Kala Pharmaceuticals (KALA) AI Stock Analysis

• Market Cap: $21.74M
• Dividend Yield: N/A
• Average Volume (3M): 33.87K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.07
• Revenue Growth: N/A
• EPS Growth: 38.50%
• Country: US
• Employees: 43
• Sector: Healthcare
• Sector Strength: 69
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -11.03
• Shares Outstanding: 6,452,398
• 10 Day Avg. Volume: 59,283
• 30 Day Avg. Volume: 33,866
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• Price to Cash Flow (P/CF): -1.70
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.00
• Price Target Upside: 345.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Kala Pharmaceuticals faces severe financial and operational challenges, with declining revenues and heavy reliance on debt, resulting in a low financial performance score. The stock's technical indicators show weak momentum, and the valuation metrics are unattractive, further impacting the stock score negatively.

Positive Factors

Clinical Trials

Positive safety data from Cohort 1 of the CHASE trial was reported, allowing the trial to advance to the next phase.

Financial Performance

Net loss of $38.5M in 2024 was less than the estimated loss, indicating better-than-expected financial performance.

Leadership

The Board has appointed Mr. Todd Bazemore as the interim Chief Executive Officer, effective immediately, ensuring leadership continuity.

Negative Factors

Clinical Trials Risk

Risks include, but are not limited to: failure of KPI-012 in clinical trials, failure to obtain regulatory approval, and potential dilution risk.

Kala Pharmaceuticals Business Overview & Revenue Model

Company Description

Kala Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of therapies using its proprietary mucus penetrating particles technology for the treatment of eye diseases. The company's product candidates include KPI-012, which is in clinical development stage for the treatment of persistent corneal epithelial defects; EYSUVIS for the short-term treatment of the signs and symptoms of dry eye disease; and INVELTYS, a topical twice-a-day ocular steroid for the treatment of post-operative inflammation and pain following ocular surgery. Its preclinical development products comprise KPI-287 that inhibits the vascular endothelial and platelet derived growth factors for the treatment of retinal diseases, including wet age-related macular degeneration, diabetic macular edema, and retinal vein occlusion; and selective glucocorticoid receptor modulators program, a novel class of compounds to regulate gene expression through the transrepression pathway while avoiding the transactivation pathway. The company was formerly known as Hanes Newco, Inc. and changed its name to Kala Pharmaceuticals, Inc. in December 2009. Kala Pharmaceuticals, Inc. was incorporated in 2009 and is headquartered in Watertown, Massachusetts.

How the Company Makes Money

Kala Pharmaceuticals makes money through the commercialization of its proprietary eye care products. The company's revenue model is primarily based on the sales of its FDA-approved drugs, which are marketed and distributed to healthcare providers and patients. Revenue streams include direct sales of products such as EYSUVIS and INVELTYS, which are specifically developed for treating ocular conditions. In addition, Kala Pharmaceuticals may engage in strategic partnerships or licensing agreements to enhance its product distribution and market reach, further contributing to its earnings.

Kala Pharmaceuticals Financial Statement Overview

Summary

Kala Pharmaceuticals is facing substantial financial difficulties, with negative profitability and cash flow challenges. The company is highly leveraged, which could pose risks if revenue does not improve. While there are significant challenges, the company has some liquidity to potentially navigate short-term financial pressures. Strategic measures will be essential to improve financial health and stabilize operations.

Income Statement

Kala Pharmaceuticals has faced significant financial challenges, as evidenced by negative revenue growth and persistently negative profit margins. The company reported negative gross profit and net income for the TTM, indicating difficulties in generating profits. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Overall, the income statement highlights ongoing profitability issues.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, suggesting potential leverage concerns. With equity making up a small percentage of total assets, the company may face challenges in leveraging its financial position. The company has struggled to maintain a positive return on equity, which could indicate inefficiencies in generating shareholder value. However, the presence of cash reserves provides some liquidity buffer.

Cash Flow

The cash flow statement shows consistent negative free cash flow, indicating the company is burning cash and may need external financing to sustain operations. The operating cash flow to net income ratio is negative, reflecting challenges in converting earnings into cash. Despite these issues, the company has managed some financing inflows, which may provide temporary relief.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
70.00K	0.00	3.89M	11.24M	6.36M	6.07M
	Gross Profit
-127.00K	-303.00K	1.33M	7.14M	3.19M	4.07M
	EBIT
-40.71M	-39.15M	-81.36M	-109.43M	-96.23M	-88.22M
	EBITDA
-32.84M	-36.08M	-36.70M	-131.96M	-92.90M	-83.25M
	Net Income Common Stockholders
-38.96M	-42.20M	-223.00K	-152.30M	-112.00M	-101.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
36.02M	50.90M	70.50M	92.14M	153.54M	85.45M
	Total Assets
37.61M	55.95M	86.82M	139.43M	221.61M	154.32M
	Total Debt
9.68M	36.32M	42.95M	80.19M	100.92M	101.18M
	Net Debt
-26.34M	-14.57M	-27.55M	-11.95M	23.65M	15.73M
	Total Liabilities
15.14M	48.45M	67.85M	122.62M	121.61M	124.63M
	Stockholders Equity
22.47M	7.50M	18.97M	16.80M	100.00M	29.69M
Cash Flow		Free Cash Flow
-32.49M	-28.54M	-79.22M	-109.12M	-92.64M	-94.06M
	Operating Cash Flow
-32.48M	-27.93M	-78.91M	-108.23M	-90.69M	-92.72M
	Investing Cash Flow
-146.00K	-429.00K	62.72M	70.80M	-78.21M	-1.33M
	Financing Cash Flow
25.77M	8.51M	-7.94M	42.55M	160.63M	8.98M

Kala Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KALA, the sentiment is Negative. The current price of 3.37 is below the 20-day moving average (MA) of 5.52, below the 50-day MA of 6.91, and below the 200-day MA of 6.58, indicating a bearish trend. The MACD of -0.38 indicates Positive momentum. The RSI at 32.42 is Neutral, neither overbought nor oversold. The STOCH value of 11.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KALA.

Kala Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATHE	51 Neutral	$45.91M	―	-154.88%	―	―	20.25%
CNTB	48 Neutral	$34.59M	―	-58.89%	―	―	―
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
INKT	44 Neutral	$33.00M	―	78.50%	―	―	55.52%
KZR	41 Neutral	$28.86M	―	-55.00%	―	-100.00%	18.17%
RNTX	26 Underperform	$37.61M	―	-82.37%	―	―	-9.30%
KALA	17 Underperform	$21.74M	―	-388.29%	―	―	38.50%

Kala Pharmaceuticals Corporate Events

Kala Pharmaceuticals Announces Executive Retention Agreements

On April 10, 2025, Kala Pharmaceuticals, known as KALA BIO, Inc., announced retention agreements with key executives, including the Interim CEO, CFO, and Head of R&D, offering substantial bonuses to ensure their continued leadership. These agreements stipulate that if any executive departs voluntarily or is terminated for cause before September 30, 2025, or the announcement of clinical trial results, they must repay the bonuses, highlighting the company’s focus on stability during a critical phase of its clinical developments.

Spark’s Take on KALA Stock

According to Spark, TipRanks’ AI Analyst, KALA is a Underperform.

Kala Pharmaceuticals faces severe financial and operational challenges, with declining revenues and heavy reliance on debt, resulting in a low financial performance score. The stock’s technical indicators show weak momentum, and the valuation metrics are unattractive, further impacting the stock score negatively.

To see Spark’s full report on KALA stock, click here.