-- Announced Positive Results from
STRIDE 3 Clinical Trial of EYSUVIS in March 2020, Demonstrating
Statistically Significant Results for Primary and Key Secondary
Endpoints --
-- EYSUVISTM NDA Resubmitted on April 30th;
Potential Approval and Launch Before Year-End --
-- Raised $146.9 Million in Gross Proceeds from
Sales of Common Stock in Early 2020 --
-- 1Q 2020 INVELTYS® Revenue of $1.1 Million
--
-- Conference Call and Webcast at 8:00 a.m. ET
–
Kala Pharmaceuticals, Inc. (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 first quarter ended March
31, 2020.
“The first quarter of 2020 was marked by substantial progress
across our business, even as we contended with the uncertainties
and unprecedented disruptions imposed by the COVID-19 pandemic,”
said Mark Iwicki, Chairman, President and Chief Executive Officer
of Kala Pharmaceuticals. “In March, we announced positive results
from our STRIDE 3 clinical trial of EYSUVIS, demonstrating
statistically significant improvements in both the signs and
symptoms of dry eye disease. These results replicated the positive
results from prior trials, which highlight the potential of EYSUVIS
to be the first prescription medicine for the short-term treatment
of dry eye disease, including dry eye flares. As we announced
earlier this week, we have resubmitted the NDA for EYSUVIS to the
FDA incorporating the positive results from STRIDE 3 and are
preparing for a potential approval and launch by year-end.”
COVID-19-related restrictions on elective procedures, which
include most ocular surgeries, have affected INVELTYS®
prescriptions and revenue, and the impacts are expected to persist
through the pandemic. Kala is continuing to support INVELTYS and is
preparing for a potential EYSUVIS launch in the second half of
2020. Kala’s sales force is utilizing virtual technologies to
remain in contact with prescribers and, based on its interactions
with eye care professionals across the United States, Kala expects
that many deferred ocular surgeries will be rescheduled once
conditions permit. Kala remains well-capitalized following its
public offering of common stock in March 2020 and anticipates that
its existing cash resources will enable it to fund its operations
into at least the second quarter of 2022.
First Quarter and Recent Highlights:
EYSUVIS™ (loteprednol etabonate ophthalmic suspension) 0.25%
Dry Eye Program: In March 2020, Kala announced positive topline
results from STRIDE 3, a Phase 3 clinical trial evaluating EYSUVIS
for the treatment of dry eye disease. STRIDE 3 met both of its
primary efficacy endpoints, demonstrating a statistically
significant improvement in the symptom endpoint of ocular
discomfort severity at day 15 in the overall intent-to-treat (ITT)
population and in the predefined subgroup of ITT patients with more
severe ocular discomfort at baseline. Statistical significance was
also achieved in conjunctival hyperemia at day 15 in the ITT
population (p<0.0001) and ocular discomfort severity at day 8 in
the ITT population (p=0.0282). Significant results were also
observed for total corneal staining at day 15 in the ITT population
(p=0.0042).
EYSUVIS was well tolerated, with adverse events and intraocular
pressure comparable to vehicle. Read the company’s press release
reporting on the full topline data here.
On April 30, 2020, Kala resubmitted its New Drug Application
(NDA) for EYSUVIS to the U.S. Food and Drug Administration (FDA).
Kala believes this application meets the criteria of a Class 2
resubmission, with a target six-month review period 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. In the first
quarter of 2020, over 42,000 INVELTYS prescriptions were reported
by Symphony Health, which represents a decrease of approximately
9.5% over the fourth quarter of 2019.
Beginning in March 2020 and continuing into the second quarter
of 2020, INVELTYS prescriptions and revenue have been adversely
affected by the ongoing COVID-19 pandemic as federal, state and
local governments implemented restrictions on elective procedures,
including most ocular surgeries. Kala believes that physicians will
move to reschedule many deferred procedures once conditions permit
and expects INVELTYS prescriptions and revenue to return to growth,
however the company is unable to project the specific timing or
potential impact on future revenues given the continued uncertainty
around the impact and duration of the restrictions related to
COVID-19.
Additionally, while Kala has suspended substantially all
in-person interactions with customers, including visits to
physician offices, clinics and hospitals, Kala’s sales force
continues to provide support virtually through telephone and
web-based technologies. Kala is following recommendations from the
U.S. Centers for Disease Control and Prevention (CDC) as well as
federal, state and local governments and will continue to assess
when it is appropriate for employees to return to normal work
practices.
Corporate:
In March 2020, Kala closed an underwritten public offering of
16,000,000 shares of common stock and, in early April 2020, sold an
additional 979,371 shares of common stock resulting from the
partial exercise of the underwriters’ option to purchase additional
shares, at a public offering price of $7.89 per share. Kala
received aggregate gross proceeds of $146.9 million from these
transactions and the sale of common stock in early 2020 under its
at-the-market offering (ATM) program, before deducting underwriting
discounts, commissions and offering expenses.
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 March 31, 2020, Kala had cash of
$196.5 million, compared to $85.4 million as of December 31, 2019.
In April 2020, Kala received an additional $7.2 million in net
proceeds as a result of the partial exercise of the underwriters’
option to purchase additional shares in the March 2020 public
offering. Kala anticipates that its existing cash resources will
enable it to fund its operations into at least the second quarter
of 2022.
- Net Product Revenue: For the quarter ended March 31,
2020, Kala reported net product revenue of $1.1 million relating to
sales of INVELTYS, compared to $1.4 million in the first quarter of
2019, a decrease of $0.3 million. Net revenues in the first quarter
of 2020 were impacted by higher reserves as compared to the same
period in 2019. Kala recognizes revenue when product is shipped to
distributors.
- Cost of Product Revenues: For the quarter ended March
31, 2020, cost of product revenues was $0.4 million, compared to
$0.2 million for the same period in 2019. As Kala began
capitalizing inventory costs for INVELTYS after receipt of FDA
approval on August 22, 2018, cost of product revenues for the
quarter ended March 31, 2019 were more favorably impacted by costs
which were expensed as research and development prior to FDA
approval. Non-GAAP cost of product revenues was $0.3 million for
the quarter ended March 31, 2020, compared to $0.2 million for the
same period in 2019.
- SG&A Expenses: For the quarter ended March 31, 2020,
selling, general and administrative (SG&A) expenses were $15.4
million, compared to $18.2 million for the same period in 2019. The
decrease was primarily due to launch-related marketing and selling
expenses incurred during the quarter ended March 31, 2019
associated with the commercial launch of INVELTYS, which were not
incurred during the quarter ended March 31, 2020, as well as a
decrease in stock compensation costs. Non-GAAP SG&A expenses
were $13.5 million for the quarter ended March 31, 2020, compared
to $16.3 million for the same period in 2019.
- R&D Expenses: For the quarter ended March 31, 2020,
research and development (R&D) expenses were $5.4 million,
compared to $7.0 million for the same period in 2019. The decrease
was primarily due to a $1.7 million decrease in external costs
related to the STRIDE 3 dry eye clinical trial, for which Kala
announced topline data in March 2020, partially offset by an
increase in employee-related costs driven by manufacturing
employees allocating more time to EYSUVIS research and development.
Non-GAAP R&D expenses were $4.6 million for the quarter ended
March 31, 2020, compared to $6.3 million for the same period in
2019.
- Operating Loss: For the quarter ended March 31, 2020,
loss from operations was $20.1 million, compared to $24.1 million
for the same period in 2019. Non-GAAP operating loss was $17.4
million for the quarter ended March 31, 2020, compared to $21.4
million for the same period in 2019.
- Net Loss: For the quarter ended March 31, 2020, net loss
was $22.0 million, or $0.54 per share, compared to a net loss of
$25.4 million, or $0.75 per share, for the same period in 2019.
Non-GAAP net loss was $19.0 million for the quarter ended March 31,
2020, compared to $22.5 million for the same period in 2019. The
weighted average number of shares used to calculate net loss per
share was 40,761,984 for the quarter ended March 31, 2020, and
33,878,021 for the quarter ended March 31, 2019.
Conference Call Information
Kala will host a live conference call and webcast today, May 7,
2019 at 8:00 a.m. ET to review its first quarter 2020 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: 9468562.
To access a subsequent archived recording of the call, please
visit the “Investors & Media” section on the Kala website at
http://kalarx.com.
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.
About Kala Pharmaceuticals:
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 January 2019 launch of INVELTYS® (loteprednol
etabonate ophthalmic suspension) 1% and its investigational product
candidate, EYSUVISTM (loteprednol etabonate ophthalmic suspension)
0.25%, which is being studied for the short-term treatment of the
signs and symptoms of dry eye disease.
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 the likelihood of many deferred ocular
surgeries being rescheduled once the COVID-19 pandemic subsides and
INVELTYS prescriptions and revenue returning to growth, the
Company's lead product candidate, EYSUVIS, including the
resubmitted NDA meeting the criteria of a Class 2 resubmission,
with a target six-month FDA review period, EYSUVIS’ potential to be
the first prescription medicine for the short-term treatment of dry
eye disease, including dry eye flares, and expectations regarding
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,” “continue” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” “should,”
“target,” “will,” “would,” 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: the impact of extraordinary external
events, such as the current pandemic health event resulting from
the novel coronavirus (COVID-19), and their collateral
consequences, including disruption of the activities of our sales
force and the market for INVELTYS and any delay in timing of
regulatory review of the NDA for EYSUVIS; whether the Company will
be able to successfully implement its commercialization plans for
INVELTYS and EYSUVIS, if approved; whether the market opportunity
for INVELTYS and EYSUVIS is consistent with the Company’s
expectations and market research; 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 for EYSUVIS will be
accepted for filing and/or approved on the timeline expected or at
all; 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.
Kala Pharmaceuticals,
Inc.
Balance Sheet Data
(in thousands)
(unaudited)
March 31,
December 31,
2020
2019
Cash
$
196,456
$
85,449
Total assets
258,526
154,323
Working capital (1)
192,974
80,710
Long‑term debt, net of discounts
71,438
71,184
Other long‑term liabilities
28,305
28,673
Total Stockholders’ equity
141,510
29,692
(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
March 31,
2020
2019
Product revenues, net
$
1,071
$
1,386
Costs and expenses:
Cost of product revenues
354
241
Selling, general and administrative
15,408
18,236
Research and development
5,434
6,959
Total operating expenses
21,196
25,436
Loss from operations
(20,125)
(24,050)
Other income (expense):
Interest income
298
756
Interest expense
(2,128)
(2,094)
Net loss
(21,955)
(25,388)
Net loss per share attributable to common
stockholders—basic and diluted
$
(0.54)
$
(0.75)
Weighted average shares outstanding—basic
and diluted
40,761,984
33,878,021
Kala Pharmaceuticals,
Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2020
2019
Net loss (GAAP)
$
(21,955)
$
(25,388)
Add-back: stock-based compensation
expense
2,497
2,473
Add-back: Non-cash interest
253
231
Add-back: depreciation
230
170
Non-GAAP Net loss
$
(18,975)
$
(22,514)
Cost of product revenues (GAAP)
$
354
$
241
Less: stock-based compensation expense
20
2
Less: depreciation
13
-
Non-GAAP Cost of product revenues
$
321
239
Selling, general and administrative
expenses (GAAP)
$
15,408
$
18,236
Less: stock-based compensation expense
1,754
1,864
Less: depreciation
150
94
Non-GAAP Selling, general and
administrative expenses
$
13,504
16,278
Research and development expenses
(GAAP)
$
5,434
$
6,959
Less: stock-based compensation expense
723
607
Less: depreciation
67
76
Non-GAAP research and development
expenses
$
4,644
6,276
Total operating loss (GAAP)
$
(20,125)
$
(24,050)
Less: stock-based compensation expense
2,497
2,473
Less: depreciation
230
170
Non-GAAP total operating loss
$
(17,398)
$
(21,407)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005100/en/
Investors: Hannah Deresiewicz
hannah.deresiewicz@sternir.com 212-362-1200
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