Aldeyra Therapeutics (NASDAQ: ALDX) stock is down 66%. The fall in ALDX stock comes as the FDA tells them they’re going to have to do more clinical testing to prove the efficacy of their proposed eye treatment. Which is fair enough in one sense, we know that the FDA does insist upon both safety and efficacy before drug approval. Perhaps it shouldn’t but that’s another matter, it does. However, what’s worrying here is that this is the second time recently that Aldeyra seems to have misread the room at the FDA. Given that the FDA is the be all and end all of the pharma development process this is worrying. And this might also explain why ALDX currently has a market capitalisation below the cash value.
The basic idea at Aldeyra: “Aldeyra Therapeutics, Inc., a biotechnology company, develops and commercializes medicines for immune-mediated diseases. Its lead product candidate is reproxalap, a reactive aldehyde species (RASP)modulator, which is in Phase III clinical trial for the treatment of dry eye diseases. The company also develops ADX-629, an orally administered RASP modulator for treatment of COVID-19, atopic asthma, psoriasis, and alcohol intoxication; and ADX-2191, a dihydrofolate reductase inhibitor for the treatment primary vitreoretinal lymphoma cancer,” and so on.
That last ran into FDA problems: “Although no safety or manufacturing issues with ADX-2191 were identified, the FDA stated that there was a "lack of substantial evidence of effectiveness" due to "a lack of adequate and well-controlled investigations" in the literature-based NDA submission. Based on prior discussions with the FDA, Aldeyra did not conduct any clinical trials of ADX-2191 in PVRL.” So, a fatal cancer, no real treatment options, Aldeyra thought the FDA would be OK with a literature search not clinical testing. The FDA wasn’t OK with that - that’s misreading the FDA. Not a good thing.
Aldeyra Therapeutics stock price from Google Finance
Then there’s this latest issue: “the FDA has not directly opined on the sufficiency of the information submitted, has no legal obligation to review the information submitted by Aldeyra, and has indicated that Aldeyra needs to conduct an additional clinical trial to satisfy efficacy requirements. As such, based on the time remaining in the NDA review cycle, the FDA may not be in the position to approve the NDA for reproxalap on or about the Prescription Drug User Fee Act (“PDUFA”) target action date of November 23, 2023 or afterwards, and it may issue a Complete Response Letter and require that Aldeyra conduct additional clinical trials and submit the results of those clinical trials before the application will be reconsidered.” The expectation was that the information currently provided would lead to approval, or at least a pathway to it without further clinical testing. That turns out not to be the case.
Again, Aldeyra seems to have been misunderstanding the FDA. Which, given the importance of the FDA seems like a significant error. Note that none of this is, at all, about whether the drugs actually work or not. Aldeyra’s also well supplied with cash. They just don’t seem to be getting what the FDA is telling, or indicating to, them quite right.
