It’s been a common sight over the past few years for a biotech startup to bring a bunch of “crossover” investors—who invest in both public and private companies—into the mix before taking a crack at an IPO. Kala Pharmaceuticals just got the first part of that done by raising a $68 million Series C round this morning. Time will tell if that means a public stock offering is on the horizon.
The financing includes a bunch of new investors in Waltham, MA-based Kala, starting with Longitude Capital, OrbiMed, Vivo Capital, and CAM Capital. RA Capital Management, Wellington Management, and existing backers Polaris Partners and Lux Capital were also involved. With the new financing, Kala has now raised more than $100 million in equity backing since its inception in 2009.
Kala is trying to use nanoparticle technology to treat a group of eye diseases. The company’s “mucosal penetrating product” platform attaches nanoparticles to engineered polymers so small they can supposedly slip through the barriers of mucous that guard the eyes from dust and viruses. The idea is to make eye drops that can deliver drugs first for front-of-the-eye diseases—like dry eye disease or the inflammation that people get after cataract surgery—before tackling tougher, back-of-the-eye disorders like glaucoma and age-related macular degeneration.
Kala’s lead drug, KP-121 (formerly known as LE-MPP), for instance, is a new formulation of loteprednol etabonate (Lotemax) that the company aims to show is better than the original. The cash from the new round will fund two Phase 3 studies of KP-121 in dry eye and pain and inflammation after cataract surgery, with the goal of filing an approval application with the FDA in 2017.
Kala is run by Mark Iwicki, who was named executive chairman in May, about eight months after he sold Parkinson’s disease drugmaker Civitas Therapeutics to Acorda Therapeutics (NASDAQ: ACOR). He came aboard Kala after the two-plus-year stint of former chief executive Guillaume Pfefer, who left in September 2014. (Pfefer is now a consultant at MGP Consulting, according to LinkedIn.)
Longitude Capital managing director Gregory Grunberg and RA Capital managing director Rajeev Shah joined Kala’s board as part of the funding.