biotech
Aldeyra's eye drug gets rejected for the third time
Aldeyra Therapeutics said yesterday that the FDA has yet again rejected its drug for dry eye disease. The biotech had been going back and forth with the agency since 2022, running new clinical trials with mixed results.
Aldeyra said the rejection letter stated that the “inconsistency of study results raises serious concerns about the reliability and meaningfulness of the positive findings” and that the “totality of evidence from the completed clinical trials does not support the effectiveness of the product.”
My colleague Adam Feuerstein took a look at Aldeyra last week leading up to the FDA decision. He called out what he thought was a red flag — that the company in an SEC filing warned about short sellers who “may be manipulative” and who allegedly publish unregulated research reports that may include “distortions or omissions of actual facts or, in some cases, fabrications of facts.”
pharma
HSBC analysts say market is too optimistic on Lilly
Shares of Eli Lilly fell nearly 6% yesterday, after analysts at HSBC downgraded the stock from hold, saying the market is overestimating the potential size of the obesity market and that there are risks to the direct-to-consumer cash strategy.
“Lilly shares are priced to perfection,” wrote the analysts, led by Rajesh Kumar.
They said they see the obesity drug market growing to $80 to $120 billion by 2032, rather than the $150 billion some investors have estimated. They also think investors are too optimistic on the launch of Lilly's investigational GLP-1 pill orforglipron and the number of people who will stay on the pill consistently.
The analysts additionally questioned Lilly's reliance on the direct-to-consumer cash market. Because patients are paying for drugs on their own without insurance, the cash market is sensitive to swings in the economy. If there's an economic downturn, many patients will no longer afford continuing to pay cash.
The assumptions around the strength of the direct-to-consumer market seem to be a key reason Lilly and Novo Nordisk's financial outlooks have diverged so much, the analysts wrote.