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

Hello, and welcome to the Aldeyra Therapeutics provides top line results from Phase II clinical trial of ADX-2191 in patients with retinitis pigmentosa call. [Operator Instructions] I will now turn the conference over to David Burke, Head of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. With me today is Dr. Todd Brady, President and Chief Executive Officer of Aldeyra. This morning, we issued a press release reporting top line results for the Phase II clinical trial of ADX-2191 in retinitis pigmentosa. A copy of the press release is available on the Investor and Media section of our website, www.aldeyra.com. The press release contains important information and should be read and considered in conjunction with the slides presented in the prepared remarks made on today's call. Turning to Slide 2. This presentation and various remarks, which may be made during this presentation contain forward-looking statements regarding Aldeyra; investigational drug candidate including ADX-2191; and its plans, expectations and opportunities, including potential market size. 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 upon 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. There are risks that result from earlier clinical trials or portions of clinical trials may not accurately predict the results of future trials or the remainder of the clinical trial and Aldeyra's continuing or 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 the 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. Todd Brady.

Well, thank you, David. Retinitis Pigmentosa is a rare but devastating group of diseases that leads to loss of vision and there is no approved therapy Based on preclinical evidence first published in 2020 which suggested that methotrexate may be effective in certain mutations that cause retinitis pigmentosa, Aldeyra in conjunction with retinal experts designed and ran an open-label clinical trial in 8 retinitis pigmentosa patients with ADX-2191, our novel formulation of methotrexate specifically designed for intravitreal administration. In the trial, patients received ADX-2191 either monthly or twice monthly for 3 months. Today, we are excited to present positive results from that trial, which in a consistent manner, demonstrated improvement from baseline in a number of measures of retinal function, including assessments that require patient perceptions such as visual acuity as well as assessments independent of perception such as neural function. Relative to baseline, statistically significant improvements were observed in both normal and low light visual acuity, time to retinal response to light as assessed by electroretinography, macular or central field sensitivity to light and dark adapted peripheral retinal sensitivity to light. Consistent with the Phase III GUARD trial of ADX-2191 in proliferative vitreoretinopathy, ADX-2191 was well tolerated and no safety concerns were identified. Overall, the results are suggestive of activity of ADX-2191 in patients with certain retinitis pigmentosa mutations and represent what we believe to be the first clinical evidence of the potentially beneficial effect of methotrexate in retinitis pigmentosa. Accordingly, we are thrilled to work with regulatory authorities to initiate a potentially pivotal Phase II/III clinical trial of ADX-2191 in certain retinitis pigmentosa mutations as we continue to advance the development of ADX-2191 for the treatment of rare retinal diseases with no approved therapy. Slide 4 describes ADX-2191, a novel, vitreous, compatible formulation of methotrexate that if approved will be the first CGMP methotrexate product for intravitreal administration. The formulation is concentrated, thereby minimizing injection volume and high density, thereby localizing methotrexate posteriorly toward the retina following injection. Late last year, ADX-2191 completed a Phase III clinical trial in a rare but serious retinal disease called proliferative vitreoretinopathy, the GUARD trial, which, as is summarized on Slide 5, achieved the primary endpoint of reduction in retinal detachment relative to historical control. Importantly, as detailed on Slide 6, administration of ADX-2191 was safe and well tolerated and following surgery for proliferative vitreoretinopathy, adverse events were generally lower in ADX-2191 treated patients than in patients that received no therapy at all. The most common adverse event associated with ADX-2191 administration was punctate keratitis or corneal inflammation, a well-known and generally mild side effect of intravitreal methotrexate. Slide 7 presents background on retinitis pigmentosa, also a rare but serious group of retinal diseases caused by a variety of genetic mutations that lead to pigmented appearance on retinal exam, reflecting cell death and associated morphological and inflammatory changes, which ultimately leads to loss of vision and in severe cases, blindness. Pioneering work first published in 2020 screening to more than 68,000 compounds for activity in cell and animal models of retinitis pigmentosa identifying methotrexate as a lead candidate for potential therapy in a particular retinitis pigmentosa mutation, the P23H mutation that causes misfolded of rhodopsin, which is a critical visual cycle protein. Methotrexate lowered levels of mutated rhodopsin by facilitating its degradation without affecting normal rhodopsin. In addition, the anti-inflammatory properties of methotrexate may also modulate the chronic neuro inflammation that is observed in eyes affected by retinitis pigmentosa. In aggregate, retinitis pigmentosa affects more than 1 million people worldwide, approximately 1/3 of which are affected with mutations that lead to misfolded rhodopsin equivalent to approximately 30,000 to 40,000 patients in the United States. ADX-2191 has received orphan designation for the treatment of retinitis pigmentosa for which there is currently no approved therapy. Slide 8 presents 2 retinal images characteristic of retinitis pigmentosa from a patient enrolled in the trial. In both images, widespread retinal damage can be observed, particularly in peripheral retinal areas, dominated by the low light photoreceptors known as rods. However, cones, the photoreceptors responsible for detailed and color vision are also affected in retinitis pigmentosa. In most cases, the disease is progressive, leading to significant loss of vision as retinal damage spreads. Slide 9 simulates the visual perception in a patient with retinitis pigmentosa, which is characterized by loss of peripheral vision allowing for only a dim and blurry central visual field around the macula or central retina. Given the preclinical activity of methotrexate and the well-characterized mechanism of action relating specifically to misfolded rhodopsin and given the safety of ADX-2191 observed in the GUARD trial, we, in conjunction with experts in inherited retinal disease designed an open-label clinical trial in 8 patients of retinitis pigmentosa due to rhodopsin misfolding mutations as is summarized on Slide 10. Over 3 months of ADX-2191 therapy, 4 patients received monthly injections and 4 patients received twice monthly injections. The primary endpoint of the trial was safety and tolerability and secondary endpoints included visual acuity, macular or central sensitivity to light, dark-adapted peripheral sensitivity to light, retinal morphology and electrophysiologic retinal response to light. Acuity, sensitivity and morphology assessments were performed monthly for 4 months from initiation of therapy. Electrophysiology was performed at baseline and at 90 days after initiation of therapy. Slide 11, a presents the baseline characteristics of the enrolled patients, which were generally similar across the monthly and twice monthly dosing cohorts. As is common in retinitis pigmentosa, visual acuity was near normal in both groups with the twice monthly cohort approaching 20/20 vision and the monthly cohort approximately 20/30 vision. Notably, baseline retinal sensitivity was approximately 50% higher in the twice monthly cohort than in the monthly cohort. Slide 12 summarizes the results for safety and tolerability, the primary endpoint of the trial. All 8 enrolled patients completed the trial per protocol. Adverse events were generally mild and most commonly related to injection site pain, which is commonly observed following ocular injections. There were no treatment-related adverse events associated with morphologic changes as assessed by optical coherence tomography. No serious adverse events were observed and there were no adverse events leading to discontinuation from the trial. Visual acuity results are graphed on Slide 13, suggesting overall statistically significant improvement in both best corrected and low-light vision in treated eyes. It should be noted that the baseline best corrected visual acuity of the twice monthly cohort was on average approximately 20/20, therefore, allowing little room for improvement. Remarkably, however, although the baseline best corrected visual acuity for the monthly cohort was on average approximately 20/30, nearly 1 line of visual improvement was observed following treatment with ADX-2191 approaching near-perfect 20/20 visual scores in aggregate. Slide 14 presents graphs of visual acuity over time in the ADX-2191 treated eye compared to the untreated eye. In a manner consistent with activity of ADX-2191, treated eyes were statistically superior to untreated eyes and change from baseline in best corrected and low-light visual acuity. Following cessation of therapy, at 120 days, best corrected visual acuity returned to baseline in the treated eye, whereas the treatment effect in low-light settings was sustained beyond the cessation of therapy, up to 120 days. On Slide 15, the results of electroretinogram assessments, which measure inner retinal neural function following exposure to dim light stimuli and are independent of patients' perceptions are graphed. In all cases, there was a numerical trend toward increase in the magnitude of inner retinal response, whereas there was an overall statistically significant decrease in time to response to light stimuli. The data suggests that photoreceptor function assessed across the entire retina in aggregate may have improved following treatment with ADX-2191. Central field sensitivity as indicated by patients' perception of light stimuli is graphed on the left side of Slide 16 and indicates a highly statistically significant overall improvement from baseline. Notably, at baseline sensitivity in the twice monthly dosing cohort was approximately 50% higher than that of the monthly dosing cohort, leaving less room for improvement from baseline. The right side of the slide presents an example sensitivity heat map from a patient enrolled in the trial which suggests improvement over 3 months of treatment in both the peripheral and central macular field. Slide 17 presents the peripheral dark adapted sensitivity to green and red light. Perception of peripheral visual stimuli specifically under darkened conditions is challenging for patients with retinitis pigmentosa and is one of the earliest and most troubling symptoms of the disease. Response to greenlight reflects contributions from both rods and cones, whereas response to red light reflects cone function. In both cases, highly statistically significant improvement in sensitivity to perceive these stimuli from baseline was observed. The increase in dark adapted peripheral field sensitivities in conjunction with the increase in macular sensitivity assessments and improvement in electroretinographic time to response suggests that ADX-2191 leads to broad-based increases from baseline in retinal function in retinitis pigmentosa patients with rhodopsin misfolding mutations. Further, the improvement of psychophysical or perception-based sensitivity and visual acuity responses in combination with physiologic electroretinographic responses independent of perception lends further support of the activity of ADX-2191. Accordingly, we intend to initiate, in conjunction with regulatory authorities, a potentially pivotal Phase II/III clinical trial of ADX-2191 in retinitis pigmentosa patients with rhodopsin misfolding mutations. And so doing, we are pleased to continue to advance ADX-2191 for the treatment of rare retinal disease with no approved therapies. As illustrated on Slide 18 and as detailed earlier this week, we believe our list of upcoming planned milestones remains robust and look forward to keeping you updated on our pursuit of improving the lives of patients suffering from diseases with unmet medical need. Operator, I would now like to open the call for questions.

[Operator Instructions] Your first question comes from the line of Justin Kim of Oppenheimer.

Maybe just 2 from us, and then will hop into the queue. As you think about these results, does the team have a view on which functional endpoint may does serve as a means to assess the response of 2191 in RP from like a pivotal study perspective, just sort of understanding around low luminance in visual acuity versus best corrected?

Well, Good Morning Justin, and thank you for the question. We are pleased to have issued the second data release of this week, a tired but determined Aldeyra team here at the Aldeyra World headquarters is back at it again. Your question is excellent for usual, Justin, and I think, deserves a discussion with regulatory authorities. And that is ultimately for this drug to be approved in patients with retinitis pigmentosa what is the pivotal endpoint. There are no approved drugs for retinitis pigmentosa. And therefore, I think discussions with regulatory agencies will be critical in determining exactly how the Phase II/III pivotal trial that we intend to initiate will be structured and what endpoints we intend to select. I think in a way, you answered your own question, which is the major issue in these patients is a dark adapted sensitivity, particularly, as you can see from some of the images that we presented today, such as on Slide 8 in the peripheral aspect of the retina, which suggests that the dark adapted chromatic perimetry, which assesses sensitivity to green and red light under dark-adapted conditions and thereby assesses peripheral retinal function might be the most clinically relevant aspect of what we've presented today. And I think the highly statistically significant results in the deck that was released today are suggestive of activity of 2191. And for that, we are thrilled.

Understood. Understood. And maybe just as we think about the 2 doses, appreciating that these are small numbers with the slight differences in baseline characteristics. Is the monthly dose sort of the one to focus or sort of are both still on the table?

Well, I would say both are still on the table. We had a robust discussion yesterday with a key opinion leader in the space. On one hand, monthly injections are more convenient than twice monthly injections. On the other hand, there is such a dire need to treat these unfortunate patients that I think there is some enthusiasm to be as aggressive as possible with treatment. The good news is, as we've demonstrated in the GUARD trial with ADX-2191 and as is known generally with intravitreal methotrexate injections, these injections are largely safe. And I think that allows for us to entertain a variety of different injection schedules to be determined and probably will be influenced by our discussions with retinal authorities as well -- I'm sorry, regulatory authorities as well.

Your next question comes from the line of Yigal Nochomovitz of Citigroup.

This is Carly on for Yigal. First, I guess, of the endpoints that you measured, we wanted to get your perspective on which metrics are sort of completely objective or maybe at least subject to potential bias given that the trial was open label? And then just to clarify, did patients know which eye received the injection? Or did they get a sham injection in the other eye, I just wanted to clarify.

Carly, and thanks for your question. I am particularly interested in the results of this trial in part because, as I mentioned in my prepared comments, we have a combination of perception-based and non-perception-based end points. To your question specifically, the electroretinogram measures neural function independent of perception. The electroretinogram is akin to an electrocardiogram or an electroencephalogram, neither of which involves patient input or perception. The beauty of the ERG results here is that -- they suggest that independent of whatever the patient may perceive or may not perceive, neural function is improving. . Regarding the electroretinogram, there are 2 key characteristics. One is the neural response to light stimuli. The other is how fast the neural response occurs following a light stimulus. And both of those improved the time to response statistically significantly overall in this clinical trial. Any time, we're assessing retinal function to your point, I think it's important that we consider both perception-based and non-perception-based characteristics as we've done here. And I think the good news is both improved in this clinical trial.

Okay. Got it. That's super helpful. Can you also just talk a little bit more about time to response and maybe how that compared to your expectations based on the mechanism.

The mechanism is truly fascinating, and I encourage investors and analysts, others on the call to read the paper that's cited in our deck that paper is open access. The process from that Dr. Chen undertook is truly remarkable. Screening on a master basis more than 68,000 compounds which I think suggests the medical need in this condition. Some of those compounds were known, some of those compounds were unknown. The clear winner in many respects was surprisingly methotrexate, which is why we initiated this trial with ADX-2191. The investigators in the paper went to great effort to elucidate the precise mechanism of methotrexate in a particular retinitis pigmentosa mutation called the P23H mutation, and it was determined that methotrexate leads to the degradation of misfolded or mutated rhodopsin while allowing for normal rhodopsin to function. I think based on that mechanism, one would expect in certain mutations that retinitis pigmentosa patient's retinal function would improve broadly. Exactly how it might improve in terms of time to response or magnitude of response, I think, is to be determined. But I think you can see from the results today that there truly is a broad-based retinal response observed from this clinical trial.

Your next question comes from the line of Tom Shrader of BTIG.

Congratulations again. I was wondering where you think you are in terms of understanding dosing. Are the real-world expectations that this drug would be used essentially forever? And do you have confidence that methotrexate is stable maybe for decades in the eye? Or do you think you're looking at some sort of loading and maintenance dose? Or what is your confidence that this dose would be stable for what's probably a chronic disease? .

I think like with any genetic mutation, a chronic therapy outside of gene therapy, chronic therapy will be required because of the mutated genetic code, proteins will continue to be synthesized that are, in this case, misfolded, which will require continuous administration or chronic administration of ADX-2191. I think Carly's question and Justin's question, we'll need to think carefully about the practical aspects of aggressive dosing versus less aggressive dosing. And many patients live far from inherited retinal disease clinics. The driving to those clinics, particularly with this disease is not an insignificant matter. And a hybrid approach might just be what you suggested, Tom, which is the classic loading followed by maintenance doses, which, in this case, might be twice monthly, followed by monthly. But again, I think we need to think more about that with our retinal experts and in discussion with regulatory authorities.

If I can make a quick follow-up on the market. Are these patients clustered in centers or because there isn't much you can do for them, they're really all over the place? I'm just kind of wondering, commercial rollout.

One positive thing about retinitis pigmentosa is that the patient community is very well mobilized. I would say among orphan diseases, retinitis pigmentosa is unfortunately one of the more common orphan diseases that afflict the retina. And thus, many of these patients are seen at the tertiary or quaternary academic centers on a regular basis, which, to your point, would facilitate patient identification. I think it's important to note that all of these patients are typically genotyped allowing us to identify those patients that suffer from rhodopsin misfolding mutations.

Your next question comes from the line of Kelly Shi of Jefferies.

Congrats on the progress. [indiscernible] this information, do you know the genetic mutations of the patients enrolled on this trial? And how would you comment on the disease severity and the speed of disease progression to this mutations? And also how does the information inform patient inclusion criteria for a pivotal trial?

Thanks, Kelly. That's a really interesting point that you make about the different mutations. All of them lead to rhodopsin misfolding. And based on the preclinical evidence we've discussed today, should be amenable or in theory responsive to treatment with ADX-2191, we intentionally enrolled a variety of rhodopsin misfolding mutations in this trial, including the P23H mutation that's described in the preclinical evidence manuscript. I think over time, more patients will need to be tested. To some extent, we'll have to look at response on an individual patient basis taking into account the particular mutations that they have. Largely though, the thesis is that if there is misfolded rhodopsin due to whatever mutation, the activity of 2191 should pertain to those patients.

Your next question comes from the line of Catherine Novack of Jones Research.

Congrats on the data. Just another follow-up on the genetic testing. I imagine genetic testing is routine for retinitis pigmentosa. Do we get a sense of how many different types of mutations lead to rhodopsin misfolding? How many have the potential to be addressed by gene therapy? Or is this so highly fragmented that gene therapy doesn't have the ability to specifically address all of the different mutations. .

Catherine, thank you, and pleasure to hear your voice. The answer is there are a variety of mutations that lead to rhodopsin misfolding. I'm not aware of the precise number, but there are many. The most common is probably the P23H mutation. But unfortunately, the gene therapy has the potential to affect only a single mutation at a time generally. Whereas therapy with methotrexate, which could be combined with gene therapy, should theoretically be able to treat any rhodopsin misfolding mutation. I think over time as we expand enrollment in clinical trials as we account for different mutations and more patients with the mutations we've treated in today's trial, we'll have a better feel for the scope of the rhodopsin misfolding mutations. As Kelly mentioned, the severity of rhodopsin misfolding mutations; and finally, and most importantly, the ability of ADX-2191 to treat those mutations.

Got it. And just 1 final question kind of from the clinical aspect, reminiscent of discussions we've seen around intravitreal injections for dry AMD. If patients have near normal vision at baseline, how willing are they to receive monthly intravitreal injections potentially indefinitely.

Well, Catherine, retinitis pigmentosa is totally different from patients with dry AMD. Patients with retinitis pigmentosa have near normal central vision that is acuity when you're focusing on an eye chart and reading letters. But I think as you can see on Slide 9, aside from central acuity, the rest of vision in these patients is unfortunately in a terrible state. In many cases, that peripheral vision is all but gone. And while we may be able to read letters on a chart, as I mentioned in my prepared comments, the central field is dim and sometimes blurry. So I think these patients are highly motivated to receive therapy. I will tell you that every patient, as I mentioned in the prepared remarks, completed the trial per protocol, which suggests the medical need in this space.

Your next question comes from the line of Marc Goodman of Leerink.

This is Rudy on the call for Marc. Congrats on the data. I have some questions. Do you have any natural history data or other real-world data from standard of care that you can compare with? And also a quick follow-up to Kelly's question, do you have data for fellow eye data that you can compare with the study?

And thanks for the kind words. Well, the one thing we know about retinitis pigmentosa is that it is inevitably progressive. And we know the end of every movie. It is a sad movie, ultimately resulting in vision loss. I personally know 2 patients with retinitis pigmentosa, one of whom is effectively blind, the other of whom had to retire early because he was unable to travel. There's no doubt that patients get worse. However, how fast do they get worse, it depends on the patient. In many cases, the disease is somewhat insidious that is slowly progressing over time. In other cases, it is more rapidly progressing. So baseline natural history data, aside from the fact that everyone, almost universally gets worse is unknown. This means that a pivotal trial would have to have an internal control group. Also to Kelly's point, I think the speed with which the disease progresses probably depends on the particular mutation, which speaks to the validity of enrolling a large variety of mutations that relate to rhodopsin misfolding in the subsequent trial and trialing those patients over a longer period of time. I'm not aware, Rudy, of any 3-month natural history data. But as we get towards treating patients for a year or 2 years, I think we'll have plenty of natural history data possibly in conjunction with an internal control in the next trial.

[Operator Instructions] Your next question comes from the line of I-Eh Jen of Laidlaw & Company.

Congrats on the great data. I have 2 questions here. The first one is that -- could you comment a little bit on the competitive landscape in the RP drug development? We noticed there's a lot of gene therapy, but do you have any more colors on that in terms of their clinical stages and others, then I have a follow-up.

Yale, and thanks, as always, for your support and good question. My understanding is that there are a variety of gene therapies in various stages development. But I think the Catherine's good point, a gene therapy relates to a gene. And there are many mutations that afflict these patients. So I'm at least in this particular case with rhodopsin misfolding more interested in a broad-based therapy that could be administered safely and chronically to address a large number of different genetic abnormalities that affect rhodopsin misfolding. As far as other stages of development for other compounds, I think there are various and I'm thrilled that there are. This is one of those diseases that makes us all feel good, whether we're investors or analysts or bankers or biotech executives that we're in some way attempting to improve the plight of these people. In fact, I can't think of a more noble endeavor on this planet. So today's results, I think, are a step in the right direction. I think relative to a variety of different mutations, they are promising and I hope this therapy and other therapies eventually see the light of day and may make a dramatic impact on the lives of patients with this terrible condition.

Great. That's very helpful. The follow-up question -- actually following up the previous one in terms of, as you mentioned, the pivotal the -- next-stage study you may have internal control. Just curious what might -- what that might be at least potentially? And maybe just one more just attached to this is that you considered maybe even dose of the drug once every 2 months given the current data in the test?

no. I think dosing will depend on future clinical data. I think we need to test 1 or 2 or both of the dosing regimens we presented today. There may be an opportunity to test other regimens, as Tom pointed out, maybe a loading dose, maintenance dose. We'll just have to see we need to have more conversations about the data with our retinal colleagues and make a decision for the next trial. I think the discussion about internal control is important. A prior question about fellow eye is interesting. Many of these patients are afflicted in a single eye. And so we wouldn't expect changes in the fellow eye to occur. Some patients are affected bilaterally, but those patients you would expect to be treated bilaterally given the severity of the disease and the near inevitable outcome of visual loss. My guess is that in the control arm in a subsequent study, we'll certainly consider sham injections. And there may be other techniques such as a historical control or a concurrent untreated control cohort that we can explore with regulatory authorities. But I look forward to updating all of you as we advance the drug to those discussions with great enthusiasm.

There are no further questions at this time. I will turn the call to Todd Brady for closing remarks.

I want to thank you again for joining us this morning to hear about these important results. As always, we appreciate your time and interest in our company and look forward to updating you on future developments.

This concludes today's conference call. You may now disconnect.