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–Conference Call and Webcast Today at 8:00 a.m. ET–
Kala Pharmaceuticals, Inc. (Kala) (NASDAQ:KALA), a biopharmaceutical company focused on the development and commercialization of therapeutics using its proprietary AMPPLIFY™ mucus-penetrating particle (MPP) Drug Delivery Technology, today reported financial results for the first quarter ended March 31, 2019.
“We are pleased with our results during the first quarter of 2019, particularly as it relates to the launch of INVELTYS,” said Mark Iwicki, Chairman, President and Chief Executive Officer of Kala Pharmaceuticals. “We have received feedback from physicians that INVELTYS has been a meaningful addition to their treatment protocols for inflammation and pain following ocular surgery. Our team has made significant progress in securing market access for INVELTYS, and initial prescription uptake has been strong. We also continue to advance KPI-121 0.25% for dry eye disease, with an August 15 Prescription Drug User Fee Act (PDUFA) target action date and topline data from STRIDE 3 expected in the fourth quarter of 2019.”
First Quarter and Recent Highlights:
INVELTYS® Launch: INVELTYS was launched in January 2019 as the first and only twice-daily ocular corticosteroid indicated for the treatment of post-operative inflammation and pain following ocular surgery. The unique combination of safety, efficacy and twice-daily dosing of INVELTYS was developed to address a significant unmet need in this setting, and Kala believes these attributes are being viewed favorably by physicians. Since the launch of INVELTYS:
KPI-121 0.25% Dry Eye Program: The U.S. Food and Drug Administration (FDA) has set a PDUFA target action date of August 15, 2019 for KPI-121 0.25%, which if approved could be the first FDA-approved product for the temporary relief of the signs and symptoms of dry eye disease. Kala’s New Drug Application (NDA) filing includes data from one Phase 2 and two Phase 3 efficacy and safety trials studying over 2,000 patients with dry eye disease. Based upon the FDA’s recommendation, Kala is conducting an additional Phase 3 clinical trial of KPI-121 0.25%, STRIDE 3 (STRIDE - Short Term Relief In Dry Eye). 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 trials, and that changes made to the inclusion/exclusion criteria of STRIDE 3 based on these analyses will improve the probability of success of STRIDE 3. Enrollment continues to progress as planned, and the Company expects to receive top-line results for STRIDE 3 in the fourth quarter of 2019.
First Quarter 2019 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 release.
Conference Call Information
Kala will host a live conference call and webcast today, May 9, 2019 at 8:00 a.m. ET to review first quarter 2019 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: 2881526.
To access a subsequent archived recording of the call, please visit the “Investors & Media” section on the Kala website at http://kalarx.com.
About Kala Pharmaceuticals, Inc.
Kala is a biopharmaceutical company focused on the development and commercialization of therapeutics using its proprietary AMPPLIFYTM 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, for which a target action date under the Prescription Drug User Fee Act (PDUFA) has been set by the United States Food and Drug Administration (FDA) for August 15, 2019.
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.
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 progress of commercial launch, status of insurance coverage and the availability of reimbursements under Medicare Part D, 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 cash runway. 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; uncertainties inherent in the availability and timing of data from ongoing clinical trials, and the results of such trials, including STRIDE 3; whether any additional clinical trials will be initiated or required for KPI-121 0.25% prior to approval of the NDA, or at all, and whether the NDA will be approved; the Company’s ability execute on the commercial launch of INVELTYS 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 KPI-121 0.25%; 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|
|March 31,||December 31,|
|Working capital (1)||135,847||160,018|
|Long-term debt, net of discounts||70,457||70,226|
|Other long-term liabilities||29,590||28,752|
|Total Stockholders’ equity||82,367||104,978|
(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)|
|Product revenues, net||$||1,386||$||—|
|Costs and expenses:|
|Cost of product revenues||241||—|
|Selling, general and administrative||18,236||5,482|
|Research and development||6,959||5,657|
|Total operating expenses||25,436||11,139|
|Loss from operations||(24,050)||(11,139)|
|Other income (expense):|
Net loss per share attributable to common
Weighted average shares outstanding—basic
|Kala Pharmaceuticals, Inc.|
|Reconciliation of GAAP to Non-GAAP Financial Measures|
|Net loss (GAAP)||$||(25,388)||$||(11,297)|
|Add-back: stock-based compensation expense||2,473||1,861|
|Add-back: Non-cash interest||231||—|
|Non-GAAP Net loss||$||(22,514)||$||(9,355)|
|Cost of product revenues (GAAP)||$||241||$||—|
|Less: stock-based compensation expense||2||—|
|Non-GAAP Cost of product revenues||$||239||—|
|Selling, general and administrative expenses (GAAP)||$||18,236||$||5,482|
|Less: stock-based compensation expense||1,864||1,222|
|Non-GAAP Selling, general and administrative expenses||$||16,278||4,180|
|Research and development expenses (GAAP)||$||6,959||$||5,657|
|Less: stock-based compensation expense||607||639|
|Non-GAAP research and development expenses||$||6,276||5,017|
|Total operating loss (GAAP)||$||(24,050)||$||(11,139)|
|Less: stock-based compensation expense||2,473||1,861|
|Non-GAAP total operating loss||$||(21,407)||$||(9,197)|
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