Aldeyra Therapeutics(ALDX) - 2024 Q1 - Quarterly Report

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].