Aldeyra Therapeutics, Inc. Stock

Hello, everyone, and thank you for joining us today for the Aldeyra Therapeutics Regulatory Update Conference Call. My name is Sammy, and I'll be coordinating your call today. [Operator Instructions] I'll now hand over to your host, Laura Nichols, Associate Director of Investor Relations at Aldeyra Therapeutics to begin. Please go ahead, Laura.

Thank you, and good morning, everyone. Today, we issued a press release announcing a PDUFA target action date extension for the new drug application of reproxalap for the treatment of dry eye disease. A copy of the press release is available on the Investor and Media section of our website, www.aldeyra.com. The press release contains important information and should be read and considered in conjunction with the prepared remarks on today's call.

With me today to discuss the PDUFA extension is Dr. Todd Brady, President and Chief Executive Officer of Aldeyra.

This presentation contains forward-looking statements regarding Aldeyra in the investigational drug candidate, reproxalap, and Aldeyra's plans, expectations and opportunities, including regulatory activities regarding reproxalap.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Aldeyra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based upon the information available to Aldeyra today and reflect Aldeyra's current views with respect to the future events and are based on assumptions and subject to risks, uncertainties, including the outcome and timing of the FDA's review and approval of the new drug application for reproxalap in the adequacy of the data contained therein.

Aldeyra assumes no obligation to update oral or written statements made today as circumstances change. Future events and actual results could differ materially from those projected in the company's forward-looking statements, including the results of operations and financial position.

Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the press release issued last night and in our filings with the Securities and Exchange Commission. I would now like to introduce Dr. Brady.

Thank you, Laura. Thank you all for joining us. I want to first say that my comments today represent only our understanding of the FDA's decision to extend the PDUFA target action date for the reproxalap dry eye disease New Drug Application or NDA because we're not party to internal FDA discussions, and my comments may not accurately reflect the FDA's rationale discussions or decisions, and our understanding is strictly limited to only those discussions that we've had with the division of Ophthalmology, which sits under the office of Specialty Medicine.

During the NDA review, we've had no direct conversation with the office of Specialty Medicine nor have we had any conversation with the FDA administration above the office of Specialty Medicine.

Finally, I'm going to restrict my comments to what we believe to be facts based on our understanding of what's been told to us by the FDA. As we disclosed in the press release issued last night, on June 16, 2025, we resubmitted an NDA for reproxalap for the treatment of dry eye disease. Approximately 30 days later, on July 16, the FDA accepted the NDA as "a Complete Class II Response" to the Complete Response letter previously received.

At the time of the NDA acceptance, the target PDUFA action date was December 16, 2025. At a meeting with the division of Ophthalmology on Friday, December 12, the division requested the submission to the NDA of a Clinical Study Report or CSR for the field trial announced on May 5, 2025. The field trial, which was supportive of the activity of reproxalap relative to vehicle did not meet the primary endpoint of reducing symptoms relative to vehicle. But I want to note that prior to submitting the NDA in June, the field trial was specifically discussed with the FDA and written agreement was reached not to submit the trial to the NDA, consistent with our prior disclosures.

The field trial CSR has been previously submitted to the IND and the CSR has been reviewed by the FDA under the IND. And during the review of the NDA, the division also requested submission of the field trial safety data, which was submitted to the NDA on August 21. The FDA has considered the submission of the CSR to the NDA, which occurred on Friday as a major amendment triggering a 90-day PDUFA extension. During the meeting last Friday, the division made no other requests and identified no other specific issues associated with the review.

Based on our understanding of the meeting, the division appeared to represent the following: Number one, the division's review, which includes review of the field trial CSR from the IND is substantively complete. Number two, on Thursday, December 11, 3 business days before the original PDUFA date, the request to submit the CSR to the NDA came from the office of Specialty Medicine, which is the signatory on any NDA action for reproxalap because reproxalap is a new chemical entity. We understand from the division that the office's rationale for the CSR submission is that all completed trials need to be included in the NDA.

Importantly, in early December, a draft label was sent by the FDA to Aldeyra, and Aldeyra has responded with comments on the draft label. In the formal communication of the review extension, the FDA noted that if no major deficiencies are identified during the extended review, labeling requests and potential post-marketing requirements, if any, will be communicated by February 16, 2026.

With that, operator, I'd now like to open the call for questions.

[Operator Instructions] Our first question comes from Catherine Novack from Jones.

I was wondering if you can comment on turnover at the FDA in the Ophthalmology division this year and specifically in the reproxalap review team. Any changes between the personnel who were there at the time of NDA acceptance versus at the December 12 meeting?

Catherine, and thanks for your note this morning as well. I am not aware of any turnover within the division of Ophthalmology. At least the FDA employees with whom we interface on a regular basis at the division have been the same throughout this review and throughout other reviews. I am aware that the Director of the Office of Specialty Medicine retired this summer and a new Director of the Office of Specialty Medicine has been in place, I believe, since late summer.

Got it. And then is it -- looking through some FDA industry guidance and it seems that it is standard to submit all CSRs regardless of therapeutic impact with an NDA. So is this -- has their guidance changed? Or what was the rationale behind admitting some of the -- admitting the CSR?

I agree with your assessment of the guidance, Catherine. Typically, in an NDA, all completed trials are submitted. Our discussion with the division in June prior to the submission of the NDA revolved around satisfaction of the Complete Response letter, which identified a single deficiency, namely a clinical trial to assess symptoms. Because we had a positive clinical trial in the dry eye chamber, we spoke with the division about submitting that trial alone. We were quite clear with the division that the field trial, while supportive of reproxalap, did not meet statistical significance. And at that time, the division agreed in writing that only the chamber trial need to be submitted in the NDA.

As I said in my prepared comments, what appears to have happened is that the Director of the Office of Specialty Medicine decided that the protocol should be followed in the standard sense that all completed trials should be submitted to the NDA and made the request that the CSR be submitted on Friday.

Got it. And then -- is there -- have you seen a label, a draft label prior to the one that was shared in the beginning of December?

No. Labeling discussions were initiated with the division at -- in the beginning of December.

Our next question comes from Matthew Caufield from H.C. Wainwright.

I appreciate the updates. Has the announced extension impacted the terms of the AbbVie option agreement, if at all, for going forward here?

Thanks for the question. Per the terms of the option agreement with AbbVie, AbbVie has 10 business days to exercise the option following approval of the NDA. There are other terms attached to that agreement and the actual option is to a co-promote, co-development agreement with AbbVie, which we've disclosed elsewhere and is in our corporate deck.

Got it. So the same time frames and same optionality exists going forward for now?

Correct.

Our next question comes from Clara Dong from Jefferies.

This is Angie online for Clara. So how should we think of the commercialization time line or any potential events between today and the next PDUFA day? What will the company be focused on during this time?

I think that the -- first of all, the launch dates have not been set for reproxalap and would depend on when the product is approved, if it is approved. My guess is that typically companies launch within a quarter or 2 of the approval. The original target PDUFA action date, which was today, would have suggested that a launch might have occurred at the end of Q1 or sometime in Q2, typically for a drug product launch. And I don't know that those time lines change very much depending on when the reproxalap is approved, again, if it's approved. The 90-day extension doesn't mean necessarily that the PDUFA is 90 days from now, it means that the FDA has 90 days to issue an action letter on the application.

Our next question comes from Marc Goodman from Leerink Partners.

This is Basma for Marc. Again, Todd, just to confirm, was there a discussion at any point on December 12 or earlier that either field trials will be used as confirmatory or supportive evidence for the package and for the -- especially for the resubmission package. So basically, one of the field trials had to be positive on the symptoms. Was there any agreement with the FDA that one of them has to be positive. And again, regarding the request on the August 12 for safety data from the field trial, is that request normal given that you had an agreement not to submit the field trial at all in the package? That's it, that's it for us.

Yes, thanks for the question. Let me take the second one first. The safety data request is normal. So during NDA reviews, the FDA updates or requests an update of the safety database as safety data come in, I think it was more or less standard for the FDA to ask for the field trial safety data to be submitted.

Regarding the discussions about the field trial. As I mentioned in my prepared comments, before we submitted the NDA in June, we discussed both the positive chamber trial as well as the field trial with the FDA, the division decided that the dry eye chamber trial would be sufficient for submission, and so that's why we submitted only the chamber trial.

Our next question comes from Tom Shrader from BTIG.

To reask a previous question, is there an expiration date on the AbbVie option that you can disclose?

No, if the drug is approved and when the drug is approved, AbbVie has 10 business days to exercise. So whenever that occurs, there will be a 10-business day period during which AbbVie can decide whether or not to exercise.

And then the second question is remedial. Could you clarify what the distinction submit to the IND versus submit to the NDA? Don't they both go to the FDA? I'm just a little unclear what that means.

That also is an excellent question. On the face of it, if the CSR has been reviewed, the CSR has been reviewed. I did pose that question to the division. It seems that the review itself, as I mentioned in my prepared comments is substantively complete, but what needs to happen I believe, based on my conversations with the division is that more detail on the field trial needs to be added to the NDA review.

I assume that the division has a very thorough understanding of the field trial. I don't think that understanding or impression will change. What may change to your question is more detail added to the NDA review.

Our next question comes from Yale Jen from Laidlaw & Company.

In terms of the label discussion you mentioned in the press release that in February of next year, if that happens, you will -- and my question is, would you guys report that after the discussion with the FDA or you will have communicated street once the PDUFA day has done?

Unlike other companies, we do not report on day-to-day interactions with the FDA during the NDA review until we receive an action letter such as the one we received last night regarding the extension. I certainly hope that label discussions occur well before February 16, 2026, especially given, as I mentioned in my prepared comments that we've already responded to a draft label. I do not expect at this point substantive changes to the label based on what we've seen so far. But until we receive an action letter, you wouldn't expect to hear from us any updates on our interactions with the FDA.

Okay. Great. Maybe just one follow-up. For the last communication you have with the FDA or the FDA request seems kind of delay to the PDUFA date. Was this something you anticipate or something that was just a surprise?

In general, I think these kinds of extensions are surprising to companies. I don't think Aldeyra is any different. It is true that the request from the office came in 3 business days before the PDUFA. On the other hand, I think towards the end of the review, both the division and the office go through a series of checklists to make sure that the application is complete. And as I mentioned, clearly, the new Director of the Office of Specialty Medicine disagreed with the division that the field trial didn't need to be in the NDA, hence, the request.

We currently have no further questions. And with that, this concludes today's call. We thank everyone for joining. You may now disconnect your lines.

Hello, and welcome, everyone, to the Aldeyra Therapeutics 2025 Research and Development Update Webcast. My name is Becky, and I'll be your operator today. [Operator Instructions].

I will now hand over to your host, Laura Nichols, Associate Director of Investor Relations, to begin. Please go ahead.

Thank you, and good morning, everyone. Today, we issued a press release announcing the expansion of Aldeyra's RASP platform into central nervous system diseases and providing an update on Reproxalap, our NDA stage product candidate for the treatment of dry eye disease.

A copy of the press release is available on the Investor and Media section of our website, www.aldeyra.com. The press release contains important information and should be read and considered in conjunction with the slides presented and prepared remarks made on today's call.

With me today to discuss the research and development updates is Dr. Todd Brady, President and Chief Executive Officer of Aldeyra; and Dr. Adam Lazorchak, Director of Translational Sciences and Non-Clinical Development.

Turning to Slide 2. This presentation and various remarks, which may be made during this presentation contain forward-looking statements regarding Aldeyra, Aldeyra's RASP modulator pipeline, the investigational drug candidate, reproxalap and Aldeyra's plans, expectations and opportunities, including regulatory and commercial activities. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Aldeyra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based upon the information available to Aldeyra today and reflect Aldeyra's current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including the outcome and timing of the FDA's review and approval of the new drug application for reproxalap that was submitted in June of this year and the adequacy of the data contained therein.

Aldeyra assumes no obligation to update oral or written statements made today as circumstances change. Future events and actual results could differ materially from those projected in the company's forward-looking statements, including the results of operation and financial position. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the press release issued this morning and in our filings with the Securities and Exchange Commission.

I would now like to turn your attention to Slide 3 and introduce Dr. Brady.

Thank you, Laura, and thank you all for joining us this morning. We are grateful for your interest in our research and development activities, in particular, because this webcast affords us the all-too uncommon opportunity to discuss the future of Aldeyra as it relates to our earlier-stage product candidates and the directions that we intend to pursue years hence forth.

As I hope you'll appreciate today, we believe our pipeline to be robust and our future bright. Aldeyra maintains a broad pipeline of product candidates that is diversified across 4 elements: stage of development, molecular structure, mechanism of action and clinical indications. As I'm sure all of you know, our lead product candidate, reproxalap, is the subject of a new drug application submitted earlier this year with a PDUFA date of December 16, 2025, for the treatment of dry eye disease.

Reproxalap is also under development for allergic conjunctivitis, having completed, we believe, Phase 3 clinical testing. Reproxalap represents the first generation of a new class of potential therapeutics known as RASP modulators, which affect a large number of proteins simultaneously in a systems-based approach that we believe represents the future of pharmacology.

Late last month, we reported the conclusion of proof-of-concept clinical testing for a relative of reproxalap, ADX-629, with positive results in alcohol-associated hepatitis, some of which I'll review in more detail during the webcast. Although, second-generation RASP modulator, ADX-246 is in development for the dry form of age-related macular degeneration, which is the precursor to geographic atrophy, today, we will focus primarily on another second-generation RASP modulator, ADX-248, a novel, potent once-daily orally administered product candidate that has demonstrated activity in a variety of preclinical models and is currently undergoing Phase 1 clinical testing.

We're pleased to announce the advancement of ADX-248 already in development for atopic dermatitis and metabolic inflammation to immune-mediated diseases that affect the central nervous system. I'm also pleased to introduce Dr. Adam Lazorchak, our new Director of Translational Sciences, who will review for us the compelling data from ADX-248 in preclinical models of neuroinflammatory disease.

Our pipeline also includes ADX-2191, which is that we are aware the only intravitreal formulation of methotrexate designed for intraocular injection. By the end of this year, we anticipate initiating pivotal Phase 3 clinical testing of ADX-2191 in primary vitreoretinal lymphoma, a rare and often fatal retinal cancer with no approved therapy. We also anticipate initiating Phase 2/3 clinical testing of ADX-2191 in retinitis pigmentosa, an orphan disease that invariably leads to progressive loss of vision in the first half of 2026. We look forward to discussing ADX-2191 in more detail in the future.

Importantly, we believe that we are well capitalized to continue to execute on our pipeline. Based on our prior guidance, current cash, cash equivalents and marketable securities of over $75 million as of September 30, are expected to support operations into the second half of 2027. Our prior cash runway guidance does not include partnership or product revenue associated with reproxalap.

Turning now to Slide 5. RASP or reactive aldehyde species are a class of small molecule drug targets that affect a large number of proteins, particularly proteins that promote inflammation through a series of well-described interactions. Thus, by binding RASP, RASP modulators such as reproxalap and ADX-248 in theory, affect a myriad of pharmacologic actions at once, thereby affording a systems-based approach that does not focus on inhibiting or activating single protein targets.

The possible advantages of modulating RASP are illustrated on Slide 6, which suggests that as opposed to turning on or off single targets, which is generally not consistent with normal biological function and therefore, can lead to unwanted side effects, Modulating RASP is akin to lowering a master volume control, a gentler but also more comprehensive approach to pharmacology.

As I've said many times before, it seems to me that our children and grandchildren and their children will not be treated with drugs that do just one thing. Instead, they'll be treated with just a few drugs that do many things, potentially allowing for the treatment of many conditions at once in concert with the maintenance of normal physiological balance.

Moving to Slide 8. As I mentioned in my opening comments regarding the signal finding RASP modulator ADX-629, we've completed our proof-of-concept Phase 2 suite of clinical trials designed to assess the feasibility of improving the signs and symptoms of immune-mediated diseases by modulating RASP. Across 7, Phase 2 clinical trials in aggregate, ADX-629, which is a first-generation RASP modulator that was administered orally twice daily, was deemed to be safe and well tolerated, and in each trial, evidence of activity in decreasing the signs or symptoms of inflammation was observed. The final, ADX-629 clinical trial was conducted in patients with alcohol-associated hepatitis, an inflammatory condition that in severe cases, can lead to death.

As is illustrated in the lower left-hand corner of Slide 9, the results of the clinical trial in alcohol-associated hepatitis were consistent with those of other ADX-629 clinical trials in patients with immune-mediated diseases, including atopic dermatitis, psoriasis and chronic cough. The model of end-stage liver disease or MELD score, which is an objective blood-based measure of liver function comprised of bilirubin creatinine and clotting function and is predictive of mortality and other clinical sequelae of alcohol-associated liver disease decreased in a consistent and statistically significant manner relative to baseline in patients with alcohol-associated hepatitis.

As is illustrated in the lower right-hand corner of Slide 10, lipid profiles improved with administration of ADX-629, an effect consistent with similar results observed in the Phase 1 clinical trial following challenge with a fatty meal as well as in clinical trials in patients with psoriasis and chronic cough. The beneficial effects with regard to lipid parameters may reflect anti-inflammatory activity in addition to the fact that RASP are precursors to lipids, consistent with the role of RASP in potentiating inflammation.

Slide 11 represents the activity of ADX-629 in statistically significantly reducing another marker of inflammation, C-reactive protein in patients with alcohol-associated hepatitis. Independent of MELD score, C-reactive protein, which is synthesized in the liver is a major determinant of mortality and other outcomes in patients with liver disease, and in broader patient populations, C-reactive protein has been associated with adverse cardiovascular outcomes, poor prognosis in cancer and similar to liver diseases, increased risk of death.

The C-reactive protein results are consistent with the results of other Phase 2 clinical trials of ADX-629 in patients with immune-mediated diseases. Overall, we believe that ADX-629 has successfully demonstrated proof of concept that RASP modulation has the potential to improve the signs and symptoms of immunological conditions.

Now, with the promise of RASP modulation in treating diseases associated with inflammation, I'd like to turn the call over to Dr. Adam Lazorchak, beginning on Slide 13, as we move from first-generation RASP modulators such as ADX-629, which is less potent and administered twice daily to second-generation RASP modulators such as ADX-248, which is among the most potent RASP modulators that Aldeyra has synthesized to-date and is expected to be administered orally once daily.

Dr. Lazorchak?

Thank you, Dr. Brady. Before summarizing our results with ADX-248, I will briefly discuss ADX-246, another second-generation RASP modulator now in formulation development that is intended to be tested in patients with the dry form of age-related macular degeneration or dry AMD.

Dry AMD is a progressive sight-threatening retinal disease that is endemic in patients with advanced age. As seen in the left side of Slide 13, ADX-246 is a potent scavenger of retinaldehyde, a RASP implicated in the development of macular degeneration. To the right, we show the activity of ADX-246 in an ABCR gene Knockout Mouse Model of dry AMD. The ABCR protein is a retinaldehyde chaperone that prevents the promiscuous conversion of retinaldehyde into A2E. A2E accumulation in the retinal pigment epithelial cells leads to retinal dysfunction and is associated with low light visual impairment, one of the first symptoms of dry AMD. As the graph on the right suggests, treatment with ADX-246 reduced levels of A2E in the eye of this mouse model.

Now moving back to our second-generation RASP modulator, ADX-248, we show on the right-hand side of Slide 14 that ADX-248 potently binds the pro-inflammatory RASP 4-hydroxynonenal or HNE. In the middle panel, the anti-inflammatory activity of ADX-248 was tested in a mouse model of acute sepsis and showed broad-based reductions in multiple pro-inflammatory cytokines. Finally, we assessed ADX-248 anti-inflammatory efficacy in a murine sensitization hypersensitization model of atopic dermatitis.

On the left-hand panel highlights data showing that ADX-248 treatment resulted in a statistically significant reduction in dermal erosion, a measure of inflammation-mediated skin ulceration and thinning. We are excited to share new preclinical results today focusing on models of Parkinson's disease, amyotrophic lateral sclerosis or ALS, and multiple sclerosis, MS. RASP molecules are closely associated with neuroinflammatory diseases affecting the central nervous system. These reactive aldehyde species play key roles in disease pathology outlined on Slide 15.

In Parkinson's disease, environmental toxins can increase neurotoxic stress along with RASP in the central nervous system. Of note, the aldehyde DOPAL, a toxic RASP produced by dopamine metabolism has been shown to promote alpha-synuclein cross-linking, leading to dopaminergic cell death. In ALS, RASP levels are elevated in the CNS of patients and certain genetic variants associated with RASP clearance increase the disease progression risk. Finally, in MS, RASP elevation has also been observed and pharmacologic inhibition of the RASP acrylene has been shown to reduce disease severity in preclinical models.

On Slide 16, we present data from ADX-629, a legacy RASP modulator tested in the experimental autoimmune encephalomyelitis or EAE mouse model, which closely mimics MS. ADX-629 was dosed twice daily for 28 days, beginning concurrently with disease induction. The disease severity was scored on a 0 to 5 scale, reflecting progressive high limb ascending motor impairment and paralysis. ADX-629 treatment significantly reduced disease severity compared to vehicle, delaying onset and slowing progression. These results suggest that RASP modulation can meaningfully reduce neuroinflammatory disease burden in the EAE preclinical MS model.

Building on this work, we developed our next-generation RASP modulator, ADX-248. On Slide 17, we show that ADX-248 binds to key neurotoxic RASPs, including DOPAL and HNE, both associated with CNS inflammation and neurodegeneration. This compound shows potent RASP binding activity in vitro, forming the foundation for its therapeutic potential in multiple CNS disorders.

Turning to Slide 18. We begin our presentation with ADX-248 in neuroinflammatory CNS disease models with the mouse MPTP Parkinson's disease model. The story of MTPT is both out of tragedy and hope for Parkinson's patients. In 1982, Dr. J. William Langston discovered the link between MPTP and Parkinson's disease when multiple patients, each early locked in their own bodies yet fully conscious, were admitted to hospitals in Northern California. Dr. Langston connected these spontaneous Parkinson's cases to synthetic heroin use and an impurity in the licit drug, MPTP.

Langston's discovery born from tragedy and detective work sent shock wave through the field of neuroscience and MPTP became an potent research tool that helped unlock the mechanisms of Parkinson's disease and contributed to the successful development of new Parkinson's therapies. With this history in mind, we evaluated ADX-248 in the mouse MPTP Parkinson's disease model, which reproduces dopaminergic neuron loss through toxin exposure.

ADX-248 was administered concurrently with MPTP at 3 dose levels: 3, 10 and 20 mg per kg twice daily for up to 19 days. Motor function was assessed using reproxalap performance, which measures balance and coordination and grip strength tests. ADX-248 at the highest dose, 20 mg per kg, significantly improved motor coordination and balance as well as grip strength compared to vehicle. These findings suggest that ADX-248 provides functional neuroprotection in this established Parkinson's disease model.

At study completion, we analyzed biochemical and histological markers shown on Slide 19. ADX-248 significantly increased total brain dopamine levels in a dose-dependent manner and enhanced the number of tyrosine hydroxylase positive, TH-positive dopaminergic neurons in the substantia [indiscernible]. These results suggest that in addition to improving motor function, ADX-248 may also preserve dopaminergic neurons and help restore dopamine balance in the brain.

To further validate our findings, we tested ADX-248 in the 6-hydroxydopamine or 6-OHDA rat model, which causes unilateral dopaminergic neuron loss. As shown in Slide 20, treatment began 2 weeks after brain lesion induction, which is a challenging test of post-injury dopaminergic neuron recovery potential. ADX-248 was dosed twice daily at 3, 10 and 20 mg per kg for 14 days. ADX-248 significantly improved wire hang endurance reflecting enhanced neuromuscular strength and coordination. A trend towards increased grip strength was also observed, but did not reach statistical significance. This model suggests that ADX-248 may contribute to functional recovery even after neuronal damage has occurred and demonstrates ADX-248 potential efficacy in a second independent and widely accepted preclinical Parkinson's disease model.

As shown on Slide 21, we evaluated ADX-248 in the SOD1-G93A ALS transgenic mouse model, which developed aggressive motor dysfunction leading to paralysis and death. Mice received ADX-248 at 3, 10 and 20 mg per kg twice daily for 60 days. ADX-248 significantly improved grip strength across all doses and enhanced rotarod balance performance at 10 and 20 mg per kg. Together, these results demonstrate that ADX-248 shows robust activity across multiple neuroinflammatory disease models.

As summarized on Slide 22, ADX-248 sequestered neurotoxic grafts such as DOPAL and HNE, improved motor performance in multiple Parkinson's and ALS disease models, increased dopamine levels and dopaminergic survival and exhibited favorable exposure and safety profiles in preclinical studies. ADX-248 preclinical studies also predict that therapeutically meaningful brain concentrations in human are achievable at doses being tested in the clinic. These favorable ADX-248 preclinical data opened the door to multiple CNS neuroinflammatory disease development paths. We believe that ADX-248's safety profile supports its continued clinical development and a Phase 1 dose escalation study in healthy subjects is ongoing.

Importantly, as is detailed in Slide 23, preclinical efficacy has been achieved at doses corresponding to 50 to 100 mg per kg human equivalent doses. These doses are predicted to be safe with approximately tenfold safety margins based on rat and dog toxicity studies. Our ongoing Phase 1 clinical trial supports the tolerability of ADX-248 at these levels. Exposure of ADX-248 is at least as high as reported in plasma levels of RASP in patients with immune-mediated diseases such as atopic dermatitis and dose escalation is continuing. We expect pivotal long-term safety and toxicology studies to be completed in 2026, supporting the initiation of Phase 2 clinical trials.

I would now like to turn the call over to Dr. Brady, beginning with Slide 25, who will comment on reproxalap, conclude the call and open the line for questions. Dr. Brady?

Thank you, Dr. Lazorchak. As I mentioned earlier in the webcast, one of the defining features of RASP modulation is the ability to effect a variety of clinical outcomes simultaneously, a phenomenon that is consistent with the activity of reproxalap in dry eye disease and that has been observed across a large number of Phase 2 and Phase 3 clinical trials.

In particular, to Aldeyra's knowledge in patients with dry eye disease, reproxalap is the first investigational drug with pivotal data supportive of acute and chronic activity in reducing symptoms and the first investigational drug for chronic administration with pivotal data supportive of acute activity and reducing ocular redness a dry eye disease sign of particular importance to patients. Said another way, when it comes to the ocular surface, many patients care as much about how they look as about how they feel.

Slide 26 presents data from the sole clinical trial submitted as supportive of efficacy of reproxalap in treating the symptoms of dry eye disease, which was the only deficiency identified in the complete response letter, or CRL, from the FDA in April of this year. The trial tested patients in a dry eye chamber, which is a rigorously controlled low humidity environment designed to simulate dry eye exacerbations, representative of the bad days of a life in a dry eye patient.

In order to qualify for the trial, patients were screened initially in a chamber after receiving vehicle or placebo eye drops. Subsequently, patients were randomized to receive either vehicle or reproxalap prior to another dry eye chamber, the so-called treatment chamber. The prespecified primary endpoint analysis, which was highly statistically significant and resulted in a p-value of 0.002, included data from both chambers, that is the screening chamber and the treatment chamber.

In the CRL, the FDA appeared to suggest that screening chamber data from the prior dry eye chamber trial was difficult to interpret at least relative to the treatment chamber data. Accordingly, we ran a post-hoc analysis of the chamber trial submitted to the NDA in June with just the treatment chamber data alone, which was included in the NDA submission in June and the result of which was 0.004, also highly statistically significant and consistent with the primary analysis.

The CRL also noted a baseline imbalance in the prior chamber trial submitted last year, and as reported earlier this year, there was no substantial difference in the baselines of the trial presented here that was submitted to the NDA in June. To reiterate the strength of the results from the trial reported earlier this year, the reproxalap-treated patients did not meaningfully escalate from baseline in a chamber that is designed to simulate a definitively noxious environment for dry eye patients. To some extent, we believe that the dry eye chamber is more clinically relevant than field trials, where patients are treated over good days and bad days since patients likely care most about their bad days, not their good ones.

As we announced in our press release this morning, and as summarized on Slide 27, our drug product, that is the filling, labeling and packaging of the single-use eye drop vials and drug substance that is the active ingredient, reproxalap, manufacturing facilities have both been the subject of routine site inspections by the FDA in 2025.

Both sites received Voluntary Action Indicated or VAI resolutions of the inspections, and the FDA has notified the manufacturers that the inspections are closed and that no further action was necessary. The successful resolutions to the inspections of our third-party manufacturing facilities support the quality of the reproxalap product and the chemistry manufacturing and controls information submitted to the NDA.

As a reminder, reproxalap is the subject of an option agreement with AbbVie, the terms of which are summarized on Slide 28. The option expires 10 business days after FDA approval of reproxalap for dry eye disease. If AbbVie chooses to exercise after FDA approval, both upfront and FDA approval milestones will be triggered, totaling $200 million, less $6 million that has already been paid to Aldeyra.

Our clinical and regulatory milestones are summarized on Slide 30. In addition to the reproxalap PDUFA date, over the next several quarters, we expect a variety of trial initiations in a number of diseases characterized by inflammation, including those that affect the retina and skin, setting up a variety of important clinical data milestones in the future. Thus, over 2026 and beyond, our catalyst news flow is expected to be robust.

Operator, I'd now like to open the call for questions.

[Operator Instructions]. Our first question comes from Tom Shrader from BTIG.

Fascinating presentation. On the MS data, I'm curious when you're actually scavenging the toxin, as I'm sure you know, MS is 2 diseases. It's a white matter inflammatory disease and then a gray matter disease that's really not understood. Do you have models? Or do you know if you're affecting gray matter disease? Have you considered progressive forms of MS?

Then a second CNS question is, the dopamine stuff is fantastic, but you're chasing the motor side of dopamine. Have you considered the depressive side of dopamine? That's another big avenue where you -- where an oral drug might be fantastic. Then I have an IP question.

Thanks, Tom. We appreciate your insightful questions. Why don't I turn the call over to Dr. Lazorchak to discuss the nature of the EAE model in multiple sclerosis. I know that he has extensive experience with that model and exactly what that model measures, particularly with regard to white versus gray matter. Then maybe Dr. Lazorchak, you can also comment on dopamine as it relates to depression and future animal models. related to that concept.

Yes. Thanks, Todd. Tom, great questions. To provide a little context on the EAE model itself. This model is an inducible model for MS, and it's effectively induced by vaccination where we break the immune tolerance or the immune ignorance to myelin basic protein of the motor neurons. The disease itself in this particular preclinical model is T cell attack or T lymphocyte attack on the spinal motor neurons. This disease progresses in the animals, starting from their high limbs and moves upwards. It's primarily in the spinal column is where a large part of the disease manifests. That's largely going to be a white matter and attack on the motor functions. There is some immune infiltration in the brain in this model, but in terms of the overall presentation of disease, it's primarily manifesting in the lower motor deficits.

Going on to your second question relating to dopamine and the overall size -- other aspects of it. The models we're looking at currently are kind of our first step into the Parkinson's space. I know there are quite a few additional models that explore other elements of Parkinson's disease, even elements of alpha-synuclein -- alpha-synuclelease accumulation, protein aggregation. I think we are definitely just at the beginning of our exploration into Parkinson's disease models. I think we've talked with KOLs and are actively engaged with leaders in the field to look at the correct models going forward that we think and the field thinks will translate into meaningful outcomes for patients.

Tom, you know, dopamine is made the mainstream when on my Spotify feed yesterday, an artist was singing about dopamine. One of those neurotransmitters that seems to have a lot of different activities and a sense for companies like ours is the gift that keeps giving.

Yes. It's always amazing given how central RASP seems to be that you haven't attracted competitors. Can you remind us, is your IP mostly around your specific molecules? Or do you have some fundamental IP about the actual target? Because it still seems like you have mostly the world to yourself.

We believe, Tom, that we are the only company actively pursuing RASP modulation as a target, which is remarkable. RASP have been described for decades as potential markers of inflammation and toxicity. The fact that no other company at the moment is working on RASP, I think, is quite interesting. Because RASP have been described for such a long period of time as mediators of disease, I think it would be impossible to patent RASP as targets, we are a composition of matter-based company.

When it comes to IP, like many companies, we first seek to patent compositions. We are generally aware of what kinds of molecules bind to and trap RASP. It's relatively easy to bind RASP, as I mentioned earlier, that ship-based reaction or micro addition reactions. It is relatively difficult to sequester RASP. Our molecules all feature a 2-click reaction process where there's a binding followed by a ring closure that effectively permanently or irreversibly sequesters RASP. Those molecules and the compositions of those molecules, including all the molecules we've mentioned today, are the subject of our compositional IP.

Our next question comes from Catherine Novack from Jones.

Just on Slide 17, what percent RASP binding is ideal? Are you looking for maximum binding? Or how should we think about what translates to efficacy here?

That's an interesting question also. Let me just describe a little bit of background as it relates to physiologic RASP. There are at least 2 examples of RASP that is vitamin A and vitamin B6, retinaldehyde and pyridoxal and pyridoxal phosphate that are required in the body for various functions. Those are highly chaperoned. Those molecules are protected Dr. Lazorchak reviewed our dry AMD model, ABCR knockout.

ABCR is a protein that protects retinaldehyde. Our drugs, therefore, are incapable of binding chaperone RASP, which is a good thing. There's a reason why RASP -- those particular RASP are chaperone. It's when those RASP aren't chaperone that are problematic, hydroxynonenal, malondialdehyde, choline are other examples of RASP that are de facto toxic. They have, to our knowledge, no known function other than promoting inflammation.

Your question is about how much of those do we need to bind, and the answer, I think, is an empirical one. We don't particularly know any more than we know about other drugs, antibodies as say to TNF-alpha or inhibition of HMG=CoA reductase, as in the case of statins. I'm not sure we completely know how much inhibition or binding is needed. I think the key outcome of what was presented today is that when administered at reasonable levels, that is levels that we're able to achieve in Phase 1 clinical trials in humans, ADX-248 also affects activity in animal models.

Then just a question on the manufacturing. Obviously, it's encouraging to see that these facilities pass inspections. Were there outstanding issues, can you remind us from previous NDA submissions? Were these facilities already inspected? How much of this is new update? How much was outstanding from prior NDA submissions?

Right. The 2 most common questions I get from investors regarding the ongoing NDA review of reproxalap are, number one: have your drug product and drug substance vendors been recently inspected by the FDA. That's the issue we're attempting to address here and the subject of your question. The other question I get is, I've read your CRL, the FDA appears to focus on an analysis of the treatment chamber only.

Have you done that analysis? What was the result? Was it submitted to the NDA. And so we attempted to answer both of those questions. I'd like to tell people that the C in CRL is Complete. It's not incomplete. One of the beauties of a CRL, if there is one, is that the FDA by law tells you everything that they found deficient in our CRLs that the FDA has said we'd like to see one more symptom trial. They have not said we found issues with your CMC with your drug manufacturing.

Our belief, given that this NDA has been reviewed twice previously, is that there really aren't any substantive CMC issues that we are aware of. The outstanding issue was the first question from investors, that is, have your manufacturing sites been inspected recently. As we got at today, both of our manufacturing sites were inspected this year. We disclosed in our Q, our most recent 10-Q filing that the last of those sites was inspected last quarter. Both inspections resulted in VAIs, which is the kind of result that you would want. Going forward, we're not aware of any outstanding issues.

Our next question comes from Clara Dong from Jefferies.

Appreciate this very informative presentation. My question is going to be on 248. On the slide, the in vivo data showing the grip strength and balance improvement, do those functional gains actually track with changes in brain tissue RASP level on the same animals? Have you tested that?

Then for the Phase 1 ongoing clinical study, besides safety, what other objective markers are you going to look at? What really constitute kind of go-forward decision for that?

Clara, thanks for your question and nailed that the government is no longer shut down. I look forward to seeing you in London next week at your conference. I would say a couple of things to begin, and then maybe I'll turn it over to Dr. Lazorchak to address some of the specifics.

RASP are notoriously difficult to measure. The reason for that is the R in RASP is Reactive, and so RASP persists for a period of days, possibly weeks in some cases, possibly minutes. The measurement of RASP is the subject of a large body of scientific literature and thus is notoriously difficult to nail down. Correlating back to Catherine's question, drug dose with the percent inhibition of available RASP is a difficult project. Rather, we would like to focus on the activities that you mentioned, the grip strength and the balance in the rotarod test.

Maybe Dr. Lazorchak, you can talk about what those outcomes mean in a clinical sense, and then I'll, after your response, talk about Phase 1.

Yes. In the preclinical models, the grip strength rotarod performance, these are behavioral functions. We actually have a wide battery of different behavioral functions that have been described in the field where you can assess essentially what is the motor or neural behavior activity in an animal. I think that is -- that's actually one of the most important things to point out is we're trying to infer behavior and behavioral changes in mice or rats in this case.

In terms of how these particular readouts translate, I think they are relevant and they are clinically translatable. For instance, in the example of grip strength, in the context of an ALS mouse model, the disease progresses in this model and the disease manifests as a weakening in muscle strength. The model is true translationally in respect to its ability to represent that decline in grip strength and improvements or delay in that decline in grip strength can be translationally relevant from the preclinical standpoint.

Similarly, with the rotarod assay, that's effectively essentially imagine yourself walking on a rotating balance beam and you're trying to maintain balance as the beam rotates. It's capturing a wide range of motor and balance and behavioral functions, which, for instance, in the case of Parkinson's disease is quite relevant. These behaviors are compromised in Parkinson's patients who have tremors, balance problems, and motor functions, which would lead them to be unstable in their gait or have abilities -- inability to grasp hold objects.

The models themselves give you insights into the brain function of these animals. We can see some of the actual effects in the brain, so we showed in the MPTP model, the brain dopamine levels are somewhat restored and TH-positive cells are rescued as well. We tie those behaviors with biomarker correlates to build the case that we actually are hitting not only the behavior, but also the biologically relevant pathways that would translate to the clinic.

Okay. To your very good question, Clara, about Phase 1. I am a believer in maximizing the output of Phase 1. Typically, Phase 1 are focused on safety, tolerability and PK with immune modulating drugs, you can also add measurement of inflammatory markers. As I described for the ADX-629 Phase 1, we also add a fatty meal challenge. This is eggs and bacon at fried and butter that -- a meal that is really designed to, at least from a dietary standpoint, inflame the patient. Then we measure lipid parameters after that fatty meal challenge as well as inflammatory markers.

I think the good news with ADX-248 is that so far, the drug appears to be safe and well tolerated. The bad news is that requires further dose escalation. Typically, in Phase 1, as you know, you start out with a low dose and increase the dose to the extent that the drug is safe and well tolerated. I would say we're sort of in the middle of that process.

PK is also important back to Catherine's question about how much RASP do we need to inhibit, and per Dr. Lazorchak's comments earlier in the call, we need to have levels of drug that are capable of sequestering known levels of RASP. So RASP are typically described at least in the plasma at micromolar -- low single-digit micromolar levels. I can tell you that we're in excess of that in terms of drug levels.

Just recall, there's a one-to-one stoichiometry. Each molecule of RASP modulator binds to one molecule of RASP. Our drugs are suicide inhibitors, so once that reaction occurs, the 2-click reaction that I was describing previously, there's no going back. I think the good news is we're at drug levels now, as Dr. Lazorchak mentioned, that are in excess of our known described levels of our target.

In terms of inflammatory markers, we're thinking about cytokines and the typical markers like CRP that I talked to C-reactive protein that I talked about earlier in the call with 629 that most companies examine. The challenge there is that typically, Phase 1 is performed in normal healthy volunteers. These are not people that are inflamed or supposed to be inflamed. Sometimes you can see minor decreases in inflammatory markers. Then I've already discussed the fatty meal challenge. We look forward to announcing the results of 248. I think it will be a comprehensive Phase 1 as was the Phase 1 for ADX-629 early next year.

Our next question comes from Yale Jen from Laidlaw & Co.

Congrats on the progress. Just 2 questions here. The first one is that for the second-gen 246 and 248, what's the specific difference between that to the 629, the first-gen compounds? Then I have a follow-up.

Thanks, Yale. All of our molecules has a similar pharmacophore that is the active site of all the molecules. The site that achieves the 2-click reaction that I've been describing is effectively the same or very similar across molecules. What differs across molecules, 629, 246, 248 is the backbone that supports that pharmacophore. The differences in the backbone relate to 2 things. One is potency in binding RASP and the other is pharmacokinetics.

As I mentioned, our first-generation RASP modulators, which includes 629, were a little bit less potent, I would say, actually significantly less potent than our second-generation RASP modulators, say, 246 and 248. That's number one. I think the other part that is worthy of focusing on is the PK. So ADX-629, given its different backbone was metabolized more rapidly. The half-life was lower than the second-generation molecules and thus, ADX-629 was dosed twice a day, whereas ADX-248 will be dosed once a day, at least according to the Phase 1 data that we've seen to-date. Per the differences between 246 and 248, again, [pharmacoh4s] are relatively similar. I would say the backbones are different. I think 246 is designed for intraocular injection, acute administration, whereas 248 was the result of an optimization that resulted in an oral candidate.

Maybe just to tag on this question answer here. You're talking about metabolized less rapidly. Have you guys reviewed the half-life of either 246 or 248?

Absolutely. We're getting some half-life data in now for 248. Just recall that because we're in the middle of Phase 1 that we are masked as to who is on 248, who is on placebo. Typically, Phase 1 cohorts, at least in our experience, are 6 patients on drug, 2 patients on placebo. Most of the data that is generated from the Phase 1 is regarding drug.

I think based on what we've seen so far, what we've seen in animals strongly suggests for ADX-248 a once-daily oral administration, which, as you know, Yale, is the holy grail in pharma. If we could just have a pill that we took once a day, I think biotech and many of its large pharma partners would be very happy.

Maybe the last question here really is that for the 248, you have a broad spectrum of sort of disease area you can tackle. You mentioned CNS today specifically as a new directions -- new expanded directions. How would you prioritize these different indications, atopic dermatitis and others over the next several quarters to see where you eventually place the bet in the more promising ones?

Yes. That's a good question, Yale. One we thought a good bit about. ADX-248, as I said in my preliminary comments, highlights the concrete advantage of immune modulating drugs in that the clinical -- the breadth of clinical indications that could be exploited is quite large.

If you look at companies, like AbbVie or other companies that are in the immune-mediated disease space, there are many indications for each drug. I think that's a worthy goal for us here at Aldeyra. If ADX-248 is a once-daily pill that is able to modulate inflammation, then it should apply to many different diseases. That's why we have in our pipeline metabolic inflammation and now as of today, CNS disease and atopic dermatitis.

In terms of priority, I would say, atopic dermatitis is the furthest along. As we know from reproxalap, RASP are intimately related to itching and eczema or atopic dermatitis is characterized in large part by itching. We're quite interested in a placebo-controlled Phase 2 trial for ADX-248 once we've narrowed down dose ranges, to test the ability of ADX-248 to modulate itching in atopic dermatitis patients. I would say that's number one.

Neck and neck behind our metabolic inflammation, and by that, I mean hypertriglyceridemia, some of the other markers I've discussed today, including CRP, possibly weight loss since RASP precursors to lipids and the CNS conditions. I think for CNS, as Dr. Lazorchak mentioned, we are actively in discussions with key opinion leaders. We're deciding what indications are best for our drug candidates, and we look forward to updating the Street in the near future as to how we plan to proceed.

This concludes our Q&A session. I'll hand back over to Dr. Todd Brady for closing remarks.

Thank you, operator, and thank you all for joining us this morning. As I've said previously, we do appreciate your time and interest in Aldeyra. As always, we look forward to updating you on future developments.

This concludes today's call. Thank you for joining us. You may now disconnect your lines.