KALA BIO, Inc. Q2 FY2021 earnings call

• EYSUVIS launch: Saw 15,632 prescriptions in Q2 2021, a 93% increase from Q1; over 28,000 prescriptions filled since launch in January. Sales force expanded from 91 to 105 reps, covering more eyecare professionals. Broadened payer coverage with OptumRx added and Medicare Part D coverage secured. 62% of Q2 prescriptions were for new to prescription dry eye therapy patients. • INVELTYS: Saw quarter-over-quarter growth in prescriptions with over 41,000 in Q2 2021 vs. 37,000 in Q1 2021, but remains impacted by pandemic uncertainties on elective ocular procedures. • Financial position: Cash position as of June 30, 2021 was $149.6 million; expect cash to fund operations for at least two years with EYSUVIS and INVELTYS revenues.

In the second quarter of 2021, EYSUVIS revenue increased to $1.7 million from $1.6 million in the first quarter. INVELTYS' net revenues in the second quarter decreased by $200,000 compared to the first quarter due to a reserve for product returns. EYSUVIS contributed to a portion of the net product revenues, with its revenue showing growth, while INVELTYS faced challenges related to returns. Specifically, EYSUVIS had 15,632 prescriptions in Q2 2021, up 93% from Q1, and over 28,000 prescriptions filled since launch in January.

• Anticipate cash together with EYSUVIS and INVELTYS revenues to fund operations for at least two years. • Believe EYSUVIS prescriptions and revenues will continue to grow as market access improves. • Expect INVELTYS prescriptions and revenues to grow over time despite pandemic uncertainties, though timing and impact hard to quantify.

• Impact of COVID-19 on elective ocular procedures affecting INVELTYS revenues and product returns. • Uncertainty in payer coverage, particularly with Medicare Part D negotiations and potential delays in expanding commercial insurance coverage. • High rejection and reversal rates of prescriptions leading to unfilled scripts, which could slow revenue growth if not addressed.

Q: Chris Neyor asked about EYSUVIS growth slowdown and reacceleration.

A: Todd Bazemore said EYSUVIS is the only growing dry eye product in recent four weeks, summer months are typically slower but EYSUVIS has strong growth rate.

Q: François Brisebois asked about EYSUVIS sales vs scripts and INVELTYS returns.

A: Mark Iwicki and Mary Reumuth explained revenue stayed up due to working through initial inventories, INVELTYS had $0.5 million reserve for returns related to COVID.

Q: Tazeen Ahmad asked about payor mix and script fill rates.

A: Mark Iwicki and Todd Bazemore discussed current commercial vs Medicare usage and improvement in script fill rates.

Q: Chris Howerton asked about salesforce impact and inventory stability.

A: Todd Bazemore talked about salesforce expansion and inventory management to avoid expiry.

Q: Yi Chen asked about Medicare Part D and pipeline status.

A: Todd Bazemore and Kim Brazzell answered on Medicare coverage and pipeline progress.

Q: Tim Chiang asked about commercial insurance coverage and physician/patient awareness.

A: Mark Iwicki and Todd Bazemore discussed CVS Caremark coverage and efforts to educate physicians and patients.