Core Thesis - Aldeyra Therapeutics, Inc. (NASDAQ:ALDX) is viewed as a high-risk/high-reward investment opportunity, trading at a discount with a market cap of approximately $230 million and holding $133 million in cash and equivalents as of March 31st [1] Company Overview - Aldeyra is a clinical-stage biotechnology company focused on developing treatments for immune-mediated and metabolic diseases, particularly through reactive aldehyde species (RASP) modulators [2] - The lead product candidate, Reproxalap, targets chronic and acute symptoms of dry eye disease and allergic conjunctivitis, showing promising results in preclinical and clinical trials [2] Recent Developments - Following a significant drop in share price from $5.4 to $1.4 due to concerns over Reproxalap's new drug application (NDA), the stock has recovered to $3.86, attributed to proactive measures by Aldeyra and AbbVie [2] - Aldeyra plans to resubmit Reproxalap's NDA by Q4 2024, with a potential PDUFA date by Q2 2025, following the initiation of three parallel Phase 3 trials to address FDA concerns [2][5] Market Context - The global prevalence of dry eye disease was estimated at 29.5% in 2021, with a market size of approximately $5.2 billion in 2023 and a projected CAGR of 4.2% over the next six years [3] - Existing treatments like AbbVie's Restasis and Novartis' Xiidra have faced declining sales due to the emergence of biosimilars and slower mechanisms of action, creating an opportunity for faster-acting products like Reproxalap [3][4] Reproxalap Program Details - The ongoing Phase 3 trials include dry eye chamber trials and a field trial, designed to demonstrate Reproxalap's efficacy in a controlled environment [5][6] - If successful, Reproxalap could receive a label for treating acute symptoms of dry eye disease, with results expected by Q3 2024 [7] Financial Overview - Aldeyra's Q1 2024 financials indicate a healthy balance sheet, with a 44% reduction in operating expenses year-over-year and a net loss decrease of approximately 48% [15] - The company has a cash runway of about three years, allowing it to sustain operations until at least the potential PDUFA date for Reproxalap [15] Pipeline Beyond Reproxalap - Aldeyra's pipeline includes ADX-629, targeting alcoholic hepatitis and Sjögren-Larsson Syndrome, and ADX-2191, aimed at retinitis pigmentosa, both showing potential for significant revenue generation [9][10][13] - ADX-629 has demonstrated promising results in weight loss and lipid improvement, with potential applications in a market projected to reach $100 billion by 2030 [11] Valuation and Market Sentiment - ALDX shares are currently trading at $3.86, reflecting a year-to-date increase of 9.97%, with expectations of a strong price reaction if Reproxalap's trial results are positive [16][17] - The potential for Reproxalap to generate revenues similar to Restasis, along with milestone payments from AbbVie, could significantly impact Aldeyra's financial outlook [17]

Group 1 - Aldeyra Therapeutics, Inc. (ALDX) has shown a year-to-date return of 5.4%, outperforming the average return of 3.8% for the Medical sector [2][3] - The Zacks Consensus Estimate for ALDX's full-year earnings has increased by 66.3% over the past three months, indicating improved analyst sentiment and earnings outlook [2] - Aldeyra Therapeutics, Inc. is ranked 92 in the Zacks Industry Rank within the Medical - Drugs industry, which has seen an average loss of 7.5% this year, further highlighting ALDX's relative performance [3] Group 2 - Teva Pharmaceutical Industries Ltd. (TEVA) has achieved a year-to-date return of 61.7%, significantly outperforming both the Medical sector and its own industry [2][3] - The consensus EPS estimate for Teva has increased by 0.3% over the past three months, and it also holds a Zacks Rank of 2 (Buy) [3] - The Medical - Generic Drugs industry, to which Teva belongs, is currently ranked 56 and has experienced a positive movement of +10.5% this year [3]

Product Development - Aldeyra Therapeutics is developing a novel pharmaceutical platform targeting reactive aldehyde species (RASP) associated with various diseases, with a product pipeline including ADX-629 and reproxalap[92]. - Reproxalap is in late-stage development for dry eye disease, demonstrating broad-based, rapid-onset activity and consistent safety in Phase 2 and Phase 3 clinical trials[92]. - The company does not expect any of its product candidates, including reproxalap, to be commercially available before at least the first half of 2025[104]. Collaboration and Licensing - An exclusive option agreement with AbbVie was established, granting AbbVie the option to obtain a co-exclusive license for reproxalap in the U.S. and an exclusive license outside the U.S., with an initial non-refundable payment of $1 million[93]. - AbbVie extended the option exercise period by paying an additional $5 million, allowing them to exercise the option until 18 months after the agreement date or 10 business days post-FDA approval[94]. - Upon execution of the collaboration agreement, AbbVie would pay a $100 million upfront cash payment, with potential milestone payments of up to $300 million[95]. - The profit-sharing arrangement for reproxalap in the U.S. is set at 60% for AbbVie and 40% for Aldeyra, while tiered royalties on net sales will apply outside the U.S.[95]. - An exclusive option agreement with AbbVie was established on October 31, 2023, with a non-refundable payment of $1 million received for the option[116]. - AbbVie extended the option exercise period by paying a non-refundable fee of $5 million, allowing them to exercise the option until 18 months after the agreement effective date or 10 business days post-FDA decision on reproxalap[117]. - Upon execution of the collaboration agreement, AbbVie will pay a $100 million upfront cash payment, with potential additional milestone payments of up to $300 million[119]. - The profit-sharing arrangement for reproxalap in the U.S. is set at 60% for AbbVie and 40% for the company, with tiered royalties applicable for sales outside the U.S.[119]. Financial Performance - The company reported a comprehensive loss of $8.1 million for the three months ended March 31, 2024, compared to a loss of $15.6 million for the same period in 2023[107]. - Research and development expenses decreased to $6.2 million for the three months ended March 31, 2024, from $11.2 million for the same period in 2023, a reduction of 44.64%[110]. - General and administrative expenses were $3.2 million for the three months ended March 31, 2024, down from $5.6 million in the same period in 2023, a decrease of 42.86%[110]. - Total other income (expense) was $1.3 million for the three months ended March 31, 2024, compared to $1.2 million for the same period in 2023, reflecting an increase of 8.33%[111]. - As of March 31, 2024, the company had total stockholders' equity of approximately $113.4 million and cash, cash equivalents, and marketable securities of $133.0 million[112]. - For the three months ended March 31, 2024, net cash used in operating activities was $10.0 million, an increase from $9.4 million in the same period in 2023[125]. - Net cash used in investing activities was $30.4 million for the three months ended March 31, 2024, compared to $30.0 million provided by investing activities in the same period in 2023[126]. - Net cash provided by financing activities was $18.2 thousand for the three months ended March 31, 2024, down from $52.6 thousand in the same period in 2023[127]. Capital Needs and Risks - Aldeyra has no products approved for sale and has primarily funded operations through equity sales and debt, indicating a need for additional capital to support product development[97]. - The company may pursue licensing or acquiring new immune-modulating approaches to expand its product pipeline[96]. - The company expects to generate operating losses for the foreseeable future, with significant investments in research and development ongoing[112]. - As of March 31, 2024, the company expects its cash, cash equivalents, and marketable securities to fund operations beyond 2026, but acknowledges the need for additional funding for ongoing R&D and commercialization activities[120]. - The company may need to secure additional capital through debt, equity, or partnerships due to economic uncertainties and potential disruptions in capital markets[122]. - The company faces risks related to the costs and timing of regulatory reviews and potential additional trials required for reproxalap[121]. - The company continues to incur costs associated with being a public entity, including compliance and insurance expenses[123]. Debt and Credit Facilities - The Hercules Credit Facility, as of March 31, 2024, had $15.0 million outstanding, with a total available term loan of up to $60.0 million[115].

Group 1 - Aldeyra Therapeutics, Inc. (ALDX) is currently outperforming its Medical sector peers with a year-to-date return of 10%, while the Medical sector has returned an average of -0.3% [2] - The Zacks Consensus Estimate for ALDX's full-year earnings has increased by 87% over the past 90 days, indicating improved analyst sentiment and a stronger earnings outlook [2] - Aldeyra Therapeutics, Inc. holds a Zacks Rank of 2 (Buy), suggesting it has favorable characteristics to outperform the market in the near term [1] Group 2 - Aldeyra Therapeutics, Inc. is part of the Medical - Drugs industry, which includes 187 stocks and currently ranks 147 in the Zacks Industry Rank, with an average loss of 12.7% year-to-date [3] - Another outperforming stock in the Medical sector is Inspire Medical Systems (INSP), which has a year-to-date return of 12.7% and a Zacks Rank of 1 (Strong Buy) [2][3] - The Medical Info Systems industry, to which Inspire Medical Systems belongs, has a current rank of 148 and has declined by 10.3% year-to-date [3]

Core Insights - Insider purchases have decreased in number and size as the second quarter begins, but notable purchases were still made by influential investors like Mario Gabelli and TotalEnergies [1] - Insider buying is often viewed as a positive signal for potential investors, especially during uncertain market conditions [1] Company Summaries - **GAMCO Natural Resources, Gold & Income Trust** - Total shares purchased: 870,000 - Price per share: $10.00 - Total cost: $8.7 million - Shares have increased over 8% since the purchase, with a yield of about 7.4% and monthly distributions [3] - **Boundless Bio Inc.** - Total shares purchased: 512,500 - Price per share: $16.00 - Total cost: $8.2 million - Shares have declined since the IPO, currently trading around $13, with five of seven analysts recommending a buy [4] - **Five Star Bancorp** - Total shares purchased: less than 252,900 - Price per share: $21.75 - Total cost: approximately $5.5 million - The stock is down about 16% year-to-date, but analysts suggest a 30% upside based on a $28.67 consensus price target [5] - **Clearway Energy Inc.** - Total shares purchased: almost 197,000 - Price per share: $22.54 to $23.08 - Total cost: around $4.5 million - Despite a recent 3% increase, shares are down over 13% year-to-date, but 27% higher than the 52-week low [7] - **Aldeyra Therapeutics Inc.** - Total shares purchased: almost 504,300 - Price per share: $3.24 to $4.21 - Total cost: over $1.9 million - The stock surged about 43% following FDA approval plans, with a consensus price target of $9.25 suggesting potential for nearly double the current price [8]

Core Viewpoint - Aldeyra Therapeutics is advancing its clinical-stage immunology pipeline, focusing on reproxalap for dry eye disease and allergic conjunctivitis, with significant recent developments impacting its stock performance and future prospects [1][4]. Company Developments - Aldeyra's lead candidate, reproxalap, is in two phase III studies for dry eye disease and allergic conjunctivitis [1]. - The company announced a clinical development plan on March 28, aimed at resubmitting a new drug application (NDA) for reproxalap to the FDA [1]. - Following a complete response letter (CRL) from the FDA in November 2023, Aldeyra plans to initiate a dry eye chamber clinical study in the first half of 2024 to address efficacy concerns raised by the FDA [4][5]. Financial Position - As of December 31, 2023, Aldeyra reported cash and cash equivalents of $142.8 million, projected to fund operations beyond 2026 [6]. Licensing Agreement - Aldeyra has an exclusive option agreement with AbbVie Inc. for reproxalap, which could yield up to $300 million in milestone payments, including a $100 million payment upon FDA approval [7][8]. Clinical Trials - The upcoming dry eye chamber study will enroll approximately 100 patients to assess ocular discomfort, with the goal of demonstrating statistically significant improvement with reproxalap compared to a vehicle [5]. - Aldeyra plans to conduct an additional dry eye chamber clinical study to account for disease heterogeneity and site differences [6]. Stock Performance - Year-to-date, Aldeyra's shares have increased by 33.5%, contrasting with a 5.7% decline in the industry [2]. - Recently, shares rallied 43.3% following the announcement of the clinical development plan [1].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from __________to__________ Commission file number 001-36332 ALDEYRA THERAPEUTICS, INC. (Exact name of Registrant as Specified in Its Charter) Delaware 20-1968197 (State or ...

Burlington, MA-based Aldeyra Therapeutics (ALDX) is a leader in the development of RASP (reactive aldehyde species) modulators for the treatment of immune-mediated diseases. Lately, it has seen success in its studies on its investigational RASP modulator, ADX-629, which has demonstrated potential activity in clinical studies of patients with psoriasis, asthma, COVID, ethanol toxicity, chronic cough and atopic dermatitis.Aldeyra Therapeutics is conducting a phase II study on ADX-629 in Sjögren-Larsson Syndro ...

The drug/biotech sector is seeing a recovery in 2024 after a rather lukewarm 2023. Biotech M&A activity is expected to be strong in 2024, which could be the prime reason for the optimistic outlook for the industry. In addition,innovation is likely to drive growth in the industry, with key spaces like weight loss/obesity and Alzheimer’s disease drugs attracting attention.High interest rates, global supply chain constraints, pressure in the U.S. regional banking space and rising geopolitical concerns (Russia/ ...

Part I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements present the company's Q3 and nine-month net losses, balance sheet positions, and a significant subsequent reproxalap option agreement with AbbVie [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets reflect a decrease in total assets, primarily due to reduced cash and matured marketable securities, alongside a decline in total liabilities and stockholders' equity Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | Sep 30, 2023 (USD) | Dec 31, 2022 (USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $143,334,888 | $144,419,364 | | Marketable securities | $0 | $29,881,520 | | Total current assets | $147,210,014 | $181,023,113 | | **Total assets** | **$147,282,247** | **$181,291,657** | | Total current liabilities | $21,617,319 | $15,360,538 | | **Total liabilities** | **$24,274,508** | **$30,283,628** | | **Total stockholders' equity** | **$123,007,739** | **$151,008,029** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a reduced net loss for both Q3 and the nine-month period, primarily driven by decreased research and development expenses and higher interest income Key Operating Results (Unaudited) | Metric | Three Months Ended Sep 30, 2023 (USD) | Three Months Ended Sep 30, 2022 (USD) | Nine Months Ended Sep 30, 2023 (USD) | Nine Months Ended Sep 30, 2022 (USD) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $6,961,669 | $11,539,620 | $25,160,437 | $38,344,594 | | General and administrative | $2,588,701 | $3,244,936 | $11,535,868 | $10,638,602 | | Loss from operations | ($9,550,370) | ($14,784,556) | ($36,696,305) | ($48,983,196) | | **Net loss** | **($8,186,871)** | **($14,553,231)** | **($32,789,548)** | **($49,122,474)** | | **Net loss per share** | **($0.14)** | **($0.25)** | **($0.56)** | **($0.84)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate decreased cash used in operating activities, a shift to cash provided by investing activities from marketable security maturities, and minimal cash used in financing activities Cash Flow Summary (Unaudited) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 (USD) | Nine Months Ended Sep 30, 2022 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($30,826,568) | ($45,406,010) | | Net cash provided by (used in) investing activities | $30,000,000 | ($56,954,530) | | Net cash (used in) provided by financing activities | ($257,908) | $1,220,092 | | **Net decrease in cash and cash equivalents** | **($1,084,476)** | **($101,140,448)** | | **Cash and cash equivalents, end of period** | **$143,334,888** | **$128,650,541** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on the company's business, liquidity outlook, debt financing, and the significant subsequent exclusive option agreement with AbbVie for reproxalap - The company believes its cash and cash equivalents of **$143.3 million** as of September 30, 2023, are sufficient to fund operations into the first quarter of 2025, excluding potential reproxalap revenue or the impact of the AbbVie option agreement[31](index=31&type=chunk)[132](index=132&type=chunk) - On October 31, 2023, Aldeyra entered into an exclusive option agreement with AbbVie Inc. for reproxalap, including a **$1 million** option fee and potential for a **$100 million** upfront payment upon collaboration agreement execution, plus up to **$300 million** in milestones and a 60/40 U.S. profit split[92](index=92&type=chunk)[93](index=93&type=chunk) - The company has a Loan and Security Agreement with Hercules Capital, with **$15.0 million** drawn as of September 30, 2023, and an additional **$20.0 million** potentially available through May 1, 2024, subject to lender approval[57](index=57&type=chunk)[110](index=110&type=chunk) - The company is involved in a putative class action lawsuit and a derivative complaint filed in July and October 2023, respectively, both relating to allegations of false or misleading statements concerning the NDA for ADX-2191, with the company disputing the claims and unable to predict the outcome[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the decrease in net loss, driven by reduced R&D and higher interest income, highlights the reproxalap NDA and AbbVie agreement, and addresses liquidity and future funding needs [Overview](index=21&type=section&id=Overview) This overview describes Aldeyra as a clinical-stage biotechnology company, highlighting its lead candidate reproxalap under FDA review, the recent AbbVie option agreement, and key upcoming clinical milestones - The company's lead product candidate, reproxalap, is under NDA review by the FDA for the treatment of dry eye disease, with a PDUFA target action date of **November 23, 2023**[101](index=101&type=chunk)[104](index=104&type=chunk) - On October 31, 2023, the company granted an exclusive option to AbbVie Inc. to co-develop and co-commercialize reproxalap in the U.S. and exclusively commercialize it outside the U.S.[103](index=103&type=chunk) - Upcoming clinical milestones for 2023 include top-line results from Phase 2 trials of ADX-629 in atopic dermatitis and Sjögren-Larsson Syndrome, and a Type C meeting with the FDA for ADX-2191 in proliferative vitreoretinopathy[104](index=104&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Results of operations show decreased research and development expenses for both Q3 and the nine-month period, alongside a slight increase in general and administrative expenses and higher net other income Comparison of Expenses (in millions USD) | Expense Category | Q3 2023 | Q3 2022 | Change | 9 Months 2023 | 9 Months 2022 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Research & Development | $7.0 | $11.5 | ($4.5) | $25.2 | $38.3 | ($13.1) | | General & Administrative | $2.6 | $3.2 | ($0.6) | $11.5 | $10.6 | $0.9 | - The decrease in R&D expenses was primarily due to reduced external clinical development costs and drug product manufacturing expenditures[120](index=120&type=chunk)[122](index=122&type=chunk) - Net other income increased by **$1.2 million** in Q3 2023 and **$4.0 million** in the nine-month period, driven by higher interest income[121](index=121&type=chunk)[123](index=123&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position of **$143.3 million** cash is expected to fund operations into Q1 2025, but additional capital will be required for full commercialization and R&D, with potential access to an at-the-market facility and credit line - The company has cash and cash equivalents of **$143.3 million** as of September 30, 2023, which is expected to fund operations into the first quarter of 2025[124](index=124&type=chunk)[132](index=132&type=chunk) - The company will need to secure additional funding for full research, development, and commercialization activities, with future funding needs dependent on factors like the outcome of the reproxalap regulatory review and the potential exercise of the AbbVie option[132](index=132&type=chunk) - Net cash used in operating activities decreased to **$30.8 million** for the first nine months of 2023 from **$45.4 million** in the same period of 2022, primarily due to a lower net loss and changes in working capital[137](index=137&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) As a smaller reporting company, Aldeyra is not required to provide quantitative and qualitative disclosures about market risk - As a "smaller reporting company," Aldeyra is not required to provide quantitative and qualitative disclosures about market risk[140](index=140&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[141](index=141&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[142](index=142&type=chunk) Part II – OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings.) The company faces putative class action and derivative lawsuits alleging false or misleading statements regarding the ADX-2191 NDA, which it disputes and intends to vigorously defend - A putative class action lawsuit was filed on July 31, 2023, alleging violations of the Securities Exchange Act related to disclosures about the NDA for ADX-2191[144](index=144&type=chunk) - A derivative complaint was filed on October 25, 2023, against certain officers and directors, based on substantially identical allegations as the class action lawsuit[144](index=144&type=chunk) [Risk Factors](index=31&type=section&id=ITEM%201A.%20Risk%20Factors.) This section outlines extensive risks, primarily focusing on the successful regulatory approval and commercialization of reproxalap, along with challenges in capital raising, competition, manufacturing, intellectual property, and historical operating losses - The business is highly dependent on the successful FDA approval and commercialization of reproxalap, and failure or significant delay would materially harm the business[146](index=146&type=chunk)[149](index=149&type=chunk) - The FDA has noted substantive review issues in a late-cycle review meeting for the reproxalap NDA and has indicated an additional clinical trial is needed, which could result in a Complete Response Letter or delay[155](index=155&type=chunk) - The company has a history of significant operating losses (**$389.5 million** accumulated deficit as of Sep 30, 2023) and expects to incur more losses, requiring substantial additional financing to continue operations and commercialization efforts[240](index=240&type=chunk)[241](index=241&type=chunk)[246](index=246&type=chunk) - The company relies on third parties for clinical trials and manufacturing, and any failure by these parties to perform could delay or derail development programs[148](index=148&type=chunk)[279](index=279&type=chunk)[284](index=284&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) There were no unregistered sales of equity securities during the reporting period - None[413](index=413&type=chunk) [Defaults Upon Senior Securities](index=78&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) There were no defaults upon senior securities during the reporting period - None[413](index=413&type=chunk) [Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company's operations - Not applicable[413](index=413&type=chunk) [Other Information](index=78&type=section&id=Item%205.%20Other%20Information.) No other information was reported for the period - None[413](index=413&type=chunk) [Exhibits](index=79&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and required SEC certifications - Exhibits filed include corporate governance documents (Certificate of Incorporation, Bylaws) and required SEC certifications (302 and 906 certifications)[415](index=415&type=chunk)[416](index=416&type=chunk)[417](index=417&type=chunk)