Chardan Capital Markets analyst Gbola Amusa highlighted VistaGen Therapeutics (OTC: VSTA) after Allergan PLC (NYSE: AGN) announced yesterday it is acquiring Naurex, a private company developing novel treatments for depression, for $560 million cash upfront plus an undisclosed amount of future milestone payments based on potential research or sales success. The analyst sees this as a key positive for VistaGen as it is Naurex's closest comp.

Amusa commented, "Both Naurex and VistaGen are developing novel NMDA receptor (NMDAR) modulators for depression that may have ketamine-like efficacy (possibly 2x as efficacious as current therapies, with effects in hours or days, as opposed to 4-8 weeks for approved drugs), without the ketaimine-like side effects (e.g. hallucinations, delirium). We believe VSTA if successful would arrive with the first oral NMDAR product for depression. We understand we are to only firm to have featured Naurex in equity research before the announcement and did so in our 18 June 2015 initation of VistaGen (see "Initiate Buy (PT$50) on AV-101's uplifting profile"). In our research, we saw Naurex as a valuable company likely to also increase visibility for VistaGen due to a potential Naurex IPO and due to the resulting increased visibility on the NMDAR class of depression drugs. Instead, as a positive potentially for both Naurex and VistaGen, Naurex shareholders have achieved more cash upfront than was likely in an IPO, while still being levered to the outcome of Naurex's products via the milestone payments from Allergan. We believe that the NPV of the cash plus milestones to Naurex shareholders likely exceeded $2 billion given the valuation of companies like Sage Therapeutics (unrated) that are developing late-stage neuroscience products."

Amusa said comps suggest completion of phase II trials could take VistaGen to roughly $2 billion in market cap (for an IRR of +169% over 3 years

For an analyst ratings summary and ratings history on VistaGen Therapeutics click here. For more ratings news on VistaGen Therapeutics click here.

Shares of VistaGen Therapeutics closed at $10.00 yesterday.