Kala Bio’s corneal treatment fails to meet primary endpoint in trial

ARLINGTON, Mass. - Kala Bio, Inc. (NASDAQ:KALA), a $133.75 million market cap biotech company whose stock has surged 174.5% year-to-date, announced Monday that its Phase 2b clinical trial of KPI-012 for persistent corneal epithelial defect (PCED) failed to meet its primary endpoint of complete healing as measured by corneal fluorescein staining. According to InvestingPro analysis, the company appears overvalued at its current price of $19.05.

The CHASE (Corneal Healing After SEcretome therapy) trial also did not achieve statistical significance for key secondary efficacy endpoints and showed no meaningful difference between either KPI-012 treatment arm and the placebo arm.

Following these disappointing results, Kala Bio plans to cease development of KPI-012 and its mesenchymal stem cell secretome platform. The company will evaluate strategic options and engage in discussions with its secured lender while implementing cash preservation measures, including a workforce reduction. InvestingPro data shows the company is quickly burning through cash, though it maintains a healthy current ratio of 2.1, indicating sufficient liquid assets to meet short-term obligations.

"KPI-012 continued to be well-tolerated and demonstrated a favorable safety profile but did not demonstrate the efficacy results that would warrant advancing the program for treatment of front-of-the-eye diseases," said Kim Brazzell, Ph.D., Head of R&D and Chief Medical Officer of Kala Bio.

The multicenter, randomized, double-masked, vehicle-controlled study evaluated two doses of KPI-012 ophthalmic solution (3 U/mL and 1 U/mL) versus vehicle dosed topically four times daily for 56 days. The trial randomized 79 patients across 37 sites in the United States and Latin America.

KPI-012 had previously received Orphan Drug and Fast Track designations from the U.S. Food and Drug Administration for PCED treatment, a rare disease characterized by impaired corneal healing.

No treatment-related serious adverse events were observed during the trial, according to the company’s press release statement. Investors awaiting more details can expect the company’s next earnings report on November 7, 2025. InvestingPro subscribers have access to 12 additional investment tips and comprehensive financial analysis for KALA, helping them make more informed investment decisions.

In other recent news, Kala Bio has completed enrollment for its Phase 2b clinical trial of KPI-012, which targets persistent corneal epithelial defect. The trial, known as CHASE, is set to release topline data in the third quarter of 2025. Additionally, Kala Bio has appointed Todd Bazemore as its new CEO and director, effective August 29, 2025. Bazemore has been serving as interim CEO since February 2025 and has held various roles within the company since 2017. In another development, Mizuho has initiated coverage on Kala Bio with an Outperform rating, highlighting the company’s novel platform technology for rare eye diseases. The research firm has set a price target of $30.00, suggesting significant potential upside. Furthermore, Kala Bio has scheduled its 2025 annual shareholder meeting for December 11, with more details to be provided in an upcoming proxy statement.

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