How Did the FDA Shatter Investor Confidence In Aldeyra Therapeutics Stock (ALDX) Today?

Aldeyra Therapeutics ALDX +2.55% ▲ stock was hit hard on Tuesday after the biotechnology company received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) for the New Drug Application (NDA) of reproxalap. This is an investigational drug candidate for the treatment of dry eye disease.

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According to the CRL, the FDA declined approval for reproxalap due to “a lack of substantial evidence consisting of adequate and well-controlled investigations … that the drug product will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in its proposed labeling.” The FDA also argued that the NDA failed to “demonstrate efficacy in adequate and well controlled studies in the treatment of signs and symptoms of dry eye disease.”

Aldeyra Therapeutics noted that the FDA didn’t request additional trial data in its CRL. Instead, the company intends to seek a meeting with the FDA to determine what needs to be done to gain approval for the NDA. The company noted that it has cash, cash equivalents, and marketable securities of $70 million, which will allow it to continue operations into 2028.

Aldeyra Therapeutics Stock Plummets Today

Aldeyra Therapeutics stock was down 74% in pre-market trading on Tuesday, following a 2.55% rally yesterday. The shares have decreased 18.34% year-to-date and 36.53% over the past 12 months.

With today’s news came heavy trading of ALDX stock, as some 10 million shares changed hands. For comparison, the company’s three-month average daily trading volume is about 1.02 million shares.

Is Aldeyra Therapeutics Stock a Buy, Sell, or Hold?

Turning to Wall Street, the analysts’ consensus rating for Aldeyra Therapeutics is Moderate Buy, based on two Buy ratings over the past three months. With that comes an average ALDX stock price target of $9.50, representing a potential 124.59% upside for the shares. These ratings and price targets will likely change in response to today’s CRL.

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