Aldeyra Therapeutics(US:ALDX)2019-03-08 21:06Product Development - The company is focused on developing next-generation medicines for inflammatory diseases, with its lead product candidate reproxalap in late-stage development for multiple conditions [340]. - Reproxalap has shown statistically significant improvements in five Phase 2 clinical trials for dry eye disease and other conditions, indicating a promising mechanism of action [342]. Financial Performance - The comprehensive loss for the year ended December 31, 2018, was $38.9 million, compared to a loss of $22.3 million in 2017, reflecting increased investment in R&D [359]. - Net loss for the year ended December 31, 2018, was approximately $38.9 million, compared to $22.3 million for 2017, reflecting an increase in losses due to clinical trials and R&D expenses [383]. - Total other income for the year ended December 31, 2018, was approximately $806,000, compared to $148,000 in 2017, consisting of interest income partially offset by interest expense [386]. - The company expects to continue generating operating losses for the foreseeable future due to ongoing R&D efforts and clinical trials [382]. - The company anticipates fluctuations in its results of operations due to various factors, including the progress of R&D and regulatory requirements [382]. Research and Development Expenses - Research and development expenses are expected to increase as the company advances reproxalap and other compounds through clinical development, with costs being unpredictable [353]. - Research and development expenses increased to $29.8 million for the year ended December 31, 2018, from $16.3 million in 2017, marking a rise of $13.5 million primarily due to external R&D expenditures [384]. - The company anticipates needing additional funding in the future to support research and development activities and commercialization efforts [395]. Capital and Funding - The company has raised approximately $10.6 million from a public offering in February 2017 and $67.6 million from another offering in October 2018, indicating strong capital support for development [343]. - The company plans to raise additional capital through debt, equity, or partnerships to fund further development of its product candidates [346]. - The company generated net cash provided by financing activities of $80.5 million in 2018, up from $37.4 million in 2017, attributed to an underwritten public offering and sales of common stock [403]. Expenses and Liabilities - General and administrative expenses are expected to rise as the company expands operations and incurs costs associated with being publicly traded [356]. - General and administrative expenses rose to $9.9 million for the year ended December 31, 2018, compared to $6.2 million in 2017, an increase of approximately $3.7 million attributed to personnel and legal costs [385]. - The company has a total of $465,991 in operating lease obligations, with $228,320 due within one year [405]. Agreements and Partnerships - The company has entered into a License Agreement with Madrigal Pharmaceuticals, with potential milestone payments of less than $340 million tied to sales milestones [348]. - The Madrigal Agreement will remain effective until all payment obligations are fulfilled, with the potential for termination under specific conditions [349]. - Future regulatory and development milestone payments to Madrigal under the Madrigal Agreement could total less than $340 million, with over 80% tied to achieving annual worldwide net sales milestones [407]. Tax and Equity - As of December 31, 2018, total stockholders' equity was approximately $86.6 million, with cash, cash equivalents, and marketable securities totaling $93.6 million [387]. - The company had Federal and State income tax net operating loss carryforwards of approximately $93.5 million and $89.7 million, respectively, with Federal NOLs generated in 2018 carrying forward indefinitely [370]. Operational Changes - The company underwent three ownership changes through the year ended December 31, 2018, which may limit the utilization of its net operating losses [373]. - The company has not made any sales under the Jefferies Sales Agreement as of December 31, 2018, which allows for aggregate sales proceeds of up to $50 million [394]. Regulatory Compliance - The company is required to maintain effective disclosure controls and internal controls as mandated by the Sarbanes-Oxley Act of 2002 [400]. - The company has not entered into any off-balance sheet arrangements through December 31, 2018 [404]. - Inflation has not had a material impact on the company's results of operations [409].