ALDX - NASDAQ

Ladies and gentlemen, thank you for standing by, and welcome to the Aldeyra Therapeutics First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. I would now like to hand over the conference to company's Chief Financial Officer, Mr. Joshua Reed. Please go ahead, sir.

Good morning, everyone. With me today are Dr. Todd Brady, President and Chief Executive Officer; and Bruce Greenberg, incoming Interim CFO. This morning, we issued a press release reporting our financial results for the quarter ended March 31, 2022. A copy of the press release is available on the Investors & Media section of our website, www.aldeyra.com. Please note that this morning's conference call contains forward-looking statements regarding future events and the future performance of Aldeyra. Forward-looking statements include, but are not limited to, statements regarding submission of potential new drug applications; potential commercialization; the anticipated timing of results from our clinical trials; our projected cash runway; our possible or assumed future results of operations, expenses, and financial position; and potential growth opportunities. These statements are based upon the information available to us today and reflect our current views concerning future events. They are based on assumptions and subject to risks and uncertainties, including the development, clinical, and regulatory plans or expectations for Aldeyra's product candidates and systems-based approaches. The risks that result from clinical trials, or portions of clinical trials, may not accurately predict the results of future trials for the same or different indications and Aldeyra's continuing review and quality control analysis of clinical data. As a result of the COVID-19 pandemic, clinical site availability, staffing, and patient recruitment have been negatively affected, and the timelines to complete our clinical trials may be delayed. Aldeyra assumes no obligation to update these statements as circumstances change. Future events and actual results could differ materially from those projected in our forward-looking statements, including the current and potential future impact of the COVID-19 pandemic on our business, results of operations, and financial position. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in our press release issued this morning and our filings with the SEC. As many of you know, next week, I will be leaving Aldeyra to take a position as CFO of another publicly-traded company in the life sciences space. Though the timing was less than ideal, it was an opportunity I could not let pass. While transitions are a natural part of this business, you always relish the friendships you make and the skills you gain along the way. Aldeyra has provided both. It has been gratifying to work with Todd, the Board of Directors, and our entire team over the past 3.5 years. I'm exceedingly proud of what we accomplished and look forward to seeing the company's continued success. Bruce Greenberg, Aldeyra's incoming CFO, is highly qualified for the post. I've taken particular pride in helping build a strong finance team at Aldeyra with more than 25 years of science and operating experience, much of it at public companies. Bruce exemplifies that depth of knowledge. Having hired Bruce as our controller in 2019 and working closely with him since, I know that he'll do an outstanding job. I will now turn the call over to Dr. Brady.

Thank you, Joshua. Good morning, everyone. Thank you for joining us as we review the recent progress of our clinical programs and discuss our first quarter financial results. But before we do that, let me convey my sincere appreciation to Joshua for his work and dedication over the past 3.5 years. All of us at Aldeyra wish him much success as he begins the next chapter of his career. And I also want to congratulate Bruce on his appointment as Vice President, Finance, Interim CFO, and Treasurer. I expect that Bruce's knowledge of our business over the past several years, coupled with deep industry and financial experience, will make this a truly seamless transition. Turning to our recent research and development highlights, between our clinical accomplishments and our R&D Day, Q1 was an exciting quarter for Aldeyra. It marked the start of what we believe will be a catalyst-rich year for our company, one in which we plan to continue executing on the key strategic milestones in our ocular, systemic, and retinal disease programs. We are continuing to advance reproxalap toward an expected midyear NDA submission in dry eye disease. Reproxalap is the lead asset in our drug discovery and development platform targeting RASP, which represent a novel pharmaceutical target comprised of pro-inflammatory small molecules that are implicated in a wide range of immunological diseases. Dry eye disease affects an estimated 39 million adults in the U.S., a large percentage of whom are dissatisfied with current standard of care treatments. It's been nearly 20 years since the first approval of a prescription drug for dry eye disease. Currently available topical therapies often require months to demonstrate even modest efficacy. As a result, the dry eye disease market remains significantly underserved. We envision introducing a new therapy that changes that pattern. We took another step toward that vision in first quarter, completing enrollment in the Phase III TRANQUILITY-2 trial of reproxalap in dry eye disease. We have received many questions from investors on TRANQUILITY-2, and I want to spend some time describing the precise nature of the trial, the criteria for success, the potential implications for our product label, if approved, and the timing of planned FDA interactions regarding our dry eye disease NDA submission. The primary endpoints of TRANQUILITY-2 are Schirmer tests on the first day of dosing and ocular redness on the second day of dosing during a dry eye chamber. Because we've implemented an alpha sharing mechanism, per FDA multiplicity guidance, that distributes alpha roughly equally across both endpoints, if either redness or Schirmer test is achieved, the primary endpoint of TRANQUILITY-2 will have been met. Based on the results of the previously completed Phase II and TRANQUILITY trials, simulations of TRANQUILITY-2 indicate that in at least 90% of the potential outcomes, the simulated trial was positive. That is, statistical significance of drug over vehicle for either ocular redness or Sherer test was achieved. We're continuing to review the TRANQUILITY data to confirm the analytical plans for TRANQUILITY-2, and we remain on schedule to report results of TRANQUILITY-2 in the second quarter. Our next major interaction with the FDA is expected to be the Type B pre-NDA meeting, following the results of TRANQUILITY-2. We may submit 2 pivotal trials for either ocular redness or Schirmer test or 2 trials for both signs, if ocular redness and Schirmer tests are achieved in TRANQUILITY-2. Pending the outcome of TRANQUILITY-2, reproxalap could represent the first time a dry eye disease drug will have qualified for the demonstration of activity for 2 objective signs, in addition to symptoms. Two additional trials are ongoing, a crossover chamber trial and a 1-day Schirmer test trial. Either of these trials could also serve as pivotal trials in support of an NDA submission. Both trials are designed to generate results soon after TRANQUILITY-2 so as not to significantly impact NDA submission timing. In addition to dry eye disease, reproxalap is also in a Phase III clinical trial in allergic conjunctivitis, a condition that affects at least 66 million adults in the U.S. alone. We initiated the Phase III INVIGORATE-2 allergen chamber trial earlier this year and expect results in 2023. Enrollment criteria endpoints, trial design, and study conduct are substantially similar to our previously completed INVIGORATE trial, which demonstrated statistically significant improvement in the primary endpoint of ocular itching and the key secondary endpoint of ocular redness. Based on data from INVIGORATE, simulation modeling of INVIGORATE-2 indicates that more than 90% of outcomes achieved the primary endpoint of patient-reported ocular itching. At our R&D Day in March, we announced topline data from our proof-of-concept trials of ADX-629, our first-in-class oral RASK modulator, in psoriasis, asthma, and COVID-19 infection. In those trials, ADX-629 demonstrated signs of pharmacodynamic and clinical activity consistent with broad-based reduction in pathologic inflammation. As we announced at R&D Day, we have advanced ADX-629 to Phase II clinical trials in 4 new clinical indications. Our Phase II clinical trials in ethanol toxicity and chronic cough have already initiated. Phase II clinical trials in Sjogren-Larsson syndrome and minimal change disease are expected to be initiated later this year, positioning our systemic program for multiple clinical milestones over the remainder of 2022 and 2023. We also continue to advance ADX-2191, our vitreous compatible formulation of methotrexate for orphan retinal diseases. An investigator-sponsored Phase II clinical trial in retinitis pigmentosa, conducted at Duke University Medical Center, has been initiated. In addition, in the first quarter, we completed enrollment in Part 1 of the Phase III GUARD trial in proliferative vitreoretinopathy. Results from both of these trials are expected in the second half of this year. Now I'll turn the call over to Joshua, after which I will summarize our recent clinical progress and our future potential in developing novel platforms for the treatment of immune-mediated diseases.

Thank you, Todd. Cash, cash equivalents, and marketable securities as of March 31, 2022, were $216.9 million. Based on our current operating plan, we expect our existing cash, cash equivalents, and marketable securities to be sufficient to fund currently projected operating expenses through the end of 2023, including potential new drug application submissions, initial commercialization of reproxalap, if approved, and continued development of our product candidates in ocular and systemic immune-mediated diseases. Moving on to our first quarter 2022 results, net loss was $16.8 million, or $0.29 per share, compared with a net loss of $11.3 million, or $0.25 per share, for the comparable period of 2021. Losses have resulted from the cost of clinical trials and research and development programs, as well as from general and administrative expenses. Research and development expenses were $12.2 million, compared with $7.7 million for the same period in 2021. The increase of $4.5 million is primarily related to increases in our clinical research and development expenditures. General and administrative expenses were $4.2 million, compared with $3.1 million for the same period in 2021. The increase of $1.1 million is primarily due to an increase in consulting expenditures. Total operating expenses were $16.5 million, compared with total operating expenses of $10.8 million for the same period in 2021. Now I'll hand the call back to Todd for closing comments.

Thank you, Joshua. We have begun 2022 with tremendous enthusiasm about our clinical progress, as well as the clinical and regulatory milestones planned for the second quarter and the second half of this year. Given a unique rapid onset of action and broad activity across symptoms and signs observed to date, we believe that reproxalap has significant potential to disrupt the dry eye disease market, and we're looking forward to announcing the results of the Phase III TRANQUILITY-2 trial later this year -- in fact, this quarter. Beyond reproxalap, our systemic and retinal disease platforms represent substantial opportunities for near-term and long-term value creation that, in our view, remains significantly underappreciated. With that, we'd be happy to take your questions. Operator?

[Operator Instructions] Our first question today comes from Justin Kim at Oppenheimer.

The overview on reproxalap trials ongoing has been helpful. As the team approaches the upcoming TRANQUILITY-2 readout, could you just discuss for us a little bit about the confidence in having a fileable data package on the basis of redness or Schirmer [cure] test? And could you just clarify the motivation for the 2 additional trials for -- following TRANQUILITY-2? Are these studies intended to serve in the place of TRANQUILITY-1 as it relates to sort of 2 pivotal studies?

Based on our conversations with the agency, we're quite confident in the strength of our NDA submission package. In fact, I would say, arguably, the package we intend to submit is the most comprehensive dry eye disease package ever submitted. As far as whether Schirmer test or redness can serve as an approvable sign of dry eye disease, I think there is plenty of precedent for either. Most drugs, beginning with RESTASIS many years ago, have used Schirmer test as an objective sign of dry eye disease. Recently, a generic steroid has been approved for use in dry eye disease with redness as the sign. So, I think we have fairly clear precedent that the FDA will accept either Schirmer test or redness. The additional trials I mentioned, that is, the crossover chamber trial and the 1-day Schirmer test trial, are designed to back up TRANQUILITY-2. In the event that the data from TRANQUILITY-2 is for whatever reason, not clear, we will essentially have two more shots on goal to support the submission package. Broadly, as you know, Justin, the FDA considers the preponderance of evidence, and the stronger your package -- that is, the number of clinical trials, the number of patients tested and so forth -- the better your odds of approval. And I think Aldeyra is in the very fortunate position of being able to run rapid 1- or 2-day clinical trials with nominal cost to support our NDA submission package. And thus, I think running additional trials is a responsible and wise use of cash as we look to submit our dry eye disease package.

Got it. Got it. Understood. Maybe just one more from me. With regards to timeline, I know you had mentioned that a midyear filing is sort of in the cards. Just wondering how the progress of the long-term safety study is going and whether that sort of still remains on the critical path.

The safety trial remains on the critical path. The safety trial is the gating factor for the submission of the NDA. As you know, the FDA requires 100 subjects, or 100 patients, to have been exposed to your commercial formulation at your commercially proposed dosing regimen for at least 12 months. We are masked as to how many patients are on drug versus vehicle, the safety trial is a 2:1 randomization, that is drug to vehicle. However, based on the information we have to date, we believe that we remain on track for a midyear submission of the NDA.

Great. Great. Congrats on the project.

Our next question comes from Marc Goodman of SVB Leerink.

Yes. Two questions; first, the dynamics of the dry eye market. Todd, can you just give us a flavor for what's happening there right now and how much anything has changed, if at all, with RESTASIS going generic? And then second, given that there's a transition at CFO, and this is a product that potentially could be licensed partnered, can you give us a sense of confidence that the relationship there is there with Bruce, or who's going to be the key driver of making that deal?

For sure, Mark. Thanks for the question. And it's an ironic question for you, because you were around when RESTASIS was launched. And I recall you were involved in some of the initial coverage of Allergan back in those days. I think 2006 was the launch date for RESTASIS. As you've mentioned, RESTASIS is now generic, which has its pros and cons. The con is that payers will almost certainly require generic step-through, as they would do in any disease when a generic becomes available. The pro is many, many, many patients have already failed RESTASIS. The median discontinuation time of RESTASIS is about a month. I think after a year of therapy, approximately 70% of patients or so have discontinued RESTASIS. So, stepping through RESTASIS and/or a generic RESTASIS, I think, will be less of an issue than might be initially apparent. Our goal is to position reproxalap as the branded drug of choice, which is why we've now run 2 head-to-head trials versus Xiidra, which is the only other novel, topically administered dry eye disease drug. In one trial, we showed that reproxalap was better tolerated than Xiidra after a single dose, over an hour after installation of that dose that there was less blurry vision than Xiidra and that there was less taste disturbance than Xiidra. And all those findings were statistically significant. That paper has been published. You can find it on PubMed free of charge. The second trial we ran head-to-head versus Xiidra with in a dry eye chamber. We were interested in seeing how well either drug protected the exacerbation of symptoms in a dry eye chamber. These chambers are noxious. This is no-humidity air blown essentially in the face -- we call that forced air -- in the face of subjects during visual tasking. And what we showed was that the dry eye chamber does escalate symptoms, but that escalation is less and slower in reproxalap-treated patients than with Xiidra-treated patients. Hence, our positioning against a generic RESTASIS. Again, our drug -- our goal is to be the branded drug of choice. Let me answer your question about the partnering. I think it's fairly apparent from my comments that there is considerable demand for a new dry eye disease drug, for two reasons. One is today's market is not satisfied, either on the physician side of the fence for the patient side of the fence, just given the lengthy onset of action for today's therapies and the fact that generally, in many patients, there's often only modest activity of either RESTASIS or Xiidra. And I think the second reason is, if you look at the late-stage dry eye disease product pipeline, there really isn't much. Unfortunately, anterior segment ophthalmology drug development is not rife with innovation. Reproxalap represents not only one of the few innovative drugs in front-of-the-eye inflammation, but also is representative, as I said in my prepared comments, of a whole new pharmacology, a whole new class of drugs that can be applied broadly to diseases that affect not just the eye, but the rest of the body. The business development process, which has been ongoing for many years, of course, just given reproxalap's status in the dry eye disease pipeline, has involved not only development aspects, but also commercial aspects. And much of the conversations now and the business development activity now is focused on potential label positioning, branding, and so forth, and those discussions are led by our commercial lead Kelly Mizer.

Our next question comes from Yigal Nochomovitz from Citi.

So, as you mentioned at the R&D Day, you've announced the 4 new indications for 629, ethanol toxicity, chronic cough, minimal change, and SLS. And on the face of it, it seems these 4 indications are mutually orthogonal in terms of clinical presentation, albeit obviously with the common underlying commonality of aldehyde involvement. So, with that being said, if you were to rank these 4 in terms of POS, which ranks highest and which ranks the lowest based on the role of aldehyde biochemistry in disease progression?

I'm smiling as you asked that question because it's something that we think about a lot here. And in a sense, the broad applicability of ADX-629 a is a tremendous advantage. That is, we're able to test diseases that, as you point out, are different and/or complementary because of the potential broad activity of the drug. RASP mediates inflammation generally, which allows us to test different kinds of inflammatory diseases, which is precisely what we're doing and have done with ADX-629. Of the diseases that I think are most likely to derive benefit, I would argue that diseases that are particularly related to aldehydes, that is Sjogren-Larsson syndrome, ethanol toxicity, are probably more likely to demonstrate at least a pharmacodynamic activity. Ethanol, when we consume ethanol, we generate RASP, in particular, acetaldehyde, as was featured in at R&D Day, and ADX-69 should trap acetaldehyde, and thereby, diminish inflammation. And Sjogren-Larsson syndrome, we have an inborn error of metabolism that is caused by a genetic mutation in an enzyme that metabolizes fatty aldehydes, which have been shown to be trapped by ADX-629 and other RASP modulators. So, I would suspect that in terms of pharmacodynamic activity, we're best positioned in ethanol toxicity and in white diseases, such as SLS. For the inflammatory diseases, which are minimal change disease and chronic cough, I'm also optimistic, and I'm optimistic because of the data that we presented at R&D Day. We intentionally tested different kinds of inflammation, so on one end of the spectrum, we had an autoimmune disease; that is, psoriasis. On the other end of the spectrum, we had an allergic disease, which is asthma. In each case, I think we had either clinical or pharmacodynamic activity, and thus, we remain optimistic about our inflammatory diseases as well. It's a little bit like selecting your favorite child. But in our case, we're optimistic about all 4 indications and look forward to discussing the results, beginning with ethanol toxicity, later this year.

Okay. Got it. That's very, very helpful incremental color. I just had two kind of housekeeping questions on dry eye and TRANQUILITY. So, you made a comment in the press release that you're continuing to review the data from the completed TRANQUILITY trial to finalize analytical plans for TRANQUILITY-2. I guess I was just a little bit puzzled by that statement. I guess I thought everything was pretty much hammered away in terms of how the co-primary for redness and Schirmer's would be analyzed in TRANQUILITY-2. So, if you don't mind just elaborating on what you mean when you say analytical plans still need some finalizing.

Well, this answer will be near and dear to your heart, Yigal, because of the simulation modeling you've done, and kudos to you for simulating the results on TRANQUILITY-2 so eloquently. The additional analysis has to do with the alpha share -- that is how much alpha is allocated to redness and how much alpha is allocated to Schirmer test. Typically, the alpha is 0.05. That is, the p-value has to be less than 0.05 to demonstrate a positive outcome. When you alpha share, you split the alpha, so nominally, you could divide the alpha in half and give 0.025 to redness and 0.025 to Schirmer test. However, the exact alpha allocation, in our case, will depend on ongoing simulations of the outcome of TRANQUILITY-2, based on the data from TRANQUILITY-1, primarily because that is the largest of the trials we've run to date. That's what I mean by ongoing analysis. We have not decided the precise alpha allocation across redness and Schirmer tests for TRANQUILITY-2. However, I expect the allocation to be roughly 1:1 at this point.

Okay. Understood. If there's a refinement, I will reburn my simulations. And then one other final question. I think you sort of alluded to this before, but just with the safety, so 100 patients on drug with 12 months of exposure. Is my understanding correct that you're going to hit that goal, presumably middle of the year, given your guidance for filing the NDA middle of the year?

Per FDA guidance, the NDA submission can occur with 6 months of data; that is, 100 patients with 6 months of exposure. However, by the standard 120-day update following NDA submission, the remainder of the 6 months of exposure needs to be submitted. I think most sponsors typically submit the NDA with 8 to 10 months of completion of exposure, which covers the initial 6 months and then allowed the sponsor to submit, 120 days later, the remainder of the 6 months.

Our next question is from Kelly Shi at Jefferies.

So, if only Schirmer's test [Indiscernible] significant for TRANQUILITY trials and will be included in the label, I'm just curious, since Schirmer's test is more of a classic endpoint, what would be your strategy to convey repro's product differentiation from other dry eye drugs to prescribers? Would these 2 new dry eye trials following TRANQUILITY help in this scenario?

That's a really interesting question that Kelly Mizer and I have been exploring with a large number of key opinion leaders, both on the optometry side and on the ophthalmology side. I think it's important to remember that about 60% of the dry eye scripts are derived from optometrists, so as a company, we spend a lot of time with key opinion leaders and thought leaders on the optometry side as well as ophthalmology. We spent a considerable amount of our interactions in terms of dealing with potential label scenarios, which gets right to your question. What if Schirmer test is the sign? What if redness is the sign? The answer is consistent, and that is, what matters is symptoms. As a healthcare provider, if you're an optometrist or an ophthalmologist, you want your patient to feel better, and you want your patients to feel better quickly. And therein lies the key competitive advantage of reproxalap, and that's why we said in our prepared comments that we expect reproxalap to represent a paradigm shift in the way dry eye disease is treated. Instead of having to wait a month or 2 months or 3 months for your patient to feel better, according to the head-to-head data we have versus Xiidra, you can wait 90 seconds. This is the key driver on the label. Whether Schirmer or redness is on the label seems to be, obviously, less relevant, and really depends on the particular healthcare provider with whom we're talking. I think on the optometry side, there may be a slight preference for redness, because patients complain of redness. As I have said before, redness may be the only dry eye disease sign that patients care about. On the other hand, ophthalmologists seemed to have a slight preference for Schirmer test, and that's because of the fact that you mentioned, Kelly, that most drugs have used Schirmer test as an indicator of activity in the past. And it makes sense that if a drug can generate more tears, dry eye symptoms and signs should improve.

Our next question is from Thomas Shrader of BTIG.

This is Sung in calling in for Tom. So, I have 2 questions. One is kind of like a follow-up question from earlier about 629. So currently, you guys have multiple indications, but any thoughts on which indications to prioritize, and then whether it makes sense to potentially partner for a bigger Phase III study? And the second question is for 2191 in PVR. Just thinking about potential commercialization down the line, could you provide any color on sales force for the indication and whether there's any overlap with dry eye disease sales force for a potential synergistic effect?

My general bias is that small companies are better at commercializing orphan drugs than mass-market drugs. So, in a scenario where, for ADX-629, all indications work and we're able to progress all indications into Phase III clinical testing, or certainly past Phase II clinical testing, I think as a company, we would prioritize the smaller diseases -- that is minimal change disease and Sjogren-Larsson syndrome. Partnering is always an option for us. I think there is considerable demand for new immunological drugs, specialty drugs that are safe. And I think a key message from R&D Day was we were unable to identify, across more than 30 or so patients tested, any adverse events that were clinically significant and related to drug. So, I do think that we'll have considerable business development opportunity. And as a company, my belief is we would look to entertain partnering discussions around mass-market indications. Of the ones we've mentioned for ADX-629, I would consider ethanol toxicity, which is a gateway indication to alcoholic hepatitis, or ASH, as well as chronic cough. I think there are many, many more indications that would apply to the brothers and sisters of ADX-629. We spent a little bit of time at R&D Day talking about what we call Project X, which is a drug discovery engine that, in our belief, is unparalleled, designed to generate new RASP modulators. I would look for the newer molecules to be tested in larger diseases. And as I mentioned previously, those diseases would be candidates for partnering.

Great. And then, just regarding the 2191, could you just provide color on the sales force required and then if there's any overlap with the dry eye disease sales force for a synergistic effect, potentially?

Yes, thank you for the reminder. The answer is, back office, yes, front office, no. Back office in terms of access, reimbursement, billing, legal, compliance, et cetera, would have considerable overlap for ophthalmology sales forces broadly. Typically, though, in ophthalmology, your sales force is either geared towards the front of the eye or the back of the eye, because the physician populations are quite different, not only in terms of their training and expertise and practice, but also in terms of their outlook on pharmaceuticals and so forth. I would say, though, that the dry eye disease and allergic conjunctivitis are representative of more typical sales force kinds of efforts, whereas ADX-2191 is different. Injectable drugs for retinal surgeons are typically buy-and-build, meaning that the surgeons purchase the drugs and then get reimbursed for them later. That is a different sales process. It typically involves a heavier emphasis on access, so that we may not need to have your standard sales force geared towards the launch and marketing and sales of ADX-2191.

Our next question comes from Matthew Cross at Alliance Global Partners.

Best wishes to Joshua in the new role. I wanted to drill down a little bit on the exact handling of these two primary endpoints in TRANQULITY-2 that you guys are fully enrolled. I guess, wanted to get a reminder on, for the handling of Schirmer's, I know you're looking at the analysis there, both before and after the fourth dose in particular, as opposed to just straight baseline and post dosing, which I know was related to what you saw in TRANQUILITY. But given that basically, they'll have 3 doses prior to that, I just wanted to kind of review the rationale for looking at that in that fashion. And then, on redness, I wanted to confirm for that part of the equation that this was, as you've done in prior trials, still contingent on a majority of the assessed time points not all being necessarily successful relative to the comparator, or if this is more strict, given the significant split with Schirmer's. And on both fronts, whether the handling in TRANQUILITY-2 should be expected to be mirrored, to some extent, in these so-called backup studies.

Well, Matt, as usual, you've raised some interesting statistical nuances. It turns out the answer to both questions is the same, and that is, I've never understood why companies pick single time points. Single time points are riskier. They diminish your statistical power. You throw away much of the data, and they're not clinically relevant. Never have I asked a patient, Mrs. Smith, how did you feel on day 37, and I don't care about before or after? Instead, a more clinically relevant and statistically powerful approach is to include all the data. And so, both with Schirmer test and redness in the chamber, we have more than one time point. In particular, with Schirmer test, you're absolutely right, we're assessing change from baseline before the fourth dose and after the fourth dose. The before the fourth dose accounts for the activity that may or may not be present with the first 3 doses, and after the fourth dose accounts for the acute activity of the fourth dose, so we're sort of measuring 2 different things, both of which are clinically relevant. Both of those endpoints are incorporated in a statistical model, which increases power -- that is, adds data to the model. And generally, the slope of improvement over time can be assessed, albeit with only 2 points post baseline. The redness assessment is approximately 10 or so time points in the dry eye chamber. We include all 10 time points in the model. As I've just mentioned, one way to think about such a statistical approach is with a slope. That is, generally, is the patient getting worse, which you would expect in a dry eye chamber, but is that patient getting worse than drug if you're on vehicle? So, the slope you would expect to be higher on vehicles than on drug. I think all of that is very clinically relevant. As health care providers, we are concerned with how patients do over time. We are not concerned with how patients do at a particular time. And thus, both for statistical and clinical relevance reasons, we analyze multiple time points. The answer to your question about will TRANQUILITY-2 be mirrored, the statistical approach for TRANQUILITY-2 be mirrored for the backup studies is absolutely, yes. We are intending to change absolutely nothing about the statistical plan. In fact, the conduct of those studies is largely the same. The Schirmer test trial doesn't count the chamber. The crossover chamber trial is the same as TRANQUILITY, except patients are crossed over. That is, a patient may have a vehicle and then come back some weeks later and get drug or vice versa, and that sequence is, of course, randomized.

Got it. Okay. Really helpful insight on several fronts there, Todd; I appreciate it. And if I can sneak in one quick confirmation, for INVIGORATE-2, I know you mentioned that you'd already initiated that study. So, just wanted to confirm, I know given your intention to kind of avoid an effective seasonality on those patients in terms of data variability. Is that study, I guess, enrolling or just initiated, but planning to really enroll the bulk of patients still in winter for a 2023 readout?

What we're learning about the front of the eye, whether it be dry eye disease or allergic conjunctivitis, is that seasonality probably matters. It definitely matters for allergic conjunctivitis, because during certain parts of the year we have pollen, and during other parts of the year, we do not have pollen. Unfortunately, to run a clinical trial in allergic conjunctivitis, you cannot have pollen in the atmosphere, because the pollen in the atmosphere compounds the exposure to pollen in the chamber, and thus, the results are confounded. And thus, we cannot enroll allergy trial, say, in the spring or fall. The answer to your question about enrollment for INVIGORATE-2 is, yes, we have begun enrollment. Enrollment has been robust, which is always a good sign, not only in terms of clinical operations, but in terms of commercial demand for such a therapy. But again, we expect to enroll over 2 allergy-free seasons, that is 2 winters, and maybe perhaps during the middle of the summer, with data coming out next year.

[Operator Instructions] Our next question is from Catherine Novack of Jones Trading.

I just have a couple of quick ones. One, I wanted to ask, on R&D spend for the year, with running additional trials for reproxalap as well as the ongoing 629 studies, how much should we be expecting for those studies, and in particular, the cost of the reproxalap studies?

Yes. Thanks for the question, Catherine. I'll give some broad guidance regarding R&D spend. With all our planned activity in 2022, from TRANQUILITY-2 to INVIGORATE-2 to the ADX-629 trials in chronic cough, ethanol toxicity, minimal change disease and SLS, with the development in our retina programs as well as advancing our RASP platform, broadly, you should expect our spend, particularly in R&D, to increase compared to 2021 levels.

Got it. And then, just as we look forward to the TRANQUILITY data, trying to get a sense of when to expect that, given that it's a short dosing period, wondering is the database already locked? And what else needs to be completed in addition to analytical plans?

Thanks for the question, Cathy. It is one that we get frequently. Let me just take a step back and explain at least how I think most sponsors analyze clinical trials. The first step is quality control of the data itself, so following the last patient's last visit -- which as you point out, it's very close to the last patient's first visit, i.e., the completion of enrollment -- the data are QC'd. There is a specific process for analyzing whether there are data for each particular endpoint, which in our trial is complicated because there are many endpoints, as I was discussing in response to Matt's question. However, I'm happy to report that I believe that that process is nearly complete. Following quality control completion, the database is locked, meaning that the database cannot be changed any further, that the queries between the clinical sites and the CRO and the sponsor have all been satisfied. Following locking of the database, which has not yet occurred in the case of TRANQUILITY-2, the database is then sent to a statistical firm, a third-party statistical firm. The statistical firm is the only group that has the randomization codes. And what that means is, generally, there is only one person at the statistical firm who at any one time knows what patient is on what test article -- that is, whether a patient is on drug or vehicle. After an initial QC process at the statistical firm, then the randomization codes are released and applied to the data within the statistical firm. There's a QC process that follows that, which is a QC process that involves the statistical analysis. And then, only following that process is the sponsor made aware of the results. So, forgive me for that lengthy answer, but I think it's important for investors to understand exactly what happens when a trial is completed and how the data are analyzed. And I hope we've given you a sense of where we are in that process, which in a nutshell, it's pre-database lock.

Our next question is from Esther Hong at Berenberg.

This is Elaine Kim on for Esther. We just wanted to ask, with the convenience of ADX-2191 as a specific injection formulation of methotrexate, we were wondering if that would be enough to compete with the growing support methotrexate itself is getting. And a follow-up is, have you gotten any feedback or conversations with KOLs or payers?

Thanks for focusing on 2191. It's a topic that I wish we had more time to discuss and more questions about. The answer to your last question about feedback from payers is an absolute yes. We have been discussing with payers, not only reproxalap but ADX-2191, which we believe could be near NDA submission, and we intend to update on the regulatory plans, particularly NDA submission plans for 2191, in the second half of this year. The convenience of a GMP product is one thing. I think the safety of a GMP product is another. Today, before methotrexate is injected in patients' eyes, save patients with proliferative vitreoretinopathy or patients with ocular lymphoma, the intravenous formulation of methotrexate has to be used. So, the vial of intravenous methotrexate is cracked open. A certain amount of the solution is drawn up into a syringe, and then that syringe is used to inject the eye. The problem with that process is that it allows for the introduction of contaminants, which when you're injecting into an eye, is potentially serious. There is a condition called endotheliitis, which is an infection of your inner eye that occasionally requires enucleation -- that is, removal of the eye -- for treatment. So obviously, very serious consequences for contamination, which is more likely to occur with non-GMP product; that is, compounded product. Oh, you had also asked about -- I also appreciate your question about the use of methotrexate these days. It's interesting, because methotrexate is already the standard of care in ocular lymphoma. What's more interesting is that the use of methotrexate is growing for the treatment of PVR, which made our Phase III GUARD trial difficult to enroll. As you recall, the GUARD trial was a randomized trial, where subjects, or patients, were either randomized to receive methotrexate or nothing, which is technically standard of care. It was difficult to convince our clinical sites and surgeons to randomize patients to nothing because of the ongoing belief of investigators that methotrexate is active for PVR. I think we've continued to see a surge in the number of posters and papers and manuscripts that describe the use of methotrexate to treat PVR, which I consider good news. I think if given the choice, most retinal surgeons that treat PVR would much rather use a GMP product than a compounded product, for the reasons that I've already discussed. So, thanks for your question.

Our next question is from Yale Jen from Laidlaw Capital.

Best luck for you, Josh. Just two quick ones here, both about the study design. In terms of the crossover chamber and the 1-day Schirmer's, what's the study size of that study, as well as what might be the rough time you will report the data, even the TRANQUILITY-2 [is] positive? And then I have a follow-up.

The patient numbers in the crossover trial are designed to roughly approximate the crossover trials we have completed for allergic conjunctivitis. I believe we have approximately 60 subjects or so in the crossover trial. But remember, that's equivalent to 120 subjects in a standard parallel group trial with a 1:1 randomization. In allergy and crossover trials, and at least in the allergy chamber, we saw highly statistically significant changes in symptoms and signs using that crossover technique, which really just eliminates patient-to-patient variability. What you might think is uncomfortable is different from what I might think is uncomfortable. And thus, it makes sense to compare drug to vehicle within patients, and that's why we're doing the crossover trial. The Schirmer study is designed to mimic TRANQUILITY, so I would expect hundreds of patients in that trial, again, because we saw [Technical Difficulty] regarding a Schirmer with about 300 subjects. The trials are designed to read out [Technical Difficulty] we are not prepared to predict the exact timing because those trials are ongoing [Technical Difficulty] our NDA submission timing, which we're reiterating is midyear this year.

Okay. Great. That's very helpful. And one more question here is for 629. You already started ethanol toxicity, and I think you mentioned about chronic cough as well. Could you give us a brief description of the study design for each of those studies?

Sure, Yale. Absolutely. We had reviewed some of that at our R&D Day. Both of those trials, interestingly enough, are crossover trials. As you can tell, we're big fans of crossover trials, for the reasons I just discussed. That is, they generally eliminate subject-to-subject variability. That's especially important when you're talking about symptoms. That is, how does the patient feel about ocular discomfort? How does the patient feel about his or her coughing? How does the patient feel after consuming ethanol? And those are different from person to person, which is why we have crossover trials, so both of those are crossover designs that, in terms of patient numbers are consistent with Phase II or Phase IIa type clinical trials in the range of 30 to 50 subjects or so.

Okay. And maybe lastly, just a follow-up on this. What might be the endpoint for each of those studies for the Phase II -- of the Phase II?

Right. We're also big believers in signs and symptoms. I think typically, over the past several decades, the FDA has moved toward a sign and symptom calculus for assessing the activity of drugs, and we agree with that shift in thinking. So, for each of these, we'll have a subjective measure in the case of ethanol, standard ethanol exposure symptoms, nausea, dizziness, emesis, vomiting, et cetera. And then signs in the case of ethanol flushing, proprioception tests, acetaldehyde levels and other RASP levels, other markers of inflammation that involve the liver, such as liver function tests. The same is true with regard to chronic cough. The typical FDA endpoint for chronic cough seems to be number of coughs over 24 hours. That can be measured objectively with the device that is attached to the patient's chest. Alongside that sign are a whole bunch of symptoms, quality of life, global impression of disease, global impression of improvement, and so on, so that for each condition, we have both symptoms and signs.

And is there a placebo involved in this study, or this is just a single arm?

Both of them are placebo controlled, so the crossover is either drug and then vehicle, or vehicle and -- I should say, drug and placebo, or placebo and then drug.

Okay. Great. And congrats on the progress.

We have no further questions on the call, so I will hand the floor back to Dr. Brady.

Well, thank you all for joining us today. And as always, we're excited about keeping you posted regarding our future updates and events.