Executive Summary

Pre-revenue quarter with operating loss widening year over year as R&D ramped for late-stage programs; cash, cash equivalents, and marketable securities were $196.7M (6/30/22), supporting runway through end of 2023 .
Dry Eye Disease (DED) program advanced: positive TRANQUILITY-2 results (Schirmer test and responder analysis) and positive chamber crossover trial; pre-NDA meeting scheduled for Q3 2022 with intent to submit an NDA thereafter .
ADX-2191 progress: pre-NDA meeting planned in 2H 2022 for primary vitreoretinal lymphoma (PVRL), with NDA submission planned in 2H 2022; GUARD (PVR) Part 1 top-line still expected 2H 2022 .
Systemic program ADX-629: Phase 2 ethanol toxicity readout expected 2H 2022; chronic cough readout expected 1H 2023; minimal change disease and Sjögren-Larsson Syndrome trials initiating in 2H 2022 .
Near-term stock catalysts: DED pre-NDA meeting (Q3 2022), reproxalap DED NDA submission, GUARD Part 1 PVR results in 2H 2022, and ADX-629 ethanol toxicity data in 2H 2022 .

What Went Well and What Went Wrong

What Went Well

DED efficacy momentum: reproxalap achieved statistical superiority vs vehicle on both prespecified primary endpoints (ocular redness and Schirmer) in the chamber crossover trial (P=0.0004, P=0.0005), and achieved the multiplicity-controlled Schirmer ≥10 mm responder endpoint (P=0.0361) .
TRANQUILITY-2 positive: reproxalap was statistically superior to vehicle for Schirmer test and Schirmer ≥10 mm responder after a single day, reinforcing objective sign efficacy for NDA .
Regulatory path advancing: DED pre-NDA meeting scheduled for Q3 2022, and ADX-2191 (PVRL) pre-NDA meeting planned for 2H 2022 with a 2H 2022 NDA submission targeted; GUARD (PVR) Part 1 top-line still expected 2H 2022 .

Selected management quotes:

“We’ve amassed what we believe is the most comprehensive regulatory package ever for a dry eye disease drug candidate…” .
“Results from our Phase 2 GUARD trial… are on schedule and are expected for the second half of this year.” .

What Went Wrong

Higher operating spend: R&D rose to $14.6M from $11.5M YoY (Q2) mainly from external clinical/preclinical and manufacturing costs; total OpEx up to $17.7M from $14.5M YoY .
Net loss widened YoY: $(17.8)M vs $(14.9)M; diluted EPS $(0.30) vs $(0.28) .
Regulatory risk on post-hoc redness: company cautioned FDA may not accept post-hoc, computer-automated ocular redness analyses for DED NDA sign requirements; additional studies could be required .

Financial Results

Income Statement Comparison (YoY and Sequential)

Metric	Q2 2021	Q1 2022	Q2 2022
Revenue ($M)	$0.0	$0.0	$0.0
R&D Expense ($M)	$11.5	$12.2	$14.6
G&A Expense ($M)	$3.1	$4.2	$3.1
Total Operating Expenses ($M)	$14.5	$16.5	$17.7
Net Loss ($M)	$(14.9)	$(16.8)	$(17.8)
Diluted EPS ($)	$(0.28)	$(0.29)	$(0.30)
Weighted Avg. Shares (M)	54.3	58.3	58.3

Notes:

YoY drivers: higher external clinical/preclinical and drug product manufacturing lifted R&D; G&A flat YoY; no revenue .
Sequential: OpEx increased Q/Q primarily on R&D (Q1 R&D $12.2M → Q2 $14.6M) .

Liquidity and Cash Runway

Metric	Dec 31, 2021	Mar 31, 2022	Jun 30, 2022
Cash & Cash Equivalents ($M)	$229.8	—	—
Cash, Cash Equivalents & Marketable Securities ($M)	—	$216.9	$196.7
Cash Runway Guidance	Through 2023	Through 2023	Through 2023

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash runway	Through 2023	Through end-2023 (Mar 17, 2022)	Through end-2023 (Aug 5, 2022)	Maintained
Reproxalap DED NDA	2H 2022	Mid-2022 planned, pending TRANQUILITY-2 & safety enrollment (May 5, 2022; reiterated May 24)	Pre-NDA mtg Q3 2022; intends to submit NDA thereafter	Maintained (timing framed around Q3 pre-NDA)
ADX-2191 (PVRL) NDA	2H 2022	Not specified in Q1	Pre-NDA meeting in 2H 2022; NDA submission planned 2H 2022	New/Introduced
GUARD (PVR) Part 1 top-line	2H 2022	2H 2022	2H 2022	Maintained
ADX-2191 Retinitis Pigmentosa top-line	Timing	2H 2022	1H 2023	Lowered/Delayed
ADX-629 Ethanol Toxicity top-line	2H 2022	2H 2022	2H 2022	Maintained
ADX-629 Chronic Cough top-line	1H 2023	1H 2023	1H 2023	Maintained
INVIGORATE-2 (AC) top-line	2023	2023	2023	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’21, Q1’22)	Current Period (Q2’22)	Trend
Regulatory pathway (DED)	Targeting mid-2022 DED NDA; alpha-sharing across endpoints; additional backup trials planned	Pre-NDA meeting in Q3; intent to submit NDA with symptoms + multiple signs (redness, Schirmer, responder)	More specific on pre-NDA timing; package breadth emphasized
Post-hoc ocular redness	Announced post-hoc positive redness; endpoint alignment evolving	Risk disclosure: FDA may not accept post-hoc computerized grading	Risk flagged; mitigated by Schirmer/TRANQUILITY-2 positives
R&D execution (trial designs)	Emphasis on crossover designs to reduce variability	Crossover DED chamber success; rapid onset positioning	Reinforced; core to labeling narrative
ADX-2191 regulatory	GUARD enrollment done; RP Phase 2 initiated	PVRL pre-NDA in 2H 2022; GUARD Part 1 2H 2022; RP result moved to 1H 2023	Path solidifying; RP timing pushed
Commercial strategy (reproxalap)	Options: partner vs internal vs hybrid; payer leverage central	Similar framing; optionality, financing in place	Unchanged; partner likely preferred
COVID-19 ops impact	Potential site staffing/recruitment delays	Noted as general risk; operations progressing	Stable risk monitoring

Management Commentary

Prepared strategic message (CEO): “We’re excited about reproxalap’s potential to change the treatment paradigm… suboptimally addressed with drugs that require at least weeks… for even modest improvement.”
On data breadth: “Submitting with a package… symptoms plus three different signs… unprecedented breadth of data.”
On ADX-2191 PVRL: “FDA has told us… clinical trials are not required for NDA submission in ocular lymphoma… basis for the NDA submission [is] literature; focus is on stability and safety of ADX-2191 formulation.”

Q&A Highlights

629 ethanol toxicity study: crossover design to detect symptom/sign signals; endpoints include hangover symptoms, intoxication measures, and LFTs; multiple potential Phase 3 paths (ED time-to-discharge or 90-day mortality in alcoholic hepatitis) .
ADX-2191 (PVRL) NDA without prospective trials: FDA feedback that literature supports efficacy; focus on vitreous-compatible, GMP formulation safety/stability .
DED commercialization: three routes (partner/internal/hybrid); payer contracting is key; optionality maintained, financing adequate .
Pre-NDA DED meeting scope: part administrative, but company seeking FDA feedback on breadth of signs (redness, Schirmer, responder) and correlations; Schirmer responder considered meaningful .
GUARD (PVR) dosing and endpoints: ~13 injections used; discontinuation acceptable; primary endpoint is re-detachment over 24 weeks, aiming to be below ~40% real-world standard-of-care rate .

Estimates Context

Wall Street consensus: S&P Global (Capital IQ) EPS and revenue estimates for Q2 2022 were not retrievable due to access limits during this session; as a result, we cannot quantify beats/misses versus consensus this quarter. Values would be retrieved from S&P Global when available.
As a clinical-stage company with no product revenue, revenue is $0; EPS loss of $(0.30) compares to $(0.29) in Q1 and $(0.28) in Q2 last year .
Expectation resets: Given advancing DED regulatory path and sustained OpEx, Street models may modestly increase near-term R&D expense while maintaining runway through 2023 .

Financial and Operating KPIs

KPI	Q2 2021	Q1 2022	Q2 2022
Cash, Cash Equivalents & Marketable Securities ($M)	—	$216.9	$196.7
Cash & Cash Equivalents ($M)	$229.8 (12/31/21 reference)	—	—
R&D Expense ($M)	$11.5	$12.2	$14.6
G&A Expense ($M)	$3.1	$4.2	$3.1
Total Operating Expenses ($M)	$14.5	$16.5	$17.7
Net Loss ($M)	$(14.9)	$(16.8)	$(17.8)

Key Takeaways for Investors

Regulatory catalysts are front-loaded in 2H 2022: DED pre-NDA in Q3 and intended NDA submission thereafter; GUARD Part 1 PVR data and ADX-629 ethanol toxicity readouts are near-term drivers of sentiment .
DED label construction upside: positive TRANQUILITY-2 Schirmer endpoints plus chamber crossover and post-hoc redness analyses create multiple “shots on goal” for sign efficacy; breadth could support differentiation on rapid onset and objective signs if accepted .
Risk: FDA acceptance of post-hoc computerized redness analyses is uncertain; the company highlighted potential for additional study requirements, partly mitigated by Schirmer successes .
Cash runway into end-2023 provides execution capacity without near-term financing, but cash burn is rising with multiple parallel programs; watch quarterly cash step-downs and OpEx trajectory .
ADX-2191 could move quickly in PVRL given literature-based efficacy precedent and focus on formulation safety; PVR readout plus regulatory dialogue will clarify path and potential time-to-market .
Commercial strategy optionality (partner/internal/hybrid) remains; payer access will be pivotal for DED; potential partner read-throughs could influence valuation ahead of filing .
Program timing update: Retinitis pigmentosa Phase 2 shifted to 1H 2023, a modest delay; other milestones maintained .

Appendix: Other Relevant Q2’22 Press Releases

May 18, 2022: Post-hoc computer-automated grading showed reproxalap statistically superior to vehicle for ocular redness in Phase 3 TRANQUILITY (p=0.020) and confirmed significance in prior Phase 2 chamber (p=0.003); company plans to discuss methodology with FDA prior to NDA .
May 24, 2022: Schirmer test designated sole primary endpoint in TRANQUILITY-2 following positive post-hoc redness; company highlighted possibility to submit two objective signs (redness, Schirmer) pending results and FDA discussion .

Sources: Q2 2022 8-K and Exhibit 99.1 press release ; Q2 2022 earnings call transcript ; Q1 2022 8-K and Exhibit 99.1 ; Q1 2022 earnings call transcript –; FY 2021 8-K and Exhibit 99.1 –; Additional Q2 press 8-Ks (post-hoc redness and TRANQUILITY-2 primary endpoint) .

Aldeyra Therapeutics, Inc. (ALDX)·Q2 2022 Earnings Summary