Aldeyra CEO Todd Brady Explains Why He Thinks Company Can Have 'Dramatic' Impact In Healthcare

Aldeyra Therapeutics Inc ALDX is a small-cap biotech company that specializes in the development of drugs to treat immune and inflammatory diseases. Aldeyra’s most advanced drug is an eye drop treatment for Sjogren-Larsson Syndrome. Benzinga sat down with Aldeyra CEO Todd Brady to chat about the company’s outlook and what investors should expect going forward.

Benzinga: Congratulations on the phase 2 study. The market looked like they really liked what they saw. The PR mentioned the ocular itching and tearing as the primary endpoints that you guys blew out of the water. How the redness endpoint was compared to the placebo?

Todd Brady: Both drug and vehicle work to reduce redness. Redness is a particularly difficult endpoint to hit in this particular model, where patients are challenged with allergens. In fact, there may be some data out there, but I haven't seen any recently of a drug that's been able to reduce redness in a significant way in this model. So, we're not terribly concerned about that at this point.

Gotcha. The other thing I saw from the PR was that two patients actually dropped out of the trial during treatment. I was wondering if you could possibly comment on that. Was it something to do with the trial? Or was it personal reasons? Or something else?

No, the drug group had a higher rate than the vehicle group of stinging. And while all of it was transient, and the vast majority of it was very mild, there were two patients that dropped out of the drug arm because of stinging. But, as we said on the call yesterday, stinging is part of allergic conjunctivitis...the fact that drugs in these patients induced stinging is certainly very common.

Phase 2 clinical data was expected for anterior uveitis treatment in Q2. Is there any update on when you might be able to give an exact date? Or is that something that you're not able to provide at this time?

It's always hard to predict exactly when these trials will read out, just, given the complexities of them. In this case, there's three arms to the trial and many different endpoints that are being examined. So, it's difficult to say precisely, but I think we feel very comfortable with next quarter, we'll be able to present data.

Are there any other diseases where your NS2 technology can trap aldehydes and provide treatment? Is there any other inflammatory diseases where this could, down the road in the future, possibly come into effect?

Well, we have, really, two lines of business. One is inflammation. And one is genetic mutations where patients aren't able to metabolize aldehydes. Allergic conjunctivitis and uveitis are examples of inflammation. Sjogren-Larsson Syndrome, and there's another disease that you can find on our website called succinic semialdehyde dehydrogenase deficiency, SSADH for short.

These are rare diseases where patients have genetic mutations that really prohibit or prevent them from being able to metabolize a certain aldehyde. But that's quite different from inflammation.
And I think the beauty of [last month’s] results in allergic conjunctivitis is that we now know that NS2 is active in a human model of inflammation. For the first time ever, we've demonstrated that aldehyde trapping is a novel anti-inflammatory in human disease. So, I think there's lots of diseases where inflammation plays a role. In fact, some people argue, most diseases have an inflammatory component.
Where we go next, we'll certainly stay in the eye, for sure. Allergic conjunctivitis is one, uveitis is another. But there are many inflammatory diseases in the eye. Scleritis, cyclitis, occular rosacea, just to name a few, blepharitis, dry eye even has an inflammatory component. So, I think there's lots to do there. And as I said yesterday, I think there's lots to do outside the eye as well in other forms of inflammation.

Sounds like it's one step at a time. You guys are really trying to focusing on this first, and maybe branch off later. But, coming off that, you mentioned this is a new treatment, a new therapy. Do you guys see, possibly, obtaining a breakthrough therapy designation based off of this? Also, going off of Sjorgen-Larsson Syndrome, do you see orphan designation possibly being in the works by the FDA?

Yes. For the rare disease, such as anterior uveitis and Sjogren-Larsson Syndrome, we would certainly content to file for orphan designation. Because this is a novel mechanism, because it has the potential to reduce inflammation in a way that has never before been demonstrated, and because one might be able to add these approaches to known approaches, I think breakthrough designation is something that we're strongly considering.

Would you feel confident the FDA would grant these designations to you? Or is it tough to speculate on that sort of decision?

Well, I don't want to speculate on the FDA, but I will say that we are not aware of any similar approach, nor have we been aware of any similar approach. I think that aldehydes are a novel target. We believe that our molecules represent the only aldehyde traps that are out there. So, in terms of novelty and a different kind of mechanism that could have dramatic impact on health care, I can attest to those two things.

Transitioning to financing and financial health of the company, how's the cash burn to the company right now and over the next 6-12 months? Is there anything that would be needed in terms of debt financing or an offering?

Well, what we're going to do in the next quarter when the uveitis results read out is, we're going to issue new guidance on our next steps in terms of clinical development, where we're hoping to...capitalize on the data. That will, of course, determine our use of proceeds going forward, and our cash burn, and our requirement for new financing.
So, I think that, for certain, at some point in the near future, pending success of these clinical trials, we'll need to raise additional capital to take the next clinical step. But, in the meantime, we're not able to issue specific guidance in that way until we read out the next trial next quarter.

Let's say I was a potential investor in Aldeyra. What catalyst should I be really excited about for the company? A quick 30-60 second sell on why I should invest in Aldeyra?

Well, our argument always has been that this is a new approach, and it's a new approach that has the capacity to, I think, dramatically impact the way we understand disease and treat disease.
And there aren't too many companies out there who can, I think, legitimately make that claim...Allergic conjunctivitis and noninfectious anterior uveitis and Sjogren Larsson Syndrome, and there are others that we'll test, which we have the capacity to do without raising any additional capital.
We've already disclosed that we have cash through, or at least well into, next year. So, I think we're well-positioned mechanistically and technologically, and we're also well-positioned from a cash standpoint...I think the combination of all those things really increases the odds that our company will be able to make a dramatic impact in healthcare.