KALA - Earnings call transcript Q3 2021 | Kala Pharmaceuticals, Inc.

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Operator

Good morning, and welcome to Kala Pharmaceuticals Conference Call to review its Third Quarter Financial Results and the Acquisition of Combangio. Please note that the slide presentation that was designed to accompany this conference call is available on Kala's website, kalarx.com, as well as through the webcast player. At this time all participants are in a listen-only mode.

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

As a reminder, this call is being recorded. to Investor call for Relations like Steier, to Kala now Director, Executive and would turn over the Jill Pharmaceuticals. I Corporate Communications proceed. Please

Jill Steier

you, and announcing a our in quarter corneal for in renamed be Combangio financial have cell-free a we defect. you clinical with development and recent along KPI-XXX, and fleet announcing third persistent two call, call. business our reviewing are and highlights; of issued one Earlier CMB-XXX, today, will other currently Thank participating we which available Investors secretome the for releases: at website press results on novel Kala's operator, the www.kalarx.com. thank epithelial today's we asset today's releases, Both all the therapy slides of section on acquisition

the Officer; with our we Officer. Reumuth, Brazzell, our Then by Mark begin for questions. and Executive Bazemore, will Todd and the will Operating Officer; open remarks call our Officer; Iwicki, Chief prepared Chief Mary Chief Kim call President up Chairman, Financial We Chief Medical

prospects most call, of in statements sufficiency During prepared financial expectations and of comparable which EYSUVIS financial Litigation of the of the non-GAAP measures Act commercialization benefits These INVELTYS; be of the principles. to as to Securities are reconciliation statements referring not non-GAAP measures the will of our forward-looking accepted and development potential GAAP this of Private market with of are of A XXXX. generally statements acquisition within and accordance we KPI-XXX will call. our the management also of accounting based meaning directly this our resources. statements cash and Combangio; are issued program conference on Reform our These the include and press regarding beliefs and is the this measures in forward-looking available other with on the associated today observations be and which our we make that release future certain plans Kala's expectations, can will found call, On website. comments about

actual filed or risks may differ later except to Kala's cause differ from and materially factors Form our XX-Q the that with The in carefully reflect materially on in uncertainties to company law. to as today from the revise SEC forward-looking any and described Iwicki. make be I expectations. press call update as statements SEC. this today's well circumstances by we actual release results the the other as will our specific required to or now The results the that statements, should obligation quarterly Investors website. be and conference those after or call events the factors report with Mark on read filings company's Our turn may over described forward-looking occur which available undertakes risk no events including will XX-Q Form identify will CEO, our

Mark Iwicki

Good and third review results to us financial morning everyone thank and our today business quarter you recent joining highlights. for XXXX

are address developing the secretome to product surface portfolio acquisition, front to we that Current vision-threatening a Our there suboptimal, PCED, defects, for for need is morbidity a that advancing acquisition that and treatments a diseases developed other believe or provide KPI-XXX treat associated KPI-XXX, PCED diseases. persistent impaired limited in very initially asset the healing. and of serious a clinical-stage rare affect and disease diseases new ocular involve development and PCED, Today, clear With ocular sequelae. and damage biotherapy is for debilitating can are epithelial we diseases. we Phase trial are eye. a corneal impaired with wound with mission II/III we care severe XQ a often better the PCED Ib are innovative address pipeline Combangio, promising, novel clinical-stage data in and a in a clinical the potentially are to corneal Kala commence therapies has stage The year. excited that of Phase our for to company patients this next being clinical with and to expand professionals medicines been and KPI-XXX at eye that goal similar planning healing of clinical with PCED back the patients very underlies toward

are in have we evaluating indications, more additional We goal evaluation IND. or these of clinical also the once with initiating the filed one of

we asset expect next year. PK a efficacy to earlier-stage initial adds preclinical rTKI including KPI-XXX our late-stage pipeline and clinical data to Importantly, of early programs, have that

capabilities potentially are beginning with For well in KPI-XXX development into to market globally. leverage PCED KPI-XXX, significant we orphan to through suited commercial and additional populations potential and the clinical expanding in advance and ophthalmic, U.S. deep our patient

joining are excited Emeritus very ophthalmologist, our CEO Chief As Mark President at will Ophthalmology part Professor Combangio, new as welcome as be we Stanford, the of well the Officer; of in Darius and as an Business vitreoretinal and who Board. Kharabi, to acquisition, of surgeon Department Blumenkranz, Kala's

as to time-consuming, to Historically, prescription therapies. for To for steroids disease changing over been which and of artificial first with like the our end, first-line on and the commercial paradigm for the severe risk Before been tears order with investment pressure with in and for and mild only long-term on for is discussions eye performance. prescription I'd disease, care therapy patients flares, initial EYSUVIS proactive EYSUVIS therapy treatment education. ramp availability With between expected. dry on-label have therapy to that steroid requires the eye positioning comment limited sought used focused the disease a FDA-approved, drive last-line, time. to quarter off-label success. chronic we educate process a key, as people or significant professionals EYSUVIS launch though over-the-counter with as call a the EYSUVIS, third on dry Kim, moderate are gap turning of effectively than eye The to has of our We fill potential our strategy intraocular slower elevation

number information launch, our we stage launch of the patient, and targeted of at we direct-to-consumer second by elaborate our including new which campaign, as patients directly over proactively discuss the strategies empower EYSUVIS them prescriptions to and aimed their a into aim Todd with now move We confident to on the we first plan digital program, time. doctors. shortly, believe and implementing and providing of will revenues potential will necessary we this grow are With long-term flares with that As resources to the in are year-end.

anticipate Todd in months of encouraging ahead. even will and rapid delivers is review We and feedback signs EYSUVIS eye as receive continue more physicians to Patients turn And action and become coverage of additional effectively will to positive therapy, continue also that EYSUVIS' of the we Kim? the about eye positive who to the of appreciate professionals now from care it the comfort we payer rapid administration. report greater acquisition EYSUVIS relief in onset clear experiences that Kim on believe obtain symptoms dry Combangio to over detail. I we call and disease.

Kim Brazzell

of touching ultimately, move a Phase KPI-XXX, often exciting and, presentation. cutting-edge designation. as mesenchymal clinical-stage program application in impaired and the corneal to represents without the a disease has eight to of This strategy development and potential regulatory harvested we number impaired within cell-free, presentation. Thank Being a healing an benefits the healing, cell pipeline epithelial marrow-derived Starting with be biomolecules PCED the initial plans Kala to needs. cell. Combangio numerous that significant science novel this of clinical in team them want we in of This therapeutic weeks for a market. with for excellent of by their program which PCED. high dosing. with approach administration BID with trial, towards is comprised This I which PCED. eight are cells, secretome the and develop by in additional intact six I great PCED involving It's applying therapy most so patients for to the full also untoward Combangio seven only human our you, such is a is evaluating of therapy treated of KPI-XXX, initiation on further indications diseases into to novel to of to our ocular effects. the significant and Mark. cell-free have and look to the acknowledge have underlying in a also anticipate drug need orphan indication cases, We process results of There's of KPI from component secretomes, KPI-XXX persistent current development an the going deck, therapies We will in of the novel Slide many significant etiology the therapy refer have of addition these would an unmet stem the an PCED, for to of them presentation. information points this a essential the cells the KPI-XXX surface the the to corneal secreted for bone overview of accomplishment really excellent that demonstrated diseases. one driven encouraging of and for they has the team proof-of-concept unexpected the in and to to for such beyond produce later management will fit I first asset this great the of drug orphan in forward as our deal technology R&D and a many patients, and I'm patients please be for designation of provides granted approach for treatment an for is ophthalmology. there's can in are expertise now healing the need disease. rare PCED to that in correct believe for our two which utilization considered improvement discuss complete provide marrow is an working Ib KPI-XXX approval important results of the X. to so a for slide this to defect. secretome unmet of FDA utilized to that It's broad significant progress are to bone welcome potential work the treatment made this with

PCED non-healing that PCED, plan is a blinding Moving significant is need persistent there safe conventional treatments. corneal treatments. defined serious potentially disease, effective to and as X. or to we a the Slide is and first and to wound a defect refractory indication for is unmet pursue,

U.S. which analysis, our on is neurotrophic The only in the U.S., EU in underlying is product corneal XXX,XXX space In vision infections, estimated year approximately morbidity, PCED an loss. ultimately XXX,XXX untreated, can scarring defects incidence disease with rare a to per fact, is these is keratitis. indicated keratitis and PCED lead in Japan etiology Based perforation, prescription neurotrophic if approved significant the and Oxervate, combined. patients and of to one-third our for factors, about all persistent be has and healing including of multiple growth neurotrophic not in etiologies. for and across activity only factor effective whose on anticipate Oxervate been underlying etiology human growth nerve hand, component knowledge, Oxervate's PCED thus cases. shown other is etiologies, disease. of the other against patients KPI-XXX, benefited and broader multiple PCED is wound contains has primarily active we those biomolecules, To including neurotrophic factors keratitis. other including neurotrophic the

healing at Turning Slide an the multiple corneal result Normal that process. is imbalance most multifactorial Impaired is a process to pathways. biologic of highly often involves regulated the healing numerous stages X. of

normal impaired to its these state. imbalances return the a multifactorial the addressing such, As to correct process therapeutic believed healing approach and require is to healing

a we surface As feel other shown action PCED to as X, ocular bioactive number diseases. healing the KPI-XXX address of delivers part impaired important and serious mechanism of with on is which of multifactorial Slide its associated molecules

matrix growth As shown slide, proteins, factors. inhibitors, and neurotrophic on this include factors protease these

ocular illustrated activity benefit This trial X, has active not healing, and who broad no As Combangio. of were trial healing. more and on PCED Slide wound showed clinical diseases on The detail models impaired portion safety supports demonstrated daily well conducted involved week. of PCED XX be issues for the X which in the provides twice Slide Phase to corneal Ib or they other established with involving subjects healing did trial overall several tolerated preclinical by KPI-XXX three subjects of corneal in safety the have with dosed disease observed. cohort an significant initial KPI-XXX potential one

the KPI-XXX nine initiated PCED Following for active the weeks. from patients weeks for and cohort. One component one two for of early for withdrawn three cohort, four in cohort, weeks, patient trial efficacy evaluable was KPI-XXX, weeks. patients unrelated eight the dosed evaluation topical patients with leaving was with in up treated being for one reasons to with eight safety the was In of efficacy trial three this daily patient to was week, dosed particularly one for PCED the twice the cohort severe patient eight

during had eight see slide, was defects, broader the many from cohort patients Top trial. portion Slide to corneal and had can shows healing X PCE patients within difficult efficacy by four shown are eight the study. one and patients of results improvement weeks. and completely duration, tolerated you of treatment-related healing staining complete the observed of within with rapid healing that of of portion so patients the these the two complete in efficacy this from healed heal. this that of treatment photographs. these the patients As to many well significant in of with other large these results corneal in the two typically showed be safety at right-hand which the of to also in seven, Four no demonstrates KPI-XXX issues week forcing as six was the measured did the line eight sustained

As after healing I lesion eight patients four eight of healing week said of completely treatment. one eight healed the of the from treatment, throughout only earlier, and achieved of which in patients four nineteen of period, All six six the the weeks with after weeks. complete PCED of patients healed remain ranged follow-up the cohort

that of complete have in One patients PCED, achieve not an two not complete the of did healing but the did defect. their resolution improvement did show

rare of before for of PCED variety the that that pretreatment could significant results underlying mechanism of broad patient syndrome, KPI-XXX keratitis patients range patients other These healing. Of from days. duration ranging etiologies to for a is and in a XX from PCED, ranged treatment infectious days the against neurotrophic disease had six KPI-XXX. broad The action that to The and healed of PCED show be evidence a also of this suggest note, the Stevens-Johnson to had of existed XXX a effective etiologies, had to XXX healed duration durations.

stages and in Todd two of reported the I on over favorable, are being Slide is their the on in provides but dose possible. in next thoughts last then first baseline of to turn finalized initial improvement KPI-XXX file resulted least shown the an had held pain, quarter XX design would PCED of were of Slide of trial vehicle-controlled presentation FDA. a pivotal FDA Phase the of pre-IND third Phase a XXX% plan of conduct evaluating important in six in plan to dosing. year the the initiate to next As pivotal to overview patients significant meeting efficacy our broad having two could required We be serve a still clinical trial the trial II/III regimens of KPI-XXX. trial complete the to and one submission support patients patients and at week of Combangio after to results various XX, to All II/III endpoints the the will week productive the trial If that randomized design, of of potential clinical III weeks support agency commercial this PCED. of The two trials, that symptom current actually etiologies. pain trials indication. Phase which after it pain only an with IND trial KPI-XXX. as There of year with resolution the an now with treatment an of a one patient BLA the guidance on and of we thirds of a at discuss a the will of common population clinical reduction the three development. treatment, for agreed is indication at also

Todd Bazemore

Thank you, Kim.

Slide on Moving to XX.

eye a model orphan blow-fill-seal in pivotal products disease formulation approved. has vials. with by four-week experience the manufacturing market of with PCED KPI-XXX of product for PCED rights KPI-XXX is spoken trials of targeted and and and as organization ophthalmic prevention KPI-XXX and allow as in for And the and period importantly, safety filling by need. treat grow and which care favorable of group neurotrophic rare orphan burden granted is cases. potential We PCED. third only full and and orphan incidence provide The we approximately treatment specialist asset. global the is for and There been That are an targets $XXX,XXX to of are clinical Japan of the KOLs U.S., of cornea in manufacturing designation approved outcomes. is etiology that ready treat to twice which annually, has substance product which dosing an we combined. unmet leading place the efficacy the worldwide speed estimated retreatment PCED have patients resolution disease, with specialists to is a currently to drug agreement PCED all when FDA-approved tolerability. rare healing, a efficient etiology only indication with treated regardless of There annual to treatment projected broad excited have for is all treatment There us commercial patients one about FDA already is a and all require a of the keratitis, KPI-XXX to critical no XXX,XXX with product day contract per of an disease and product. deep about a patients one into potential treatment are with deliver for and that the will substantial products in often for continue scaled loss broad PCED underlying large all an U.S. XXX,XXX small with an patients PCED with is tell it the is to and drug estimated priced pain primarily label a vision at highly an the a unit EU a if drug dose,

Turning indications as ocular host the the mechanism wound Stevens-Johnson healing address to to therapy corneal multifactorial orphan Slide XX, to process. corneal novel other a cycle versus and of opportunities KPI-XXX action secretome regenerative a serve in product strong of with as cell-free a syndrome. ophthalmic burns, disease and ulcers, with potential the complexities graft has This pipeline is a life approach such

taken can incremental together, As to additional see, plans our And address a you additional KPI-XXX. these successful, efforts indications. our are if expand opportunity substantial for create market these conditions development to

targeting are We initiation of least these of additional a XXXX. second the of in at proof-of-concept study human half indications one in

healing addition, outside In present other eye opportunities of Continuing may out-licensing Slide that to opportunities. there XX. wound the are on potential

the have we expected KPI-XXX. outlined for regulatory Here, exclusivity patent and

biologic least for potential XX has a that for be introduced market agent, years at to that As of biosimilars prevent eligible KPI-XXX exclusivity would period. being for the

potential KPI-XXX, for is the KPI-XXX patent XX the addition, would In as as beyond XX-year seven-year such patent to has with PCED, possible also a extension as which to in patent for There exclusivity conditions U.S. ocular of term run and the orphan significant years concurrently ending it's term biologic PCED XXXX. drug a used treatment well in XXXX portfolio of exclusivity. receive the related with

And to excited moving can forward. candidates strategy aligned multiple XX now space. opportunity. serious which potential in vision so this of pipeline and with updates we you why are that EYSUVIS to product On significant maximize the on the transaction and additional In regulatory very ophthalmic potential disease to designations the progress launch. I'll plan ophthalmic of on update KPI-XXX We KPI-XXX. have continue about advancing forward cause could regulatory we to review pursue Combangio to are time program accelerate look this help summarizes need treat future with the our enthusiastic providing acquisition corporate lines Slide development the to our This would and is rare side, development unmet diseases transition with a the conclusion, of progress loss. we to a that a address

XXXX, months, address with headwinds XX% prescriptions, which leading a I've outlining today the over I our and third my patient quarterly Health the believe our quarter While begin of key quarter. an to XX,XXX several we've performance increase EYSUVIS spent encountered momentum our want the to recap of over the we indicators EYSUVIS. demonstrate strategy last hub representing In of second most and Symphony positive reported several comments of for

prescriptions. week-ended November including since EYSUVIS More been professionals approximately for unique X,XXX the launch. EYSUVIS care have prescribed the have XXXX, over January, X, of the filled prescriptions refill in As launch since XX,XXX eye than X,XXX

prescriptions and indicating prescriptions report the EYSUVIS for to patients dry encouraged third the quarter increase dry goal preferred of entirely of the quarter. continued first-line for over an that for X,XXX two are XX% third therapy, all thirds approximately to towards in were prescription EYSUVIS second progress use quarter, in written becoming therapy We eye flares. of of our first-line the the prescription were treatment eye new Retail

June weekly over currently compared summer and of the nine addition, XX% during weekly volume In last months volumes script July. to higher weeks script average the is

some dry increasing with While are XX% prescription flares, recent EYSUVIS driven growth to demand. seasonality the growth market four-week measure would recent can continued eye most new-to-therapy over be with is this four-week in newly number initiating also growth in of a patients prescriptions, therapy the the grow which that of dry we by period. share of of indicate seeing eye continues in expected

EYSUVIS also most the share over XX% the saw four-week of an achieving We for of recent for all-time in increase market. new an four-week high NRxs, prescription period

to lack EYSUVIS figures, coverage. physician these rest while that all Importantly, pharmacy, are EYSUVIS. about of estimate getting at filled the of due with currently only We totality being not for the insurance prescriptions reflect of promising, rejected the demand do half patient

on coverage doctors will we we in And get most volumes. that believe comfortable as their prescriptions covering payer increase in brands anticipate will formulary. higher many of more resulting filled, more health prescribing ECP that turn, EYSUVIS grows, become these are script As

a all of professionals. we study, the and highest options conducted grows. Finally, prescribing quantitative the from scored ECPs. study therapies Part by significant we grow research And feedback in to of D XXX OTC care The remain coverage to market eye market EYSUVIS plans dry July to both prescription disadvantage ECPs an encouraged coverage both anticipate eye compared within XXXX, and as In our very commercial the improvement we coming will I are only discuss payer hard And months. coverage intent payer with was access and reported Medicare shortly, increase working coverage. and report as

we Now a understand highlighting some that these by been while to are be with Today, strategy also moments has challenges. encouraged during the met and the launch we acknowledge challenges we data, spend faced outline I want them. the few primary to to launch what adjust our

meaningful first level market a a specifically access allow coverage patients’ filled manner, will timely acquiring and in by to the written covered insurance. the market access be majority acquiring that prescriptions The challenge of of is enough

course, the not issue facing all Kala. to unique this Of is launched an products. biggest It newly is arguably challenge

EYSUVIS with within launch, two of still are ESI Part large achieving with formulary quarters coverage first the While Optum and to successful plans. D Medicare we additional grow coverage working in and commercial

plans we've As Part stated, collectively of health dry represent all Medicare XX% commercial eye prescriptions. previously about D and

Express with commercial quarter, third an made plans Scripts us covered approximately within both contracts order in and through the In plans to XX% PBMs. additional meaningful with Specifically, OptumRx, coverage. bringing lives the under Express X.X their EYSUVIS through existing health to we working Optum formulary these and progress, of number are pull contract million custom that at Scripts new clients adding the to we grow of add the health commercial, to

ahead, prescription leading as which adding Prime XX% access regard of focused line we to we formulary expand secured CVS/Caremark Collectively, D Medicare, our total Medicare Scripts plans large in than Looking all With at commercial on Part preferred the total to would and to in Express commercial with EYSUVIS our coverage these and to greater are such access other XX%, wins lives. have bringing UnitedHealthcare. be eye therapies. dry Therapeutics, would

Humana, We with SilverScript, are collectively Part represent and ESI; coverage plans under begin Part XXXX. Part than the XX% covered Medicare largest as anticipate United in all remaining on lives. AARP focused D D more D along of such Medicare We growing which to Medicare now additional

are EYSUVIS, to continue continuing As coverage help we assistance program to our for cost access for out-of-pocket work we also market commercial defray to co-pay patients. increase

challenge has been pandemic. The COVID-XX second the

newly market to unique that their in-person the be visit doctors believe ophthalmology been EYSUVIS. system, easily access to challenge Relatedly, delayed. know, you where resulting intervention. one educate the restrictions particularly office visits the diagnosed a can When professionals as the havoc the who has the the pandemic such more less both to not we newly As representatives sales limiting number to visited prescription specialties for looking where patient Again, also Kala, it eye in-person are on products from patients the doctors, seek pandemic regards most in non-emergent them to may diseases wreaked treatment but has have it on be means is at and impacted specifically, COVID compelled launched fewer for patients decision have therapeutic dry medical health care patients of volume. limited the with of this ability by of and their

we becoming made difficult are the pandemic, of launched indefinitely, particularly majority to has expect conditions. it this vast dynamics returning the to products commonplace pre-pandemic during vaccines country do as persist not across While for and these are the communities now

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the prescribed stated we eye we patients that dry only were of diagnosed before, estimate As X% steroids past. about off-label in

flares. which and they eye prescription We patients moderate patients as XX% care ECPs discussions professionals are option paradigm flares. preferred to we Therefore, eye working suffer position that dry of more disease patients we identify treat report from while with to approximately to need flares, EYSUVIS their only are of drive for reverse patients XX% patients experience and eye about What help to their is mild to believe proactive dry know the flares. that between experiencing actually that first-line

ECPs episodic as-needed a patient treated our of shifting educate frame. fundamentally manifest professionals treating we treatment As the and a a basis on we to Since be altering worsening that with to maintenance on much to prescribing they this of about condition time way the think begin care and population, EYSUVIS launch, therapy of this an actions taken we educate are benefits paradigm. symptoms eye can shorter have for number from disease a chronic the

we this As them. our of our major both to flares and the to increase year to in eye dry help representatives force participated dry the all key frequency from sales in And prescribers. drive in reach interactions and education need the we've with increased order around XX congresses medical eye you treat to know, earlier order XXX

And are that's know We this experience to Now we patients an receptive are eye starting also that is from that direct-to-consumer patient education. to suffering therapies audience focus eye believe advertising. flares. we many from disease on dry other the dry of

or manage and care online, We like to many target also tools therapies on of websites, that top know their identify disease. our health relying better resources are searching to patients social media

the increase help details of forward social between flares We by around We launching be drive campaign media year's will look will this experiencing EYSUVIS treatment as help dry underway. discussions to flares encourage and to direct-to-consumer therapy. and short-term awareness will believe more patients we such, to which as of digital in-office and only a availability those eye ECPs eye additional dry rapid-acting, media incorporate education, As and FDA-approved, gets digital our campaign end providing education the option. proactive targeted patients

Turning now INVELTYS. to

XX months, the in surgical over said surgical surgery impacted pandemic procedures slow and volume the recovering has has the a ocular have we past market, fewer negatively resulting rate. As been at

In addition, quarter, and moved during coverage. predominantly from formulary the steroid was removed surgical CVS in category INVELTYS the ophthalmic third a generic to

believe quarter we continues of sales, While prescriptions there prescriptions pandemic compared to XXXX, Health place Symphony mitigate INVELTYS cover in this approximately access revenues programs present, XX,XXX of the that by will uncertainties patients. in second to of XXXX. CVS reported quarter those In the prescriptions time. over XX,XXX Despite grow affected and third the impact help and INVELTYS of the to have were INVELTYS we the

However, due increased elective ocular the we the potential potential uncertainties and these impact coverage. disruptions market quantify or unable specific project future access procedures revenues continued the on to gaining to remain on timing of

first-line recent As for for we indicators by disease. slowed call. previously over for we XXX% which preferred stated, with are our position treatment we eye while coupled INVELTYS INVELTYS eye position the a recognize the dry second with believe is efforts We for dry commercial therapy EYSUVIS of new targets leading key that synergistic completely we INVELTYS growth targets EYSUVIS focus growth also prescription these sales initiatives the In undertaking, and as are encouraged primary the the EYSUVIS. ultimately in as closing, and are prescription accelerate the are trends, summer of months, EYSUVIS prescription should short-term is

I'd further call on now is review updates working to against to execute future team Mary results. financial over to like providing look calls. you hard the to Our strategy, I our to commercial forward turn our and

Mary Reumuth

Thanks, Todd.

of During quarterly from I financial review this performance. our certain results, discussion highlights will our

refer For today's our please press release, to our which website. available financial results, full on is

over quarter net respect also $X.XX $X.X of distributors increased. quarter. the which have million, sales to and from up over of reported the million that XX% previous third to consistent our XX% by second the EYSUVIS, we reported sales this quarter Symphony increased of shipments which million represents we of XX% recognize the is over quarter net prescriptions the revenue with by is the of of For With $X.XX XXXX. and Broken of down million; $X.X product, on million which a second represents which INVELTYS, quarter $X.X revenue decrease increase product from revenues of second a XXXX, made in EYSUVIS,

Our revenues coming from business partially by assistance net a significant were percentage patient programs. our of impacted

consistent within $X $XX.X a primarily market incurred to We expect to programs were of for on reliant which during as quarter, spending SG&A quarter for from of driven we decrease operating be assistance expenses these With period. gain lower as during certain million due EYSUVIS with sold to decreased the the INVELTYS compared in XXXX same in by is million the expenses to net second by also less first year. quarter second of coverage. third total in units the to decrease the the and the decrease distributors patient revenue additional the prescriptions respect access launch-related was to Total INVELTYS, half

cost-containment does cost as and well acquisition we and XXXX. cash to reflect June of cost until the now, pleased together decided our team our certain for of upfront of Combangio. I because equivalents anticipated environment equivalents fund remote been X.X EYSUVIS with believe compared efficiency the million respect not primarily to us of as office. $XXX.X been and so cash with cash containment Our mentioned as to and operations the cash our KPI-XXX, of measures, quarter a XX, as we the resources, the $X will the XXXX. development in measures September of downsize and to XXXX, XX, we second over have was million revenue to just the have acquire With have September as of $XXX.X Cash years XX Including we from work corporate million INVELTYS cost enable as

will terms XXXX. We for per headquarters and company December October subject our million into XX, this XXXX, certain that terminating termination savings a on to be approximately from year conditions. have agreement effective lease be entered $X through The will

force In current addition, we have our size. decided to at maintain its sales

our I discussed operator our increase KPI-XXX, and implementing and cash the not the today. prepared our programs, earlier. we call will EYSUVIS, overall As burn for now concludes development That XXXX. expenses we operating DTC for for to will the which pass progressing includes continue our over digital questions. look to remarks on reducing campaign Todd above XXXX, ahead that focus including anticipate targeted to This

Operator

Argyrides Our Instructions] with first Wedbush. question from Andreas comes [Operator

Andreas Argyrides

Good morning and few. to thanks for to taking keep them I'll our questions. try a

on help of sense can little make a you're Maybe bit that us about the you Just some providing. EYSUVIS. metrics quickly

relatively refill you they Also, you where price you up, stand. around kind discounts and ophthalmologists are Can then provide prescribed optometrists. provide scripts scripts a if scripts. between And to there? of comments if some breakdown, Maybe total could between they're have, and comments flat. saying but You're still seemed quite compared low

Todd Bazemore

unpack Todd. I jump try Sure. This miss to There's to back it. a If hesitate so anything, on. please I'll there, is don't lot

prescription for of so any growth prior trends, nice been well, XX% So growth month seen about in referenced four-week more as of that we prior growing in we've and four-week the quarter-over-quarter eye over terms dry period recent what EYSUVIS faster products. than month, versus or scripts. recently, is other growth there growth XX% in even growth of when new-to-brand think overall in most the as And or performance, really of weeks weeks most about with But four the acceleration and four the recent I that recent prescriptions look at XX% NRxs. has over time,

here fall So the again, some we're leading into as optimistic. getting that have indicators us

about asked You in bit scripts a the opposite growth revenue.

drivers continue access impact always And question nets things program about is is and are And increased the the positive One through our was programs to are assistance gross we utilization that assistance becoming patient split that coverage think another in a to heard our on optometrists an as have specialty. time. impact will over more I of we more the see patient continue our of that we saw to have on we fewer I the that was the as that to quarter. item there final prescriptions gross prescriptions net. in prescriptions. that primary obviously, EYSUVIS filled stated between that an of evolve has within And What and market grow

with coming moderate I XX% which And patients is therapy of more XX% all think seeing first-line to oftentimes as nearly that that about not first positioning by prescriptions surprising mild split to disease. those ophthalmologists, an know optometrist. treated and as are and us optometrists been product the from almost at is we from we've for patients

think – don't the... in know there I I was questions any if other

Andreas Argyrides

on more X just you're the want time. question then a don't Combangio for have I'll seeing? Yes, acquisition. more on comment to and take what But EYSUVIS I refills,

Todd Bazemore

up their into and the first which launch Yes. get of first have treated market market. Really Refills were those prescriptions XX% that And QX closer fall have of now are through starting patients of see some we're being that up was flares, as the is season. into within those as the time to worked quarter, first and revenue needing their to part that initial back see good winter the the head EYSUVIS, bottle quarter, come in also to the that refills compared driver starting the to that got question. we're they XX% into QX, in refills flare obviously, of back to coming

by data those encouraged we're well. So as

Andreas Argyrides

Okay. one a Combangio the quick acquisition. of then just And on kind

acquisition or on few KPI-XXX And quite other So are are a developing makes Phase the in versus, internal the broadly II. let's there internal say, of speaking, What Thanks. that more more pipeline the compelling? pushing candidates ahead timing this pipeline.

Kim Brazzell

neurotrophic to Kim about represents only There's that indication. in lead keratitis. for a in less in of other said of PCED. development one Brazzell. I'll that that's one-third There only keratitis competition. is on we're broad neurotrophic etiologies products This severe product for development for before, There's aware that PCED few actually comment the And are as we applications disease.

for see, there's broad we development indication. only clinical product a in one development, as that's So in PCED

Andreas Argyrides

the back in queue. I'll start Okay, thanks.

Operator

Our next with question Neyor Christopher comes JPMorgan. from

Christopher Neyor

questions for for questions. taking Thanks the Great. the or

So first on is one coverage. payer

and commercial XX%. So you guys on received lives some at which stand currently at you about Medicare covered coverage initial about stands XX%

on for XXXX Part discuss in So first, just the coverage color think looking you any how when additional is that scripts? D for about then the provide benefit beyond? can coverage and added strategy the higher lines And UnitedHealth? CVS you coverage, into level second, and we could there maybe be can will just And time when Medicare we and and expectations see adding

Todd Bazemore

Hey, Chris questions. its Todd. happy answer I'm your to

plans. large as D both plans we're remaining Medicare active the Part the commercial discussions with as in So well

bids, received we good from really sight I very feedback a line those feel And with what we've I were of payers. should bids as We we've are, or submitted expectations We conversations competitive into those consistent have the into resubmitted say. expect most early actually plans Medicare to like the and occurring of be XXXX. we feel recently all to like get just got D Part

the continue said grow we – coverage to feel our And I and we've for both got of throughout first continue but to within the bit D a would like coverage commercial XXXX. maybe expect coverage so throughout Part commercial year what Medicare Part we've to that to for Medicare is a coverage the chance payer the half evolve D become year. to little quicker, expect

Christopher Neyor

That's were helpful. scripts QX being on call related of roughly the think of rejected. question; And that you kind XX% I mentioned

that over So where stand And level you evolving coming that I see the does do how guess now? right quarters?

Todd Bazemore

Yes.

I about XX% think were said rejected. we talking when quarter, we last

we're coverage. right? the professionals of facing the scripts. But lack are that those range the is really Eye think because issue strong. know of arguably now. of filled in care writing lots insurance and We It's of brand, through demand pharmacy sort biggest still with are I right majority scripts of not getting the

having we it we broad add their But exists out prescriptions, on have is a scripts resulting can a effect. only a of the will ultimately, are EYSUVIS base help to close to that assistance We current most rolled of believe most prescribing bit. two-pronged but some so patient that right in, – perceive a market broader we that Not the within have will in demand our here programs increase coverage of and still more gap plans the these that additional patients. We that the formulary physicians will will health adjustments are quarter. important access the do in encourage thing EYSUVIS covering filling believe turn result in that across will to think

Christopher Neyor

are just treatment-naive continues? what who already progress about seeing you're eye a and and and bit maybe patients the a launch how those And split talk as taking Great. therapy dry between

Todd Bazemore

more taking maybe flares. position as about be first-line that, induction initiating stated eye or patients That's the prior to advertising accelerate in the But bring again the EYSUVIS's previously. have We drive treatment-naive, to been before, the biggest they a some direct-to-consumer we're patients more this this have practice one-third that therapy that we to get from close do can And is a by foothold to as been about therapies more using running that's sure. and for treat name. therapy launching particular, patients do therapy. by two-thirds dry dry of report suffering encouraged a up flares of number on to flares. into care eye gap can chronic in that thing their there's between professionals' to And mild-to-moderate those help opportunity think also number of Yes, the that that end at we flares think and medication of suffer is targeted office EYSUVIS so perception EYSUVIS really managed tears here significant only the of And artificial real on in and prescribed on digital coverage not why we're year physician's care the to their to patients by the proactively ask eye patients we EYSUVIS. chronic

Christopher Neyor

the cash one the on And Thanks. saw you runway. then last

about I you XQ comments about the framework just for your you relative addressed in cash then thinking you in OpEx specifically, that current any think think does And include XXXX. revenue confidence help that already but levels, the upfront provided runway And should the think it through the we how some helpful levels? with commentary. growth? just commentary, to could on preliminary I Maybe

Mary Reumuth

Thanks, Yes. Chris.

expect we that we So That launch We that expect we'll talked that good into our OpEx we part well. levels, the QX effective. that fund development as as does our as over of expense to revenue. programs so And XXXX. a be some XXXX. we feel far increase include campaign XXXX that that runway do And cash in our we we about following OpEx operating not able uptick as of XXXX expect be will will in DTC that about, said

Christopher Neyor

one. And Great. then last

your acquisition So Combangio we the development OpEx for incremental of about the do how think as part program?

Mary Reumuth

Yes.

So that's runway. into our baked cash

some implemented containment XXXX that Combangio for expenses asset we measures to talked about. that of about the we talked things the think that moving which, in the the one effective to remember will lease termination, We cover we've incur I important expect when is cost forward.

Christopher Neyor

Perfect. Thanks for taking the questions.

Mary Reumuth

you. Sure. Thank

Operator

from with next comes François Brisebois The Oppenheimer. question

François Brisebois

the Thanks question. for Hi.

Okay.

net kind track you surprising the can – actually them reported. seems you is used that as quarter. last progressing? more big down So – is from of that assistance fact idea is? us, kind of we why rebates. more. It at making why the discounts to talked revenues What people kind that? net patient using of or scripts Any But you it them was with It seems like assistant Was the that about more in was as program as it again is terms the of that the the coverage the the revenues if patient sense went it, remind it wasn't like program look

Todd Bazemore

was as questions. down XX%, increase more EYSUVIS EYSUVIS. volume, to that scripts getting revenue for well Hey, quarter-over-quarter, INVELTYS in up volume down, the up INVELTYS. revenues – But up in volume removal And a was while we the CVS program. driven increase was almost in did through see attributable Frank. There filled clarify, Good revenue overall revenues and for to were correlation as were from by was our revenues to not was largely the up volume direct XX%. co-pay XX% I XX% mean, as formulary just

a rejections But those of Frank, pick we gross are to think co-pay QX on through impact more happening that rejected those has on you up few the assistance program. about of obviously, talked prescriptions about filled I to now our what's think we're just part call, is getting nets. as there, starting that

revenues along into it same with improvement level in prescriptions. the So does of one-to-one direct saw we correlate a improvement not in

François Brisebois

Right.

Okay.

or no your guys' So from rebates end? new big discounts

Todd Bazemore

No.

François Brisebois

share treatment. you the you how if orphan? you of side only do be one-third of that the what the – is about PCED, – one-third that on it's potential times pricing? But implication look size, on Okay. maybe the does you for they're interested is correlate if guess, it's Or – OXERVATE it – do it And talked Or price is both X the in? this, pricing would that is I here $XXX,XXX per market, that's

Todd Bazemore

in at there's $XXX,XXX developing what Incidence an KPI-XXX That is keep if only to good questions, and got would I PCED market successfully estimated early of we've OXERVATE, about too is about really just been neurotrophic disease with XXX,XXX I in I having only the pricing. keratitis a foremost, would All a is really expect think say I year what rather. the get it's to would to And I'd it's keratitis the one-third or U.S. fair OXERVATE. we're be I market disease. the there would neurotrophic say price would mind with XX,XXX ultimate of said, while incidence cases, about year. And is rare to XXX say analog speculate Frank. market rare that on and first patients of rather, in a PCED XX,XXX – expect per

So analog for point good use pricing I our think a it's consideration for to very potential. at this

François Brisebois

lot lastly just And earnings Great. call. Okay. in a here, this

causes front, PCED it to PCED? it leads What to easy diagnose? the what Is On known? Is it?

Mark Iwicki

take that? do you Kim, want to

Kim Brazzell

as are There in diseases such underlying of cause two. Sure. we out degradation that eye. pointed slide. underlying There's keratitis on that a And and number really of it's diseases, the neurotrophic layer the the epithelial a themselves

natural You a other resulting also epithelial There's a – get indications. get a you surgical defect. and of number

wound many deficiency, you a example, or For get cases, Levels a a of the keratitis. of scratch get lot herpes you – viral eye. in on

healing underlying and an that heal have gets scratch bigger can't and You it then bigger and ability, and wound bigger. or

that NK that a PCED. So of to lead there's outside etiologies can a number of

François Brisebois

Great. Thank you. Okay.

Operator

question with Jefferies. Instructions] next Chris [Operator comes Our Howerton from

Chris Howerton

expansion Thank congratulations exciting so on the questions of you the business. taking Great. much and your for

on would two assets? that you is to prioritize some are as second relative space? direct-to-consumer or for new you Thank KPI-XXX, then the other for how me developing be, story guess question could the of entity your comparator ophthalmology existing would I And So marketing success questions give a planning you're the have I us going that to chemical you.

Mark Iwicki

Sure. This is Mark.

the have the your well to exciting. be intent think that, really first clinical answering asset, study to very the a program for to excited pivotal could very start part late-stage that we're is I Phase look, be that, with able question study first the a II/III of is really

expect or initial data also next program we have preliminary the TKI PK and Our advancing, early is to year. and efficacy

runway, we're our in half. to And done advance and while continuing as is both so have cash also able with resources, to hope we've on first development SEGRM our work to the be to candidate in and reflected program those what a programs the

INVELTYS. all and advance can of continue on EYSUVIS work promotion the So to of we the that and of launch

Todd Bazemore

I'm sorry, the part. Chris, second

been of your I think that might question. have the second part

Chris Howerton

Yes. Yes.

Mark. much so thanks So

the other The a of success have was ophthalmology just in you campaign question a marketing direct-to-consumer space? story a if of comparator

Todd Bazemore

Yes. most that Look, their peak, over a at And I $X Restasis, think think, enjoyed They, of I obviously made efforts. years on great the have billion brand. that a a nearly its right? was They've direct-to-consumer year is lot the success.

Of as as to course, that they has well as successful And return well. Xiidra that their campaign saw with we time we consumer began launched been the growth consumer. view Xiidra new around launched that last having year actually some

Chris Howerton

Or of provide Got it. relative the have on you in force? helpful? sales can terms any a be Thank you. relative could expanding I I that return on you sense investment metrics mean, And do to any guess

Todd Bazemore

Yes.

good patient I over to right last nine think now EYSUVIS months ROI for that XXX that increasing start And next with the from think would synergies of the awareness say start work efforts office that demand. pull to it's benefit the of so too digital to I driving are consumer we the quoting now to we patient driving us is we've I representatives. that the But educational doctor's the done early we some be can where feel numbers. lever patients into

Chris Howerton

you That's Thank Okay. very much. awesome.

Todd Bazemore

Thank you.

Operator

Mark time. for showing at back I'd further to this turn any over questions not I'm call Iwicki like to remarks. closing And the

Mark Iwicki

our you vision will move commercial care this operator, PCED for the execute pandemic. joining acquisition change is as and of all you, wounds. Combangio forward continue Kala advance potential us we major diseases. and look ocular Thank our soon. We're day portfolio transformative broad commercial step we our and beyond medicines for living we products to potentially the updating And all of gain of extremely the about of with delivering a COVID-XX to morning. Today people on treatment and of KPI-XXX our eye of existing We thank of to a excited toward new share believe other you as take market to the a strategy

Operator

Ladies today's and presentation. gentlemen, this conclude

now wonderful and have day. You a may disconnect,

Kala Pharmaceuticals (KALA) 15 Nov 212021 Q3 Earnings call transcript