–Conference Call and Webcast Today at 8:00 a.m.
ET–
Kala Pharmaceuticals, Inc. (Kala) (NASDAQ:KALA), a
biopharmaceutical company focused on the development and
commercialization of therapeutics using its proprietary AMPPLIFY™
mucus-penetrating particle (MPP) Drug Delivery Technology, today
reported financial results for the second quarter ended June 30,
2019.
“We are very pleased with our results in the second quarter. The
INVELTYS launch is progressing well, with positive feedback from
physicians and strong growth in prescriptions, market share, and
revenues compared to the first quarter,” said Mark Iwicki,
Chairman, President and Chief Executive Officer of Kala
Pharmaceuticals. “Our experience with INVELTYS provides a strong
foundation as we advance KPI-121 0.25%, our product candidate for
dry eye disease, which, if approved, we believe will be a promising
new therapy for the millions of patients who experience episodic
dry eye flares.”
The PDUFA action date for KPI-121 0.25% is August 15, 2019. In
parallel, Kala continues to enroll the STRIDE 3 trial of KPI-121
0.25% and is targeting topline data by the end of 2019.
Second Quarter and Recent Highlights:
INVELTYS®: INVELTYS (loteprednol etabonate ophthalmic
suspension) 1% was launched in January 2019 as the first and only
twice-daily ocular corticosteroid indicated for the treatment of
post-operative inflammation and pain following ocular surgery. The
unique combination of safety, efficacy and twice-daily dosing of
INVELTYS was developed to address a significant unmet need and Kala
believes these attributes are being viewed favorably by
physicians.
- Quarter-over-quarter growth was 173%; approximately 31,000
INVELTYS prescriptions were filled in the second quarter of 2019
compared to approximately 11,000 prescriptions filled in the first
quarter of 2019. As of July 26, 2019, approximately 53,000
prescriptions of INVELTYS have been filled.
- INVELTYS continues to achieve strong market share growth and
now has approximately 6.8% branded new prescription market share in
just over six months since launch.
- INVELTYS has achieved approximately 50% unrestricted Commercial
market access, for a total of approximately 92 million covered
commercial lives.
- To date INVELTYS has achieved approximately 23% Medicare Part D
unrestricted market access, for a total of approximately 10 million
covered Medicare Part D lives. Medicare Part D contract
negotiations are ongoing with most coverage decisions anticipated
in early 2020.
KPI-121 0.25% Dry Eye Program: The U.S. Food and Drug
Administration (FDA) has set a PDUFA target action date of August
15, 2019 for KPI-121 0.25%, which if approved could be the first
FDA-approved product for the temporary relief of the signs and
symptoms of dry eye disease. Kala’s New Drug Application (NDA)
filing includes data from one Phase 2 and two Phase 3 efficacy and
safety trials studying approximately 2,000 patients with dry eye
disease. Based upon the FDA’s recommendation, Kala is conducting an
additional Phase 3 clinical trial of KPI-121 0.25%, STRIDE 3
(STRIDE - Short Term Relief In Dry Eye). Kala believes that it has
identified key factors that contributed to the differences observed
in the results from STRIDE 2 compared to those of STRIDE 1 and the
Phase 2 trials, and that changes made to the inclusion/exclusion
criteria of STRIDE 3 based on these analyses will improve the
probability of success of STRIDE 3. Kala is targeting topline data
from STRIDE 3 by the end of 2019.
Financial Results:
The financial results below contain both GAAP and non-GAAP
financial measures. The non-GAAP financial measures exclude stock
compensation, depreciation and non-cash interest expense. See
“Non-GAAP Financial Measures” below; for a full reconciliation of
our GAAP to non-GAAP financial measures please refer to the tables
at the end of this press release.
Second Quarter 2019 Financial Results
- Net Product Revenue: For the quarter ended June 30,
2019, Kala reported net product revenue of $2.1 million relating to
sales of INVELTYS, which was launched in January 2019, compared to
$1.4 million for the first quarter of 2019. This represents
quarter-over-quarter growth of 50%. The Company did not recognize
revenue for the first quarter of 2018. Revenue is recognized when
products are delivered to distributors.
- Cost of Product Revenues: Cost of product revenues for
the second quarter of 2019 was $0.4 million compared to $0 for the
same period in 2018. Non-GAAP cost of product revenues was $0.3
million for the quarter ended June 30, 2019 compared to $0 for the
same period in 2018.
- SG&A Expenses: For the quarter ended June 30, 2019,
selling, general and administrative (SG&A) expenses were $17.0
million compared to $7.2 million for the same period in 2018. The
increase in SG&A expenses for the quarter ended June 30, 2019
was primarily due to costs associated with hiring additional
personnel, building the commercial organization and an increase in
facility costs associated with Kala’s corporate headquarters under
a new lease which commenced in late 2018. Non-GAAP SG&A
expenses were $15.1 million for the quarter ended June 30, 2019
compared to $5.6 million for the same period in 2018.
- R&D Expenses: For the quarter ended June 30, 2019,
research and development (R&D) expenses were $7.1 million
compared to $7.4 million for the same period in 2018. The decrease
in R&D expenses for the quarter ended June 30, 2019 was
primarily due to a decrease in manufacturing costs associated with
INVELTYS, which were expensed as R&D prior to FDA approval,
partially offset by an increase in clinical costs associated with
the STRIDE 3 clinical trial. Non-GAAP R&D expenses were $6.2
million for the quarter ended June 30, 2019 compared to $6.5
million for the same period in 2018.
- Operating Loss: For the quarter ended June 30, 2019,
loss from operations was $22.4 million compared to $14.5 million
for the same period in 2018. Non-GAAP operating loss was $19.6
million for the quarter ended June 30, 2019 compared to $12.1
million for the same period in 2018.
- Net Loss: Net loss was $23.8 million, or $0.70 per
share, for the quarter ended June 30, 2019 compared to a net loss
of $14.6 million, or $0.60 per share, for the same period in 2018.
For the quarter ended June 30, 2019, non-GAAP net loss was $20.7
million, compared to $12.2 million for the same quarter of 2018.
The weighted average number of shares outstanding used to calculate
net loss per share was 33.9 million for the quarter ended June 30,
2019 and 24.6 million for the quarter ended June 30, 2018.
Year-to-Date Financial Results
- Net Product Revenue: For the six months ended June 30,
2019, Kala reported net product revenue of $3.4 million relating to
sales of INVELTYS, which was launched in January 2019. The Company
did not recognize revenue in the first half of 2018.
- Cost of Product Revenues: Cost of product revenues for
the six months ended June 30, 2019 were $0.6 million compared to $0
for the same period in 2018. Non-GAAP Cost of product revenues were
$0.6 million for the six months ended June 30, 2019 compared to $0
for the same period in 2018.
- SG&A Expenses: For the six months ended June 30,
2019, SG&A expenses were $35.2 million compared to $12.6
million for the same period in 2018. The increase in SG&A
expenses for the six months ended June 30, 2019 was primarily due
to costs associated with hiring additional personnel, building the
commercial organization and an increase in facility costs
associated with Kala’s corporate headquarters under a new lease
which commenced in late 2018. Non-GAAP SG&A expenses were $31.4
million for the six months ended June 30, 2019 compared to $9.9
million for the same period in 2018.
- R&D Expenses: For the six months ended June 30,
2019, R&D expenses were $14.1 million compared to $13.0 million
for the same period in 2018. The increase in R&D expenses for
the six months ended June 30, 2019 was primarily due primarily due
to an increase in clinical costs associated with the STRIDE 3
clinical trial partially offset by a decrease in manufacturing
costs associated with INVELTYS which were expensed as R&D prior
to FDA approval. Non-GAAP R&D expenses were $12.5 million for
the six months ended June 30, 2019 compared to $11.5 million for
the same period in 2018.
- Operating Loss: For the six months ended June 30, 2019,
loss from operations was $46.5 million compared to $25.7 million
for the same period in 2018. Non-GAAP operating loss was $41.0
million for the six months ended June 30, 2019 compared to $21.3
million for the same period in 2018.
- Net Loss: Net loss was $49.2 million, or $1.45 per
share, for the six months ended June 30, 2019 compared to a net
loss of $25.9 million, or $1.06 per share, for the same period in
2018. For the six months ended June 30, 2019, non-GAAP net loss was
$43.3 million compared to $21.6 million for the same period in
2018. The weighted average number of shares outstanding used to
calculate net loss per share was 33.9 million for the six months
ended June 30, 2019 and 24.6 million for the six months ended June
30, 2018.
Cash Position
- As of June 30, 2019, Kala had cash of $118.0 million compared
to $170.9 million as of December 31, 2018. Kala anticipates that
its existing cash on hand will enable it to fund operations through
at least the third quarter of 2020, with additional cash runway
expected when including INVELTYS revenue.
Conference Call Information
Kala will host a live conference call and webcast today, August
6, 2019 at 8:00 a.m. ET to review second quarter 2019 financial
results. To access the conference call, please dial 866-300-4091
(domestic callers) or 703-736-7433 (international callers) five
minutes prior to the start of the call and provide the conference
ID: 2677066. To access a subsequent archived recording of the call,
please visit the “Investors & Media” section on the Kala
website at http://kalarx.com.
About Kala Pharmaceuticals, Inc.
Kala is a biopharmaceutical company focused on the development
and commercialization of therapeutics using its proprietary
AMPPLIFYTM mucus-penetrating particle (MPP) Drug Delivery
Technology, with an initial focus on the treatment of eye diseases.
Kala has applied the AMPPLIFY Drug Delivery Technology to a
corticosteroid, loteprednol etabonate (LE), designed for ocular
applications, resulting in the August 2018 FDA approval of
INVELTYS® for the treatment of inflammation and pain following
ocular surgery and its lead product candidate, KPI-121 0.25%, for
the temporary relief of the signs and symptoms of dry eye disease,
for which a target action date under the Prescription Drug User Fee
Act (PDUFA) has been set by the United States Food and Drug
Administration (FDA) for August 15, 2019.
Non-GAAP Financial Measures
In this press release, the financial results of Kala are
provided in accordance with accounting principles generally
accepted in the United States (GAAP) and using certain non-GAAP
financial measures. The items included in GAAP presentations but
excluded for purposes of determining non-GAAP financial measures
for the periods presented in the press release are stock-based
compensation expense, non-cash interest and depreciation.
Management believes this non-GAAP information is useful for
investors, taken in conjunction with Kala’s GAAP financial
statements, because it provides greater transparency and
period-over-period comparability with respect to Kala’s operating
performance. These measures are also used by management to assess
the performance of the business. Investors should consider these
non-GAAP measures only as a supplement to, not as a substitute for,
or as superior to, measures of financial performance prepared in
accordance with GAAP. In addition, these non-GAAP financial
measures are unlikely to be comparable with non-GAAP information
provided by other companies. For a reconciliation of these non-GAAP
financial measures to the most comparable GAAP measures, please
refer to the table at the end of this press release.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, that involve substantial risks and uncertainties, including
statements regarding INVELTYS for the treatment of inflammation and
pain following ocular surgery, including progress of commercial
launch, status of insurance coverage and the availability of
reimbursements under Medicare Part D, the Company's lead product
candidate, KPI-121 0.25% for the temporary relief of the signs and
symptoms of dry eye disease, including the Company’s belief that
changes made to the inclusion/exclusion criteria of STRIDE 3 will
improve the probability of success and the Company targeting to
report topline results for STRIDE 3 by the end of 2019, the
Company’s expectations regarding its use of cash and cash runway.
All statements, other than statements of historical facts,
contained in this Press Release, including statements regarding the
Company’s strategy, future operations, future financial position,
future revenue, projected costs, prospects, plans and objectives of
management, are forward-looking statements. The words “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“predict,” “project,” “target,” “potential,” “will,” “would,”
“could,” “should,” “continue” and similar expressions are intended
to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. The
Company may not actually achieve the plans, intentions or
expectations disclosed in its forward-looking statements, and you
should not place undue reliance on such forward-looking statements.
Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements as a result of various risks and uncertainties,
including but not limited to: whether the Company will be able to
successfully implement its commercialization plans for INVELTYS;
whether the market opportunity for INVELTYS is consistent with the
Company’s expectations and market research; uncertainties inherent
in the availability and timing of data from ongoing clinical
trials, and the results of such trials, including STRIDE 3; whether
any additional clinical trials will be initiated or required for
KPI-121 0.25% prior to approval of the NDA, or at all, and whether
the NDA will be approved; the Company’s ability execute on the
commercial launch of INVELTYS on the timeline expected, or at all;
whether the Company's cash resources will be sufficient to fund the
Company's foreseeable and unforeseeable operating expenses and
capital expenditure requirements for the Company's expected
timeline; other matters that could affect the availability or
commercial potential of INVELTYS and the Company's product
candidates, including KPI-121 0.25%; and other important factors,
any of which could cause the Company's actual results to differ
from those contained in the forward-looking statements, discussed
in the “Risk Factors” section of the Company’s Annual Report on
Form 10-K, most recently filed Quarterly Report on Form 10-Q and
other filings the Company makes with the Securities and Exchange
Commission. These forward-looking statements represent the
Company’s views as of the date of this release and should not be
relied upon as representing the Company’s views as of any date
subsequent to the date hereof. The Company does not assume any
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Financial Tables:
Kala Pharmaceuticals,
Inc.
Balance Sheet Data
(in thousands)
(unaudited)
June 30,
December 31,
2019
2018
Cash
$
118,006
$
170,898
Total assets
178,815
220,966
Working capital (1)
115,102
160,018
Long‑term debt, net of discounts
70,692
70,226
Other long‑term liabilities
29,356
28,752
Total stockholders’ equity
61,066
104,978
(1) The Company defines working capital as
current assets less current liabilities. See the Company's
condensed consolidated financial statements for further information
regarding its current assets and current liabilities.
Kala Pharmaceuticals, Inc. Condensed Consolidated
Statement of Operations (In thousands, except share and per
share data) (Unaudited) Three Months Ended
Six Months Ended June 30, June 30,
2019
2018
2019
2018
Product revenues, net
$
2,057
$
—
$
3,443
$
— Costs and expenses: Cost of product revenues
352
—
593
— Selling, general and administrative
17,007
7,151
35,243
12,633
Research and development
7,108
7,368
14,067
13,024
Total operating expenses
24,467
14,519
49,903
25,657
Loss from operations
(22,410)
(14,519)
(46,460)
(25,657)
Other income (expense): Interest income
646
313
1,402
522
Interest expense
(2,061)
(414)
(4,155)
(781)
Net loss
(23,825)
(14,620)
(49,213)
(25,916)
Net loss per share attributableto common stockholders—basic and
diluted
$
(0.70)
$
(0.60)
$
(1.45)
$
(1.06)
Weighted average sharesoutstanding—basic and diluted
33,882,939
24,567,103
33,880,494
24,554,834
Kala Pharmaceuticals, Inc. Reconciliation of GAAP to
Non-GAAP Financial Measures (In thousands)
(Unaudited) Three Months Ended Six Months
Ended
June 30,
June 30,
2019
2018
2019
2018
Net loss (GAAP)
$
(23,825
)
$
(14,620
)
$
(49,213
)
$
(25,916
)
Add-back: stock-based compensation expense
2,621
2,291
5,094
4,152
Add-back: Non-cash interest
240
20
472
—
Add-back: depreciation
218
92
388
173
Non-GAAP Net loss
$
(20,746
)
$
(12,217
)
$
(43,259
)
$
(21,591
)
Cost of product revenues (GAAP)
$
352
$
—
$
593
$
—
Less: stock-based compensation expense
39
—
41
—
Non-GAAP Cost of product revenues
$
313
$
—
$
552
$
Selling, general and administrative expenses (GAAP)
$
17,007
$
7,151
$
35,243
$
12,633
Less: stock-based compensation expense
1,787
1,550
3,651
2,772
Less: depreciation
142
2
236
3
Non-GAAP Selling, general and administrative expenses
$
15,078
$
5,599
$
31,356
$
9,858
Research and development expenses (GAAP)
$
7,108
$
7,368
$
14,067
$
13,024
Less: stock-based compensation expense
795
741
1,402
1,380
Less: depreciation
76
90
152
170
Non-GAAP research and development expenses
$
6,237
$
6,537
$
12,513
$
11,474
Total operating loss (GAAP)
$
(22,410
)
$
(14,519
)
$
(46,460
)
$
(25,657
)
Less: stock-based compensation expense
2,621
2,291
5,094
4,152
Less: depreciation
218
92
388
173
Non-GAAP total operating loss
$
(19,571
)
$
(12,136
)
$
(40,978
)
$
(21,332
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190806005239/en/
Investors: Hannah Deresiewicz
hannah.deresiewicz@sternir.com 212-362-1200
Media: Kari Watson kwatson@macbiocom.com 781-235-3060
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