Kala Bio Stock Collapses 89% on Failed Eye Drug Trial
Company halts KPI-012 development and announces 51% workforce reduction after Phase 2b study for rare eye condition misses primary endpoint.
Kala Bio (KALA) shares suffered a near-total collapse, plummeting 89% in catastrophic trading after the biopharmaceutical company announced its pivotal Phase 2b clinical trial for a key eye treatment had failed. The news prompted an immediate halt to the drug's development and a deep corporate restructuring, erasing the vast majority of the company's market capitalization.
The devastating results came from the CHASE Phase 2b study of KPI-012, a novel therapy developed for persistent corneal epithelial defect (PCED), a rare and severe condition that can lead to significant vision loss. In a statement, the company confirmed the trial of complete corneal healing at the designated eight-week mark. Furthermore, key secondary endpoints also showed no meaningful difference between the treatment and placebo groups.
In the wake of the clinical failure, Kala Bio's management has moved to cease all development of KPI-012 and its related stem cell platform. The company is now implementing drastic cash preservation measures, including a painful , while it evaluates all strategic options to determine a path forward.
Investor reaction to the announcement was immediate and severe. before closing the session down 89.27%. The outcome represents a major setback for the company and for patients awaiting new treatments for PCED. While the company noted KPI-012 had a favorable safety profile, the lack of efficacy has forced it back to the drawing board, underscoring the high-risk, high-reward nature of biopharmaceutical research and development. The company must now navigate a challenging period of uncertainty as it communicates with its lenders and stakeholders about its future.