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

[Audio Gap] the FDRR should be made by the deciding official within days after the meeting, unless there is an interim response by the deciding official such as a request for information or a decision by the deciding official that additional discussion is needed, in which case, the decision should be made 30 days after the requested information is provided where the discussion occurs. Now based on such time lines, Aldera expects to meet with the O&D in the fourth quarter of 2026. Overall, the timing of the O&D FDRR decision will depend on a number of factors, including whether the deciding official request additional information, or determines there is a need to discuss the FDRR with internal or external experts or convene an advisory panel or other factors. The occurrence and timing of which are uncertain. Importantly, following the FCR or decision, the NDA must be resubmitted, with the additional information, if any, required by the decision. We're aware of FDRR submitted in 2026 following reviews by the division of ophthalmology. One, FDRR resulted in an appeal granted decision approximately 60 days after the FDRR was submitted and on FDRR is awaiting an advisory panel. As presented on Slide we have submitted a variety of adequate and well-controlled clinical trials that, in our opinion, demonstrate the effectiveness of reproxalap and improving the symptoms of dry eye disease as well as improving different signs of dry eye disease, including tier production as measured by summer test and ocular redness. The results switched to our knowledge comprise the largest and most comprehensive package of clinical trials ever submitted in a dry eye disease were generated across a variety of kinds of clinical trials, including chamber trials and field trials and also parallel group designs and crossover or similar designs that compare patients to themselves to account for patient to patient differences. Of particular interest or chamber trials, which are designed to account for dry eye disease exacerbations, which could be the most relevant aspect of the disease to patients and that most patients are more interested in their bad days than they're good days. Additionally, the chamber results measure acute drug activity within minutes of administration, the timing of which is more important to patients than potential improvement that may require weeks or months to achieve. Now having had access to the 3 FDA NDA reviews. Slide 6 summarizes our abbreviated interpretation of the FDA's conclusions in contrast to our interpretation of the conclusions of the results for each submitted trial. Overall, the FDA appears to consider 5 of the 9 trials as so-called failed trials, while noting that 4 of the trials were successful. However, as can be seen on the slide, from our perspective, a considerable majority of the endpoints are supportive of the activity of reproxalap and thus, we believe there are multiple paths by which the FDA could approve for proxalapp. First, we believe we meet the recommendations in the FDA draft dry eye guidance for, among other things, either 2 positive trials for Schirmer response or 2 positive trials for symptoms in 2 positive trials for signs. And taking a step back to the statute, we believe that a finding of substantial evidence of effectiveness can be made on more than one adequate and well-controlled trial or 1 adequate and well-controlled trial with confirmatory evidence. Further, we're aware of at least one appeal determination, not an ophthalmology that disfavored a trial counting approach in favor of meta-analyses and more holistic assessments when evaluating the totality of evidence. Slide 7 summarizes the failure rates for clinical trials of drugs approved for the treatment of dry eye disease. Dry eye disease trials commonly fail as the draft dry eye disease guidance states clinical trials for the treatment of dry eyes, even with known effective therapies can fail to demonstrate efficacy. The reasons for such failures are likely due in part to random changes in environmental conditions such as humidity, temperature, wind and particulate matter that include pollen and pollution. Of note, the larger the trial and the more geographically diverse the clinical sites, the more environmental variability incurs. Additionally, for individual dry disease patients, the disease varies day to day, there are good days and there are bad days that are difficult or impossible to predict within an individual patient. The environmental variability and the day-to-day variability and the interaction of those 2 variabilities in dry eye trials suggest that single site, single day trial, such as dry eye chamber trials 027, 030 and 032, may more effectively discern treatment effect that longer and larger field trials that suffer from uncontrollable factors that may obscure or eliminate treatment effect. Slide 7 also highlights the need for new drugs for the treatment of dry eye disease, 5 of the 8 approved drugs present only Schirmer test data and the label, the server test is not routinely performed by the vast majority of eye care providers and is generally not considered by patients that is it is unlikely that any patient wakes up in the morning concerned about their Schirmer test score. Further, the new mechanisms in dry eye disease therapies are lacking. 6 of the approved dry eye disease therapeutics are not novel drugs and 3 of which are cyclosporin. 2 of the approved drugs contained PFAS or so-called forever chemicals. One can only be used for 2 weeks due to toxicity. One is available as an artificial tier in certain countries outside the United States and 2 approved dry eye disease therapies contained on post-hoc data in the drug label. No dry eye disease drug approved for chronic use has demonstrated improvement in redness. And perhaps most importantly, there is no approved dry eye disease drugs that presents activity in a dry eye chamber which, as I've stated previously, is possibly the most clinically relevant aspect of dry eye disease since patients are most concerned with bad days, not good ones, and acute activity in minutes not activity that may require weeks or months of treatment. Accordingly, Slide 8 presents the basis for the market opportunity for reproxalap and dry eye disease, a condition that affects tens of millions of people in the United States, yet currently available treatments continue to be considered by providers and patients to be inadequate. We are well capitalized to execute on the FDRR process, and we remain steadfast in our commitment to working with the FDA to provide a novel therapeutic option for dry eye disease. As is summarized on Slide 9, we reported $45.1 million in cash, cash equivalents and marketable securities as of June 30, 2026. And today, we are updating our financial guidance to note that we believe our current resources will be sufficient to fund the company into 2029. Importantly, our operational cash runway guidance does not include partnership or product revenue associated with the proxalapp, including the AbbVie option agreement that we have previously disclosed. Our budget does include continued advancement of the primary vitreoretinal lymphoma pivotal program and contains contingency funding for additional dry eye disease clinical development if required. As I've noted earlier in the call, FDRR submission for reproxalap and a meeting with the FDA's office of new drugs are expected to occur in the fourth quarter of this year. Pending resolution of the FDRR, our development pipeline shown on Slide 10, remains robust in order to conserve resources, we're suspending our program for ADX-2191 in retinitis pigmentosa and other than noting that our oral RASP inhibitor ADX-248, has completed Phase I and is now Phase II ready. We expect to provide guidance for our programs for ADX-248 and ADX-246 pending resolution of the FDRR as is summarized on Slide 11. And with that, operator, I'd now like to open the call for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] [Audio Gap].

[Audio Gap] kind of walk me through what specifically is going to be appealed and whether you anticipate additional trials. [Audio Gap] What additional trials may be requested part of it.

For sure. Catherine, and thanks for your question, and thanks for your many interesting notes over the past 12 months or so about this process. The FCRR process, which, again, is regulated per PDUFA guidelines is really designed to allow the sponsor to contest the decision from the reviewing division and the reviewing office above that division. And specifically, in our case, the latest complete response letter did not specified further trials, which, as you point out, is unique. But it did note that in the FDA's opinion, the totality of evidence did in favor reproxalap. So specifically, the appeal is about the totality. So the general arguments for the number of trials being positive, the overall assessment of those trials, which typically includes pooling data or meta analyses are all parts of that appeal. Now your point about what will the office of new drugs to do with this appeal is interesting? What's the amenity, what's the solution? And I think there are really 2 flavors. One is some sort of additional analysis, which includes pooling data met analysis or other sort of assessments of the data, including recounting of the positive versus negative trial. And the other flavor is more trials, more clinical trials and in this case, though, it's difficult for us to imagine what an additional trial against the backdrop of 9 completed trials or an additional 2 trials against the backdrop of noncompleted trials would add to the package. So while it's difficult for me to assign some sort of probability that more trials are going to be required, I don't think it's likely in part because it's difficult for us, at least to imagine what a trial or 2 in addition would add to what we've already submitted.

Got it. And then I have to ask [Audio Gap] what has been AbbVie's comments on this as it progresses. Any input from them? What's been the most recent interaction?

[Audio Gap] right and from our perspective remain involved in the clinical and regulatory processes that we have described today.

Great. Thanks, Todd.

Your next question comes from the line of Aman Makarem with Jefferies.

A couple of questions here. First, following the Type A meeting, the plan was to hold the Type D meeting to discuss the potential in the resubmission. What did you learn at the Type B meeting that you didn't already know following the Type A meeting you had before? And then has FDA given you any reason to believe the FDRR will require some sort of an expert consultation or advisory committee or is your current base case is that O&D can decide the appeal within the Senate time line?

Right and thanks for your question. One question is what have we learned in the Type B meeting that we didn't already know in the Type A meeting. And the next question is the need for internal or external review on the part of O&D. The Type A meeting was held in June, as you know, subsequent to that meeting, we issued an 8-K announcing that we needed to have another meeting, which is a Type B meeting. The Type B is, for those of you that aren't temps an abbreviated Type C and amongst the alphabet soup of FDA meetings a Type A meeting is generally held within 30 days. Those are urgent situations. Type C meetings are your standard FDA meeting which require some period of time to hold, you can ask as many questions. Type D is a mini type C, which is direct questions, 2 or 3 questions I think you only get to consult with 1 or 2 different groups within the division. And so obviously, after the Type A, we felt like there was more clarification that was needed and I would just go back to my answer to Catherine's question about the content of the appeal, which really focuses on the justification for totality and the kinds of analyses that we mentioned that I mentioned, I feel like we just didn't get the kind of clarity that we needed in the Type A meeting, and that clarity was provided in the Type B meeting sufficient for us to make the decision that we've announced today. Let me turn to expert consultants. I am not aware of an advisory panel that's ever been held in dry eye disease. First, the disease is well known. It's well characterized. There are 8 approved products in a condition. So we don't really think there is a lot of room for discussion about what is this disease and how might we treat it. The question then is, will the office of new drugs, which is going to review this appeal, bring in internal or external experts. I also would argue that is unlikely for the same reasons that an advisory panel is unlikely. It is possible, though, as I mentioned, of the only 2 appeals in ophthalmology that we're aware of. Both of them occurred this year. One of them was an appeal granted within 60 days. But the other did result in an advisory panel, which adds time and cost to the process. I think that panel took approximately 3 months or 4 months to put together. However, that is for an indication for which there are no approved drugs. So I think our situation here and dry disease relative to an advisory panel is different.