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VistaGen Gets $36M Through Sale of Majority Stake

NEW YORK (GenomeWeb News) – VistaGen Therapeutics, a developer of bioassays for drug rescue projects, has signed a strategic financing agreement that will bring in proceeds of $36 million.

Under the agreement, VistaGen will provide 72 million shares of its restricted common stock at $.50 per share to the European subsidiary of Bergamo Acquisition Corp. The deal will provide Bergamo with a majority stake in VistaGen, which currently has around 20 million shares outstanding.

South San Francisco, Calif.-based VistaGen said that it will use the proceeds to accelerate and expand its stem cell technology-based drug rescue programs using its CardioSafe 3D and LiverSafe 3D bioassay systems. The technologies are used to generate newer and safer versions of small-molecule drug candidates that have been discontinued by pharmaceutical firms due to heart or liver safety issues.

"Since our inception nearly 15 years ago, we have carefully deployed more than $53 million, including over $15 million from grant awards and collaboration revenue, to successfully develop innovative stem cell technology and bioassay systems capable of bringing clinically relevant human heart and liver biology to the front end of the drug development process," VistaGen CEO Shawn Singh said in a statement. "Upon the closing of this transformative financing, our strong long-term financial position will enhance substantially our ability to drive our core programs to valuable commercial outcomes."

VistaGen noted that the agreement with Bergamo doesn't include any warrants or investment banking fees.

The firm's shares closed Tuesday at $.75 on the OTC Markets.