ARLINGTON, Mass. - KALA BIO, Inc. (NASDAQ:KALA), a biopharmaceutical company focused on eye diseases, has secured $10.75 million through a private placement of common and preferred stock to institutional investors. The sale includes 1,340,603 common shares at $6.44 each and 3,286 Series I preferred shares at $644.00 each. The transaction is expected to close around December 31, 2024, pending customary conditions. The company, currently valued at approximately $32 million, has seen its stock surge over 16% in the past week. According to InvestingPro analysis, KALA appears slightly undervalued based on its Fair Value assessment.
The company, which is developing treatments for rare and severe eye diseases, stated that the funds would extend its operational runway into the first quarter of 2026. The proceeds are earmarked for advancing the clinical development of their lead candidate, KPI-012, for persistent corneal epithelial defect (PCED), and for general corporate purposes. InvestingPro data reveals that while KALA maintains a healthy current ratio of 2.15 and holds more cash than debt, the company is rapidly burning through its cash reserves. InvestingPro subscribers can access 8 additional key financial insights about KALA's financial health and market position.
KALA BIO is currently enrolling patients in the Phase 2b CHASE trial for KPI-012 across over 40 clinical sites. CEO Mark Iwicki expressed gratitude for the investors' support during this critical phase, with over 80% of the CHASE trial enrollment complete. Topline data from the trial is anticipated in the second quarter of 2025, which could potentially lead to the first of two pivotal trials for a Biologics License Application (BLA) submission.
The securities sold in this private placement have not been registered under the Securities Act of 1933 and are subject to restrictions on resale. KALA BIO has committed to registering these securities for resale with the SEC within 30 days post-closure of the placement.
KALA BIO's investigational therapies are based on its proprietary mesenchymal stem cell secretome (MSC-S) platform. In addition to PCED, the company is exploring KPI-012's potential for treating Limbal Stem Cell Deficiency and conducting preclinical studies for retinal degenerative diseases. With an overall Financial Health score of "FAIR" from InvestingPro, the company shows promise despite current challenges in profitability. The stock has demonstrated significant resilience, often moving counter to broader market trends with a beta of -2.14.
This financial move comes as the company continues to push the boundaries of treatment for rare ocular diseases, with KPI-012 having received Orphan Drug and Fast Track designations from the U.S. FDA.
The details provided are based on a press release statement from KALA BIO, Inc.
In other recent news, Kala Pharmaceuticals (NASDAQ:KALA) reported a lower than expected net loss of $9.0 million for the third quarter, below the anticipated $10.0 million estimated by H.C. Wainwright. The firm has reaffirmed its Buy rating and $15.00 stock price target for Kala Pharmaceuticals. The Phase 2b CHASE trial of Kala's drug, KPI-012, for the treatment of persistent corneal epithelial defect (PCED) is progressing, with top-line results expected in the second quarter of 2025. To expedite the trial, Kala has opened five clinical trial sites in Argentina and is planning additional sites across Latin America.
KPI-012, a novel therapy derived from mesenchymal stem cell secretome, targets various causes of PCED, a condition currently lacking an FDA-approved drug that addresses all underlying etiologies. Kala is also exploring KPI-012's potential in treating limbal stem cell deficiency and other corneal diseases. Meanwhile, Kala's second drug candidate, KPI-014, is in the preclinical stage of development for inherited retinal degenerative diseases.
In other developments, the company reported the immediate resignation of board member Mark S. Blumenkranz, M.D., from both the board and its committees, but has not yet named a successor. Kala has also secured a private placement deal led by SR One and ADAR1 Capital Management to raise approximately $12.5 million, which will further the clinical development of KPI-012.
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