Aldeyra Therapeutics, Inc. (ALDX) Earnings Call Transcript & Summary

Welcome to the 2022 Aldeyra Therapeutics Research and Development Day. I am so happy to see many of you here in person. It's great to be back in person again. And thanks to all of you who are listening online as well. We appreciate all the support we get from our investors and have gotten from our investors and analysts and banking friends over the years, it means a lot to us. By way of introduction, I'm Todd Brady, I am the Chief Executive Officer of Aldeyra. I thought I would begin with an introduction that I don't think any of you have ever heard. In the late '90s, I was a graduate student in the MD, PhD program at Duke University. And I joined a laboratory that was interested in developing drugs to prohibit or inhibit chemical reactions. And the way they were doing that was they were developing drugs they bound to a precursor of those reactions, which is a whole new way of thinking about pharmacology. And I'll talk more about that later on. The problem was that those precursors were too reactive. So to bind those precursors, we were working on 30 years ago you had to have a drug right there in the right spot at the right time, which is a pharmacokinetic nightmare. Fast forward 10 years, I was an investment professional at a venture capital fund, and a partner hands me a deal, and he says, I don't understand this deal, but I'd like you to look at it and tell me what you think. So the next day, I came back to them and I said, if this works, it will change medicine. And that was Aldeyra Therapeutics. So I led the first institutional financing of Aldeyra in 2005, alongside Johnson & Johnson, which still own shares in our company. And I think based on the data today, you'll agree that we're one step closer to changing medicine. We're going to focus our comments on ADX-629, which is a novel oral RASP modulator. We'll talk about some new molecules as well and we'll highlight some recent clinical data from ADX-629 as well as some preclinical data from our colleagues at the University of Nebraska Medical Center. We are a publicly traded company. And I think it's important that you consider our forward-looking statement slide. We'll be making forward-looking statements. In addition, quality control is still ongoing in certain cases. We simply don't have time to present all the data from every study. And given the early nature of our trials and studies, of course, we don't intend to make claims about efficacy or safety that are definitive. Let me give you a tour of today's run of show. I'll begin by talking about RASP and reactive chemistries broadly. And then we'll turn it over to Geoff Thiele, who we worked with for some time now, who can talk about his own experiences with RASP and his colleague, Mike Duryee regarding ADX-629 and some experiments they've been running over the past several months. We'll have questions. We'll have a break. We'll introduce you to Dr. Adam Brockman, who runs our translational efforts at Aldeyra, and then I'll cover the proof-of-concept top line data from ADX-629 and Adam will talk about where we're going next, not only with ADX-629, but also with new molecules as well. We'll have questions and then I'll conclude. This slide has made it into our corporate deck or some parts of this slide. We're very interested as a company not in modulating single targets, not in modulating proteins directly. And as I'll talk about in a few slides, that's quite unique. Most drugs are single-target focused and protein focused. We're also interested in modulating systems. If you can inhibit a chemical reaction, often you can inhibit many things at once. And I'll say just broadly that the drugs that our children will receive or our grandchildren will receive or our great grandchildren will not inhibit or modulate or activate single targets. They will do many things at once. And I don't mean to claim that we're going to have a panacea anytime soon, but as the future rolls on, we will have drugs to do many things at once. And in some cases, possibly like RASP modulation, we'll have drugs that upregulate certain things and downregulate certain things all at the same time to modulate a system. We have made the transition at Aldeyra from focusing on the front of the eye, then to the back of the eye and now systemically and the latter is what today is about. This is another slide from our corporate deck. It summarizes our pipeline. We have some new milestones for ADX-629, which Adam will talk about later in the presentation. As I said on our earnings call earlier this month, Aldeyra is entering a catalyst-rich period in its life, beginning shortly with the announcement of TRANQUILITY-2 thereafter with Phase III results from our retina program for ADX-2191, NDA submissions and so forth. RASP are everywhere. They are, in a sense, ubiquitous. They are exogenous and internal. We are constantly making RASP. I often get the question, where do they come from in your body? And if I could give a one-word answer, it would be alcohols. We're constantly making alcohols or drinking alcohol as the case would be. And alcohol is any organic molecule with an OH group. And typically, that is oxidized to an aldehyde and then further oxidize to an acid. Now the enzymes that take care of aldehydes are often closely linked spatially to the enzymes that make acids. And the reason for that is you don't want aldehydes. They're reactive, they're toxic, they're immunogenic. Dr. Thiele will spend a lot of time talking about why aldehydes are bad. There are really 2 ways to get rid of aldehydes. One is they bind to things, mostly proteins, to some extent lipids, to some extent sugars. And the other way is with enzymes, and we'll talk about enzymatic deficiency today that results in serious disease called Sjogren-Larsson Syndrome. Now the way RASP mediate inflammation is well described. There are several different mechanisms ultimately that will lead to cytokine release. We argue that RASP are pre-cytokine that is one of the first things to get going at the inflammatory cascade is the increase in metabolism that leads to oxidation of alcohols, at least the production of aldehydes, which exceeds the capacity of the system to metabolize aldehyde so then you have inflammation induced by RASP. Someone said to me once, can you show me a picture of an aldehyde of a RASP, we have 2 or 3 up here. Usually, we talk about malondialdehyde or MDA or hydroxynonenal or HNE, those are the 2 most commonly described RASP. If you go to PubMed and you type in malondialdehyde or hydroxynonenal, you will see tens of thousands of papers literally pop up. I sometimes get the question, well, why hasn't anyone thought of modulating RASP? And there's 2 answers. One is the technology didn't exist until 2004 when this company came up with the idea of developing molecules to bind and modulate RASP. The second idea is those 10,000 thousands of papers that I described were about RASP as markers of disease, not about RASP primarily as causes of disease. And so the aha moment at Aldeyra in the early days was RASP aren't just markers of disease. They cause disease, and so let's target them. And that's why I said to the partner back in 2005 or '04, this will change medicine because it represents a whole new pharmacology. Here's more information on exactly how RASP and what proteins are modified by RASP but how RASP will work in the inflammatory cascade. I mentioned NF-KB. I think you can look at some of our cytokine results that we'll present today and understand that maybe possibly there is some down regulation of NF-KB activity that leads to reduction of cytokines. We're also happy to send investors more information. We have a whole slide deck publicly available information with annotated bibliographies and so forth on precisely how RASP work. The bottom line is the mechanisms of RASP as it relates to inflammation -- as they relate to inflammation are well described. I want to spend some time on this slide. It talks about how RASP modulation is different from essentially every other drug. So 99% of the drugs we have today, if not 99.9% of the drugs we have today that are prescribed by physicians, either inhibitor receptor, activator receptor or inhibit an enzyme. All of those are protein targets, receptors are proteins, enzymes are proteins. And essentially, what we're doing is turning things on or off. But it's interesting to think about receptors in terms of computers and computer language, receptors are on or off, they're digital. They're 0 or 1. They're either activated or they're not activated and receptors don't have memory. If an agonist comes along to a receptor, it doesn't matter what's on the receptor, it's going to get agonized. Whereas aldehyde binding is not digital, RASP do have memory. And what I mean by that is the amount of RASP binding to proteins changes the more there is binding or the less there is binding. So it's a little bit like a rheostat or a potentiometer, the amount of binding of RASP on a protein will change the structure and function of those proteins differentially. We'll hear more about that from Dr. Thiele. So instead of an on and off switch we have a dimmer switch with RASP modulators. I think this is probably the first drug most people ever heard of that doesn't directly target a protein and doesn't have a single target. RASP are a whole family of molecules. There are probably hundreds of RASP, all of which are pro-inflammatory and many of which are upregulated in the case of inflammation. So this is a totally unique pharmacology and as I said earlier, I think it represents the future of pharmacology. The future of drugs that our offspring will receive, that is drugs that don't just do one thing, but do many things. Drugs that don't just target a single protein but modulate a lot of factors at once in an effort to down-regulate or upregulate a system. I love this graphic. Today's drugs are on or off. Now there are good reasons to turn things all the way off. If the patient is in the emergency room and hemorrhage, you don't want to turn that off. If a patient comes in with ventricular tachycardia, you want to turn that off. But most diseases that we're familiar with and that we will suffer from as we age, are chronic and they're insidious, and they're persistently disturbing and slowly over time, lead to morbidity and more mortality. And that is, I think, where cases of not turning things off are good. I don't mean that we shouldn't downregulate things, but I do mean that turning things off can be bad and lead to toxicity. Imagine that you're conducting a symphony, and the violas are out of tune and the timing is wrong. And instead of adjusting that, you tell the violas to leave. It doesn't make sense. Imagine the pressure in the tires of your car are wrong and instead of adjusting the pressure of the tires, you take off a tire. That doesn't make sense. Our lives are not digital. We don't have 2 speeds in our car, 0 and as fast as it will go. We don't have 2 volumes with our ear pods, 0 and as loud as they will go. We're more used to dimmer switches, or volume controls, and that is what RASP modulation is about. We're not turning things on or off. We're modulating systems. We're taking the volume from a 7 to 2. And for chronic diseases, especially diseases where you want to avoid toxicity that makes a lot of sense. Does it work? Well, we're one pivotal trial away with reproxalap, our lead RASP modulator NDA submission in allergic conjunctivitis. And likewise, with dry eye disease, one pivotal trial away. If you're interested in how that trial might turn out, you can read Yigal's latest note from Citibank on deep simulations along those lines. Based on the evidence we have today, much of which is from very late-stage trials, at least in the eye, this idea seems to have a lot of merit. You can also read about reproxalap in particular, as a RASP modulator in numerous papers, just go to PubMed and type in reproxalap, and you'll see lots of evidence for RASP modulation that has been peer reviewed. Okay. Why don't I take the opportunity to introduce Dr. Thiele. There are a few people that walk this planet that know as much about RASP as Dr. Thiele. We are thrilled to be working with him who is -- Dr. Thiele is a noted immunologist. He's been studying RASP for many years now. I hope he'll tell the story how we got involved in all this. We've had numerous collaborators at the University of Nebraska Medical Center over the years, we were introduced to Dr. Thiele that way. We're absolutely thrilled to be working with him and then he will introduce his colleague, Mike Duryee, he will talk about specific experiments that they've been running with ADX-629. Geoff?

Thank you, sir. Well, it's great to be here today. I always like to talk about my favorite subject, which is alcoholic liver disease, aldehydes in any chronic disease process. First of all, I like to thank Aldeyra for inviting both Mike and I here today. We've had a great collaboration with them. They are wonderful people to work with. And they've been helping us move along some of our research that we've had and I'll show you in a few minutes where we've had some real trouble trying to get funding in the past, it has been how are you going to treat your diseases. There is no real treatment for aldehyde mediated diseases, okay? So they have -- this has been a godsend to us, if you will. As you -- as Todd just told you, I am the Umbach Professor of Rheumatology. What does rheumatology got to do with aldehydes? Where did that come from, right? Well, actually it started after I did my PhD and then post doc and my experience has been, I've always worked with, big word, post-translational modification of proteins. What that means is after you make a protein, they get modified inside your body. They will get sugar stuck on there. They get all kinds of things stuck to a protein. So that's called post-translational modification. And my thing was as we looked at it to see, could I break immune tolerance. Immune tolerance for those who don't know is, we do not attack our own body. That's called immune tolerance. Our immune system says, I'm going to leave you alone. You're me. But if you change proteins enough, if you alter the system enough, all of a sudden, you attack self. Almost everybody in this room, I know or somebody who has rheumatoid arthritis, systemic lupus erythematosus, psoriasis, all those things are autoimmune diseases. And there's always been a thought that there has to be a way to break this immune tolerance in the thought the post-translational modifications. So I got into this because when I got done my post doc, Dr. Mike Sorrell, who is a noted GI doc, gastroenterologist, he came to me, Geoff, I got a problem. I said what's that. He said, "I do alcoholic liver disease for living. And I say, okay, this is -- and what we believe happens is when people drink alcohol, the major metabolic byproduct is acetaldehyde. We believe it binds to proteins in the liver, induces an immune response and then the immune system starts killing off the liver. And I said, Dr. Sorrell, that's nice, but what proof do you have for that. And the biggest proof he had, he had to do transplantation. We had just started transplantation at the university of Nebraska Medical Center for liver. It's interesting. Most patients who drink alcohol takes 10 to 20 years to get alcoholic liver disease. Okay. And these guys by way drink like a 12-pack of beer every day or a whole bottle of whiskey a day. This is how much they drink to get alcoholic liver disease over a 10- to 20-year period. That's pretty impressive, by the way. So then he said, what's interesting is we go and transplant these patients because they go on to alcoholic cirrhosis. That is their liver just dies, and they're going to die unless they get a liver transplant. So we transplant the liver and this is where it gets interesting. After we transplant them, if they start drinking within about 2 years, the liver totally dies off. Now wait a minute, I'm a scientist. If it took you 10 to 20 years to get alcoholic liver disease the first time, wouldn't you suspect and if you put a normal liver back into somebody it would take another 10 to 20 years, it took 2 years. His suggestion at that point was this is why we believe there's something about the immune system responding to these aldehydes. That's how I got into the business of acetaldehyde and actually looking at adduction or modification. All right. So with that introduction, I have no disclosures. I have to do this, of course, the university makes me do that. These are my disclosures. I'm sorry, they're very minor. Okay. So Todd talked a little bit about malondialdehyde. I'm not going to bore you to death with all these topics. We just do some interesting parts of these. It's almost always generated peroxidation of lipids inside the membranes of a cell. So when a cell gets stressed, it starts making MDA, malondialdehyde. Interesting, keep this in mind for the later part of the talk. Malondialdehyde can generate its own acetaldehyde. In other words, you'll see in a few minutes, Malondialdehyde, it's a di-aldehyde. There's 2 aldehyde groups there. When it breaks down, it can form its own acetaldehyde. Important, we'll talk on -- little later in the talk. MDA itself can be directly toxic to cells, okay? It can react with proteins, it can activate them. So some of the enzymes, Todd was talking about. If you bind at the site that causes the enzymatic reactions, it stops that enzymatic reaction from occurring. It can form adducts bind to proteins, it can react with DNA and cause mutagenesis. This has been shown very nicely in cancer, and it can also increase inflammation on its own, okay? Pretty cool, does some nice stuff. This is what it sort of looks like. And what I really want you to get from this something Todd already brought up, that is, look, these arrows are going both ways, right? As it forms, they dissociate. The nicest part about these guys is they combine and if you get a lot of these malondialdehyde or even acetaldehyde, it's going to keep binding to the protein and it's going to start causing problems. If you take it away, okay? As you remove it, you don't have the problems. It will just keep dissociating, and so you always have this interaction where binding release, binding release, binding release. So as Todd said, it depends upon the level that you actually have in your body, okay? What about acid acetaldehyde? Where does it come from? Well, the major place acetaldehyde comes from your body is alcohol consumption. It's the first major metabolic byproduct of alcohol. Interesting, cigarettes. I learned not to smoke cigarettes, right? When I was in college, I had to be cool. This is back in the 1980s, I'm that old, right? Everybody tried to smoke cigarettes or smoke a pipe because it looked cool, right, so you did. What I found out is it burned when I smoked, right? I didn't like that burning sensation. Later found out, first of all, the smoke is irritating. The second of all, cigarettes have 1 millimole. 1 millimole, which for those of you know that's quite a bit of acetaldehyde in every cigarette you smoke. Every cigarette you smoke, Todd's point, where do you get these aldehydes come from? We get them from cigarette smoke, okay? You get them from alcohol, Wow, so I learned it quickly, quit smoking cigarettes because I didn't like it, okay. I then probably saved my liver and that's probably a good idea too. It's found in the manufacture of plastics, so in plastics, sometimes you will have leaching off of plastics. And they've had to do this in a lot of places. In the end, they found out there are lots of acetaldehydes, formaldehydes, butyraldehydes and it is one of the reasons people shouldn't drink from plastic bottles, right? Well, when those have all been cleaned up and they're pretty good now, but that was the source. Toxic effects that people know about with acetaldehyde is flushing syndrome. Anyone of Asian ancestry should know that this is a problem. The Asians lack ALDH2 -- I am sorry, ALDH1, okay? So they cannot break down acetaldehyde very well. Acetaldehyde causes reaction that causes them to turn red in the face when they drink, okay? It can form adducts, impairs protein function, damages enzymes, damages DNA, bad deal, okay? All of those, I can tell you, are not a good idea. Increases inflammation and fibrogenesis, we know that. Stresses and damages cells, promotes fatty liver, turns out that acetaldehyde, okay, is a single carbon unit that's very important in the production of fats, hence, fatty liver when you drink alcohol. For those of you who know alcoholic liver disease, it goes from a normal liver to a fatty liver, to hepatitis, finally, it goes to cirrhosis and the liver dies. Acetaldehyde is very important in all of those processes. Contributes to hangovers, okay? Alcohol does not cause hangovers, contrary alcohol is not toxic. Alcohol, I can pickle you an alcohol and you don't die, okay? It's the major -- it is the metabolic byproducts that cause problems. And most of those are the acetaldehydes to potent aldehydes, all kinds of different -- the proxy nitrites, the 4-hydroxynonenal. These guys are the products that cause or contributes to hangovers, okay? They cause tissue damage, causes all kinds of issues. Before acetaldehyde adduct, this is called a stable acetaldehyde adduct. This is an artificial thing we do in the lab. They thought that they could actually disclose things and diagnose alcohol drinking and everything with this. And this has never ever worked. The product that the end is called an N-ethyl lysine. Never has been important. Here's the one that most people would be like to be ever after, which is the non-reduced adduct. And when you bind simply what happens is, here's acetaldehyde structure. It attacks this immuno group, takes awful water, and it makes a nice little adduct down there, problem it is, is its wholly unstable. Again, it depends on concentration, how much of this you have in your body at any one time. And if I can remove the acetaldehyde there's less toxicity. Again, look at these nice little arrows, reversible, okay? Nice. Well, the problem we had, when I just go back to my original studies, working in alcoholic liver disease was acetaldehyde binding proteins is unstable. I couldn't use it diagnostically. They are hard to follow. MDA does the same problem. So Dr. Dean Tuma who I work with back in the day, Dean has since -- Dr. Tuma since retired. But Dean was probably one of the best chemists I ever know in my life, okay? And Dean got together back in the day, the 2 things that are really hot in alcoholic liver disease was the production of acetaldehyde adduct formation and oxidated stress, okay? Well, MDA occurs when you get what the cell is stressed and it causes MDA. So people know about MDA and acetaldehyde, and doctor Tuma said, "Hey, why don't we put these 2 together and see what they do". And he's a chemist, biochemist and he actually sit down and says I think what will happen is that I'll attack here to do this and it will make this really cool structure. And it turns out it's really very stable structure as I'll show you in a minute. And so what we do is take 2 pieces of the alcoholic liver disease process and put them together, and we formed this thing called malondialdehyde acetaldehyde adduct, MAA, okay? This is a cool product. By the way, we did the experiment and worked out exactly like Dr. Tuma said, obviously, because I'm going to talk about this. And he told me he says, you know, Geoff, in 35 years of doing research, this is the only experiment I ever drew up that worked the first time, which is true in science, by the way. Science is always failure upon failure and you get that one -- and I'll show you a cool serendipitous one in a minute. All right. So I get malondialdehyde formed, I get acetaldehyde formed when you drink, MDA because you got to stress. It can form in any tissue is undergoing stress because MDA, what did I tell you? MDA can break down to form what, acetaldehyde. Wow, you get high levels of stress you make MDA, okay? This thing is highly stable. It's almost impossible to break down if anybody here is a biochemist, I show you the structure in a minute, causes a nice electron cloud, which makes this thing perfectly stable, causes additional stress to the cell. So Mike and I -- Mr. Duryee and I have thrown these on cells, and it causes cells to do some really cool stuff, they get really stressed out. It activates protein function, forms adducts and it increases inflammation directly. Okay. I don't have to do anything else. And the coolest thing I could say is this is highly stable. How is it made? This is MDA, 2 aldehyde groups here. Here's acetaldehyde, it attacks an immuno group, most likely an in-terminal or for those of you who are chemists, the epsilon amino group of a lysine. For those of you who know what that means is a lysine is an amino acid, it has 2 amino groups. It has one at the in-terminal as a carboxyl group, and it has right in the middle, another immuno group that is free on any protein. It sits right at out there free ready to react with things. When that happens it can form one of these 2 products. This is called -- we call it the win one, it's unstable. It will also fly off. You see it has 1 malondialdehyde, 1 acetaldehyde. This can then be converted into what's called the 2:1. There's 2 MDAs and 1 acetaldehyde, highly stable, can't be broken down. You can jump on it, spit on it, do what you want to it. It just doesn't go away once it's formed. Think about how that's different than we talked about the acetaldehyde and the MDAs before, okay? Those guys keep coming off. This became a great biomarker, by the way, number one, and I will show you that in a minute. But number two, it's stable. It can be measured. It's highly fluorescent by the way because it's a ring structure, all ring structures are fluorescent. Cool. Great deal. Now interesting, Mr. Duryee is going to show you something later. We can stop the formation of this with 629. It's an aldehyde, right? There's 2 different aldehydes. This is pretty cool. All right. Why do we care? Well, this happens every day your life. You're getting MDA and acetaldehyde formed between the alcohols, this oxidated stress even as you're getting older, your cells die, you have stress, okay. We want to have that because what we believe and we know is almost everybody in this room will make antibody to MDA. I'm an immunologist, cytokine antibodies. Everybody that's all the rage is COVID. Everybody knows about antibodies now. But you make antibodies to MAA, why would I do that? It helps remove any of the modified dead cell material, brilliant. We'd want to do that, okay? But as it says here, too much if something is bad. Again, Todd's point, you have too much acetaldehyde, too much MDA, bad, right? Well, the same case here. We're going to make this product, okay? So these cells start to die, okay? Increasing acetaldehyde levels is the precursor to several diseases. We know that. I'm going to show you some of that in a few minutes. It's not just unique to alcoholic liver disease. That's why rheumatologists now is actually looking at how -- I mean, they're looking at these things. They can form adducts, okay? And the immune system does see these differences. I'm going to show you the coolest study ever did in my life in a minute and show you why this becomes so important. And autoimmune disease may be an issue, okay? Again, this is why we got to get rid of the aldehydes. Bad deal, all right? All right. What are adducts biology, normal proteins in the body can become altered by chemicals. That's called an induction. They nonspecifically start to stick. You know what does that mean they nonspecifically stick, they usually attack an amino group and are stuck there. As Todd said either cysteine or usually a lysine group, okay? These guys can be covalent in some cases, okay? And it can be generated by enzymatic, or they can be as spontaneous. As I told you earlier, the immuno side of the terminal chain of a protein or in a lysine group, consequences of the nonenzymatic modifications are multiple, and I will show you some of those in a minute. And most sites were this occurred, that's interesting. You have to have a functional site, nucleophiles to attack. Let me give you an example. We've done so much work with MA. We really understand this molecule really nicely, but bovine serum albumin, okay? It just takes. So everybody has albumin in the body, so do cows. So we took bovine serum albumin. We know it has 26 lysines and 1 in-terminal group. So you would think there'll be 27 sites you can modify with MAA, right? If you combine to amino groups, why don't I just hit them all? It turns out that max we can ever modify is about 2.5. Why? Because you have to have a site to attack. The immuno group has to be activated. It has to become a nucleophile. And there's only certain sites on that protein. That's good because what that tells me, not everything is being modified only certain sites, which may be helpful as we go through some of these studies. Coolest study I ever did. It has really gotten me excited about aldehydes again. For a while, we were starting to lose interest because how do I treat them, how do I -- who cares? What's it really doing? What we did is we took bovine serum albumin and MAA adducted it. We can do this in a test tube. Mike and I can take a test tube with some albumin, put an x amount of MDA, x amount of acetaldehyde, it just makes MAA spontaneously, pretty cool, right? Then I'm an immunologist. What we do, I want an antibody to MAA. Because I can use it for all kinds of cool studies. So I was trying to make an antibody, okay? So I took that BSA and how can we make anybody, I usually immunize the mouse. And I wouldn't immunize the mouse. Now there's one other little thing you have to understand. In order to generate an immune response, you have to have an adjuvant, okay? The immune system, in other words, if I take bovine serum albumin and inject it to anybody in this room, you will not make an immune response to it. It's a soluble protein that'll circulate around, it will be taken up and go away and nobody will care. They won't make any antibodies, nothing will happen. So in immunology, we -- it's called an adjuvant, we stick the protein on something. And the idea is if I stick it in your arm, so all of you guys have had your vaccinations, right? The classic one for most used alum. They use an alum precipitative of protein. They stick the protein on aluminum hydroxide. Why? They stick it in your arm and the immune system goes, "Oh, there's something that's in my arm, okay, that's not going away because stuck to the alum, it's stuck in that arm. And immune systems, I don't like that. So not causing all these cool macrophages and neutrophils and all these cool things start eating at that to get rid of it. Pretty cool, okay? So you have to have an adjuvant. So I actually went to Australia to give a talk, and I told my lab tech at the time, not Mike, Mike is too smart to do that, okay? But I told her this, okay, mix some with adjuvant, inject all these mice. I did a phone call at 2 in the morning. Dr. Thiele. I said, yes, I forgot to use adjuvant. I said, okay, just inject them once a week for the next 5 weeks, great negative control. They will not do anything. We're good. Just get a whole another set of animals back and you can do that without I said get a whole new study and start the whole series over with this adjuvant. And I noticed spending a lot of time. You have -- this is the coolest thing, okay? So we immunized them with BSA MAA and then we tested them for antibody production. And I'm not going to tell you about the adjuvant ones because I don't care. This was the coolest finding ever. I immunized these guys with BSA MAA. We ran them in an ELISA, All you guys know what an ELISA is just the way where we can test for antibodies, right? And in that ELISA point, we put BSA MAA, BSA. I put HSA human serum albumin because the mice hadn't seen HSA. I want to make sure there was no just nonspecific cross-reactivity things. Plus, I can adduct HSA human serum albumin with MAA, so I could see how much antibody versus the MAA. If they don't react to the HSA, they should be -- but they react to HSA MAA, reacting to MAA makes sense. So here's what we got. Dose response we're getting different doses and look at this. At low doses, I made really beautiful antibody response in a nice dose-dependent manner, levels off. Pretty cool. I injected BSA MAA and I got MAA. You said, who cares? You inject BSA MAA. I had no adjuvant. I made an immune response without adjuvant. Now this is cool, because what this told me right away was MAA itself is what, its own adjuvant. It generated an immune response in the absence of an adjuvant. That's cool, but it got better. At lower doses, almost all of this antibody response was on the BSA not to the MAA, and at higher doses all to the MAA. And how do I know that? Here's a response to HSA, nothing, HSA MAA, it made up the difference between the 2. Coolest experiment I ever run, serendipitous since I had no clue that this is going to happen. And so, why do you care again, I'm making an immune response to an aldehyde and the protein to which it's attached without any adjuvant. I'm an immunologist. I am an autoimmune disease guy. My next step was, could I break immune tolerance? See where I'm going. If I put a MAA adduct on a liver protein and alcoholic liver disease, now am I going to attack the liver, right? I broke immune tolerance. Is that possible? Does this make sense? I hope, pretty cool. So we did the next step. We took cytosol from the mouse, mice or little mice are identical, okay? Took one cytosol, liver cytosol from mouse, MAA adducted it, injected the mouse. That's all this says, okay? And what Mike and I found was these guys -- we were able to show that we could break immune tolerance to the cell protein that is we -- I made antibodies and T cell responses to the cytosol, I injected, broke tolerance. Increased the antibody to both, okay? We ended up with a low-grade autoimmune liver disease, which was sort of cool because our AST and ALT levels went up. There were inflammatory infiltrates in that liver similar to alcoholic hepatitis. This is pretty cool. We came out that MAA may be involved, therefore, in the development progression of acholic liver disease. Makes sense. It's pretty cool, right? Well, the problem was not much of a market for alcoholic liver at this time, especially so I'm going to treat them. I keep telling you, that's the hardest part we ever had. I can figure is I'll have a higher treatment give him anti-inflammatories. We do that. That's what people used to do for this because hepatitis has itis, anything with itis is inflammation. But it's very nonspecific for something at it. It just wasn't helpful. And we got involved with some other people in rheumatoid arthritis. We've got in cardiovascular disease, inflammatory bowel disease, smoking-related disease. We started looking at this MAA present in all of these. It should be, by definition, right, because what I tell you, MAA is formed from stress of a cell. You get MDA form, you get acetaldehyde form. People drink, they smoke, obviously. By the way, what's the major co-factor in any of our diseases. People with rheumatoid arthritis have more disease process when they smoke. They're pulling in 1 million of acetaldehyde every time they smoke a cigarette, Wow, okay? Drinking is a major common founder in all disease processes. You see or especially don't smoke and drink with cardiovascular disease, right? Put those altogether, you sort of going, pretty smart, but there, I'm going to show you some data from these 5 because then Mike is going to come back in a few minutes. He's going to show you how he's used ADX-629 to actually inhibit some of these responses with MDA and acetaldehyde. One of the first things we did, Mike and I are very close to a friend of ours, Dr. Dan Anderson. He's a cardiologist. He's Chair of Cardiology right now -- Chief of Cardiology. And Dan was really pretty cool. He has friends and he says, "Hey, can you guys give me an atheroma? And for those of you all know what happens is they go in and do -- they do an angioplasty on people who are having an MI, okay? They go up to the vein, from femoral vein up into the heart and they plasty you. Well, when they do that, they can actually there's a little map they put in there and they catch the atheroma. We've been able to catch about 50 of these right now. And so we went back and said, "Okay, remember, I told you I made an antibody to MAA. Well, this is a negative statement what we do is all the controls to show that there was just the antibodies we used in this process did not specifically stick there. We have an antibody to MAA and this is the same section, by the way, anti MAA came back with a fluorescent antibody, that fluorescent is red, and we found out that MAA is found in the atheromas that we caught. Pretty cool. MAA is actually inside the atheromas, okay, cool. Big slide. I'm just going to shorten these for you. We also looked at the patients, antibody titers. Look at this, here's the vasculature of a normal person. Here's somebody most of the young people have this sort of thing from the McDonald's French fries and all the other cool stuff we like to drink and you can see it start to get a little red, It is not looking as nice as this. This is somebody who has an MI. There's the plaque, okay? And this is somebody who has what obstructive cardiovascular disease. They don't have a plaque, but it's thickened, all right? And so what happens is we look at the antibody titers to these, and we looked at different antibody types. There's IgG, IgM and IgA, we just look at those routinely. The important thing you need to look at is normal controls, nonobstructive CAD, obstructive CAD, cardiovascular disease. And what you see is patients with MI have super high levels of antibody to MAA. Nor did have the plaque with that antibody, so we can follow these people. And quite frankly, it's as predictive as troponin is in a cardiovascular artifact. Does anybody know by the way what you do for these 2 patients they come in with. This person, by the way, will come with angina. Both these 2 sets of patients ended up with angioplasty, most of them emergency angioplasty. We can now tell the difference, and our doctors tell us, boy, if I just had to somebody -- somebody do it on their own time, it's much cheaper than doing it from the emergency room. So it's one of the things we're looking at, okay? IBD, irritable bowel disease. So what happens? We actually looked at these guys and looked at ulcerative colitis and Crohn's disease. There's a control. This is intestinal tissue by the way, stain for anti-MAA, nothing in a control intestinal tissue. Crohn's disease has a little bit of staining for MAA. Ulcerative colitis has tremendous amounts of antigen in their colon. Look over here, antibody titers, okay? The GMs and As. But what's important more than anything else, people with ulcerative colitis have -- by the way, this is a long scale. This is not a linear scale. These numbers are hugely different, People with ulcerative colitis have huge levels of antibody to MAA. So now they have it in the tissue, but they have the antibodies there, suggesting it's playing a pathogenic role. We actually have looked at these guys with reasons under the curve as far as sensitivity and specificity of this assay, and we know that IgG antibodies give you about 0.81, very under the curve, this is fairly predictive. Okay. If I add both antibodies together, starting IgG plus A, IgG plus M, it really doesn't change that outcome. But the beautiful thing here is what it correlates nicely with the disease process. Okay, couple more rheumatoid arthritis. I love this slide. There's a protein, and this is the coolest thing ever. Rheumatology has one of the things that we've got going for us. If you -- if I draw anybody, everybody is blood in this room right now, and if you have an antibody to a thing called citrulline CCP, it is cyclic citrullinated proteins, if you don't have RA, you will within 5 to 10 years, it's absolute. So this is great. So we have patients that are called CCP positive or CCP negative. There's a small portion, about 20% of our patients are CCP negative, okay? They just are. They have rheumatoid arthritis, but they don't have the CCP positivity. But if you are CCP positive, you have RA, okay. Got it. So what we did is stain for anti-MAA in the blue, anti-CCP sit in the green. And this -- this red is CD45. It's a pan lymphocyte marker, okay? Then we can overlay all those guys to see where do they show up? And the coolest part here is see this purple stuff? I didn't stain with purple, I stain with blue, green or red. These guys, yellow and red, this purplish sort of stuff. That's where MAA and CCP co-localized and you say who cares? Who cares? If I take citrullinated proteins and inject the mouse, they make no antibodies, they make no T cells. As a matter of fact, everyone in this room has high levels of citrullinated proteins. If I take your skin, keratinized epithelial cells, I take your skin and put it on a -- we do a western blot and stain it. Everyone you will have high levels of citrulline in your skin. Why don't we all break tolerance to make antibodies and T cells to citrullinated proteins? I think I have the answer. MAA and citrulline colocalized. What does MAA do? Anything it's attached to becomes immunogenic. So it is MAA helping to drive the anti-CCP response, and we believe that is what's happening, okay? Antibody titers shown here. These are all RA patients. These 2 bars over here. These are controls. Again, we looked at the IgM A, G, the different antibody types. Doesn't matter what antibody type is, these patients, all RA patients have higher levels to MAA, I think the data and then controls too. The last thing I'm going to show you, and then turn this over to Mike is alcoholic liver disease. This is a liver from a patient with alcoholic liver disease, stain for anti-MAA. So the MAA is in the tissue. Oh, and by the way, here's an alcoholic liver disease patient versus the nonacoholic liver disease patient versus a high drinker who doesn't have alcoholic liver disease versus a control, look, these guys have higher antibody titers to MAA. So do I think MAA helps drive lots of these different disease processes? Yes. How can I stop that? I think that's the question, oh, 1 more, 1 more smoking. That's why you shouldn't smoke. We did bronchoalveolar lavage on patients, okay, normals, smokers, alcohol-consuming smokers, non-smokers, I'm sorry, alcohol consuming smokers. We're looking for dark black in this case, purple, what you find out is normals have no staining. Smokers have a little bit of staining and that's shown actually over in that figure over here, and that is here's the smokers, alcohols that do not smoke and then alcoholics that smoke. The 2 together are bad, the 2-hit model things are not a good idea, don't smoke and drink. You're going to end up MAA in your lungs. It's in the cells of the lungs. Okay, bad deal. All right. So why do we care and why are we excited? Every time we put in a grant -- how are you going to treat this. When we give them an antioxidant, that didn't work. Given them antifibrotic, that didn't work. Give them all kinds of anti-inflammatories that didn't work. How do I treat these patients, right? How can I stop? We never had any real luck with this. And I'd have to sit there, I don't know how I'm going to do this, but we're finding cool stuff, but I don't have to stop it and everybody just wants start to treat more than they want anything else. When Aldeyra came to us and said, "Hey, we got this aldehyde sink. That's what we like to call it. It just sucks it all out and takes it away. We said, yes, we'd be interested, okay? Because it's going to bind acetaldehyde, it binds malondialdehyde, it appears to binding malondialdehyde together, the miotic, wow, this is powerful for us. And if we can decrease that, you decrease the inflammation, you decrease the disease, okay? Does this work? I'll leave that to Mike. He's going to tell you the use of -- the Aldeyra product, at least in some of our animal model systems. Michael? And by the way, this is Mike Duryee. He's been with me 26 years. So yes, we started together and yes, we've had a good time. Mike?

Awesome. So my name is Mike Duryee. I'm kind of the nuts and bolts behind our lab. He does all the fancy showing up, and I take care of business in the lab and make sure everybody is doing their jobs and everything. So today, I'll talk to you a little bit about our evaluation of 629 in, in vitro and in vivo inflammatory models. So like Geoff was saying, we really don't -- I mean alcohol is cool and everything, and we've had a lot of funding in alcoholic liver disease, but it also bit us in the bu***, right? So we kind of lost our funding and had to move on to a new line of thinking. And so we were rheumatologists, why are we working on alcohol. So we ended up going to a couple of our rheumatology people when we went to the cardio and that's how we came up with all that really cool data. So while this is -- the alcohol model is a cool tool to use, we're really more interested in the rheumatology and the cardiology and the IVD stuff because that's true inflammation. Alcohol just stop drinking, right? That's what they told us when they defunded us basically just stop drinking. So when we look at -- and in the alcohol model, that's primarily what I'll talk to you about because this is the quickest, easiest way for us to test this RASP inhibitor in our laboratory, quick, dirty, easy way. So when we look at alcoholic liver disease studies, primarily people use cell lines. And so these are cells that are just immortalized, right? And they're really tough to grow. While they grow really easy, but everybody, it's kind of not really privy in the scientific world. So you just use them to test and make sure your stuff works, right? The other way you can do this is you can get isolate primary cells from livers and you can isolate the cells individually and test on these adducts and alcohols. And that doesn't work very good. So the other way that we kind of do it is to use animal models. Well, these are super expensive. They're really time consuming, and you don't always get the greatest data from it. The other issue is humans. We all know how humans are. This one guy does he drink 5 beers. When you get those in for his clinic or does you really drink 2 cases of beer every day. So it's hard to really know how much beer or alcohol these guys are drinking and how to actually look at that. So wouldn't it be great if we had a model that would actually be able to test this. Maybe there we go. So Dr. Thiele and I, we kind of went out and we looked for a model system. Well, these guys that from this company called Vitron had this really cool precision-cut liver slice model. And -- but they used it more in toxicity studies and things like that. So it's what it does. So it's pretty cool because it maintains cellular integrity. This has every single cell in that liver intact and working together in harmony. And it also maintains cellular function. It -- we know that metabolizes ethanol, and it can be a great in vivo, ex vivo model. So how do we do this, right? So what we do is we take an animal liver, we excise it from it. They have this little coring tool that we use, and we've taken core, these little chunks of about [indiscernible] out of the animal. And then we have here -- it's literally a meat slicer. So the blade on it is a wall paper blade like you would use to cut wallpaper and it spins around with this drill real fancy, right? But what it does is it cuts these 250 microns slices of these livers. And what we can do then is take culture in this little device here. So this is like a little mini roller bottle, has a titanium screen on it and what the screen does is you float that liver slice onto it and it rolls in and out of the media. So it actually picks up oxygen. We have -- I kid you not, this is a pressure cooker. It is literally a pressure cooker that they have put in to seal it all up and you pump oxygen into that so as the slice rolls in and out of the rolls in and out of the bath of media, what happens is it picks up oxygen. So that's really cool because this is how we're able to culture these for a long time with ethanol. And you can see this is one of the papers, the first papers we published on this model. And you can see that it actually does metabolize ethanol over 96 hours. If you use a 4-methylpyrazole, this is an ADH enzyme, so alcohol dehydrogenase enzyme that inhibits the enzyme. We can actually block it in there. So pretty cool. We also know that it will increase acetaldehyde concentrations in there. So we know this model is metabolizing ethanol every time we do it. One of the other really cool things about this model is that it accumulates fats in these animals. So you can see all the little red dots in this picture here compared to the controls that it actually does increase the fat content in there, and that's directly related to the ethanol that's in our system. Once again, if you use that alcohol dehydrogenase inhibitor, you can completely deplete the fat out of there. The other thing we looked at is fibrosis. So it's a great model of fibrosis, right? So each one of these red pictures here is showing you fibrosis in ethanol, blocking it with 4-methylpyrazole here actually gets rid of that fibrosis. But one of the greatest things that Geoff and I were most excited about is that this happens, if you culture these with ethanol for 3 days, you actually make MAA. And so that same antibody he was talking about using to detect it, we can detect it in these liver slices after 3 days. And what super neat about that is this is the first time that Geoff and I have ever done anything like this in an in vivo model, right? So every time we've ever made MAA, it's always been in a test tube. This is the first time we've ever had alcohol directly make that adduct in a tissue. And that was really cool for us. So that says that it actually does happen. We're not just detecting in the tissue. So these guys came to us and they're like, "Hey, how about that liver slice model, right? I think it seems pretty cool. You guys get alcohol and stuff in there. Well, what a better way for them to test if these RASP inhibitors work than to use our model system with alcohol. So to do this, what we did was we first tried an in vitro model. So what this means is we just took it in a test to made it in there, see -- saw if it worked. We then will go to our precision liver slice model, adding 629 into there to see if it works. And we'll do that in mice and human. I'll show you some of that data. And then in the end there, once we knew it was working, we actually did the more expensive animal model to see if it was actually working in vivo. So as you can see here, what I did was I had our guys take in the -- - add 629 to acetaldehyde and combine it with a protein. And then one of the neat things about both the MAA molecule and the 629 is that they have output reading. So MAA has this really cool ring structure. You probably saw that when Dr. Thiele was talking about it. Well, that ring structure can be picked up at a fluorescent wavelength of 398, and one of the really neat things about the 629 is that it can be picked up by spectrophotometry at 245. So we can actually kind of measure these in an in vitro and see what's going on. So we took acetaldehyde, malondialdehyde and the combination of malondialdehyde and acetaldehyde, and we incubated it with a protein, and then we look to see what would happen using our outputs. So as you can see over here, this is the MAA adduct fluorescing on its own. So that has no 629 in it. This is 629, which is the vehicle. And if you add the malondialdehyde and acetaldehyde to make the MAA, it actually prevents it from making MAA. When we look at the ability of it to decrease the levels of 629, remember, I told you it was -- it has a wavelength of 245. So if it binds something in theory, what should happen is it should decrease the level of it. MDA is decreased right here in response to it and also malondialdehyde and acetaldehyde. So we prevented the miotic from forming. We're still trying to work on why this has increased, but we have some really cool reasons as to why. So in conclusion, this 629 prevents the formation of MAA as determined by our fluorescence at 398. We also noted sequesters malondialdehyde preventing the adduct formation at 245. So 2 different methods we've shown that it actually does work. And this potentially forms an adduct that renders acetaldehyde inactive from binding the protein. And remember, that's what the cool thing about this is, we want to prevent these from binding to the proteins prior to they initiate the inflammation and the autoimmunity. So our next model then was to use our precision cut livers. And I already told you that we cut the livers out, turn them into these slices. But then we incubated the 629 in there with our alcohol. And then we look for acetaldehyde levels, triglycerides, inflammation and whether it was toxic or not. So as you can see here, we looked at acetaldehyde levels first, and we completely decreased it with the 629. When we looked at the triglyceride levels, we were able to completely decrease it as well back to control levels. So pretty exciting. When we looked at the inflammation of these slices. So what happens when you incubate these slices with ethanol, they'll actually release cytokines because remember, it's a slice that has every cell type in there, not only hepatocytes, it also has stellate cells, macrophage, endothelial cells. And those endothelial cells, macrophage and the stellate cells will actually release cytokines in response to those adducts being formed in there. So as you can see, 629 decreased the IL-6 levels and it also decreased the MCP-1 levels. These are big pro-inflammatory cytokine markers that we look at all the time in alcoholic liver disease. And if you look at this, these are -- this is lactate dehydrogenase and ATP and adenosine triphosphate. So this is -- this tells us whether the cell is living and surviving. So a decrease in that, which you see with ethanol actually tells you that it's not struggling to survive. When we add the 629 to it, it actually increases it. And this is pretty cool too, because it's actually higher than the controls. So we're still working out why that is, but it's a pretty cool observation. Our next step then, so conclusions from the mouse model. ADX demonstrates a great anti-inflammatory potential. Acetaldehyde levels generated, the decreases of the acetaldehyde levels. It also decreases the triglycerides and inflammatory cytokines. But the most important thing, there was really no cytotoxic effects from this in the liver size model. So next, we had the luxury of being at a transplant university. So we get livers in all the time. And this time, we were fortunate enough to get a liver that was donated to us through the Nebraska organ recovery system. And typically, what happens is if they're too fatty or they determine something in the liver, they won't go for transplantation and they'll send them to research. So again, we can test for the same outputs that I showed you in the mouse model. And if you look again -- so this is more human than getting closer to the human, which is what Geoff and I always strive for. Acetaldehyde levels again are decreased,; triglyceride levels are decreased, that's pretty interesting. So it's following the mouse model. When we look at inflammation in these, IL-6 levels were decreased. Macrophage chemotactic protein was decreased. LDH levels, which is like -- so that's the breakdown of the membranes. Ethanol increases that, and we've seen that many times. ADX-629 will decrease it almost back to control levels, and similar event we see with the ATP, suggesting that there's no cytotoxic effects using the drug. So we had statistical significance that increased using acetaldehyde, triglycerides, inflammatory cytokines. And once again, no cytotoxic effects we're seeing. So our next deal was, okay, this all works in the liver slice model, but we wanted to go to an in vivo model. And so what we did, there's this cool study that the NIAAA, that's the alcoholic NIH that gives us funding. One of our colleagues, his name is Bin Gao, he came up with this model. It's called an acute on chronic. And so what happens is, is you feed the mice for 10 days, which is equivalent to probably drinking a beer. So they drink 4 or 5 beers every day for 10 days. So that's the acute. And then what happens is then you -- what we did was we ended up given them a bolus. So we orally gavaged them 629 at 400 milligrams per kilogram. We let them sit for about 30 minutes to get metabolized in there. And then we gave them basically what is equivalent to about 4 shots of whiskey, right, 31.5%. So they get another gavage, and then I kid you not, these mice totally passed out. And I looked at our grad student, my -- did you kill them? What did you do? And everybody is kind of freaking out. And within 5 or 6 hours, they all started waking back up, and we're running around the cage, and they seemed really hungry. It was kind of funny. So more like a human model than you actually suspect. And so the very first thing we did was we cut out the liver, and we got H&Es. So we did section stains on it. And if you look, you can see all the little fat droplets that's in there. So all these little holes in here, and this is a vessel going through the liver here. You see all those little holes in there. That's called fat deposits, right? Look at the treated mouse liver with the 629, not near as many of those droplets in there, you see with that. So we're like maybe we're on to something here. This is cool. When we looked at -- so we looked at the fat accumulation, right? We saw that in there in the H&E were like, what happened in the fat. So we took the serum from these mice. This is serum now. It's not in the tissue. Significant decrease with 629 in the amount of serum triglycerides. We then ground up the liver and we looked and we see here, too, exactly the same thing, significant decrease in the amount with the 629. This is Oil Red O staining. So what this does is this stain, stains bright red for fat accumulation in the liver. And you can see that it actually decreases it quite significantly with the addition of the 629. And then what we did here was we used integrated density. So this is actually capturing them out from all the multiple mice we did to get a really significant decrease. We looked at the acetaldehyde levels in these mice, significant decrease. This is in the liver. And ALDH so this is alcoholic or aldehyde dehydrogenase which is one of the enzymes that breaks down acetaldehyde, there was no change in that either, suggesting that it is absorbing the acetaldehyde prior to even initiating any of the enzyme. It's safe, right? ALT and the serum and in the liver. These are both hallmark enzyme tests that they use in the clinics all the time, significant decreases with the addition of 629. When we looked at the inflammatory, remember, we talked all that nice inflammation. We do -- when we looked in the liver, so this is ground up liver tissue, interferon gamma has decreased. IL-10 is decreased, albeit not significant, but a few more in and I guarantee that will pop. IL-6, similar type of phenomenon. You always get these weird outliers when you're only using a few mice. So -- but MCP, this has significantly shown that in everything that we've done, which is pretty neat. So the treatment in the animal studies, the conclusions that we can draw from that or fatty liver was restored to normal. Acetaldehyde levels were significantly increased. The treatment showed no signs of toxicity, which is really neat. Inflammation was decreased in response to the treatment. So what can we take home from this? So the utility of the ADX-629 to prevent formation of these RASP proteins, adducts including the MAA adducts in vivo, and hence, this might be a very exciting inflammatory tool for us to prevent these aldehydes from even forming. And like Dr. Thiele and I were talking, we have always wanted some way to prevent these forming prior to you getting disease because we truly believe that these MAA adducts and the adducts that are formed are what's driving the disease. So thank you everybody. Appreciate it.

Thank you, Mike. Dr. Brady, Dr. Thiele and Mr. Duryee will be happy to take a few of your questions. So we'll be happy to open the floor for questions. The mic is live for the web, so you won't hear anything through a speaker, but.

Yigal Nochomovitz from Citi. I had a lot of questions, but I'll try to restrict it to a few. For Dr. Thiele, you talked about the antibody that you created for MAA. But I'm just wondering, when you do that, wouldn't the MAA actually react with that antibody and produce adducts on the antibody and that potentially change the structure or function of that antibody -- or is that not an issue?

Yes. Actually, if the antibody is circulating in the liver, it probably at the time -- especially with alcoholic liver disease or if it's in the joints, absolutely, you can actually adduct them, which would cause an immune complex mediated disease could happen. But the odds of that are pretty low because it takes -- what's the half Mike, about 8 hours to get to -- start to get to completion. So it's not just an immediate MAA formation, it takes time for it to occur.

Okay. Got it. And then regarding the conclusions on the fatty liver, do you have any thoughts as to what the mechanism of action would be for 629 to decrease liver fat?

I don't. Do you have any thoughts -- the only thing I can think of is that acetaldehyde is one of the precursors to triglycerides, right? So if we can get rid of the acetaldehyde prior to it, initiating any transformation into fat going into that fatty acid synthesis that acetaldehyde does -- so maybe you can explain a little better.

He's correct. Acetaldehyde is a major metabolic byproduct. It's the major cause of fatty liver. It has -- it's because of the carbon you need to add a couple of hydrogens and the oxygens that is major in making triglycerides, okay? So yes, it's acetaldehyde. If you get rid of the acetaldehyde, you get rid of fatty lever. That's -- so you saw that we needed the 4MP, we did 4-methylpyrazole when we did those studies, that inhibits the production of acetaldehyde period. So you say, why don't you use 4MP, right? It is toxic, cytotoxic. Not a good product.

Those are very impressive data. So I'm just curious, as you said, when the MAA like product being formed is irreversible. So is that all of the treatment need to be given at a very early stage to prevent it forming and then once it happens like at a very late stage, like nothing can help. Is that the case?

So 2 things here. One, you are making antibodies. You saw up there, I don't hide that. We make some antibodies in MAA. Most of its IgM and there is no autoimmune disease ever known to man caused by IgM. It has to class switch to an IgG. So we all make these IgM antibodies to believe it or not, in your own body, I go to the gym quite a bit. I go sprain my ankle. I'm going to make antibodies to my own DNA, I make it to my own collagen to all my own normal proteins. Why would I do that? It's garbage disposal thing. We grab them and remove them. As long as we do that all the time, there's not a problem. The problem is when you make too much of that. And let's say you class-switching now to this G and that's we in autoimmune disease look at, But if that happens, now I can't remove all of that material and now it's causing all the dip. But as long as I can immunologically remove that stuff every day in my life, there is not an issue. So we're okay with that. All of you have auto antibodies. Everybody in this room, sorry. Okay? All of us have antibody to DNA, especially somebody with SLE, right? SLE is anti-DNA antibodies. All of us have those antibody. We just don't develop the disease. Low levels are fine, too much kills us. That's why their product is so cool. If it works for us, also, we removed MAA. It removes MAA modified proteins best we can do. That is fascinated. I don't form it. I remove it. I'm excited. I really am. This is some of the best stuff we've ever seen, right?

And Todd, you mentioned earlier, there's a different species of RASP. I'm just curious in terms of for drug development. Do you need to discriminate or distinguish them to have different species specificity for different things or that's not even issue?

One of the things we're trying to avoid is specificity. Now that in the drug development world is heresy, blasphemy what I just said. But as mentioned, I don't think the future of pharmacology is specific. I think it's nonspecific that we're aware, ADX-629, reproxalap and the analogs of these molecules are not specific in binding RASP. Now for years, we've disclosed in our 10-K filings, in particular, there are 2 physiologic RASP retinaldehyde, a form of vitamin A., and pyridoxal phosphate, which is a form of vitamin B6. Those are highly protected. They have to be because if they're not, they're going to indiscriminately bind and cause all sorts of toxicity. Now retinaldehyde does that probably in dry AMD and Stargardt disease. But our drugs have not been able to trap those molecules in a living system because they're so well chaperoned which suggests to us that molecules are likely to be safe at least from the promiscuity standpoint.

Thank you for sharing very interesting work. Actually, my questions follow the same line by 2 professors. I wonder, have you screened the species of acetaldehyde adducts from the liver disease model in mice and also the human patients with relevant liver disease in a different world where do you think -- how translatable the preclinical results of ADX-629 to human trials?

I couldn't hear it unfortunately this...

The question is, have you screened for aldehyde adducts in humans. How translatable are the data with ADX-629 that you've shown preclinically?

Yes. So the most interesting thing we found and this is why we're excited by the MAA product we play with. If you have inflammation, it forms MAA. At a lower side, it doesn't matter so much here, but it does for us. We think that what it's attached to is more important as far as specificity of disease, okay? So MAA [indiscernible] you end up with rheumatoid arthritis, MAA to a liver cytosol, you end up with alcoholic liver disease. But there's MAA in every inflammatory disease out there. There's MDA and acetaldehyde in every inflammatory disease. That's part of what I was trying to show with those 5 different -- every disease we've looked at, if there's inflammation, there's MAA in there. As an immunologist, I care about the other side is what's it specific for. But if I don't have to -- if I don't form it with this product, I don't care, right? I don't care what the protein is. I'm not going to have to worry about that. So yes, that's how gene -- I think it's highly generalizable to every inflammatory process. Okay?

Thanks for the presentation. Just 2 for me. Just maybe along those lines, have there been identified biological processes in terms of MAA's role in sort of natural immune surveillance and anything identified there?

Yes. It's like almost there's a whole bunch of these adducts. So for example, I love doing this example because everybody knows it. We all have LDLs right, and LDLs are bad. But when they get oxidized, they get removed, it's a modification, it's post-translational modification stress thing. It takes it away and we remove those, MAA is the same sort of thing. Every day, we use it to just remove materials, okay? That's a normal function, normal function has gone bad. When you get too much, it's bad. So yes.

And maybe just on the mouse model. Is there a temporal aspect to those data? I know they were sort of sacrifice at 9 hours, but just trying to understand whether there's something about the mouse model and the mouse cells that maybe remove sort of those fat deposits naturally and so you're blocking that with 629? And just trying to understand that a little bit more.

Yes, we have not done the temporary how long you can go. These have all been pretty much in vitro and then a short-term mouse model. One of the things we've talked about doing, we do long-term alcohol feeding of mice and rats long term for mouse and rat. Mice live about a year, 2 years max. Long term, will be about 6 months. So could you feed them, we just want to know did it work. And the data is very impressive, I think. So now it's worth spending the money and say, okay, let's go 6 months, give them ADX, and let's see what happens to them after 6 months. And what's the temporary? Absolutely, it's a perfect thing to do. So almost everything we've done is an immediate, can we do this? Can we measure it? What's the system going to look like. Now we can start doing those longer term. Nobody wants to do long term. Why? Costs a lot of money. So somebody's got to kind of come up with the money to do it. But other than the money part, this is absolutely where we need to go. I agree 100%.

I think it's a highly related question, but your adjuvant effect of MAA ad hoc, can you chase that down? Can you find a TLR or some sort of thing? Or is it -- so I kind of...

Yes. So it's interesting. It fits nicely because Todd showed you earlier that one of the receptors that binds aldehydes is Scavenger Receptor A. Yes MAA goes to Scavenger Receptor A. It also goes through TLR-4, SRB-1. So almost all the scavenger receptors will take it up. That is actually one of our VA grants right now we have is to look at how does it get into cells, how does it signal? How does it cause fiber? I mean you put MAA in a cell, you will cause fibrosis. It will cause increased bone inflammatory. So MAA modified protein on a cell will cause all those point inflammatory and all the affects you see. Acetaldehyde does the same thing. It's just it's more trenching. Malondialdehyde does the same thing. It's just more trenching because it's not a stable, stable adduct. MAA is stable. That's why it works so well, okay? And it's so easy for us to follow because I can make an antibody to it. One of the things I always tell people, why don't you make an antibody like those other ones. Well, think about acetaldehyde, they take it, they modify it, they stick it into the mouse, what do you think happens to all the acetaldehyde, it falls off, right, because it's a transient reversal thing. So all I'm left with this acetaldehyde floating with the protein I attached to doing there, nothing happens. MAA is stable. That's why we were able to do that, okay? Beautiful question. Absolutely.

Any other questions?

I just had one for Todd. Todd, there's a lot of discussion this morning about acetaldehyde and malondialdehyde. But as I understand it, there's a large species of aldehydes, hundreds of different variants. So what do we know about ADX-629 in terms of addressing the broad family of aldehydes beyond these 2, which are, I assume, the predominant ones, but there are others.

Well, I think as Adam will tell you, we've never found an aldehyde a RASP, it doesn't bind our molecules that isn't sequestered by our molecules. That's the first thing I would say. I think -- the literature mostly describes malondialdehyde and hydroxynonenal. We have a lot of new evidence regarding MAA these days. Acetaldehyde I think, traditionally was reserved for ethanol abuse, although we now know that's not exclusive. Acetaldehyde it is not exclusive to ethanol abuse. There are many others, Yigal, but the most described are the ones that we've mentioned today. And again, we have tested all sorts of aldehydes in terms of binding to our molecules, and we've not found one that doesn't bind.

I know that this may be a little early, but are there indications that you would like to study ADX-629 now that you haven't mentioned so far?

I think we'll cover that in the second half of the presentation. Dr. Brockman will go into more of our preclinical data. We'll talk about our clinical data, and then we'll talk about the rationale for the indications that will work on subsequently with ADX-629 and the relatives of ADX-629.

Okay. Thank you. We'll take a break until about 11:35. So thanks very much, and we will see you soon. [Break]

Welcome back, everyone. It's my pleasure to introduce to you Dr. Adam Brockman. Adam wears many hats at Aldeyra, consistent with his long career in biotechnology. Adam essentially runs all of our nonclinical efforts, at least as they relate to pharmacology, preclinical experiments, toxicology. And more recently, he's become involved in our translational efforts that is the movement of molecules from preclinical to clinical testing. Adam is going to take you through some additional preclinical studies that we performed on 629, after which I will go through the top line data of the 3 Phase II trials that we're announcing today. Adam?

Thanks, Todd. So just a little bit more preclinical data before we get to the clinical proof of concept data. So this is a Murine model of cytokine storm, so you might be familiar with this model. But you're administering lipopolysaccharide endotoxin to mouse generating a cytokine storm. And we have this pretty close to the top of our funnel in our platform as we develop 629 and its analogs. And as you can see, we really have a pan anti-inflammatory response that includes the TH1, TH2 and TH17 pathways down-regulated with TNF alpha, interferon gamma, interleukin-1 beta, IL-5, IL-17, all significantly decreased and the anti-inflammatory cytokine IL-10, significantly increased. Next, we have a similar model also induced with endotoxin LPS at this time introduced intranasally to create a model of acute respiratory distress syndrome or ARDS, obvious importance with considerations around COVID-19 and that sort of thing. And then again, one of the main signals from this model is the cytology. And so if you can increase the percent macrophage in the lung, as you would see 100% in control animal and decrease the neutrophils. That's a very strong sign, and we had significance in both of those effects with ADX-629, again, owing to this anti-inflammatory response -- broad anti-inflammatory response. And then additionally, we wanted to take a look at ulcerative colitis. So this is a very common model with dextran sulfate sodium inducing the disease state. And when we administer ADX-629, in this case, 100 mg per kg IP, we can get a statistical decrease in the overall disease activity index with ADX-629. Finally, with puromycin aminonucleoside or the PAN model for nephritis, we were able to administer ADX-629, 250 milligrams -- mg per kg, excuse me, twice daily for 13 days, and we're able to see a significant decrease in proteinuria. And this will tie in after we discuss the clinical proof-of-concept data to some of the commercial indications that we're selecting. So with that, I'll turn it back over to Todd, and he can share with you our clinical proof-of-concept data and then we'll go back into the commercial indications.

Thank you, Adam. I want to set the stage for why we ran the proof-of-concept Phase II trials that we ran because ADX-629 and RASP modulation broadly is a novel pharmacology -- a novel approach. We thought it would be wise to test 629 in different kinds of inflammation. Typically, the chocolate and vanilla of inflammation is allergy and autoimmune disease. COVID, what's happening at the time, so at least at the beginning of the pandemic, and COVID is representative of all of the above. It's also different from the 2 other diseases on this slide because it's an infectious disease. It's a somewhat complicated story because you want some inflammation and infection. If you don't have any inflammation, the infection kills the host. So there's really a balance of infectious disease between too much and too little inflammation. And in that way, COVID is quite different from asthma and psoriasis. The Phase II trials were run against the backdrop of a very successful Phase I trial where we gave tremendous doses of ADX-629, I think, up to 1.2 grams to human subjects. We did not see any drug-related adverse events in Phase I. We were able to demonstrate target engagement measured by malondialdehyde levels in plasma. What's interesting about this finding is that for normal people, malondialdehyde should be fairly low because presumably were not inflamed. But nonetheless, we're able to show that in a small number of patients. And then one thing we did in Phase I, as many of you know, is we gave subjects a fatty meal, so eggs, fried and butter, bacon, et cetera. This is sort of an inexpensive way to challenge normal people. When you eat a fatty meal, you experience dyslipidemia, you move into a temporary pro-inflammatory state and you're able to measure that with normal kinds of lipid parameters, HDL, LDL, free fatty acids. And these all were statistically reduced in drug-treated patients versus those patients that took placebo following that fatty meal. I think it's also important to set the stage in terms of clinical development for new molecules or new pharmacologies, often proof-of-concept trials will precede Phase IIa trials. Now we consider Phase IIa, IIb and Phase III. For commercial opportunities, these are indications that we would intend to develop fully, indications that may be eventually launched. What we're talking about today is before that. Psoriasis is a great proof of concept. It is probably the most used proof-of-concept indication in immunology because you can biopsy or measure the lesions. A lot of psoriasis assessment is noninvasive, and it is a classic autoimmune TH1 kind of disease. Because companies run trials in psoriasis early on, it does not necessarily mean that they intend to develop psoriasis. Asthma is the same thing, except on the other side of the immune spectrum for allergy, particularly asthma challenge trials, and we'll talk more about our results in those trials. COVID was a 300-milligram twice daily treatment for 28 days. The primary clinical output of COVID trials, the NIAID scale. I'll show the scale in a second. There are other classic outputs that the FDA requested of us when we designed the trial in conjunction with the FDA. And they include things like admission to the ICU, mortality, supplemental oxygen use, et cetera. It's important to understand that we enrolled mild to moderate patients. Here is the breakdown of the baseline characteristics in the trial. Most of our patients were moderate and we had a few mild subjects as well. But baseline characteristics were largely similar across groups. We had 7 subjects on drug, 4 subjects on placebo and that's because it was a 2:1 randomization. Again, per agreement with the agency. We had a slight disadvantage in the drug group based on baseline history. We did have a higher amount of preexisting disease in our drug patients. Note of interest, the BMI scores in both groups, normal is 20. Well, here's what happened. All the subjects on ADX-629 completed the trial, none of them decompensated, none of them exacerbated. We did have 1 of 4 subjects in the placebo arm decompensate, that subject required supplemental oxygen, was admitted to the hospital and the disease state was so severe that subject had to be discontinued from the trial. Unfortunately, we don't know the ultimate outcome of that subject. Here's the NIAID scale, higher is better, 8 is normal, 1 is death. And here is a last observation carried forward analysis of the NIAID scale over the trial at every day using the LOCF analysis drug was numerically superior to placebo. The 1 patient in placebo that experienced decompensation did not drive entirely the lower placebo response, but obviously, that subject contributed to the lower scores in the placebo group. We're very interested in safety. In fact, for many investors, I told them the key outcome of all 3 of these trials is safety. This has not been done in humans. RASP modulation has not been systemically attempted in humans before. We believe this is the first time that it's been done. So safety, obviously, is paramount. We're thrilled to see the safety profile here. Obviously, the serious adverse events and placebo was the patient that I described. Here is our cytokine profile. I want to make a couple of comments about cytokines. Our colleagues at the University of Nebraska actually assess cytokines correctly, and that is in the tissue. We can't always do that in humans. We can't perform lung biopsies in COVID patients. We can look at plasma, which I would say is peripherally related to cytokines of relevance in whatever tissue was inflamed. The only statistical changes we noted were down- regulations of cytokines versus vehicle. And those are in CXCL9 and interferon gamma. What's interesting about those 2 is they're related. So CXCL9 has become quite famous of late. There's a paper that came out in Nature, not too long ago, that described aging as a process of inflammation and the key marker driving that age-related inflammation is CXCL9. It's known as the anti-aging cytokine. And lo and behold, that is highly statistically reduced over 28 days, at least in COVID-infected patients and TNF alpha almost made it across the statistical significance line. Let me switch to asthma. A very different study. This is a crossover study. Again, allergic type inflammation, technically this is atopic, asthma patients had to be allergic to something. They had to experience changes in their pulmonary function testing as a result of exposure that is inhalation in this case to certain allergens. They were treated for 7 days and then crossed over to the other treatments randomly assigned, so drug versus vehicle. We looked at the key symptom, which is the asthma control questionnaire and we had 2 signs. One is sputum cell counts, which we're very interested in for obvious reasons that both doctors feel and Brockman discussed as well as we looked at acute changes. This is acute exacerbation in pulmonary function tests. This is the Asthma Control Questionnaire. Obviously, higher is worse. And in terms of improvement, we saw more improvement numerically at least in drug-treated patients, which is quite remarkable for at the end of 8. Similarly, numerical improvement in sputum cell counts. We looked at both eosinophils, which are obviously a key driver of allergic inflammation as well as neutrophils, which reflect more acute inflammation. And I'll talk more about that when we get to the cytokine results -- both of them were numerically reduced. The placebo levels of eosinophils, particularly about a day after challenge were statistically higher than no change, indicating the sort of late-stage increase in eosinophils that you would expect to see in asthma or an acute asthmatic episode. Again, we had an acceptable safety profile. There were no serious adverse events. We did have 1 patient discontinue the trial because of an asthmatic exacerbation. We were pleased to see that malondialdehyde levels, at least in plasma, correlated with the clinical responses and the cell count changes in sputum. I'd also like to say the same thing I said about cytokines with RASP. Tissue is probably where cytokine levels and RASP are most relevant. We get somewhat of a surrogate of that in plasma. Here, again, the only statistical changes we noted with in the trial drug versus vehicle were decreases relative to vehicle. TNF alpha, as was the case with COVID was decreased. And IL-5 was also decreased. IL-5, as you know, is a key eosinophil/TH2-related cytokine, and that is consistent with the results we saw in sputum. Finally, I'll talk about psoriasis. This is a -- that was a trial of 10, moderate -- primarily moderate psoriasis subjects. There was no vehicle control, 90 days of treatment, and the primary endpoints were change versus baseline. Everyone uses PASI and IGA. The changes in PASI were dramatic. That is, over time, PASI scores decreased relative to no change. These were highly statistically significant changes. You can see that within subject error bars there, essentially all subjects, say for one, did extremely well on drug in terms of their psoriasis scores. As is the case with many drugs these days, we looked at responder analysis. This is the PASI-50, the PASI-75. That is what percent of patients improved by 50% on the PASI scale, what percent of patients improved by 75%. And you can see that generally, over time, subjects did better in terms of response. And then finally, the Investigator Global Assessment is used to confirm the positive results often and as was the case seen here with statistically significant changes occurring after about 4 weeks of treatment. One patient discontinued, the remainder of patients that were on drug. I think we had 1 patient that was lost to follow-up during the COVID pandemic era. But by and large, no serious adverse events, and we considered the safety and tolerability profile to be acceptable. Here is malondialdehyde in plasma remarkably similar to our IGA results and somewhat similar to our PASI results. And then finally, in this trial, we looked at lipid levels. And we thought it would be interesting to see what happens to patients after 3 months of dosing in terms of their lipid profile. Can we replicate what we're seeing acutely in Phase I? Can we replicate what Dr. Thiele and colleagues have done in animals and the answer is yes. Statistically significant changes relative to baseline in triglycerides and cholesterol modest upward trend in HDL and nearly significant decrease in LDL. We did not see any changes in plasma levels of cytokine, but as you mentioned, at the beginning of this talk, one good news about psoriasis is you can assess tissue directly, noninvasively. We worked with a company called DermTech, which has a tape stripping method. This is a tape you put on top of the lesions, you rip off the tape. They can recover about 1.5 milligrams of tissue. After the tape stripping, that tissue is then sequenced -- RNA sequenced in a pan gene manner. That is a lot of different analyses are done at once. The graph in the upper right on this slide is actually real data. What they're doing is identifying key genetic expression pathways that differ between baseline and 12 weeks of treatment. And then at the bottom, what the table indicates is the changes in those pathways, which involve multiple genes, up-regulation, down-regulation of baseline compared to 12 weeks of treatment. What's so interesting if you focus on the left of this table, if you look at lesional tissue at 12 weeks, this is the actual lesion after 12 weeks of treatment and you compare it within the same patient to normal skin, tape stripping of normal skin. There's very little going on in terms of differential expression. In fact, they were able to detect no pathways that were differentially regulated between normal and lesional skin after 12 weeks of treatment, which suggests that treatment with ADX-629 is normalizing gene expression. In conclusion, we did not see any safety signals in this series of small clinical trials. I think we were successful in demonstrating signals of clinical activity across different kinds of inflammation. And we're now prepared as a result to advance ADX-629 and relatives of ADX-629 to subsequent indications. So with that, I'll turn it back over to Dr. Brockman to talk about our future directions. Adam?

Some very exciting proof-of-concept clinical data there. And I think one of the things from my perspective and translation is how that all falls back into our platform. So we are able to design these traps with very high efficiency from a medicinal chemistry perspective. And we -- our funnel has evolved over time from to take in vitro RASP binding to Murine sepsis assay, typical ADMET characterization, et cetera and rapidly get additional [ trap ] molecules. So with that in mind, we've planned 2 new INDs in 2023, another systemic candidate and another retinal candidate. Each of which will have a rich series of backup molecules behind them. So these are our 4 indications that we've selected for full development. Two of them are common disorders. So ethanol toxicity as covered so well by Professor Thiele and Mr. Duryee. Chronic cough both of those fairly common. And then 2 rare orphan diseases, Sjogren-Larsson syndrome which we've mentioned a few times; and minimal change disease. Notice perhaps that 3 of the 4 have to direct evidence of increased aldehyde driving the disease. So ethanol toxicity again, as Professor Thiele and Mr. Duryee covered driven by acetaldehyde and MAA. Chronic cough, which I'll go over in a minute, has some evidence of increased RASP in sputum and bronchoalveolar lavage fluid. Sjogren-Larsson syndrome, which is driven by fattyaldehyde dehydrogenase deficiency. And then minimal change disease, which has a very strong overlap with our puromycin-induced model as well as a broad inflammatory overlap into condition. So I don't want to get too much more into ethanol toxicity since it's been covered in so much depth. But I think maybe just to reiterate that there are no approved treatments for the disorder driven by ethanol toxicity. And so we want to further explore in this common indication that affects up to 10% adults in the U.S. and what we can do with our RASP modulators. Chronic cough. Chronic cough, again, a very common illness affects an estimated 13 million adults in the United States and 10% of people worldwide. Quality of life is significantly impaired. And again, we have direct evidence that RASP are increased. So this data is courtesy of Brian Day, at National Jewish in Denver, Colorado. And you show a significant increase for hydroxynonenal and bronchoalveolar lavage fluid in relative controlled samples. Sjogren-Larsson syndrome in the form of ichthyosis is caused by aldehyde dehydrogenase. 1,300 patients in the United States is the incidents, very debilitating disorder. So in addition to the ichthyosis, you also have decerebrate, motor, cognitive, speech and ocular manifestations. So again, the decerebrate posturing is sort of shown by this wrist like this and it's part of the motor and cognitive decline experienced by these children. Minimal change disease is so called because it can only be detected with an electron microscope. You can see the effacement of epithelial foot processes with an electron microscope. Major cause of nephrotic syndrome in children, 90% of cases in children, approximately 10% to 15% for adults. Treatment involves corticosteroids. But obviously, long term, those patients would like to wean off of steroids, if they could. But unfortunately, relapse occurs in 40% to 50% of the children, in adults relapses are particularly frequent. So we would like to see if ADX-629 and its analogues we're developing could help these patients. This gives you a sense of the time line with ethanol toxicity and initial trials and all toxicity, we're expecting results in second half 2022. And then chronic cough, SLS and minimal change disease, we're expecting results in 2023. All right. I guess with that, we'll turn it back over to questions.

We did have a question from an online participant who asked, we made a comment that we're not fans of specificity. I should clarify that comment. We are fans of specificity as it relates to modulating RASP. That we are aware reproxalap ADX-629 and the molecules that Adam is screening through the funnel that he showed, have no pharmacologic activity or no substantial pharmacologic activity. They don't bind to receptors, they don't inhibit enzymes, but they are non -- they are promiscuous when it comes to RASP binding. So we don't mean to say that we would expect all sorts of off-target toxicity with these molecules. What I do mean to say is all the species of RASP that have been described that are pro-inflammatory are likely to be bound by our molecules. Other questions?

Thanks, Todd. So you have some initially very promising data in 3 indications, psoriasis, asthma, COVID. But now you're -- it seems like you're pivoting away from those a bit these new 4 indications. So help me understand the strategy and the thinking there. I would have expected with this data, you would have pursued those 3 a little more.

Let me comment on each of them individually. We remain in discussions with the government regarding COVID. However, further work in COVID would depend on governmental support. I also think that COVID is much more controlled than it was in the beginning of 2020 now that we have vaccines and other approved therapies. Asthma and psoriasis are crowded markets. My personal opinion is that they are big pharma markets, they are marketing sensitive, that there are many effective therapies that it's difficult to get drugs approved and successfully marketed. An example in psoriasis is the new proposed endpoint, it's PASI-90. That is the percentage of patients that are improving by 90% in PASI. And when you start thinking about endpoints like PASI-90, you start questioning how much unmet medical need is there really? I don't want to rule out psoriasis, and I don't want to rule out asthma, I never say never, but I think pursuit of indications in that genre would require a large pharma partnership.

And then just one quick follow-up. If I'm recalling correctly, at a point in the past, you had pursued SLS. So just explain you're going back to that now? So what's changed, there must be a reason why you've decided to pursue that again?

One of Dr. Thiele's colleagues at the University of Nebraska is the world's leading authority on SLS, Bill Rizzo. In fact, he ran an R&D Day some years ago. We tested reproxalap as a topical dermal formulation some years ago as a cream. And we saw activity but the patients weren't cured by any stretch. And relative to having to put cream all over the patient's bodies, the clinical effect that really wasn't substantial. However, there was an effect. And Dr. Rizzo's argument was that treating RASP superficially topically isn't the best idea. In these patients, RASP are generated systemically if we only had an oral. And lo and behold now we have an oral that's safe. Well, it seems to be safe and well tolerated and now shown activity in different kinds of diseases. So that's why we're moving into a small trial in SLS patients. The endpoints are going to be different. Sure, we'll look at skin, but more magnetic resonance imaging, more fatty alcohols and fatty aldehydes in the plasma. And finally, quality of life scales, sleeping, itching, behavior, seizures, that sort of thing.

Maybe just as we think ahead for these 4 selected indications, can you talk a little bit about the chronic tox work done are being done with the molecule and just how long of the observation period and treatment window you expect for these various indications?

Adam, do you want to discuss our -- where we are in our toxicology program and then what's required for chronic therapy?

Sure. So at this point, we've completed a 91-day toxicology studies. And we're planning to conduct chronic toxicology studies as we approach Phase II/III as is typical in drug development. We've also launched our embryo-fetal toxicology program. So I think these current raft of studies we're planning 91 days or shorter for the Phase II, and we'll consider longer time points, success in those programs indicates.

6-month toxicity studies are expensive, as you might imagine, there's a bit of an animal shortage due to COVID and supply chain issues. We didn't want to initiate those prior to getting this sort of clinical data in the proof-of-concept studies.

And maybe just onto the potential platform and additional candidates and backups. Just with challenges in measuring RASP generally. How should we think about differentiating these molecules from one another outside of maybe target tissue? And is RASP profiling sort of feasible here?

Adam, maybe you can talk about how we triage molecules from retina to systemic and whether or not you think RASP triaging or differential RASP binding profiles is something we'll consider.

So we do, in our funnel, as I showed, we do have 2 things at the top of the funnel. We have RASP binding. And so the kinetics of how the molecule binds to RASP in vitro is an important differentiator as for selective molecules to advance. But then on top of that, we take a very holistic view, particularly with that first Murine sepsis assay. So with that assay, you're looking at exposure, do you have adequate PK to drive an effect, but then also PAN inflammation response to include [ TH1 ], TH2 and TH17. And so I think we're putting all of that together before we pick a candidate to promote even into extensive ADMET characterization. So we're trying to look at both of those directions, the broad holistic biological assay as well as the in vitro binding assay. Does that answer the question?

Yes. Okay. And just as you think about those candidates, just what -- why is there sort of the need to create such a broad portfolio of candidates just once you've selected are nominated 1 or 2?

Sure. Yes. And I think like all small molecule biopharmas, drug optimization is a multivariable optimization. And so we want to optimize as best as we possibly can, everything from solubility to clearance to overall exposure and safety. And so I think we -- our philosophy is that -- and we have a true platform here. We know how to design these molecules fairly efficiently. And so we want to make the best of that platform that we possibly can and get molecules that are really suited to purpose for each indication that we're interested.

We have an online question, which is how much more dosing or dose ranging do you intend to do. I think with the RAS modulation platform, we're quite fortunate in that we know levels of our target, at least in plasma. If you go to PubMed and you type in your favorite autoimmune disease or inflammatory disease, there'll be some evidence of the plasma levels of RASP, particularly malondialdehyde or hydroxynonenal. That's generally in the low single-digit micromolar range. Well, in Phase I, we've exceeded those levels in plasma. The drug doses tested in the 3 Phase II trials generally result in plasma levels that are low single-digit micromolar. I don't expect will be required to continue to treat patients with as high levels as we do in the beginning of drug as at the end of the disease because patients generally present with flare states. It's particularly true with dry eye disease. Patients come in with hot eyes. As many of you know, reproxalap is administered 4 times a day topically, initially for the first month that then tapered down to twice a day. And the reason for that is we believe that tissue levels of RASP subside after the flare is treated. So I don't expect very much more dose ranging. I think we know the target levels of drug we need to achieve at least systemically. Part of that answer is empirical based on the data that we have presented today, and I think the data will generate with our future indications as well.

I agree the psoriasis data looks interesting, a remarkably clean. As far as I understand, you're calculating all your statistics based on no treatment effect as a comparator. Is that realistic? Have you pressure tested it? If you look at the recent psoriasis readouts, it's got a significant placebo rate that seems to be getting higher with time. So your sense of how robust the result is.

I think placebo rates in psoriasis particularly high with topical treatments, first of all. Secondly, because this is a signal-generating trial, we didn't think it's worthwhile to treat patients with placebo for 90 days. So what we really wanted to see was a change from baseline. Now had we not seen a change from baseline? I think psoriasis or TH1 type diseases or maybe more broadly, autoimmune diseases would have been a no-go. But we did. One thing I've heard is that, well, you sort of ran the trial in the summer, patients get better in the summer with this great data that came out this year that shows that about half the patients are seasonal in psoriasis, and half the patients aren't seasonal. And of the half of the patients that are seasonal, only about 30% get better in the summer. So I don't think what we're seeing is purely a seasonal effect especially because of the biomarker data that we showed. I don't think the data are definitive. Obviously, we don't have a placebo or control except for baseline, but I do think the data are promising.

And then in your responder analysis, it looks like you have some dropouts where everything should be round numbers. What's going on? Is that something you can tell us about?

Part of the issue with COVID, as I've said regarding other conditions. It's not so much recruiting patients, it's keeping them in trials. And I've heard that across the industry with our big pharma colleagues with our biotech colleagues. And I think at least in a small way, that's what's happening a little bit. We lost a patient in psoriasis. We lost a patient in asthma and so forth. And perhaps that's what's going on here. But I want to emphasize, these are small numbers. These trials are tiny. And you always expect 10% to 20% of your patients to not make it all the way through. And I think that's what's happening here in psoriasis.

And then last, a little bit of -- but do you believe your neutrophil effect? Because you haven't said COPD yet.

Of all indications, I am likely not to pursue COPD as one of them. Just because I think there's a lot of tissue damage in COPD. I think that market like asthma is somewhat well served by existing medications and those patients that don't respond probably have so much tissue damage that it's hard to reverse. I'm glad you brought up the neutrophils, though typically in allergic diseases, you want to focus on eosinophils, basophils, the like. What the data suggests to us, at least at a signal finding level is that there was some acute inflammation in these patients probably due to the pollen inhalation, the challenge which we wouldn't have expected but did see here. The good news is numerically at least the levels of eosinophils -- of neutrophils are lower in drug-treated patients than vehicle-treated patients.

Todd, so for the psoriasis, given the unique MOA of 6 to 9, have you thought maybe the synergistic effect with standard of care? Is that maybe something was to explore? And then just another one for the trials. Does the patient allow to use concomitant medicine like even topical for the trial?

The question about concomitant medications is no. Patients were specifically requested not to use any other therapy. Patients don't always do that but that's certainly the idea is just to test the effect of 629 alone. Really like the question about synergy. For polypharmacy, administering a RASP modulator with something else. One of the beauties about RASP modulators is there aren't any other RASP modulators. At least there's not another platform that we're aware of that modulates RASP, which means that you could take a RASP modulator and combine it with almost any other mechanism, and you would expect some benefit. Now we've done this clinically, at least with reproxalap, and a TH1 autoimmune type disease called uveitis, which afflicts the front of the eye, where we co-administer reproxalap and corticosteroids topically to the eye. That paper has been published. You can read all about it online. But the gist of it is that the activity of that combination exceeded the activity of either steroid or RASP modulators alone. So we're very excited about polypharmacy and combining this drug in future studies with other mechanisms.

First is, have you mentioned when you're going to start a trial? Should it be second quarter?

The alcohol toxicity trial is now ongoing, based in part on the early data we received from our colleagues at University of Nebraska. So that has initiated and that is why that trial will likely read out this year. The other trials are to be initiated.

And second question is that just look forward that in case of many of those study works get approved and you have the rare disease as well as the patient [metrology] sized patients. What do you think about the pricing if it comes to that?

Broadly, our opinion is that for small companies, orphan diseases are more attractive. Not only because the clinical trials are often smaller and the unmet need higher, but also because commercializing those indications is much more feasible than say, commercializing a mass-market disease. However, I think in the case of chronic cough, the alcohol toxicity, the demand is so large with the lack of available therapy is significant. It is probably worthwhile us pursuing those indications. I often get asked when would you partner? And typically, we've looked to partner after the completion of Phase II. We're remarkably well financed, and I don't see any reason to partner before that because we can perform those trials. And I think we -- based on reproxalap being able to successfully demonstrate Phase II activity in the past.

Are they the same molecule for the rare disease and it can be XXXXXXXXXXXXXXX?

Eventually, we'll look to segregate molecules and indications. So it could be that 629 winds up in an orphan space, either SLS or MCD here. And it could be that some of Adam's newer molecules wind up in mass market spaces. The pricing differential that you bring up is important. We don't want to wind up with 1 mass- market disease and 1 orphan disease.

And maybe just one more on -- I know you mentioned that alcohol could read out by the end of this year, but just given the design of minimal change disease, I presume that's potentially open label. And I'm just wondering, do you think that the full sort of 6 patients is required before you could have sort of a signal or whether it's something that you might -- could expect maybe earlier and just the timing of that?

A related question is why are you running 6 patients open label? Why aren't you doing a bigger trial? And the answer to both of these questions is MCD and SLS are orphan diseases. They are diseases that, in particular, afflict children. Thus, it is important to demonstrate safety. If we don't see any activity where we do see some sort of safety issue in these initial 5 to 6 patient trials open label, then there's a no-go signal for those. And that's why we're running those studies. They're small orphan diseases where clinical activity and acceptable safety profiles are just simply requirements for moving forward. To your point about seeing activity sooner, we would agree. I think it depends on the kind of activity that we're seeing, how definitive are the signals you're able to see, but that's part of the art of biotech as we're getting data from these open-label trials as you point out.

And maybe just a follow-up. How should we think about background therapy there? I mean steroid usage potentially? And do you have sort of ideas yet in terms of the criteria of how long a patient needs to be on drug and stable? Or any thoughts there?

So for SLS, there is no background therapy because nothing works. For minimal change disease, the way the trial is designed is that the patients will flare. They'll go on to steroids, which is really the only thing that's used predominantly to treat these patients. As the flare is controlled, the last week of steroid therapy, during that steroid taper. As you know, steroids are tapered, because if we don't taper them, there's this rebound inflammation. The last week of steroid therapy during the taper would be co-administration with 629. And then the end point is relapse over 90 days. Due to the patients during that 90-day period require reinitiation of steroid therapy because of proteinuria and other reasons why you would treat patients again with steroids. Other questions?

Todd, I just had one clarifying question on the alcohol toxicity trial. So is the idea there to address the tissue damage associated with alcohol use? Or is it also a goal to diminish alcohol intolerance? Or is it both?

Both. We're looking at so many different things in this alcohol challenge trial. One is symptoms. Adam helped develop a hangover scale, if you will. Another is flushing, which is a sign of alcohol intolerance. But more importantly are liver function tests and other measures of hepatic inflammation and safety. There's a little bit of imaging as well. The reason we're doing the latter is because the extension of alcohol tolerability or toxicity is alcoholic liver disease, which is a serious issue. It kills many thousands of patients each year, as Dr. Thiele described the endpoint there is mortality. So essentially, the patients with serious alcoholic hepatitis or alcoholic liver disease present to the hospital, generally, they're admitted, they are treated and then over 90 days to assess mortality. It didn't want to commit to that trial. I think we need to see what happens in the alcohol tolerance trial first but activity in this challenge trial, the tolerance trial opens up a whole new set of indications, some of which involve mortality. I'll just say a couple of things wrapping up. We have a whole new series of milestones now. When I mentioned Aldeyra is entering a catalyst-rich period I meant that there are a lot of different things going on at our company. I just want to highlight ADX-2191, which is our vitreous-compatible methotrexate for rare retinal diseases. Towards the second half of this year, we'll be talking a lot more about that molecule. I hope highlighted by results from the GUARD trial, which is a Phase III trial of 2191 in proliferative vitreoretinopathy. And then I'll end on this. We think that RASP modulation is novel. We think that the pharmacology is novel. If we're right, I think medical school will be taught differently is at least as it relates to pharmacology. This is completely different that we're aware, no other company is working on this. And if I had to guess, as we move into the future, more and more drugs will be treating systems, not proteins. And so investing in Aldeyra is investing in the future. And with a little luck, you may be able to tell your offspring 1 day, I was part of this story, which now plays a prominent role in how we treat diseases. And then finally, I think our RASP modulator platform is unparalleled. We are, as far as we know, the world's experts on designing RASP molecules, RASP modulator molecules. Adam has put together an exceptional screening platform. And other than companies that we've collaborated with or may not be collaborating with now, we don't know of any other group that's anywhere close to this kind of technology and development. I want to thank you all again for coming today. Again, it's so great to see many of you in person. I look forward to continuing our conversations as always.