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Aldeyra (ALDX) to Report Q2 Earnings: What's in the Offing?

Zacks Equity Research
·4 min read

Investors will focus on pipeline updates when clinical-stage biotechnology company, Aldeyra Therapeutics, Inc. ALDX, reports second-quarter 2020 results on Aug 6.

The stock has gained 13.4% in the year so far against the industry's decline of 4.3%.

The company beat earnings expectations by 29.17% in the last reported quarter. Over the trailing four quarters, it surpassed earnings estimates on three occasions, the average surprise being 8.45%.

Let us see how things have shaped up prior to this announcement.

Factors in Focus

Aldeyra is a clinical-stage biotechnology company, which focuses on the development of novel therapies for immune-mediated diseases. Hence, investors will focus on pipeline updates.

The company’s lead compounds, reproxalap and ADX-629, target reactive aldehyde species (RASP) leading to elevated levels of cytokine release via activation of a broad array of inflammatory factors, including NF-κB, inflammasomes and Scavenger Receptor A. The pipeline also includes ADX-2191, a dihydrofolate reductase inhibitor in phase III testing for proliferative vitreoretinopathy, and ADX-1612, a chaperome inhibitor in phase II testing for COVID-19 and ovarian cancer.

Reproxalap is being evaluated in phase III studies in patients with dry eye disease and allergic conjunctivitis. Last month, the company announced development plans to support a New Drug Application (NDA) for reproxalap in dry eye disease. Based on the FDA meeting minutes, Aldeyra plans to begin two clinical studies to assess the activity of reproxalap in reducing tear levels of RASP as an objective sign of dry eye disease. The company expects top-line results from the first of the RASP studies by the end of 2020, though the COVID-19-related potential disruptions are concerning. In addition, a safety study in dry eye disease patients is expected to be initiated in the fourth quarter of 2020 with the submission of the NDA targeted for late 2021.

In May 2020, the company announced the planned advancement of the investigational new HSP90 inhibitor, ADX-1612, to clinical testing for COVID-19. Aldeyra also announced that ADX-629, a novel orally administered investigational RASP inhibitor, has been granted a BARDA CoronaWatch meeting. Further updates will be keenly awaited by investors.

Enrollment in key studies has been significantly delayed due to the COVID-19 pandemic and management’s updates on revised timelines will also be in focus.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Aldeyra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.   

Earnings ESP: Earnings ESP for Aldeyra is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Bristol-Myers Squibb BMY has an Earnings ESP of +3.35% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Translate Bio TBIO has an Earnings ESP of +5.26% and a Zacks Rank #2.

Pacira BioSciences, Inc. PCRX has an Earnings ESP of +28.42% and a Zacks Rank of 2.

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Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report
 
Translate Bio, Inc. (TBIO) : Free Stock Analysis Report
 
Pacira BioSciences, Inc. (PCRX) : Free Stock Analysis Report
 
Aldeyra Therapeutics, Inc. (ALDX) : Free Stock Analysis Report
 
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Zacks Investment Research