CEO CAST:	This is Ken Strough with CEO Cast. My guest today is Ralph Snodgrass. Ralph is the founder and Chief Executive Officer of the privately held biotech company VistaGen. Ralph, it is terrific having you with us today.
R.S.:	Thank you very much, Ken, it is good to be here.
CEO CAST:	Why don't you describe to us this technology that you are using to help in the commercial development of complex human mammalian tissues from stem cells?
R.S.:	We want to exploit the power and the value of stem cells for their ability to not only identify or discover novel therapeutic targets but to use the stem cells for their predictive screening assays. It is clear that 90% of drugs that go into clinical trials fail, and a very high percentage, roughly about 1 out of 3 fail because of unexpected human toxicities. We are using stem cells to try to predict those human toxicities so that one can develop safer drugs faster.
CEO CAST:	You then are not actually developing a drug?
R.S.:	Yes, we are. Our company's business model really is in two parts. There is a collaborative services R&D model, where we work with pharmaceutical companies to provide sophisticated R&D collaborations using stem cells and the predictive screening assays. At the same time, we are following up on discoveries that we have made through our understanding of stem cell biology for both drug targets and potential biological drugs, for treating diseases of cancer, neurological diseases, and blood and immune disorders.
CEO CAST:	So the area of concentration is immunity and blood?
R.S.:	Well, I would say that the real area of concentration with the recent alliance that we made with ReNeuron in Britain, is in the area of CNS diseases, Alzheimer's, Parkinson's, Huntington's, stroke and so on, areas of cancer. In addition, the key regulatory genes that we discover through stem cells allow us to look for genes and molecules that are involved in cancer development and then for the blood and immune disorders.
CEO CAST:	So, ReNeuron is a neurological oriented company?
R.S.:	Yes, ReNeuron is a human brain and nervous system stem cell company in England that is developing stem cells for treating neurological diseases through cell based therapies. We are working with ReNeuron to take advantage of the stem cells that they have developed for discovery and predictive screening assays for toxicology and efficacy.
CEO CAST:	You have other collaborations other than this?
R.S.:	We do, we have collaborations with GlaxoSmithKline and Pfizer. These are in the area of toxicogenomics. We have collaborations with the NIH, and the NCI, to develop these systems for predictive toxicology. We also are working with Genometrix to evaluate this high throughput gene expression system for predicting toxicology applications.
CEO CAST:	What is the revenue model for your company?
R.S.:	Again, the revenue model is based on the two parts of the business. One is based on R&D services: it is very similar to the Millennium model, which got started by providing very sophisticated R&D collaborative services. So we get technology access fees, milestones and development fees through that type of service based collaborations. On the drug development side, we get licensing fees, milestone fees, and royalties associated with product sales.
CEO CAST:	The product sales--do you do some of that also?
R.S.:	We will eventually. Right now we are still a young company. We will be working with partners to commercialize discoveries that we make. But ultimately, for the areas that we think that we can fully service on the sales and marketing side through sales and marketing partners, we will ultimately co-market or sell drugs directly ourselves.
CEO CAST:	That is a very tricky area because as you know, the later you can get into Phase trials, the better you are negotiating. At this point, have you given any thought to what point will you seek a cooperative partner, particularly on the distribution side?
R.S.:	Absolutely. When to partner out the programs is a critical decision that any company faces, because as you quite rightly acknowledge, the longer you hold it in house, the more value that you can accrue. For us it is a matter of focus and resource allocation. We will take a program as far along the development pipeline as makes sense for our resources, and to try to optimize our focus and resource allocation. If we find an opportunity that is slightly outside of our therapeutic focus, we will be more inclined to partner that out early. If it is a very large market like a CNS application, we will clearly work with a partner early on in the process because the cost of that development program exceeds a small company's capacity. So, we will be opportunistic while looking for the right time, the right place, to partner programs.
CEO CAST:	How well have you done in terms of hiring these highly skilled technical people that you need in an organization such as yours?
R.S.:	I think that one of the real strengths and assets of VistaGen is its management team. We have a management team that not only spans pharmaceutical development all the way from discovery through clinical trials, but also very sophisticated technology management experience. So, as a young company, I am very proud of the way that we've been able to attract quality people. And again, part of that is because of the excitement around stem cells, the value that stem cells bring, and the new ways that one can use stem cells to develop novel effective therapies. I think that really invigorates scientists and management.
CEO CAST:	One of the things that you and I have been on the periphery of discussing is genomics. How does genomics impact your business?
R.S.:	VistaGen will always be known for the strength of the biology it brings to pharmaceutical development in terms of stem cell biology. But we take advantage of the cutting edge genomics and proteomics tools to analyze the effects on stem cells. So we evaluate both biology as well as drug effects through looking at the changes in gene and protein expression patterns. So all the significant developments that are being made in both genomics and proteomics accrue to our benefit because we can use those technologies to further our own product development.
CEO CAST:	How have you financed the company, Ralph?
R.S.:	Currently the company has been financed through a combination of individual investors, through founders' money, and through corporate partnerships. At this point we are attracting our first institutional round which we anticipate closing on $10-15 million later this summer.
CEO CAST:	Will that be sufficient financing for you? With what you have on your plate there?
R.S.:	Yes, it will. It will be sufficient to take us through about 18 months, and at that point, depending on the market place and so on, we will be well primed for another significant financing round, whether it will be public or private.
CEO CAST:	One last question for you: What are the challenges that you feel you are facing currently and, along with that, what is keeping you on your tip toes as you look forward?
R.S.:	Great questions. There are two: The challenge that we face is to make people aware of the strength of our patent position. There has been a lot of talk about stem cells and the various types of stem cells and so on. We face a marketing challenge making sure that people understand the strength of VistaGen's platform from a technical and intellectual property position. The second thing that keeps us on our toes, is that this is a very moving technological area, and we need to stay current on all the new genomics and proteomics developments. We have really pushed the biology platform to take advantage of some of these new developments in analytical technology, and we are quite happy about the progress we have made so far in that area.
CEO CAST:	Ralph, thanks so much for being with us.
R.S.:	Thank you very much. I appreciate the opportunity.

For further information, contact:
H. Ralph Snodgrass, Ph.D., President and CEO
650-558-9505 (v)
rsnodgrass@vistagen-inc.com
www.vistagen-inc.com