KALA BIO, Inc. Q3 FY2020 earnings call

• Mark Iwicki highlighted the FDA approval of EYSUVIS for short-term treatment of dry eye disease and the company's position to grow with two products using amplified technology. - Todd Bazemore discussed EYSUVIS launch preparations, including sales force expansion to support both EYSUVIS and INVELTYS, and INVELTYS showing 84% quarter-over-quarter growth in prescriptions. - Mary Reumuth reviewed financial results, noting cash position of $159.1 million as of September 30, 2020, and expected cash runway into at least Q3 2022.

In the third quarter of 2020, INVELTYS net revenue was $2.2 million, an increase from $1.5 million in the third quarter of 2019. Cost of product revenues for Q3 2020 were $0.7 million, consistent with Q3 2019. SG&A expenses for Q3 2020 were $23.9 million, primarily due to launch-related expenses for EYSUVIS. R&D expenses decreased to $3.5 million in Q3 2020 from $7.1 million in Q3 2019, mainly due to a decrease in external spending on the STRIDE 3 clinical trial for EYSUVIS.

• Updates on EYSUVIS commercial peer coverage rebate status will be provided each quarterly call. - SG&A expenses in Q4 are expected to be consistent with Q3 due to launch-related expenses for EYSUVIS. - Net revenues are expected to be negatively impacted in 2020 and possibly into 2021 due to COVID-19-related restrictions on elective procedures.

• Ongoing or future surges in COVID cases may result in reinstatement of restrictions on elective procedures, impacting INVELTYS sales. - Uncertainty around the impact and duration of COVID-19-related restrictions on future revenues.

Q: When can we anticipate updates on EYSUVIS commercial peer coverage rebate status?

A: We'll provide updates on each of our quarterly calls next year regarding the coverage status for EYSUVIS.

Q: Should we anticipate a similar increase in SG&A for Q4 given the sales force expansion?

A: Yes, Q4 should be consistent with Q3 as it's primarily due to launch-related expenses for EYSUVIS.

Q: Could you update us on INVELTYS formulary and payer coverage, and potential changes in 2021?

A: INVELTYS has over 80% unrestricted access with commercial payers and 23% with Medicare; we're resubmitting bids to Medicare plans in 2021.

Q: Should we expect positive impact on INVELTYS from EYSUVIS sales force expansion?

A: Yes, the expanded sales force will call on more eye care professionals, providing additional exposure for INVELTYS.

Q: Any color on the number of refills physicians would make for EYSUVIS?

A: It depends on the eye care professional and patient's flare pattern; eye care professionals are comfortable treating flares with EYSUVIS.

Q: Is there an improvement in the net average selling price of INVELTYS?

A: We expect gross to net to improve as Medicare coverage increases and we become less dependent on opt-out co-pay cards.

Q: Is the sales team already reaching out to ophthalmologists and optometrists for EYSUVIS?

A: Yes, we've begun disease state discussions and will have product-specific discussions soon after launch.