Aldeyra Therapeutics stock craters at all-time low on FDA letter

Takeaways

• Aldeyra Therapeutics’ shares dropped by almost 75%, hitting a record-low on Thursday.
• The FDA told a drugmaker via letter that the drug it submitted to treat dry eyes disease had not been proven effective in enough trials.
• The company expects to release the data from a current trial in the second half of the year, and then resubmit its drug for approval at the end of the year.

Aldeyra Therapeutics’ (ALDX), shares plummeted by nearly 75%, reaching a new low on Thursday after the Food and Drug Administration said that the company’s drug for dry eye disease had not been proven effective in enough clinical studies.

The FDA responded to the new drug application (NDA), for reproxalap – a treatment for Dry Eye Disease.

Aldeyra reported that the FDA had written that the drug “failed [to] demonstrate efficacy” in adequate and well-controlled studies in treating ocular symptomatic associated with dry eye. The FDA told Aldeyra that the firm must prove the drug’s efficacy through at least one further clinical trial.

The drugmaker has said that it will announce the results from a current trial in the second-quarter, and plans to resubmit their NDA by mid-2025, if the results are positive. "The review period for the potential NDA resubmission is expected to be six months," Aldeyra said.

Aldeyra shares fell 74% to $1.39 in recent trading after previously touching a record low of $1.18. The stock was up nearly 30% in the last 12 months as of Thursday.