Kala Bio plunges after scrapping development of lead drug

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(Reuters) -Kala Bio will stop developing its experimental treatment for a type of eye condition after it failed to meet the main goal in a mid-stage study, sending the drug developer’s shares down 93% in premarket trading.

The company’s lead drug, KPI-012, did not meet the main goal of completely healing persistent corneal epithelial defect (PCED) after eight weeks, the company said.

The drug also failed to meet the secondary goals, the company said, adding there was no meaningful difference between the treatment arm and the placebo.

The company said it would conserve cash and review strategic options, including talks with its secured lender, job cuts and other cost reductions.

PCED is an eye condition in which the outer layer of the cornea, known as the epithelium, fails to heal and close within two weeks after an injury, despite receiving treatment.

Currently, there are no FDA-approved treatments for this condition.

It may be caused by an underlying condition such as an infection or diabetes and could increase the risk of infection, perforation, scarring and vision loss.

The study tested the safety and efficacy of two doses of KPI-012 in 79 patients with PCED for a period of 56 days.

(Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Shreya Biswas and Sriraj Kalluvila)