Aldeyra Therapeutics, Inc. Q2 FY2021 earnings call

• Orphan drug designation granted to ADX-2191 for primary vitreoretinal lymphoma, retinitis pigmentosa, and proliferative vitreoretinopathy. Phase II clinical trial of ADX-2191 in retinitis pigmentosa to be initiated this year.
• On track to discuss Phase III INVIGORATE trial results and regulatory strategy for reproxalap in ocular allergy with FDA. Phase III TRANQUILITY and TRANQUILITY-2 trials for reproxalap in dry eye disease ongoing, with top line results planned for fourth quarter 2021.
• Initiated a Phase II clinical trial in dry eye disease to optimize RASP level collection.
• Initial results from Phase II trials in asthma, psoriasis, and COVID-19 of ADX-629 expected in fourth quarter 2021 or first quarter 2022.

There are no traditional product segments with defined revenue contributions as described in the transcript. The focus is on pipeline segments: The retinal disease program with ADX-2191, which has received orphan drug designations for multiple rare retinal disorders. The anterior segment ophthalmology pipeline includes progress on reproxalap trials for ocular allergy and dry eye disease. The systemic inflammatory disease pipeline involves ADX-629 with Phase II trials in asthma, psoriasis, and COVID-19 expected in the fourth quarter of 2021 or first quarter of 2022.

• Cash and cash equivalents as of June 30, 2021, were $249.7 million, sufficient to fund operating expenses through end of 2023.
• NDA submission for reproxalap expected late this year or early next year, dependent on safety trial timeline.
• Phase III GUARD trial part 1 to conclude enrollment at end of 2021.

• COVID-19 pandemic negatively affecting clinical site availability, staffing, patient recruitment, potentially delaying clinical trial timelines.
• Uncertainties in clinical trial results predicting future trials, regulatory review and quality control issues affecting results.

Q: Can you talk about this new indication for the RP. So I guess, first of all, your other ideas there came from the docs at Mass Eye and Ear, and you bought the technology out. Did this one come from them, too? Or I'm just kind of curious where the idea came from, why starting the study now? Has the methotrexate off-label being used for this indication before? Maybe you could just give us a little history of that. And then is there a screening that takes place because this is a genetic disease. Just curious about that. And then also on the Phase II to optimize the RASP level study that you're talking about there, is that an FDA requirement? Is this going to be one of those supplements after you file? Just curious who's calling that.

A: Thanks as always for the excellent question. And so on retinitis pigmentosa, a program about which we're very excited. I think as you can tell from our prepared comments this morning. The genesis of retinitis pigmentosa as it relates to methotrexate is a paper that was published out of Case Western and the University of Pittsburgh that's highlighted in our corporate deck that was updated and posted this morning. You can see the data in the deck, which suggest that methotrexate is particularly important in rhodopsin misfolding, rhodopsin is a protein that's critical in the than the light sensation cascade in the retina. And methotrexate seems to be able to prevent the redoxin is holding and certain genotypes of retinitis pigmentosa. So the answer to the second part of your question is that patients in the upcoming clinical trial will be screened genetically not only to identify retinitis pigmentosa, but this particular subtype, this genetic subtype of retinitis pigmentosa that seems to respond well to methotrexate. Regarding your question about the Phase II trial in dry disease that we mentioned this morning in the prepared comments. This is not an FDA requirement. But as you know, we're particularly interested in assessing RASP levels in tears. RASP is the target of our drug. If we can successfully demonstrate changes in RASP following drug administration then I believe we will be the first company ever to demonstrate that a topical drug can affect the target of that drug in the tears of patients. We're also interested potentially in highlighting the changes in RASP in the pharmacology section of our potential drug label, if commercialized. So we're taking the assessment of RASP very seriously. Hence, this Phase II trial which, as we mentioned, is designed to optimize tear collection, obviously, a pivotal process in the assessment of RASP.

Q: I just wanted to follow up on the Phase II trial that you're running, the new one that you've just announced. You're saying the purpose is to optimize the tear collection process to measure RASP. Could you just help us understand a little bit better why this wasn't possible within the context of the 2 TRANQUILITY Phase IIIs?

A: Of course, and thanks for the question. I'm happy to clarify the Phase II RASP trial. The TRANQUILITY trials are identical and based on the highly successful run-in cohort from January -- and as part of TRANQUILITY, we've identified ocular redness as the primary endpoint. Ocular redness has numerous advantages. Not to mention the fact that we've consistently demonstrated activity in ocular redness with reproxalap not only in dry eye disease, but also ocular allergy. But also because ocular redness is probably the sign, the exclusive dry disease sign that matters to patients. Patients do not care about Schirmer's test. Patients do not care about ocular screening or any other so-called signs of dry disease, hence, our selection of ocular redness. Nonetheless, as I mentioned in response to Mark's a good question prior, we're still very interested in assessing RASP and presenting RASP data to the Street and potentially including RASP data in our product label. This is why that we've initiated this study. Tear collection is tricky. As you know, in dry eye patients, tears are at the premium. There just aren't very many tears in many subjects. The result of that is difficult to measure RASP. We require about 3 microliters of tears to generate a RASP signal from a single subject. And believe it or not, about 25% of the subjects in the running cohort for TRANQUILITY were not able to produce 3 microliters or more tears. This is why we are altering optimizing the tear collection process. And that ultimately is what this trial is about. As I mentioned, though, Yigal, ocular redness remains the primary endpoint here in this Phase II trial.