The analysts said that the US Patent and Trademark Office has issued two key patents for VistaGen's lead asset AV-101.
“Management estimates that these patents would not expire until at least 2034 and represent a fundamental milestone,” wrote Oppenheimer analysts Jay Olson and Silvan Tuerkcan in a note to clients.
“We believe VistaGen’s unique antidepressant (AV-101) may offer ketamine-like efficacy without the side effects or inconvenience, and recently initiated coverage with a US$6 price target,” they added.
READ: VistaGen Therapeutics rockets after Oppenheimer initiates coverage with Outperform rating, US$6 price target
The analysts said VistaGen currently has a pair of Phase 2 trials running to demonstrate the “efficacy and safety of AV-101 in patients with depression and an inadequate response to at least one prior treatment.”
Data from the first, smaller trial, with 25 participants, is expected to come in by the end of 2018. The second, larger trial with 180 subjects isn’t expected to throw up results until mid-2019.
The Oppenheimer note indicated that if the Phase 2 trials are successful, VistaGen could begin pivotal trials by early-2020, with potential NDA filing in 2022. The antidepressant would then be expected to launch in the United States in 2023.
“We estimate 4 million major depressive disorder (MDD) patients in the US are candidates for AV-101,” wrote the analysts. “We forecast a peak 5% market share and $7,000 annual net price, implying peak sales of $1.5bn with 25% probability of success and $373 million risk-adjusted sales in 2030.”
The analysts viewed VistaGen as “underappreciated and undervalued,” with a novel, “potentially best-in-class, rapid acting” oral antidepressant.
“We assume that AV-101 has a product life cycle lasting until at least 2030,” the analysts said in their base case assumption.
Shares of the biotech were trading 3.3% higher at US$1.46 on Wednesday.