Ladies and gentlemen, thank you for standing by and welcome to the Aldeyra Therapeutics First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to the company's Chief Financial Officer, Joshua Reed. Please go ahead, sir.

Good morning, everyone. With me is Dr. Todd Brady, President and Chief Executive Officer of Aldeyra. This morning we issued a press release reporting our financial results for the quarter ended March 31, 2021. A copy of the press release is available on the Investors and Media section of our website, www.aldeyra.com. Please note that this morning's conference call contains forward-looking statements regarding future events and the future performance of Aldeyra. Forward-looking statements include statements regarding submission of potential new drug applications, potential commercialization, the anticipated timing of results from our clinical trials, our projected cash runway, our possible or assumed future results of operations, expenses and financial position and potential growth opportunities among other things. These statements are based upon the information available to the company today. These statements reflect Aldeyra's current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including the development, clinical and regulatory plans or expectations for Aldeyra's product candidates and systems-based approaches. The risks that result from clinical trials or portions of clinical trials may not accurately predict results of future trials for the same or different indications and Aldeyra's continuing review and quality control analysis of clinical data. As a result of the COVID-19 pandemic, clinical site availability, staffing and patient recruitment have been negatively affected and the timelines to complete our clinical trials may be delayed. Aldeyra assumes no obligation to update these statements as circumstances change. Future events and actual results could differ materially from those projected in the company's forward-looking statements, including the current and potential future impact of the COVID-19 pandemic on our business, 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 company's press release issued this morning and our filings with the SEC. I would now like to turn the call over to Dr. Brady.

Thank you. Joshua. The remarkable top line results we reported last week from our Phase 3 INVIGORATE Trial in allergic conjunctivitis set up what we expect to be a catalyst-rich year for Aldeyra in 2021. Reproxalap achieved statistically significant improvement over vehicle for the primary endpoint of patient reported ocular itching, the key secondary endpoint of investigator assessed ocular redness and the secondary endpoints of patient reported ocular tearing and total ocular severity score. The clarity of the p-values achieved in the INVIGORATE allergen chamber further suggests Reproxalap clinical utility and reduce ocular itching, redness and tearing which are the hallmark symptoms and signs of allergic conjunctivitis. To our knowledge Reproxalap is the first allergic conjunctivitis compound that has been observed to show activity versus vehicle across symptoms and signs in a large well-controlled allergen chamber trial. INVIGORATE achieved the primary endpoint of improvement over vehicle and patient reported ocular itching score at all 11 pre-specified time points each with a p-value of less than 0.0001. Over the duration of the allergen chamber, improvement over vehicle for the key secondary endpoint of ocular redness was achieved as were the secondary endpoints of patient reported ocular tearing score and total ocular severity score, consistent with the primary endpoint p-values for all secondary endpoints were less than 0.0001 indicating superiority of Reproxalap over vehicle and potential clinical utility across symptoms and signs of allergic conjunctivitis in the setting of continuous moderate to high pollen exposure. Consistent with the prior clinical experience of Reproxalap and other prescription ophthalmic solution, mild and transient instillation site discomfort was observed, but importantly, there were no observed safety or tolerability concerns in the trial and no discontinuations due to adverse events. Reproxalap has now been tested in over 1200 patients with no clinically significant safety signals. With…

Thank you, Todd. As Todd noted we recently sold 10 million shares of common stock at a price of $12.50 per share in an underwritten public offering. The offering generated net proceeds of approximately $117.3 million after deducting offering discounts commissions and estimated expenses. Cash and cash equivalents as of March 31, 2021 were $138.4 million. Based on our current operating plan including the net proceeds from the recent underwritten public offering, we believe that existing cash and cash equivalents will be sufficient to fund currently projected operating expenses through the end of 2023 including potential NDA submission for Reproxalap, initial commercialization of Reproxalap if approved and continued and late-stage development of the company's product candidates in ocular and systemic immune-mediated diseases. Turning now to our first quarter 2021 results. Research and development expenses were $7.7 million compared with $6.6 million for the same period in 2020, the increase of $1.1 million is primarily related to higher clinical development, and manufacturing costs, partially offset by lower personnel-related costs and a decrease in preclinical cost. General and administrative expenses were $3.1 million for the quarter compared with $3 million for the same period in 2020. The net loss for the first quarter of 2021 was $11.3 million or $0.25 per share compared with a net loss of $9.9 million or $0.34 per share for the quarter ended March 31, 2020. Now, I'll hand the call back over to Todd for closing comments.

Thank you. Joshua, we have continued to make significant strides in advancing our lead program toward commercialization and anterior ocular inflammatory diseases, and we do so from a position of financial strength. We are focused on executing our mission of improving the lives of patients by developing novel, immune-mediated therapies that satisfy unmet medical need. With that, Joshua and I would be happy to take your question. Operator?

Thank you. [Operator Instructions] Your first question comes from Justin Kim of Oppenheimer. Your line is open.

Hi, good morning. Thanks for taking the question. Just a couple from me and just maybe touching on the cash balance as the team reviews the overall pipeline and sort of the robust cash position. Are there areas of the pipeline where we might see or expect a greater focus on potential pipeline on the[ph]BDM&A is there anything in terms of what programs might have - should have growth given for the additional cash?

Well, let me, Justin. Thanks for the question. And let me start off and perhaps Josh can provide some color. I think we are rich in pipeline assets at this point as I mentioned in my prepared comments, we are very excited about the potential for RASP inhibition broadly which is reflected not only in Reproxalap, our lead asset that I hope is close to the goal line in terms of submission of a marketing application, but also in terms of retinal disease and systemic disease, both of which are likely to relate to RASP inhibition. So I think as Josh may mention a lot of the proceeds that have been raised this year are earmarked for continued development of RASP inhibition broadly as well as our retinal program with ADX-2191 which as you know, is currently in Phase 3 testing for proliferative vitreoretinopathy. We are always opportunistic in terms of assessment and licensing of new assets. I think we've proven to investors over the years that we're capable of evaluating in licensing and developing novel assets but with that, perhaps, I will turn it over to Josh for further color.

Yes, I think that - So, Justin, thanks for the question. Todd has it right. I think with RASP inhibition, we expect continued development there and certainly, we brought in ADX-2191 via an acquisition that we completed in 2019. So we will continue to be opportunistic where we see an asset that may fit with our portfolio.

Understood, got it. Great. And maybe just on Tranquility, can you discuss sort of what that's may be required prior to the initiation of Tranquility 2?

There are no additional steps required prior to the initiation of Tranquility 2. Tranquility 2 is identical to Tranquility 1. At this point, the initiation of Tranquility 2 is a matter of sequencing. We do wish to have a slight stagger between the two trials, so that we can adjust analysis plans and so forth if need be; however, I do not expect us to do so based on the strength of the run-in cohort of Tranquility where we saw statistical significance in the primary endpoint, after only 23 patients. The primary endpoint for Tranquility and Tranquility 2 is also supported by the redness readout from INVIGORATE as you know.

Okay, got it. And maybe just through a follow up to that-- in light of the stagger and potentials to have, let's say, some information around Tranquillity prior to an NDA--pre-NDA meeting on AC, is that a hope for the team to discuss dry eye in addition to sort of the AC program at that first meeting with the FDA around filing?

Yes. You know, the FDA typically desires to discuss one IND at a time when program at a time. In the pre-NDA meeting or allergic conjunctivitis which I would argue could happen early second half of this year, one of the questions that we're going to ask is, how does the agency wish to receive NDA filings for allergic conjunctivitis and dry eye disease because we as the sponsor are very interested in working with the agency and making sure that those submissions are performed in a manner that is optimal for the agency to review. So that I expect we will be guiding the street as to the precise mechanisms of those two filings later in the second half of this year.

Got it. Great, thanks for taking the questions. And congrats on the progress.

Thank you, Justin.

Your next question comes from Kelly Shi of Jefferies. Your line is open.

Good morning and thank you for taking my questions. So my question is regarding ADX-629 --it's an oral version of Reproxalap and my question is even though there are two different administration route, but what is the[ph] real route through 629 programs from the [ph]odd part is the results so far from Reproxalap and also strategically how do you think about prioritized indications for these two molecules? Thank you.

Thanks for the question. Kelly and I'm glad you mentioned ADX-629 which we view as a hidden gem in our pipeline. When we started this company many years ago, we were excited about RASP as a target. Not only do Reproxalap and ADX-629 which are closely related structurally represent new molecules and not only do those new molecule represent targeting new physiologic mediators of disease but the entire pharmacology is different. From 99% of drugs available today, most of drugs that we take today bind to proteins, receptors, enzymes, cytokines or they're directly involved in making proteins, such as the case with gene therapy. Most drugs available today effect single targets, a particular receptor, a particular enzyme. Reproxalap in ADX-629 are different and that those drugs target a variety of non-protein that is small molecule inflammatory mediators and therefore we have classified RASP inhibition as a systems-based approach. The challenge with the drugs available today is that inhibiting a single target that is taking a single molecule out of a physiological cascade leads to toxicity --now I guess driving your car with three tires whereas modifying a system without inhibiting a single target have safety advantages and efficacy advantages. One reason that we believe we have seen the broad-based symptomatic activity of Reproxalap in dry eye disease, not just with dry eye score, not with dryness score, not just with ocular discomfort score, not just with burning, not just with stinging but across the board it is due to the fact we believe that Reproxalap effects variety of the small molecule mediators of inflammation. So this kind of systems-based approach could have efficacy advantages as well. There is no reason why RASP inhibition should only apply to the eye or the front of the eye which is why in response of Justin's question I mentioned RASP inhibition as it may apply to the retina and systemic diseases. We're really thrilled about ADX-629 and the potential thereof. We are currently testing the drug across different forms of inflammation as by representing more allergic or TH2 type inflammation psoriasis representing more autoimmune or TH1 type inflammation. To your question, Kelly, it's really difficult to prioritize diseases or kinds of inflammation as they relate to treatment with ADX-629 until we see the results of those trials, but I think you can hear in our voices today that we are optimistic given the success of Reproxalap as you point out about the prospects of ADX-629. In a way the front of the eye for Aldeyra has been a model of inflammation. I think it's very clear with INVIGORATE and the success we've had in dry eye disease that Reproxalap is active and safe and therefore I think there is considerable read through to, the potential success of ADX-629 and that's why we're so excited about keeping you up to date regarding the Phase 2 results later this year.

Very insightful. Thank you, Todd.

Thank you, Kelly.

Your next question comes from Marc Goodman of SVB Leerink. Your line is open.

Good morning, guys. Two questions, first for Tranquility trials. I mean obviously everybody very excited about seeing the secondary endpoint of redness in the previous trial we just saw few weeks ago and gives us more confidence. But I guess just flipping that around when you think about these trials what do you worry about the most? If something happens, it doesn't go the way we were thinking? What do you think would be the reason, just curious how you're thinking about that? And second question is, can you just give us an update on the retina program and talk about that really. So just how enrollments going and stuff. Thanks.

For sure, and I think for the questions, Marc. And thanks for your recent activity regarding redness in your notes along those lines. We were particularly interested prior to the readout of INVIGORATE about how ocular redness would turn out, because as I said in my prepared comments, I do think there is a tremendous clinical relationship between allergic conjunctivitis and dry eye disease and if you're going to pick a sign. you might as well pick something that patients care about and that is ocular redness. It is difficult for us to think of another sign that patients care about and by extension that health care providers care about. I have never heard a patient say I'm really interested in increasing my Schirmer score or my inferior corneal staining score or any other objective side that we usually use to asses dry eye disease. We're fortunate that Reproxalap seems to have anti-redness activity not only because that activity indicates immune mediating efficacy in part, but also because it is commercially desirable in that patient and physicians who are interested in reducing redness. What can go wrong? Well, in the clinical trial business--those of us that have been around for decades have had lots that go wrong, it is always possible for clinical trials to readout sideways and an unexpected manners. In dry eye disease, there is considerable variability. This is why many companies developing drugs today for dry eye disease perform a number of Phase 3 trials and Aldeyra is no different. One way to combat variability is numerous trials and that's exactly what we've done with the Renew trials, with the Phase 2b formulation trials that we believe will satisfy our requirements for symptom control over 12 weeks and dry eye disease. But also the Tranquility trials 1…

Thanks.

Thanks, Mark.

Your next question comes from Yigal Nochomovitz of Citi. Your line is open.

Good morning. This is Carly [ph] on for Yigal. Thank you for taking my questions. Just follow up on an earlier question regarding the upcoming FDA discussions. Can you comment on what you see is the advantages and disadvantages of filing 1 NDA for dry eye and allergic conjunctivitis versus the advantages and disadvantages of filing separate NDAs for each indication? And I guess the second part of the question is does out there, I have a preference at this point between those two filing strategy? Thank you.

Hi, Carly. Good morning and thanks for your question. There are no obvious advantages or disadvantages that we are aware of regarding filing separately or at the same time and the reason for that is that in the event that there are two separate NDAs, one NDA will reference the other - as such that we don't have to replicate a good deal of work across NDAs. What we're not interested in is what the agency prefers. I'll just take a step back to say how fortunate are we as a sponsor and as investors but we're in a position that we can't file two NDAs. Outside of oncology, I don't know of many companies that have been fortunate enough to file two NDAs at one time and we're thrilled. I think the fact that that we've generated data in two different anterior segment inflammatory diseases. Those data have been positive that the drug has been well tolerated. That there are no clinically relevant safety signals now in more than 1200 patients that have been exposed to Reproxalap - all is remarkable and we are hoping that our colleagues at the FDA recognize the breadth of activity across two different diseases, as well as the safety advantages I've mentioned of Raproxalap in getting this drug in the hands of patients and physicians.

Okay. Thank you for taking the questions.

Thanks, Kelly.

[Operator Instructions] Your next question comes from Edwin Zhang of H.C. Wainwright. Your line.

Thanks for taking my questions. First, congrats on the solid quarter. A quick question on international expansion. What's your current thinking on geographical expansion after the recent clinical success of a Reproxalap? Are you looking for partners ex-US? Also related to this does the European regulator except chamber studies for pivotal trial and the EMA approval in dry eyes and allergic conjunctivitis? Thank you.

A very good morning and I will say I have enjoyed to discussing with you over the years our potential outside of the United States. I think too often biotechnology companies focus only on the United States. I guess that is easy to do given that many biotechnology companies our domiciled exclusively in the United States. But there really is no reason why Reproxalap couldn't be a first-line option across the world. Ocular diseases such as allergic conjunctivitis maybe even more prevalent outside of the United States, particularly in Asia. I can tell you that as a result of our continued progress in allergic conjunctivitis and dry eye disease, Aldeyra has received a considerable amount of inbound interest regarding at regional partnering outside the United States. The direct answer to your question is yes, we would intend to partner Reproxalap outside the United States. Inside of the United States, we have many options. As I've mentioned in other calls one of the attractive elements of ocular surface inflammation is that commercial launches are feasible for small companies generally based on what other companies have done sales forces are in the 100 to 200 to 300 rep range. This is imminently possible for small companies to achieve; however, the question for Aldeyra is what is optimal for Reproxalap which as you know has broad applicability in allergic conjunctivitis and dry eye disease. So we like any other responsible biotechnology company will continue to evaluate the pros and cons of an internal launch Reproxalap versus a partnered launch of Reproxalap. Our most recent financing from last week gives the company considerable flexibility to evaluate both - a go it alone and partnered strategy and we are thrilled to be in such a position of financial strength for obvious reasons.

Thank you.

Thanks, Edwin.

Your next question comes from Esther Hong of Berenberg. Your line is open.

Hi, good morning. I wanted to ask about pipeline candidate ADX-1612 any updates there? It looks like data is going to be releasing about 2022 from an investigator-sponsored study in ovarian cancer. So any expectations and future plans in that indication? Thanks.

Hi, Esther good morning. Thanks for asking about 1612 because we often don't have time to discuss that compound. You're absolutely correct. The 1612 is primarily now the subject of a Phase 2 ovarian cancer trial that is being run across multiple centers in Europe in combination with PARP inhibitors. We are not exactly sure of the timing of the results of that trial because that trial is investigator sponsored as you mentioned. However, I think there is considerable preclinical reason to believe that activity of HSP90 inhibition, which is the mechanism of 1612 in combination with PARP inhibition and potentially platinum therapy could be beneficial for patients. We await the results of those investigations in the ISP and obviously would communicate to the street once we hear back.

Thanks.

Your next question comes from Parkhar Agrawal of Jones Trading. Your line is open.

Hi, good morning and thanks for taking my questions. First CMC related question, do you have the stability data for Reproxalap in-house? If not, when do you expect to have this data and how long do you expect the product to be stable? And second on some of the early stage pipeline on the new molecules that could enter the clinic next year? Could you give more details on what could be the differentiation for these molecules versus Reproxalap? And then I have a follow-up on ADX-629.

Perfect Prakhar. Thank you. I'll see if I can remember all those questions. Regarding chemistry manufacturing and control, stability has not been a concern to-date. Our registration batches are in excellent shape. And to-date, we would expect 24-month stability as is standard in NDA filings. So in conclusion, I don't think that there are any CMC roadblocks at all at this point. We have guided that NDAs are possible for dry eye disease and allergic conjunctivitis by the end of this year or early next year. I think the gating factors for those NDA submissions are more likely really to the standard NDA safety studies which in dry eye disease are 12 months or long. Nonetheless, I still think that we're in a good position to meet the NDA submission timelines that I have mentioned. Your next question relates to new molecules, regarding RASP inhibition and the potential advantages thereof. As I mentioned in my prepared comments, we have consistently developed new chemical entities with similar pharmaco [ph] floor that are designed to irreversible a bind to RASP. Some of those new molecules are considerably more potent than Reproxalap and ADX 629. The advantages of potency remain to be proven in the clinic. However, we are committed, as a company to developing new intellectual property around compositions associated with RASP inhibition as well as generating a robust novel RASP inhibition clinical pipeline across a number of different diseases. And then, I believe you had a follow-up question, Prakhar?

Yes, so on ADX 629, the Phase 2 trial in mild allergen asthma --given it's the small proof of concept trial with limited treatment duration could you frame expectations on what could we expect to see on various endpoints? And any biomarker data that you will be measuring? Thank you.

Thanks, again for the excellent question. I'm thrilled to receive so many questions on our pipeline. I think too often the street values Aldeyra as a dry eye disease company. Our pipeline, as you know, extends well beyond the two indications that we're moving forward for Reproxalap and as we look forward to the future, I think that there will be a lot to say about not only anterior ocular inflammation, but also retinal and systemic disease. In terms of asthma specifically, asthma, psoriasis and COVID-19 are proof of concept of Phase 2 clinical trials as you point out not only are clinical endpoints assessed but also biomarker assessment that represents a large portion of the output of those trials. Asthma is particularly interesting not only because it is a TH2 allergic-type inflammation, where we have at least with Reproxalap consistently demonstrated activity. But also because of the number of clinical and biomarker endpoints that can be assessed associated with asthma. Two examples are the standard pulmonary function tests associated with most asthma clinical trials and eosinophil sputum accounts, which is a measure of inflammatory cell counts in the sputum of patients. We're also intending to measure plasma cytokine profiles, plasma RASP profiles and I'm really excited to assess all these different data, which will point us to mechanistically appropriate clinical indications in the future for ADX-629.

Your next question comes from Yale Jen of Laidlaw & Company. Your line is open.

Okay. Good morning and thanks for taking the question. I just want to confirm that in terms of reporting the Tranquility one and two data, are you guys going to just plan into one reporting of the outcome or you one after another. In other words, the first for one and [ph]turn for a second - Second for Tranquility 2?

Right. Good morning, Yale. Our goal is to keep you as busy as possible. So I would suspect that we're with it -

You're there?

Yes. I would suspect that we will report both TRANQUILITY 1 and TRANQUILITY 2 separately just given the timing and the stagger between the two trials that I have previously mentioned.

And one follow-up question here is actually follow-up, with your earlier comments in terms of the RASP basically is a systemic approach. The flip side of that actually is the safety. So how would - in addition to empirical studies, how would you guys thinking about the safety that offer any - just based on this target [ph] that when I impact of the individual?

Yes, that is an excellent question. I can tell you, because I was there that the first institutional investment in the company, which was in 2005 which was led by Domain associates and Johnson & Johnson. The question of systemic toxicity was first and foremost that is what are the safety ramifications of inhibiting RASP broadly throughout the body. As we've said in our 10-K now for many years that we know of there are only two RASP targets that are physiologic that is involved in non-inflammatory metabolic processes and those are retinyl aldehyde which is a form of Vitamin A and pyroxidal and pyroxidal phosphate which are forms of Vitamin B6. Both of those molecules are highly chaperone or highly protected. We've had no evidence in animal or human that our RASP inhibitors are capable of even approaching those molecules. And we have seen no clinical evidence either with topical ocular administration or oral administration that RASP inhibition effects those two molecules. What appears to be the case, then is that RASP that are available systemically and, in the eye, our pro-inflammatory and those RASP are the target of our drug. We've now been through a rigorous Phase 1 trial with high of ADX 629. We saw no adverse events related to drug and those data support the safety profile of ADX 629. We look forward to monitoring the efficacy and safety of 629 in larger trials and in disease patients and rest assure that the results of those investigations will be shared with investors we hope by the end of this year.

Okay, great. Thanks for the bio level one lectures.

You're welcome, Yale. It is my pleasure.

We have reached the end of the Q&A session. I will now turn the call back to Dr. Brady for closing comments.

Thank you, operator. And I thank you all for joining us again this morning. As always, we look forward to keeping you updated on our progress. Next month we will be participating in the Jefferies Virtual Healthcare Conference. Please check our website for the scheduled presentation time. and for those of you that are participating. We look forward to meeting with you soon. Thanks again.

This concludes today's conference call. Thank you for your participation. You may now disconnect.