$KALA TP $39 Kala Pharmaceuticals (KALA)
Developing treatments for inflammatory ocular conditions, Kala Pharmaceuticals wants to improve the lives of patients everywhere. With the October 30 PDUFA date for its EYSUVIS product fast-approaching, several analysts think that now is the time to get on board.
EYSUVIS is a corticosteroid designed for the short-term treatment of signs and symptoms of dry eye disease (DED). DED is a multifactorial disease of the tears and ocular surface of the eye that causes discomfort, visual disturbances and tear film instability, which is usually accompanied by hyperosmolarity (higher concentration of salt than water in tears) and inflammation. Affecting about 16.4 million adults in the U.S., the condition has a major impact on a patient’s quality of life, and in some cases, can lead to declines in work productivity.
Wedbush analyst Liana Moussatos is optimistic about the therapy’s prospects, noting that approval could come before the PDUFA date. To this end, a U.S. launch is forecasted for early 2021, with KALA set to be launch ready in Q4 2020, and the analyst believes blockbuster revenue ($1 billion) could be in store.
Citing presentations from Key Opinion Leaders (KOLs), Moussatos highlights the broad market opportunity for the asset given the current unmet need and its potential position as the first approved corticosteroid in this indication.
Additionally, based on clinical data, unlike already approved drugs RESTASIS, CEQUA and XIIDRA, the therapy generated a rapid onset of action, with it also overcoming well-known adverse events associated with ketosteroids such as increases in intraocular pressure (IOP).
Moussatos mentioned, “Dr. Holland made specific reference in his remarks to both EYSUVIS’ rapid onset of action as well as its favorable safety profile with respect to IOP elevation as reason for his choice to use it as first-line therapy for a high percentage of his patients if approved.”
Summing it all up, the analyst stated, “Given the inadequate control of dry eye flares on current standard-of-care treatments and the unwillingness of eye care professionals (except cornea specialists) to use corticosteroids off-label, we feel EYSUVIS is uniquely positioned to immediately address an underserved portion of the market using corticosteroids off-label as a short-term therapy for rapid relief while gradually addressing chronic users of immunomodulatory agents such as cyclosporine (RESTASIS, CEQUA) and lifitegrast (XIIDRA) on maintenance therapy.”
To this end, Moussatos rates KALA an Outperform (i.e. Buy) along with a $39 price target. This puts the upside potential at a massive 430%
