Kala Pharmaceuticals (KALA) AI Stock Analysis

• Market Cap: $26.07M
• Dividend Yield: N/A
• Average Volume (3M): 78.49K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.97
• Revenue Growth: N/A
• EPS Growth: 38.50%
• Country: US
• Employees: 38
• Sector: Healthcare
• Sector Strength: 42
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -1.74
• Shares Outstanding: 6,452,398
• 10 Day Avg. Volume: 43,364
• 30 Day Avg. Volume: 78,486
• PEG Ratio: -0.03
• Price to Book (P/B): 4.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -0.86
• Enterprise Value/Market Cap: -0.05
• Enterprise Value/Revenue: -9.38
• Enterprise Value/Gross Profit: 21.54
• Enterprise Value/Ebitda: 0.01
• 1Y Price Target: $13.50
• Price Target Upside: 234.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 31 Underperform
• Price Target: ―

Kala Pharmaceuticals faces significant financial difficulties, marked by declining revenues and heavy reliance on debt, which pose serious risks. The technical analysis reflects a strong downtrend, with the stock being oversold, adding to the negative outlook. Valuation is unattractive due to negative earnings and the lack of a dividend, further weighing down the stock's appeal.

Positive Factors

Clinical Trial Progress

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.

Negative Factors

Clinical Trial Risks

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 demonstrates significant financial challenges, with declining revenue, profitability issues, and reliance on debt financing. The business shows limited capacity to generate positive cash flows. These factors together provide a challenging outlook for the company, with substantial risks and uncertainties.

Income Statement

Kala Pharmaceuticals has experienced a consistent decline in total revenue over the past several years, with the latest data showing zero revenue. Gross profit margins and net profit margins are negative, indicating profitability challenges. The company has also reported negative EBIT and EBITDA margins, reflecting operational inefficiencies and significant losses.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio due to significant liabilities and limited equity. The return on equity is negative, indicating losses for shareholders. However, the equity ratio is relatively low, pointing to reliance on debt financing. The company has managed to maintain some cash reserves, which is a positive aspect.

Cash Flow

Kala Pharmaceuticals has consistently reported negative free cash flow, indicating cash outflows exceed inflows. The operating cash flow to net income ratio is negative, showing core operations do not generate sufficient cash. Despite a stable pattern of financing cash flow, this is primarily driven by debt.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	0.00	0.00	3.89M	11.24M	6.36M
	Gross Profit
-61.00K	0.00	-303.00K	1.33M	7.14M	3.19M
	EBIT
-39.72M	-40.98M	-39.15M	-81.36M	-109.43M	-96.23M
	EBITDA
-32.85M	-40.98M	-36.08M	-36.70M	-131.96M	-92.90M
	Net Income Common Stockholders
-35.65M	-38.51M	-42.20M	-223.00K	-152.30M	-112.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.90M	51.18M	50.90M	70.50M	92.14M	153.54M
	Total Assets
55.95M	55.48M	55.95M	86.82M	139.43M	221.61M
	Total Debt
36.32M	32.25M	36.32M	42.95M	80.19M	100.92M
	Net Debt
-14.57M	-18.93M	-14.57M	-27.55M	-11.95M	23.65M
	Total Liabilities
48.45M	43.15M	48.45M	67.85M	122.62M	121.61M
	Stockholders Equity
7.50M	12.33M	7.50M	18.97M	16.80M	100.00M
Cash Flow		Free Cash Flow
-27.42M	-29.59M	-28.54M	-79.22M	-109.12M	-92.64M
	Operating Cash Flow
-27.36M	-29.38M	-27.93M	-78.91M	-108.23M	-90.69M
	Investing Cash Flow
-195.00K	-208.00K	-429.00K	62.72M	70.80M	-78.21M
	Financing Cash Flow
21.30M	29.88M	8.51M	-7.94M	42.55M	160.63M

Kala Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KALA, the sentiment is Neutral. The current price of 4.04 is above the 20-day moving average (MA) of 3.66, below the 50-day MA of 4.40, and below the 200-day MA of 6.11, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 53.98 is Neutral, neither overbought nor oversold. The STOCH value of 77.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KALA.

Kala Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATHE	54 Neutral	$59.29M	―	-154.88%	―	―	20.25%
Sector *	53 Neutral	$5.14B	3.03	-43.89%	2.83%	16.75%	-0.06%
CNTB	49 Neutral	$45.61M	―	-58.89%	―	―	―
KZR	42 Neutral	$28.71M	―	-57.78%	―	-100.00%	18.17%
RNTX	38 Underperform	$45.42M	―	-86.78%	―	―	-2.37%
INKT	38 Underperform	$28.30M	―	78.50%	―	―	55.52%
KALA	31 Underperform	$26.07M	―	-576.46%	―	―	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.