Shares of Aldeyra Therapeutics Inc. (ALDX) experienced a steep decline of 61.9% in morning trading on Monday, reaching a 3 1/2-year low. This drop was significant enough to lead the decliners on the Nasdaq. The Massachusetts-based biotechnology company faced setbacks after the U.S. Food and Drug Administration (FDA) identified "substantive review issues" with its new drug application (NDA) for reproxalap, a treatment for dry-eye disease.
FDA Raises Concerns About Clinical Relevance
The FDA, in minutes from a late-cycle review meeting, communicated that there appears to be a lack of data supporting the clinical relevance of ocular signs to validate the dry eye indication. Aldeyra Therapeutics Inc. stated that they have already submitted responses to address the review issues raised by the FDA. However, the FDA deemed additional clinical trials necessary to fulfill efficacy requirements.
Potential Impact on NDA Approval
The NDA review cycle for reproxalap concludes on November 23, 2021. Aldeyra expressed concerns that the FDA's decision may not align with their expectations, potentially delaying or preventing NDA approval. As a result, the stock price of Aldeyra Therapeutics Inc. is now on track to reach its lowest point since April 3, 2020.
Stock Performance Comparison
Over the past three months, Aldeyra's stock has plummeted by 73.6%, showcasing the challenges the company has faced in recent times. In comparison, the iShares Biotechnology ETF (IBB) has experienced a 5.2% decline, while the S&P 500 (SPX) has eased by 2.9%.
With Aldeyra Therapeutics Inc. facing significant obstacles in obtaining FDA approval for their dry-eye disease treatment, the company enters a period of uncertainty as it navigates these challenges.
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