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Analysts at Stifel recently initiated coverage on Vistagen Therapeutics Inc (NASDAQ:VTGN), emphasizing the potential of its lead asset, fasedienol, in clinical development for social anxiety disorder (SAD). Fasedienol, acquired by VTGN in 2022, is undergoing PALISADE-3/4 studies, set to conclude in 2025.
According to the analysts, SAD represents a substantial market opportunity.
Despite VTGN's current valuation, a discount compared to several CNS peers, the risk/reward ratio leans toward the upside given the ongoing fasedienol studies.
Stifel initiated coverage with a Buy rating and a price target of $12. The analysts acknowledged certain nuanced considerations beyond the clinical risk associated with VTGN.
Despite these considerations, they believe the valuation, approximately $60 million in market cap or roughly $135 million with all warrants exercised, is undervalued for a phase 3 CNS asset.
Regarding the fasedienol data, analysts note a mixed but generally favorable outcome, with a positive phase 2 and one positive/one negative phase 3 across PALISADE-1/2. Stifel highlights VTGN's two upcoming SAD studies with similar designs, indicating that success in either trial could potentially support a marketing application.
The broader landscape of anxiety disorders in the US is significant. While affordable generics exist, insights from Key Opinion Leaders (KOLs) suggest that a novel mechanism with a rapid onset of action would likely attract substantial usage.
Price Action: VTGN shares are up 16.90% at $3.19 on the last check Tuesday.
Posted In: VTGN
