H.C. Wainwright maintains Buy on Kala Bio, target at $15

On Friday, H.C. Wainwright analyst Yi Chen maintained a Buy rating on Kala Bio (NASDAQ:KALA) shares, along with a $15.00 price target. Chen’s statement followed Kala Bio’s recent announcement of its 2024 financial results, which indicated a net loss of $38.5 million, or ($10.15) per share. This loss was slightly below the estimated $40.0 million. According to InvestingPro data, the company maintains a healthy current ratio of 3.11, though it’s quickly burning through cash. With a market capitalization of just $28.17 million, the stock appears undervalued based on InvestingPro’s Fair Value analysis.

Kala Bio’s management highlighted progress in the Phase 2b CHASE trial of KPI-012 for the treatment of persistent corneal epithelial defect (PCED), noting that 87 patients have been randomized. However, the study encountered a minor setback as 13 patients who were initially enrolled and treated did not have their PCED diagnosis verified by the central reading center. Consequently, the trial will need to include approximately 16 additional patients to achieve the desired target of 90 evaluable participants. The stock has faced significant pressure, down 33.36% year-to-date, according to InvestingPro data, which offers 12 additional investment insights for subscribers.

The primary goal of the CHASE trial is to achieve complete healing of the PCED without any corneal fluorescein staining in the area of the lesion by Day 56. According to the analyst, the study is expected to complete enrollment by the end of the second quarter of 2025 and aims to release topline results in the third quarter of the same year.

Chen’s reiteration of the Buy rating and the $15 price target comes as Kala Bio continues to work towards meeting its clinical trial milestones. The company’s efforts in advancing KPI-012 through the trial stages are a significant part of its strategic development plan.

In other recent news, Kala Pharmaceuticals reported its fourth-quarter earnings for 2024, showing an earnings per share (EPS) of ($1.74), which exceeded both Oppenheimer’s forecast of ($2.47) and the consensus estimate of ($2.28). Oppenheimer maintained its Outperform rating for the company, setting a price target of $15.00. The company’s focus remains on developing KPI-012 for rare ocular diseases, with the Phase 2b trial for persistent corneal epithelial defect (PCED) now expected to have topline results by the third quarter of 2025.

In a separate development, Kala Bio announced the resignation of its CEO, Mark Iwicki, who will continue as Chair of the Board of Directors. Todd Bazemore, who has been with the company since 2017, has been appointed as the interim CEO. Bazemore, previously the President and Chief Operating Officer, brings extensive experience from his roles at other pharmaceutical firms. The leadership change comes as the company prepares for the Phase 2b trial results of KPI-012, which has received Fast Track Designation from the FDA. These recent developments reflect Kala Bio’s continued efforts in advancing its treatment pipeline and ensuring leadership continuity.

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