Key Takeaways

Shares of Aldeyra Therapeutics ( ALDX ) plummeted nearly 75% to an all-time low Thursday morning after the Food and Drug Administration (FDA) said the company's dry eye disease drug has not proven to be effective in enough studies.

The developmental drug company said that it received a letter from the FDA responding to its new drug application (NDA) for reproxalap, a treatment for dry eye disease.

The drug has "failed to demonstrate efficacy in adequate and well controlled studies in treating ocular symptoms associated with dry eyes," the FDA wrote, Aldeyra said. The agency told the firm that it needs to prove the drug's effectiveness in at least one more clinical trial .

The drugmaker said it expects to announce results from an ongoing trial in the second quarter, with plans to resubmit its NDA by mid-2025 if the trial has positive results. "The review period for the potential NDA resubmission is expected to be six months," Aldeyra said.

Shares of Aldeyra were down 74% in recent trading to $1.39 after earlier touching a record-low $1.18. The stock had been up nearly 30% over the past 12 months entering Thursday.

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