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Janus Henderson Just Took a 13.6% Stake in Vistagen. Should You Buy VTGN Stock Now?
Thanks to the shrill buzz around artificial intelligence, the unmatched potential of the biotech industry largely goes unnoticed. Yet, the opportunity is huge, with the market already reaching a mammath $1.55 trillion in 2023. Experts project it will further grow to $3.88 trillion by 2030.
Within this huge and growing opportunity, the savviest investors are looking for rare biotech companies that specialize in treating mental health conditions. One such biotech gem is California-based Vistagen Therapeutics (VTGN).
Founded in 1998, Vistagen Therapeutics is a clinical-stage biopharmaceutical company focused on developing pherine nasal sprays and other central nervous system (CNS) therapeutics for disorders such as anxiety and depression. In June 2024, VistaGen was awarded the Platinum Bell Seal for Workplace Mental Health from Mental Health America, recognizing its commitment to mental health in the workplace for the second consecutive year.
Valued $104.5 million, VTGN stock is up 15.9% in the year to date and 14% in the past 52 weeks.
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A recent positive development for Vistagen came in the form of an investment from the leading biotech-focused investment firm, Janus Henderson. The firm picked up 4.1 million shares of the company for a stake of 13.6%. Investors should note that Janus Henderson also acquired nearly 3.6 million shares through its Janus Henderson Biotech Innovation Master Fund, representing an addition 11.7% stake. This dual investment underscores Janus Henderson’s conviction in Vistagen. Plus, the Biotech Innovation fund has been particularly successful, with annualized returns of more than 50% since its 2020 inception. This suggests to investors that Janus Henderson knows how to pick biotech winners.
Importantly, this investment comes just as Vistagen is preparing for its PALISADES-3 Phase 3 trial readout.
PALISADES-3 is the name of Vistagen’s Phase 3 clinical trial for its investigational nasal spray fasedienol, intended for the acute treatment of social anxiety disorder (SAD). It is a randomized, double-blind, placebo-controlled trial evaluating the efficacy, safety, and tolerability of a single (acute) intranasal dose of fasedienol to relieve anxiety triggered by a public speaking challenge in adults with SAD. The study design uses a public speaking challenge as the anxiety-inducing method, similar to earlier trials. Notably, Vistagen is targeting a top-line data release for PALISADE-3 in Q4 2025.
Instead of acting like traditional SSRIs or benzodiazepines (which affect the whole central nervous system and can take weeks to work), fasedienol aims to produce relief within minutes after a single dose by dampening the amygdala’s hyperactivity during an anxiety-provoking event (like public speaking). In its Phase 3 PALISADE‑2 trial, Vistagen achieved statistical significance, with fasedienol showing a clinically meaningful reduction in anxiety during public speaking challenges versus the placebo. Secondary endpoints also reached significance, offering multiple supporting data points that underscore the therapy’s efficacy.
Moreover, as grim as it may sound, the number of individuals suffering from SAD is huge and is expected to grow in the coming years. Vistagen has revealed that it affects over 30 million U.S. adults.
Thus, fasedienol can act as an effective and quick treatment for these individuals, provided it gets approval from the U.S. Food and Drug Administration.
For the three months ended June 30, 2025, revenues grew substantially from $84,000 to $244,000 year over year. Losses widened to $0.47 per share from $0.35 per share in the prior year, marking the third consecutive quarter of widening losses. However, this was also the third straight quarter of the company’s losses coming in narrower than the Street estimates.
R&D expenses increased to $11.7 million this quarter, up from $7.6 million in the same period last year, reflecting ongoing development of fasedienol as well as other key pipeline candidates, including Itruvone for major depressive disorder and PH80 targeting menopausal hot flashes and additional women’s health indications.
In terms of the cash situation, Vistagen ended the quarter with a cash balance of about $49 million, and by the time of the Janus Henderson announcement, its cash and marketable securities were up to $63.2 million. This far surpasses its current short-term debt levels.
As a clinical-stage company, Vistagen is largely a “wait and see” story financially, dependent on future trial results, regulatory approval, and commercial acceptance. That further underscores the importance of the upcoming PALISADES-3 readout.
Overall, analysts have deemed VTGN stock a “Strong Buy,” with a mean target price of $13. This indicates upside potential of about 280% from current levels. Out of five analysts covering the stock, four have a “Strong Buy” rating, and one has a “Hold” rating.
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On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
