Aldeyra Therapeutics, Inc. ALDX announced that the FDA has accepted its resubmitted new drug application (NDA) for reproxalap, a first-in-class investigational RASP modulator, for the treatment of the signs and symptoms of dry eye disease.

With the FDA accepting the resubmitted NDA for review, a decision from the regulatory body is expected on April 2, 2025.

Simultaneously, Aldeyra announced that it has expanded its existing option agreement with AbbVie ABBV.

Shares of Aldeyra were up 11.6% on Nov. 18 following the announcement of the news. The stock has rallied 33.9% so far this year against the industry’s decline of 6%.

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More on ALDX's NDA Resubmission of Reproxalap

We remind investors that in November 2023, Aldeyra received a complete response letter (CRL) from the FDA for its NDA of reproxalap to treat dry eye disease. Per the FDA, the study results supporting the NDA failed to demonstrate reproxalap’s efficacy in treating ocular symptoms associated with dry eyes, which formed the basis of the CRL issue.

Back then, the FDA had recommended that at least one additional adequate and well-controlled study should be conducted on reproxalap to demonstrate a positive effect on the treatment of ocular symptoms of dry eye.

Following this, Aldeyra decided to initiate a dry eye chamber clinical study to address the issues stated by the FDA in the CRL.

In May, ALDX enrolled the first patient in a phase III dry eye chamber study, which was designed to ensure a potential resubmission of NDA for reproxalap for treating dry eye disease.

In August, the company announced that the phase III dry eye chamber study, which evaluated reproxalap for the treatment of dry eye disease met the primary endpoint. In the study, treatment with reproxalap was statistically superior to vehicle for the prespecified primary endpoint of ocular discomfort, an FDA-accepted symptom of dry eye disease.

Aldeyra resubmitted the NDA for reproxalap for treating signs and symptoms of dry eye disease last month.

ALDX's Option Agreement With AbbVie

Under the latest expanded option agreement, Aldeyra will begin certain pre-commercial activities, for which 40% will be paid by the company, and the remaining 60% will be borne by ABBV if the option is exercised. AbbVie too has independently started pre-commercial planning activities.

We remind investors that, in October 2023, Aldeyra entered into an exclusive option agreement with AbbVie, which granted the latter an option to acquire a co-exclusive license to develop, manufacture and commercialize reproxalap within the United States and an exclusive license for the same outside the United States.

If ABBV chooses to exercise the option, ALDX will be eligible to receive an upfront payment of $100 million less option fees of $6 million, which was previously paid. Additionally, Aldeyra is eligible to receive up to $300 million in regulatory and commercial milestone payments from AbbVie, including a $100 million milestone payment payable upon the potential FDA approval for reproxalap.

Aldeyra and AbbVie will share U.S. profits and losses received in connection with the commercialization of reproxalap. While Aldeyra would receive 40% of the profits, ABBV would receive the remaining 60%.

ALDX's Zacks Rank & Key Picks

Aldeyra currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the biotech sector are Immunocore Holdings plc IMCR and Castle Biosciences, Inc. CSTL, each carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Immunocore’s 2024 loss per share have narrowed from $1.79 to 94 cents. Loss per share estimates for 2025 have narrowed from $2.35 to $1.57 during the same time. Year to date, shares of IMCR have declined 54.6%.

IMCR’s earnings beat estimates in two of the trailing four quarters while missing the same on the remaining two occasions, the average surprise being 25.57%.

In the past 60 days, estimates for Castle Biosciences’ 2024 loss per share have narrowed from 58 cents to 8 cents. Loss per share estimates for 2025 have narrowed from $2.13 to $1.88 during the same time. Year to date, shares of CSTL have surged 29.3%.

CSTL’s earnings beat estimates in each of the trailing four quarters, the average surprise being 172.72%.

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