Canaccord: Aldeyra Has Potentially 'Huge Catalysts,' Could More Than Double

In a report published Wednesday, Canaccord Genuity analyst Corey Davis initiated coverage of Aldeyra Therapeutics Inc ALDX with a Buy rating and a price target of $16. Aldeyra is developing a unique aldehyde-trapping molecule, NS2, to treat two orphan indications with significant unmet need: Sjögren-Larsson Syndrome (SLS) and noninfectious anterior uveitis (AU). "NS2 is currently in Ph2 for SLS and AU, with results anticipated at the end of 2015; since no human efficacy data is available to date, readout of the these trials would be huge catalysts for the stock," analyst Corey Davis mentioned. Encouraging preclinical and safety data supports NS2's ability to trap free aldehydes and thus address diseases where aldehydes are thought to mediate pathology. Once the efficacy of N2S is proved, Aldeyra may emerge as an attractive M&A candidate and get several offers, Davis said. Likely risks include the company's failure to produce positive results from its ongoing Phase 2 clinical studies or its failure to get FDA approval.