Key Takeaways KALA's phase IIb study of KPI-012 for PCED failed to meet primary and secondary endpoints.The company will discontinue KPI-012 and its MSC-S platform after the study setback.KALA BIO plans cost cuts and strategic reviews as it reverts to the preclinical stage.Shares of KALA BIO (KALA) have nosedived 88.3% in a month after the company announced the failure of a mid-stage study evaluating its only clinical pipeline candidate, KPI-012, for the treatment of persistent corneal epithelial defect (PC ...

Company Performance - MoonLake Immunotherapeutics (NASDAQ:MLTX) experiences a drastic decrease in its stock price to $6.24, about 89.93% [1][6] - KALA BIO, Inc. (NASDAQ:KALA) sees its stock decline sharply to $2.13, translating to an 88.82% decrease [2][6] - IO Biotech, Inc. (NASDAQ:IOBT) experiences a 77.31% decrease in its stock price, falling to $0.35 [3][6] - Maris-Tech Ltd. (NASDAQ:MTEKW) sees its stock price decrease to $0.22, a 71.16% drop [4] Industry Insights - The recent market movements highlight the volatile nature of the stock market, where companies across various sectors can experience significant fluctuations [5] - Factors such as market sentiment, industry trends, and company-specific developments play crucial roles in influencing stock prices [5]

Kala Bio Inc. (NASDAQ: KALA) stock is down on Monday after the company halted development of its experimental treatment for a specific eye condition.The company had a session volume of 14.04 million compared to the average volume of 216.47 thousand, according to data from Benzinga Pro.On Monday, the company announced that its CHASE Phase 2b trial of KPI-012 for persistent corneal epithelial defect (PCED) did not meet the primary endpoint of complete healing of PCED as measured by corneal fluorescein stainin ...

-- Study did not meet primary endpoint of complete healing of PCED at Week 8; secondary endpoints also did not achieve statistical significance -- -- KPI-012 was well-tolerated with no treatment-related serious adverse events observed -- -- KALA to cease clinical development of KPI-012, preserve cash and explore strategic options -- ARLINGTON, Mass., Sept. 29, 2025 (GLOBE NEWSWIRE) -- KALA BIO, Inc. (NASDAQ:KALA), a clinical-stage biopharmaceutical company dedicated to the research, development and commerci ...

Summary of KALA BIO FY Conference Call Company Overview - **Company**: KALA BIO (NasdaqCM: KALA) - **Focus**: Development of treatments for rare ophthalmic diseases using a proprietary mesenchymal stem cell secretome platform - **Lead Program**: KPI-twelve, currently in Phase IIb clinical trial for persistent corneal epithelial defects (PCED) [3][10] Key Points and Arguments - **Clinical Trial Progress**: Enrollment for the KPI-twelve trial was completed in June 2025, with top-line data expected in September 2025 [3][34] - **Management Experience**: The management team has previously developed and obtained NDA approval for two ophthalmic products, which were divested to focus on the secretome platform [4] - **Secretome Technology**: The secretome consists of biomolecules secreted by mesenchymal stem cells, which are processed into a patient-friendly topical eye drop formulation [5][6] - **Mechanism of Action**: The product aims to promote wound healing, tissue repair, and has anti-inflammatory and neuroprotective effects [6][23] - **Market Opportunity**: The estimated incidence of PCED in the U.S. is about 100,000 cases per year, with a potential market exceeding $3 billion [13][19] - **Current Market Landscape**: The only FDA-approved product for PCED is Oxervate, which only addresses neurotrophic keratitis, covering about one-third of PCED cases [14][19] - **Efficacy Data**: In a Phase Ib trial, 75% of patients showed complete healing of PCED, which is comparable to Oxervate's reported efficacy [28][30] - **Regulatory Designations**: KPI-twelve has orphan drug and fast track designations, indicating a strong potential for expedited development [10][31] Additional Important Information - **Patient Burden**: Current treatments like Oxervate require complex dosing regimens and have significant adverse effects, highlighting the need for simpler and more tolerable options [17][18] - **Trial Design**: The ongoing trial includes a run-in phase to minimize placebo effects, which is expected to enhance the statistical power of the results [36] - **Future Outlook**: The company is optimistic about the upcoming data readout and the potential for KPI-twelve to be the first approved product for a broad indication in treating all patients with PCED [34][36]

ARLINGTON, Mass., Sept. 03, 2025 (GLOBE NEWSWIRE) -- KALA BIO, Inc. (NASDAQ:KALA), a clinical-stage biopharmaceutical company dedicated to the research, development and commercialization of innovative therapies for rare and severe diseases of the eye, today announced that members of management will present at the H.C. Wainwright 27th Annual Global Investment Conference being held in New York, NY on Wednesday, September 10, 2025 at 2:00 p.m. ET. Management will be available for one-on-one meetings on Wednesd ...

Company Overview - KALA BIO, Inc. is a clinical-stage biopharmaceutical company focused on developing innovative therapies for rare and severe eye diseases [3] - The company utilizes a proprietary mesenchymal stem cell secretome (MSC-S) platform for its investigational therapies [3] Leadership Announcement - Todd Bazemore has been appointed as President and Chief Executive Officer (CEO) of KALA BIO, having served as interim CEO since February 2025 [1][2] - Bazemore brings over 30 years of leadership experience in the biopharmaceutical industry, particularly in rare diseases [1][2] Clinical Development - KALA's lead product candidate, KPI-012, is currently in clinical development for persistent corneal epithelial defect (PCED), a rare disease with no FDA-approved treatments addressing all underlying causes [3] - KPI-012 has received Orphan Drug and Fast Track designations from the U.S. FDA [3] - The company is preparing for the upcoming readout of the Phase 2b CHASE trial of KPI-012, which is seen as a pivotal moment for potential commercialization [2] Strategic Focus - The company aims to transition from a clinical-stage biotechnology firm to a fully integrated organization with commercial capabilities [2] - KALA is also exploring the potential of KPI-012 for other rare corneal diseases and has initiated preclinical studies for retinal degenerative diseases [3]

Summary of KALA BIO (KALA) FY Conference - August 13, 2025 Industry Overview - The conference focused on novel drugs for front of the eye indications, particularly in ophthalmology, featuring multiple panelists from various companies including KALA Bio, HARO, OkioPharma, and Cularis Bio [1][2][3] Key Points and Arguments Unmet Needs in Ophthalmology - Dry eye disease is a significant issue, especially in low humidity areas like West Texas, where patients frequently seek treatment [6][7] - There are various conditions affecting the front of the eye, including corneal diseases, glaucoma, and cataracts, indicating a broad spectrum of unmet medical needs [6][7] Emerging Treatments - The evaluation of emerging treatments is based on their ability to improve patient outcomes and ease of use [8][9] - Barriers to integrating novel treatments include the need for development, regulatory challenges, and ensuring patient compliance [10][11] KALA Bio's Innovations - KALA Bio's KPI 12 utilizes a mesenchymal stem cell secretome to promote corneal healing, addressing multiple biological pathways involved in impaired healing [22][25] - The product aims to provide essential biomolecules that stimulate healing across various pathways, which is crucial for patients with persistent corneal epithelial defects (PCED) [27][28] Commercial Performance and Strategy - KALA Bio reported a 66% growth in total prescriptions quarter-over-quarter, with a significant portion being new prescriptions, attributed to their unique access program [19][20] - The company aims to capture a larger share of the cyclosporine market, currently ranking second in the U.S. [20] Competitive Landscape - KALA Bio's VeeVi is the first water-free cyclosporine product, delivering significantly higher concentrations to the cornea compared to traditional therapies, which often cause discomfort [16][17] - The product has shown rapid onset of action and sustained benefits, making it a strong competitor in the dry eye market [18][19] Clinical Trials and Expectations - KALA Bio is anticipating results from the phase two CHACE trial, with previous trials showing promising healing rates in patients with PCED [28][29] - The company is focused on demonstrating efficacy and safety to facilitate regulatory approval and market adoption [30][31] Neuropathic Corneal Pain Treatment - OkioPharma's ircosimod targets neuropathic corneal pain, a condition with no FDA-approved treatments, showing significant pain reduction in trials [31][36] - The drug is positioned as a potential first-line treatment for patients who have failed other therapies, including opioids [36][37] Glaucoma Treatment Innovations - Cularis Bio's QLS 111 targets episcleral venous pressure, a previously unaddressed component of intraocular pressure (IOP), offering a new approach for glaucoma management [45][46] - The product is expected to be complementary to existing therapies, particularly for patients with normal tension glaucoma, which is prevalent in Asian populations [48][49] Barriers to Adoption - Key barriers to the adoption of new therapies include physician hesitance, regulatory hurdles, and payer reimbursement challenges [64][66] - Physicians often require time to gain experience with new treatments before widespread adoption occurs [66][67] Future Directions - KALA Bio and its competitors are focused on advancing their clinical trials and addressing the regulatory landscape to bring innovative treatments to market [70][74] - The emphasis is on demonstrating consistent efficacy across diverse patient populations to secure FDA approval and enhance market penetration [71][74] Additional Important Content - The discussion highlighted the importance of addressing both the inflammatory and evaporative components of dry eye disease through innovative drug delivery systems [56][57] - The potential for combination therapies was noted, particularly in enhancing patient compliance and treatment outcomes [50][51] This summary encapsulates the key discussions and insights from the KALA Bio conference, emphasizing the ongoing innovations and challenges within the ophthalmology sector.

Core Viewpoint - KALA Bio (KALA) has shown a significant price increase of 35.9% over the past four weeks, with analysts projecting a mean price target of $13, indicating a potential upside of 74.7% from the current price of $7.44 [1][11]. Price Targets and Analyst Consensus - The average price target for KALA ranges from a low of $12.00 to a high of $15.00, with a standard deviation of $1.73, suggesting a relatively tight clustering of estimates among analysts [2][9]. - The lowest estimate indicates a potential increase of 61.3%, while the highest suggests a 101.6% upside [2]. - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [9]. Earnings Estimates and Analyst Optimism - There is increasing optimism among analysts regarding KALA's earnings prospects, as evidenced by a positive trend in earnings estimate revisions [11]. - Over the last 30 days, one estimate has increased, leading to a 1.7% rise in the Zacks Consensus Estimate for the current year [12]. - KALA holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for upside [13]. Caution on Price Targets - While price targets are often sought after by investors, they can be misleading and should not be the sole basis for investment decisions [3][10]. - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8].

[PART I – FINANCIAL INFORMATION](index=9&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis of KALA BIO, Inc.'s financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of KALA BIO, Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations and comprehensive loss, changes in stockholders' equity (deficit), and cash flows, along with detailed notes explaining the company's business, accounting policies, and financial instrument valuations [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show a decrease in total assets and a shift in stockholders' equity from a positive balance to a deficit between December 31, 2024, and June 30, 2025, primarily driven by a reduction in cash and cash equivalents and an increased accumulated deficit Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $31,942 | $51,181 | | Total current assets | $33,663 | $52,797 | | Total assets | $36,053 | $55,483 | | Total current liabilities | $16,016 | $16,956 | | Total liabilities | $39,259 | $43,151 | | Total stockholders' (deficit) equity | $(3,206) | $12,332 | | Accumulated deficit | $(688,022) | $(667,920) | - Cash and cash equivalents decreased by **$19,239 thousand** from **$51,181 thousand** at December 31, 2024, to **$31,942 thousand** at June 30, 2025[19](index=19&type=chunk) - Total stockholders' equity shifted from a positive **$12,332 thousand** at December 31, 2024, to a deficit of **$(3,206) thousand** at June 30, 2025[19](index=19&type=chunk) [Condensed Consolidated Statement of Operations and Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Loss) The company reported increased net losses for the three months ended June 30, 2025, and a decreased net loss for the six months ended June 30, 2025, compared to the same periods in 2024, primarily due to higher operating expenses, particularly in research and development, and a decrease in grant income for the three-month period Condensed Consolidated Statement of Operations and Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $4,643 | $4,317 | $9,236 | $9,739 | | Research and development | $6,232 | $5,317 | $12,287 | $11,668 | | Total costs and expenses | $11,028 | $9,605 | $21,697 | $21,536 | | Net loss | $(11,155) | $(9,579) | $(20,102) | $(21,386) | | Net loss per share (basic and diluted) | $(1.71) | $(3.16) | $(3.13) | $(7.32) | - Net loss increased to **$(11,155) thousand** for the three months ended June 30, 2025, from **$(9,579) thousand** in the prior year, and decreased to **$(20,102) thousand** for the six months ended June 30, 2025, from **$(21,386) thousand** in the prior year[22](index=22&type=chunk) - Research and development expenses increased by **$915 thousand** (17.2%) for the three months ended June 30, 2025, and by **$619 thousand** (5.3%) for the six months ended June 30, 2025, compared to the respective prior year periods[22](index=22&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Deficit)) The statements reflect a decrease in total stockholders' equity (deficit) from $12,332 thousand at December 31, 2024, to $(3,206) thousand at June 30, 2025, primarily due to the net loss incurred during the period, partially offset by stock-based compensation expense and minor common stock issuances - Total stockholders' equity (deficit) decreased from **$12,332 thousand** at December 31, 2024, to **$(3,206) thousand** at June 30, 2025[27](index=27&type=chunk) - The accumulated deficit increased from **$(667,920) thousand** at December 31, 2024, to **$(688,022) thousand** at June 30, 2025, reflecting the net loss[27](index=27&type=chunk) - Stock-based compensation expense contributed **$4,550 thousand** to additional paid-in capital for the six months ended June 30, 2025[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company experienced a net decrease in cash and cash equivalents of $19,239 thousand, primarily driven by cash used in operating activities and financing activities, contrasting with a net increase in the prior year period Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(16,558) | $(20,059) | | Net cash used in investing activities | $(16) | $(49) | | Net cash (used in) provided by financing activities | $(2,665) | $23,410 | | Net (decrease) increase in cash and cash equivalents | $(19,239) | $3,302 | | Cash and cash equivalents at end of period | $31,942 | $54,197 | - Net cash used in operating activities decreased by **$3,501 thousand**, from **$(20,059) thousand** in 2024 to **$(16,558) thousand** in 2025[30](index=30&type=chunk) - Net cash from financing activities shifted from a positive **$23,410 thousand** in 2024 to a negative **$(2,665) thousand** in 2025, mainly due to debt repayments and lower proceeds from equity financings[30](index=30&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering the company's business, significant accounting policies, fair value measurements, grant income, various liabilities, debt, equity financings, stock-based compensation, loss per share, income taxes, commitments, contingencies, and segment information [Note 1. Nature of Business and Basis of Presentation](index=14&type=section&id=Note%201.%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) KALA BIO, Inc. is a clinical-stage biopharmaceutical company focused on rare and severe eye diseases, with its lead product candidate KPI-012 for persistent corneal epithelial defects (PCED), and has incurred significant losses, raising substantial doubt about its ability to continue as a going concern - KALA BIO, Inc. is a clinical-stage biopharmaceutical company focused on rare and severe diseases of the front and back of the eye[32](index=32&type=chunk) - The lead product candidate, KPI-012, for persistent corneal epithelial defects (PCED), has received Orphan Drug and Fast Track designations from the FDA[33](index=33&type=chunk) - The company incurred net losses of **$11,155 thousand** and **$20,102 thousand** for the three and six months ended June 30, 2025, respectively, and had an accumulated deficit of **$688,022 thousand** as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern[36](index=36&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=18&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies, including the adoption of new accounting pronouncements like ASU No. 2024-03 for expense disaggregation disclosures, which is not expected to materially impact the financial statements - The company follows U.S. GAAP for financial statement preparation, requiring management estimates and assumptions[41](index=41&type=chunk) - ASU No. 2024-03, effective for annual periods after December 15, 2026, requires disaggregated expense information but is not expected to materially impact the company's condensed consolidated financial statements[49](index=49&type=chunk)[51](index=51&type=chunk) [Note 3. Fair Value of Financial Instruments](index=20&type=section&id=Note%203.%20Fair%20Value%20of%20Financial%20Instruments) The company's financial instruments, primarily cash equivalents and contingent consideration, are measured at fair value using a three-level hierarchy, with contingent consideration liabilities showing a loss on remeasurement for the three and six months ended June 30, 2025 Fair Value of Financial Instruments (in thousands) | Financial Instrument | June 30, 2025 Fair Value (in thousands) | December 31, 2024 Fair Value (in thousands) | | :------------------- | :-------------------------------------- | :---------------------------------------- | | Cash equivalents | $30,852 | $39,707 | | Contingent consideration - Current | $1,603 | $0 | | Contingent consideration - Non-Current | $3,230 | $4,659 | | Total Liabilities | $4,833 | $4,659 | - Contingent consideration liabilities are measured at fair value using Level 3 unobservable inputs, based on a probability-adjusted discounted cash flow model[54](index=54&type=chunk)[58](index=58&type=chunk) - The change in fair value of contingent consideration liabilities resulted in a loss of **$153 thousand** for the three months ended June 30, 2025 (compared to a gain of **$29 thousand** in 2024) and a loss of **$174 thousand** for the six months ended June 30, 2025 (compared to a loss of **$129 thousand** in 2024)[54](index=54&type=chunk) [Note 4. Grant Income](index=23&type=section&id=Note%204.%20Grant%20Income) The company recognized grant income from the CIRM Award, totaling $547 thousand and $2,897 thousand for the three and six months ended June 30, 2025, respectively, supporting the KPI-012 program for PCED - Combangio, a subsidiary, received a **$15,000 thousand** grant from CIRM for the KPI-012 program for PCED[60](index=60&type=chunk) Grant Income (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Grant income | $547 | $980 | $2,897 | $2,055 | - The company received a **$2,260 thousand** disbursement from CIRM in April 2025 upon achieving a specified milestone[60](index=60&type=chunk) [Note 5. Prepaid Expenses and Other Current Assets](index=23&type=section&id=Note%205.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets increased to $1,721 thousand as of June 30, 2025, from $1,616 thousand at December 31, 2024, primarily due to prepaid retention bonuses Prepaid Expenses and Other Current Assets (in thousands) | Category (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Prepaid retention bonuses | $878 | $0 | | Prepaid research and development | $380 | $463 | | Insurance | $94 | $636 | | Total | $1,721 | $1,616 | - Prepaid retention bonuses significantly increased from **$0** at December 31, 2024, to **$878 thousand** at June 30, 2025[62](index=62&type=chunk) [Note 6. Accrued Expenses and Other Current Liabilities](index=24&type=section&id=Note%206.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities decreased to $3,838 thousand at June 30, 2025, from $4,975 thousand at December 31, 2024, mainly due to decreases in compensation and benefits, and contract manufacturing Accrued Expenses and Other Current Liabilities (in thousands) | Category (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Compensation and benefits | $1,508 | $2,390 | | Development costs | $1,168 | $736 | | Contract manufacturing | $178 | $672 | | Total | $3,838 | $4,975 | - Compensation and benefits decreased by **$882 thousand**, and contract manufacturing decreased by **$494 thousand**[63](index=63&type=chunk) [Note 7. Leases](index=24&type=section&id=Note%207.%20Leases) The company leases office and laboratory space in Menlo Park, California, with a right-of-use asset of $1,507 thousand and a corresponding lease liability of $1,633 thousand as of June 30, 2025, incurring total lease costs of $440 thousand for the six months ended June 30, 2025 - As of June 30, 2025, the company recognized a right-of-use asset of **$1,507 thousand** and a lease liability of **$1,633 thousand**[65](index=65&type=chunk) Lease Cost (in thousands) | Lease Cost (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $149 | $149 | $298 | $298 | | Short-term lease cost | $9 | $9 | $17 | $17 | | Variable lease cost | $54 | $50 | $125 | $110 | | Total lease cost | $212 | $208 | $440 | $425 | - The weighted average remaining lease term is **3.2 years** with a discount rate of **13.1%** as of June 30, 2025[67](index=67&type=chunk) [Note 8. Debt](index=26&type=section&id=Note%208.%20Debt) The company has a Loan Agreement with Oxford Finance, with an outstanding principal balance of $26,948 thousand as of June 30, 2025, and extended amortization and maturity dates following a $2,500 thousand prepayment in June 2025 - Principal loan balance under the Loan Agreement was **$26,948 thousand** as of June 30, 2025, down from **$29,284 thousand** at December 31, 2024[85](index=85&type=chunk) - The amortization date for the loan was extended to January 1, 2026, and the maturity date to May 1, 2027, after a **$2,500 thousand** prepayment in June 2025[80](index=80&type=chunk) Interest Expense Component (in thousands) | Interest Expense Component (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization of debt discount | $48 | $75 | $93 | $147 | | Accretion of final payment fee | $125 | $240 | $266 | $480 | | Contractual coupon interest expense | $912 | $1,155 | $1,813 | $2,299 | | Total Interest Expense | $1,085 | $1,470 | $2,172 | $2,926 | [Note 9. Warrants](index=31&type=section&id=Note%209.%20Warrants) As of June 30, 2025, the company had 3,983 common stock warrants outstanding, with exercise prices of $413.50 and $609.23, expiring in October 2026 and October 2025, respectively Warrants Outstanding | Issued | Exercise Price Per Share | Expiration Date | Shares Exercisable at June 30, 2025 | | :----- | :----------------------- | :-------------- | :---------------------------------- | | 2016 | $413.50 | October 2026 | 290 | | 2018 | $609.23 | October 2025 | 3,693 | | Total | | | 3,983 | [Note 10. Equity Financings](index=31&type=section&id=Note%2010.%20Equity%20Financings) The company engaged in various equity financings, including at-the-market offerings and private placements of common and preferred stock, raising significant gross proceeds in 2023 and 2024 to fund operations - From January 19, 2023, to June 30, 2025, the company sold **784,196 shares** of common stock under its at-the-market offering for total net proceeds of **$7,036 thousand**[91](index=91&type=chunk) - In December 2024, a private placement of common and Series I Preferred Stock generated aggregate gross proceeds of approximately **$10,750 thousand**[95](index=95&type=chunk) - Other private placements in March 2024 and June 2024 generated gross proceeds of approximately **$8,600 thousand** (Series G Preferred Stock) and **$12,499 thousand** (common stock and Series H Preferred Stock), respectively[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 11. Stock-Based Compensation](index=35&type=section&id=Note%2011.%20Stock-Based%20Compensation) Stock-based compensation expense for the six months ended June 30, 2025, was $4,550 thousand, an increase from $4,259 thousand in the prior year, reflecting new option and RSU grants under the 2017 Equity Incentive Plan Stock-Based Compensation Expense (in thousands) | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $714 | $653 | $1,454 | $1,318 | | General and administrative | $1,526 | $1,230 | $3,096 | $2,941 | | Total | $2,240 | $1,883 | $4,550 | $4,259 | - During the six months ended June 30, 2025, the company granted options for **509,525 shares** and **106,725 RSUs**, with a weighted average grant-date fair value of **$6.08** for options[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 12. Loss Per Share](index=36&type=section&id=Note%2012.%20Loss%20Per%20Share) The basic and diluted net loss per share attributable to common stockholders for the three and six months ended June 30, 2025, was $(1.71) and $(3.13), respectively, with potential common stock equivalents excluded due to their anti-dilutive effect Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders (in thousands) | $(11,155) | $(9,579) | $(20,102) | $(21,386) | | Weighted-average common shares outstanding | 6,513,108 | 3,030,213 | 6,429,950 | 2,921,712 | | Net loss per share (basic and diluted) | $(1.71) | $(3.16) | $(3.13) | $(7.32) | - Potential common stock equivalents, including options, unvested RSUs, unexercised warrants, and convertible preferred stock, were excluded from diluted EPS calculation due to their anti-dilutive effect[100](index=100&type=chunk) [Note 13. Income Taxes](index=36&type=section&id=Note%2013.%20Income%20Taxes) The company did not record income tax provision or benefit due to a full valuation allowance on deferred tax assets, stemming from a history of cumulative net losses, and an ownership change in December 2022 limited net operating loss carryforwards to an annual utilization of $0.2 million - No provision or benefit for income taxes was recorded for the three and six months ended June 30, 2025 and 2024[101](index=101&type=chunk) - The company maintains a full valuation allowance for its U.S. federal and state deferred tax assets due to cumulative net losses[101](index=101&type=chunk)[102](index=102&type=chunk) - An ownership change in December 2022 limited the annual utilization of net operating loss carryforwards to **$222 thousand**[103](index=103&type=chunk) [Note 14. Commitments and Contingencies](index=38&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) The company has commitments under a license agreement with Stanford University and potential contingent consideration payments related to the Combangio Acquisition, totaling up to $105,000 thousand for development, regulatory, and commercialization milestones, plus mid-to-high single-digit royalties - The company holds a worldwide, exclusive license from Stanford University for patent rights related to KPI-012, requiring annual maintenance fees and potential milestone/royalty payments[107](index=107&type=chunk) - Contingent consideration for the Combangio Acquisition includes potential future payments of up to **$105,000 thousand** for specified development, regulatory, and commercialization milestones[109](index=109&type=chunk) - Following the First Dosing Milestone in February 2023, the company paid **$2,500 thousand** in cash and **$2,354 thousand** in common stock to former Combangio Equityholders[109](index=109&type=chunk) [Note 15. Segment](index=39&type=section&id=Note%2015.%20Segment) KALA BIO, Inc. operates as a single operating and reportable segment, focusing on the development and commercialization of innovative therapies for rare and severe eye diseases, with all tangible assets located in the United States - The company manages its operations as one operating and reportable segment[110](index=110&type=chunk) - The singular focus is on the development and commercialization of innovative therapies for rare and severe diseases of the front and back of the eye[110](index=110&type=chunk) - All of the company's tangible assets are held in the United States[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of KALA BIO, Inc.'s financial condition and operational results, highlighting its transition to a clinical-stage biopharmaceutical company focused on KPI-012 for PCED, significant operating losses, and the need for additional funding [Overview](index=40&type=section&id=Overview) KALA BIO, Inc. is a clinical-stage biopharmaceutical company focused on developing KPI-012 for persistent corneal epithelial defects (PCED), which is currently in a Phase 2b clinical trial, and has incurred significant operating losses, relying on external funding - KALA BIO is a clinical-stage biopharmaceutical company developing KPI-012 for persistent corneal epithelial defects (PCED)[114](index=114&type=chunk) - The CHASE Phase 2b clinical trial for KPI-012 completed patient enrollment in July 2025, with topline safety and efficacy data expected by the end of September 2025[115](index=115&type=chunk)[116](index=116&type=chunk) - The company incurred net losses of **$11,200 thousand** and **$20,100 thousand** for the three and six months ended June 30, 2025, respectively, and had an accumulated deficit of **$688,000 thousand**[122](index=122&type=chunk) [Financial Operations Overview](index=42&type=section&id=Financial%20Operations%20Overview) This section details the components of the company's financial operations, including general and administrative expenses, research and development costs, contingent consideration remeasurement, interest income/expense, and grant income, highlighting significant investment in R&D and reliance on grant funding - General and administrative expenses are expected to remain comparable to 2024 levels, increasing substantially upon KPI-012 marketing approval due to commercialization efforts[127](index=127&type=chunk) - Research and development expenses are expected to be comparable to 2024, driven by the CHASE trial and preclinical studies for KPI-014[129](index=129&type=chunk) - Grant income from the CIRM Award supports the KPI-012 program, with **$2,300 thousand** disbursed in April 2025, and is recognized as related R&D expenses are incurred[139](index=139&type=chunk)[142](index=142&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) The company's net loss increased for the three months ended June 30, 2025, compared to 2024, primarily due to higher R&D expenses and a loss on contingent consideration remeasurement, while for the six-month period, net loss decreased due to higher grant income and lower interest expense Results of Operations - Three Months Ended June 30 (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | | General and administrative | $4,643 | $4,317 | $326 | | Research and development | $6,232 | $5,317 | $915 | | Loss (gain) on fair value remeasurement of contingent consideration | $153 | $(29) | $182 | | Net loss | $(11,155) | $(9,579) | $(1,576) | Results of Operations - Six Months Ended June 30 (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | General and administrative | $9,236 | $9,739 | $(503) | | Research and development | $12,287 | $11,668 | $619 | | Loss on fair value remeasurement of contingent consideration | $174 | $129 | $45 | | Net loss | $(20,102) | $(21,386) | $1,284 | - Grant income decreased by **$433 thousand** for the three months ended June 30, 2025, but increased by **$842 thousand** for the six months ended June 30, 2025, due to milestone achievements and timing of costs[152](index=152&type=chunk)[161](index=161&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant funding requirements due to ongoing operating losses and R&D expenses, with existing cash expected to last into Q1 2026, relying on equity/debt financings, collaborations, and potential milestone payments, but with substantial doubt about its ability to continue as a going concern without additional capital - Cash and cash equivalents were **$31,900 thousand** as of June 30, 2025, expected to fund operations into the first quarter of 2026[181](index=181&type=chunk)[189](index=189&type=chunk) - The company is eligible to receive up to **$325,000 thousand** in commercial-based sales milestone payments from Alcon, but has not received any to date[163](index=163&type=chunk) - Net cash used in operating activities was **$(16,600 thousand)** for the six months ended June 30, 2025, an improvement from **$(20,100 thousand)** in the prior year[182](index=182&type=chunk)[183](index=183&type=chunk) - Net cash used in financing activities was **$(2,700 thousand)** for the six months ended June 30, 2025, a significant change from **$23,400 thousand** provided in the prior year, primarily due to debt repayments and lower equity proceeds[182](index=182&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern without raising additional capital through equity, debt, or collaborations[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk relates to interest rate fluctuations affecting its cash equivalents and floating-rate debt, though an immediate 10% change in interest rates is not expected to materially impact fair value or operating results - Cash equivalents consist of money market accounts and U.S. treasury securities with maturities less than **90 days**[199](index=199&type=chunk) - An immediate **10%** change in interest rates would not materially affect the fair market value of cash equivalents[199](index=199&type=chunk) - The Loan Agreement's outstanding principal of **$26,900 thousand** (as of June 30, 2025) bears a floating interest rate, but a **10%** change in the 1-Month CME Term SOFR rate is not expected to have a material impact on operating results or cash flows[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the interim CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2025[201](index=201&type=chunk) - No material changes in internal control over financial reporting occurred during the three-month period ended June 30, 2025[202](index=202&type=chunk) [PART II – OTHER INFORMATION](index=65&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides additional information beyond the financial statements, including legal proceedings, comprehensive risk factors, equity security sales, other disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=65&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - The company is not currently subject to any material legal proceedings[204](index=204&type=chunk) [Item 1A. RISK FACTORS](index=65&type=section&id=Item%201A.%20RISK%20FACTORS) This section outlines significant risks that could materially affect the company's business, financial condition, and operating results, spanning financial stability, product development, commercialization, dependence on third parties, intellectual property, regulatory compliance, employee matters, and common stock value [Risks Related to Our Financial Position and Need for Additional Capital](index=67&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company has a history of significant losses and negative cash flows, with an accumulated deficit of $688,000 thousand as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern and requiring significant additional funding - The company has incurred significant losses and negative cash flows since inception, with a net loss of **$20,100 thousand** for the six months ended June 30, 2025, and an accumulated deficit of **$688,000 thousand**[207](index=207&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern without additional capital, which management plans to address through equity/debt financings or collaborations[215](index=215&type=chunk) - Failure to raise capital when needed could force delays, reductions, or elimination of product development efforts or cessation of operations[217](index=217&type=chunk) [Risks Related to Product Development](index=79&type=section&id=Risks%20Related%20to%20Product%20Development) The company's success is highly dependent on KPI-012, and its limited operating history in biologics development poses challenges, as clinical trials are costly, uncertain, and prone to delays or failures that could prevent or delay regulatory approval and commercialization - The company is substantially dependent on the success of KPI-012, its lead product candidate, and any future product candidates[236](index=236&type=chunk)[237](index=237&type=chunk) - Clinical trials are expensive, time-consuming, and uncertain, with preclinical and early clinical results not necessarily predictive of later-stage success[240](index=240&type=chunk) - Delays or difficulties in patient enrollment, especially for rare conditions like PCED, could significantly delay or prevent regulatory approvals[246](index=246&type=chunk)[247](index=247&type=chunk) [Risks Related to the Commercialization of our Product Candidates](index=90&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20our%20Product%20Candidates) Commercialization of approved product candidates faces risks including failure to achieve market acceptance, inadequate formulary coverage or reimbursement, intense competition from major pharmaceutical companies, changes in U.S. trade policy, and potential product liability lawsuits - Even if approved, KPI-012 may fail to achieve market acceptance by clinicians and patients or adequate formulary coverage, pricing, or reimbursement by third-party payors[264](index=264&type=chunk) - The company faces substantial competition from major pharmaceutical companies with greater resources, and KPI-012 will compete with existing and developing treatments for PCED and LSCD[281](index=281&type=chunk)[282](index=282&type=chunk)[285](index=285&type=chunk) - Product liability lawsuits related to product candidates could divert resources, incur substantial liabilities, and limit commercialization[288](index=288&type=chunk) [Risks Related to Our Dependence on Third Parties](index=99&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company heavily relies on third parties for clinical trials, manufacturing, and supply of product candidates, introducing risks such as unsatisfactory performance, failure to meet deadlines, non-compliance with regulations, production difficulties, and potential supply shortages, which could delay or impair development and commercialization efforts - The company relies on third parties to conduct clinical trials, and their unsatisfactory performance or failure to meet deadlines could delay regulatory approvals[290](index=290&type=chunk)[292](index=292&type=chunk) - Reliance on third-party manufacturers for KPI-012 production increases risks of insufficient quantities, unacceptable costs, and difficulties in complex biologic manufacturing processes[295](index=295&type=chunk)[296](index=296&type=chunk) - CIRM funding for KPI-012 imposes compliance obligations and potential royalty payments, and failure to meet milestones could result in loss of funding or default under the Loan Agreement[308](index=308&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk) [Risks Related to Our Intellectual Property](index=109&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends on obtaining and maintaining robust patent protection for its technology and product candidates, including KPI-012, which is exclusively licensed from Stanford University, facing risks of challenges to patent validity, inability to obtain patent term extensions, costly litigation, and potential loss of licensed rights - The company's success depends on obtaining and maintaining patent protection for its proprietary technology and product candidates, including KPI-012[321](index=321&type=chunk)[322](index=322&type=chunk) - Failure to obtain patent term extensions under the Hatch-Waxman Act or similar foreign legislation could shorten marketing exclusivity and harm the business[327](index=327&type=chunk)[328](index=328&type=chunk) - KPI-012 is protected by patent rights exclusively licensed from Stanford University, and loss of these rights due to termination or non-compliance would materially harm the company's competitive position[338](index=338&type=chunk)[340](index=340&type=chunk) [Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters](index=121&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20of%20Our%20Product%20Candidates%20and%20Other%20Legal%20Compliance%20Matters) Obtaining regulatory approval for product candidates like KPI-012 is expensive, time-consuming, and uncertain, with risks of delays, rejections, or significant post-marketing requirements, while non-compliance with stringent healthcare laws and trade policies could lead to severe penalties and adverse impacts on commercialization - Failure to obtain required regulatory approvals for product candidates will prevent commercialization and materially impair revenue generation[360](index=360&type=chunk)[361](index=361&type=chunk) - Approved products will be subject to significant post-marketing regulatory requirements, including ongoing surveillance, reporting, and compliance with cGMPs and GCPs[380](index=380&type=chunk) - Relationships with customers and third-party payors are subject to anti-kickback, fraud and abuse, false claims, and privacy laws, with potential for criminal sanctions, civil penalties, and reputational harm for non-compliance[405](index=405&type=chunk)[406](index=406&type=chunk) [Risks Related to Employee Matters](index=161&type=section&id=Risks%20Related%20to%20Employee%20Matters) The company's future success hinges on retaining key executives and attracting/motivating qualified personnel, especially those with biologics expertise, while a remote work environment and potential failures in internal computer systems or security breaches could disrupt operations, compromise data, and harm product development - The company's future success is highly dependent on retaining key executives and attracting, retaining, and motivating qualified scientific, clinical, manufacturing, and management personnel[475](index=475&type=chunk)[476](index=476&type=chunk) - Internal computer systems and those of vendors are vulnerable to cyber-attacks and security breaches, which could disrupt product development, lead to loss of proprietary information, and incur significant liabilities[477](index=477&type=chunk) - A partially or fully remote workplace could negatively impact business by affecting employee productivity, straining technology resources, and increasing operational risks[480](index=480&type=chunk) [Risks Related to Our Common Stock](index=164&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The company faces risks related to its common stock, including potential delisting from Nasdaq due to non-compliance with listing requirements, which would trigger a default under its Loan Agreement, and the stock price is volatile, with substantial sales by existing stockholders potentially causing significant declines - Failure to comply with Nasdaq's continued listing requirements, such as minimum bid price or stockholders' equity, could lead to delisting, negatively impacting stock liquidity and capital access[484](index=484&type=chunk)[485](index=485&type=chunk) - A delisting from Nasdaq would constitute an event of default under the company's Loan Agreement, adversely affecting its financial condition[492](index=492&type=chunk) - The price of the common stock is volatile and fluctuates substantially due to various factors, including clinical trial results, regulatory developments, and market conditions[497](index=497&type=chunk) [General Risk Factors](index=174&type=section&id=General%20Risk%20Factors) General risks include adverse impacts from changes in tax laws (e.g., IRA, OBBBA) and increased uncertainties and costs related to patent prosecution and enforcement due to patent reform legislation like the Leahy-Smith America Invents Act - Changes in income, sales, use, or other tax laws, such as the IRA and OBBBA, could adversely affect the company's business and financial condition[519](index=519&type=chunk) - The Leahy-Smith America Invents Act could increase uncertainties and costs in patent prosecution and enforcement, potentially leading to challenges to the company's patents[521](index=521&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=176&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any unregistered sales of equity securities or use proceeds from public offerings during the reporting period - No unregistered sales of common stock, preferred stock, warrants, stock options, restricted stock units, or restricted stock awards occurred during the period[522](index=522&type=chunk) - There was no use of proceeds from public offerings of common stock during the period[523](index=523&type=chunk) [Item 5. Other Information](index=176&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarterly period - None of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarterly period[525](index=525&type=chunk) [Item 6. Exhibits](index=178&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including retention agreements, certifications from the CEO and CFO, and XBRL-related documents - Exhibit 10.1 refers to the Form of Retention Agreement[526](index=526&type=chunk) - Exhibits 31.1 and 31.2 are certifications of the Interim Chief Executive Officer and Chief Financial Officer, respectively, pursuant to Section 302 of the Sarbanes-Oxley Act[526](index=526&type=chunk) - Exhibits 32.1 and 32.2 are certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, by the Interim CEO and CFO[526](index=526&type=chunk) [SIGNATURES](index=179&type=section&id=SIGNATURES) The report is duly signed on behalf of KALA BIO, Inc. by its Interim Chief Executive Officer, President and Chief Operating Officer, Todd Bazemore, and its Chief Financial Officer, Mary Reumuth, on August 8, 2025 - The report was signed by Todd Bazemore, Interim Chief Executive Officer, President and Chief Operating Officer, and Mary Reumuth, Chief Financial Officer, on August 8, 2025[530](index=530&type=chunk)