In June 2021, I authored the article, Aldeyra Therapeutics: A New Approach To Ocular Inflammatory Diseases With Impressive Clinical Data. I used to be intrigued by each the persistently robust breadth of scientific knowledge that the corporate had collected together with the novel underlying science that guarantees a brand new strategy to treating sure inflammatory illnesses. Unfortunately, the previous 12 months because the publication of that article has seen a bumpy downhill journey for Aldeyra Therapeutics (NASDAQ:ALDX) shareholders and the general meltdown in small tech biotech has exacerbated the ache. However, issues are wanting up once more.
As its lead indications, Aldeyra is pursuing ocular circumstances of each dry eye illness (DED) and allergic conjunctivitis (AC). This article will probably be primarily centered on updating readers on the DED program which appears destined to grow to be a big worth of shareholder worth within the close to time period. I urge these unfamiliar with Aldeyra to begin with my preliminary June 2021 article which explores their novel strategy that targets Reactive Species Aldehydes or RASPs, molecules which are recognized to be related to irritation.
There have been a number of latest twists and turns associated to the Aldeyra and its DED program. Some sudden disappointments have rocked the shares whereas different complementary research have produced stunningly convincing p values that mamma could be happy with. In a shocking flip of occasions, one key examine that initially failed to hit a key major endpoint, achieved it 5 months later when a extra goal measuring instrument was used to reevaluate early readings of ocular redness. This reversal reminds certainly one of an NFL referee going to the videotape and stating, “Upon further review...” This growth meant that the corporate had seemingly already achieved the minimal hurdle vital for DED FDA approval.
The icing on the cake got here on July 12, 2022 with the discharge of scientific knowledge from the Dry Eye Disease Chamber Crossover Trial of Reproxalap, a study design whereby particular person sufferers served as their very own management in measuring a number of endpoints versus a placebo/car. With affected person to affected person variability eradicated in a crossover design, the examine achieved spectacular outcomes that will have helped clarify some earlier inconsistencies in scientific knowledge associated to affected person variability.
The firm now believes it has simply met its DED scientific goals, a place that I concur with, and is getting ready to submit an NDA to the FDA. A profitable monetization occasion with a big pharmaceutical firm for DED appears doubtless.
What is Reactive Aldehyde Species (RASP)?
The neutralization of RASP is the underlying platform that Aldeyra’s enterprise is predicated upon. In easy phrases, RASP are reactive molecules within the physique that generally bind to mobile biomolecules and disrupt their operate. An over-abundance of RASP within the physique can activate pro-inflammatory mediators and the result’s damaging irritation. The Aldeyra strategy is to neutralize RASP, and they seem like the one public firm focusing on these molecules at the moment. RASP are fashioned by a wide range of organic processes, together with lipid peroxidation, alcohol oxidation, polyamine and glucose metabolism. The full and sophisticated definition of RASP will be discovered on Wikipedia. The presence of RASP in sufferers with DED is the idea for focusing on the molecules as a explanation for the underlying irritation that’s related to DED. Reproxalap is the identify of the ophthalmic answer eye drop that Aldeyra has been testing for each DED and allergic conjunctivitis. Its pipeline contains different variations of the remedy as proven within the chart under:
What is Dry Eye Disease?
The Mayo Clinic describes DED as follows:
Dry eye illness is a standard situation that happens when your tears aren’t in a position to present satisfactory lubrication to your eyes. Tears will be insufficient and unstable for a lot of causes. For instance, dry eyes could happen when you do not produce sufficient tears or when you produce poor-quality tears. This tear instability results in irritation and harm of the attention’s floor.
Dry eyes really feel uncomfortable. If you have got dry eyes, your eyes could sting or burn. You could expertise dry eyes in sure conditions, comparable to on an airplane, in an air-conditioned room, whereas driving a motorbike or after taking a look at a pc display for a number of hours.
Treatments for dry eyes could make you extra snug. These remedies can embody life-style adjustments and eyedrops. You’ll doubtless must take these measures indefinitely to manage the signs of dry eyes.
Signs and signs, which normally have an effect on each eyes, could embody:
A stinging, burning or scratchy sensation in your eyes Stringy mucus in or round your eyes Sensitivity to mild Eye redness A sensation of getting one thing in your eyes Difficulty sporting contact lenses Difficulty with nighttime driving Watery eyes, which is the physique’s response to the irritation of dry eyes Blurred imaginative and prescient or eye fatigue
Source: Mayo Clinic
The Market for Dry Eye Disease
In May 2022, Fortune Business Insights just lately issued a press release selling a market analysis report on DED. This desk from that launch offers a fast snapshot of the DED market:
FDA Requirements for Dry Eye Disease Approval
The FDA issued draft guidance on dry eye illness in December 2020. Without entering into all of the trivia, apart from demonstrating security, the FDA requires demonstrated efficacy in a single signal and one symptom of DED over car (placebo), in not less than two satisfactory and well-controlled, multicenter impartial trials.
Here is the related excerpt from the FDA steering doc:
• Signs of dry eye embody, however aren’t restricted to, corneal staining, conjunctival staining, decreased tear breakup time, and decreased Schirmer’s tear check rating (with or with out anesthesia).
• Symptoms of dry eye embody, however aren’t restricted to, blurred imaginative and prescient, mild sensitivity, sandy or gritty feeling, ocular irritation, ocular ache or discomfort, and ocular itching. Subjects can self establish their very own time period for ocular discomfort, which can be utilized instead of every other time period.
Source: Dry Eye: Developing Drugs for Treatment Guidance for Industry DRAFT GUIDANCE
One goal signal that isn’t particularly listed within the FDA draft doc that Reproxalap has focused is ocular redness (aka conjunctival hyperemia). This was the target signal that was the idea of approval for EYSUVIS, a corticosteroid eye drop permitted by the FDA for DED, however solely brief time period utilization.
Reproxalap Has Achieved Multiple Endpoints for an NDA and Eventual FDA Approval
Links had been offered above to a few of vital knowledge releases by Aldeyra since my preliminary article. However, for the sake of brevity, and to summarize the funding thesis based mostly upon cumulative scientific knowledge launched within the final 12 months, the main target right here will probably be on slides introduced by Aldeyra from its latest Dry Eye Disease Chamber Crossover Trial of Reproxalap presentation on July twelfth. In this crossover trial, every affected person acted as his/her personal management, a design that eliminates affected person to affected person variability. After a two-week washout interval, sufferers beforehand handled with Reproxalap had been handled with car and vice versa. I urge these to watch the presentation in its entirety.
The most vital takeaways from the examine are introduced within the slide under. Statistical significance was achieved in three DED indicators and a number of DED signs as specified within the FDA draft steering mentioned earlier:
Recall that two nicely designed research are required to show efficacy in every signal or symptom endpoint. As indicated within the slide under, Aldeyra now believes it’s within the place to submit an NDA to the FDA requesting a label claiming efficacy in 3 indicators and one symptom. The firm has scheduled a pre-NDA assembly with the FDA for the present quarter ending 9/30/22. No different FDA permitted DED drug has obtained a label with a couple of goal signal.
The signal known as ocular redness is self-explanatory. The two extra indicators relate to the Schirmer Test, a paper wick that measures tear manufacturing.
The Big Reproxalap Advantage over the Competition – Immediate Relief to DED Patients
The market for dry eye illness contains each over-the-counter eye drops and prescription medicines. Patients are more likely to transfer towards prescription based mostly medicines after failing to get aid with OTC eye drops. The two main model identify eye drop prescriptions permitted for long run use are Restasis and Xiidra. In 2019, Novartis (NVS) acquired Xiidra from Takeda Pharmaceutical (TAK) for $3.4 billion at closing in a deal price as much as $5.3 Billion. In February 2022 The FDA approved the first generic version of Restasis. A nasal spray based mostly DED drug known as Tyrvaya was also recently approved by the FDA in October 2021.
Aside from being the one permitted DED drop more likely to obtain a number of indicators on its label, for my part, the extra vital benefit is that Reproxalap works quickly. This fast response is the explanation Aldeyra was in a position to run a crossover trial and likewise represents a big advertising benefit. Common sense dictates that, with all different concerns being equal, any rational ophthalmologist treating a affected person with dry eye discomfort would naturally be inclined prescribe a drop that gives the affected person with each fast and long run aid.
In its crossover trial presentation, Aldeyra shared the next compelling research that point out why Reproxalap must be in a robust place to achieve market share towards the highest gamers in the long run utilization DED market due its speedy motion benefit:
Current Valuation and Cash Position of Aldeyra
Like most small cap biotechs, the previous 12 months has not been variety to Aldeyra shares. At a latest value of $5.75, firm has a market cap of about solely $336,000,000 after peaking at $15.95 in April 2021. Unlike many small biotechs the corporate has a strong steadiness sheet because it has raised capital at opportune instances. As of March 31, 2022 Aldeyra had about $217,000,000 in money, money equivalents and marketable securities. The firm has $15,586,000 in long run debt due in October 2023 and complete liabilities of $32,004,000. Cash utilized in working actions, which included working a number of scientific trials, totaled $12,873,000 in the latest quarter. The following excerpt from the corporate’s March 31, 2022 10-Q discloses its present money runway…
Based on its present working plan, the Company believes that its money and money equivalents, as of March 31, 2022, will probably be adequate to fund at the moment projected working bills by the tip of 2023, together with potential new drug utility (NDA) submissions; preliminary commercialization of reproxalap, if permitted; and continued early and late-stage growth of our product candidates in ocular and systemic immune-mediated illnesses.
ALDX Insider Buying
My final article on Aldeyra identified the insider purchases by Perceptive Advisors LLC, a ten% plus holder required to report transactions. Most of their purchases are nonetheless underwater. Recently, following the spectacular crossover outcomes, they’ve been including to their vital place:
The major danger right here is apparent. Despite all of the constructive scientific knowledge, it’s all the time potential that the FDA will discover one thing it would not like and will fail to just accept the NDA, fail to approve Reproxalap, or delay the approval course of. Aldeyra has a robust steadiness sheet however bringing a drug to commercialization is an advanced and costly endeavor and any delays could be pricey.
Aldeyra is a small firm with solely about 14 staff on the payroll because it outsources a lot of its analysis and growth work. Although there are by no means any ensures, it seems to be near GO TIME for the FDA approval of Reproxalap for DED. However, I doubt that Aldeyra will try to commercialize Reproxalap by itself. A partnership or outright sale of Reproxalap appears doubtless. I identified a comparable buy of XIIDRA by Novartis (NVS) for as much as $5,000,000,000 and the way Allergan just lately misplaced exclusivity for Restasis to a newly permitted generic. Allergan, now a division of AbbVie (ABBV), looks as if a logical, deep pocketed companion or suitor for Reproxalap.
Aldeyra appears to be in a really enviable place and a monetization occasion that might embody each DED and allergic conjunctivitis appears potential within the close to time period. In my opinion, Aldeyra shares are grossly undervalued.