Biotech Movers: Aldeyra Therapeutics, Inc. (NASDAQ: ALDX) and pSivida Corp. (NASDAQ:PSDV)


We are now midway through the week and – so far – things have been pretty volatile in the biotechnology space. We have seen companies move up and down on various inputs and data releases, and we have covered a couple of these in our previous Biotech Movers coverage here and here.

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As we head into the start of a new session on Wednesday, here is a look at some of yesterday’s biggest movers, what is driving the action in each, and where we expect the companies in question to move going forward.

The two companies we are focusing on today are Aldeyra Therapeutics, Inc. (NASDAQ: ALDX) and pSivida Corp. (NASDAQ:PSDV).

We will kick things off with Aldeyra.

This one was an early session mover on Tuesday, but chances are we are going to see the real action play out today. The company put out a press release detailing its plans to host a conference call at (or slightly before) market open in the US on Wednesday, with the conference call set to report on data from a phase 2b trial of one of the company’s lead development assets.

Specifically, management will host the call to address the outcome of the study, which was set up to quantify the efficacy and safety of a drug called ADX-102, which is currently under investigation across a host of indications, but for which the upcoming call will address the above two mentioned metrics against an indication of allergic conjunctivitis.

As noted, the real action will come during the call as we find out how the drug performed against its endpoints. The primary endpoint is ocular itching as evaluated by the patient, and the student is vehicle controlled, so we are looking for a statistically significant improvement from baseline in ocular itching in the active arm as compared to the same figure in the placebo arm. If we get a readout indicative of efficacy, and things are relatively clean on the safety side of the equation, Aldeyra is going to run.

Let’s see what happens.

Next in line, pSivida.

This one is a little more straightforward, at least at the present time. The company announced data from a phase 3 study investigating the impact of its lead asset, a drug called Durasert, in a target indication of posterior segment uveitis. Interestingly, and seemingly purely coincidentally, this one is also a late stage ocular investigation, and markets will no doubt pitch the two companies against each other in terms of comparison of topline results from the studies in question. In reality, however, there is no real crossover between markets – at least not in the current indications.

So, what did the data say?

Well, the trial hit its primary endpoint and also hit on a few key secondaries. In that regard, at least, it’s a big win. Take a look at price action, however, and you might be fooled into thinking otherwise. The company has declined close to 16% on the news, in a direct response to what we see as a misinterpretation of the result. Well, not a misinterpretation, that’s perhaps a little harsh. More a focus on the wrong thing. Specifically, the data showed that the drug translated to a little bit more intraocular pressure than did the control arm, and markets are clinging onto this as a potential tolerability concern as and when the drug goes in front of the regulatory authorities. There’s a chance, of course, that it will factor into discussions, and we will probably see some sort of labeling outcome as a result of the safety red flag. However, that’s really all that is going to happen. This is one of the only drugs targeting the syndication (the only drug, for many patients) and the efficacy profile (i.e. the clinical benefit it brought about) far outweighs the safety concerns served up by the data that points to intraocular pressure at a slightly higher level.

As such, and in response to the recent decline, we suggest that this one as well positioned for a turnaround, and that the current decline might be a nice opportunity to pick up shares at a discount.

We’ll be in on the Aldeyra call and we’ll amend this article in response to what’s discussed.

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