Kala Pharmaceuticals Reports Third Quarter 2018 Financial Results
– INVELTYS™ Launch on Track for Early 2019 –
– Strengthened Cash Position; Runway Extends At Least Through Early 2020 –
– KPI-121 0.25% NDA Filed for Dry Eye Disease –
“We have made substantial progress over the past few months. In addition
Third Quarter and Recent Highlights:
INVELTYS Approved; Launch Targeted for Early 2019: INVELTYS
(loteprednol etabonate ophthalmic suspension) 1% was approved by the
NDA Submitted For Dry Eye Disease; STRIDE 3 Study Ongoing: Following
a productive meeting with the
October 2018, Kala submitted an NDA to the FDA, which includes data from one Phase 2 and two Phase 3 efficacy and safety trials studying over 2,000 patients with dry eye disease.
In addition, based upon the FDA’s recommendation, Kala initiated an
additional Phase 3 clinical trial in
July 2018, STRIDE 3 (STRIDE - Short Term Relief In Dry Eye), evaluating KPI-121 0.25% for the temporary relief of the signs and symptoms of dry eye disease. 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 study, and that changes made to the inclusion/exclusion criteria of STRIDE 3 based on these analyses will improve the probability of success. The Company expects to report top-line results for STRIDE 3 in the fourth quarter of 2019.
Completed Financing Transactions to Strengthen Balance Sheet: In
$110Mcredit facility from Athyrium Capital Management, LP, a leading healthcare-focused investment firm. The initial $75 milliontranche was funded immediately and an additional $35 millionof funding will be available upon reaching certain future milestones. A portion of the initial tranche was used to repay in full the Company’s prior debt facility.
Closed an underwritten public offering of 8,625,000 shares of its
common stock, including the underwriters’ option to purchase
additional shares, at a public offering price of
$8.25per share, before offering discounts. The offering resulted in aggregate net proceeds of approximately $66.4 millionto Kala.
Third Quarter 2018 Financial Results
Cash Position: As of
September 30, 2018, Kala had cash of $74.9 millioncompared to $114.6 millionas of December 31, 2017. The Company believes that the existing cash as of September 30, 2018combined with the proceeds from the October 2018financings will extend through at least early 2020.
R&D Expenses: For the quarter ended
September 30, 2018, research and development expenses were $7.0 millioncompared to $7.0 millionfor the same period in 2017. A decrease in external costs as a result of the completion of our Phase 3 clinical trials of INVELTYS and KPI-121 0.25% STRIDE 1 and 2 was offset by an increase in costs associated with the KPI-121 0.25% STRIDE 3 trial and an increase in employee-related costs due to the hiring of additional personnel and stock compensation expense associated with stock options granted in 2018, resulting in a net change of $0.
G&A Expenses: For the quarter ended
September 30, 2018, general and administrative expenses were $8.5 millioncompared to $2.5 millionfor the same period in 2017. The increase in general and administrative expenses is primarily attributable to an increase in commercial-related costs as the Company builds its commercial infrastructure in anticipation of the launch of INVELTYS in early 2019, an increase in employee-related costs due to an increase in general and administrative employee headcount to support public company operations and a commercial organization and stock compensation expense associated with stock options granted in 2018.
Operating Loss: Loss from operations for the quarter ended
September 30, 2018was $15.5 millioncompared to $9.5 millionfor the same period in 2017.
Net Loss: Net loss was
$15.6 million, or $0.63per share, for the quarter ended September 30, 2018, compared to a net loss of $10.2 million, or $0.56per share, for the same period in 2017.
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 into target tissues of the eye. In
preclinical studies, the AMPPLIFY Drug Delivery Technology increased
delivery of loteprednol etabonate (LE) into ocular tissues more than
three-fold compared to current LE products by facilitating penetration
through the tear film mucus. INVELTYS was approved by the FDA on
About KPI-121 0.25%
Kala is developing KPI-121 0.25% for the temporary relief of the signs and symptoms of dry eye disease utilizing a two-week course of therapy administered four times a day. Dry eye disease is a chronic, episodic, multifactorial disease affecting the tears and ocular surface and can involve tear film instability, inflammation, discomfort, visual disturbance and ocular surface damage. KPI-121 0.25% utilizes Kala's AMPPLIFY mucus-penetrating particle (MPP) Drug Delivery Technology to enhance penetration of loteprednol etabonate (LE) into target tissue 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 mucus. Kala has completed one Phase 2 and two Phase 3 clinical trials of KPI-121 0.25%. Kala believes that KPI-121 0.25%'s 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, could result in a favorable profile for the management of dry eye flares and other dry eye associated conditions.
Kala is a biopharmaceutical company focused on the development and commercialization of therapeutics using its proprietary AMPPLIFY 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 recently approved 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.
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 timing of commercial launch, 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 expectation to report top-line
results for STRIDE 3 in the fourth quarter of 2019, the Company’s
expectations regarding its use of cash and its cash runway and the
Company’s ability to access the second tranche under its credit facility
with Athyrium. 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; whether the
Condensed Consolidated Balance Sheets
|September 30,||December 31,|
|Total Stockholders’ Equity||54,934||89,679|
(1) The company defines working capital as current assets less current liabilities. See the Company’s consolidated financial statements for further details regarding its current assets and current liabilities.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Research and development||$||7,027||$||7,018||$||20,051||$||23,128|
|General and administrative||8,469||2,516||21,102||5,607|
|Total operating expenses||15,496||9,534||41,153||28,735|
|Loss from operations||(15,496)||(9,534)||(41,153)||(28,735)|
|Other income (expense):|
|Change in fair value of warrant liability||—||(623)||—||(1,844)|
|Total other income (expense)||(107)||(641)||(366)||(2,186)|
|Net loss per share—basic and diluted||$||(0.63)||$||(0.56)||$||(1.69)||$||(4.51)|
|Weighted average shares outstanding—basic and diluted||24,600,080||18,034,278||24,570,081||6,860,777|