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Note: MissionIR has received monetary compensation to perform investor relations services and increase investor awareness for VistaGen Therapeutics (OTCQB:VSTA). Readers should be aware that this compensation may indicate a potential bias in the material presented. The information presented is provided for informational purposes only and is not to be treated as advice to make any specific investment. The content included in this article is based on factual information obtained from public filings and other sources. For our full disclaimer, please visit the link on our profile.

The good news is that new pharmaceutical discoveries are being made nearly every day for the treatment of life threatening diseases. The bad news is that, after hundreds of millions of dollars spent to identify and develop these potential lifesavers, they often never make it to market. Lives may hang in the balance, but it makes little difference when promising new drugs are allowed to sit on the shelf, sometimes indefinitely.

The problem is that every new drug, regardless of its potential efficacy, requires formal approval by the U.S. Food & Drug Administration. Unfortunately, over the past decade, the number of new drugs approved by the FDA has dropped by a full 50%, despite major increases in research and development by the pharmaceutical industry. It’s not unusual for a company to invest more than a billion dollars, and over a decade of skilled resources, to get a new drug candidate to market. The fact is that even the most promising candidates can be shelved late in the game, long after the money and time have been spent, due to toxicity issues that were not discovered earlier. It’s a huge loss to the developing company, but a greater loss to the people whose lives could have been improved or even saved.

This is not an isolated problem. It is estimated that approximately a third of all potential new drug candidates fail to meet safety requirements in preclinical or clinical trials. The result is a massive inventory of promising drugs that are currently discontinued due to safety concerns. However, with more predictive and clinically-relevant in vitro toxicology bioassay systems, many of these hibernating drug candidates could be revived and developed as variants which are as effective as the original, but without the safety concerns.

VistaGen Therapeutics, Inc. (OTCQB:VSTA) is a biotechnology company applying stem cell technology for drug rescue and cell therapy. Drug rescue combines human stem cell technology with modern medicinal chemistry to generate new chemical variants ("drug rescue variants") of promising drug candidates that have been discontinued during preclinical development ("put on the shelf") due to heart or liver safety concerns.

VistaGen's versatile stem cell technology platform, Human Clinical Trials in a Test Tube, has been developed to provide clinically relevant indications, or predictions, of potential toxicity of new drug candidates before they are ever tested on humans. VistaGen's human pluripotent stem cell-based bioassays more closely approximate human biology than conventional animal studies and nonclinical in vitro techniques and technologies currently used in drug development.

Using mature human heart cells produced from pluripotent stem cells, VistaGen leveraged its Human Clinical Trials in a Test Tube platform to develop CardioSafe 3D, a three-dimensional (3D) bioassay system for predicting the in vivo cardiac effects of new drug candidates before they are tested in humans. The Company now plans to leverage CardioSafe 3D to build a pipeline of new, safer, variants of once promising drug candidates that have been "put on the shelf" by pharmaceutical companies because of toxicity concerns, despite positive efficacy data signaling their potential therapeutic and commercial benefits.

VistaGen is also developing LiverSafe 3D, a predictive liver toxicity and drug metabolism bioassay system, and is preparing to initiate pilot preclinical development of cell therapy programs focused on autologous bone marrow transplantation and heart, liver and cartilage repair. Each of these development programs is based on the proprietary human pluripotent stem cell differentiation and cell production capabilities of the Company's Human Clinical Trials in a Test Tube platform.

Risks

Since inception, VistaGen has obtained and employed more than $41 million from various strategic collaborations, investments and grant awards. Although its technologies have undergone many years of development and already demonstrated their ability to test drug toxicity, VistaGen’s success remains dependent on the results of future drug rescue and pilot preclinical cell therapy programs, its ability to enter into drug rescue collaborations, availability of additional capital to support research, development and commercialization activities, and the success of its research, development, regulatory approval, marketing and distribution plans and strategies.

There is considerable risk involved with investing in VistaGen, as with all biotechnology companies, but investors would be wise not to overlook the potential rewards as they far exceed the current market valuation of the Company (approximately $39 million market cap as of September 23, 2011). Revenues generated by just one drug successfully rescued and brought to market can total hundreds of millions, if not billions, of dollars. Even more importantly, rescuing a drug candidate means the chance for rescued lives. Better cells make better medicine.



Disclosure: See Note at top. I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: VistaGen Therapeutics' Potential Rewards Far Exceed Its Current Market Valuation