[Updated, 11:04 am ET] In the big market for treatments for age-related macular degeneration, the leading cause of blindness in the elderly, there’s a turf war between companies with injectable drugs. Kala Pharmaceuticals is one of a few companies trying to bring an eye drop into the mix, and it just got a fresh round of cash to bankroll the journey.
Waltham, MA-based Kala is announcing today that it’s raised a $22.5 million Series B round of equity financing. New investor Ysios Capital led the round, which also included Kala’s existing investors—Lux Capital, Polaris Partners, and Third Rock Ventures—and new strategic investor AbbVie Biotech Ventures, the VC arm of AbbVie (NYSE: ABBV). Ysios general partner Karen Wagner has joined Kala’s board as part of the deal. Kala has now raised about $45.2 million in equity financing, according to CEO Guillaume Pfefer.
Kala was formed in 2009 by MIT professor Bob Langer, Johns Hopkins’ Justin Hanes, and former Johnson & Johnson executive Colin Gardner. The big idea behind Kala is to more efficiently deliver drugs through the barriers of mucous that guard the eyes from assault by dust and viruses. Kala does this with what it calls a “mucosal penetrating product” platform; it says it can create nanoparticle drugs attached to engineered polymers so small that they can slip through the eye’s defenses.
Kala’s pitch is that it could use this platform to make eye drops that deliver drugs not just to the front of the eye, but to the middle and the back of the eye, where injectable treatments are the norm. The so-called “wet” form of age-related macular degeneration, for instance—when abnormal blood vessels grow in the macula and leak behind the eye, leading to distorted vision and potential blindness—is typically treated with injections of bevacizumab (Avastin) or newer drugs like ranibizumab (Lucentis) and aflibercept (Eylea).
Kala, like nearby Bernardsville, NJ-based startup PanOptica, wants to develop an eye drop for AMD, a multi-billion dollar market. Still, because of the difficulty of the task, the company is trying to manage its risk by first proving its platform can work for easier targets—front-of-the-eye disorders, like the inflammation that people get after cataract surgery, or dry eye disease. In those cases, Kala’s strategy is to take drugs that are proven to work, tweak them with its platform, and come up with treatments that beat existing therapies by requiring fewer doses or getting to the site of disease more efficiently. Kala’s lead drug candidate, LE-MPP, for example, is a new formulation of loteprednol etabonate (Lotemax), the corticosteroid anti-inflammatory agent sold by Bausch & Lomb (now owned by Valeant Pharmaceuticals), that Kala hopes to prove is better than the original. A generic version of the Bausch drug will become available this year.
“We can really blow away performance in terms of pharmacodynamics of a drug, simply because we have the right approach to deal with this barrier, which a lot of commercial products don’t have,” Pfefer says.
Of course, Kala doesn’t have the clinical data to really back this up yet, hence the plan for the financing. Kala will use the cash to run four clinical trials for LE-MPP. If the first three go well, they’ll help establish a franchise for LE-MPP in several disease types. There’s a Phase 3 study for post-cataracts inflammation; a Phase 2 trial for blepharitis, or swelling of the eyelids; and a mid-stage study for dry eye disease. The fourth trial is an exploratory study in diabetic macular edema—a way for Kala to try to show that its platform can effectively get a drug to the back of the eye.
By taking this strategic route, Kala can push a program forward while doing the early work on the AMD eye drop it’s developing, which would block both the vascular endothelial growth factor (VEGF) and platelet-derived growth factor (PDGF) proteins. The approved, injectable wet AMD drugs work by blocking only VEGF, though New York-based Ophthotech (NASDAQ: OPHT) is developing an injectable anti-VEGF/anti-PDGF combination. The hope is that combining the two approaches will not just stop the abnormal blood vessels that sprout up in wet AMD from continuing to grow, as the anti-VEGF drugs do, but cause those blood vessels to recede.
Still, Kala’s effort on that front is very early on. It’s developing a tyrosine kinase inhibitor for wet AMD—the type of molecule widely used as cancer drugs—with its platform, and is currently screening through various compounds in the hope of selecting a candidate by the end of the year to move forward. And Pfefer says Kala is also working with a few pharma companies to potentially take their own molecules, and apply Kala’s technology to make a wet AMD drug—the type of thing that would lead to a licensing deal if all goes well. But taking steps forward with LE-MPP will give Kala time to let all of those things shake out.
“This is the best, fastest way and [most] economically efficient way to demonstrate that the platform works,” Pfefer says.