Vistagen Therapeutics Inc (VTGN) Finds Stem Cell Partner In Bayer AG (ADR) (BAYRY) With Phase II TRD Data On Tap

This cardiac stem cell deal between Bayer, Versant and Vistagen comes on the heels of a much higher profile cardiac stem cell deal between Johnson & Johnson (NYSE:JNJ) and Capricor Therepeutics Inc. (NASDAQ:CAPR) that took place in 2014. It was higher profile because, first, it involved a potential $325 million package that J&J has yet to decide on as to whether it is going all in. Second, the deal comes at Phase II stage rather than the investigational preclinical stage.

Capricor is also developing cardiac stem cells for post heart attack treatment, and has already completed enrollment in its Phase II trial with results scheduled for Q4 of this year. J&J should be making its final decision on taking over the project by this summer, something that should give an indication of the potential value of this smaller scale deal between Vistagen and Bayer/Versant.

In any case, if BlueRock can use the technology that it has licensed from VistaGen to create epicardium cells from pluripotent stem cells, there’s a huge potential market in their application. It’s this market that VistaGen is set to receive milestones and royalties on, and that is potentially worth a lot more than $1.25 million, not least because the company charged with taking these cells to market is essentially an offshoot of Bayer AG (ADR) (OTCMKTS:BAYRY).

Interestingly, the original inventor in these technologies, Dr. Gordon Keller, serves as the director of UHN’s McEwen Centre for Regenerative Medicine. He is one of team of cofounders of BlueRock. Essentially, then, Keller has licensed the technologies to VistaGen, only for the latter to license them right back to him (and Bayer, of course) a few years later.

Vistagen Therapeutics Inc (NASDAQ:VTGN) finished September with $6.3 million of cash and cash equivalents, which it expects will last through the first half of 2017. The additional $1.25 million that derives from the BlueRock deal should extend this into the third quarter.

Nothing’s guaranteed, as always, and Vistagen is a long way from seeing any milestone payments, let alone royalties. VistaGen is still a development stage biotech, and it may need to raise money towards the end of next year. However, the BlueRock deal is nice to have on the backburner while it focuses on AV-101, and should help support the stock as Phase IIa data come in for AV-101 next quarter.

Note: This article is written by David Rich and was originally published at Market Exclusive.