Q2 2020 Aldeyra Therapeutics Inc Earnings Call

Aldeyra Therapeutics second quarter 2020 financial results conference call at this time, all participants are in a listen only mode. After the speaker's remarks, there will be a question and answer session.

Good question. During this session you wouldn't it's a press star one on your telephone if you would like to withdraw your question press the pound key.

Please be advised that todays conference is being recorded.

Require further assistance. Please press star Zero I would now like to introduce the company's Chief Financial Officer, Mr., Josh Reading Mr., Josh We're reading. Thank you you may begin.

Thank you and good morning, everyone on the call with me are Dr. Cod Brady out there as president and Chief Executive Officer, and David Mcmahon, Our Chief commercial officer.

Dr. Brady will begin with an overview of our recent highlights and upcoming clinical milestones.

I will discuss our second quarter financial results and then we'll take your question.

Please note that this morning's conference call contain forward looking statements regarding future events and the future performance of out there.

Forward looking statements include statements regarding the timing of planned clinical trial initiation out there as possible or assumed future results of operation expenses and financial position.

Business strategies and plan.

Research development and commercial plans or expectation.

Trend market sizing competitive position industry environment and potential growth opportunities among other things.

These statements are based upon the information available to the company today.

As a result of the cobot 19 pandemic.

Clinical site availability staffing and patient recruitment had been negatively affected and the timeline to complete our clinical trials may be delayed.

Oh Dear 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 statement.

During the current and potential future impact of the Cobot 19 pandemic on our business 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 and the company's press release issued this morning containing financial results for the quarter ended June 30, Twentytwenty and the company's filings with the FCC.

And with that I'll turn the call over to Dr., Todd Brady, our president and Chief Executive Officer.

Thank you Josh one good morning, everyone.

As our industry and health care first responders continue working together to defeat the worst public health crisis in a century.

Our thoughts or with those affected by Corbett 19.

The seemingly relentless spread of the novel Corona virus has made twentytwenty, a tragic and surreal year.

But we remain hopeful and confident in the abilities of our industry to develop the therapies necessary to extinguish this variant disease.

I again want to especially think our team for their work and dedication to our mission developing first in class medicines to approve the lives of patients with immunological diseases, whose condition.

Or not being adequately treated by the current standard of care.

From our perspective, the key pipeline development of the second quarter was our type C meeting with the FDA.

Which charted the remaining clinical pathway to an end da submission for topical ocular approx.

And dry eye disease.

The meeting culminated in an agreement to use levels have reacted aldehydes species or Ross the therapeutic target for approximate <unk> as an objective sign endpoint for subsequent clinical evaluation.

In the fourth quarter. This year, we plan to initiate clinical testing to assess the activity of topical ocular fox lap in reducing tier levels of Ross.

Another objective signs of dry eye disease, and we expect preliminary results by the end of the year.

The timing of the clinical trial is of course subject to Finalization of trial design rapid assay development and potential disruptions due to covert 19.

[noise] initiation of a safety study and dry eye disease patients who is also plan for the fourth quarter and indeed submission is expected by the end of 2021.

Our optimism for the use of Ross as an objective sign of dry disease is supported by data from our successful phase two eight trial.

And would approximate treatment diminish levels of Ras tier rasp and tiers as measured by a life following 28 days of treatment.

For the upcoming RASK trials, the longest duration of dosing under consideration is also 28 days, whereas the shortest dosing duration.

Is one to two days.

Additionally, the upcoming Ras trials will include a chamber assessment to measure the effective acute changes in dryness on Ross.

And other signs and symptoms of dry eye disease.

We'll be sharing additional details of the protocol following rapid assay validation FDA requirement and look forward to providing trial design shortly.

From a safety perspective topical ocular Approx lab already has been evaluated in more than 1000 patients.

With no observed safety concerns.

In short the safety consistency and clinically significant activity of Approx up across numerous clinical trials.

Suggests that Refracs left could be an important addition to the limited number of therapeutic options for dry eye disease.

Which affects more than 30 million patients and the United States.

Looking at other Okcular programs in our pipeline topline results from the phase three Invigorates Allergan Chamber trial of Approx lapping allergic conjunctivitis are expected in the first half of 2021.

And the retinal disease area and the second quarter of this year. The European Commission granted orphan medicinal product designation to Adx 21, 91 for the treatment of retinal detachment opening a new market opportunity for Adx 21, 91 in the European Union as drugs, receiving the orphan medicinal product designation.

Are eligible to protocol assistance research funding and upon approval 10 years, but you market exclusivity.

Adx 21, not 21 91, our novel and proprietary Intravitreal methotrexate injection is being evaluated into phase three guard trial for proliferative Vitreoretinal sympathy.

PVR is a rare, but sight threatening condition and a leading cause of failure retinal detachment surgery.

Acting roughly 4000 patients per year in the United States, a nearly twice as many in Europe and Japan combined.

Given the nature of PVR and given the clinical site delays caused by Cobot 19. The progress of guard has been slow although we expect to provide you with an update by the end of this year.

As many of you know there is no approved therapy for PVR and Adx 21, 91 has received orphan drug and fast track designation.

From the FDA.

Adx 21, 91 is also the subject of our new clinical program in primary Vitreoretinal lymphoma, or PVR L. A rare aggressive high grade cancer that affects approximately 2900 people in the United States.

With about 600, new cases diagnosed annually.

There are no approved treatments for the disease, although the standard of care is pharmacy compounded methotrexate that has been injected into the high.

We have recently filed for orphan drug designation for Adx 21, 91 NPV RL.

Turning to our systemic disease programs, we're very excited about Adx 20, Adx six to nine which to our knowledge is the first systemically available RAF inhibitor.

The clinical testing of which represents the first time systemic rasp and ambition has been assess clinically.

Marking an exciting new milestone in the development of this novel mechanism of action.

And I and de has been filed with the FDA for phase two clinical testing of Adx six to nine.

In patients with covert 19 in order to prevent cytokine release syndrome, and respiratory compromise clinical development is expected to begin this year.

In an animal model, a cytokine storm adx six to nine demonstrated a broad and highly statistically significant reduction in cytokine levels, including TNF Alpha interferon gamma and I'll 17, well up regulating the key anti inflammatory cytokine aisle 10.

The data suggests that rasp inhibitors have the potential to represent immunological switches, which may modulator immune systems from pro inflammatory states to anti inflammatory states.

And the fourth quarter of this year. We also expect to initiate clinical trials of Adx six to nine in psoriasis and auto immune disease.

And a topic asthma and allergic disease.

In combination trials, and cobot 19, psoriasis and asthma cover the gamut of inflammation and the results of the trials will characterize the immune modulating activity of Adx six to nine and rasp inhibition more generally.

Switching to Adx 16, 12, our novel Hsp 90 inhibitor.

Enrollment has been completed in the investigator sponsored phase two you'd Oreo trial and ovarian cancer.

Regarding the Adx 16, 12, covert 19 program consistent with the FDA feedback additional preclinical anti viral testing they'd xsixteen 12 against Sars koby to the virus that causes covert 19 will be performed by the National Institute of allergy and infectious diseases.

Which has accepted our request to evaluate Adx 16, 12 and in vivo models.

We plan to update on the Adx 16, 12 Cobot program.

By the end of 2020.

We approach the midpoint of the third quarter in a strong financial position.

Enhancing our flexibility with recent common stock sales to to healthcare focused funds perceptive advisors and the affinity partners.

These transactions raised gross proceeds of approximately 19.5 million completing our previously announced at the market offering program.

We expect our cash runway to be sufficient to fund operations through Twentytwenty too.

Including potential refracs lap approvals in dry eye disease and allergic conjunctivitis.

Now with that I'd like to turn the call back over to Josh for the financial review.

Thanks, Todd for the quarter ended June 30, Twentytwenty, we reported a net loss of $7.5 million compared with a net loss of $13.3 million for the quarter ended June 32019.

Net loss per share with 25 cents for the quarter ended June 30, Twentytwenty compared with 49 cents for the same period in 2019.

Losses have resulted from the cost of clinical trials and research and development program as well as from general and administrative expenses.

Research and development expenses were $4.9 million for the quarter ended June 30, twentytwenty compared with $10.7 million for the same period in 2019.

The decrease of $5.8 million is primarily related to a reduction.

Clinical and preclinical development manufacturing and personnel costs.

General and administrative expenses were $2.2 million for the quarter ended June 30, twentytwenty compared with $3.1 million for the same period in 2019.

The decrease of $900000 is due to lower personnel related costs, including stock based compensation and other miscellaneous administrative costs.

In the second quarter of 2020.

Total operating expenses were $7.1 million compared with total operating expenses of $13.7 million for the same period in 2019.

As of June 32020, cash cash equivalents.

Marketable securities were $66.2 million.

Subsequent to June 32020, $25.2 million and cash was received from at the market offering program sales to perceptive advisors, a video partners and other investors.

Based on current operating plants cash cash equivalents and marketable securities as of June 30, 2020, plus the additional at the market offering program proceeds are expected to be sufficient to fund operations through the end of twentytwenty to including potential anda approvals for product.

The lab and dry disease, and allergic conjunctivitis, assuming positive clinical trial results and plant and the a submission acceptances and approval.

Use of cash cash equivalents and marketable securities are also expected to include the continuation of part one of the Thethree Guard trial in PVR and phase two clinical testing of Adx six to nine an orally administered RAF inhibitor and inflammatory diseases.

Now I'll turn the call back to Todd for closing comments.

Thanks, Josh we had a number of milestones plan for the second half of 2020.

And look forward to executing on our clinical development strategy across our okcular and systemic programs.

Looking at our IR calendar next week, we'll be presenting at the BTI GE virtual Biotechnology conference.

And Wedbush pack grow virtual health care conference.

These events will be webcast. Please check the events and presentations section of our website for details.

We always look forward to meeting with investors and hope to connect with you that these or other upcoming events.

As always we remain committed to executing efficiently at our strategic plan and bring to market novel therapies that impute improved the lives of patients with serious unmet medical needs.

With that Josh, Dave and I will be happy to take your questions operator.

At this time, if he would like to ask a question. Please press Star then the number one on your telephone keypad that is star one to ask a question.

First question comes from the line.

With Cantor.

Hi, Thanks for taking my questions here. So first question I have for you can you get into more detail significant the ASCII AIDS recognition of grass.

The science or dry eye disease is and what that means for you in terms in terms of potential approval and market opportunity.

And then the second question I had for you is on your Koby trials, how adaptive are those trials in light of the constantly evolving landscape for the treatment of co badge and then how enrollment gone and then my last question here as you noted that there's been some headwinds to clinical trial progression due to Kobe can you give more color on which trials may be impacted here. Thank you.

Hi, good morning, Gleeson and thanks for your excellent questions.

We wrap development is a truly transformative for aldeyra.

Ross is the pharmaceutical target upon which the company was founded many years ago.

To our knowledge no company has ever therapeutically addressed Ross and yet Ross represent a very broad based anti inflammatory approach that probably applies to many many diseases not only ocular diseases, such as dry disease, but also assessed.

Diseases.

So for all those reasons we were thrilled.

About the FDA decision to classify Ross as an objective sign of dry eye disease, which as you know as an inflammatory.

Condition, what it means practically for the company is that the ongoing clinical trial. The clinical trials that are about to start regarding the assessment of rash should be.

Likely to work based on the fact that the mechanism offer proxy lap in our other Ras inhibitors is the direct inhibition of Ras These compounds buying Kobe lastly to Ross. So what we're really measuring is a chemical reaction.

In vivo and in this case in the a tier fluid of patients that have been administered.

Proxy lab.

In all that leads us to believe that will be in a position to file an NDA for dry disease next year as we have previously announced.

Regarding the co vid trial designs.

We anticipate for both programs enrolling approximately 30 patients I think they'll likely via two to one randomization drug to placebo at this point, we have not included adaptive designs I think the nature of the results of these first trials will.

Help us determine subsequent clinical testing, which is obviously going to be much more significant yes. There are positive results from the preliminary outputs that we have here.

Enrollment hasn't started the I, India has been filed for six to nine as I mentioned on the call. Today 16, 12 is the subject of further.

In vivo investigation.

And coded that is being performed by NIAD and we're absolutely thrilled about NIE adds decision to to test Adx 16, 12 on our behalf.

That could impact as you mentioned lease across the industry has been significant.

The one that trial in our case in our pipeline that has been affected.

By Covidien 19.

As the guard trial, the phase III guard trial for PVR.

What seemed to have happened during the peak of.

Covance cases back in March April may and so forth was that many patients simply were not coming into the hospital. Despite.

Vision changes despite losing sight.

The.

Number of patients coming in.

Was diminished during that timeframe and Furthermore, many clinical sites as you know simply did not have research staff, which were considered for a while to be non essential.

Such that it was a difficult if not impossible in some cases.

Two enrolled to enroll patients.

However, the good news is regarding the rest of the pipeline, we do not seem to be have benda vertically affected by coal that in terms of enrollment.

The dry eye program was largely under discussion with the FDA.

During the peak number of cases.

In the spring.

The allergy program to phase three allergy program.

Was on plan hold because of pollen as you know you cannot to enroll allergy programs with ambient Paul and and we expect to invigorate program to re initiate again and the fall. So we were quite fortunate in terms of timing with regard to our other clinical programs Louise.

Relative to the impact of of co of it.

Okay. Thank you.

As a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad that is star one to ask a question or next question comes from the line of Justin with Oppenheimer and company.

Hi, Good morning, guys. Thanks for taking the questions and congrats on the progress.

I know, it's early days, but as you think about establishing our product club action on roster the sign a dry eye. We've had some discussion with investors on what would be an appropriate duration of observation to assess its activity can you just talk a little bit about the rationale behind the acute versus four week time points from a trial perspective.

Disease perspective on labeling perspective.

Right good morning, Justin.

Good to hear from you.

The as I highlighted in my comments. This morning, the potential range of dosing duration for the rest trials is anywhere from one to two days on the acute and to 28 days on the more chronic or sub chronic end, which reflects the phase two trial that is the data in our corporate deck showing that out.

For 28 days of administration of approximate up there with a highly statistically significant reduction in RASK levels as measured by Eliza.

I want to spend a few seconds talking about the two different ways to measure Ras Ross exist in our body and to form so called free RAC better routes that are sort of floating around and then routes that are bound to pro teams.

The Lysa measures RASK found a protein and as you know a lives as an antibody mediated.

Detection assay the reason why we're able to generate antibodies.

Alan Raspy is that when Ras binding proteins Theyre antigen.

And form antibodies in some cases antibodies against self proteins. So the lies on measures bound RASK and found RASK generally accumulate over time, which is why in the phase two study over 28 days, we use the alive to assess RASK levels.

On the other into the spectrum.

Regarding one to two day or acute dosing for proxy lab, we think that techniques such as LCM mass mass spec might be more relevant to assessing ras because they're we'd be looking at free RASK levels that would change acutely.

Following dosing so somewhere within those two ranges of dosing paradigms and those two different assay techniques.

We will end up validating that precise technique and and.

And establishing protocol design.

For the first to the rest studies to begin shortly.

Okay, Great got it.

And maybe then.

How do you think about dosing regimens to the investigator in how you had conversations with the FDA.

Whether you'd have to do sort of Q I'd or be idea. You know just to appreciate that you would be tapering and sort of.

Disease state.

Eventually.

Right and that gets back to the first part of your question how might the clinical community perceive duration of dosing and dosing regimens.

First of all I think that.

Signs of diseases, including dry eye disease.

Our primarily or first and foremost regulatory milestones I do not believe it certainly in the case of dry eye disease that either physicians or patients.

Our particularly worried about signs patients do not wake up in the morning thinking I Wonder what my Schirmer test is I wonder what my corneal staining and so forth instead, we view signs and I think most patients and physicians you scientists regulatory.

Milestones so the dosing paradigm for trials associated purely with signs I think is a lot less important.

In this case for one to two doses.

Dave one to two day dosing paradigm, you're thinking of of limited number of doses for the 28 day dosing paradigm I would expect we would dose.

Q I'd, which is the first phase of our induction maintenance.

Dosing paradigm, which was established with the release of the phase three renewed trial.

Back in December.

At December.

In terms of how positions look at the dosing paradigm for approximately in general.

In terms of treating patients I think that the induction maintenance paradigm established with renew over 12 weeks.

Really sets the tone and more precisely the label for how the drug will be used and that is.

Q I'd dosing initially.

Followed by be I'd dosing for the meat space.

Okay Thats really helpful.

Maybe just a clarification question I know in the press release it says that.

Going to be a dry NDA filing.

By the end of next year is the current thinking still to continue on order with a concurrent falling just.

I know later, except that it is also going to call. Just wondering if the expectation is that you would expect them together still.

Our current thinking is that both will be filed together.

Pending positive clinical data of course.

It turns out that the timelines for dry eye disease, and allergic conjunctivitis continue to overlap.

The safety studies, the efficacy studies, the timeline for filing BMD and da all of those seem to overlap.

For dry eye and allergic conjunctivitis at this point.

I would suggest that a concurrent India is perhaps the best regulatory strategy, but of course will have to see how.

Events play out.

Over the latter part of this year in the early part of next year before we can guide specifically on the possibility of a concurrent and da we really do like that concurrent and be a paradigm. However, because of the overlap between dry eye disease and allergic conjunctivitis, there seems to be about a 50% of.

Overlap such that about half the patients with strategies complaint of ocular itching and about half the patients with allergic conjunctivitis complaint I'm trying to us and a single compound that could treat both diseases or is indicated for both diseases would be highly advantageous not only to to physicians, but also to patients as well.

Okay.

Right right that makes less sense.

Now let's continue just.

On the safety study is there an expectation for what the size and scope.

Duration, that's all comer patients you would anticipate for.

Right for dry eye disease.

My current understanding is that the FDA generally requires 100 patients complete one year of dosing.

However.

Based on.

Other risk other sponsors interactions with the agency, we believe that we can file based on six months.

Safety data.

So what happens is most sponsors will over enroll they'll begin with more than 100 patients such that they have 100 Completers ad.

At 12 months.

To our knowledge the.

The safety trials are.

Our fairly standard and dry eye disease.

I will say as you mentioned in my.

Prepared comments that we've tested.

Well over 1000 patients.

We have seen no safety signals.

No changes in intraocular pressure.

No retinal findings.

No aberrant corneal findings.

Or any other safety.

Signals that would suggest that there has been an issue with repriced slept dosing in any patient that's received drug so far.

Great. Thanks, again, and I'll hop back in Q.

Thanks, Jeff.

And there are no further questions at this time I will turn the call back over to Dr. Brady for closing remarks.

Well. Thank you all again for joining us today.

As always we look forward to keeping you updated on our progress.

Have a nice day. Thank you.

Thank you, ladies and gentlemen that does conclude todays conference call. Thank you for your participation and assets you. Please disconnect your lines.

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