VistaGen Therapeutics, Inc. (VSTA) Positioned to Benefit from Multiple Monetization Options

Stem cell technology has traditionally been associated with therapeutic regeneration, using these basic building blocks of life to generate new cells that can replace damaged cells. Potential therapeutic applications run the gamut from the replacement of damaged nerve cells to the generation of new heart or liver tissue. However, VistaGen Therapeutics, which is in fact involved in researching and developing therapeutic applications, is best known for a totally different but no less important application of stem cell technology.

Stem cells, in addition to therapeutic applications, can allow scientists to generate mature human cells right in the laboratory; cells that can then be used to efficiently screen drugs for possible toxicity without going through the time and expense involved in human clinical trials, and this is just what VistaGen is focused on doing. The company’s proprietary Human Clinical Trials in a Test Tube stem cell based drug assay platform provides a major advantage to anyone involved in the extremely expensive and risky process of new drug development.

In particular, VistaGen plans to use the technology itself to build a pipeline of drug rescue variants, drugs that have important therapeutic potential but have been shelved due to heart or liver toxicity issues. VistaGen is convinced that it can rescue some of these drugs, using their unique in-lab testing system to economically tweak them, maintaining their demonstrated efficacy while removing their toxicity. VistaGen can then enjoy significant economic participation rights as the new drug is taken to market.

Clearly there are also other rich options the company may soon find itself considering. A powerful technology such as this could result in billions of dollars saved, by helping to avoid the massive costs involved in going to market with a fatally flawed new drug, and such a tool, once finalized, could carry huge licensing potential. In addition, VistaGen could easily become a takeover target, as large pharmaceutical companies look for quick ways to fill profit gaps left by expiring patents.

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