Aldeyra Therapeutics Inc. (ALDX:NASDAQ) is one. Its lead drug candidate Reproxalap is a small molecule that inhibits RASP, or reactive aldehyde species. Recent results from a Phase 2 trial showed efficacy of the Reproxalap ophthalmic solution in dry eye syndrome. The study met, with statistical significance (p=0.016), its primary endpoint.
"2021 was a year of shiny new toys. 2022 will include replacing a lot of batteries."
—Analyst Thomas Shrader
Also promising, Shrader wrote, is Aldeyra's program in which it is testing the clinical benefits of RASP inhibition in psoriasis and atopic asthma.
Shrader pointed out that while Aldeyra's ophthalmologic therapeutic candidates deal with conditions involving the front of the eye, much excitement in the field surrounds treatments for back of the eye problems, such as retinal disease.
As for SQZ Biotechnologies Co. (SQZ:NYSE), it is an early clinical stage company in the autologous chimeric antigen receptor T-cell space. SQZ's most recent data readout, in squamous cell carcinoma of head and neck, was encouraging, Shrader wrote.
He noted that while there have been numerous advancements generally in the cell therapy space, use of cell therapies is far behind, still in the early stages in terms of accessibility and acceptance.
In summarizing the biotech industry this year and its outlook for next year, Shrader commented that "2021 was a year of shiny new toys. 2022 will include replacing a lot of batteries."
Regarding the later 2021 trend of biotech stocks' share prices plummeting, Shrader cited two examples, BTIG's Top Pick runners up.
One is Pliant Therapeutics Inc. (PLRX:NASDAQ), which plummeted to $15 per share from $44.
The other is Stoke Therapeutics Inc. (STOK:NASDAQ), down 60% year to date.
BTIG's biotech analysts have gotten the sense, from talking to investors, that they are unwilling to wait for major catalysts to come from prospective life sciences stories, Shrader noted.
With so many companies in the space to choose from, investors generally are picking the ones already at the finish line and with the best valuations at the given time, he said.
This trend, Shrader purported, will likely lead to mergers and acquisitions activity.
Otherwise, "companies will execute their plans and hopefully arrive at a decent proof of concept, a reasonable commercial shot at a market that isn't flooded with alternatives and a more down-to-earth valuation."
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Important Disclaimers for BTIG LLC, Aldeyra Therapeutics, and SQZ Biotechnologies, Dec. 15, 2021
I, Thomas Shrader, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
I, Sung Jun Hong, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report.
BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Aldeyra Therapeutics (ALDX)
BTIG LLC had an investment banking services client relationship during the past 12 months with: Aldeyra Therapeutics (ALDX)
BTIG LLC managed or co-managed a public offering of securities in the past 12 months for: Aldeyra Therapeutics (ALDX)
BTIG LLC has received compensation for investment banking services in the past 12 months from: Aldeyra Therapeutics (ALDX)
BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Pliant Therapeutics (PLRX)
BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: SQZ Biotechnologies Co (SQZ)
BTIG LLC had an investment banking services client relationship during the past 12 months with: SQZ Biotechnologies Co (SQZ)
BTIG LLC managed or co-managed a public offering of securities in the past 12 months for: SQZ Biotechnologies Co (SQZ)
BTIG LLC has received compensation for investment banking services in the past 12 months from: SQZ Biotechnologies Co (SQZ)
BTIG LLC expects to receive or intends to seek compensation for investment banking services in the next 3 months from: Stoke Therapeutics, Inc. (STOK)
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