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Summary

  • Biotechnology company focused primarily on the development of products to treat immune-mediated, inflammatory, orphan diseases.
  • Business is dependent in large part on the success of a single product candidate, NS2.
  • NS2 has not entered a clinical trial to demonstrate efficacy in humans.

Based in Burlington, MA, Aldeyra Therapeutics (NASDAQ:ALDX) scheduled a $25 million IPO on the Nasdaq with a market capitalization of $69 million at a price range midpoint of $11 for Friday, April 11, 2014.

The full IPO calendar is available at IPOpremium.

SEC Documents
Manager, Joint managers: Aegis Capital

Co-Managers: None

End of lockup (180 days): Wednesday, October 8, 2014

End of 25-day quiet period: Tuesday, May 6, 2014

Summary
ALDX is a biotechnology company focused primarily on the development of products to treat immune-mediated, inflammatory, orphan, and other diseases that are thought to be related to a naturally occurring toxic chemical species known as free aldehydes.

Valuation

Glossary

Valuation Ratios

Mrkt

Price /

Price /

Price /

Price /

% offered

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

Aldeyra Therapeutics

$68

n/a

-18.4

2.9

3.0

37%

Conclusion
No collaboration partners.

ALDX's business is dependent in large part on the success of a single product candidate, NS2, which has not entered a clinical trial to demonstrate efficacy in humans.

The rating is neutral to negative.

To put the conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced above.

Business

ALDX is a biotechnology company focused primarily on the development of products to treat immune-mediated, inflammatory, orphan, and other diseases that are thought to be related to a naturally occurring toxic chemical species known as free aldehydes.

ALDX discovered and is developing NS2, a product candidate that is designed to trap and allow for disposal of free aldehydes, for the treatment of the following diseases: Sjögren-Larsson Syndrome (SLS), a rare disease caused by mutations in an enzyme that metabolizes fatty aldehydes; discoid lupus, an autoimmune condition that affects skin; acute anterior uveitis, an inflammatory eye disease; and ocular rosacea with meibomian gland dysfunction, a dry eye disease associated with rosacea, an inflammatory dermal condition.

ALDX believes there is significant unmet medical need for the therapies it intends to develop. ALDX is not aware of any therapy that has been approved by the United States Food and Drug Administration, or the FDA, for SLS or ocular rosacea with meibomian gland dysfunction.

ALDX believes that therapies for discoid lupus are moderately to poorly effective in controlling or curing the disease without drug related toxicity. Acute anterior uveitis is often treated with corticosteroids (commonly used anti-inflammatory agents), but prolonged use of corticosteroids can lead to significant morbidity.

In addition, SLS, discoid lupus, and acute anterior uveitis are rare conditions. ALDX intends to request orphan drug designation from the FDA for the drugs that ALDX is developing to treat rare diseases.

NS2 has been tested in a variety of in vitro and preclinical models, and has demonstrated the ability to trap free aldehydes, diminish inflammation, reduce healing time, protect key cellular constituents from aldehyde damage, and lower the potential for scarring or fibrosis.

Animal studies

NS2 has been tested in a variety of toxicity studies in animals and appears to be generally safe and well tolerated. ALDX is also developing aldehyde traps distinct from NS2 that have the potential to treat diseases other than those described above.

Clinical trials

ALDX has evaluated NS2 in a Phase I clinical trial in 48 healthy volunteers where NS2 was observed to be safe and well tolerated when administered as an eye drop up to four times per day over seven days.

In 2014, ALDX plans to initiate the following clinical trials, the data from all of which are expected to be available in the second half of 2015:

Phase II clinical trials with ALDX's NS2 eye drop in acute anterior uveitis and in ocular rosacea with meibomian gland dysfunction;

Phase II/III clinical trial in SLS with a topical dermatologic formulation of NS2;

Phase II clinical trial in discoid lupus with a topical dermatologic formulation of NS2; and

Phase I clinical trial of NS2 administered orally to healthy volunteers.

Dividend Policy

No dividends are planned.

Intellectual Property

ALDX's patent portfolio currently includes patents and patent applications covering the composition, formulation, and uses of NS2, and the compositions and uses of other novel aldehyde trapping compounds.

As of January 9, 2014, ALDX owned one United States patent, four United States non-provisional patent applications, and five provisional patent applications, as well as numerous foreign counterparts to these patents and patent applications.

Competition

Novartis International A.G. (pimecrolimus), Amgen, Inc. (AMG 811), Astion Pharma A/S (ASF-1096), Celgene Corporation (CC-11050), and Basilea Pharmaceutica (alitretinoin) have conducted or are conducting clinical trials in discoid lupus.

Novartis (ESBA105) and EyeGate Pharmaceuticals, Inc. (EGP-437) have conducted or are conducting clinical trials in anterior uveitis. For the diseases ALDX intends to study, there may be other developmental therapies of which ALDX is not aware.

A myriad of new treatments have been or are being developed to treat inflammatory diseases, and in theory could be used for the treatment of the diseases ALDX's products are intended to target. Immune-modulating products include cytokine inhibitors, immune cell receptor inhibitors, and Janus kinase inhibitors.

Companies that currently market such therapies include Abbvie, Inc., Johnson & Johnson, UCB Inc. and UCB S.A., Amgen, Inc., Bristol-Myers Squibb Co., and Pfizer, Inc,

5% stockholders

Funds affiliated with Domain Associates, L.L.C . 50.1%

Johnson & Johnson Development Corporation 44.5%

Use of proceeds

ALDX expects to net $19.1 million from its IPO. Proceeds are allocated as follows:

$10 million for research and development activities for NS2, including ALDX's currently planned clinical trials of NS2 and development of other molecules that may relate to ALDX's aldehyde trapping platform, and the remainder for working capital and other general corporate purposes.

ALDX believes that its anticipated research and development expenditures will be sufficient to complete the five clinical trials described in the prospectus, and ALDX believes that each clinical trial will require between $1 million to $2 million to complete.

Disclaimer: This ALDX IPO report is based on a reading and analysis of ALDX's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: IPO Preview: Aldeyra Therapeutics