– Completed Last Patient Last Visit for STRIDE
3 Dry Eye Disease Trial; Topline Results on Track for First Quarter
of 2020 –
– Achieved Full Year 2019 INVELTYS® Revenues of
$6.1 Million –
– Conference Call and Webcast Today at 8:00
a.m. ET –
Kala Pharmaceuticals, Inc. (Kala) (NASDAQ:KALA), a
biopharmaceutical company focused on the discovery, development and
commercialization of innovative therapies for diseases of the eye,
today reported financial results for the fourth quarter and full
year ended December 31, 2019.
“The last patient has now completed their final study visit in
the STRIDE 3 Phase 3 trial,” said Mark Iwicki, Chief Executive
Officer of Kala. “We are on track to report topline data in this
quarter and to resubmit our New Drug Application to the U.S. Food
and Drug Administration in the second quarter of 2020. If approved,
we believe that EYSUVIS (KPI-121 0.25%), our product candidate for
dry eye disease, could become the preferred prescription therapy
for dry eye flares, which affects the vast majority of patients
with dry eye disease. In 2019, we successfully launched INVELTYS,
achieving steady growth in prescriptions and market share, and we
continue to build a broad base of prescribing eye care
professionals. This reflects the strong demand we are seeing for
INVELTYS in the marketplace, as well as the execution of our
commercial team. Our field sales, marketing and market access
infrastructure has us well-positioned to rapidly launch EYSUVIS
later this year, if approved.”
Fourth Quarter and Recent Highlights:
EYSUVISTM (loteprednol etabonate ophthalmic suspension) 0.25%
Dry Eye Program: In February 2020, Kala completed the last
patient, last visit in STRIDE 3 (STRIDE – Short Term Relief in Dry
Eye), its Phase 3 clinical trial evaluating EYSUVIS for the
temporary relief of the signs and symptoms of dry eye disease.
Specific modifications were made to the inclusion and exclusion
criteria of STRIDE 3 relative to STRIDE 1 and STRIDE 2 to improve
the probability of success of the trial. Kala expects the results
of this trial to serve as the basis of its response to the complete
response letter (CRL) it received in August 2019 from the U.S. Food
and Drug Administration (FDA) regarding its New Drug Application
(NDA) for EYSUVIS. Kala is targeting to report topline results from
STRIDE 3 in the first quarter of 2020 and resubmission of its NDA
to the FDA in the first half of 2020. Kala believes this
resubmission would be subject to a six-month review under the
Prescription Drug User Fee Act (PDUFA).
INVELTYS® (loteprednol etabonate ophthalmic suspension)
1%: INVELTYS was launched in January 2019 as the first and only
twice-daily post-surgical ocular corticosteroid. Since launch:
- Over 144,000 INVELTYS prescriptions have been reported as of
January 31, 2020.
- INVELTYS has achieved approximately 11.2% branded new
prescription market share.
- Over 3,300 eye care professionals have prescribed
INVELTYS.
- INVELTYS has achieved approximately 80% unrestricted Commercial
market access, and approximately 23% unrestricted Medicare Part D
market access, for an aggregate total of approximately 145 million
covered lives.
In the fourth quarter, approximately 47,000 INVELTYS
prescriptions were reported by Symphony Health, representing
prescription growth of approximately 17% compared to the third
quarter 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.
Cash Position:
- As of December 31, 2019, Kala had cash of $85.4 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 its
operations into the second quarter of 2021.
Fourth Quarter 2019 Financial Results:
- Net Product Revenues: For the quarter ended December 31,
2019, Kala reported net product revenue of $1.2 million relating to
sales of INVELTYS, which was launched in January 2019. Revenue is
recognized when products are delivered to distributors.
- Cost of Product Revenues: Cost of product revenues for
the quarter ended December 31, 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 December 31, 2019, compared
to $0 for the same period in 2018.
- SG&A Expenses: For the quarter ended December 31,
2019, selling, general and administrative (SG&A) expenses were
$14.5 million, compared to $14.3 million for the same period in
2018. The increase in SG&A expenses for the quarter ended
December 31, 2019 was primarily due to costs associated with
commercial infrastructure being in place for the entire fourth
quarter of 2019 as compared to only a portion of the fourth quarter
of 2018, an increase in facility-related costs, partially offset by
lower pre-launch external costs incurred during the fourth quarter
of 2018. Non-GAAP SG&A expenses were $12.7 million for the
quarter ended December 31, 2019, consistent with the same period in
2018.
- R&D Expenses: For the quarter ended December 31,
2019, research and development (R&D) expenses were $6.1
million, compared to $9.2 million for the same period in 2018. The
decrease in R&D expenses for the quarter ended December 31,
2019 was primarily due to the NDA filing fee for EYSUVIS of $2.6
million incurred in the fourth quarter of 2018. Non-GAAP R&D
expenses were $5.5 million for the quarter ended December 31, 2019,
compared to $8.6 million for the same period in 2018.
- Operating Loss: For the quarter ended December 31, 2019,
loss from operations was $20.2 million compared to $23.6 million
for the same period in 2018. Non-GAAP operating loss was $17.6
million for the quarter ended December 31, 2019, compared to $21.3
million for the same period in 2018.
- Net Loss: Net loss was $22.0 million, or $0.63 per
share, for the quarter ended December 31, 2019, compared to a net
loss of $25.2 million, or $0.76 per share, for the same period in
2018. For the quarter ended December 31, 2019, non-GAAP net loss
was $19.2 million, compared to $22.7 million for the same period in
2018.
The weighted average number of shares outstanding used to
calculate net loss per share was 34.9 million for the quarter ended
December 31, 2019, and 33.2 million for the quarter ended December
31, 2018.
Full Year 2019 Financial Results:
- Net Product Revenues: For the full year ended December
31, 2019, Kala reported net product revenues of $6.1 million
relating to sales of INVELTYS, which was launched in January 2019.
The Company did not recognize revenues in 2018.
- Cost of Product Revenues: Cost of product revenues for
the full year ended December 31, 2019 was $2.0 million, compared to
$0 for the same period in 2018. Non-GAAP cost of product revenues
was $1.7 million for the full year ended December 31, 2019,
compared to $0 for the same period in 2018.
- SG&A Expenses: For the full year ended December 31,
2019, SG&A expenses were $65.0 million, compared to $35.4
million for the same period in 2018. The increase in SG&A
expenses for the year ended December 31, 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
$57.6 million for the full year ended December 31, 2019, compared
to $29.4 million for the same period in 2018.
- R&D Expenses: For the full year ended December 31,
2019, R&D expenses were $27.3 million, compared to $29.3
million for the same period in 2018. The decrease in R&D
expenses for the year ended December 31, 2019 was primarily due to
a decrease in INVELTYS-related manufacturing and headcount costs,
which in 2018 were expensed as R&D prior to FDA approval and
the NDA filing fee for EYSUVIS expensed in 2018. These costs were
partially offset by an increase in spending on STRIDE 3, and an
increase in facility-related costs in 2019. Non-GAAP R&D
expenses were $24.1 million for the full year ended December 31,
2019, compared to $26.3 million for the same period in 2018.
- Operating Loss: For the full year ended December 31,
2019, loss from operations were $88.2 million compared to $64.7
million for the same period in 2018. Non-GAAP operating loss was
$77.4 million for the full year ended December 31, 2019, compared
to $55.8 million for the same period in 2018.
- Net Loss: Net loss was $94.3 million, or $2.76 per
share, for the full year ended December 31, 2019, compared to a net
loss of $66.7 million, or $2.49 per share, for the same period in
2018. For the full year ended December 31, 2019, non-GAAP net loss
was $82.6 million, compared to $57.5 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 year ended
December 31, 2019, and 26.8 million for the year ended December 31,
2018.
Conference Call Information:
Kala will host a live conference call and webcast today,
February 12, 2020 at 8:00 a.m. ET to review the fourth quarter and
full year 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: 5786176. 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 discovery,
development and commercialization of innovative therapies for
diseases of the eye. Kala has applied its AMPPLIFYTM mucus
penetrating particle 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% and its investigational product
candidate, EYSUVIS (loteprednol etabonate ophthalmic suspension)
0.25%, which is being studied 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, including progress of commercial
launch, status of insurance coverage and the availability of
reimbursements for commercial and Medicare Part D patients, 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 relative to STRIDE 1 and STRIDE 2 will improve
the probability of success, the Company targeting topline results
for STRIDE 3 in the first quarter of 2020, resubmission of its NDA
to the FDA in the second quarter of 2020, expectations regarding
timing of FDA review of its NDA and potential launch timing, 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)
December 31,
December 31,
2019
2018
Cash
$
85,449
$
170,898
Total assets
154,323
220,966
Working capital (1)
80,710
160,018
Long‑term debt, net of discounts
71,184
70,226
Other long‑term liabilities
28,673
28,752
Total Stockholders’ equity
29,692
104,978
(1) The Company defines working capital as
current assets less current liabilities. See the Company's
consolidated financial statements for further information regarding
its current assets and current liabilities.
Kala Pharmaceuticals,
Inc.
Consolidated Statement of
Operations
(in thousands, except share
and per share data)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Product revenues, net
$
1,180
$
—
$
6,074
$
—
Costs and expenses:
Cost of product revenues
747
—
2,008
—
Selling, general and administrative
14,492
14,329
65,015
35,431
Research and development
6,138
9,239
27,275
29,290
Total operating expenses
21,377
23,568
94,298
64,721
Loss from operations
(20,197
)
(23,568
)
(88,224
)
(64,721
)
Other income (expense):
Interest income
384
840
2,357
1,687
Interest expense
(2,145
)
(2,100
)
(8,480
)
(3,314
)
Loss on extinguishment of debt
—
(390
)
—
(390
)
Net loss
(21,958
)
(25,218
)
(94,347
)
(66,738
)
Net loss per share attributable to common
stockholders—basic and diluted
$
(0.63
)
$
(0.76
)
$
(2.76
)
$
(2.49
)
Weighted average shares outstanding—basic
and diluted
34,899,019
33,234,169
34,209,756
26,753,906
Kala Pharmaceuticals,
Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(in thousands)
(unaudited)
Quarter Ended
Year Ended
December 31,
December 31,
2019
2018
2019
2018
Net loss (GAAP)
$
(21,958
)
$
(25,218
)
$
(94,347
)
$
(66,738
)
Add-back: stock-based compensation
expense
2,325
2,198
9,991
8,615
Add-back: Non-cash interest
249
197
958
273
Add-back: depreciation
229
109
843
352
Non-GAAP Net loss
$
(19,155
)
$
(22,714
)
$
(82,555
)
$
(57,498
)
Cost of product revenues (GAAP)
$
747
$
—
$
2,008
$
—
Less: stock-based compensation expense
167
—
268
—
Less: depreciation
1
—
3
—
Non-GAAP Cost of product revenues
$
579
$
—
$
1,737
$
—
Selling, general and administrative
expenses (GAAP)
$
14,492
$
14,329
$
65,015
$
35,431
Less: stock-based compensation expense
1,629
1,602
6,879
5,955
Less: depreciation
146
37
522
42
Non-GAAP Selling, general and
administrative expenses
$
12,717
12,690
$
57,614
$
29,434
Research and development expenses
(GAAP)
$
6,138
$
9,239
$
27,275
$
29,290
Less: stock-based compensation expense
529
596
2,844
2,660
Less: depreciation
82
72
318
310
Non-GAAP research and development
expenses
$
5,527
8,571
$
24,113
$
26,320
Total operating loss (GAAP)
$
(20,197
)
$
(23,568
)
$
(88,224
)
$
(64,721
)
Less: stock-based compensation expense
2,325
2,198
9,991
8,615
Less: depreciation
229
109
843
352
Non-GAAP total operating loss
$
(17,643
)
$
(21,261
)
$
(77,390
)
$
(55,754
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200212005159/en/
Investors: Hannah Deresiewicz
hannah.deresiewicz@sternir.com 212-362-1200
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