential to be significant value-creating catalysts for the company. As we advance development of mental health treatments with groundbreaking potential, we've added to our strong team of great people with extensive experience in CNS drug development, clinical operations, CMC, commercial operations, and medical and regulatory affairs. During our last quarter, we also expanded leadership expertise on our board of directors with the additions of Mary Rotunno and Maggie Fitzpatrick to our board, which now has a female-led majority, a significant distinction, and board representation within the biopharmaceutical space.

Our experienced team is well-positioned to advance our programs through important late-stage clinical and regulatory milestones and navigate a responsible path forward to potential commercialization of PH94B in social anxiety disorder. Our team is comprised of amazing individuals who not only possess vast knowledge and experience within our industry but who also share our passion for social change and align with our corporate values. As we forge forward as changemakers in the mental health arena, we are confident and very excited about the potential of our CNS pipeline to make meaningful transformations in the daily lives of those impacted by mental illness. I'd now like to turn it over to Jerry Dotson, our CFO, to summarize some highlights from our fiscal year '22 second quarter financial results.

Jerry?

Jerry Dotson -- Chief Financial Officer

Thank you, Shawn. As Shawn mentioned, I'll highlight a few items from the second quarter of our fiscal year 2022 financial results. I would also encourage everyone to review our quarterly report on Form 10-Q that we filed with the SEC earlier this afternoon for additional details and disclosures. For the second quarter of our fiscal year 2022 ending on September 30, 2021, VistaGen recognized approximately $0.4 million in noncash sublicense revenue from the $5 million upfront payment that we've received in the second quarter of fiscal 2021 related to our PH94B development and commercialization agreement with AffaMed Therapeutics.

We recognized approximately $0.3 million related to this agreement in the second quarter of fiscal year 2021 that ended on September 30, 2020. Our research and development expenses increased by about $7.7 million from $2.4 million to $10.1 million for the second quarter ended September 30, 2020, and 2021, respectively. This increase results primarily from conducting our PALISADE phase 3 program for PH94B in SAD with the continuation of PALISADE-1 and the initiation of PALISADE-2 and PALISADE long-term safety study, as well as the initiation of our phase 2A study of PH94B for the treatment of adjustment disorder with anxiety. While we continued nonclinical development and outsourced manufacturing activities for both PH94B and PH10, all of that accounting for increased expenses of approximately $5.9 million during the quarter ended September 30, 2021, compared to the same quarter of the previous fiscal year.

Salaries and benefits expense for the quarter ended September 30, 2021, increased by approximately $1.6 million versus the expense for the comparable prior-year quarter, primarily due to the hiring of additional senior management and other personnel focused on clinical operations, outsource manufacturing activities, and regulatory affairs. General and administrative expenses increased to approximately $3.1 million from approximately $1.3 million for the quarters ended September 30, 2021, and 2020, respectively. The increase was primarily due to the hiring of additional senior management personnel and expenses incurred in connection with various customary pre-commercialization activities for PH94B. Our net loss for the second quarter of fiscal 2022, the quarter ending September 30, 2021, was approximately $12.8 million, versus a loss of $3.3 million for the comparable quarter of fiscal year 2021.

At September 30, 2021, the company had cash and cash equivalents of approximately $93.6 million. I'd also note that between October 1, 2021, and today, the company has received approximately $1.1 million in additional cash proceeds from the exercise of outstanding warrants. Again, please refer to our quarterly report on Form 10-Q filed earlier today with the SEC for additional details and disclosures. I'll now turn the call back to Shawn.

Shawn Singh -- Chief Executive Officer

Thanks, Jerry. So, we continue to march forward determined and resilient and unwavering toward several significant and potentially transformative milestones across our pipeline with patient- and investor-focused priorities guiding our mission to improve the lives of millions of people who battle mental health challenges every day. Our team at VistaGen is thankful for the privilege and for the opportunity to make a difference for those needing changes in their treatment options. Our accomplishments this year and as we advance toward our goal of becoming a top-tier biopharmaceutical company would not at all be possible without the commitment, hard work, and endurance of our entire VistaGen team, our collaborators, and our stockholders.

We thank you for your continued support, and we look forward to creating life-changing value for patients and for all of our stakeholders.

Mark Flather -- Vice President, Investor Relations

Thank you, Shawn. This concludes our prepared remarks. Operator, we'd like -- now like to open up the call for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Brian Skorney with Robert W. Baird. Please proceed with your question.

Brian Skorney -- Baird -- Analyst

Hey. Good afternoon, everyone. Thank you for taking my question. I guess on the initiation [Audio gap] I was just hoping you could kind of walk us through how to think about sort of how randomized patients and screened outpatients are handled in the follow-up and how you kind of look at monitoring me the drug level -- drug exposure levels that they have.

And then I think the gating factor on the study was animal tox studies. I guess, was there anything of note in those studies because -- and can we assume that being cleared to enroll patients in the study means there was nothing of note?

Shawn Singh -- Chief Executive Officer

Hey, Brian, thanks for the question So, no, there was nothing of note in the six months tox studies that support us getting into the long-term safety study. Mark Smith, our CMO, is on. I'll let Mark address some of your questions regarding the study. It's ongoing --

Mark Smith -- Chief Medical Officer

Yeah. So --

Shawn Singh -- Chief Executive Officer

On track. Yeah. So, the placebo-controlled studies, you know, we are looking for patients who, you know, get very stressed out by public speaking. So, we're kind of, you know, self-selecting some of those patients.

But for the long-term safety, we're really looking for all comers. Pretty much everybody with social anxiety disorder, we want to give them a try on this medication. So, those that maybe didn't quite make the inclusion-exclusion for the placebo-controlled maybe because they were not quite sick enough or maybe they were on -- already taking like an SSRI, they're on some background medications that were not allowed in the placebo-controlled side. We're allowing all those people now to come into the long-term safety.

So, a lot of those people who screen failed for the two randomized trials, we will allow them to go in -- now to the long-term safety. Now, the FDA has given us the green light on that. So, I think it'll be very interesting to see how some of these other patients, you know, respond to the medication, and also, those with -- we want to make sure that it's safe to use on top of background anti-depressants, which we believe it will be but this will provide some evidence for that.

Brian Skorney -- Baird -- Analyst

And maybe --

Mark Smith -- Chief Medical Officer

And you have maybe also asked about how do we monitor, how much they're taking. So, it's two ways. The old-fashioned way, we essentially weigh the vial before and after each visit. That'll give us an indication of how many administrations they delivered.

And the second way is we're asking them to actually record on a cellphone app. So, they'll each have an app on their smartphone and we ask them at the end of each day to record how many times they took. It in the previous outpatient study, on average, even though they can take it up to four times a day. On average, they took it about 1.5 times a day.

So, we'll see if that continues in this long-term safety That'll be important information, I think, for us as to guiding the folks how to take this medication.

Brian Skorney -- Baird -- Analyst

Great. And then maybe if I could just ask a follow-up. On -- just trying to get some granularity on sort of how to think about the timeline for PALISADE readout. I think that in the protocol, it allows for up to seven weeks from screening to last visit of a patient.

So, should we also expect maybe another six weeks on top of that for data lock and scrubbing? So, I'm just trying to figure out like once you announce the completion of enrollment, would you think it's about a quarter from that completion to top-line data?

Mark Smith -- Chief Medical Officer

Yes. I'd say four to six weeks, you know, after we enroll our last patient. So, you know, the protocol itself could go fairly quickly. But yes, you're right, I mean there could be a little prolonged screening period.

So, yeah, four to six weeks, I would expect.

Brian Skorney -- Baird -- Analyst

OK. Thank you.

Operator

Our next question comes from the line of Andrew Tsai with Jefferies. Please proceed with your question.

Unknown speaker

Hey, good afternoon. It's [Inaudible] mortgage associates for Andrew Tsai. Just have a few questions and I appreciate your time today. If I could begin, you know, you just briefly talked about the cardio -- the carbon-14 radiolabeled study to see where the drug goes.

To confirm, it does stay in the peripheral neurons and does not get into the brain. Do you know how it gets eliminated by the body?

Mark Smith -- Chief Medical Officer

Good question. Good question. The shorter answer -- the short answer is we really don't know. In this particular study, most was gotten -- eliminated through the feces and some in the urine.

Now, I'm not sure that's true in man to be honest because I think in this particular study, we were getting a lot of volume to these rats, and I think some of it went back down there, nasopharynx and into their gut. That could happen in humans as well if they sniff too hard or something. But the shorter answer is we don't believe it's, you know, taken up into the brain. That was very clear in this study that most of it was contained in the nasopharynx and then some of it went back down the throat.

But, you know, a lot of people try to give drugs through the nose, you know, like oxytocin hoping that some will get across -- and then into the brain. That is not why we're giving this in the nose. We're giving it in the nose because that's where the receptors are. But at -- back to your question how it's eliminated, honestly, we don't know completely.

We actually -- I was just we -- were just researching this and much to my surprise, we learned that the nose actually has a lot of cytochrome P450 enzymes in it. You know, not as much as the liver but quite a substantial amount, you know. And so, obviously, this is, you know, a mechanism by which drugs can be metabolized. So, it may be metabolized locally right in the nose.

Much to my surprise, to be honest, and we may investigate that. So, that actually maybe how it's eliminated. And one other caveat for that C-14 experiment. We were measuring C-14, so we don't know if the PH94B was modified.

You know, it could have been metabolized, and so whatever -- what small amount we were seeing in the body, we're not even sure that was parent drug. So, still a lot to be learned here.

Unknown speaker

Thank you for the explanation. To follow up on just -- briefly on that. Do you know if there's any changes in heart rate or blood pressure after administration to the nasopharynx?

Mark Smith -- Chief Medical Officer

So, early experiments that Dr. Monti did that discovered these pherines. Early experiments when he was back in academia, he did see some transient changes in blood pressure and heart rate. And mainly, to a slight decrease in blood pressure, slight decrease in heart rate, and heart rate variability.

So, yes, there were some transitory effects. So, we do believe this does affect the sympathetic -- parasympathetic nervous system, and we're actually looking forward now to some small studies. Not part of the placebo control because we didn't want to complicate that but some smaller studies where we will be examining this and heart rate blood pressure, skin conductance was a consistent change. We'll be also looking at this in an upcoming PTSD study where we enroll PTSD patients and look at some biomarkers like this because we believe this drug, part of its mechanism of action is to tone down the fight-or-flight response.

And so, we'll be measuring these biomarkers in upcoming studies.

Jerry Dotson -- Chief Financial Officer

And we'll provide more guidance on that as we go forward.

Unknown speaker

Oh, thank you. Just a few more questions. So, we know that the PALISADE-1 and 2 studies are ongoing. Do both U.S.

PALISADE studies need to be successful for you to file an NDA? Because we ask only because the phase 2 at a very high p-value. So, could that be a supporting study? And then what do you do if one of the two studies fail? Do you have some sort of hedge or backup that you can leverage down?

Jerry Dotson -- Chief Financial Officer

Good question.

Shawn Singh -- Chief Executive Officer

Yeah. Well, the standard requirement --

Jerry Dotson -- Chief Financial Officer

What?

Shawn Singh -- Chief Executive Officer

Let me address this. The standard requirement is what applies here. So, obviously, as is the case normally, you need two adequate well-controlled studies to anchor your NDA. PALISADE-1 and PALISADE-2 are intended to suit that purpose.

If one of them doesn't read out as supportive, then we also have PALISADE Global that will start sometime in the middle of next year. That would be to support regulatory submissions outside the United States, but it could also be further supportive of what we might need to do in the U.S. I don't think it's safe at the moment. We certainly haven't had guidance from the agency that the phase 2 study could be used to support just adding one more phase study -- phase 3 study on top of that.

So, I think we have to just assume that the track we're on is intended -- through this whole program is intended to ultimately, if successful, support the NDA in the United States in mid-'23. PALISADE Global would launch, we expect, some time in the middle of next year.

Unknown speaker

Got you. That's the global phase 3 trial?

Shawn Singh -- Chief Executive Officer

Yeah. It'll be a replicate of what we see in PALISADE-1 and PALISADE-2, it just involves other jurisdictions besides the United States.

Unknown speaker

Wonderful. OK. Thank you. And again just a few more questions.

The next question is, you know, the -- up a little bit about the competitive landscape in SAD other than, you know, assess our eyes, benzos, beta-blockers. We see that companies are starting up anxiety studies, so what's your messaging around that competitive environment?

Shawn Singh -- Chief Executive Officer

Well, look, there's never a one-size-fits-all for any of these, you know, psychiatric indications. We are considerably downstream, as you know. We're certainly not aware of anybody in the phase 3 arena who's got the type of product profile that we're advancing with PH94B. So, we certainly hope the world continues to get as many anxiety and depression treatment options as possible because we do know that no one size fits all.

But on the other side, you know, we're extremely confident about where we're positioned with PH94B in social anxiety disorder.

Unknown speaker

Got you. Thank you. And so, for PH94B for adjust disorder, you started the phase 2 study. How did you end up choosing kind of the four-times-a-day dosing regimen rather than, you know, two or six? And what makes you kind of feel that this four-times-a-day dosing will be safe and efficacious?

Shawn Singh -- Chief Executive Officer

Well, remember, our objective with the program, the phase 2A program is to be able to explore PH94B's potential in a fairly broad range of anxiety disorders beyond SAD. So, these are exploratory phase 2A studies, which means first time in these populations. So, it may not be that 94B is used the same way in all different anxiety disorders and -- as this one is designed from a different perspective as you've just noted. I'll let Mark add a little more color to that.

But our purpose here -- remember, these are small exploratory phase 2A studies to try to get some information to be able to assess potential to move into phase 2B as we want to see additional indications for PH94B as we build on top of what we hope to be the initial first-and-foremost focus in social anxiety disorder. Mark?

Mark Smith -- Chief Medical Officer

Yeah. So,3 the way we chose the dose was really based on our preclinical tox studies. So, we -- in the -- we gave that four times a day intranasally in our tox studies. So, we knew that we had coverage for that preclinically.

So, this is the highest recommended dose, 3.2 micrograms intranasally, four times a day. So, we decided, you know, because this was the first time -- actually, one of the very first placebo-controlled trials I'm aware of in the U.S. in adjustment disorder, we decided to just push our dose, you know, because it's been so well-tolerated and give it the best chance in this disorder beyond SAD.

Unknown speaker

Got you. And, you know, what data have you seen to kind of show that this drug will have an effect kind of throughout the day given kind of, you know, our long workdays anywhere from like 8 a.m., wake up [Audio gap] you know, 10, 11 p.m. sleep time.

Mark Smith -- Chief Medical Officer

Yeah. So, again, you know, most of our studies have been single dose, but we did have one outpatient study where they -- in social anxiety disorder where they were allowed to take it up to four times a day. And like I said, they -- on average, they took it one and a half. There were a few people that took it, you know, two or three times a day.

There were -- I can't recall anybody that needed to take it, you know, boom, boom, boom, you know. So, it seems -- and this is anecdotal but it seemed from that study that people were taking it, you know, one, two times a day and that seemed to be sufficient. But again, we do plan to do a -- another study next year where we address the question you've just posed to see, you know, what happens when people do redose, and how long does the dose last. And so, we'll be addressing those -- some of those questions next year in some ancillary studies.

Shawn Singh -- Chief Executive Officer

But one of the key benefits of the product profile that we envision for PH94B is the fact that it does have a shorter duration effect than, say, a benzodiazepine. And that would -- allows us some hope and some confidence that it's going to be a very flexible treatment alternative for people. There are not only multiple different events within a particular day where people might have anxiety-provoking triggers, but it could be the very same event throughout a longer period in the day. So, the ability to use the drug up to four times a day is very important, and that it should not, as we've seen so far in our clinical development, impair cognitive functioning and -- for sedation.

It's really distinct from what a benzodiazepine delivers and even as to the rapidity of the onset. So, faster onset but without the side effects and safety concerns of benzodiazepine is an incredible component of why we are advancing our PH94B forward in SAD.

Unknown speaker

Yes. Thank you. And I mean, there definitely seems to be an unmet need in that category. I just want to ask, do you have time for a few more questions?

Shawn Singh -- Chief Executive Officer

Mark Flather?

Mark Smith -- Chief Medical Officer

Sure.

Mark Flather -- Vice President, Investor Relations

Well, I want to -- yeah. We'll -- let's just come back to you. We'd be happy to take additional questions. But yeah, we've got a few more in the queue and we'll come back if the questions aren't answered.

Is that good?

Unknown speaker

Yes. Wonderful. Thank you.

Mark Flather -- Vice President, Investor Relations

Excellent.

Operator

Our next question comes from the line of Tim Lugo with William Blair. Please proceed with your question.

Tim Lugo -- William Blair -- Analyst

Thanks for taking my question and congratulations on the progress in the quarter. Mark, I think you mentioned, given the prior experience, you're expecting a 1.4 or maybe 1.5 times a day use. Is that roughly what's occurring on the open-label study as of now? And I guess as a follow-up, I know there's a maximum of four times a day. Is there are also a minimum in that study for how much patients use per day?

Mark Smith -- Chief Medical Officer

It's too early to tell, you know, what the average dose is going to be. We'll be monitoring that, though, throughout the study. But no, there's no minimum. And, you know, we instruct patients they don't have to take it every day.

And, you know, and that's the beauty of this drug is that, you know, they only take it when they need it. I mean, they may go several days and not, you know, encounter a social stressor. So, in those days, there's no need to take it. But then another day, they may have a very stressful day and they may need to take it two or three times that day.

So, there's no minimum, there is a maximum of four based on our tox work but no minimum. And we will be monitoring this through the app regularly, but I don't have any data to share with you right now.

Tim Lugo -- William Blair -- Analyst

OK, that's understandable. And for the -- in the long-term study, you know, since you don't have the public speaking requirements in that trigger, are you collecting through the app what is kind of triggering use?

Mark Smith -- Chief Medical Officer

No, not per se. They, you know, we are actually looking into that, we are discussing that. That was measured in the phase 2 study. And, you know, there was various things that that study was all done in New York, so there were, you know, things like being on, you know, subways and stuff that were individual maybe to that environment.

But we're discussing that whether that would be feasible, but currently, we're not collecting that information.

Tim Lugo -- William Blair -- Analyst

OK. And can you just roughly describe how enrollment is going in PALISADE-1 and, you know, your happiness with the site conduct to date?

Shawn Singh -- Chief Executive Officer

So, Tim --

Mark Smith -- Chief Medical Officer

Yeah. I mean, it's going according to plan. And -- yeah, we -- we're pretty confident we will deliver as planned, you know, next summer.

Tim Lugo -- William Blair -- Analyst

OK. That's great to hear. And maybe one last question. Can you just talk about -- I know you have the adjustment disorder study up and running, and I also know that you're planning a number of other phase 2As since you kind of give us a map of the additional phase 2s, when you expect to start them, and when we can start seeing some data coming out of those.

Shawn Singh -- Chief Executive Officer

Yeah. So, Tim, most of those studies that we've mapped out for you before, 2022, we'll be initiating the remaining components from the phase 2A -- exploratory phase 2A program for 94B. So, some will start in the first half of the year and others in the second half of the year in '22. But they all should be up and running during the course of '22.

The adjustment disorder study should read out near the end of '22. The others won't read out in '22, most likely but adjust disorder study will.

Tim Lugo -- William Blair -- Analyst

OK. Great to hear. Congrats on the quarter.

Shawn Singh -- Chief Executive Officer

Thanks, Tim.

Operator

Our next question comes from the line of Jason McCarthy with Maxim Group. Please proceed with your question.

Jason McCarthy -- Maxim Group -- Analyst

Hey, guys. Thanks for taking the question. A lot of questions were asked and answered, sounds like a lot of progress has been made. Maybe a very broad, general question, Shawn maybe -- or Mark.

Maybe you guys can talk a little bit about your thoughts on the mental health space, particularly what happened after the COMPASS readout the other day. And, you know, the views of the space around the need for safety for some of these drugs are the big deal on the psychedelic side. But there's a lot of positive safety aspects around 94B and the drugs that you're developing. Can you talk a little bit about that impact?

Shawn Singh -- Chief Executive Officer

Yeah, absolutely. It's a critical component of every screen that we've put into each candidate across the pipeline. And the safety is a critical component of the success, we think, of any drug in either neuropsych or neurology. So, the trade-off you typically have to make between the benefit for the underlying conditions and the cost associated with the side effects and safety concerns, it's a tough challenge sometimes, especially as it affects compliance.

So, each of our three candidates, as in all clinical work today and all preclinical work supportive of that has just had an exceptional side effect and safety profile. And a lot of that has to be really driven toward the mechanism of action and whether it's the pherines or whether it's AV-101, there's a differentiation from what's out there today that has very well-established concerns associated with their use. We just don't see those and to be able, especially what we've seen recently with 94B in the GABA-A study and in the C-14 study, it just continues to fortify what we had thought about these candidates going into them early on. It's just they're completely different.

To not have to require systemic uptake and distribution of 94B and 10 to achieve anti-anxiety and antidepressant effects. And that's radical, and it's something that we think if we're successful in this phase 3 program with 94B, it will carry us quite well into the commercial arena. So, it's a big deal. We've seen, again, as Mark laid out to you, some of the rationale we think that supports why we're seeing such an excellent safety profile.

And I think as, you know, as things continue in the program, I don't think we anticipate seeing anything different than what we've seen so far through clinical development. But of course, we're going to be watching it carefully.

Tim Lugo -- William Blair -- Analyst

Great. Thank you, Shawn.

Operator

Our next question is a follow-up from Andrew Tsai with Jefferies. Please proceed with your question.

Unknown speaker

Thank you. I just want to note -- I appreciate the time that you've taken today to answer all of these questions very thoroughly. I'm sure that the street appreciates, as well as investors too. Just one last question for you.

You know, presumably, in the phase 2 study for PH94B, there were patients that did not respond to the drug. Do you ever figure out why that may be the case? And if so, how did you address it in the phase 3 study? Just trying to wonder how you can maximize essentially the probability of success for those phase 3 trials.

Shawn Singh -- Chief Executive Officer

Mark, go ahead and address that.

Mark Smith -- Chief Medical Officer

Yeah. Well, I'll take the second part, [Inaudible] of how do we maximize probability of success. I mean, we -- it's really through a two-step inclusion-exclusion criteria. So, we're including patients, you know, who have a pretty severe social anxiety disorder.

We, you know, that's based on the Liebowitz scale, and so we're looking for patients like that. But on top of that, we're also making sure that they have a sufficient, you know, response -- stress response to the public speaking itself. So, we're looking for people who, you know, get pretty stressed out by the five-minute talk we ask them to do. And does that mean -- so, we're, you know, we're asking a lot of these subjects and we appreciate them, you know, participating in this study.

So, I think that -- the fact that they have high scores coming in makes them more sensitive to see a drug effect. So, that's sort of how we're maximizing our success and really following on the phase 2 protocol very closely. Now, back to your question. Yes, there were some patients who didn't respond.

I think it was -- I'm trying to remember, I think it was about 25 percent, 30 percent who did not respond, you know, completely to the drug in the phase 2. And it's a good question. We don't know exactly what will predict response and nonresponse, you know, genetically or physiologically. I think that's an interesting question, but it is a minority of people who did not respond, luckily.

And didn't seem to be related to gender that we can tell because in the open-label study, both males and females responded to the drug. It doesn't seem to be related to age or gender, but, you know, we'll continue to look into that. And -- because I agree, it is an important question. But it is a minority, thankfully, at least from that phase 2 data.

Mark Flather -- Vice President, Investor Relations

All right. That's all the time we have for questions today. If you have any additional questions, please contact us at [email protected] or call any of the phone numbers listed on our press release today. Thank you for tuning in, and we appreciate everyone's attention and support.

We look forward to keeping you current on our continuing progress. This concludes our call. Have a great day, and you may all disconnect now.

Duration: 48 minutes

Call participants:

Mark Flather -- Vice President, Investor Relations

Shawn Singh -- Chief Executive Officer

Jerry Dotson -- Chief Financial Officer

Brian Skorney -- Baird -- Analyst

Mark Smith -- Chief Medical Officer

Unknown speaker

Tim Lugo -- William Blair -- Analyst

Jason McCarthy -- Maxim Group -- Analyst

More VSTA analysis

All earnings call transcripts