VistaGen Therapeutics, Inc. (VSTA) Human Pluripotent Stem Cell-Based Bioassay Technology Stands to Revolutionize $51B+ Drug R&D Space

VistaGen Therapeutics stands at the forefront of the biotech industry today with their human pluripotent stem cell (hPSC) differentiation capabilities, which allow the company to produce a wide variety of functional adult human cells that can be used to benchmark complex disease behaviors and drug interactions. The company’s current emphasis is on the highly-lucrative drug rescue space (using small molecule drug candidates), where a vast stockpile of once-promising (yet discontinued) drugs exists, which are soon to be joined by yet more discontinued New Molecular Entities (NMEs) rejected by the FDA. Helping companies offset massive R&D outlays that fail to come to fruition due to toxicity and other complications, via their proprietary hPSC-enabled Human Clinical Trials in a Test Tube™ platform, VSTA is able to assist major players like Bayer (OTCM: BAYRY), GlaxoSmithKline (NYSE: GSK), Johnson & Johnson (NYSE: JNJ) and Roche (OTCM: RHHBY), as well as smaller pharma developers, to recoup the increasingly high levels of R&D investment required to develop new drugs, offering comprehensive in vitro 3D “micro-organ” culture assay systems like their CardioSafe 3D™.

Predictive toxicology and drug metabolism assessment via 3D bioassays made of real human cells provides an unprecedented power to evaluate a given drug candidate well before expensive human trials ever begin. Technology like VSTA’s CardioSafe 3D represents over a decade and a half of applied science know how in hSPC differentiation between the company and its collaborators, and is a revolutionary leap beyond generally underperforming 2D cultures. The capacity to grow normal, non-transformed, human heart cells (cardiomyocytes) in a framework that produces intact 3D cell networks and tissue structures, more accurately models the structures and biology within the human body itself, resulting in heretofore unknown degrees of testing accuracy. Moreover, CardioSafe 3D is faster, in addition to being more accurate, making clinically relevant predictions for both toxic and non-toxic effects in cardiac tissue at rates virtually unattainable elsewhere.

This same technology stands behind VSTA’s other leading bioassay platform, LiverSafe 3D™, which uses mature, hSPC-derived liver cells (hepatocytes), solidly addressing one of the top two causes for drug failure, liver toxicity and adverse drug metabolism results. The underlying technology gives VSTA a developmental footprint that spans pharmaceutical applications ranging from stem cell-derived blood, to bone, cartilage, and even pancreatic beta-islet cells as well, ultimately dovetailing with the regenerative medicine space, where stem cell technology represents a huge future market. The regenerative medicine space is particularly attractive for VSTA as they will be able to do novel models for human disease, potentially leading to breakthrough new small molecule drug developments, as well as biologics that can trigger endogenous tissue repair and healing, effectively combating what are otherwise essentially untreatable degenerative diseases.

In the U.S. during 2013 alone the pharma sector dumped over $51B in R&D into new drug development, yet the FDA’s Center for Drug Evaluation and Research (CDER) approved only 27 NMEs, 13 of which went to the top five pharma players. In addition, competition from generics on expired drug patents, combined with the extant R&D costs and progressively diminishing product pipelines, puts a sharp focus on VSTA’s new and safer developing Drug Rescue Variants™. After spending millions of dollars and sometimes decades developing a new drug, it is a huge blow to a given company’s bottom line to have to discontinue development and marketing due to bad drug interactions or toxicity.

The fundamental trends in this space all add up to a very bright future for VSTA and the company’s recent (Apr 23) announcement that the USPTO issued a Notice of Allowance for their “Cell populations enriched for endoderm cells” (application 12/836,275), further reinforces VSTA’s already strong IP position, handsomely complementing existing patents licensed exclusively by VSTA from the Icahn School of Medicine at Mount Sinai in NY (#7,763,466, #8,512,957 and #8,143,009). This latest announcement regarding expansion of VSTA’s stem cell tech IP protection strengthens their LiverSafe 3D platform considerably and highlights the company’s world-class proficiency in hSPC differentiation, placing VSTA in the pole position when it comes to executing future collaborative efforts in the liver biology and drug metabolism assay arena. It also sets VSTA up nicely for regenerative cell therapy and drug applications using pancreatic beta-islet cells to address diabetes, a condition from which over 8.3% of the U.S. population suffered last year alone (25.8M diabetics) and which threatens as many as 79M Americans, who are pre-diabetic according to the same ADA® data.

The company’s AV-101 (L-4-chlorokynurenine) small molecule prodrug candidate for neurological disease and disorders has successfully exited Phase 1 development (aided by some $8.8M in grant funding from the NIH) and represents a godsend for chronic neuropathic pain patients, who must contend not only with broad-spectrum difficulties due to a compromised central nervous system, but attendant epileptic phenomena and depression as well. AV-101 is a huge out-licensing candidate for development and marketing that investors should keep an eye on, but the potential for VSTA’s hSPC-based bioassays in drug development are even more profound and deserve even greater consideration.

More info on VistaGen available at www.vistagen.com

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