Once a VC, Todd Barry decided to assume the CEO and president post of Aldeyra, a start-up with a promising – and potentially far-reaching – technology for treating ocular and other diseases.
Tom Salemi: Hi, everybody, welcome back to the OIS Podcast. This is your host, Tom Salemi. Well, I hope you’ve enjoyed the recent visits with the Masters of the Universe. I’m very grateful that they all took some time to sit down and chat with me at OIS@ASCRS. If you haven’t listened to those interviews, of course go on OIS.net. You can find the Podcasts and you can find the videos of those video interviews. So if you want to see as well as hear from the Masters of the Universe, please click on those videos and enjoy the interview. Today we’re going to get back into tales of innovation. We’re looking early stage, and I’m speaking specially with Aldeyra Therapeutics. Its CEO, Todd Brady, is actually an acquaintance of mine. We talked a few times when I used to write for other magazines, and Todd was with Domain Associates. Well, Todd joined Aldeyra as CEO and President, and it’s a great story that I hope you’ll enjoy. Aldeyra is dealing with a technology, and I’ll let Todd tell the whole story, but it’s called the aldehyde trap, and it’s got a product out there called NS2 that has really broad applications, and had some success recently in clinical trials for both allergic conjunctivitis and non-infectious anterior uveitis, both phase 2 trials and actually the first was a phase 2A trial. But Aldeyra has a great technology that’s producing great clinical results. Recently raised some money. It’s a publicly traded company, raised $12 million in a financing, and has a very, very broad pipeline. It certainly has a lot going on, and Todd will get into its various programs, its applications in ophthalmology, and how it actually might find applications outside of ophthalmology. So hope you enjoy this conversation with Todd Brady of Aldeyra.
TS: Well, Todd Brady, welcome to the Podcast.
Todd Brady: Thanks, pleasure to be here.
TS: It’s nice to have you. I know we’ve talked to each other a few times in our previous lives, you at Domain and me at OIS. So it’s a small world after all, I guess.
TB: Well, it’s great to reconnect.
TS: Let’s connect on Aldeyra. You had some clinical news lately. Can you fill us in on that front?
TB: We’ve had a big year, Tom. We’ve had actually 2 positive phase 2 studies read out in the eye. We have, as you know, a novel product called NS2, topical ocular formulation of a novel aldehyde trap and we released data back in February showing that NS2 was effective clinically and other ways in terms of reducing the symptoms associated with allergic conjunctivitis, and then also last month in anterior uveitis, where we compared NS2 to topical steroids, which are of course the gold standard for therapy. And I guess the problem with steroids is they’re toxic. And so the fact that NS2 had demonstrated efficacy equivalent to steroids in this study is a real home run, and I think a major advance for the industry because it represents a novel, non-toxic approach to treating uveitis. I think, Tom, that together these data are really interesting because if you think about allergy or allergic conjunctivitis, that’s one side of inflammation, sort of a so-called TH2 dominated disease. And then autoimmune disease, uveitis and that ilk is more TH1 dominated, and so to the other end of the spectrum. And I tell people It’s like getting Bernie Sanders and Ted Cruz to vote together on the same bill in favor of the thing. So every other disease really in the inflammatory world in the eye is some combination of this. And so I think NS2 has really proven that it has broad applicability across the whole inflammatory spectrum in the eye.
TS: And how difficult is it to run trials in this space? Are the endpoints pretty clear cut? Is patient recruitment pretty easy? Physician recruitment easy? What’s it like?
TB: Well, I gotta tell you I’ve been in drug development a long time and worked with a variety of different companies. The eye is a wonderful organ to test, right, for a couple of reasons. One is you can treat it topically, often, especially for anterior disease. And two is you can measure the clinical effects fairly easily and non-invasively. And so we’re thrilled to be working in the eye. And this is one of the few programs ever that have actually started in the eye and will probably migrate to other parts of the body pending continued clinical success. So we’re thrilled to be in the eye. Allergic conjunctivitis is a very common disease, as you know, and that’s easy to recruit. In fact, I think upwards of 20% of the world has some form of allergic conjunctivitis. Anterior uveitis is a different animal. That’s a rare disease. Depending on which data you use, there’s probably somewhere between 25,000 and 150,000 patients in the US that have some form of anterior uveitis. But it’s rare, and obviously harder to recruit, just given the prevalence and incidence of the flares.
TS: Tell us a bit about your lead product and the aldehyde trap. What is it, how does it work? How did you come up it, and what does it do in treating everything you’re trying to treat with it?
TB: You know, back when you and I first crossed paths when I was on the venture side at Domain Associates, we came across this deal in 2005.
TB: And it was a group of founders who really came up with this notion of trapping aldehydes. They happened to be thinking more about retinal disease, but the same concept applies not only in the eye, but elsewhere in the body as well. Aldehydes are toxic, and we all generate aldehydes. We all have literally hundreds of different kinds of enzymes designed exclusively to get rid of aldehydes. So the other key thing about aldehydes is if left unchecked, they are pro-inflammatory. We believe that aldehydes are a part of a novel and complex signaling mechanism that leads to inflammasome activation that leads to transcription factor activation, that then leads to cytokines. And interestingly, that whole inflammatory response leads to more aldehydes. So there’s a cycle here, where aldehydes are leading to inflammation, which leads to more aldehydes, and so forth. And I think when you consider how we as the medical community have approached inflammation, we’ve largely been focused on very non-specific mechanisms like aspirin and steroids, but also anti-cytokines mechanism. So Humira, Imbrel, and some of the largest selling classes of drugs in the world are focusing on those particular targets that are cytokines. No one has ever focused on cytokine. So not only from 2005 on did we develop a new class of molecules that are novel, but we are also the first company that we’re aware of to initiate concerted effort in trapping aldehydes. So we have a novel target and a novel class of drugs designed to mitigate that target. And I think we’ve showed with the data that we just talked about a minute or two ago that this is meaningful in human disease, and it’s broadly meaningful in ocular inflammation.
TS: Is it easier to sell a story that has a real distinct and new and novel approach, or is it harder to sell because it’s so unusual and people might not be familiar with the mechanisms behind it?
TB: Boy, I’d say that’s a great question. Before you have clinical data, it is a difficult process. It’s fine and good to stand up and say we’ve got something new and interesting. But until you’ve proven that it’s interesting and meaningful to patients and physicians, it’s a difficult pioneering process. After you’ve proven this, though, and I think we have – I think we’ve done it twice this year – then it becomes really interesting because if the mechanism is completely unique, and we believe this is, then you, in theory, any physician could layer an aldehyde trap on top of existing therapy, whether it be steroids or antihistamines or whatever it is for patients that either aren’t responsive to standard of care or fully or sufficiently responsive to standard of care, or are experiencing toxicity due to standard of care. And this is the issue with steroids, by the way. Everyone knows in the eye steroids are completely toxic, right? I mean you’ve got cataracts, you’ve got glaucoma, you’ve got increased rates of infection, you’ve got corneal thinning and ulceration. I mean from a toxicity stand point, steroids are a disaster. They work, but they’re a disaster toxicologically. And thus, I think a new mechanism, a new approach that you could layer onto steroids or at least replace steroids with initially is really valuable, especially now that we’ve got clinical data to support that.
TS: We’re going to take a quick break from this talk with Todd Brady at Aldeyra to remind you to go to OIS.net for information about our upcoming OIS which is in August, OIS@ASRS. We’re getting strong registrations on there already, and we’re going to be posting more information about the agenda as we get it, and we’ll be focusing on some of the companies and technologies that we’ll be looking at that conference in the Podcast in future weeks. So go to OIS.net, check out – for information about OIS@ASRS. Keep looking, and of course we hope to see you there in San Francisco. Now back to this conversation.
TS: So are the phase 2 results – is that the tipping point that you need? Or do you need to go all the way to prove that this technology is more than just a novel approach?
TB: Well, I don’t know how many drugs in the eye have demonstrated positive phase 2 data that go on to sale later on. But I gotta believe that in this case, when you can show statistically significant changes in itching and tearing in allergic conjunctivitis, and you can even in a small study show that you can reduce cell count in the anterior chamber just as well as gold standard steroids, I gotta believe that that really bodes well for large versions of phase 2, which is really what phase 3 is. We’re really intending to change very little as we move towards phase 3 this year. And our hope is that the data continue to translate like they have in phase 2 and into phase 3. And you know, whether or not physicians and strategics and others are excited by the phase 2 data, and I think they are, we’re moving ahead, and we’re going to continue to advance these programs. And not only that, we’ve announced that we’re going to move into other ocular inflammatory diseases and the endgame, I think, is to bring the market a completely new approach that not only can assist in treating and curing diseases, but also reduce the toxicology burden on patients that we have today primarily due to steroids.
TS: Just looking at your website and the pipeline, you’ve got 6 different projects, and a seventh item that just says various. Are you able to – how are you maintaining all these – managing all these trials simultaneously? Is that challenging, or because the nature of your technology, it actually allows for managing this many trials at the same time?
TB: I think it’s doable. It’s always easy to throw in various at the end. I think it’s doable. I think in this case, to date, we have focused on aldehyde trapping. So in the most simplistic way, there’s one mechanism in this whole company, which is an aldehyde trap. I think you could divide that further into 2 camps. One is inflammation that we’ve talked about. The other are these inborn errors of metabolism, or more specifically, inborn errors of aldehyde metabolism, where there’s groups of patients which unfortunately are very rare that have genetic mutations in aldehyde metabolizing enzymes. And because these patients can’t metabolize aldehydes, the aldehyde mode is very high. And that leads to all sorts of badness. So that’s really the other side of our business is more of an orphan slash, if you will, enzyme replacement therapy approach, where an aldehyde trap would really compensate for the lost function of the enzymes that are mutated in these patients. So it’s all related to the same general concept. And I think because a lot of these diseases are very rare, I think it’s – even for a small company like us, I think it’s quite doable.
TS: That’s exciting. Do you anticipate holding onto the rights of all these products? Or does your model rely upon partnering with larger entities to take this across the finish line? Or take something across the finish line?
TB: I’ve learned over the years, as you know, that relying on much of anything is difficult [?] We have run the business as if we are a go-it-alone and standalone entity. We just closed a financing a week or two ago along those lines. We’re fully capable and intend to move forward by ourselves. I think we would consider, of course, OUS or outside US partnerships, certainly in the eye. Whether we do that in rare, orphan and genetic diseases is a whole other discussion. I think that’s a lot less likely. But we’re certainly willing to consider partnerships outside the US at this point.
TS: And you mentioned the capital raised. How much did you raise and what was that process like?
TB: So we closed on just around $12 million net, a little bit more than that. That’s really what we needed to advance the program as we’ve discussed it. I’ve been an investor a long time, and I don’t like dilution more than anyone else, and I think that what we need to do is advance the ball down the field in the ocular space. We need to perform the next phase 2/3 type studies in conjunction with our colleagues at the FDA in Washington. And the amount of money we needed to do that was in the $10 million range, so we closed on a little bit more, and look forward to starting those trials.
TS: And the public market’s reception to ophthalmology, are you feeling there’s any sort of surge in interest in ophthalmology startups or ophthalmology big players on the public market? Is that a sector that is generally positively favored?
TB: I think so. I think ophthalmology is fascinating because it historically – there hasn’t been a ton of innovation in the space. I mean I think a lot of the drugs, as I mentioned previously, that get to the eye have been inherited from other parts of the body. Steroids are a great example, right? Cyclosporine. Other examples. It just seems like in the end, the eye is an afterthought in terms of innovation and drug development. We’re really proud to start out in the eye. We’re proud to have discovered and tested and initially proven in early clinical trials that this drug is important and clinically meaningful. And then maybe we’ll expand elsewhere in the body. I think investors generally have resonated with this concept that the other beauty of ocular disease, Tom, is that you can approach the physicians fairly easily, right? There’s a group of physicians in the US that are, even for a small company, are approachable in terms of the sales force. And many of them focus on the front of the eye, and many of them focus on the back of the eye. And the kind of drug you have sort of dictates which kind of sales force you hire. But commercially it’s something that’s quite feasible even for smaller groups.
TS: That is something you hear. Companies of every size, just ophthalmology still seems to be a sector where there’s – and we try to foster that at OIS – a bit of a collegial attitude between clinicians and corporations in startups.
TB: Yes. And we appreciate that concept, and I think you’re absolutely right. I think that it’s one of the few areas where even at an early stage there’s a nice relationship, I think, between industry and academics, both small and large companies in the academic sector. And we actually look forward to seeing more innovation, not just from us, but other companies as well, dedicated to the ocular space.
TS: And just finally, how did you find your way to take over this company that was once a portfolio company? And how did you get Aldeyra onto the public markets?
TB: Well, taking it over wasn’t my master plan. You know how it is in venture, as CEOs come and go for better opportunities or worse. It’s sometimes the right thing to do to, as the largest investor, to step in and to run the company on an interim basis. And that’s exactly what we did at Domain. I think what happened in the case of Aldeyra is the data kept coming in on the preclinical side, and it looked better and better and better, and finally I held up my hand and changed my title to Entrepreneur in Residence, and we had inbound calls from investment bankers based on the data and the potential in the clinic and the potential for orphan disease and ocular disease. And we eventually filed to go public back in 2014, and maybe even late 13, and at that point it’s time to move on. So I am absolutely thrilled to be here. I have a great and long standing and continuing relationship with my friends at Domain, and still involved in several of their companies. But I gotta say from a personal standpoint, it’s great and so fulfilling to be part of a biotech company that is completely innovative and doing something completely new. And even if we’re just a little bit right, we could have a major impact, I think, in not only patient care, but also the way we think about inflammatory disease or some of these orphan diseases of these inborn errors in metabolism. And that in itself is very gratifying.
TS: I imagine it must be exciting to be swinging for the fences like you are. So appreciate your sharing the story with us today.
TS: Well, thank you, Todd Brady, for joining us on the Podcast. It was great to reconnect and so glad to hear Aldeyra’s doing well. And thank you of course to our listeners for joining us again for a tale of innovation. A reminder: go to OIS.net. Not only can you find out information about OIS@ASRS, but you can sign up for the Eye on Innovation Newsletter which we’ll send you to your inbox. Our unique reporting on ophthalmology, these Podcasts or future Podcasts as well as radio content from our recent OIS@ASCRS in New Orleans. So again, go to OIS.net. You’ll find a lot of great content and of course information about our upcoming OIS@ASRS. We hope you register so we can see you in San Francisco.