Laidlaw Maintains Buy Rating on Aldeyra, Confident in Growth Despite FDA Shock
Shares of Aldeyra Therapeutics (NASDAQ: ALDX), a $107 million market cap biotech company, continued to be under pressure Friday after receiving a second Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) for its new drug application (NDA) for dry eye disease (DED) treatment reproxalap. However, despite the regulatory hurdle, analysts at Laidlaw maintained a “Buy” rating with a $11 price target—six times higher than the stock’s current $1.79 price.
According to an analysis from InvestingPro, analyst price targets range from $6 to $11, reflecting strong confidence in Aldeyra’s long-term resilience. Meanwhile, the stock fell nearly 74% in Friday trading and more than 78% in a week, marking one of the company’s toughest weeks.
Laidlaw analyst Yale Jen said the CRL was a “rare event” and unlikely to happen again. He also noted that Aldeyra is conducting two clinical trials for reproxalap, with top-line data expected in the current quarter. Historical data from previous trials have shown reproxalap to have positive results in treating DED, leading Laidlaw to believe that the upcoming data will further support the drug’s efficacy.
Additionally, Laidlaw said that Aldeyra’s option agreement with AbbVie (NYSE: ABBV) remains intact and is not affected by the latest FDA decision. According to InvestingPro, Aldeyra has strong liquidity with a current ratio of 5.59, indicating sufficient financial capacity to overcome short-term challenges and continue R&D activities.
On the other hand, some financial institutions have adjusted their expectations. Jefferies lowered its price target to $6 but maintained a “Buy” rating. BTIG and HC Wainwright both maintained positive ratings on the stock with targets of $11 and $10, respectively, citing reproxalap’s unique advantages in treating DED and its different mechanism of action.
In addition, Aldeyra has announced plans to re-file an NDA in mid-2025 after completing ongoing trials, demonstrating its commitment to pursuing FDA approval. The company has $101 million in cash and liquid securities through the end of 2024, providing a solid financial foundation to continue its recovery strategy.
Is ALDX a Stock to Hold Now?
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