Buy VistaGen On AV-101 Profile, Chardan Analyst Says

In a report published Thursday, Chardan analyst Gbola Amusa initiated coverage of

with a Buy rating and price target of $50. AV-101 is likely to be the first oral anti-depressant that is fast acting and as effective as ketamin but does not lead to ketamine side effects. According to the Chardan report, "In recent years, ketamine has been shown by leading thought leader Dr. Carlos Zarate (who will run VistaGen's phase IIa program) to dramatically improve major depressive disorder (MDD) within 24-72 hours, versus the 4-8 weeks that current drugs take. Ketamine, however, has important side effects that have led to ketamine's abuse as a street drug." VistaGen and Naurex are the only companies that are in advance stages of developing ketamine-like drugs for MDD. While there is more visibility into Naurex's product, VistaGen offers the advantage of oral intake. "Regardless, both companies are exposed to, and could see dramatic upside, in what could reasonably be a new mega-blockbuster class of depression drugs," Amusa stated. The analyst believes that AV-101 has the potential to drive significant returns for VistaGen. There is likely to be better visibility into the drug from September 2015, with progress in the Phase II trials of AV-101. The company's balance sheet and share liquidity have also been improving. The analyst expects the stock to attract significant investor interest and see meaningful upside going forward.