Kala Pharmaceuticals Reports First Quarter 2020 Financial Results and Provides Corporate Update
-- Announced Positive Results from STRIDE 3 Clinical Trial of EYSUVIS in
-- EYSUVISTM NDA Resubmitted on
-- Raised
-- 1Q 2020 INVELTYS® Revenue of
-- Conference Call and Webcast at
“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
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
First Quarter and Recent Highlights:
EYSUVIS™ (loteprednol etabonate ophthalmic suspension) 0.25% Dry Eye Program: In
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
INVELTYS® (loteprednol etabonate ophthalmic suspension) 1%: INVELTYS was launched in
Beginning in
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
Corporate:
In
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 ofDecember 31, 2019 . InApril 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 theMarch 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 onAugust 22, 2018 , cost of product revenues for the quarter endedMarch 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 endedMarch 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 endedMarch 31, 2019 associated with the commercial launch of INVELTYS, which were not incurred during the quarter endedMarch 31, 2020 , as well as a decrease in stock compensation costs. Non-GAAP SG&A expenses were$13.5 million for the quarter endedMarch 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 inMarch 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 endedMarch 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 endedMarch 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 endedMarch 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 endedMarch 31, 2020 , and 33,878,021 for the quarter endedMarch 31, 2019 .
Conference Call Information
Kala will host a live conference call and webcast today,
To access a live webcast and subsequent archived recording of the presentation, please visit “Events” in the “Investors” section of 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
About
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
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
|
||||||||
Balance Sheet Data |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
|
|
|||||||
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. |
|
|||||||||
Condensed Consolidated Statement of Operations |
|||||||||
(In thousands, except share and per share data) |
|||||||||
(Unaudited) |
|||||||||
Three Months Ended |
|||||||||
|
|||||||||
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 |
|
|
|||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||
(In thousands) |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
|
|||||||
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@sternir.com
212-362-1200
Source: