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

Good morning, and welcome to the Aldeyra Therapeutics Conference Call. My name is Irene, and I will be the coordinator of today's event. [Operator Instructions] I would now like to turn the conference call over to Bruce Greenberg, Vice President of Finance, Interim Chief Financial Officer and Treasurer. Thank you. Sir, please go ahead.

Thank you, and good morning, everyone. With me today are Dr. Todd Brady, President and Chief Executive Officer of Aldeyra; and Dr. Stephen Machatha, Chief Development Officer of Aldeyra. Joining us on today's call is Dr. Tomasz Stryjewski, an ophthalmologist specializing in retinal surgery and macular diseases, who serves as a consultant to Aldeyra. This morning, we issued a press release reporting top line results for Part 1 of the Phase III GUARD trial of ADX-2191 in proliferative vitreoretinopathy. A copy of the press release is available on the Investor & Media section of our website, www.aldeyra.com. The press release should be read and considered in conjunction with the slides presented in the prepared remarks made on today's call. Please turn to Slide 2. This presentation and various remarks, which may be made during this presentation contain forward-looking statements regarding Aldeyra, its investigational drug candidate, ADX-2191, and its plans and expectations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Aldeyra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on the information available to Aldeyra today and reflect Aldeyra's current views with respect to future events and are based on assumptions and subject to risks and uncertainties including the development, clinical and regulatory plans or expectations for Aldeyra's investigational drugs, including ADX-2191. The risk that result from earlier clinical trials or portions of clinical trials may not accurately predict the results of future trials or the remainder of a clinical trial and Aldeyra is continuing our post-hoc review and quality analysis of clinical data, including p-value estimates. Aldeyra assumes no obligation to update these statements as circumstances change. Future events and actual results could differ materially from those projected in the company's forward-looking statements, including results of operations and financial position. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the press release issued this morning and in our filings with the Securities and Exchange Commission. I would now like to turn your attention to Slide 3 and introduce Dr. Brady.

Thank you, Bruce. We are quite pleased to announce this morning that Part 1 of the Phase III GUARD trial of ADX-2191 in proliferative vitreoretinopathy or PVR achieved the primary endpoint of reduction of retinal detachments relative to historical control over 6 months. In addition, numerical superiority was demonstrated for ADX-2191 over routine surgical care for the majority of secondary and exploratory endpoints, none of which were statistically powered, but which, in aggregate, achieved statistical significance. ADX-2191 was well tolerated and was numerically superior to routine surgical care for multiple safety endpoints. Overall, the results suggest promising activity of ADX-2191 and clinically relevant sequelae of PVR, potentially representing a new treatment option for a sight-threatening disease with no approved therapy. With us today is Dr. Tomasz Stryjewski, a practicing retinal surgeon at Tallman Eye Associates in Andover, Massachusetts, who is a Board-certified ophthalmologist specializing in retinal surgery and macular diseases and is a consultant to Aldeyra. Dr. Stryjewski will review the clinical results of the GUARD trial, and at the end of today's presentation, Dr. Stryjewski and Dr. Stephen Machatha, our Chief Development Officer, will be available for questions on ADX-2191, the unmet medical need in PVR and the results of the GUARD trial. Turning to Slide 4. ADX-2191 is a specialized formulation of methotrexate USP for intravitreal injection, representing the first sterile noncompounded formulation of methotrexate designed to meet the unique requirements of intravitreal administration, the treatment of rare retinal diseases, including PVR, primary vitreoretinal lymphoma, a fatal cancer and retinitis pigmentosa, a potentially blinding inherited retinal disease. ADX-2191 is optimized to mimic the vitreous, the fluid in the back of the eye that interfaces with the retina. In terms of excipient composition, density, viscosity, tenacity, PH and active ingredient concentration. Importantly, the volume of administration is less than that of compounded methotrexate, potentially resulting in an improved safety profile, although compounded methotrexate is injected into the vitreous today, ADX-2191 would, if approved, represent the first GMP methotrexate available for intravitreal administration. ADX-2191 has received FDA Orphan Drug and Fast Track designations for the prevention of PVR and Orphan Medicinal Product designation from the European Medicines Agency. ADX-2191 has also received FDA Orphan Drug Designation for primary vitreoretinal lymphoma and retinitis pigmentosa, 2 serious retinal diseases that lack FDA-approved treatments. PVR, described on Slide 5, is a rare fibroproliferative disease that affects approximately 4,000 patients per year in the United States. The disease is the leading cause of surgical failure for the repair of retinal detachment, and due to the proliferation of cells and formation of scar tissue on the retina can cause recurrent retinal detachments, which may eventually lead to loss of vision. Currently, there is no FDA or EMA-approved therapies for PVR. I'd now like to turn the call over to Dr. Tomasz Stryjewski to discuss the potential application of ADX-2191 for the treatment of PVR, the data generated to date with compounded methotrexate injections and the results of the GUARD trial. Dr. Stryjewski is a board-certified ophthalmologist specializing in retinal surgery and macular diseases, also as a practicing surgeon. He trained in Ophthalmology and vitreoretinal surgery at Massachusetts Eye and Ear Infirmary where he also served as Chief Resident, Director of the Eye Trauma Service and was a member of the Harvard Medical School faculty. Dr. Stryjewski?

Thank you, Dr. Brady. Slide 6 represents both preclinical and clinical data indicating the potential activity of methotrexate, the active ingredient of ADX-2191 in preventing PVR. On the left panel, our data demonstrating the effect of methotrexate on reducing cellular proliferation and a tissue model of PVR. On the right panel, our data from an investigator-sponsored trial, The Massachusetts Eye and Ear Infirmary, a Harvard-affiliated hospital in Boston, Massachusetts, demonstrating lack of retinal detachments, represented by dots, over many months following intravitreal administration of compounded methotrexate for a period of 3 to 4 months indicated by the shaded area on the graph. As is summarized on Slide 7, a variety of reports of the clinical activity of compounded intravitreal methotrexate in PVR have been disclosed in recent years. Overall, intravitreal methotrexate injections, which have been used for decades for the treatment of primary vitreoretinal lymphoma and more recently for the treatment of PVR are safe and well tolerated and appear to reduce the rate of retinal detachment in patients with PVR. As a result, many retinal physicians now routinely inject methotrexate for the prevention of PVR and thus, a safe sterile noncompounded FDA-approved formulation of intravitreal methotrexate is in demand. Slide 8 illustrates the GUARD trial. The GUARD trial is a 2-part multicenter historical and active controlled trial to assess the effectiveness of serial ADX-2191 intravitreal injections for the prevention of PVR over 6 months. Importantly, Part 1 of the GUARD trial was designed to indicate preliminary activity of ADX-2191 and to generate sufficient data for the statistical powering of Part 2. Patients with retinal detachment due to moderate-to-severe PVR or patients with retinal detachment due to open globe injury were enrolled. The dosing regimen consisted of 13 injections, 1 at the time of initial retinal detachment surgery, 8 injections weekly thereafter followed by 4 injections every other week. The primary endpoint of Part 1 of the GUARD trial was the comparison of subsequent retinal detachments and ADX-2191 treated patients versus that reported in the scientific literature or historical control over 6 months of observation. Two large and well-designed trials in PVR sighted on this slide have been conducted in aggregate of 292 patients and indicated a retinal detachment rate of approximately 39% over 6 months following initial retinal attachment surgery. A number of secondary exploratory endpoints were assessed to measure other clinically relevant sequela of PVR, including central macular thickness, retinal and macular complete attachment rates at 6 months, formation of epiretinal membranes that may be precursors to PVR and hypotony or intraocular pressure less than 5 millimeters of mercury, which is predictive of loss of vision. Safety endpoints also assess clinically relevant sequela of PVR, including pain, postoperative inflammation, uveitis, intraocular pressure elevation, macular and corneal edema or swelling and macular fibrosis. While the GUARD trial was initially randomized to enroll subjects into either ADX-2191 or routine surgical care cohorts, 41 patients were enrolled to receive ADX-2191 in an open-label portion of the trial. The addition of open-label subjects facilitated enrollment against the backdrop of a number of investigators who expressed concern about randomizing PVR subjects given the evidence of methotrexate activity recently released and summarized on Slide 7. Accordingly, 68 patients were treated with ADX-2191 and a substantially smaller cohort of 38 patients underwent routine surgical care only. Because of the low number of control patients, none of the secondary or exploratory endpoint of ADX-2191 versus routine surgical care were statistically powered and therefore, the primary endpoint compared to the historical control was justified. As is presented on Slide 9, the primary endpoint of Part 1 of the GUARD trial was achieved. Relative to historical control, fewer retinal detachments were observed over 6 months in ADX-2191 treated patients with a statistically significant odds ratio of less than 0.5. The results suggest that following treatment with ADX-2191, the odds of retinal attachment due to PVR within 6 months of retinal attachment repair may be half that of current standard of care. Consistent with the primary endpoint results as shown on Slide 10, a majority of the secondary and exploratory endpoints were numerically in favor of ADX-2191 over the routine surgical care arm of the GUARD trial despite small numbers of patients in the trial and a particularly small number randomized to routine surgical care. Importantly, none of the secondary or exploratory endpoints were statistically powered and in many cases were substantially underpowered to detect difference between ADX-2191 and routine surgical care. Visual acuity was similar between groups. Central macular thickness was numerically lower in the ADX-2191 group and all dichotomous endpoints were numerically in favor of ADX-2191 over routine surgical care. A random effect meta-analysis of the dichotomous results and aggregate indicated an odds ratio of 0.6 which achieved statistical significance in favor of ADX-2191, suggesting the possibility of broad-based clinical benefit of ADX-2191 over routine surgical care. Intravitreal injections of ADX-2191 were observed to be safe and well tolerated as is summarized on Slide 11. During the conduct of the trial, there was only 1 patient discontinuation, which was due to scheduling difficulties. The most commonly observed adverse event was punctate keratitis, a form of corneal inflammation that is a well-known side effect of intravitreal methotrexate injections, especially when injecting -- when injected solution reflexes onto the ocular surface following injection. Interestingly, the 16% incidence of punctate keratitis in the GUARD trial was well below what is reported in the literature, which in 1 large series was 58%, suggesting that the ADX-2191 formulation, particularly the reduced volume, may offer clinically relevant safety advantages over compounded intravitreal methotrexate injections. The potential safety advantages of ADX-2191 over routine surgical care are particularly evident on Slide 12, which represents all treatment-emergent adverse events that occurred in at least 10% of either cohort. In every case, the odds of the adverse events were lower in the ADX-2191 group than in the routine surgical care group and effect that, in aggregate, yielded an odds ratio of 0.3, equivalent to a 70% reduction in the probability of occurrence. Overall, relative to routine surgical care, the safety results suggest a broad reduction in inflammation following retinal detachment surgery in patients treated with ADX-2191.

Thank you, Dr. Stryjewski. Slide 13 summarizes our upcoming milestones associated with ADX-2191, which represents a platform approach for the potential prevention and treatment of rare retinal diseases. As we have previously announced, we intend to participate in a pre-NDA or new drug application meeting with the FDA this quarter to discuss a potential NDA filing of ADX-2191 for the treatment of primary vitreoretinal lymphoma, an aggressive and fatal cancer with no approved therapy, but that is routinely treated with compounded intravitreal methotrexate injections. Subsequently, in the first half of next year, we intend to discuss with the FDA the results from the GUARD trial and remaining clinical development requirements for NDA submission for the prevention of PVR. In addition, we expect to announce Phase II clinical trial results of ADX-2191 in retinitis pigmentosa in the first half of next year. Our upcoming 2191 milestone calendar is robust, given the potential of ADX-2191 to address a number of serious rare retinal diseases where methotrexate is currently used. ADX-2191 represents a critical aspect of our late-stage development pipeline and a near-term product opportunity that is highly meaningful to Aldeyra and potentially for the patients whose lives we seek to improve. Operator, I'd now like to open the call for questions for Dr. Stryjewski, Dr. Machatha or me.

[Operator Instructions] Our first question comes from Justin Kim from Oppenheimer.

Congrats on the update. Maybe just 2 questions before having to queue again. Just as you think about potentially bringing ADX-2191 to market under a first FDA approval for a intravitreal methotrexate, how do you think about these results in supporting a filing? And do you see that first approval potentially under PVR or PVL? Just any thoughts on sort of the puts and takes there?

Thanks for the question. Great to see you at the American Academy of Ophthalmology this week. It's an important question because the first filing, per my prepared comments, would be in ocular lymphoma, that is the NDA would be submitted later this quarter for primary vitreoretinal lymphoma. Thus, PVR would be a supplemental NDA or sNDA filing that would occur subsequent to a potential approval in lymphoma, which is why we intend to discuss the GUARD results with the FDA following the NDA submission for lymphoma, which, as I mentioned earlier, is expected to be this quarter.

Okay. Great. And maybe could you just provide any additional context as to what is meant by routine surgical care? Just it seems a little bit confusing given that there has been changes to standard of care as suggested by changes to the trial? And how are these patients managed as well as maybe even how treatment of retinal detachment over the course of the study following surgery were also addressed?

Another good question, Justin. Maybe I'll make a few preliminary comments and then I'll ask Dr. Stryjewski to comment on how PVR is treated surgically. The first thing I'd like to say is that we took great pains to compare the safety of ADX-2191 to routine surgical care. That's important because the safety database from the GUARD trial will be a critical part of the NDA submission for ocular lymphoma, that is the FDA will want to make sure that this particular formulation of methotrexate which, as we mentioned, is optimized to mimic the vitreous, it has numerous other positive qualities, is safe before considering an NDA for lymphoma. So the results today pertain not only to PVR but also to lymphoma. Maybe Dr. Stryjewski, you can talk a little bit about how all the patients were treated in this trial following retinal detachment, what the standard of care is and whether that standard of care surgically has evolved very much over the past several years?

Sure. One of the challenges of conducting a study like the GUARD study is that this is a surgical study, which are not very common in our field. Most of them are drug studies, topically applied eye drops or intravitreal injections. In this study, all patients are undergoing retina surgery or vitrectomy. That is the only way to repair a retinal detachment. The retina is like wallpaper on a wall. When you get a hole in the wallpaper, fluid goes through that hole and the wallpaper comes off the wall. When a retinal detachment has been complicated by PVR or basically scar tissue that develops during the healing process, that wallpaper starts to shrink because there are membranes on the surface of it that are contracting it and crunching it. And so the challenge with PVR surgery -- PVR retinal detachment repair is that you can put the retina back in place, but that scar tissue on the surface, in a very high proportion of cases, will just contract and pull the retina back off. For this study, as part of the protocol, there was a standardized set of parameters that we expected surgeons to follow in terms of how they perform to the surgical repair and the postoperative care. So that all patients were receiving the same kind of techniques in surgery and similar postoperative care. And that was across the board, both in the active control arm and in the 2191 arm. Eyes that undergo PVR repair surgery are very inflamed afterwards. The eye is very injected. There's a lot of inflammation in the eye and the patients are, in general, the eye is quite uncomfortable. So in this study, all patients were receiving surgery, but the 2191 arm also had the addition of serial injections of the study drug. And so that's how the study was conducted. And as we discussed in the safety results across the board, the eyes that receive drug were much quieter, much less inflamed and have significantly less adverse events because even the patients with under control, they're undergoing a type of treatment, which is surgery, but the surgical repair in both groups was the same, and it was intentionally designed that way.

Our next question comes from Tom Shrader from BTIG.

Congratulations. I just want to make absolutely sure, routine surgical care included no compounded methotrexate? You haven't said that explicitly as far as I can tell.

Yes, Tom. That's absolutely correct. In the routine surgical care arm, patients received only surgery, which technically, as of several years ago, was standard of care. PVR patients were surgically treated. There was no therapy administered. That's how we ran the trial. As I mentioned, as Dr. Stryjewski mentioned in the prepared comments, these days, many physicians are administering methotrexate and compounded methotrexate in combination with surgery, but that was not the case in our trial.

And then if I can ask Dr. Stryjewski a question? Is the dosing that you used in this trial, would you consider it arduous going forward? And is any of the advantage, the fact that they got a lot of doses very regularly or would compounded methotrexate be used essentially exactly as was used in the trial?

So it is an intensive course of treatment or asking patients to come back weekly. What -- some may find surprising is how low the discontinuation rate was. Patients were extremely faithful with maintaining the schedule. And I think because when patients -- when they get to the point of being eligible for enrollment into the GUARD study, they've already had many retinal detachments previously that failed. And they view enrollment into the study as kind of like their last chance of potentially preserving vision, so they're highly motivated. And so I think for the right patient population in patients who are very concerned about having another retinal detachment due to PVR, there's pretty high motivation and that certainly seem to be the case in this study.

And would you expect a high uptake in people having their first surgery?

I think it depends. I think certainly, if patients know someone who has gone through retinal detachment surgery and have seen kind of how difficult the postoperative recovery is, patients after surgery have to lay with their face down on bed rest for 1 week and it has to do with how the gas or oil is protecting the retina and that's also contributing to the reduction in PVR risk. So I think if people have seen how difficult that is, I think there will be interest in using it with a first attachment. In this study, of course, the enrollment was restricted to people who had a prior detachment and now have very moderate-to-severe PVR, which we had defined in the protocol or had a traumatic ocular injury that had resulted in a retinal detachment.

Our next question comes from Yigal Nochomovitz from Citi.

This is [ Carlee ] on for Yigal. Just to follow up on 1 of the prior questions. I guess, what's your base case in terms of the regulatory pathway here considering how rare PVR is and the unmet need? Could this data plus some of the support of literature on compounded methotrexate be sufficient to file? And I guess given as you mentioned that physicians may be reluctant to randomize patients to just routine surgical care? How are you thinking of designing Part 2 of GUARD?

Thanks for the critical question. I think your comments are well stated. Today, PVR is commonly administered for the treatment, I'm sorry, methotrexate is commonly administered for the treatment of PVR, which makes for subsequent clinical testing along the lines of the GUARD trial, is difficult, if not impossible. And the reason for that is the abundance of now disclosed reports of the activity of methotrexate and PVR as is presented on Slide 7. That means our discussion with the FDA, I think, will be very interesting. The path going forward almost certainly will not involve a GUARD trial in the way that we've run GUARD presented today, just given the lack of feasibility for randomizing subjects to standard of care. As Dr. Stryjewski mentioned in his prepared remarks, we faced quite an outcry from a number of retinal surgeons regarding randomization of patients in a setting where methotrexate has been demonstrated in the literature to be active. That is especially for serious PVR patients or severe PVR patients, there was a considerable amount of reluctance to randomized subjects. I think your comment about the go-forward scenario in terms of approval or additional data is absolutely correct. Any regulatory review because of the statements I've already made is likely to involve not only the results of the GUARD trial and in particularly the safety results of the GUARD trial, but also the expanding literature on the treatment of PVR with methotrexate.

Okay. Great. That's super helpful. And then we just had 1 other question. You mentioned that the visual acuity was similar between ADX-2191 and the routine surgical care. I guess I'm just curious if you would expect to see a visual acuity benefit in this setting and why or why not?

Not particularly, visual acuity is impacted acutely following retinal detachment and it's probably also impacted chronically over many retinal detachments. But in this trial, where patients were surgically repaired and most detachments, if they occurred, occurred early on well before 6 months. We wouldn't expect to see a dramatic difference in visual acuity after 6 months. A very long-term trial over many years and over many retinal detachments may evidence a change in visual acuity in favor of 2191, but again, I think the practicality of running such a trial is low.

Our next question comes from Catherine Novack from Jones Research.

Congrats on the data. My first question is for Dr. Stryjewski. I'm just curious if you can comment on the magnitude of the difference versus -- in retinal attachment versus the historical controls? What would be considered clinically meaningful, I mean, in this context? And then how does this compare with the emerging data we have for methotrexate?