Kala Pharmaceuticals (KALA) 11 Mar 192018 Q4 Earnings call transcript

Good day, and welcome to Kala Pharmaceuticals Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, a Q&A session will be held. And as a reminder, this call is being recorded. I would now like to turn the call over to Mary Reumuth, Chief Financial Officer for Kala Pharmaceuticals. proceed. Please

and for Operator, call. in you thank you, participating all today's Thank

on Todd Officer; me Mark Officer. the Kim Executive Officer; are the Today's Brazzell, Chief Chairman, Medical Joining webcast company webcast Chief be the call being site. available Iwicki, Web is also Web is Kala from live, recorded, Chief Hongming will found an and our Today's Chen, the recording and President, being Investors indicated press in can and Chief as corporate link Bazemore, Scientific Operating and Media on archived and by section site release. Officer; call be our

the of and clinical Principles. regarding expectations, be associated of on to as non-GAAP INVELTYS future statements this not with comparable expectations in prepared sufficiency our launch Securities of in plans, most the we Litigation of These directly will financial certain Act Accounting prospects include U.S., Investor site, X forward-looking statements that Kala's and commercial belief within the issued non-GAAP will the call, the accordance Reform about today. trial, measures year-end These of comments based XXXX. statements are today, the in reconciliation will press section financial ongoing we non-GAAP can statements referring Private STRIDE with are our our A our meaning During the resources. www.kalarx.com. of of observations management of cash and release in measures the are be These our measures. Web found in call, this Relations Accepted measures to which available On GAAP make Generally

events and will carefully in be actual report which the Commission, factors company's our before the differ read Web should corporate Exchange market uncertainties available limitation and as the press filings Risk actual site, company's annual from may the release SEC on which in materially the may identifies expectation. the with on and included as the cause filed well Our opens Securities described be XX-K, Factors Investors today's with our tomorrow, without results Form specific including will that time-sensitive risks conference is those as company statements to events Iwicki. or undertakes of in to or Mark that The of any described accurate after materially turn contains conference over CEO, call The of circumstances this now the today, call obligation content to XXXX. statement. no I call. the to Kala or update of information the Monday, revise this will date results only the call differ live March XX, from date forward-looking the Mark? reflect

Mary. Good you, financial for December corticosteroid inflammation XX, indicated afternoon for today. and we post-operative Kala. first approval August, for Thank surgery. quarter ocular our the following results pain XXXX. a and treatment only you thank the issued landmark the any Earlier and us year for everyone, FDA In for today, received was Kala of INVELTYS, year ended joining XXXX and twice-daily

net organization and few first INVELTYS, a and pleased the sales the feedback trials, will temporary account X the X KPI-XXX market December receiving completed for weeks accepted and Phase results top two INVELTYS for X.XX%. of our the progress volume are quarter progress call successful in XXXX. Todd of review in I quarter our in with the details X the our access. and X, made Based the The fourth August Operating prescription experienced NDA the XX, Kala's with continues our STRIDE we further over XXXX. payor We've also our progress later candidate from in with the Following $XXX.X completed by that the a will equity the physician of eye U.S. X trial, uptake line and disease, infrastructure we was XXXX, launch of the look NDA gaining been Kala's now launch. proceeds KPI-XXX INVELTYS provide Todd planned with forward Operating discuss for in we also product including the X signs and disease. relief financings the clinical of clinical Phase Officer, the Bazemore, from and anticipated ophthalmology an strengthened filed Officer, along Chief in data to dry of build-out symptoms target date STRIDE launched of FDA on-boarding to Enrollment in trial million. significant X.XX%, in Chief call. debt sheet this dry really fourth XXXX, resulted STRIDE made we in in our In PDUFA positive, balance of commercial as team. on given has the the eye aggregate to action was Bazemore, turn of highly STRIDE and January to for year, and of in specialty approval, we of

INVELTYS Mark, I'm of and everyone. afternoon you, the days Thank with launch. early the good pleased

seen a the have start. be launch good you from to prescription of data, many appears As off to

fill to been this believe phase clinicians ensure the pharmacy launch Early the INVELTYS, their restrictions. INVELTYS clinical product on from eye of Based Our is with early we positive. early experience feedback that INVELTYS's and that receptive profile. has are to professionals clinical received, patients gaining able without feedback prescriptions care are very during physicians goal are experience to at we

January, available are our with price per number our INVELTYS, a conducted of since January. Lotemax has which $XXX we this and launched inflammation. from impressed suspension, in its heard a including last the have bottle, National of We a they of compares top of the with early price has strong bottle. per results of efficacy that list to and week Launch list $XXX prescribers We INVELTYS Meeting in been

data. are This have Scripts growth prescriptions eight of Symphony first into to represents months growth showing two been of in an share of the INVELTYS rate just than weeks filled branded strong since XX% report to that been with already [indiscernible] a average weekly pleased launch. We according launch. more have just X.X%, X,XXX

that of hired been have on we experienced and very oversees majority of XX% samples have team XX X.X are we our experienced is The pharmacies, of offices going team who surgical team earlier this at through comprise focusing targets years ophthalmology them. sales a an product have available is representatives launch. to All to XX to working their efforts professionals, currently representatives, since filled. year, the [indiscernible] ensure insure diligently calls have management and As to all the addition prescription care INVELTYS with average eye over working high that sales access pull-through, five been with reps and prescriptions in help experience, noted who sales conversion protocol of our on the help prescribing

all a aware, you for As factor product critical uptake are access. market launch at payer is

progress the of early already launch. in have securing significant made days coverage in We

ocular the market reminder, XX% commercial a and D as Part Now, steroid approximately XX% Medicare is coverage.

On increase payers. access. several lives, for significant of would unrestricted approximately the as account believes one-third achieved several had initiate have unrestricted for for coverage wins, of These today, front, commercial covered approximately access also The INVELTYS unrestricted early a we plans coverage million has further total early additional will our of which have team INVELTYS QX, market XX of commercial by commercial wins in access. lives which and all

of for to able XXXX cycle. covered our coverage, submit in XXXX bids fourth Medicare for the we the As Medicare were quarter

as INVELTYS We those even It update health to since as Part that with plans. are through we bids, note important have bids approximately several filled those calls reimbursed prescriptions of We Medicare plans. launch progress. currently all to on working by Part been D working these through is large plan XX% future D you talks were

access their opt Medicare can patients through the use patients little can becoming Co-Pay In card to Card thereby as their program. the our and patients remember who for benefit, little $XX of addition, cash-pay will to prescription. for use to all prescription, Commercial have that and choose patients as use as pay their essentially the Medicare as INVELTYS pay of card immediate $XX out

have more a we than to would start. co-pay strong is utilized to X,XXX positive early still patients leading INVELTYS launch. $XX, co-pay context, in off our Medicare multiple For is there approximately level that fill brand I the summary, In It and preferred are typical successfully prescription. are say to-date, indicators their program

lot of experienced our our of eye team of very us, professionals execute an know have Officer, on ophthalmology I Medical the program. Brazzell Chief work for a over ahead dry I'm We on but to market competent call a have well confident drivers. Dr. our this will we continue turn that disease to update that now Kim key will and

Thank you, and everyone. afternoon good Todd,

safety X the X placebo with sign for and January pre-specified in conjunctival from at clinical As X.XX% results disease. day and KPI-XXX trials, X STRIDE that of STRIDE achieved eye evaluate we we Phase trials, of in of In a significance our hyperemia endpoint statistical announced XXXX XX. top reminder, both efficacy patients dry primary versus line two

X. the the with treatment symptom achieved trend at in addition, toward significance we In X primary endpoint XX of STRIDE ocular day pre-specified in statistical discomfort effect for STRIDE

announced an statistical on a both trials. is we key August the STRIDE had a be were of severity treatment pre-specified been effect action baseline which also and ocular a XX first X, X; dry endpoint initiated data secondary eye flares. effects treatment recommendation, date X.XX% in with and disease, we primary review observed target signs more we STRIDE XXXX. We STRIDE symptoms endpoint filed X.XX%. by expected approved, X, X, If treatment In also for XX, ocular a FDA STRIDE trial, discomfort for Phase of a endpoint. submission temporary NDA NDA of a trend from for also of X NDA the the Phase X significance The severe towards KPI-XXX In of Also accepted was to in both for XXXX, the additional that in KPI-XXX indicated X FDA's include day discomfort strong clinical PDUFA trial. with patients achieved December, October relief for pre-specified day the Positive based at in X. discomfort secondary pre-specified second would product an as with supported at severity dry STRIDE have of by

As X we that will in of differences believe STRIDE believe in the observed to identified the the trial, X have inclusion/exclusion and X those from to have accordingly Phase previously STRIDE X factors we made results of STRIDE that we is contributed increase criteria we quarter briefly disclosed, expect of discuss changes STRIDE trial. compared to key we turn the the rolling line top our Chief The fourth call will back success Reumuth, trial and we XXXX. now the in of Financial that financial track, will I results our results. Mary on the probability report to who X of Officer, to that

you, Thank Kim.

not will financial I providing we are INVELTYS, to highlights. provide financial guidance, pleased be our but We the key in early launch of am

cash our INVELTYS. December We Our revenue as to XX, was to XXXX additional fund $XXX.X anticipate enable of position when with from runway of cash existing through XX, XXXX. least that operations at million, us million as mid-XXXX will December including compared $XXX.X

net of for loss net share ended the a to refer was periods million, $X.XX to of weighted loss was loss in the the today's a shares XXXX loss Net same to or per quarterly used XXXX, the share loss of million XX, the December million for for per $X.XX share $XX.X our number period compared $XX.X per $X.XX full-year-ended compared net for or Please or or release period discussed. quarter per share net XXXX. of XXXX. Our in and press for $X.XX the average XX, annual calculation per $XX.X share the of same $XX.X December in million

million quarter compared fourth same the $XX.X for million XXXX. of non-GAAP net to our XXXX, the loss quarter For of $X.X was

million of XX, impact to for excludes interest GAAP For financial ended million Please XXXX, of stock-based depreciation, the loss of the $XX.X same reconciliation see $XX.X was period Non-GAAP fair a of net year non-cash compensation, XXXX. full value release the compared for expense, loss and net press measures. to December warrants. non-GAAP non-GAAP in change the the

INVELTYS compared paid the $XX with for to same expenses anticipation the and compared during of for million December in period by as fourth connection as to million quarter for of fees period as R&D External and the $X.X same XXXX. full-year in to year costs compensation of of PDUFA R&D STRIDE million X, XXXX, XXXX, was STRIDE XXXX, the R&D with ended were the in increased quarter the and anticipation X, $XX.X associated in fourth costs XXXX. associated STRIDE X.XX%. were in expense increase costs million $X.X Our in the for R&D expenses XXXX million ended well offset head count million in expenses December Stock-based our quarter XX, KPI-XXX X decreased to headcount fourth expenses primarily the The due for costs and INVELTYS the and XX, were Non-GAAP launch. launch. $X.X for as compared the NDA for with for were an X XXXX. well increase $X.X

For the period XXXX. compared ended $XX.X December expenses same in XX, R&D to full-year were non-GAAP the for million $XX.X XXXX, million

personnel, expenses quarter due costs our $XX.X XXXX million SG&A For million in an XXXX, compared were for year million of same advance SG&A new was headquarters. in XX, lease ended the for the increase the additional $XX.X million XXXX XX, quarter to were associated December fourth XXXX. of to in organization, incurred XXXX, commercial The compared period XX, due of costs the to costs December expenses January the external ended XXXX full-year INVELTYS in the and $XX.X hiring expenses period the $X.X SG&A the for ended XXXX. commencement building in in our compared facility December the to primarily for of with increase same to for launch corporate

was compared expense public year for same to increase $X.X ended XXXX. in XXXX, XXXX, the for the period to the compensation stock fourth operating the XXXX, resulted the with Non-GAAP items were XXXX, in and to in the compared just ended in cost period stock full-year XX, addition a expenses million in year, the compared XX, during associated as to with discussed, quarter result for in granted options same SG&A December of the a December period which quarter of $XX.X increasing expenses costs external XXXX. SG&A an associated for For company the same million a

non-GAAP the million ended For the for to SG&A $X.X same $XX.X compared in XX, period XXXX, December were expenses million XXXX. full-year

compared million same for loss operating $XX.X $XX.X full-year to XXXX. in period $XX.X of for the XXXX, to of XXXX. for for to loss same XXXX $XX.X ended quarter million Our fourth operating for the the $XX.X with XXXX, in the was compared was XXXX. XX, December loss Operating million ended fourth $X.X period year for million million quarter Non-GAAP the the December XX, million was compared

same to to turn the For XX, non-GAAP the ended XXXX. for million December period will $XX.X in compared full-year $XX XXXX, I operating was loss now the Mark. back million call

ready X.XX% of STRIDE Operator, very Thanks, the we're acceptance launch, XXXX difficulty] We [technical PDUFA launch for in prepared as of made well. for INVELTYS the year months further Mary. first exciting today. Kala, to progress of end with August, as with well and believe really on that INVELTYS, proceeding the be remarks the the will XXXX the INVELTYS pleased few approval progress take the our results KPI-XXX by tremendous That we've with another X.XX% We've of progress concludes with the filing and that in of questions. year. X X the year We're the already and NDA, of the made the trial. initiation in KPI-XXX

from [Operator Fargo. Wells Instructions] We David a have Maris question with

Your now line open. is

Good afternoon.

and Just that from you at the recent wanted to or is the that approval all, you. competitively, how you change Thank the does ask as about dynamic it view it? expected pretty same much Bausch,

aware and [PID] We're time approved changes been this some good of afternoon, second it David. to that don't the I Good to planning come of importantly year. dynamic. note, think was We've [ph] the it expecting And launch. potential dosing. quarter think Hi, product with I question. that in

match dosing. the not for label approved ocular still the for does still only So twice-a-day switches, delta steroid

that you mean Thank would you. price-wise any have and as sure burden, -- counter that, seem if have detail but pushback? you be you're be I'm just of can that me a there aware efficacy to is dose mean, that any a anything from I standpoint they or good pushback I competitive no-brainer, perceiving mean I payer can on? follow-up would very are hearing that you to a And lower you

at Nothing point, David. this

very you thank much. Great,

with Our next Wedbush. Liana question comes from Moussatos

Your line is now open.

question. taking Thank for you my

data eye, when any STRIDE yet? QX, in have So, think with will QX, August late QX, X idea dry you do early be you in for PDUFAs XXth an in

Hi, Liana, this is Kim.

in track. Our of the but on Recruitment guidance early QX. still looking towards in end terms recruitment. been of We're has it's is QX,

So as but that now we'll is monitor planned. everything go, right as we

Thank you.

[Operator Instructions] with Our Yi next question Chen comes from H.C. Wainwright.

Your line open. is now

for much of loss you of taking expect 'XX XXXX. do Bausch Lotemax? expects exclusivity from Thank coming my company second-half first-half Health question. on Lotemax you How have impact in to or generic of

question. Great

Lotemax launch We very access really that would to on launch expect improve been in access the expect most and We've you from Lotemax as good contracting of successful be itself. generic to imagine for INVELTYS coming for to impact over in time. continue early

rather expect INVELTYS, impact but And so, on Lotemax. would we impact on an not direct

A XX-K financial today? the will quick Thanks. question, be filed

will be it Yes, tomorrow. filed before market

Thank you.

no I'm time, over for call the any like remarks. showing back to this questions. At turn closing further I'd

call just thank would everyone we updating forward say for to you and to a questions, Kala, joining appreciate you, have and of the evening. great the really to support and I and following we look soon. and everyone your for like Thank Well,

the for Ladies and you participation does conference. today's gentlemen, This thank program. conclude in your

You a may disconnect. day. now great have Everyone