Kala Pharmaceuticals Reports Third Quarter 2020 Financial Results and Provides Corporate Update
-- 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
-- 3Q 2020 INVELTYS® Net Revenue of
-- 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
“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
Third Quarter and Recent Highlights:
EYSUVIS™ (loteprednol etabonate ophthalmic suspension) 0.25%: On
Kala estimates that DED impacts approximately 38 million people in the
For the EYSUVIS launch, Kala will leverage its experienced and established ophthalmic team that successfully launched INVELTYS in
INVELTYS® (loteprednol etabonate ophthalmic suspension) 1%: Approximately 38,000 INVELTYS prescriptions were reported by
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.
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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 ofDecember 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 inMarch 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
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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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 30, 2020 , and 34,168,282 for the quarter endedSeptember 30, 2019 .
Nine Months Ended
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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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 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 endedSeptember 30, 2020 , and 33,977,477 for the nine months endedSeptember 30, 2019 .
Conference Call Information:
Kala will host a live conference call and webcast today,
Non-GAAP Financial Measures:
In this press release, the financial results of Kala are provided in accordance with accounting principles generally accepted in
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
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
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 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
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
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|||||||
Balance Sheet Data |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
|
|
|
|||||
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. |
|
||||||||||||
Condensed Consolidated Statement of Operations |
||||||||||||
(In thousands, except share and per share data) |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
|||||||||||
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 |
||||||||
|
||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
|
Nine Months Ended |
||||||||||
|
|
|
||||||||||
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@sternir.com
212-362-1200
Source: