Kala Pharmaceuticals, Inc. (NASDAQ:KALA), a commercial-stage biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies for diseases of the eye, today announced that it has entered into a definitive agreement to sell its commercial portfolio and related intellectual property assets to Alcon Inc. This includes EYSUVIS, the first and only U.S. Food and Drug Administration (FDA) approved medicine for the short-term (up to two weeks) treatment of the signs and symptoms of dry eye disease, and INVELTYS, a twice-a-day corticosteroid for the treatment of post-operative inflammation and pain following ocular surgery.
“The sale of EYSUVIS and INVELTYS is an important step as we execute on our strategic plan and pursue our mission of delivering innovative therapies that can address significant unmet needs in ophthalmology,” said Mark Iwicki, Chief Executive Officer and Chairman of Kala. “Alcon is an ideal partner to expand the reach of our commercial assets. Alcon has a decades-long history of delivering market-leading vision care to patients around the world and benefits from robust franchises in dry eye disease and surgical care, making them deeply familiar with eye care professionals and the patients EYSUVIS and INVELTYS are intended to treat. We look forward to working with Alcon through this transition and, ultimately, to devoting our internal resources to developing innovative therapies, including KPI-012, to further transform the treatment of eye diseases.”
Kala plans to focus on developing KPI-012, a novel cell-free secretome therapy that has the potential to address a number of rare and severe ocular diseases. Subject to the submission and clearance of an investigational new drug application for KPI-012, Kala expects to initiate a Phase 2/3 clinical trial of KPI-012 for persistent corneal epithelial defect (PCED) in the fourth quarter of 2022 and plans to expand its development program for KPI-012 into additional front and back of the eye indications, with additional details forthcoming in the months ahead. Following the closing of the sale of its commercial assets, Kala expects to realize a substantial reduction in operating expenses, which together with the net proceeds from the upfront cash payment received from this transaction, will extend Kala’s operating cash runway into the second quarter of 2024, beyond the expected KPI-012 Phase 2/3 data readout.
Under the terms of the asset purchase agreement, Kala will receive an upfront payment of $60 million and will be eligible to receive commercial-based sales milestone payments. Kala anticipates the transaction will close in the third quarter of 2022, subject to certain conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.
Piper Sandler acted as the exclusive financial advisor, and Wilmer Cutler Pickering Hale and Dorr LLP served as legal counsel to Kala.
