Kala Bio Stock Sinks On CEO Exit, But Retail Feels It’s An Overreaction

Shares of Kala Bio Inc. tumbled over 35% on Wednesday, on track for their worst single-day decline ever, after the company announced the resignation of CEO Mark Iwicki.

President Todd Bazemore has been named interim CEO, while Iwicki will remain as chair of the board. 

Iwicki, who has led Kala for nearly a decade, oversaw multiple phases of drug development.

Despite the steep selloff, retail traders on Stocktwits believe the market reaction is excessive, as evidenced by the 'extremely bullish' sentiment score. 

One user argued that Iwicki's departure "is the best thing possible for this company" and could signal a potential sale of the company after Kala's upcoming pipeline update.

Kala is set to report mid-stage trial data in the second quarter for KPI-012, its experimental treatment for persistent corneal epithelial defects, a condition that can lead to vision loss. 

The company is also exploring KPI-012 for Limbal Stem Cell Deficiency and other rare corneal diseases, while its MSC-S platform is in preclinical studies for retinal degenerative conditions like Retinitis Pigmentosa and Stargardt Disease.

At the end of 2024, Kala raised approximately $10.8 million through a private placement of common shares and Series I convertible preferred stock with institutional investors.

The company is expected to report fourth-quarter earnings in March. Wall Street projects an adjusted loss per share of $2.28, down from $3.62 a year ago, on no revenue.

Kala shares are down just 2.2% over the past year.

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