Everybody.
Good evening.
We're going to get started with the next session. I'm Marc Goodman, one of the biopharma analysts, and we're lucky enough to have Todd Brady, the CEO of Aldeyra Therapeutics, to go through the next session. Todd, thanks for joining us.
Pleasure.
I suppose it's kind of a tale of two pieces to the company. Like it's the reproxalap, which is what everybody's focused on right now, justifiably so, but there's so much else going on in the pipeline. Let's start with reproxalap. And just for everybody's sake, just the quick background on reproxalap and why has it taken so long to get to where we are, given that it--I don't know. I'm just a little shocked that it has.
Right.
Because the product clearly works. I don't know, give us the quick kind of lowdown on the product.
Marc, thanks for having us. Aldeyra is thrilled to be here and obviously a premier conference. Yeah, people complain about drug prices, right? What they don't realize is how long it takes to get a drug to Marcet and how much money it takes to get a drug approved. It's been a long road. One of our original investors is here from 2005, and biotech never moves in a straight line. It's just sometimes difficult. We are an interesting mix as a company of, I would say, sort of a pre-commercial company and a pipeline, your classic biotech pipeline company. Reproxalap, as you mentioned, which is our drug under NDA review for dry eye disease, is the commercial side of that. We have a partnership with AbbVie. They have an option on the drug. They have 10 business days to exercise that option.
Just explain that so somebody understands.
For sure. The reproxalap NDA PDUFA date is April 2. We struck a deal with AbbVie, which is the only big pharma, I think, left in the front of the eye these days, where they have an option to co-promote reproxalap. The way it works is it's $100 million upfront. It's $100 million at approval. Then there's a couple hundred million dollars in other milestones after that. There's a 60/40 split of the P&L. For a small company like us, a very robust deal, which you'd expect for a large Marcet like dry eye. I think there's plenty of unmet need in dry eye, particularly the ability to work fast, right? Dry eye patients really don't have a drug that works fast, you know, within minutes these days. That's the way the AbbVie deal works.
As you point out, most of our investor interest has been around reproxalap and the many trials required to get a dry eye drug approved. There's signs and symptoms, you know, so that's four trials, two sign trials, two symptom trials. It's a lot of time and money, but for the patients that suffer from this disease, probably worth it.
Yeah. Talk about how the product is differentiated versus the products that are on the Marcet today.
Right. You know, for a long time, there was only one product. You have these old drugs, Restasis, which I know you covered in the Allergan days way back when. There are several products now, but as I mentioned, they're really the kind of drug that takes weeks to work. You know, patients come in with hot eyes, right? Their eyes are painful. Their eyes are red. No one wants to hear, "Well, just take this for a few weeks and maybe you'll feel better." People want to feel better within a week.
By the way, it'll burn for a few weeks, but you'll get through it.
Yeah. Deal with all the side effects, and then there is the hope you will feel better eventually. The proposition for reproxalap is that it works within minutes. One way to get a dry eye drug approved, per FDA guidance, is to put people in a small room, smaller than this room, and blow hot air in their face without any humidity. It is sort of like Miami sun's humidity in a small room with no view. The beauty of that is you can detect changes in symptoms and redness within minutes. It is a great way to exacerbate potential subjects, and you can measure the effect of drug very rapidly. The idea would be, at least from AbbVie's perspective, the sales reps change the word "weeks" to "minutes." This could work in minutes, in theory, would be the idea.
Yeah. AbbVie, I'm just trying to understand. April 2 comes, drug's approved. AbbVie can basically take the option. They pay you, like you said, the $100 million at that point. It becomes a 60/40.
Right.
Do you have the, like, you're all in, you're ready to go with your part of it? And how are you thinking about that?
That's a great question.
Yeah.
First of all, if AbbVie exercises before the PDUFA, which is April 2nd. They owe us exactly $94 million, because that's $100 million less $6 million they paid us already. If the drug subsequently gets approved, it's another $100 million. You know, between now and 10 days, 10 business days after April 2nd, in theory, if all goes well, it's $194 million.
Right.
The P&L split, which is a 60/40 kind of thing, is obviously heavily weighted in terms of effort on the AbbVie side, right? We're a small company. We don't have sales reps. We don't have a Marceting team. What we do have is background on the drug in terms of mechanism and continuing medical education. We have KOL relationships. So that's sort of our side of the.
You're not planning on putting reps on the ground?
No. No.
Right, right. Okay. So your 40 comes in from that angle?
Exactly.
As far as the split and stuff. I see. And then just continuing just on that with the differentiation. So Miebo is on the TV all the time. What do you make of that product and yours? How do you think about them?
Miebo is an artificial tear in Europe. That's the first thing I'd say.
Yeah.
For some reason, it's a drug here.
Yeah. It's on the TV all the time. You're just getting bombarded with it.
Yeah, yeah. I mean, there's a variety of new drugs. There's another cyclosporine out there now, which is sort of a Miebo plus cyclosporine. There's Miebo, which is, again, outside the U.S., sort of akin to an artificial tear. There are a few other drugs in the pipeline, but again, we're not seeing anything that works within minutes or could work within minutes. The other advantage for reproxalap is the sign is redness. I like to say, in dry eye disease, there are all kinds of signs, right? There's Schirmer test, which is a piece of paper in your eye that measures tears. There's tear film breakup time. There's tear osmolarity. All kinds of fancy ways that we use signs to measure dry eye. But there's only one that patients care about, and that's redness. Who wants a red eye?
To have that on your label, I think we would be, in theory, the first chronically used drug that works on redness. Today, we have steroids that work on redness, but you can't give those long term, as you know, cataracts and glaucoma and so forth. Therein lies between redness and the rapid onset and symptom control to, I think, major Marceting angles.
Is AbbVie involved right now in labeling negotiations with you? Like, how is that working?
Yeah, the terms of the option are that anything we get from the FDA, we obviously would share with AbbVie. I've been thrilled with that. AbbVie and Aldeyra are in regular contact with the FDA, and obviously, they've done a few more NDAs than we have. It's been really fantastic to have them involved. They have observer rights in any meeting with the FDA. For obvious reasons, we take their feedback very seriously.
Are we basically in labeling right now? I mean, is that basically where we are? Discussions have started.
Typically, companies, you know, will enter into robust dialogue with the FDA around label and other things around this time. The fact that I'm sitting here talking to you would suggest that we believe that the PDUFA is.
Everything's moving forward as hopefully planned is basically what we're saying.
Everything's moving the way we would like to see it.
Good. Good, good, good. Good to hear. There's been a history in other products in eye care at the company. Talk about the rest of the portfolio in eye care and how you're thinking about it today and how that's evolved, because we were just talking beforehand about two or three assets that, you know, which direction are you going to take them? Where are we?
Yeah, for sure. You know, back in the day in 2005, we started this company in the eye. It was a retina company back then. We're moving back towards the retina. I tell people, clinically, we started in the front of the eye. We went backwards and now we're going down.
Right, right.
Right. You know, I think behind the eye or behind the front of the eye, we have skin, liver, and retina. Those are our major efforts clinically. At heart, we're an immunology company, right? We started thinking about our lead target for reproxalap. We call it RASP. RASP is a pro-inflammatory class of small molecules that relate to not only many inflammatory diseases or immunology diseases, but also metabolism. RASP are pro-fat. They are precursors to fat. A year or two ago, we released some preclinical data at R&D Day on controlling metabolism by modulating RASP and sequestering or degrading RASP. That's something I think you'll hear more about in the future. In retina, we really have two approaches. RASP are intimately related to dry AMD, which is a precursor to what everyone knows as geographic atrophy.
I think the challenge in the dry AMD Marcet or the geographic atrophy Marcet is we don't have drugs today that treat symptoms. You know, patients don't wake up and think, "How are my lesions?" They wake up and they think, "I can't see at night. Everything looks wavy." We intend to actually target some of the symptoms behind dry AMD before it gets to geographic atrophy. That's something you'll hear about later this year. We should be in the clinic, if not this year, early next year for that.
An IND will be filed, basically what you're saying, to move into dry AMD with a RASP.
The RASP modulator. That's right. The target is by the end of this year, if not the first of next year.
Is this an eye drop?
This would be an injection.
Injection.
Yep.
Okay.
The second thing is we bought a company some years ago called Helio, which had an intravitreal or an injected methotrexate. Actually, methotrexate's been injected into the eye for decades and decades for lymphoma and other conditions. We're taking it forward, and retinitis pigmentosa, another form of retinal inflammation, which has no real therapy, a pretty large orphan disease, you know, probably 80,000 or 90,000 patients that would apply to the types of retinitis pigmentosa that methotrexate would affect. That phase two, three trial should also be getting going this year.
Yeah. Just talk about that program. It just feels like it's been, you know, kind of around for a while and not moving forward. Just explain to us what the hell's going on there.
Yeah. We started, you know, we were just talking before this chat. We started in ocular lymphoma. It turns out that, you know, probably in the 1980s, certain retina surgeons started injecting methotrexate into people's eyeballs that had lymphoma in the retina. You know, methotrexate's a pretty potent antineoplastic agent, and lo and behold, it works. The problem with lymphoma in your retina is it metastasizes to your brain. Median survival in those cases with retinal lymphoma is about five years. It's a very serious condition. Methotrexate's been shown to reduce cells and so forth and so on. We submitted an NDA a couple of years ago just based on the literature at the behest of the FDA. Turns out there aren't enough randomized controlled trials that are effective or no randomized controlled trials.
One of the things we're thinking about is running a trial with the blessing of the FDA, but you'll hear about.
The FDA asked you to file.
Yeah.
They said, "We'll hold on." We changed our mind kind of thing?
Yep.
Is that basically what happened?
Therein lies the difference between acceptance and review.
Right.
I think people forget. NDA acceptances are about whether the FDA wants to look at an application. Review is when they look at it.
Yeah.
You know, you would think lymphoma has been treated since the 1980s. Okay, so why aren't there sufficient papers out there to justify? It turns out there really is no randomized controlled data, and that's by law something the FDA wants to consider. We are thinking about getting that going again later this year.
You're thinking about.
Lymphoma.
It would be one pivotal study, presumably, in lymphoma, which would be, I presume, small, right?
Right.
You're talking about 20 patients?
Exactly.
Something like that.
You know, in that range, for sure. Yeah. In fact, that's exactly what we've been thinking of. You may hear more from us along those lines. Retinitis pigmentosa came about because there is an investigator at Case Western Pitt who came up with this idea that methotrexate could facilitate the degradation of rhodopsin, which is this protein mutated in retinitis pigmentosa. Sure enough, in animals, it seemed to work. We have, with the FDA, designed a phase II , III trial that could be pivotal in theory that we'll initiate later this year. We'll also update on that probably in the second half of the year.
Okay. So that one you pretty much have decided we're moving forward with the study. The lymphoma one, you're.
TBD.
Right. You want to do it. You're thinking about doing it.
For sure. It needs to be done. I mean, for a fatal cancer with no therapy, it needs to be done.
Yeah. Okay. Okay. Let's come back to the, I guess, the immunology part of the story, which you always say we're an immunology company at heart, which I guess RASP really truly is. Talk about some of the immunology areas that you have been thinking about, you've been talking about, and how your thinking has evolved over the past, you know, I guess it's really been about a year and a half or so that you've been.
Sure. Yeah, we have this.
Down this path.
What we call signal-finding molecule, ADX-629, which is actually a relative of reproxalap. Some years ago, we took it through a variety of different trials: asthma, psoriasis, atopic dermatitis, among others. The data versus baseline in psoriasis and atopic dermatitis were fantastic. I mean, RASP are elevated in every inflammatory disease. In fact, it's difficult to find an inflammatory disease where RASP are not elevated, which makes sense. They're part and parcel of inflammation. They're caused by inflammation. They promote inflammation. It's sort of this vicious cycle of inflammatory insult as a result of RASP. If you degrade RASP, you sequester RASP, you trap RASP, in theory, you can block that cycle and treat a variety of different inflammatory diseases. Right now, we're targeting atopic dermatitis. We have a once-a-day oral molecule, ADX-248, second-generation RASP modulator.
The oral space, as you all know, in atopic dermatitis has not been worked out. If you're a kid, you have mild to moderate disease, you don't want to inject Dupixent. If you're an adult, you have mild to moderate disease, you don't want to inject Dupixent either. What you'd rather do is take a pill. That's sort of where we're going after. You know, the one thing we've shown consistently with RASP modulators, including reproxalap in allergic conjunctivitis, which, by the way, should be the subject of an SNDA at some point soon, is that we can diminish itch. What is atopic dermatitis? You scratch yourself, right? It's eczema. And a major issue in kids. I feel like one of the things we'll look closely at, as we did with 629, with 248, is itching.
Let's go back to 629. What was the data that you saw in AD that got you excited?
We ran open-label trials in a variety of these conditions. Atopic dermatitis and psoriasis looked at the classic PASI, EASI scores versus baseline in atopic dermatitis, itching versus baseline. They all got better in a manner that I think would be inconsistent with what we see with placebo effects. I mean, these are probably real effects. TBD, pending a randomized controlled trial, which is coming up next with 248. Data that I think got a lot of KOLs excited. We're still working with those KOLs. As I said, there's a huge unmet need in the oral space for mild to moderate disease in eczema and atopic.
Just so we understand the proof of concept, you had how many patients were in that AD trial?
I think about 10 patients. Yep.
We.
We treated them for 90 days.
Right.
You know, over time.
We looked at the PASI scores.
PASI scores, EASI scores. Really everything got better. Now, some of that's placebo effect. You know, in any trial, atopic dermatitis included, you'll see placebo effects. You know, the magnitude of responses, the consistency of responses, the kinds of patients we enrolled in that trial that were generally resistant to therapy just didn't suggest that these are placebo-like in nature responses.
What kind of AEs did we see taking this pill?
Nothing consistent. Nothing. I mean, we've treated probably 100 patients with ADX-629. Nothing consistent. Sort of like reproxalap, you get, as you mentioned, a little installation site irritation that you get with every other drug. Nothing consistent there either.
There's no on-target, like, this is what you get with this, like even.
You know, as a medical community, we target proteins, maybe JAK or TYK2, or we have an antibody to IL-17 or something. The problem with doing that is proteins aren't meant to be turned off all the way. Or they're not meant to be turned on all the way either. They're meant to be modulated a little bit, like a volume knob back and forth. That's what RASP does. RASP affect proteins. They don't turn them on. They don't turn them off. They affect a variety of proteins so that we call it the master volume knob. You know, you take your inflammatory score from a nine to a two or a nine to a four. That, to me, is the future of pharmacology. I don't think when our grandkids are running around getting treated by drugs, they're going to have a drug that takes out a single protein anymore.
I think it's going to be a drug that takes out or modulates many proteins and turns them down or up instead of turning them off or on. That, to me, is where we're going .
Just to be clear on this program, though, you had 10 patients, you saw good data, and you're moving forward, but it's a different molecule. Just explain to us the difference between 248 and 629.
First generation 629, second generation 248.
The major advance is the potency of the molecule in terms of binding, trapping, degrading RASP, and the fact that 248's once a day, oral. We have been able to modulate the backbone of these molecules to make them last longer in the blood so they're not metabolized by the liver as easily. They're not excreted by the kidneys as easily. That allows you to dose once a day, assuming you, you know, increase your half-life. If you can get target levels that are sort of consistent with where RASP are, which is sort of single-digit micromolar.
629 was BID?
629 is BID.
Yeah. Okay. Let's just go back to 629 again. Obviously AD, we moved that forward. We just talked about that. You're moving into a study that's about to start, like a phase one SAD/MAD. Is that what we're basically starting right now?
That's right. Yep.
Okay.
ADX-248 is in phase I .
Phase I. Is that we'll hear more about that in this year?
Second half. The idea would be to start atopic dermatitis in the randomized trial right after.
Right. Late this year, early next year.
Yeah.
It's kind of what you're.
I'm happy to report. I think phase one's going really well. No consistent AEs, target levels actually reached in our first dose, which I've never seen in a phase one trial before. A very potent molecule, metabolically very stable, which is what you want for a drug that has no side effects.
Can you just expand on that? What do you mean by target levels?
If you look at the literature, you type in your favorite inflammatory disease. Pick atopic dermatitis, and then type in, go to PubMed, type in, and pick your favorite RASP, malondialdehyde,
Right. Right. Yeah, you hit that pretty quickly. Okay. Now let's go back to 629. You mentioned some of the other indications that you were going after. What were some of the other proof of concept trials that you ran?
Psoriasis was one.
Okay. What happened with that one?
The same thing in atopic. You know, PASI scores went down. Investigator global assessment scores went down. Again, in a manner and rate, a magnitude and rate that you just simply wouldn't expect with placebo effects. We're well aware of what placebos do. We have so many randomized trials now in atopic dermatitis and psoriasis. There's a lot of confidence in those data, just again, given the size and the timing of those effects with psoriasis.
You chose not to move forward with psoriasis. You're moving forward with AD.
I think the oral space in psoriasis is a little better worked out. Otezla is a great example.
It's a competitive issue more than the.
It's a competitive issue. You know, I think in psoriasis, we're looking at PASI 90 scores, PASI 100 scores, almost cures that disease. Not the case in atopic dermatitis.
Right. Right.
For sure.
The Marcet's more open.
We ran a trial in asthma. We ran a trial in COVID. You know, every study seemed to suggest some activity that probably exceeded what you might expect to see with placebo.
Did you run it in asthma? Were you thinking of moving forward in asthma? Like, just because that's a big Marcet too.
Easy proof of concept because you could challenge patients.
Yeah.
You can do the bronchial challenge, and their airways constrict, and you see how well your drug works. I think it's sort of similar to psoriasis, tough Marcet to break into.
AD's the better.
Right.
Strategic way to go.
For sure.
Okay. Okay. All right. So that's basically the 248. We're moving forward with that. Talk about some of the other INDs that you're talking about, you know, basically putting forward in the next year.
Yeah. We covered retina. We covered skin. As I mentioned, RASP are precursors to fat. In fact, to make triglycerides, you need a fatty aldehyde, which is a form of RASP. We kept seeing in all these studies we talked about, psoriasis was one a good example. Triglycerides went down in patients. Now, these are patients with normal triglyceride levels, in theory. In every trial, phase one included, we kept seeing reductions in triglycerides. We saw normalization of the lipid profiles of these patients. It is because to make bad actors on the fat side, you need RASP. If we are sequestering RASP, it might be interesting. We ran the classic sort of diet-induced obesity model in animals. We used novel RASP sequestering agents that seem to be positive. You may hear from us later this year on the metabolism side.
We call it metabolic inflammation. I think metabolism and inflammation are merging.
Wow.
Yes.
Metabolism seems to be a little hot right now.
Yes. Yes, for sure.
Just say the word obesity, your stock will go up probably.
Right. There are all kinds of challenges with obesity, right? You have substance abuse. You have joint pain. You have, you know, all kinds of peripheral metabolic issues, muscle mass loss that GLP-1s may or may not fix. Those kinds of areas are something we're thinking about carefully in terms of.
There's some proof of concept for is it can I use the word obesity? Like what?
For sure. I mean, you know, we're good at making fat mice a little less fat, for sure, especially in combination with GLP-1s. There is some sort of synergy there metabolically that we're working out. I don't think you'll see us go into obesity per se, certainly not as a single agent. You might see us go into a situation where patients have liver inflammation, or they have joint pain, or some other sort of inflammatory process in conjunction with obesity, which obviously is very common.
Right. Right. Right. Interesting. Have we missed any of the programs? I'm just trying to think through.
Those are the ones. You know, we've got two shots on goal in retina. We've got atopic dermatitis for skin. And 629 is still in clinical testing for what we're calling alcoholic hepatitis.
Oh, right. I forgot.
You know, over time, we'll get that trial enrolled.
Is that just taking a hard time to enroll?
It is. Yeah. It's a classic alcoholic hepatitis kind of thing. You know, it's difficult to get patients to come to grips with alcoholism to begin with. Secondly, to show up every other week and get tested and poked and prodded. Those are kinds of challenges you see with any alcoholic abuse trial. We'll get there. I think the data will, in theory, turn out the same way every other trial has with 629, which is we have glimmers of effect, and that'll add on to our metabolic inflammation story as we move down the road.
Okay. All right. Okay. Let's just come back and conclude with how the year is going to progress. Number one, reproxalap is going to get approved on April the 2nd, which is the plan.
Fingers crossed.
If that happens, AbbVie presumably sends a check for how much again?
If it gets approved, $194 million.
194 million.
Yes.
Period. If it gets approved, there's no.
Correct.
We should expect, I mean, there's no like, we can do it if we want to.
That's right. I mean, I think AbbVie will do it. I mean, I don't know. I can't speak for AbbVie, but they're.
They don't have to.
They don't have to.
It's still an option.
You know, iCare is still one of their five therapeutic programs.
Yeah. No, I mean, I don't know why they'd start down the path. They got an approved drug. Why they wouldn't.
Right. Right. They've been quite active on the pre-commercial side. I'm.
Drug gets approved. They send you $194 million. Great. Okay. And then just to be clear, we're going to spend 40% of the whole program.
Right.
To kind of come back to that because that was a little confusing just before.
Yeah. So how much is that, right? So, you know, typically in the dry eye space these days, it's about three years to profitability.
Uh-huh.
On average.
Yeah. That makes sense.
You know, this is not the days of Restasis where there's no other drug. You're not going to blow it out in terms of the launch. I think it would be a thoughtful, strategic launch. We actually do have a cap. Aldeyra has a cap on expenses.
At what?
Every year. Not disclosed, but very reasonable, far less than our upfronts.
Uh-huh.
It's not like there's a big pharmaceutical company that can spend us into the ground.
Right.
Where we run out of money funding that 40%.
Yeah. I was saying, if they decide, okay, we need to spend $150 million to launch the drug, just to throw a number out there, you're putting up 40% of that.
40% of that up to the cap.
Up to the cap.
Up to the annual cap. Beyond that, the amount is deferred against profit.
Right.
It's a very tenable situation.
Right. Presumably in year three, you're, you know, you're making money.
Right.
Okay. With the product or year four, whatever it is. That's when the profits start to come back at 40%.
Exactly. Yep.
It's basically the plan.
Yep. Yep.
Okay.
I think with the kind of money, sure, some of the money we get upfront will be used for that 40%. I think we'll put a lot of that into.
The cash position today is what?
100 million.
100 million.
As of the end of the year, we announced into 2027. That is if we do everything, all the skin, liver, and retina programs.
Right.
You know, I think we can be thoughtful. We have a very tunable company. We have eight people.
Yeah.
We have.
But it's.
Programs we can turn on and off.
It sounds like the focus, though, is 629 and AD, right? That's one that you've made a decision.
248 and AD, yes.
I'm sorry. 248. 248 and AD. That's like, okay, we're moving forward with that.
Yep.
The lymphoma product and the RP.
RP is a yes.
RP is a yes.
Lymphoma is TBD.
Okay.
Depending on the FDA.
FDA.
You know, we have the 629 trial in hepatitis. Beyond that, maybe metabolic inflammation.
Right. Right. Which, okay.
Probably pending some of this money coming in.
Right. Exactly. It'll feel a lot better.
That's the right question to ask.
Exactly. Okay.
Good.
Excellent. Great. Thank you for being here.
All right. Thank you.
Enjoyed the conversation.
Good.
Good luck.
All right.
Looking forward to that check.
Right. You and me both. Good. Thanks for attending.