Kala Bio Stock Just Plunged 89% Today – Here’s What Happened

KALA BIO (KALA) announced on Monday that its KPI-012 failed in a mid-stage clinical trial evaluating it as a treatment for persistent corneal epithelial defect.

A persistent corneal epithelial defect (PCED) is a corneal injury that fails to heal within the typical timeframe of two weeks, persisting for weeks or even months despite standard treatment. Kala’s study to evaluate the safety and efficacy of two doses of KPI-012 ophthalmic solution did not meet the primary goal of complete healing of PCED at week 8, the company said. It also noted that the secondary goals in the study did not achieve statistical significance, and there was no meaningful difference between the KPI-012 treatment arm and the placebo arm in the trial.

The company subsequently decided to cease clinical development of KPI-012 and stated that it is evaluating its strategic options. The firm noted that it intends to preserve cash, including by laying off some of its workforce and implementing other cost-saving measures.

Kim Brazzell, Chief Medical Officer of Kala Bio, said that the company is “disappointed” to see the new study results.

“KPI-012 continued to be well-tolerated and demonstrated a favorable safety profile but did not demonstrate the efficacy results that would warrant advancing the program for treatment of front-of-the-eye diseases,” he added.

Shares of the company slipped 89% at the time of writing. On Stocktwits, retail sentiment around KALA stock rose to ‘extremely bullish’ from ‘neutral’ territory over the past 24 hours, while message volume rose to ‘extremely high’ from ‘high’ levels.

Following the company’s announcement, LifeSci Capital downgraded Kala Pharmaceuticals to ‘Market Perform’ from ‘Outperform’ and removed the firm's price target on the stock.

Mizuho analyst Graig Suvannavejh, meanwhile, expressed disappointment that the company did not share any data details or host a call to discuss the study results, as per TheFly.  

KALA stock is down by 69% this year and by about 62% over the past 12 months. 

Read also: Dogwood Therapeutics Stock Soars Pre-Market On Securing License For Cancer-Related Pain Management Drug

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