Hello. I'm Amin Makarem, one of the biotech analysts here at Jefferies. I'm happy to introduce and welcome Todd Brady, CEO of Aldeyra Therapeutics. This is a fireside chat format. Thank you for joining us. My pleasure. Thanks, Amin, for having us. Just to start, can you give us a one-minute overview of the company, the pipeline, most immediate milestones, and what we should expect in the next 6 - 12 months? For sure. Aldeyra Therapeutics is an immunology company. We're huge believers in the immunology field. It just is the gift that keeps giving these days as we learn more about that complex biological system. We've started out in the eye. dry eye disease is the topic du jour. I'm sure we'll spend most of our time on dry eye disease, since that is an NDA stage product. Behind that, allergic conjunctivitis, two of the, I would say, the most common immunological diseases of the front of the eye. Most people have one of them on this planet, which is kind of interesting. Then behind that, ocular lymphoma and other conditions that are in some part inflammatory in the pipeline, atopic dermatitis and dry AMD and so forth. Both, I would say, late stage NDA stage products as well as some phase I, II type products. Starting with reproxalap, focusing on that, can you briefly walk us through its regulatory journey to date? At the risk of PTSD, we have investors here in the audience that I've known for 10 or 15 years, so assuming there are no panic attacks. Actually, we have such an interesting setup these days. We have, I think, been the only company to receive three complete response letters, which is the FDA's way of saying rejection after you submit a new drug application for efficacy. I may be wrong, but I don't think there is another company that's received three efficacy rejections. The reason for that is if you get a CRL, a complete response letter, and it says, "Run another trial," the company doesn't submit another trial unless it's positive, unless it's statistically significant in the eyes of the company, meaningful. Well, the first CRL said, "Run another trial." We had a statistically significant trial. We submitted it. The FDA came back and said, "Well, we think there's a baseline imbalance," principally. We thought, all right. We had two more trials, and one of them was statistically significant, so we submitted that trial. In the last CRL we got back in March, I think we got kind of a unique letter. I haven't seen one of these either, although I do think there was a depression drug called gepirone that received a similar letter. This was before they started releasing CRLs. The letter said, in a sense, "You have so many trials, we're not sure what to make of it." Right? Some trials are positive. Of course, they listed the negative trials. They didn't talk about the positive trials. One thing that I would suggest to the FDA is there should be fair balance in your rejection letters. They should talk about positive things and negative things, right? Anyway, in the FDA's eyes, there are four positive trials, but there are five negative trials. Sort of you count your fingers, five negative is more than four positive, and this was more or less the basis for their rejection. I know that because the Freedom of Information Act allows you to more or less read the reviews. Prior to just a few years ago, you couldn't read the negative FDA reviews. You could only read the positive FDA reviews. They're called the summary basis of approvals or SBAs. Now, if you're the affected party, which we are, the company, you can actually, through FOIA, request the reviews and have read the reviews. By our read, it is as simple as five is more than four. What we've done to be helpful for investors, we put in our corporate deck all of our trials, all of our primary endpoints. We have included a separate slide that has our view of those primary endpoints and the FDA's view of those primary endpoints and trials. We are days ahead of our Type A meeting. When you get a rejection, you have the right to have what's called a Type A meeting to discuss that rejection, presumably to discuss how do you fix the rejection. We are days ahead of preliminary comments ahead of that meeting. The FDA sends you written comments ahead of those meetings. Had we gotten those comments or had we had that meeting, I wouldn't be here today, your timing is flawless. We expect both of those to occur imminently, and we'll know a lot more. 30 days after that meeting, we get minutes. We intend to have a conference call with the street to update on several things. One is the nature of the reviews that we have seen of the three NDA submissions. Two, the discussion and feedback from the Type A meeting, because we'll have the minutes at that point. Three, the path going forward. Now, there are two options at this point. One is that the FDA says the Type A meeting. We have reconsidered. We've seen your meta-analyses and pooled data and your assessment as a sponsor of the totality of evidence, which, to be fair, we hadn't provided before because we'd always sent in a single trial at a time or a trial or two. We, the FDA, have changed our mind, and we think there is totality, and we'd like to negotiate a label. I think there is a low probability of that just based on our prior interaction with this division. If the FDA continues to disagree that totality is supportive in favor for reproxalap for dry eye disease, we will appeal. Appeals are well documented. There is guidance on appeals. You can just type in FDA appeal guidance, or it's actually called FDRR, Formal Dispute Resolution Request, and read all about it. Another company has publicly announced recently, within the last couple of weeks, Outlook Therapeutics, a win on appeal after receiving three CRLs from the same division, ophthalmology. Because Outlook is publicly traded, you can read all about it. We saw that as a very positive sign. I think, to use vulgar parlance, this is about to get real. We'll meet with the FDA shortly, and in 30 days, you'll all know what we intend to do subsequently. Okay. All sounds good. Just to get a bit more specific, can we go into the specific studies you view as directionally successful, but FDA has a different view and doesn't consider positive. Where are the key issues there? Well, in the CRL, the FDA listed five trials. Two of those trials were not statistically significant. In those cases, we agree. Either your P value is less than 0.05 or it is not. Three of those trials, we disagree with the FDA's position. Now, each of the trials has a different FDA reason. You can read all about that in our corporate deck. I mentioned the baseline imbalance, for example, for one of them. We clearly disagree with that. Baseline is controlled pretty much by every statistical model. I have never seen a statistical model that doesn't include baseline as a covariate. The reason is because if you randomize subjects, you might have a different baseline in one group, say, your vehicle group, and a different baseline in your drug group, and so thus, you must put baseline as a covariate in your model. All those things everyone does, including us. There's clearly grounds for disagreement there. Going forward, I think as an investor, if you're a new investor, as I mentioned, it's an interesting setup because you can go to our corporate deck, you can look at the trials, you can more or less intuit our argument based on what we have at corporate deck, and then guess how that appeals process would happen. Now, if we appeal, I'm not saying we will, but if we appeal, that appeal would go to the Office of New Drugs, which is a very high up office that sits right below CDER, the drug unit of the FDA, the small molecule drug unit. You can pretend you're at the OND and benchmark the odds of success. It's been interesting to me to have this new dialogue with investors, some of which are now front-page holders, that don't take clinical trial risk. They don't take science risk. They don't take mother nature risk. They don't take p-value risk. They take process risk, which is exactly where we are. The latest CRL didn't say run more trials. It said prove totality. Usually, you don't count on your fingers to prove totality, and there was an appeal for gepirone, I mentioned that depression drug, regarding totality, and the outcome of that appeal was you can't count your fingers. You got to do normal things like meta-analyses and pooled analyses, all of which we have now submitted to the FDA ahead of this upcoming Type A meeting. I think for those of us that have been in the stock and in the company for years now, it hasn't been great to get to three CRLs. For new investors, I think it's a really interesting setup. Our stock is low. You can benchmark the odds of success, I think reasonably well, just simply by looking at the endpoints in our corporate deck, the vast majority of which are statistically significant. I see. One interesting aspect of this CRL was that FDA didn't request additional trials. How do you interpret that? How does it shape your strategy heading to this Type A meeting? Like I said, I haven't seen a CRL like that. I don't know what gepirone's CRL said, but it must have said something like that. Usually, if the FDA has an efficacy concern, they say, "Run more trials," which makes sense. In this case, they didn't. I actually spoke with the director and deputy director of the reviewing division, which in this case is ophthalmology, and I asked them, I said, "What is it that you feel like you need to see?" Their argument, in a nutshell, was, "You really haven't provided a totality argument. There's no integrated summary of efficacy, and we understand the reason for that is we've been asking for single trials, and you submitted single trials. I think the message back to me from the director was, "We've given you the opportunity to support the totality without having to run more trials." Generally, in any process after a CRL, whether there's an appeal or not, a win is not having to run more trials. I'm glad you asked the question because in our case, then the next question is, what if you had to run more trials? What would they be? I think in our case, our strongest results are Schirmer test, which is a strip of paper in your eye. It measures how much tears you have, which is important to dry eye for obvious reasons. It's probably our strongest endpoint. Those trials are effectively two-week trials or two-dose trials, very short trials, and those are what we would run. In terms of cost to the company, I think each trial is $5 million or less. We have $50 million in cash. We have guided that our cash goes into the second half of 2028. I don't think there's an issue of, do we have enough money and time to play this process out, even if we have to do more trials? I think it's an issue of, does the FDA play ball at this upcoming Type A meeting, which will happen, I believe, within days, or do then we have to appeal the process and go speak to the Office of New Drugs? Is there a possibility that the FDA ask for an additional trial, do you think? Or that's a lower chance that's going to happen? Well, I don't think the division will ask for a new trial because they had that opportunity in the Complete Response Letter, and they told me explicitly, "We wanted to give you the opportunity to demonstrate totality without running a new trial." Again, another unique aspect of that Complete Response Letter. If there is another trial requirement, my anticipation, who knows, would be that it would come during the appeal process, and somewhat the Office of New Drugs says, "Okay, we've gone through all your trials, and we just think you need another trial or two." How that trial looks and so forth, it really depends on our discussions with that group. Is there a possibility to have some sort of a subpopulation study? Is it population that you think the drug works better and focus on that, or you would just go broad? Interesting question because the letter said, "We recommend you identify patients and conditions that are more likely to respond to your drug." If anything, the unique aspect about reproxalap and dry eye, it's the only drug, in our view, to have demonstrated acute activity, meaning within minutes. What's so cool about dry eye is you could, per the guidance from the FDA, you can test it in two ways. You can send patients home and ask them how they feel over weeks, or you can put them in a small room and blow hot air in their face, and they get red and they get symptomatic and so forth. That's what we've done. No other drug's ever done that. There is no dry eye label of, I don't know, six or seven approved dry eye drugs that has dry eye chamber data in it because, in our view, no other drug works that quickly. If you had a new entrant to the dry eye market that had data within minutes, that's what everyone wants. That's what everyone wants in everything these days. Just think about Instagram and Reels and Snapchat or whatever people use these days. Our lives are moving quicker. They're not moving slower. The consumer demand from the patient population, whatever the medical need is, whatever the indication, it's going to be quicker, and that is sort of the need that reproxalap, in theory, could fill. Okay. Let's talk about the appeal, if it gets to that point. If you ultimately pursue an appeal, what does the process look like? How long do you think it would take? Great question. Per the FDA appeal guidance, my country doctor view of it is everything is 30 days. You request a meeting, that's 30 days. There's 30 days to get the minutes from that meeting. This is what Outlook did. They had a 60-day process. They won the appeal, and now they have to resubmit their application to negotiate a label with the reviewing division. Best-case scenario for us. My personal view is more likely because we have so many trials, because there's meta-analyses and pooled data and so forth, our process may have a little back and forth, but each back and each forth is 30 days. You can quickly see how often these appeals turn out to be months long. I don't know how things will go if we appeal. I don't know if we're going to appeal. It can take probably six months in some cases to get through that initial phase. It could be as short as two months. It could be as short as 30 days if you don't ask for a meeting. It's sort of a TBD, and I think that's the challenge for us as executives in the company. We just don't know. We can't predict that process. Just getting a little bit deeper into the appeal process, how does it work? You mentioned Office of New Drugs, but what components of the FDA are engaged with this appeal process? The way it works is you appeal to the office. Let me back up. The FDA has divisions which are indication-specific, in our case, ophthalmology, and then above that is an office. Above ophthalmology is an office called the Office of Specialty Medicine. I don't know why, but it's called that. Above that is the Office of New Drugs, which, per the name, oversees all new drugs in the small molecule space. It sits right below CDER. Because our signatory on NDA approvals or rejections is the Office of Specialty Medicine, we appeal the Office of New Drugs. Which is we're fortunate in that regard because it's a fairly senior organization. They're used to these complex reviews. During the appeal, if there's some sort of resolution, whether there's a new trial or whether there's a mandate to negotiate a label, during the next NDA submission, which optimally is a two-month review, the OND will oversee the process. Things in theory will go much more smoothly, at least from our end. I'm not sure ophthalmology loves it when the Office of New Drugs is overseeing them and in a sense, micromanaging the process. That's sort of what the guidance from the FDA mandates. I see. Do you have a sense on the historical success rate for appeals, particularly in Ophthalmology Division? Are there relevant precedents? Is there anything that can be learned from there? That is a great ChatGPT question. The thing about ChatGPT is it's just remarkable in how well it is able to read all the 10-Ks, all the 10-Qs, all the public filings, all the FDA documents. I've done that. I've asked that for you, and for us really. There's a couple of unique things. First of all, more than half the time, probably about 60% of the time, there is a win, and I put "win" in quotes, meaning that the sponsor does not have to do more trials. I am certainly leaning that way in our case if we go to appeal, not only because I think our data are good and the preponderance and the totality are there, but also because the CRL didn't say do more trials. I also asked if it turns out that there's ever been a case where the rejection letter didn't say more trials, but the appeal did, okay, which is our case. Let's say the appeal, we appeal, and they come back say, "Okay, we disagree with your rejection letter. It turns out it's worse than you thought. You have to do more trials." That has never happened. We can find no evidence of that, so I'll be surprised for that reason if we wind up doing more trials. Like I said, if we do, no big deal. It's just more time and effort. You had asked about IP, and we'll be guiding on IP in the second half of this year. It's been a real pleasure on that topic to work with AbbVie, which is our partner. I know you're going to ask about AbbVie. We have a partnering relationship with AbbVie. They have an option on reproxalap. It's $200 million up front, assuming they opt in after approval, another couple hundred million in milestones after that, and a 60/40 AbbVie Aldeyra P&L split going forward. By virtue of the option, AbbVie has the right to be involved in all of this. I can't speak for AbbVie. I can tell you they are intimately involved. Okay in all of this. Any incoming or outgoing correspondence, AbbVie has the right to be involved. In summary, I'm optimistic about the process based on other processes. I encourage investors to look up gepirone, which is another, maybe the only other totality appeal that we can find, where they had quote three negative trials and quote two positive trials. Three is more than two. We'll talk about IP later on in the year. Rest assured that AbbVie is involved, particularly at this point on the clin reg side of things. All right. That's helpful. Just to wrap up reproxalap, more broadly, how attractive is the commercial opportunity there for reproxalap if this ends up being approved? Each dry eye drug that's launched, and I think there's six or seven of them now, the market seems to grow. Dry eye as a condition is an amazing condition. It's one of these conditions that are growing as we get older, as the population expands, as we continue to pollute our planet, as temperatures are getting warmer. There's more pollen. There's more dust. Our children, including my children, which are now young adults, grow up with a screen six inches in front of their nose. It's going to get worse. It's not going to get better. As far as I'm concerned, the more products, the better. Now, ostensibly, our label would be the only one that's supportive of acute activity within minutes, particularly in a flare setting. Patients don't care about their good days. Who cares about your good days, right? If you're feeling good, you don't care. You're good. If you're feeling bad, if the humidity goes down, if pollen increases or you sit on an airplane, you have those vents in your face, that's bad. To have a drug that's proven to work in that flare setting I think is important. The other thing that ostensibly would be on our label is redness. In dry eye disease, you talk about symptoms, which is how people feel. Signs, which is what you can see in a patient if you're an investigator, well, the only sign people care about is redness, because the patients can also see that. Who wants red eyes? When you get old like me, you don't care anymore. When you're young, you don't want red eyes. It makes you, I don't know, not only do you look bad, people think you're partaking in illicit activities and so forth, staying out too late, doing something bad. I think the redness, the acute activity, the demonstration of activity during bad days is important commercially for this drug if it's ever approved. Okay, helpful. Moving to pipeline, you have a few assets in the pipeline. Can you basically rank those assets from the one that you think become more central part of your story moving forward? Well, believe it or not, we have another NDA stage asset, which is ocular lymphoma. We have, we think, the world's only ocular injection formulation of methotrexate, which is an old drug approved in the 1950s for lymphoma, systemic lymphoma. Unfortunately, there is a variant of lymphoma that it just starts in your eye. It is universally fatal, meaning survival is less than five years. The problem is it metastasizes back to your brain. As I like to tell people, the optic nerve is just an extension of your brain. It comes right out of your brain. It's the only part of your brain you can see if you look into someone's eye. If you get cancer there, it just goes backwards, eventually. The standard of care is methotrexate, there's no methotrexate approved for lymphoma. We submitted an NDA some years ago. That NDA was also rejected. The NDA was based on the literature, after the FDA encouraged us to submit the NDA based on the literature. Apparently, those trials weren't sufficient for the FDA to approve the drug. We're back to discussing with the FDA what is it they want to see in ocular lymphoma. Maybe there's another trial, maybe there's not. I think we need to involve other divisions, not just the ophthalmology division at this point. That will be interesting from a regulatory standpoint to see how that plays out over the next six months in parallel with our other regulatory discussion in dry eye disease. Behind that, most of the questions I get from investors are about atopic dermatitis, which is obviously just a huge unmet need, particularly in children. Eczema. You don't want to inject children. Today, we use DUPIXENT and other drugs. We inject patients. Those drugs work pretty well for moderate to severe patients. We really are lacking something that's safe that you can use to treat mild disease and itching particularly. That's where we are with an oral RASP inhibitor, Reproxalap, our eye drop RASP inhibitor. We have an oral RASP inhibitor. We've recently completed phase I. I think you'll hear more about that asset coming up. Behind that, dry AMD, another huge unmet need. We have a couple of drugs that purportedly reduce growth of lesions in dry AMD. It's another disease we're all going to get if we live to be old enough. Hopefully, all things going well, we'll be in the clinic at some point next year and talk more about that then. Just one clarification question. For the ocular lymphoma, do you have an SPA agreement with the FDA already? If so, what other alignment do you need to get from the FDA? We do. We do have a Special Protocol Assessment agreement in ocular lymphoma. I think the question for us is that the right trial to run at this point? As we continue to dialogue with the Division of Ophthalmology, is that division exclusively the right division with whom to discuss, with which to discuss the indication? Usually, if you have a cancer indication, the Oncology Division works on that. Yeah. I think we're, before we run said trial, trying to think a little more broadly about what does it mean if the trial works? What does it mean if the trial doesn't work? Do we have the correct people at the FDA helping us think about that? Okay, helpful, as we are running out of time. Just in closing, what's the cash runway right now? How do you prioritize the capital between the reproxalap and the pipeline, and basically the key events we have to look forward? Right. We reported $65 million in cash at the end of the last quarter. I think we also reported seven or eight employees. We're efficient. We're streamlined. You sort of have to be when you get three CRLs. The good news is we can dial up or down R&D as needed. We don't have a huge amount of fixed cost. We had $15 million in debt. We have paid down that debt, as we've announced, you can assume we have about $50 million in cash as of the last quarter, plus the, or minus the debt paydown. That we've guided is the back half of 2028, I guess, in theory, longer, depending on what we choose to do or not to do, but plenty of time to see out the reproxalap NDA saga at this point. Plenty of time to run more trials in dry eye should we have to do that. Plenty of time to talk to the FDA about ocular lymphoma. I don't think from a cash standpoint or an infrastructure standpoint we're at risk of anything in the near term. Okay. Thank you very much for joining us. Thank you. Thank you for having me.