Kala Pharma Sees Unexpected Reaction to FDA Approval

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Kala Pharmaceuticals, Inc. (NASDAQ: KALA) shares dipped on Thursday after the U.S. Food and Drug Administration (FDA) announced that it had approved INVELTYS (loteprednol etabonate ophthalmic suspension) 1% for the treatment of post-operative inflammation and pain following ocular surgery.

In most cases an FDA approval would help boost the stock, but this seems to be a case of sell the news for Kala Pharma.

What separates INVELTYS from the rest is that it is a twice-daily (BID) ocular corticosteroid, while all other ocular steroids are only approved for four-times-a-day dosing. This more frequent dosing requirement can lead to issues for both doctors and patients.

Separately, Kala is continuing to advance KPI-121 0.25% for dry eye disease. The company has initiated a third Phase 3 clinical trial, STRIDE 3 (STRIDE – Short Term Relief In Dry Eye), evaluating KPI-121 0.25% for the temporary relief of the signs and symptoms of dry eye disease.

Kim Brazzell, Ph.D., Chief Medical Officer of Kala, commented on the approval:

The FDA approval of INVELTYS is a tremendous milestone for Kala. Approximately 8 million patients undergo ocular surgeries each year. The approval of INVELTYS offers patients and their eye care professionals the first and only BID ocular corticosteroid therapy that has been shown in clinical trials to be clinically effective while maintaining a proven safety profile, which may improve compliance and prove less burdensome for patients. We believe INVELTYS will be an important addition to eye care professionals’ treatment armamentarium.

Shares of Kala were last seen down about 4% at $12.98, with a consensus analyst price target of $30.80 and a 52-week range of $11.39 to $26.75.