–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 third quarter ended September
30, 2019.
“INVELTYS demonstrated growing demand in the third quarter, with
positive feedback from physicians and a continued uptick in
prescriptions and market share. Additionally, we made important
progress in expanding payor coverage,” said Mark Iwicki, Chief
Executive Officer of Kala. “Our STRIDE 3 Phase 3 clinical trial for
EYSUVISTM (KPI-121 0.25%), our product candidate for dry eye
disease, continues to enroll and we are targeting topline data in
the first quarter of 2020. We expect that data from this trial will
serve as the basis for our resubmission of the EYSUVIS New Drug
Application to the U.S. Food and Drug Administration.”
If approved, Kala believes EYSUVIS will be the ideal
prescription therapy for treating dry eye flares that affect the
vast majority of dry eye patients.
Third 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. Kala
believes these attributes are being viewed favorably by
physicians.
- Quarter-over-quarter prescription growth was 30%; approximately
40,000 INVELTYS prescriptions were reported by Symphony Health in
the third quarter of 2019 compared to approximately 31,000
prescriptions reported in the second quarter of 2019. As of October
25, 2019, approximately 97,000 prescriptions of INVELTYS have been
reported.
- INVELTYS continues to achieve strong market share growth and
now has over 10% branded new prescription market share in just over
ten months since launch. Branded new prescription market share grew
by 55% in the third quarter compared to the second quarter.
- INVELTYS prescribers grew by 19% quarter-over-quarter. Launch
to date, approximately 2,700 eye care professionals have prescribed
INVELTYS, which represents nearly 40% of Kala’s targets.
- INVELTYS has achieved approximately 75% unrestricted Commercial
market access, for a total of approximately 125 million covered
commercial lives.
- 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 2020.
EYSUVISTM (loteprednol etabonate ophthalmic suspension) 0.25%
Dry Eye Program: On August 7, Kala received a complete response
letter (CRL) from the U.S. Food and Drug Administration (FDA)
regarding its New Drug Application (NDA) for EYSUVIS for the
temporary relief of the signs and symptoms of dry eye disease. The
FDA indicated that efficacy data from an additional clinical trial
will be needed to support a resubmission of the NDA. Kala is
currently conducting the additional Phase 3 clinical trial, STRIDE
3 (STRIDE - Short Term Relief In Dry Eye), which Kala expects will
serve as the basis of its response to the CRL. Kala 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 Kala believes 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 in the first quarter of 2020
and resubmission of the NDA in the first half of 2020. The Company
believes this resubmission would be subject to a six-month review
under the Prescription Drug User Fee Act (PDUFA).
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.
Cash Position
- As of September 30, 2019, Kala had cash of $97.6 million
compared to $170.9 million as of December 31, 2018.
- Kala anticipates that its existing cash resources, together
with projected INVELTYS revenue, will enable it to fund operations
through the next 18 months.
Third Quarter 2019 Financial Results
- Net Product Revenue: For the quarter ended September 30,
2019, Kala reported net product revenue of $1.5 million relating to
sales of INVELTYS, which was launched in January 2019. Revenue is
recognized when products are delivered to distributors. Included in
net product revenue for the three months ended September 30, 2019,
is a $0.6 million reduction of reported revenue resulting from a
change in the estimate of our payor mix related to the first two
quarters of 2019.
- Cost of Product Revenues: Cost of product revenues for
the quarter ended September 30, 2019 were $0.7 million compared to
$0 for the same period in 2018. Non-GAAP cost of product revenues
were $0.6 million for the quarter ended September 30, 2019 compared
to $0 for the same period in 2018.
- SG&A Expenses: For the quarter ended September 30,
2019, selling, general and administrative (SG&A) expenses were
$15.3 million compared to $8.5 million for the same period in 2018.
The increase in SG&A expenses for the quarter ended September
30, 2019 was primarily due to costs associated with hiring
additional personnel, building the commercial organization to
support the launch of INVELTYS, and an increase in facility-related
costs. Non-GAAP SG&A expenses were $13.5 million for the
quarter ended September 30, 2019 compared to $6.9 million for the
same period in 2018.
- R&D Expenses: For the quarter ended September 30,
2019, research and development (R&D) expenses were $7.1 million
consistent with the same period in 2018. A decrease in
INVELTYS-related R&D costs for the third quarter of 2019 was
offset by an increase in facility-related costs for the same period
in 2018. Non-GAAP R&D expenses were $6.1 million for the
quarter ended September 30, 2019 compared to $6.3 million for the
same period in 2018.
- Operating Loss: For the quarter ended September 30,
2019, loss from operations was $21.6 million compared to $15.5
million for the same period in 2018. Non-GAAP operating loss was
$18.8 million for the quarter ended September 30, 2019 compared to
$13.2 million for the same period in 2018.
- Net Loss: Net loss was $23.2 million, or $0.68 per
share, for the quarter ended September 30, 2019 compared to a net
loss of $15.6 million, or $0.63 per share, for the same period in
2018. For the quarter ended September 30, 2019, non-GAAP net loss
was $20.1 million, compared to $13.2 million for the same period in
2018. The weighted average number of shares outstanding used to
calculate net loss per share was 34.2 million for the quarter ended
September 30, 2019 and 24.6 million for the quarter ended September
30, 2018.
Year-to-Date Financial Results
- Net Product Revenue: For the nine months ended September
30, 2019, Kala reported net product revenue of $4.9 million
relating to sales of INVELTYS, which was launched in January 2019.
The Company did not recognize revenue in the first nine months of
2018.
- Cost of Product Revenues: Cost of product revenues for
the nine months ended September 30, 2019 were $1.3 million compared
to $0 for the same period in 2018. Non-GAAP Cost of product
revenues were $1.2 million for the nine months ended September 30,
2019 compared to $0 for the same period in 2018.
- SG&A Expenses: For the nine months ended September
30, 2019, SG&A expenses were $50.5 million compared to $21.1
million for the same period in 2018. The increase in SG&A
expenses for the nine months ended September 30, 2019 was primarily
due to costs associated with hiring additional personnel, building
the commercial organization to support the launch of INVELTYS, and
an increase in facility-related costs. Non-GAAP SG&A expenses
were $44.9 million for the nine months ended September 30, 2019
compared to $16.7 million for the same period in 2018.
- R&D Expenses: For the nine months ended September
30, 2019, R&D expenses were $21.1 million compared to $20.0
million for the same period in 2018. The increase in R&D
expenses for the nine months ended September 30, 2019 was primarily
due to an increase in spending on STRIDE 3, an increase in
facility-related costs in 2019, 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 $18.6
million for the nine months ended September 30, 2019 compared to
$17.8 million for the same period in 2018.
- Operating Loss: For the nine months ended September 30,
2019, loss from operations was $68.0 million compared to $41.2
million for the same period in 2018. Non-GAAP operating loss was
$59.7 million for the nine months ended September 30, 2019 compared
to $34.5 million for the same period in 2018.
- Net Loss: Net loss was $72.4 million, or $2.13 per
share, for the nine months ended September 30, 2019 compared to a
net loss of $ 41.5 million, or $1.69 per share, for the same period
in 2018. For the nine months ended September 30, 2019, non-GAAP net
loss was $63.4 million compared to $34.8 million for the same
period in 2018. The weighted average number of shares outstanding
used to calculate net loss per share was 34.0 million for the nine
months ended September 30, 2019 and 24.6 million for the nine
months ended September 30, 2018.
Conference Call Information
Kala will host a live conference call and webcast today,
November 7, 2019 at 8:00 a.m. ET to review the third 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: 1955939. 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® (loteprednol etabonate ophthalmic suspension) 1% for the
treatment of inflammation and pain following ocular surgery, and
its lead product candidate, EYSUVISTM (loteprednol etabonate
ophthalmic suspension) 0.25%, for the temporary relief of the signs
and symptoms of dry eye disease.
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, EYSUVIS, 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, the Company targeting topline
results for STRIDE 3 in the first quarter of 2020, and the
Company’s expectations regarding its use of cash, cash runway and
projected revenues. 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 and
EYSUVIS 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 EYSUVIS 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 EYSUVIS, if and when approved,
on the timeline expected, or at all; whether the Company will be
able to generate its projected net product revenue 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 EYSUVIS; 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) September 30,
December 31,
2019
2018
Cash
$
97,556
$
170,898
Total assets
161,013
220,966
Working capital (1)
94,490
160,018
Long‑term debt, net of discounts
70,935
70,226
Other long‑term liabilities
29,026
28,752
Total Stockholders’ equity
43,056
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) Quarter Ended
Nine Months Ended September 30, September 30,
2019
2018
2019
2018
Product revenues, net
$
1,451
$
—
$
4,894
$
— Costs and expenses: Cost of product revenues
668
—
1,261
— Selling, general and administrative
15,280
8,469
50,523
21,102
Research and development
7,070
7,027
21,137
20,051
Total operating expenses
23,018
15,496
72,921
41,153
Loss from operations
(21,567)
(15,496)
(68,027)
(41,153)
Other income (expense): Interest income
571
325
1,973
848
Interest expense
(2,180)
(432)
(6,335)
(1,214)
Net loss
(23,176)
(15,603)
(72,389)
(41,519)
Net loss per share attributable to commonstockholders—basic
and diluted
$
(0.68)
$
(0.63)
$
(2.13)
$
(1.69)
Weighted average sharesoutstanding—basic and diluted
34,168,282
24,600,080
33,977,477
24,570,081
Kala Pharmaceuticals, Inc. Reconciliation of GAAP
to Non-GAAP Financial Measures (In thousands)
(Unaudited) Quarter Ended Nine Months
Ended September 30, September 30,
2019
2018
2019
2018
Net loss (GAAP)
$
(23,176)
$
(15,603)
$
(72,389)
$
(41,519)
Add-back: stock-based compensation expense
2,572
2,265
7,666
6,417
Add-back: Non-cash interest
237
75
709
75
Add-back: depreciation
226
70
614
243
Non-GAAP Net loss
$
(20,141)
$
(13,193)
$
(63,400)
$
(34,784)
Cost of product revenues (GAAP)
$
668
$
—
$
1,261
$
— Less: stock-based compensation expense
60
—
101
— Less: depreciation
2
—
2
— Non-GAAP Cost of product revenues
$
606
$
—
$
1,158
$
—
Selling, general and administrative expenses (GAAP)
$
15,280
$
8,469
$
50,523
$
21,102
Less: stock-based compensation expense
1,599
1,581
5,250
4,353
Less: depreciation
140
13
376
16
Non-GAAP Selling, general and administrative expenses
$
13,541
$
6,875
$
44,897
$
16,733
Research
and development expenses (GAAP)
$
7,070
$
7,027
$
21,137
$
20,051
Less: stock-based compensation expense
913
684
2,315
2,064
Less: depreciation
84
57
236
227
Non-GAAP research and development expenses
$
6,073
$
6,286
$
18,586
$
17,760
Total
operating loss (GAAP)
$
(21,567)
$
(15,496)
$
(68,027)
$
(41,153)
Less: stock-based compensation expense
2,572
2,265
7,666
6,417
Less: depreciation
226
70
614
243
Non-GAAP total operating loss
$
(18,769)
$
(13,161)
$
(59,747)
$
(34,493)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107005279/en/
Investors: Hannah Deresiewicz
hannah.deresiewicz@sternir.com 212-362-1200 Media: Kari
Watson kwatson@macbiocom.com 781-235-3060
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