Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Aldeyra Therapeutics regulatory update and conference call. At this time, all participants are in a listen-only mode. After the speakers' presentations, there will be a question-and-answer session. I would now like to hand the call over to Laura Nichols, Head of Investor Relations. Laura, please go ahead.
Thank you, and good morning, everyone. With me today is Dr. Todd Brady, President and Chief Executive Officer of Aldeyra. Today, on September 29th, we issued a press release announcing the intent to submit a formal dispute resolution request, or FDRR, for reproxalap for the treatment of the signs and symptoms of dry eye disease. A copy of the press release is available on the Investor and Media section of our website, www.aldeyra.com. Turning to slide two. This presentation and various remarks which may be made during this presentation contain forward-looking statements regarding Aldeyra, its investigational drug candidate, reproxalap, and its plans, expectations and opportunities, including the FDRR.
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 performance or achievements expressed or implied by the forward-looking statement. These statements are based upon the information available to Aldeyra today , and reflect Aldeyra's current views with respect to the future events, and are based on assumptions and subject to risks and uncertainties, including the development in clinical and regulatory plans or expectations for Aldeyra's investigational drugs, including reproxalap. There are risks that result from earlier clinical trials that may not be indicative of results of ongoing or future trials. 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 operational 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 three and introduce Dr. Brady.
Thank you, Laura. Before I discuss our decision to submit the formal dispute resolution request, or FDRR, for reproxalap for the treatment of dry eye disease, I want to begin with a bit of background. As many of you know, in November of 2022, we submitted the first new drug application, or NDA, for reproxalap for the treatment of the signs and symptoms of dry eye disease. The NDA was supported by six adequate, well-controlled clinical trials that, in our opinion, demonstrated the activity of reproxalap in improving not only the symptoms of dry eye disease, but also two signs of dry eye disease. That is Schirmer test, which is a measure of tear production, and ocular redness. In November of 2023, the FDA issued a complete response letter stating that an additional symptom trial was recommended.
As part of a comprehensive strategy that was designed to account for disease heterogeneity and potential differences in clinical sites and environment, Aldeyra initiated three clinical trials assessing dry eye disease symptoms. A six-week field trial and two trials that were performed in dry eye chambers per draft FDA dry eye disease guidance. In August 2024, Aldeyra announced the achievement primary endpoint of the first dry eye chamber trial, reproxalap, and the NDA was resubmitted in October 2024. At the time of the NDA resubmission, results from the other two symptom trials were not yet available. On April 2nd, 2025, we received a complete response letter notification from the FDA again stating that an additional symptom trial was recommended. The two ongoing symptom trials were subsequently completed.
One trial, a dry eye chamber trial that simulates a moderate to severe dry eye disease exacerbation, requires therapy in a low humidity-controlled environment, was statistically significant. Whereas one trial, a so-called field trial, where patients administer treatment over weeks, whether or not the patients feel the drug was needed to control symptoms, was numerically supportive but not statistically significant. Following discussion with the FDA, during which agreement was reached to submit only the positive chamber trial, the NDA was resubmitted on June 16th, 2025. Following initiation of label negotiations and approximately four days before the target Prescription Drug User Fee Act, or PDUFA, date of December 16th, 2025, the FDA requested submission of the field trial, which was considered a major amendment and triggered a three-month PDUFA delay. On March 16th, 2026, following reinitiation of label negotiations, we received a complete response letter.
The letter did not recommend more trials, but stated, quote, "That the totality of evidence from the completed clinical trials does not support the effectiveness of the product," end quote, and recommended that the reasons for failure in certain trials be explored and that the populations or certain conditions in which reproxalap may be effective be identified. No manufacturing or safety issues were identified in any of the complete response letters. On June 10th, 2026, Aldeyra met with the Division of Ophthalmology and the Office of Specialty Medicine at an end of review Type A meeting, and again on September 25th, 2026, at a Type D meeting to present arguments supportive of the totality of evidence. Based on the outcome of those meetings, Aldeyra intends to submit an FDRR to the Office of New Drugs or OND.
As is summarized on slide four, the FDRR process is subject to PDUFA goals. FDRR guidance states that a meeting requested as part of the FDRR should be treated as a Type A meeting and held within 30 days after the submission of the FDRR. The decision on the FDRR should be made by the deciding official within 30 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 or the discussion occurs. Based on such timelines, Aldeyra expects to meet with the OND in the fourth quarter of 2026.
Overall, the timing of the OND FDRR decision will depend on a number of factors, including whether the deciding official requests 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 FDRR decision, the NDA must be resubmitted with the additional information, if any, required by the decision. We are aware of two FDRRs 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 one FDRR is awaiting an advisory panel.
As presented on slide five, we have submitted a variety of adequate and well-controlled clinical trials that, in our opinion, demonstrate the effectiveness of reproxalap in improving the symptoms of dry eye disease, as well as improving two different signs of dry eye disease, including tear production as measured by Schirmer test and ocular redness. The results, which to our knowledge comprise the largest and most comprehensive package of clinical trials ever submitted in a dry eye disease NDA, 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 are chamber trials, which are designed to account for dry eye disease exacerbations, which could be the most relevant aspect of the disease to patients in that most patients are more interested in their bad days than their 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. Having had access to the three FDA NDA reviews, slide six summarizes our abbreviated interpretation of the FDA's conclusions in contrast to our interpretations of the conclusions of the results for each submitted trial. Overall, the FDA appears to consider five of the nine trials as so-called failed trials, while noting that four 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. Thus, we believe there are multiple paths by which the FDA could approve reproxalap. First, we believe we meet the recommendations in the FDA draft dry eye guidance for, among other things, either two positive trials for Schirmer response or two positive trials for symptoms and two positive trials for signs. 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 one adequate and well-controlled trial with confirmatory evidence. Further, we are aware of at least one appeal determination, not in ophthalmology, that disfavored a trial counting approach in favor of meta-analyses and more holistic assessments when evaluating the totality of evidence.
Slide seven 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, quote, "Clinical trials for the treatment of dry eyes, even with known effective therapies, can fail to demonstrate efficacy." End quote. 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 occurs. Additionally, for individual dry eye 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 two variabilities in dry eye trials suggest that single-site, single-day trials, such as dry eye chamber trials 027, 030, and 032, may more effectively discern treatment effect than longer and larger field trials that suffer from uncontrollable factors that may obscure or eliminate treatment effect. Slide seven also highlights the need for new drugs for the treatment of dry eye disease. Five of the eight approved drugs present only Schirmer test data in the label. The Schirmer 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.
Six of the approved dry eye disease therapeutics are not novel drugs, and three of which are cyclosporine. Two of the approved drugs contain PFAS or so-called forever chemicals. One can only be used for two weeks due to toxicity. One is available as an artificial tear in certain countries outside the U.S. And two approved dry eye disease therapies contain only post-hoc data in the drug label. No dry eye disease drug approved for chronic use has demonstrated improvement in redness. Perhaps most importantly, there is no approved dry eye disease drug that presents activity in a dry eye chamber, which as I have 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 eight presents the basis for the market opportunity for reproxalap in 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 nine, we reported $45.1 million in cash equivalents, and marketable securities as of June 30th, 2026. 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 reproxalap, 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 and retinitis pigmentosa. 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. With that operator, I'd now like to open the call for questions.
Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Now please stand by while we compile the Q&A roster. Your first question comes from the line of Catherine Novack with JonesTrading. Your line is open. Please go ahead.
Hi. Morning. Thanks for taking my questions. Just overall, I know that FDA has not requested any additional trials, so what do you anticipate will really be the part that is appealed? Are you appealing the analysis of the trial? Are you asking for them to do a meta-analysis of the efficacy? Really kind of walk me through what specifically is going to be appealed and whether you anticipate additional trials.
Right. [crosstalk].
What additional trials may be requested as part of it?
Good morning, Catherine, and thanks for your question and thanks for your many interesting notes over the past 12 months or so about this process. The FDRR 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. Specifically in our case, the latest complete response letter did not specify further trials, which as you point out is unique. It did note that in the FDA's opinion, the totality of evidence didn't favor reproxalap. So specifically, the appeal is about the totality. 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.
Your point about what will the Office of New Drugs do with this appeal is interesting. What's the remedy? What's the solution? I think there are really two flavors. One is some sort of additional analysis, which includes pooling data, meta-analyses, or other sort of assessments of the data, including a recounting of the positive versus negative trial. The other flavor is more trials, more clinical trials. In this case though, it's difficult for us to imagine what an additional trial against the backdrop of nine completed trials or an additional two trials against the backdrop of nine completed trials would add to the package.
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 two in addition would add to what we've already submitted.
Got it. I have to ask, what has been AbbVie's comments on this as it progresses? Any input from them? What has been the most recent interaction?
Well, you will have to ask AbbVie directly what they think about all this. I can tell you that per the terms of the option agreement, which has been disclosed, AbbVie has the right to review incoming and outgoing FDA correspondence and the right to sit in on meetings. The only thing I will say is that they have exercised said right, and from our perspective, remain involved in the clinical and regulatory processes that we have described today.
Great. Thanks, Todd.
Thanks, Catherine.
Your next question comes from the line of Amin Makarem with Jefferies. Your line is open. Please go ahead.
Hi. Thanks for taking my questions. Couple of questions here. First, following the Type A meeting, the plan was to hold a Type D meeting to discuss a potential NDA resubmission. What did you learn at the Type D meeting that you didn't already know following the Type A meeting you had before? Has FDA given you any reason to believe the FDRR will require some sort of an expert consultation or advisory committee? Or is it your current base case is that OND can decide the appeal within the standard review timeline?
Right. Good morning, Amin, and thanks for your question. One question is, what did we learn in the Type D meeting that we didn't already know in the Type A meeting? The next question is the need for internal or external review on the part of OND. 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 D meeting. A Type D is, for those of you that aren't familiar with Type Ds, an abbreviated Type C. 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 meetings, which require some period of time to hold. You can ask as many questions.
A Type D is a mini- Type C, which is direct questions, two or three questions. I think you only get to consult with one or two different groups within the division. Obviously, after the Type A, we felt like there was more clarification that was needed. 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 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 at the Type D 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 is well-characterized. There are eight approved products in the condition. We do not 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 two appeals in ophthalmology that we are 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 three months or four months to put together.
However, that is for an indication for which there are no approved drugs. So, I think our situation here in dry eye disease relative to an advisory panel is different.
Helpful. Thanks.
Thanks, Amin.
Just a reminder, if you would like to ask a question, please press star one on your telephone keypad now to raise your hand. Your next question comes from the line of Matthew Caufield with H.C. Wainwright. Your line is open. Please go ahead.
Hi. Great. Thank you. Good morning, Todd. Thanks for the strategic update this morning. Does the planned FDRR submission include formal explanation for the agency on thoughts of why the field trial had failed, for example? Do you feel that type of explanation component has been addressed with the agency from your prior conversations, or is that still kind of an open item?
Yes. Good morning, Matt. For sure. The reasons why certain trials may not have worked are included in the appeal. They were also included in the Type A and Type D discussions. Those reasons, in particular, the ones that I attempted to outline in my prepared comments today. Dry eye disease is sort of like depression. Both conditions relate to the brain. The optic nerve comes right out of the brain. The eye is the only extension of the brain you can observe directly. So there is a, as we like to say, central component to dry eye disease, which means that a lot of trials are just going to fail. There are simply too many uncontrollable factors that come into play, particularly when assessing symptoms of the disease. I mentioned today the environmental variability.
Obviously, humidity affects dry eye, temperature, wind, particulate matter, a bunch of other factors that we simply can't control. What's most interesting, as the trials get bigger and more clinical sites, which are geographically dispersed, are enrolled, all of that variability gets averaged, and it's difficult to discern a treatment effect. Of most interest to us are therefore single-site trials where there is no geographic variability. The other thing I would say is how you feel in dry eye depends on how you slept, what happened to you the day prior, and there's this day-to-day variability of the disease, which means that to eliminate that sort of variability, you need single day trials. As I mentioned, and as you know, Matt, my prepared comments, we had three trials that were single site, single day, in controlled environments.
That really takes out, I think, a lot of the variability that we see in the disease. At any rate, this sort of discussion, you can bet, is included in the appeal.
Excellent. Thank you. Appreciate it.
Yeah. Thanks, Matt.
Your next question comes from the line of Yale Jen with Laidlaw & Company. Your line is open. Please go ahead.
Good morning, thanks for taking the question, Todd. My question is that in addition to the two precedents you mentioned just a moment ago, do you envision any other sort of scenarios? Overall, how would you assess that at this moment, even before you request a meeting? Thanks.
Yeah, I think in response to Catherine's question, I mentioned two flavors of the outcome. I guess there's another flavor, which is appeal granted. Appeal granted is rare. Often the deciding officials don't always agree entirely with the sponsor, but then said deciding official doesn't also agree necessarily with the reviewing division. What happens in those cases is often sort of an interim decision, which is an appeal denied, but please provide said analysis. So, of the two flavors of that, one is an analytical remedy, along the lines of what I've discussed previously. Another is a clinical trial remedy. But as I said about clinical trials, it's just difficult for us, I've talked to many investors about this over the past several months. It's difficult for investors to imagine as well, what kind of trials would we need to do?
What more data would we need to generate? If we ran more trials, what would be the threshold for success and aggregate of the new trials and so forth and so on? I think the division's perspective in writing the last complete response letter was, we have enough trials. Let's work together to make a decision. Obviously, we couldn't do that with the division, the reviewing office alone, and we think the best course of action at this point is a fresh perspective on the application.
Okay, great. Thanks a lot. Appreciate that.
Thank you, Yale.
There are no further questions at this time, so I will turn the call back to Dr. Todd Brady for closing remarks.
Thank you, operator, and thank you all for joining us again this morning. We, as always, appreciate your time, interest in Aldeyra, and we look forward to updating you on future developments.
This concludes today's call. Thank you all for attending. You may now disconnect.