-- Obtained FDA Approval for EYSUVISTM, First
Prescription Therapy Approved Specifically for the Short-Term
Treatment of the Signs and Symptoms of Dry Eye Disease -- --
EYSUVIS Expected to Begin Shipping to Wholesalers by End of 2020 --
-- 3Q 2020 INVELTYS® Net Revenue of $2.2 Million -- -- Cash
Position and INVELTYS Revenue Expected to Provide Runway Into at
Least 3Q 2022 EYSUVIS Revenue Expected to Provide Additional Runway
-- -- 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 third quarter ended September 30, 2020
and provided a corporate update.
“We are pleased with our third quarter results and the fourth
quarter of 2020 is off to a strong start following the recent FDA
approval of EYSUVIS, which we plan to launch by year end as the
first prescription therapy specifically designed to address the
short-term treatment needs of people living with dry eye disease,”
said Mark Iwicki, Chairman, President and Chief Executive Officer
of Kala Pharmaceuticals. “EYSUVIS, which is enabled by Kala’s
proprietary AMPPLIFY technology, is well-suited to address a
significant unmet need for eye care professionals and patients who
want an FDA-approved, safe, effective and fast-acting therapy for
dry eye disease. We are in a strong financial position to
commercialize EYSUVIS along with INVELTYS and we look forward to
ensuring that patients and eye care professionals have access to
these innovative therapies.”
Third Quarter and Recent Highlights:
EYSUVIS™ (loteprednol etabonate ophthalmic suspension)
0.25%: On October 26, 2020, the U.S. Food and Drug
Administration (FDA) approved EYSUVIS for the short-term (up to two
weeks) treatment of the signs and symptoms of dry eye disease
(DED). The FDA granted approval for EYSUVIS based on results from
four clinical trials that enrolled over 2800 patients and
demonstrated rapid and significant improvements in both the signs
and symptoms of dry eye disease. EYSUVIS was well-tolerated across
the four trials, with adverse events and intraocular pressure
increases comparable to that observed with vehicle (placebo).
Kala estimates that DED impacts approximately 38 million people
in the U.S. and that approximately 17 million people have been
diagnosed with DED and are under the care of an eye care
professional. Based on Kala’s research, 75% of patients have never
tried a prescription therapy and only approximately 10% of patients
are currently on a prescription dry eye medication. Kala estimates
that approximately 80 percent of dry eye patients experience
episodic symptoms (flares) and EYSUVIS is the first FDA-approved
therapeutic with a clinical profile well-suited for providing
fast-acting relief from these dry eye flares.
For the EYSUVIS launch, Kala will leverage its experienced and
established ophthalmic team that successfully launched INVELTYS in
January 2019. Kala will target ophthalmologists and optometrists
who treat the majority of dry eye patients and are responsible for
over 85% of market prescriptions. The Company plans to expand its
sales force to 90 sales representatives by year-end, with
additional expansion to approximately 125 sales representatives
planned in 2021, pending the status of the COVID-19 pandemic.
Launch efforts are underway and EYSUVIS has received strong
positive feedback from eye care professionals as a first-line
prescription therapy for their patients with dry eye disease. Kala
expects to begin shipping EYSUVIS to wholesalers in the U.S. by the
end of 2020 and for the full promotional launch to begin in January
of 2021.
INVELTYS® (loteprednol etabonate ophthalmic suspension)
1%: Approximately 38,000 INVELTYS prescriptions were reported
by Symphony Health in the third quarter of 2020, which represents
an increase of approximately 84% compared to the second quarter of
2020. Relatedly, cataract procedures increased in the third quarter
compared to the second quarter of 2020, reflecting the resumption
of ocular surgeries as COVID-19-related restrictions on elective
procedures began to relax late in the second quarter.
Based on the speed with which ocular surgeries have continued to
be rescheduled, Kala continues to believe that INVELTYS
prescriptions and revenue will continue to grow over time. However,
the Company is unable to project the specific timing or quantify
the specific potential impact on future revenues given the
continued uncertainty around the impact and duration of the
restrictions related to COVID-19. Kala expects that net revenues
will be negatively impacted for the full year 2020 and could
continue to be negatively impacted into 2021.
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 Kala’s GAAP to non-GAAP financial measures,
please refer to the tables at the end of this press release.
- Cash Position: As of September 30, 2020, Kala had cash,
cash equivalents and short-term investments of $159.1 million,
compared to $85.4 million as of December 31, 2019. This increase
reflects aggregate gross proceeds of approximately $146.9 million
received from Kala’s follow-on underwritten public offering of
common stock in March 2020 and sales of common stock under its
at-the-market (ATM) offering program in the first quarter of 2020,
partially offset by cash used in operations. Kala anticipates that
its existing cash, cash equivalents and short-term investments,
along with anticipated sales of INVELTYS, will enable it to fund
its operations into at least the third quarter of 2022. Kala
expects revenue anticipated to be generated from sales of EYSUVIS
will provide additional cash runway.
Third Quarter 2020 Financial Results
- Net Product Revenue: For the quarter ended September 30,
2020, Kala reported net product revenue of $2.2 million relating to
sales of INVELTYS, compared to $1.5 million in the third quarter of
2019, an increase of $0.7 million.
- Cost of Product Revenues: For the quarter ended
September 30, 2020, cost of product revenues was $0.7 million,
consistent with the same period in 2019. Non-GAAP cost of product
revenues was $0.7 million for the quarter ended September 30, 2020,
compared to $0.6 million for the same period in 2019.
- SG&A Expenses: For the quarter ended September 30,
2020, selling, general and administrative (SG&A) expenses were
$23.9 million, compared to $15.3 million for the same period in
2019. The increase was primarily due to an increase in external
sales and marketing costs related to preparation for the launch of
EYSUVIS and increased stock-based compensation costs. Non-GAAP
SG&A expenses were $20.5 million for the quarter ended
September 30, 2020, compared to $13.5 million for the same period
in 2019.
- R&D Expenses: For the quarter ended September 30,
2020, research and development (R&D) expenses were $3.5
million, compared to $7.1 million for the same period in 2019. The
decrease was primarily due to a decrease in external spend on
STRIDE 3, Kala’s Phase 3 clinical trial of EYSUVIS. Non-GAAP
R&D expenses were $2.4 million for the quarter ended September
30, 2020, compared to $6.1 million for the same period in
2019.
- Operating Loss: For the quarter ended September 30,
2020, loss from operations was $25.8 million, compared to $21.6
million for the same period in 2019. Non-GAAP operating loss was
$21.4 million for the quarter ended September 30, 2020, compared to
$18.8 million for the same period in 2019.
- Net Loss: For the quarter ended September 30, 2020, net
loss was $27.9 million, or $0.50 per share, compared to a net loss
of $23.2 million, or $0.68 per share, for the same period in 2019.
Non-GAAP net loss was $23.2 million for the quarter ended September
30, 2020, compared to $20.1 million for the same period in 2019.
The weighted average number of shares used to calculate net loss
per share was 56,030,717 for the quarter ended September 30, 2020,
and 34,168,282 for the quarter ended September 30, 2019.
Nine Months Ended September 30, 2020 Financial
Results
- Net Product Revenue: For the nine months ended September
30, 2020, Kala reported net product revenue of $4.1 million
relating to sales of INVELTYS, compared to $4.9 million for the
same period in 2019, a decrease of $0.8 million. Net revenues in
the first nine months of 2020 were impacted by a reduction in
ocular surgeries due to restrictions related to COVID-19 as
compared to the same period in 2019.
- Cost of Product Revenues: For the nine months ended
September 30, 2020, cost of product revenues was $1.8 million,
compared to $1.3 million for the same period in 2019. Included in
cost of product revenues for the nine months ended September 30,
2020, and due to COVID-19, was a reserve of $0.5 million for excess
inventory. Non-GAAP cost of product revenues was $1.7 million for
the nine months ended September 30, 2020, compared to $1.2 million
for the same period in 2019.
- SG&A Expenses: For the nine months ended September
30, 2020, SG&A expenses were $54.6 million, compared to $50.5
million for the same period in 2019. The increase was primarily due
to an increase in external sales and marketing costs related to
preparation for the launch of EYSUVIS, increased administrative and
professional fees and increased stock-based compensation costs,
partially offset by lower travel due to COVID-19. Non-GAAP SG&A
expenses were $47.2 million for the nine months ended September 30,
2020, compared to $44.9 million for the same period in 2019.
- R&D Expenses: For the nine months ended September
30, 2020, R&D expenses were $15.0 million, compared to $21.1
million for the same period in 2019. The decrease was primarily due
to a decrease in external spend on STRIDE 3, Kala’s Phase 3
clinical trial of EYSUVIS. Non-GAAP R&D expenses were $12.5
million for the nine months ended September 30, 2020, compared to
$18.6 million for the same period in 2019.
- Operating Loss: For the nine months ended September 30,
2020, loss from operations was $67.2 million, compared to $68.0
million for the same period in 2019. Non-GAAP operating loss was
$57.3 million for the nine months ended September 30, 2020,
compared to $59.7 million for the same period in 2019.
- Net Loss: For the nine months ended September 30, 2020,
net loss was $73.2 million, or $1.44 per share, compared to a net
loss of $72.4 million, or $2.13 per share, for the same period in
2019. Non-GAAP net loss was $62.5 million for the nine months ended
September 30, 2020, compared to $63.4 million for the same period
in 2019. The weighted average number of shares used to calculate
net loss per share was 50,851,167 for the nine months ended
September 30, 2020, and 33,977,477 for the nine months ended
September 30, 2019.
Conference Call Information: Kala will host a live
conference call and webcast today, November 5, 2020 at 8:00 a.m. ET
to review its third 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: 9199546. 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 EYSUVIS: EYSUVIS (loteprednol etabonate ophthalmic
suspension) 0.25% is approved for the short-term (up to two weeks)
treatment of the signs and symptoms of dry eye disease. EYSUVIS
utilizes Kala's AMPPLIFY mucus-penetrating particle (MPP) Drug
Delivery Technology to enhance penetration of loteprednol etabonate
(LE) into target tissue of the ocular surface. EYSUVIS was approved
by the FDA on October 26, 2020. Kala believes that EYSUVIS' broad
mechanism of action, rapid onset of relief of both signs and
symptoms, favorable tolerability and safety profile and the
potential to be complementary to existing therapies, offer a
differentiated product profile for the short-term treatment of dry
eye disease, including the management of dry eye flares.
EYSUVIS, as with other ophthalmic corticosteroids, is
contraindicated in most viral diseases of the cornea and
conjunctiva including epithelial herpes simplex keratitis
(dendritic keratitis), vaccinia, and varicella, and also in
mycobacterial infection of the eye and fungal diseases of ocular
structures. The initial prescription and each renewal of the
medication order should be made by a physician only after
examination of the patient with the aid of magnification, such as
slit lamp biomicroscopy, and, where appropriate, fluorescein
staining. Prolonged use of corticosteroids may result in glaucoma
with damage to the optic nerve, as well as defects in visual acuity
and fields of vision. Corticosteroids should be used with caution
in the presence of glaucoma. Renewal of the medication order should
be made by a physician only after examination of the patient and
evaluation of the IOP. Use of corticosteroids may result in
posterior subcapsular cataract formation. Use of corticosteroids
may suppress the host response and thus increase the hazard of
secondary ocular infections. In acute purulent conditions,
corticosteroids may mask infection or enhance existing infection.
Use of a corticosteroid medication in the treatment of patients
with a history of herpes simplex requires great caution. Use of
ocular corticosteroids may prolong the course and may exacerbate
the severity of many viral infections of the eye (including herpes
simplex). Fungal infections of the cornea are particularly prone to
develop coincidentally with long-term local corticosteroid
application. Fungus invasion must be considered in any persistent
corneal ulceration where a corticosteroid has been used or is in
use. The most common adverse drug reaction following the use of
EYSUVIS for two weeks was instillation site pain, which was
reported in 5% of patients.
Please see full Prescribing Information at www.eysuvis.com.
About INVELTYS: INVELTYS (loteprednol etabonate
ophthalmic suspension) 1% is a twice-a-day corticosteroid for the
treatment of post-operative inflammation and pain following ocular
surgery. INVELTYS utilizes Kala’s proprietary AMPPLIFY
mucus-penetrating particle (MPP) Drug Delivery Technology to
enhance penetration of loteprednol etabonate (LE) into target
tissues of the eye. In preclinical studies, the AMPPLIFY Drug
Delivery Technology increased delivery of LE into ocular tissues
more than three-fold compared to current LE products by
facilitating penetration through the tear film mucins. INVELTYS was
approved by the FDA on August 22, 2018. Kala believes INVELTYS has
a favorable profile for the treatment of inflammation and pain
following ocular surgery, due to its twice-a-day dosing
regimen.
INVELTYS, as with other ophthalmic corticosteroids, is
contraindicated in most viral diseases of the cornea and
conjunctiva including epithelial herpes simplex keratitis
(dendritic keratitis), vaccinia, and varicella, and also in
mycobacterial infection of the eye and fungal diseases of ocular
structures. A prolonged use of corticosteroids may result in
glaucoma with damage to the optic nerve, defects in visual acuity
and fields of vision. If this product is used for 10 days or
longer, IOP should be monitored. Use of corticosteroids may result
in posterior subcapsular cataract formation. Use of steroids after
cataract surgery may delay healing and increase the incidence of
bleb formation. In those diseases causing thinning of the cornea or
sclera, perforations have been known to occur with the use of
topical steroids. The initial prescription and renewal of the
medication order should be made by a physician only after
examination of the patient with the aid of magnification such as
slit lamp biomicroscopy and, where appropriate, fluorescein
staining. Prolonged use of corticosteroids may suppress the host
response and thus increase the hazard of secondary ocular
infections. In acute purulent conditions, steroids may mask
infection or enhance existing infection. Use of a corticosteroid
medication in the treatment of patients with a history of herpes
simplex requires great caution. Use of ocular steroids may prolong
the course and may exacerbate the severity of many viral infections
of the eye (including herpes simplex). Fungal infections of the
cornea are particularly prone to develop coincidentally with
long-term local steroid application. Fungus invasion must be
considered in any persistent corneal ulceration where a steroid has
been used or is in use. In clinical trials, the most common adverse
drug reactions were eye pain (1%) and posterior capsular
opacification (1%). These reactions may have been the consequence
of the surgical procedure.
Please see the full Prescribing Information available at:
www.inveltys.com.
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 AMPPLIFY mucus
penetrating particle Drug Delivery Technology to a corticosteroid,
loteprednol etabonate (LE), designed for ocular applications,
resulting in the October 2020 approval of EYSUVISTM (loteprednol
etabonate ophthalmic suspension) 0.25% for the short-term (up to
two weeks) treatment of signs and symptoms of dry eye disease and
the January 2019 launch of INVELTYS® (loteprednol etabonate
ophthalmic suspension) 1% for the treatment of post-operative
inflammation and pain following ocular surgery.
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
Company’s expectation to begin shipping EYSUVIS to wholesalers in
the U.S. by the end of 2020 and for the full promotional launch to
begin in January of 2021, the Company having approximately 90 sales
professionals in place by year-end and growing to 125 sales
representatives in 2021, pending the status of the COVID-19
pandemic, to support the launch of EYSUVIS, INVELTYS prescriptions
and revenue returning to growth over time, the commercial
opportunity for EYSUVIS and INVELTYS, 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 EYSUVIS and INVELTYS; whether
the Company will be able to successfully implement its
commercialization plans for EYSUVIS and INVELTYS; whether the
market opportunity for EYSUVIS and INVELTYS is consistent with the
Company’s expectations and market research; the Company’s ability
execute on the commercial launch of EYSUVIS 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 EYSUVIS, INVELTYS and the Company's product
candidates; 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)
September 30,
December 31,
2020
2019
Cash, cash equivalents and short-term
investments
$
159,120
$
85,449
Total assets
225,096
154,323
Working capital (1)
158,606
80,710
Long-term debt, net of discounts
71,967
71,184
Other long-term liabilities
27,549
28,673
Total Stockholders’ equity
106,030
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
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Product revenues, net
$
2,220
$
1,451
$
4,124
$
4,894
Costs and expenses:
Cost of product revenues
701
668
1,814
1,261
Selling, general and administrative
23,893
15,280
54,602
50,523
Research and development
3,468
7,070
14,955
21,137
Total operating expenses
28,062
23,018
71,371
72,921
Loss from operations
(25,842)
(21,567)
(67,247)
(68,027)
Other income (expense):
Interest income
51
571
451
1,973
Interest expense
(2,157)
(2,180)
(6,419)
(6,335)
Net loss
(27,948)
(23,176)
(73,215)
(72,389)
Net loss per share attributable to common
stockholders—basic and diluted
$
(0.50)
$
(0.68)
$
(1.44)
$
(2.13)
Weighted average shares outstanding—basic
and diluted
56,030,717
34,168,282
50,851,167
33,977,477
Kala Pharmaceuticals,
Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Net loss (GAAP)
$
(27,948)
$
(23,176)
$
(73,215)
$
(72,389)
Add-back: stock-based compensation
expense
4,261
2,572
9,249
7,666
Add-back: Non-cash interest
269
237
782
709
Add-back: depreciation
220
226
674
614
Non-GAAP Net loss
$
(23,198)
$
(20,141)
$
(62,510)
$
(63,400)
Cost of product revenues (GAAP)
$
701
$
668
$
1,814
$
1,261
Less: stock-based compensation expense
32
60
60
101
Less: depreciation
13
2
39
2
Non-GAAP Cost of product revenues
$
656
$
606
$
1,715
$
1,158
Selling, general and administrative
expenses (GAAP)
$
23,893
$
15,280
$
54,602
$
50,523
Less: stock-based compensation expense
3,244
1,599
6,930
5,250
Less: depreciation
150
140
450
376
Non-GAAP Selling, general and
administrative expenses
$
20,499
$
13,541
$
47,222
$
44,897
Research and development expenses
(GAAP)
$
3,468
$
7,070
$
14,955
$
21,137
Less: stock-based compensation expense
985
913
2,259
2,315
Less: depreciation
57
84
185
236
Non-GAAP research and development
expenses
$
2,426
$
6,073
$
12,511
$
18,586
Total operating loss (GAAP)
$
(25,842)
$
(21,567)
$
(67,247)
$
(68,027)
Less: stock-based compensation expense
4,261
2,572
9,249
7,666
Less: depreciation
220
226
674
614
Non-GAAP total operating loss
$
(21,361)
$
(18,769)
$
(57,324)
$
(59,747)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005262/en/
Investors: Hannah Deresiewicz
hannah.deresiewicz@sternir.com 212-362-1200
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