Kala Bio Stock Collapses 89% on Failed Eye Drug Trial
Company to halt development of its lead drug candidate, KPI-012, after it failed to meet the primary endpoint in a key Phase 2b study.
Shares of Kala Bio Inc. (KALA) plummeted over 89% in catastrophic trading after the biopharmaceutical company announced its lead drug candidate failed a critical mid-stage clinical trial. The company's stock collapsed to record lows on enormous trading volume, which surged to nearly 36 times the daily average.
The devastating sell-off was triggered by news that its CHASE Phase 2b clinical trial for KPI-012, a potential treatment for the rare eye condition known as persistent corneal epithelial defect (PCED), . The primary goal of the study was the complete healing of the corneal defect, which was not achieved with statistical significance compared to a placebo.
Following the disappointing results, Kala Bio announced it would immediately discontinue the development of KPI-012. The company stated that while the drug was well-tolerated, the lack of efficacy prompted the decision to halt the program. This also includes ceasing the development of its broader mesenchymal stem cell secretome (MSC-S) platform for other front-of-the-eye diseases.
"The results of the CHASE Phase 2b trial are deeply disappointing," the company acknowledged in a press release. The failure represents a significant setback, as KPI-012 was the company's most advanced clinical asset. the wiped-out potential future revenue that investors had priced into the company's valuation.
In response to the trial failure and subsequent financial pressure, Kala Bio announced it is exploring a range of strategic options to preserve its capital. The company plans to implement a significant workforce reduction and other cost-saving measures as it engages in discussions with its lenders. Investors will now be closely watching for the company's next steps as it navigates this critical juncture with a severely diminished pipeline and market capitalization.