Kala Pharmaceuticals(KALA) - 2024 Q2 - Quarterly Report

Clinical Development - KPI-012 is currently in Phase 2b clinical development for the treatment of persistent corneal epithelial defects (PCED), with topline safety and efficacy data expected in Q1 2025[99]. - The CHASE trial has opened approximately 35 to 40 trial sites in the U.S. and is in the process of initiating sites in Latin America, pending regulatory approval[98]. - The company has ceased development of preclinical pipeline programs unrelated to its MSC-S platform to focus resources on KPI-012[100]. - The company anticipates substantial increases in research and development expenses as it advances the clinical development of KPI-012 and other product candidates[164]. Financial Performance - The company reported a net loss of $9.6 million and $21.4 million for the three and six months ended June 30, 2024, respectively, and an accumulated deficit of $650.8 million as of June 30, 2024[104]. - For the three months ended June 30, 2024, total operating expenses were $9.6 million, slightly up from $9.6 million in the same period of 2023[124]. - The net loss for the three months ended June 30, 2024, was $9.6 million, an improvement of $0.8 million compared to a net loss of $10.4 million in the same period of 2023[124]. - General and administrative expenses decreased to $4.3 million for the three months ended June 30, 2024, down from $5.0 million in the same period of 2023, a reduction of $0.6 million[125]. - For the six months ended June 30, 2024, research and development expenses totaled $11.7 million, an increase of $3.4 million from $8.3 million in the same period of 2023[133]. - Net cash used in operating activities for the six months ended June 30, 2024, was $20.1 million, compared to $17.3 million for the same period in 2023, reflecting an increase of $2.8 million[161]. Funding and Capital - The company has incurred significant losses from operations and negative cash flows, financing operations primarily through the sale of its Commercial Business to Alcon and various stock offerings[104]. - The company raised $75.0 million through the sale of common stock under an at-the-market offering, with 565,974 shares sold prior to the termination of the sales agreement on January 10, 2023[142]. - The company completed a private placement in December 2022, raising approximately $31.0 million through the issuance of common stock and Series E Preferred Stock[151]. - The company plans to finance cash needs through equity offerings, debt financings, and collaborations, which may dilute ownership interests[170]. - The company may need to raise additional capital in the future to advance its business, which could adversely affect its financial condition[172]. Grants and Milestones - The company received a $15.0 million grant from CIRM to support the KPI-012 program, with an initial disbursement of $5.9 million received on August 2, 2023[118]. - Grant income for the three months ended June 30, 2024, was $1.0 million related to the CIRM Award, with no grant income recognized in the same period of 2023[130]. - Grant income for the six months ended June 30, 2024, was $2.1 million related to the CIRM Award, while no grant income was recognized in the same period of 2023[138]. - A grant of $15 million was awarded to the company by CIRM on April 28, 2023, to support the KPI-012 program, with $5.9 million disbursed in August 2023 and an additional $3.2 million expected in August 2024[154]. - The company may be required to pay up to $105.0 million in contingent milestone payments to Combangio equityholders based on the achievement of specified milestones[114]. Cash and Debt Management - As of June 30, 2024, the company had $54.2 million in cash and cash equivalents, an increase from $50.9 million as of December 31, 2023[158]. - The company expects existing cash resources to fund operations into the fourth quarter of 2025, but does not anticipate these resources will be sufficient to complete the clinical development of KPI-012[166]. - The aggregate principal amount outstanding under the Loan Agreement bore interest at a floating rate equal to the greater of 30-day LIBOR or 0.11% plus 7.89% through June 30, 2023[174]. - The interest rate on the Loan Agreement is now a floating rate with a minimum of 8.00% effective July 1, 2023[174]. - The company’s cash equivalents as of June 30, 2024 consisted of money market accounts and U.S. treasury securities with maturities of less than 90 days[173].