Aldeyra Therapeutics Inc (ALDX) 2015 Q4 法說會逐字稿

Greetings and welcome to the Aldeyra Therapeutics full-year 2015 financial results conference call. (Operator Instructions). And as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Carol Ruth, President and CEO of The Ruth Group. Thank you, Ms. Ruth, you may begin.

Thank you, operator. Good morning, everyone, and welcome to the Aldeyra Therapeutics full-year 2015 conference call and audio webcast. With me today are Dr. Todd Brady, President and Chief Executive Officer, and Stephen Tulipano, Chief Financial Officer of Aldeyra Therapeutics.

Earlier this morning Aldeyra issued a press release announcing the Company's financial and operating results for 2015. We encourage everyone to read today's press release which is available on Aldeyra's website at www.Aldeyra.com. In addition, this conference call is being webcast through the Company's website and will be archived there for future reference.

Please note that various statements we make during this call about the Company's business, financial position, business strategy and plans and objectives for Aldeyra's future operations are considered forward-looking statements within the meaning of the federal security laws.

Actual results could differ materially from those stated or implied by these forward-looking statements due to risks, changes and circumstance, assumptions and uncertainties associated with the Company's business.

These risks are described in the Risk Factors and Management's Discussion and Analysis of Financial Condition sections of Aldeyra's annual report on Form 10-K for the year ended December 31, 2014, and quarterly report on Form 10-Q for the quarter ended September 30, 2015, which are on file with the SEC and available on the SEC and Aldeyra websites.

Additional factors may also be set forth in those sections of Aldeyra's annual report on Form 10-K for the year ended December 31, 2015, which is expected to be filed with the SEC later today. We encourage all investors to read these reports and our other SEC filings.

This conference call contains time sensitive information that is accurate only as of the date of this live broadcast, March 30, 2016. Aldeyra undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that I would now like to turn the call over to Dr. Todd Brady. Todd?

Thank you, Carol, and thank you all for joining us this morning for our full-year 2015 conference call. It is our pleasure to speak to you today to highlight our accomplishments in 2015 and to provide an overview of the milestones that we hope to accomplish in 2016 as we continue to advance NS2 and other aldehyde traps as a novel first-in-class approach for inflammatory disease and inborn errors of aldehyde metabolism.

As we recently announced positive data from our Phase 2a clinical trial of our lead aldehyde trap NS2 in patients with allergic conjunctivitis represent what we believe to be the first demonstration of the efficacy of an aldehyde trap in any human disease and suggest that NS2 and similar compounds could play an important and much needed role in treating inflammation while avoiding many of the toxicities of currently available anti-inflammatory medication.

Our allergic conjunctivitis trial was one of three Phase 2 trials that were initiated in 2015 to assess the safety and efficacy of aldehyde trapping in inflammatory ocular disease and inborn errors of aldehyde metabolism. As we have previously disclosed, we expect to report top-line data from our Phase 2 clinical trial of topical ocular NS2 in patients with active, noninfectious anterior uveitis next quarter.

Allergic conjunctivitis and noninfectious anterior uveitis are two different forms of inflammation, allergy and autoimmune disease respectively. And with data from clinical trials in both of these diseases, we expect to be positioned to provide further details regarding the clinical and regulatory strategy that we intend to employ to exploit the therapeutic potential of NS2 in ophthalmic inflammation.

It is important to note that the eye is the first step in our effort to treat inflammation and we believe that the therapeutic potential of NS2 and other aldehyde traps is likely to extend to many forms of inflammation throughout the body.

As we have previously mentioned, we are committed to developing a systemic formulation of NS2 and other compounds to exploit the broad therapeutic potential of aldehyde trapping in non-ocular inflammatory disease and we plan to initiate clinical development of a systemic formulation this year.

Potential indications for a systemic aldehyde trap include not only inflammatory or autoimmune crises where patients are treated in acute care settings with systemic and often toxic medications, but also inborn errors of aldehyde metabolism that include Sjorgren-Larsson Syndrome, or SLS, and Succinic Semi-Aldehyde Dehydrogenase Deficiency known as SSADH deficiency, which are two severe diseases with no FDA approved therapy.

Our Phase 2 clinical trial of topical dermatologic NS2 for the treatment of the skin disease in SLS was also initiated in 2015 and we look forward to reporting results from that trial in the second or third quarter of 2016.

Because patients with SLS, SSADH deficiency and possibly other inborn errors of aldehyde metabolism have genetic mutations in key aldehyde metabolizing enzymes that result in elevated levels of toxic aldehyde, we believe that the therapeutic potential of NS2 and other aldehyde traps is considerable in these diseases.

Given our recent positive Phase 2a allergic conjunctivitis data, in addition to our continuing belief in aldehyde trapping as an important first-in-class approach in inflammation and inborn errors of aldehyde metabolism, everyone here at Aldeyra is excited about what lies ahead in 2016. And we look forward to continuing to update you on our progress with systemic administration of aldehyde traps as well as our ongoing Phase 2 clinical trials in noninfectious anterior uveitis and SLS over the coming quarters.

I would now like to turn the call over to Steve Tulipano, our CFO, for a review of the financials before providing closing remarks and opening the floor to questions. Steve?

Thanks, Todd, and good morning, everyone. In 2015 we had a loss from operations of $12 million compared to a loss of $7.3 million in 2014 as we advanced three Phase 2 programs through the clinic. Research and development expenses totaled $7.6 million for 2015 compared to approximately $3.7 million in 2014. The year-over-year increase in 2015 was due to our three active trials and increased headcount costs compared to 2014.

G&A for 2015 was $4.4 million versus $3.6 million in 2014. The increases there are related to increased legal, insurance, personnel and other G&A costs. For the year ended December 31, 2015 Aldeyra reported a net loss attributable to common stockholders of approximately $12.1 million compared to a net loss of approximately $9.6 million for the year ended December 31, 2014.

Basic and diluted net loss per share was $1.40 for the year ended December 31, 2015 compared to basic net loss of $2.51 per share and diluted net loss of $3.09 per share for the same period in 2014. Included in the 2015 net loss was $2.2 million related to non-cash stock-based compensation expense. We entered 2016 with $27.6 million in cash, cash equivalents and marketable securities.

This concludes our prepared remarks for today's call. Operator, we would like to now open it to -- open the floor for questions. Thank you.

(Operator Instructions). Roy Buchannan, Janney Montgomery Scott.

Thanks for taking the questions. First I had one I guess if you could give -- I mean, you gave pretty fine detail on the Sjorgren-Larsson timing 2Q or 3Q, but it looks like it is still enrolling on clinicaltrials.gov. Is 3Q a better bet in any risk that it goes into 4Q?

Hey, Roy, good morning. I think the risk that this goes into Q4 is very low. I also think that the data guidelines or data guidance we gave today is consistent with our prior enrollment guidance. So really we don't see any material changes there.

I realize that Q2 and Q3 is a broad range, but, as you know from clinical trials, enrollment is only part of the picture; the rest of the picture is data analysis and reporting and so forth. So given the nature of the trial that is why we have given the guidance.

Okay, that makes sense. And then you guys are presenting tomorrow at the SSADH conference in Boston. Can you give us any sense what we might see there, any potential updates on your clinical plans?

Yes, you will see some of that, we are planning to 8-K our slides so the public can review those slides. That talk will be given, as you know, by David Clark, our Chief Medical Officer. The SSADH symposium, which is online and available to anyone who looks it up, is the SSADH conference run by the key opinion leaders in the disease.

And we are thrilled to be able to present there, obviously, because we believe we have a critically important new approach in that disease. And I think just by viewing the agenda you can see sort of the quality and breadth of the presentation. But we will -- David will be speaking in more detail about our data and preclinical data in SSADH and our clinical approaches that we hope to take this year and next.

Okay, great. Then just the last quick question I guess on allergic conjunctivitis. I know you are waiting for the uveitis data. I just wondered what you think about the -- I guess the dosing regimen. If you expect to stay with four times a day and what kind of -- I guess what kind of treatment regimen do you foresee during allergy season? People using the chronic use the whole season or as needed, what do you think there? Thanks.

Well, those are all great questions, Roy, and we are going to provide, as you mentioned, more clinical and regulatory detail after the uveitis data are reported by us next quarter. I can say that -- a couple of things.

First of all, as you know from clinicaltrials.gov, the dosing regimen of NS2, the concentration of the drug, all of that is the same between the allergic conjunctivitis trial, where we just reported positive results, and the upcoming data from anterior uveitis will represent the same dosing strategy. So nothing has changed really except for the time of dosing, which is 16 days in allergic conjunctivitis and six weeks in uveitis. But everything else is going to be the same.

I think going forward, and I am always a big believer clinically in if you have positive results in a Phase 2, as you advance to Phase 3 keeping as much the same as possible. And I think you might expect us to do something very similar in subsequent trials that we have done for our current trials.

Your question about the market is an interesting one and we'll be prepared to give more detailed market guidance subsequent to the uveitis data. But I think that new medications in any disease are often first used in patients that are recalcitrant to standard of care.

So I think that at this point we are less concerned about the frequency of dosing, how the drug might be used in populations whether it be seasonal or perennial. And we will need to work that out based on the data of subsequent trials. And of course our correspondent regulatory agencies.

I think one thing we do know is that we have reported for allergic conjunctivitis is that NS2 topically in the eye is safe and well tolerated. And so I think there is the potential not only to combine NS2 with currently available medications, but also the potential to dose, as you mentioned, Roy, more chronically than some of the high-powered anti-inflammatory medications, which in the eye are sometimes quite toxic.

Thanks, very helpful, thank you.

Olivia Lamb, Laidlaw & Company.

Hello and good morning and thank you for taking my question. I actually have a few questions on behalf of Yale Jen. So my first question is for the SLS program can you provide a little bit more color on the current status of the patient recruitment?

Hi, Olivia, and good morning. Well, I don't think I have much more to add than what I spoke about with Roy. We typically do not and have not press released the last patient in in clinical trials, we don't plan to in the near future simply given the period of time that is needed to treat these patients.

We prefer to disclose last patient/last visit as we have done with both Phase 2 trials that have completed to date. So, I will just reiterate though, as you mentioned with Roy, that our previous enrollment guidance is perfectly consistent with the guidance that we gave today in terms of data reporting for SLS which is Q2 or Q3 of this year.

Okay, great. Thank you. And then also for the allergic conjunctivitis and non-infectious anterior uveitis studies, do you guys plan or what medical conferences do you guys plan to potentially report any of the clinical data at later this year?

Yes, great question. We are going to update that post the uveitis data. You can rest assured that we have a presence at every major ocular conference. We have relationships with every major key opinion leader in ocular inflammation and that is the subject of a great number of conversations not only internally to Aldeyra but also externally with our key opinion leaders.

I think that what is so interesting about this approach and your question is that this is a first-in-class novel mechanism. There, to our knowledge, has never been a first-in-class novel mechanism in the eye. The eye has unfortunately always inherited approaches from other parts of the body, so steroids or NSAIDs or cyclosporine; all were developed outside the eye and then migrated to the eye.

This is the first time, again that we are aware of, in ocular inflammation where a novel approach has been developed in the eye and then will migrate to other parts of the body from there.

And it is a long-winded way of answering your question, but I think from a publication and a disclosure standpoint at scientific meetings it affords us the opportunity to describe what we think is a novel approach, a novel pathophysiological mechanism, which is the aldehyde signaling that leads to inflammation.

And a variety of preclinical data that much of which is currently on our website, including two posters that we presented last year at ARVO, and then combining that with data from allergic conjunctivitis and possibly uveitis depending on how the data come out.

I think this is a very powerful package that could lead to major impacts in the scientific field. Exactly how we present it, how those data are compiled and written up and so forth and so on we will be prepared to disclose post uveitis data. That is a good question though, good question, Olivia.

Great, thank you very much.

(Operator Instructions). Kevin Patel, Cowen and Company.

Hi, I am calling for Ritu Baral. Just could you go over possibly what your OpEx guidance will be for 2016?

So, Kevin, thank you for your question, I really appreciate it. You can assume that our OpEx in 2016 will mirror our OpEx in 2015. As we stated earlier, we have $27.6 million in cash coming into the year. We expect that cash to extend out to the end of 2017 and to complete the two current Phase 2 trials, but also to complete a Phase 1 trial systemically as well as three systemic Phase 2 trials.

Okay, great.

I think -- Kevin, it is Todd. And Steve, thank you for that answer. I think what is not reflected in Steve's comments -- or Steve's comments are future trials and ocular inflammation.

Given the positive Phase 2 data in allergic conjunctivitis I think the one thing we know for sure is that we will be taking some next steps clinically, which again we will detail not only in terms of clinical development but regulatory development and also financially after the uveitis data come in.

So, I think that we can expect that there will be some increase in R&D expenditures given the positive nature of the data that we reported in February. But we will guide on that, Kevin, specifically next quarter when the uveitis data come out.

Okay, great. And is it expected that having your end of Phase 2 or a meeting with the FDA post the noninfectious anterior uveitis trial?

Again, I think it is too early to say. I think part of that depends on the data, Kevin. But off the cuff, I think that is a very logical conclusion. If you review the development path of -- well, the only other drug that has been approved really for anterior uveitis is steroids.

If you review the steroid development path, an end of Phase 2 meeting or something similar would certainly be reasonable to assume based on the trial design that we have completed recently in uveitis.

Great, thank you.

Olivia Lamb, Laidlaw and Company.

Hey, good morning, this is Yale. How are you gentlemen?

Hey, Yale, how are you?

Sure. My first question is -- sorry I came in late, so I may have missed the early part of the presentation. First question is what might be the medical conferences or other venues you may talk about the systemic version of NS2 going forward? And kind of a meeting besides the one coming up this end of this month.

Yes, we -- there is two ways we think about inflammation, Yale. As you know, one is in the eye and one is outside the eye. I think the premiere ocular conferences are ARVO and AAO, the latter occurring sometime in the fall. Outside the eye there is a variety of conferences which sort of span from the rheumatology conferences all the way to the more basic science conference AAAAI is a good example.

And we presented a poster at AAAAI last year, which I think with some of the seminal -- if not the seminal data suggesting that aldehyde trapping has a major impact on a broad based reduction of anti-inflammatory cytokines. And an up regulation -- I am sorry, a broad-based reduction of inflammatory cytokines and an up regulation of anti-inflammatory cytokines and that poster is on our website.

So, I think that amongst those mix of conferences I think you could expect to see a presence at Aldeyra -- from Aldeyra.

Okay, great. Thanks a lot I appreciate it. Congrats on the good quarter.

Yes, thank you.

(Operator Instructions). There are no further questions at this time. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.