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VistaGen Therapeutics (VSTA) Addresses Billion Dollar Weakness in Drug Development

|Includes: VistaGen Therapeutics, Inc. (VTGN)

On November 19, 2010, the U.S. Food & Drug Administration formally banned the sale on the American drug market of Darvon, a popular dextropropoxyphene made by Eli Lilly for pain relief. For many years Darvon had been a major player in the prescription analgesic market, and a significant income source for Eli Lilly, generating roughly $100 million in annual sales. The problem was that the use of Darvon had become associated with serious or fatal heart rhythms. Since 2010, other countries have taken steps to limit or ban the sale of Darvon, although the drug has been used by millions of people around the world.

The costly collapse of Darvon was yet another example of a drug gone bad from unanticipated issues of toxicity. The cost of doing all the things necessary to develop and bring a new drug to market can total more than $1 billion, and the unexpected late-stage appearance of toxicity problems can represent a tremendous financial blow to the developer, in addition to posing a threat to substantial user populations. If Lilly had been given some pre-release indication of the potential problems in the use of Darvon, it could have perhaps allowed the company to develop a safer modified version of the drug, saving untold financial resources and user anguish.

Moreover, a drug doesn’t even have to be taken off the market in order for toxicity concerns to prove toxic to the bottom line. The anti-diabetic drug Avandia, which had been generating well over $2 billion in annual sales for GlaxoSmithKline, has faced drastically reduced sales and a slew of lawsuits following reports associating rosiglitazone, the generic name, with an increased risk of heart attacks, even though later studies were unable to confirm the risk. The drug is still on the market, but with sales killing restrictions, and could still be suspended.

VistaGen Therapeutics has come up with what is believed to be the answer to this critical high-cost weakness in the drug development system. Through the use of advanced stem cell technology, VistaGen has developed a way to test the effects of drug candidates on human heart cells early in the development process. Traditional testing involving animals can fail to detect potential risks, and human trials can require large numbers of patients and lengthy testing with still no guarantee. VistaGen’s early testing process represents a huge advance in drug development, helping to identify problems before they turn into major human and financial casualties.

For additional information, visit the company’s website at www.VistaGen.com

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