KALA - Earnings call transcript Q2 2019 | Kala Pharmaceuticals, Inc.

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Operator

Good morning, and welcome to Kala Pharmaceuticals Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, a Q&A session will be held.

As a reminder, this call is being recorded.

I would now like to turn the call over to Mary Reumuth, Chief Financial Officer, for Kala Pharmaceuticals. proceed. Please

Mary Reumuth

And for Operator. call. in you thank you, participating all today’s Thank

and Operating me Mark Kim Executive Officer; are the Brazzell, Bazemore, Chairman, Medical Joining company Chief Iwicki, from Officer. President, and Chief Todd Chief Officer;

Today's the can Investors found link the be website corporate being at call section in on webcast is Media and webcast live, & Kala the kalarx.com.

A non-GAAP accordance referring found Media section which & are During measures measures, of with Accepted most this GAAP financial Generally call, directly the release also Investors to measures in we non-GAAP today, reconciliation Accounting to website. the is be our Principles. will which can the financial our prepared in of issued be comparable in not press available

about our in that statements the XXXX. STRIDE commercial are and INVELTYS These expectations, On this August expectations associated launch the Kala's Act the clinical Litigation based resources. include call, trial; of ongoing X on future observations are meaning of of belief our the of statements of with cash we X, prospects within Private today, as and and statements sufficiency the Securities statements our management will of Reform U.S.; comments plans, XXXX. These will forward-looking regarding certain make

today filings the filed which will website. Form described be in on Report corporate Quarterly to events results SEC, closes in those the as risks read our release press the including may of may results carefully update available and after after described with differ XX-Q, events this well The actual should the the or Our no uncertainties from which that conference our Investors included the materially factors expectations. specific date Risk to actual reflect identify in SEC market be materially or cause undertakes forward-looking circumstances as our or the will with revise statements from call. obligation company any company's on and to Factors, today's statements differ

now to Kala's CEO, Iwicki. Mark will Mark? the I turn call over

Mark Iwicki

Thank you, morning, good Mary, and everyone.

quarter you morning. financial joining appreciate second this we review which our results We released us earlier today to

XXXX commercial for and year growth continues as both programs. our on to be we a execute strong R&D Kala,

describe is the well. will very further in believe launch INVELTYS Todd in the detail that going we call, As later

are in revenue, INVELTYS prescriptions launch. have second million reporting We approximately $X.X XX,XXX net written and quarter been of since

access Part for made Importantly, are lives just even significant over strides achieved uptake anticipated a by has AMPPLIFY provides. And we've platform unrestricted Medicare achieved important combination therapeutic decisions day months, safety, the by in XX% of covered lives Medicare our payers. launch market a gaining of technology INVELTYS. the dosing XX% that all INVELTYS in six reaffirms The access covered need Part confidence in access in market in INVELTYS market commercial approximately unrestricted efficacy, D with and D of in payers. and twice XXXX, for unrestricted approximately the INVELTYS has of and all most covered though In INVELTYS already

expected nicely. by Our the XX. our for X.XX% August We submission on are decision R&D await NDA efforts KPI-XXX advancing FDA's also

trials Recall our included STRIDE completed STRIDE our NDA X and that Phase and trial. X the clinical X clinical two Phase results from X

results key X on we ongoing and trial the as to and contributed STRIDE make specifically the X the designed may the observed progress to trials. X of continue results X compared differences address our have STRIDE Phase STRIDE to We good which that to factors from

from X We the XXXX. are by of targeting top-line data STRIDE end

call to over to the INVELTYS I'd Todd to discuss now the launch. turn like

Todd Bazemore

you, and good Thank morning everyone. Mark,

of in INVELTYS As Mark launch. the these early continue progress mentioned the we with made we pleased very to days be have

at able of goals. during the to goals pharmacy and gaining are clinical INVELTYS restrictions. physicians INVELTYS primary our launch stated, previously to are experience we these prescriptions of continue with that to both have achieve we without this patients As phase fill And ensure their

Approximately XX,XXX in over the of second the of previous XXX% an quarter. increase representing quarter INVELTYS filled were prescriptions

a As and of prescription months the achieved filled, X.X% new just share market week ending of six in July XX, branded prescriptions over have approximately has since XX,XXX INVELTYS launch. been

continues through approximately force of comprise XX% pull-through sales sales prescriptions X eye launched professionals, to INVELTYS of significant progress decile already targeted Our are surgical efforts And prescribed make targets. prescribing securing since through XX% The XX the INVELTYS to-date. have in all of XX care high approximately prescribers with the decile X majority protocol our who launch. towards

days market early noted Mark access securing of the made in in have coverage significant the launch. we progress

steroid As unrestricted D the achieved commercial that coverage. XX quarter approximately commercial, On call, for first our Part approximately and reported XX% is we patients. had coverage market ocular reminder, a million XX% Medicare we

are commercial to have of as achieved for approximately access We approximately pleased of all lives. patients that today, million XX% unrestricted XX report representing we

Part Medicare early D ongoing most contract XXXX. in coverage are with decisions negotiations anticipated

unrestricted already of Part covered in approximately lives payers. our XX% achieved has XX% Medicare Medicare D of all of progress Part represents by lives. significant quarter This INVELTYS access of As updates market D since today, first

program. see from has have eye the filled excellent INVELTYS Launch professionals. We usage received of continue care feedback been to-date, of the prescriptions to robust co-pay which utilizing our majority program co-pay

XXXX. and co-pay ability we strategy coverage. rest driving program XXXX patients' line expect the we our our INVELTYS, in the anticipate In commercial co-pay reliance significant with beyond experience Medicare use fill of as and with and to on expand program We the of through reduced prescriptions, of their physician

is performance. early the in with In days summary, although launch, be we to it INVELTYS our continue pleased still very

our on on on progress you we Our our commercial team updating and calls. future executing look to key drivers forward is

call to to the Mary financial now results. discuss over turn our I'll

Mary Reumuth

Todd. Thanks,

certain excludes and financial discussion quarterly results will These financial non-GAAP expense. financial depreciation, of our this I reference During compensation, measures non-cash interest measures. non-GAAP stock

measures, reconciliation website. our is press of to full on refer available to a which financial GAAP For release today's non-GAAP please our

of of second representing $X.X quarter million no of revenue growth sales compared in recorded reported the in the quarter-over-quarter We XXXX. we the of net XX%. XXXX in INVELTYS million from For to same quarter product of $X.X first quarter XXXX revenue

representing of XX% XXXX. quarter product the of the cost recorded gross Cost $X.X of for XXXX. in which We no of were a with margin million the is XXXX quarter first revenues consistent of same revenues approximately product second quarter of

facility late of associated organization, new $XX our SG&A second quarter to million is expenses associated XXXX $X.X personnel, corporate increase compared primarily the hiring XXXX. the and headquarters increase in were in cost under The for million XXXX. our lease commenced in with period building due for to same which an a our costs commercial with

$X.X of $XX.X in million the same for expenses were quarter the XXXX SG&A period Non-GAAP second XXXX. for compared million to

due by for prior $X.X same a million manufacturing approval, offset compared The quarter period were XXXX to second expenses the with to expenses of R&D XXXX. costs associated R&D costs $X.X clinical INVELTYS associated in and was partially were FDA in primarily in million X. in decrease development expensed an which research for to decrease STRIDE increase as the with

for second $X.X the $X.X in Non-GAAP to same XXXX of compared million period the R&D million was XXXX. for quarter expenses

Loss from in million operations XXXX. $XX.X for for same the million second quarter the $XX.X compared was period to

second the compared same $XX.X was Non-GAAP operating to for in loss the $XX.X period XXXX. for quarter XXXX million of million

in to net of quarter compared or share XXXX for the per $XX.X million share of loss same XXXX. loss $X.XX second was for $X.XX million a Net period per or $XX.X the

the quarter same loss $XX.X million of to was for million $XX.X net Non-GAAP XXXX. compared

loss calculate for used XXXX, June XX.X June million was number the The ended quarter XX, ended for weighted shares and average to quarter share of XX, net per XX.X the XXXX. million

us as $XXX.X as XXXX, revenue our $XXX of INVELTYS. third million position of December fund to to at million compared quarter was June will when through from additional of We cash expected enable anticipate least XXXX that cash with operations XX, cash runway XX, XXXX. Our the including existing

set today will X.XX% question-and-answer prepared for regarding answering be session. process our for now note and concludes NDA or our review Please the will as filing a for the next remarks week, we NDA or regulatory questions KPI-XXX status. PDUFA we not the That that date hold is

questions. ready are we to Operator, take

Operator

Thank Instructions]. [Operator you.

question coming the And from Chris JPMorgan. with line our of first Schott

Your open. line is

Unidentified Analyst

as of can kind walk [indiscernible] through the to Schott. addressed X the particularly Good get STRIDE confidence relative Phase as is prior in the study, for first what but the prepared Chris of you around this studies. your question we us closer readout to you you morning. Chris gives completion remarks, X This My on

year. DTC much. that's the increased campaign including this creating later efforts you variable example highly the you've completion of patients July For changes the eye beginning with effect Kala’s medical highlighted recent disease Thanks Novartis's overall suggesting on a symptoms. and to market the see with And criteria companies and increased Do as product opportunity? launch eye positive potential education inclusion/exclusion acquisition Xiidra important in in dry these a highlighted dry promotion very also second the activity

Mark Iwicki

morning, so for Good Chris, thanks questions. and your much

in STRIDE for we probability going And designed STRIDE of X as point patient well To we X that say stable like out that STRIDE in base important the that And on improving of we STRIDE we're between I'd success X getting change had STRIDE a and to the X with really exclusion significant some well changes that a STRIDE that talk of have criteria sure or in and factor what the we criteria we've trial, STRIDE first knowledge hoped have over really to the we differences X success you about of as trial. like feel that inclusion/exclusion that's yes, is made the period. the said, believe see and that we been kinds we've And X. inclusion working of is run-in making set the X. symptomatology patients concentrated a and

on your Moving to second question.

like relief product XX% with action just When this and a patients and there's albeit they dry products that couple it likely think eventually positive small much I eye minority the of for market useful first of hopefully of dry of paid disease suffer reaffirms what symptoms something ultimately rapid a from of of the used KPI-XXX signs X Novartis most a be as for is eye would not approved. the look a the you product product big of is. is Xiidra, manifestation that to XX% nearly episodic of onset acquisition STRIDE really patients as where severe our and those if how that's are with disease things more

So we sign feel for the a that's market. that great really

thing. a good happens in Of course education any is marketplace the really that

being to was product in eye DTC their dry the XX are educate a bump long when clear maybe way Xiidra to patients patients a as and was started launched there's treated disease. they many There There the million first million around as with by when them X patients eye million are pharmaceutical their to maybe patients XX even diagnosed treated X that product dry roughly and at a and that around caregiver. only actively disease suffer most fewer from than being go

bullish more very people going be there's just the have the the dry eye think market on opportunity where symptoms we we to temporary that So signs tremendous and episodic that after the a the for of much disease we're of of market a disease. manifestation the again especially continue of part relief

be Yes, Operator, the might it treat you're can or be the they eventually approved and if take way And when patient of more could really more they disease, we even first a for therapy whole flares our next to disease of maintenance to the to the through line the question. product, Chris. happen. could their moderate episodes then on severe from a types where welcome also think KPI-XXX mild course patient manifestation adding product use ideal we whole

Operator

with Jefferies. next Our coming Amin the question Biren from of line

line open. Your is

Biren Amin

QX question. my your guess I Hey revenue revenue, scripts with refer in quarter like taking Can this terms you guys, of per just it thanks million INVELTYS versus dropped what QX. seems versus explain so for I $X.X XX,XXX in QX? in happened script

Todd Bazemore

The question. revenues good in quarter. per not the Biren, Sure, scripts dropped

quarter-over-quarter. occurred were that saw trade and In working through are some demand. in first to launch fact the to second of now net in we initial where are inventory What quarter quarter the gross reflective our our doing in sales had slight gotten trade And improvement is levels we point a stocking normalized.

the second our and now trade through had those the in inventories initial we quarter. recall in worked quarter first launch So have

Biren Amin

the us scripts of for sampling? drug your XX,XXX then for guess I how And with those [indiscernible] are of many

Todd Bazemore

I'm sorry you could the repeat question.

Mark Iwicki

amount all Yes, program Biren, "samples of are or fair drug, our using those free whenever co-pay drug". script a scripts, it's look those you not at that's but patients are not free

Biren Amin

what percent are those using co-pay So Mark guess program? the I of

Todd Bazemore

co-pay say going are XX% of I'm just prescriptions utilizing little I'm the of getting to Yes, the north filled sorry, it's filled card.

Biren Amin

Got fully do that guess paying it. decline I that they become when to I And so paying scripts then expect you guess? scripts or

Todd Bazemore

Yes, it's a good question.

we'll elect we is in begin buy that less co-pay than that to in improvements continue in example a over can of buy a the ways. down contracts it that may gross to probably evolve for covered X commercial down that still continue an different but pay, it Remember prescription be from to a and scripts on co-pay expected themselves time maybe that to unrestricted time; less to We once from X if in of card down starting to buy have use to has less and buy impact for access Tier use getting can to a patient is a co-pay card co-pay in lot to net the example, a reliance. card a be our over XXXX prescription, Tier uncovered the fewer future. so down payers a also is biggest have couple but One a used less

Operator

line from question coming the Rajavelu Oppenheimer. Esther next from Our of

is line open. Your

Esther Rajavelu

Good X, can you complete on or I give an will think for is you that on questions. taking a STRIDE us enrollment Thank morning. when my wrap-up? you update couple have it do

Mark Iwicki

not on that. the We've made given patient end year. Yes. in when that this of may haven't get quarter announce from guidance last completed, the Esther. visit future done of any we narrowed is specific yet, guidance really the trial the our guidance to but very What XQ we've any kind We we last -- our about

Esther Rajavelu

But Got targeting it. XXX still you're patients? that

Mark Iwicki

We are correct.

changed trial. well of is well and we're that into and We trial haven't the enrollment going of the the course

Esther Rajavelu

eye you inflammation disease. with throughout there use or year? help see for would we aspect the understand associated Got specifically seasonality a dry for the it. it And Is expect to to inflammation can then specifically us

Todd Bazemore

There's -- certainly can flares talk a we but an will it's other winters of stimulate about a the season cold will the to environmental component deal allergy things, stimuli lot of it, tend environmental create involve allergy great as certainly it. dry

things eye getting some form learning more eye that the is dry increases time and about we're of One of screen more dry flare. likelihood of the or

So triggers pretty are there's lot a triggers seasonality there constant the lot throughout and a but these of be may of year. some

Esther Rajavelu

Got it.

Todd Bazemore

an in It periods the where you much the and won’t be drug in distinct fall. allergy spring see

Esther Rajavelu

And in INVELTYS cataract what types? percentage is it. versus last question, my of use surgery then Got other

Todd Bazemore

question, good it's Yes, Esther.

scripts we the say probably actually in of more Medicare. are more than cataract, So half of would now right majority is used half our than

XX% the at a are and a third which So are most of cataract scripts of Medicare our commercial scripts our if patients. we predominantly typically patients look about breakout a little north

Operator

Our Yi line next question is coming from the of Chen with H.C. Wainwright.

open. is line Your

Yi Chen

for the distributors. you taking a are question. my you order My do is Thank restocking question quarter? at current the levels And what in INVELTYS expect first significant

Todd Bazemore

we -- we normalized that is sell-out Yi, expect have our is what now reflective inventory just demand. of our we've said and levels that

quarter. that So occurred we've initial trade worked the load first through the in launch

Yi Chen

Okay. forward? And second question, going look we how the SG&A should at expenses

Mary Reumuth

Yes.

So SG&A in to QX was QX. fairly similar

guidance, specific say in force our QX. I of we've sales complement giving team hired full commercial without our and would So our

to trajectory the from expect continue should we So there.

Operator

[Operator Instructions].

showing call questions to Mr. the back in the At this further you. Iwicki, I'll no queue. turn time, I'm

Mark Iwicki

much. everyone us like this say very you to morning. for to I just joining you Thank thank And

And getting eye X.XX% hopefully we the and X for only be with will from our progress NDA everyone especially on INVELTYS to disease. of continue uptake near steroids of of update fastest of by as around steroid market market The trial hear the the that our the our we excited We making with really growing their STRIDE post-op the excitement share and also for about end to anything market brands the launch when today. dry response growth the but in for XXXX. and one KPI-XXX FDA specific end certainly not

this everyone to your morning. time updating for again soon. forward you look we And thank So

Operator

concludes Ladies participation. you and gentlemen, your Thank this conference. for today's

at You may disconnect lines your this time.

Kala Pharmaceuticals (KALA) 6 Aug 192019 Q2 Earnings call transcript