ARLINGTON, Mass. - KALA BIO, Inc. (NASDAQ:KALA), a biopharmaceutical company focused on developing treatments for severe eye diseases, has announced a private placement deal with institutional investors to raise approximately $12.5 million. This funding is aimed at advancing the clinical development of their lead product candidate, KPI-012, for a rare eye condition.
The private placement, led by SR One and including ADAR1 Capital Management and another investor specializing in life sciences, will see KALA sell both common and preferred stock. Specifically, 1,197,314 shares of common stock are priced at $5.85 each, and 9,393 shares of Series H Convertible Non-Redeemable Preferred Stock are priced at $585.00 each. The transaction is expected to close on or about June 28, 2024, subject to customary closing conditions.
KALA intends to use the net proceeds to further the clinical development of KPI-012 for the treatment of persistent corneal epithelial defect (PCED), a condition characterized by impaired corneal healing. The company also plans to allocate funds for general corporate purposes.
The securities involved in this private placement have not been registered under the Securities Act of 1933, and as such, cannot be offered or sold in the United States absent registration or an exemption from registration requirements.
KALA has committed to filing a registration statement for the resale of the common stock issued in the placement and the common stock issuable upon conversion of the preferred stock within 30 days following the closing of the deal.
KPI-012 has received Orphan Drug and Fast Track designations from the U.S. Food and Drug Administration for the treatment of PCED. KALA is also exploring the potential of KPI-012 for other rare corneal diseases and is conducting preclinical studies to assess its proprietary mesenchymal stem cell secretome platform for retinal degenerative diseases.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, and there will be no sale of KALA securities in any state or jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. Any future offering of the securities will be done through a prospectus.
The information in this article is based on a press release statement from KALA BIO, Inc.
In other recent news, Kala Pharmaceuticals (NASDAQ:KALA) has been under the financial microscope with H.C. Wainwright adjusting its 12-month price target for the company's stock. Initially reduced to $18 from $21, the target was later adjusted to $21 from $22, in both instances maintaining a Buy rating.
This came after Kala Pharmaceuticals reported a net loss of $11.8 million for the first quarter, which exceeded the projected loss of $8.8 million. A net loss of $42.2 million was reported for the full year of 2023, aligning with estimates.
These financial updates coincide with the company's ongoing Phase 2b CHASE trial for KPI-012, a potential treatment for persistent corneal epithelial defect (PCED). Kala Pharmaceuticals plans to announce topline results by the end of 2024. The company also conducts preclinical studies on KPI-014 for inherited retinal degenerative diseases.
Despite the financial losses, H.C. Wainwright's valuation of Kala Pharmaceuticals stands at around $91-105 million, leading to the reiteration of the Buy rating. These recent developments underscore the continued confidence in the company's potential amidst its ongoing trials and research.
InvestingPro Insights
In light of KALA BIO's recent announcement of a private placement deal, an analysis of the company's financial health and stock performance is crucial for investors considering this opportunity. InvestingPro data reveals a market capitalization of $13.18 million, indicating the relatively small size of the company within the biopharmaceutical industry.
Furthermore, with a Price/Book ratio of 1.95 as of the last twelve months leading up to Q1 2024, the company's stock is valued nearly twice its book value, suggesting that investors are willing to pay a premium over the company's net asset value.
However, KALA's financial challenges are reflected in its negative operating income of -$40.86 million over the same period, which underscores the company's ongoing expenses outweighing its revenue. Moreover, the stock's performance has been notably poor, with a 1-week total price return of -14.81% and a staggering 1-year total price return of -71.43%, indicating significant volatility and investor caution.
InvestingPro Tips provide further context to these figures, highlighting that KALA holds more cash than debt on its balance sheet, which can be a positive sign of financial stability. Yet, the stock is also in oversold territory according to the Relative Strength Index (RSI), which might interest investors looking for potential rebound opportunities. It is important to note that the company is quickly burning through cash and analysts do not anticipate profitability this year, which could be a concern for long-term investment prospects.
For investors seeking a comprehensive analysis, InvestingPro offers additional tips that delve deeper into KALA's financials and stock performance. There are currently 14 more InvestingPro Tips available at: https://www.investing.com/pro/KALA. To access these insights, interested parties can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing valuable information for making informed investment decisions.
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