ALDX Crashes 71% as FDA Issues Third CRL for Dry Eye Disease Drug NDA

Shares of Aldeyra Therapeutics ALDX plunged 70.7% on Tuesday after the company announced receiving a Complete Response Letter (CRL) from the FDA for a third time for the new drug application (NDA) seeking approval of reproxalap, an investigational drug candidate, for the treatment of dry eye disease.

We remind investors that ALDX initially received a CRL for its reproxalap NDA in 2023, citing that the study results supporting the filing failed to demonstrate the candidate’s efficacy in treating ocular symptoms associated with dry eyes. Back then, the FDA recommended that at least one additional adequate and well-controlled study be conducted on reproxalap to demonstrate a positive effect on the treatment of ocular symptoms of dry eye.

Following the setback, Aldeyra Therapeutics announced meeting the primary endpoint in a phase III dry eye chamber study later in 2024, which evaluated reproxalap for the treatment of dry eye disease. In the study, treatment with reproxalap was statistically superior to vehicle for the prespecified primary endpoint of ocular discomfort, an FDA-accepted symptom of dry eye disease. Based on the results, ALDX resubmitted the NDA for reproxalap for treating signs and symptoms of dry eye disease in late 2024.

However, the FDA again issued a CRL in 2025, citing potential methodological issues in the previously completed phase III dry eye chamber study, including baseline differences between treatment arms that may have affected result interpretation. The agency said an additional symptom study would be required for resubmission. Based on the FDA’s recommendation, Aldeyra Therapeutics reported meeting the primary endpoint in a phase III dry eye chamber study that assessed the activity of reproxalap in reducing ocular discomfort, an FDA-accepted symptom of dry eye disease. No notable differences in baseline scores across treatment arms were observed in the clinical study, and no safety concerns were identified.

Later in 2025, ALDX resubmitted the reproxalap NDA for dry eye disease, including new data from the dry eye chamber study that met its primary endpoint. Per the latest press release, this application has also been rejected by the FDA.

The stock has plummeted 74.8% in the past six months compared with the industry’s decline of 9.1%.

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Why the FDA Issued a Third CRL for ALDX’s Reproxalap NDA?

The FDA issued the third CRL for ALDX’s reproxalap NDA, citing a lack of substantial evidence from adequate and well-controlled investigations demonstrating the candidate’s effectiveness in treating the signs and symptoms of dry eye disease.

Per the agency, the resubmitted 2025 application failed to establish efficacy, noting that inconsistent results across clinical studies raised concerns about the reliability and clinical relevance of the positive findings. The FDA concluded that the overall body of evidence from completed studies does not support the candidate’s effectiveness. No safety or manufacturing concerns were identified in the review.

During the regulatory review process, the FDA provided draft labeling to Aldeyra Therapeutics in late 2025 and again in March 2026, though the company indicated that labeling discussions were not finalized. The agency recommended that the company further analyze why certain studies failed and determine whether specific patient populations or conditions may show clearer treatment benefits.

Importantly, the FDA did not request additional confirmatory studies or recommend conducting new studies. ALDX plans to request a Type A meeting with the FDA to clarify the steps needed for potential approval. Aldeyra Therapeutics reported $70 million in cash, cash equivalents and marketable securities as of Dec. 31, 2025, which it expects will fund operations through 2028.

Aldeyra Therapeutics, Inc. Price and Consensus

Aldeyra Therapeutics, Inc. price-consensus-chart | Aldeyra Therapeutics, Inc. Quote

ALDX's Zacks Rank & Key Picks

Aldeyra Therapeutics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are ADMA Biologics ADMA, Catalyst Pharmaceuticals CPRX and ALX Oncology Holdings ALXO. While USNA and CPRX sport a Zacks Rank #1 (Strong Buy) each, ALXO carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for ADMA Biologics’ 2026 earnings per share (EPS) have increased from 85 cents to 96 cents. ADMA shares have gained 1.5% over the past six months.

ADMA Biologics’ earnings beat estimates in one of the trailing three quarters, matched once and missed on the remaining occasion, with the average negative surprise being 1.79%.

Over the past 60 days, estimates for Catalyst Pharmaceuticals’ 2026 EPS have risen from $2.55 to $2.82. CPRX shares have gained 17.9% over the past six months.

Catalyst Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, with the average surprise being 35.19%.

Over the past 60 days, estimates for ALX Oncology Holdings’ 2026 loss per share have narrowed from $1.21 to 90 cents. ALXO shares have surged 79.4% over the past six months.

ALX Oncology Holdings’ earnings missed estimates in each of the trailing four quarters, with the average negative surprise being 12.82%.

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