Vistagen Therapeutics is cutting its workforce by about 31% as it reduces operating costs and focuses resources on its late-stage clinical program. The company said the changes took effect Oct. 26 and are intended to preserve the capabilities needed to advance fasedienol toward U.S. registration-directed Phase 3 development.
The restructuring also leaves room for potential future development of two Phase 2 drug candidates, while reducing the company’s salary and benefit costs.
- Pipeline priorities: Vistagen plans to retain core clinical, regulatory, technical and corporate capabilities to support fasedienol, its lead candidate for social anxiety disorder. It also cited potential future development of itruvone for major depressive disorder and refisolone for menopausal hot flashes.
- Expected savings and costs: The company estimates the workforce reduction will save about $3.2 million annually in salary and benefits and incur approximately $1 million in severance and termination costs. Actual costs and savings may differ from those estimates.
- Employee support: Eligible affected employees may receive cash severance and temporary health coverage if they elect the coverage and sign a separation agreement.
- Strategic effect: The cuts reduce the company’s operating-cost base while retaining staff for its stated clinical and regulatory priorities. The estimated annual savings exceed the estimated severance costs, though the timing of savings and expenses was not specified.