Innovation In Ophthalmics Corporate Overview August 2020 NOT FOR PROMOTIONAL USE 2 Disclaimers and Notices This presentation 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® and its commercial progress, the Company's lead product candidate, EYSUVISTM, for the short-term relief of the signs and symptoms of dry eye disease, including expectations regarding t ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) The company presents unaudited financial statements showing a net loss of $45.3 million and a significant increase in assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $128,023 | $85,449 | | Total current assets | $197,024 | $105,484 | | Total assets | $245,510 | $154,323 | | Total liabilities | $116,567 | $124,631 | | Total stockholders' equity | $128,943 | $29,692 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Account | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Product revenues, net | $833 | $1,904 | | Total costs and expenses | $22,113 | $43,309 | | Loss from operations | $(21,280) | $(41,405) | | Net loss | $(23,312) | $(45,267) | | Net loss per share | $(0.42) | $(0.94) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Account | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(39,134) | $(51,596) | | Net cash used in investing activities | $(57,450) | $(943) | | Net cash provided by financing activities | $139,160 | $19 | [Nature of Business and Liquidity](index=9&type=section&id=1.%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) The biopharmaceutical company faces significant losses and COVID-19 impacts but believes cash is sufficient for one year - The company's lead product candidate, EYSUVIS™, has a Prescription Drug User Fee Act (PDUFA) goal date of **October 30, 2020**, for its NDA review by the FDA[19](index=19&type=chunk) - As of June 30, 2020, the company had an accumulated deficit of **$340.7 million**, having incurred significant losses since inception[22](index=22&type=chunk) - Management believes that existing cash, cash equivalents, and short-term investments as of June 30, 2020, will be **sufficient to fund planned operating expenses for at least the next twelve months**[23](index=23&type=chunk)[24](index=24&type=chunk) - The **COVID-19 pandemic has adversely affected the market for INVELTYS** due to moratoria on elective ocular surgeries, resulting in a significant reduction in demand[25](index=25&type=chunk) [Revenue & Accounts Receivable, Net](index=16&type=section&id=5.%20REVENUE%20%26%20ACCOUNTS%20RECEIVABLE%2C%20NET) The company recognizes revenue from INVELTYS sales upon delivery, with net sales reflecting various deductions and reserves - Revenue from product sales is recognized at the point the customer obtains control of the product, which occurs upon delivery[45](index=45&type=chunk) Activity in Product Revenue Provisions and Allowances (in thousands) | Category | Balance at Dec 31, 2019 | Provision for H1 2020 Sales | Payments/Credits in H1 2020 | Balance at June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Trade Discounts, Allowances and Chargebacks | $1,783 | $1,060 | $(2,450) | $398 | | Product Returns | $180 | $0 | $(1) | $64 | | Rebates and Incentives | $10,044 | $6,770 | $(11,103) | $5,570 | [Debt](index=23&type=section&id=9.%20DEBT) The company holds a $75.0 million term loan at a fixed rate, secured by company assets and requiring a minimum cash balance - On October 1, 2018, the company entered into the Athyrium Credit Facility and borrowed the full **$75.0 million principal amount** of the Term Loan A[65](index=65&type=chunk) - The loan bears a fixed interest rate of **9.875% per annum**, with principal payments starting on the fourth anniversary of the loan (October 2022)[66](index=66&type=chunk) Carrying Value of Debt (in thousands) | Component | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Principal loan balance | $75,000 | $75,000 | | Unamortized debt discount and issuance cost | $(3,559) | $(3,999) | | Cumulative accretion of exit fee | $256 | $183 | | **Long-term debt, net** | **$71,697** | **$71,184** | [Equity Financings](index=26&type=section&id=11.%20EQUITY%20FINANCINGS) The company raised over $137 million in net proceeds from equity offerings in H1 2020 and established new financing facilities - In Q1 2020, the company raised net proceeds of **$12.5 million** by issuing 2,352,671 shares through its at-the-market (ATM) offering[77](index=77&type=chunk) - In March and April 2020, the company sold 16,979,371 shares in an underwritten offering, resulting in total net proceeds of **$125.4 million**[78](index=78&type=chunk)[80](index=80&type=chunk) - In May 2020, the company filed a new **$350.0 million shelf registration statement** and entered into a new amended and restated sales agreement for up to **$75.0 million** of common stock under an ATM offering[81](index=81&type=chunk)[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses financial performance, highlighting COVID-19's impact on revenue and improved liquidity from recent capital raises - The company's primary focus is on the commercialization of INVELTYS and the development and potential launch of EYSUVIS, which has a PDUFA goal date of **October 30, 2020**[111](index=111&type=chunk)[115](index=115&type=chunk) - The **COVID-19 pandemic has adversely impacted INVELTYS sales** by reducing elective ocular surgeries and has restricted sales force activities, leading to lower-than-expected revenue[124](index=124&type=chunk)[125](index=125&type=chunk)[129](index=129&type=chunk) - As of June 30, 2020, the company had **$128.0 million in cash and cash equivalents** and **$56.5 million in short-term investments**, sufficient to fund operations into at least Q2 2022[8](index=8&type=chunk)[183](index=183&type=chunk)[222](index=222&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) This section details how decreased product revenue from COVID-19 was offset by lower SG&A and R&D operating expenses - The decrease in product revenue was primarily driven by a reduction in total units sold, attributed to the **decline in elective surgeries resulting from COVID-19 restrictions**[145](index=145&type=chunk)[154](index=154&type=chunk) - The decrease in R&D expenses was mainly due to a **$1.9 million reduction in external spending** on the STRIDE 3 clinical trial for EYSUVIS, which concluded in March 2020[150](index=150&type=chunk) Comparison of Results for the Three Months Ended June 30 (in thousands) | Account | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Product revenues, net | $833 | $2,057 | $(1,224) | | Selling, general and administrative | $15,301 | $17,007 | $(1,706) | | Research and development | $6,053 | $7,108 | $(1,055) | | Net loss | $(23,312) | $(23,825) | $513 | Comparison of Results for the Six Months Ended June 30 (in thousands) | Account | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Product revenues, net | $1,904 | $3,443 | $(1,539) | | Selling, general and administrative | $30,709 | $35,243 | $(4,534) | | Research and development | $11,487 | $14,067 | $(2,580) | | Net loss | $(45,267) | $(49,213) | $3,946 | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company raised $137.9 million from stock offerings in H1 2020, ensuring sufficient liquidity into at least Q2 2022 - In H1 2020, the company raised **$125.4 million from an underwritten offering** and **$12.6 million from an ATM offering**, for total net proceeds of $139.2 million from financing activities[167](index=167&type=chunk)[170](index=170&type=chunk)[179](index=179&type=chunk) - Management estimates that existing cash, cash equivalents, and short-term investments of **$184.6 million** as of June 30, 2020, will fund operations into at least the second quarter of 2022[183](index=183&type=chunk)[222](index=222&type=chunk) - **Net cash used in operating activities decreased to $39.1 million** in H1 2020 from $51.6 million in H1 2019, reflecting lower operating expenses[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk is low, with investments in short-term government securities and fixed-rate debt - The company's cash, cash equivalents, and short-term investments of **$184.6 million** are held in short-term U.S. Government securities, with low sensitivity to a 10% change in interest rates[196](index=196&type=chunk) - The **$75.0 million outstanding debt** under the Athyrium Credit Facility has a fixed interest rate of 9.875%, posing no risk from interest rate fluctuations[197](index=197&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes during the quarter - Based on an evaluation as of June 30, 2020, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective** at the reasonable assurance level[198](index=198&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, such controls[199](index=199&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings.) The company reports that it is not currently subject to any material legal proceedings - The company is **not currently subject to any material legal proceedings**[200](index=200&type=chunk) [Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of losses, product dependency, COVID-19 impacts, and IP reliance - The company has a history of significant losses (**$340.7M accumulated deficit** as of June 30, 2020) and expects to incur further losses, requiring substantial additional funding[203](index=203&type=chunk)[218](index=218&type=chunk) - The business is **highly dependent on the commercial success of INVELTYS** and obtaining marketing approval for its lead product candidate, EYSUVIS[238](index=238&type=chunk) - The **COVID-19 pandemic has adversely impacted operations** and the market for INVELTYS due to reduced elective surgeries and may continue to adversely affect the business[259](index=259&type=chunk)[260](index=260&type=chunk) - The company **relies on third-party manufacturers** like Catalent for commercial supply, which increases risks related to production issues, regulatory compliance, and supply chain disruptions[294](index=294&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - A substantial portion of the company's patent portfolio, including for INVELTYS and EYSUVIS, is **in-licensed from The Johns Hopkins University (JHU)**, making the company dependent on this agreement[348](index=348&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=150&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered inducement stock options to new employees in accordance with Nasdaq listing rules - On April 15, 2020, the company granted stock options to purchase **8,000 shares of common stock** to two new employees as an inducement grant[459](index=459&type=chunk) - These options were granted outside of the company's 2017 Equity Incentive Plan, in accordance with **Nasdaq Listing Rule 5635(c)(4)**[459](index=459&type=chunk) [Exhibits](index=152&type=section&id=Item%206.%20Exhibits) This section lists key filed exhibits, including sales and license agreements, and required CEO/CFO certifications - Key exhibits filed include the Amended and Restated Sales Agreement with Jefferies LLC and the Fifth Amendment to the Exclusive License Agreement with The Johns Hopkins University[464](index=464&type=chunk) - The filing also includes **CEO and CFO certifications** pursuant to Sarbanes-Oxley Act Sections 302 and 906[464](index=464&type=chunk)

Kala Pharmaceuticals, Inc. (NASDAQ:KALA) Q1 2020 Earnings Conference Call May 7, 2020 8:00 AM ET Company Participants Niranjan Kameswaran - Senior Vice President, Strategy Mary Reumuth - Chief Financial Officer Mark Iwicki - Chairman, President and Chief Executive Officer Kim Brazzell - Chief Medical Officer Todd Bazemore - Chief Operating Officer Conference Call Participants Chris Neyor - JP Morgan Liana Moussatos - Wedbush Securities Biren Amin - Jefferies LLC Yi Chen - H.C. Wainwright & Co. Tazeen Ahmad ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or oth ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or other ju ...

Kala Pharmaceuticals, Inc. (NASDAQ:KALA) Q4 2019 Earnings Conference Call February 12, 2020 8:00 AM ET Company Participants Niranjan Kameswaran - Senior Vice President, Strategy Mary Reumuth - Chief Financial Officer Mark Iwicki - Chairman, President & Chief Executive Officer Kim Brazzell - Chief Medical Officer Todd Bazemore - Chief Operating Officer Conference Call Participants Liana Moussatos - Wedbush Securities Chris Neyor - J.P. Morgan Esther Rajavelu - Oppenheimer & Co. Biren Amin - Jefferies LLC Yi ...

Corporate Highlights & Financial Status - As of December 31, 2019, Kala had $85.4 million in cash [2] - Kala expects existing cash resources, along with projected INVELTYS revenue, to fund operations at least through 1Q2021 [2] INVELTYS Performance & Market - INVELTYS was approved by the FDA in August 2018 and launched in the US in January 2019 [3] - In 2019, INVELTYS generated over 127,000 total prescriptions (TRxs) and achieved an 8.6% branded new prescription (NRx) market share [3] - INVELTYS has approximately 75% commercial coverage and 23% Medicare Part D coverage [3, 24] - The US ocular surgery market is estimated at approximately 8.6 million procedures in 2019 and is projected to grow at a CAGR of 3.5% [16, 17] EYSUVIS Development & Market Potential - STRIDE 3 Phase 3 trial for EYSUVIS is expected to be fully enrolled with topline data expected in 1Q2020 [2, 50, 52] - Approximately 80-90% of dry eye disease (DED) patients experience flares [29, 39] - The addressable US market opportunity for DED flares is estimated to be over $8 billion [39] - Approximately 3% of steroid prescriptions are for dry eye, representing approximately 255,000 prescriptions [38] AMPPLIFY Technology - AMPPLIFY technology increases Loteprednol Etabonate (LE) penetration to corneal and aqueous humor by more than 3x [5, 7]

Corporate Highlights - Kala is well capitalized with cash of $976 million as of September 30, 2019[2] - The company expects existing cash resources, together with projected INVELTYS revenue, to fund operations through the next 18 months[2] INVELTYS (for post-surgical inflammation and pain) - INVELTYS was launched in the U S in January 2019[2,9] - The Wholesale Acquisition Cost (WAC) price of INVELTYS is $245 per prescription[9] - Eye care professionals report prescribing steroids in greater than 90% of cataract, glaucoma and refractive surgeries[17] - In 2018, there were approximately 82 million ocular surgery procedures in the U S, with a projected Compound Annual Growth Rate (CAGR) of 41%[20,59] - Branded products account for approximately 25% of prescriptions and approximately 60% of gross sales in the ocular surgery market, which is estimated to be valued at approximately $17 billion[20] EYSUVIS (for Dry Eye Disease) - Approximately 80-90% of all Dry Eye Disease (DED) patients suffer from flares[29] - Approximately 82% of patients on artificial tears suffer from flares[29] - Approximately 17 million people in the U S are diagnosed with DED[37] - Only 3% of steroid prescriptions are for Dry Eye, representing approximately 255,000 prescriptions[40,41] - The addressable U S market for DED flares is estimated to be greater than $8 billion[42]

Kala Pharmaceuticals, Inc. (NASDAQ:KALA) Q3 2019 Earnings Conference Call November 7, 2019 8:00 AM ET Company Participants Niranjan Kameswaran - Vice President, Strategy Mary Reumuth - Chief Financial Officer Mark Iwicki - Chairman, President & Chief Executive Officer Kim Brazzell - Chief Medical Officer Todd Bazemore - Chief Operating Officer Conference Call Participants Chris Neyor - JPMorgan Kambiz Yazdi - Wedbush Securities Faizzan Ahmad - H.C. Wainwright Operator Good morning and welcome to Kala Pharma ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38150 KALA PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) Delaware 27-0604595 (State or ...