All right. Thank you, everyone, for joining the Oppenheimer Healthcare Conference. The next presenting company here will be KALA BIO. We do cover KALA with an outperform rating at the firm. From the company presenting, we'll have President and COO Todd Bazemore, and then Head of R&D and CMO Kim Brazzell. So thanks for joining today. In terms of format, we're gonna do a fireside chat. I think it's 30 min is the slot, the time slot that we have. Feel free to send over questions if you would like. Happy to get through them. So with that, thanks for joining. And maybe if we can just start, there's been quite the transformation at KALA, not only in the name, but at the company in the past few years. So, we'd love to maybe get a little more color on, you know, for people to be aware of, it's a big year for you guys. So what, you know, the transition story, what happened there, and how we went from a commercial to more of a rare disease developmental stage company here? Sure, Frank. I'm, I'm happy to answer that question, and, and thanks for the time today. So, you know, as you know, KALA started off in what I would describe as much larger ophthalmic indications, specifically in post-surgical pain and inflammation and dry eye disease. Company very successfully got two NDAs filed and approved. And unfortunately for us, the approval of our dry eye product, which was the larger opportunity of the two, occurred right in the midst of the pandemic. And so, like a lot of companies, we found it to be quite challenging to launch new products during the pandemic. And while those products had good uptake, very strong week-over-week prescription growth, and they were securing good managed care wins, the reality of the additional capital that we were going to need to bridge us to profitability, and to the revenues of those products became significant enough, just was not gonna be accessible, certainly not in the capital markets we've all experienced the past couple of years. We had done a deal in late 2020 to acquire a company called Combangio that had this really interesting mesenchymal stem cell therapy technology that originated out of Stanford. And so the decision was made, with the board to focus the company back on our clinical development routes, to sell off our commercial assets, which we did successfully do, in the summer of 2022 to Alcon. And then, just refocus the organization to go back to being a clinical stage biotech, focused on our new platform technology. Okay, great. And then, with that acquisition, you know, let's definitely the focus of the company has changed to that. So let's change the focus of the conversation to this lead product. It's KPI-012. So maybe just help us for those not familiar with it, what is this lead product? And, and I guess, why is it the lead product? I can address the product KPI-012. It's a novel therapeutic approach that utilizes secretomes that are, in our case, harvested from human bone marrow-derived mesenchymal stem cells. The secretome approach, without going in a lot of detail, allows us to produce a cell-free therapy that's comprised of all the essential biomolecules that are secreted by the mesenchymal stem cells. Basically, we culture up the stem cells. They secrete a number of factors for the primary purpose of maintaining the integrity and protecting the stem cells. We are then able to remove the cells and are left with really an aqueous solution containing all these factors. It includes a number of molecules that are known to be involved in corneal wound healing, as well as other maintenance and regenerative pathways in the eye. It includes growth factors, protease inhibitors, matrix proteins, neurotrophic factors, and a variety of other that we feel our data suggests has significant potential of modulating or improving the wound healing process in the eye. We acquired this technology and the product when we acquired Combangio, which was a private company. We acquired in late 2021. They had brought the secretome from a collaboration between scientists at the University of Illinois and Stanford University. They had advanced the lead program KPI-012 into human trials for PCED, which we can touch on, and had very robust data showing that they could heal these non-healing lesions. Based on that, we brought the product in, we filed an IND, and are now conducting a phase II/III clinical trial in persistent corneal epithelial defects, and are looking at it for other potential indications in the eye. Okay, great. Maybe if we can, you know, before we get into the data to date and what we're expecting in the second half here of 2024 in terms of data, maybe PCED, is it, you know, what is it, and how understood is it? You know, maybe just the size of this market here. Yeah. Well, PCED is basically a persisting non-healing defect or wound on the surface of the eye, that's refractory to conventional treatments. It's usually defined as a wound or defect that hasn't healed or improved in 10-14 days. In addition to causing significant symptoms, as you can imagine, having denuded epithelium on the front of the eye, and there's a lot of pain receptors there, you get a lot of pain, photophobia. If it's in the center of the cornea, you get significant visual impairment. But one of the major concerns with these non-healing defects is if they don't heal, they continue to degrade. They can lead to infection. They can lead to perforation, vision loss, which requires then things such as corneal transplants, and so forth. So, it's treated primarily by corneal specialists. When they see this condition, their first objective is to try to heal it, because they know if this persists for a great deal of time, there can be significant morbidity involved. It's caused by a number of underlying etiologies. Trauma is common. Diabetic keratopathy is common. Neurotrophic keratitis, severe ocular surface disease, significant Sjögren's, or graft versus host, those sorts of things. Herpes keratitis is a very common cause, and ocular surgery. And so, there's a number of etiologies, and patients can often have more than one etiology. So, you know, the incidence that we see is approximately 100,000 patients in the U.S., and probably in Europe and Japan, that increases by, I think it's up to 238,000. So we see it as a significant unmet need. It amongst corneal specialists. There is a lot of knowledge on this, because it's one of the more severe conditions that come into their office. The only current pharmaceutical treatment, and we can talk a bit about that, is OXERVATE, which is recombinant human nerve growth factor. And it's only been shown to work in those etiologies involving neurotrophic keratitis, which we estimate to be about a third of all etiologies. So the other two thirds, there are no approved therapeutic products to treat those. So we see there's a significant unmet need both in the neurotrophic keratitis space, but also the other etiologies, and particularly in those patients that have more than one underlying etiology. Okay, great. So the last question we talked about PCED quite a bit and what it is. And in your answer, Kim, you had mentioned NK, and maybe it's a third of the PCED population. Can you just help us understand what NK is, and, you know, why you could potentially also help those patients? NK, which is neurotrophic keratitis, is a condition that's really caused by damage to the corneal nerves. There's a number of stages, but stage two is a neurotrophic keratitis that has led to a PCED. As we said, about a third of patients, the underlying etiology is neurotrophic keratitis. And the secretome, in addition to having a variety of other factors, does have neurotrophic factors. One of the big ones, [platelet] epithelial- derived factor. And we've been able to show that it stimulates corneal nerve viability. So from that perspective, and from the data that we've seen in both the phase Ib trial and preclinical data, we expect KPI-012 to work for PCEDs that are secondary to neurotrophic keratitis, along with those that are not associated with NK. Okay, great. And you know, just to go off of that, you said so far the data, the phase 1b that you had seen. This was pre-acquisition, I assume here. Can you just help us run through that data high level, what it was, and why is it encouraging? Certainly. When we, you know, one of the primary reasons we acquired Combangio was the data they had from their initial trial in PCED patients. It was a trial that involved three non-PCED patients that we evaluated for safety and saw no safety issues, and then went on to treat eight patients that were diagnosed with persistent corneal epithelial defects. And by the definition of PCED, this means these were defects that were not healing. We treated these patients in this trial twice a day for up to four weeks, and then followed them for up to 12 weeks. The key efficacy endpoint of the trial was complete healing of the corneal defect, as evaluated by corneal fluorescein staining. The important thing about that is, first of all, that is what clinicians will be striving for when they see these patients: get that lesion healed up. Secondly, it's the endpoint that FDA has indicated that they want to see for demonstration of efficacy for our product in PCEDs. So in these patients, we saw significant improvement in all eight patients and complete healing of the lesion in six of the eight patients. And that we thought was very encouraging, because again, these are defects that haven't healed with standard therapy. Six of the eight had completely healed by week four. But as we said, all eight patients showed significant healing. It also showed in this trial significant benefit against other efficacy endpoints. Vision improved, which you would expect if you have patients with a central cornea in the visual axis defect. We had significant improvement in pain. In fact, of the six patients that had significant pain at baseline, all of those had resolved and had a 0 pain score by week three. From a safety perspective, we saw no significant tolerability or safety issues in the trial. It was very, I wouldn't say benign, but it was very benign. Okay, okay, great. And what, when you say these patients, by definition, don't refractory to conventional treatments, what are those treatments? Well, the conventional treatments today, again, we'll talk a little bit about OXERVATE. But when one of these patients presents, the first thing they do is try to identify the underlying condition, and try to, you know, address that while they're doing other things. That can be things such as abuse of preservatives. It can be diabetic conditions that they can treat, Sjögren's syndrome, and so forth. Then there are not a significant number of options for most of these patients. They use aggressive lubrication with preservative-free artificial tears. They put ointments in. They use punctal plugs. Many cases, they'll put in what's called a bandage contact lens, which goes over the cornea, provides a protective barrier. In many cases, you get frictional forces by blinking that can exacerbate that. Sometimes they put in a larger lens, scleral lenses. In the worst case, if it doesn't heal, they sometimes do a procedure called tarsorrhaphy, where they actually sew the eyelids or glue the eyelids shut. That provides some relief for the patient and eliminates, to a great extent, exposure to the environment. For those patients that the underlying etiology is neurotrophic keratitis, which is manifest by a loss of corneal sensitivity, OXERVATE is currently used, and as it has an indication for the treatment of neurotrophic keratitis. So it's a sometimes complicated treatment regimen, but again, very focused on by the clinician to heal that lesion, because that's the key part of maintaining the vision and reducing the pain and other side effects. Okay, great. And this phase II, can you just help us? What, you know, what level, what type is a phase II? I assume phase IIb here that's about to read out in the second half, 2024. How is this, in terms of clinical trial design, maybe size of the trial? What, you know, what can you share about that? Well, the ongoing trial, we did an initial cohort, safety cohort, because we were studying the dose we studied in the initial trial, and a higher dose. So we did a couple of patients, so no safety issues. The main portion of the trial is, you know, randomized, multicenter, vehicle controlled, placebo controlled trial, in 90 patients, that have PCED, that has been persistent for at least 14 days, many of them longer than that. We're testing two doses, one unit, three units, and sort of complicated what a unit is. So it's probably beyond the scope today, and comparing that to vehicle. We're dosing 4x a day, and we're dosing for eight weeks or 56 days. And then they come back two weeks later, as a check, and six months later for a safety assessment. We're using a mixture of academic and non-academic sites. A lot of these patients, particularly in urban areas, end up at university, where there are very. They do have a number of corneal specialists. The study is currently being enrolled. We're making significant progress there. The primary endpoint is complete healing of the cornea of the lesion at day 56. We've set it up statistically, so that if we hit the primary endpoint day 56, we can then look without a penalty at six weeks, at four weeks, and so forth. This study is designed to really optimize the dose, as well as the duration needed, to provide complete healing in these patients. Okay, no, that's very helpful. Would this be, could this be considered, based on the size of the disease here? Could this be considered a pivotal trial, or? Yes, we this would be considered a pivotal trial. And you know, we have, we size the trial or the number of patients based on the data that, from OXERVATE in their U.S. trial, which was their pivotal trial for the U.S., along with the trial they did in Europe. So based on those assumptions, if we had the same treatment effect, we would have a 98% power to see statistical significance. Okay, great. Sorry, I cut you off. Yeah, and the size of these trials, the number of patients, are similar to those that OXERVATE did, that supported their approval for NK. Okay. And on that note, I think this is an extremely important part of the story that sometimes is totally just not known, is you mentioned OXERVATE many times here and NK. How successful, you know, it kind of it's a private company. How successful? What do we know about OXERVATE's launch numbers? And I guess part of that then question is, how are you differentiated other than the indication you're going after? How are you differentiated from OXERVATE? Sure. Sorry, I'm happy to jump in. I'm sorry for the technical difficulties I've been having this morning with the video component of the call. But, look, I think it's a great question. And, you know, interestingly, OXERVATE has been one of the most successful orphan disease launches in the U.S. market over the last several years. It has largely gone unnoticed by investors because of the fact that Dompé is a private company. You know, we believe through CMS reported utilization data and public statements that have been made, that OXERVATE U.S. revenues are already in excess of $700 million a year, and very likely, on their way to eclipsing $1 billion in annual revenues here in the next couple of years. So that would make it one of the most successful orphan disease launches in the last five-seven years in the U.S. market. That really hasn't been paid that close attention to because of the fact that that Dompé is a private company, as we said. I would say that, you know, an important note as you touched on is that OXERVATE is indicated specifically to treat PCEDs that have neurotrophic keratitis as the primary etiology. And epidemiology data suggests that that's about one-third of the estimated 100,000 PCED cases in the U.S.. You know, meaning the other two-thirds of those patients currently have no FDA-approved products specifically to treat PCED. We believe on indication alone, we'll have a great opportunity. But, you know, probably more important than just indication. I think the fact that, you know, the secretome is really a multifactorial biological approach to treating wound healing, right? It's an array of multiple components, that address the wound, as Kim stated earlier, that we believe, will be a highly efficacious product to treat these wounds. And then specifically as to how the products, you know, potentially could line up if we look at clinical data from past trials. We know that there's some significant tolerability issues that exist with OXERVATE. We have certainly in our market research heard that continues to be an issue. And, of course, we've not seen any of those issues in our trials. In fact, in the phase 1b trial, we measured eye pain as a secondary efficacy endpoint. All patients that had pain at baseline saw complete resolution of that pain after three weeks of dosing. Additionally, we're going to come in a premixed unidose vial that will be very easy for the patient to administer. They simply need to rip off the top and administer the drug in their eye. OXERVATE has a somewhat involved 19-step process that the patient has to go through, 6x a day each time they dose the product. We believe that our product will be easier for patients to administer. We'll have more favorable tolerability for the patients. And of course, we will have a broader indication to address all etiologies, above and beyond, just, Neurotrophic Keratitis. That's very helpful. Thank you, Todd. Is there a reason that, you know, Dompé focused on NK? Why would a company look at NK? Is there something in the mechanism of action of KPI-012 that maybe is different that makes sense for PCED in a broader sense, or why the focus there on NK? How is that different? I can address that from OXERVATE perspective. OXERVATE is a single agent. It's a recombinant nerve growth factor. And so when you think about its utilization in conditions of diseases of the eye, NK makes sense, because you got a problem with the nerves, and you're treating it with a neurotrophic factor. As Todd said, we have a variety of different factors that are known to be involved in normal healing, and that address some of the biologic pathways that are altered in abnormal healing. You know, we can address differentiation and migration of epithelial cells, knock down the proteolysis that occurs, add back some basement membrane that's usually impaired, also have neurotrophic factors. So, we feel, you know, OXERVATE it does, you know, they have shown it works in NK. We feel the variety of other factors that we have in KPI-012 will allow it to work in NK as well, as these other etiologies. And also, as I said before, in patients that may have more than one underlying etiology. So you're addressing, you know, all the etiologies. So based on that, based on the phase, the initial clinical data, we feel that we have significant potential to treat a broad class of these patients. Okay, no, that's very helpful. And then, maybe, Todd, is there any color on OXERVATE's, you know, launch in terms of, you know, can you just remind us when it launched? And, what can we kind of, guesstimate about the market penetration, so far? Sure. So OXERVATE was approved in late 2018 and launched in 2019. And, they've done a really nice job of penetrating into the neurotrophic keratitis market. And I think, along with the reference, they've created a lot more awareness and understanding of PCED amongst, you know, in particular, the general practicing ophthalmologists and optometrists who are often, the first line physicians, that are seeing these patients, and then when identifying, that it's a persistent wound, will often then refer the patient on to a corneal specialist. And so, you know, I you know, we believe from, you know, what we've seen in, as I said earlier, the CMS utilization data, and then from public statements made, that they've done a really nice job penetrating the NK market. I think, really importantly, is, you know, we are hopefully in a position to be coming to market in the next several years. They will have done a lot of work to lay the groundwork for a broader understanding and increased diagnosis of PCEDs. And of course, with our broader indication, should we be successful, we'll be able to address a larger number of those patients. Okay, okay, great. And I just want to make sure I give a fair chance to, you have more than KPI-012. You basically have a little bit of a pipeline within a product here with that. Can you just touch on that and also on KPI-014? And then after that, maybe I'll let you close up just in the last few minutes with the cash position and where you stand these days. Thank you. Yes, I can touch on that. But you know, we believe the KPI-012 and the platform, the secretome platform, have applicability across a number of different ocular diseases, diseases that involve corneal healing or damaged corneal health. And we've looked at indications such as limbal stem cell deficiency, graft versus host disease. These, of course, are orphan indications as well. But again, because of the multifactorial mechanism of action, and there is data in the literature suggesting mesenchymal stem cells and secretomes can be effective there. And there's a growing literature base on the effect of, again, mesenchymal stem cells or secretomes, in the back of the eye on retinal diseases, supporting, you know, protecting the neuronal factors, providing antioxidant, protecting neurotrophic. So we have an earlier stage program there looking at a variety of different secretomes for their benefit and retinal health, and are focused primarily on inherited retinal dystrophies, where we think we could provide a therapy that would be gene agnostic. You know, gene therapy is great, but there's 300, 250, 300 genes involved in these retinal degenerations. So if we could come up with a product that perhaps doesn't cure them, but slows the progression and provides patients with, you know, vision for a longer amount of time, that would be a significant advance for these patients. Great. Thank you. And then, maybe just on the cash position of the company at this stage, what has been shared? Sure. Well, look, I would tell you the company's in a very strong financial position. We reported total cash of $56 million at the end of Q3 of this past year. And we've publicly stated that that's enough to get us into the second quarter of 2025. You know, we successfully executed on a $31 million PIPE about a year ago at this time. And since then, we're also successful in securing a $15 million grant from the California Institute for Regenerative Medicine. So we're in a really good position. You know, cash, you know, we believe at least a couple of quarters beyond expected data readout for the ongoing phase II trial. And you know, we're just heads down and focused on executing the trial and getting to a positive data readout in the second half of this year. Okay, okay, great. Well, thank you so much for joining. I think we're up on time. Really appreciate the time. Thank you. Thank you, Frank. We really appreciate the time. Thank you.