The case for & against
Bull & Bear analysis
Bearish
Kala Pharmaceuticals, Inc. (NASDAQ: KALA) is a biopharmaceutical company focused on developing innovative treatments for serious eye diseases, particularly with its flagship product ISUVIS for dry eye disease and the pipeline asset KPI-012 targeting persistent corneal epithelial defects (PCED). The company is transitioning towards a model centered on research and development (R&D), utilizing its proprietary technology to advance novel therapies, positioning itself to capture significant market opportunities amidst rising demand and unmet medical needs within ophthalmology.
Bull says
- ↑Phase 2/3 trial for KPI-012 addresses PCED market estimated >$1B
- ↑Alcon divestiture provided $65M cash, funding operations into Q2 2024
- ↑Commercial payer coverage reached 92%, including CVS formulary addition
- ↑ISUVIS prescriptions rose 31% in Q2 2022, signaling growing adoption
- ↑Non-GAAP operating expenses cut >50% in 2022 to preserve cash
- ↑High liquidity ratio and solid quality factors underpin risk profile
Bear says
- ↓Net product revenues fell to $1.4M in Q1 2022 amid 70% Medicare rejections
- ↓Cash balance halved to $44.6M by June 2022, heightening cash-burn risk
- ↓KPI-012 trial setbacks could delay pivotal Phase III launch
- ↓Competition from Restasis, Oxervate and Zydra may pressure market share
- ↓High short interest signals investor skepticism and potential further declines
- ↓Weak profitability and negative earnings yield factors weigh on valuation
Earnings Call · Q2 2021 · Mgmt. Guidance
Updated 06-30-2026neutral
Transcript signals
Bull points
- If we're able to get added to the CVS Caremark formulary in the second half of this year, that would immediately jump by a serious commercial unrestricted access over 75%.
- And I'm confident we'll quickly have us at about 60% unrestricted commercial access. But if we can tip CVS Caremark in the quarter, like I said, that would accelerate us quickly to north of 75% access with commercial payers.
- We're out there educating mostly eye care professionals, and we do have some direct-to-patient efforts ongoing, and we expect later in the year to launch more broad digital direct to patient efforts that will help with, you know, further educating.
Bear points
- the overall dry eye market is flat. In fact, Zydra is down about a point and a half or two percentage points.
- Loss from operations for the second quarter of 2021 was 29 million, compared to 21.3 million for the same period in 2020.
- Net loss for the second quarter of 2021 was 36.5 million, or 57 cents per share, compared to a net loss of $23.3 million, or 42 cents per share, for the same period in 2020.
Read full transcript analysis ›