Shares of Kala Pharmaceuticals (NASDAQ: KALA) surged more than 250% during Wednesday’s trading session after the company reported FDA acceptance of its investigational new drug application for the company’s lead product candidate KPI-012.

The company says that the innovative treatment has the potential to address a rare but significant condition known as persistent corneal epithelial defect (PCED), which affects an estimated 100,000 people in the United States each year.

PCED is a persistent, non-healing corneal wound that resists conventional treatments and can lead to serious complications such as infection, ulceration, scarring, and vision loss if left untreated. It can be caused by a variety of factors including neurotrophic keratitis, corneal transplant surgery, viral or microbial keratitis, and limbal stem cell deficiency.

KPI-012 has shown promise in preclinical and clinical studies as a potential treatment for PCED, thanks to its multifactorial mechanism of action.

“The acceptance of the KPI-012 IND is an important milestone for Kala, as we work to translate the promise of our MSC-S platform into better outcomes for people living with rare ocular surface diseases,” stated Kim Brazzell, Ph.D., Head of R&D and Chief Medical Officer. “We are now turning our focus to clinical execution. We are working closely with investigators to initiate our Phase 2b clinical trial of KPI-012 for PCED in the first quarter of 2023.”

The company says that the upcoming Phase 2b clinical trial will be a randomized, double-masked, and vehicle-controlled study, evaluating the safety and efficacy of two doses of KPI-012 when applied topically four times a day for 56 days.

Approximately 90 adult patients with PCED are expected to be enrolled in the trial, with the primary endpoint being complete healing of PCED as measured by corneal fluorescein staining.

If the results of the trial are positive, Kala Pharmaceuticals believes it could serve as the first of two pivotal trials needed to support the submission of a Biologics License Application to the Food and Drug Administration (FDA).

The company expects to begin enrollment in the trial in the first quarter of 2023 and to report topline data in the first quarter of 2024.

KPI-012 represents a significant step forward in the treatment of PCED and could potentially become the first approved treatment for this condition across all its various etiologies.

Shares of Kala Pharmaceuticals trade on the NASDAQ under the symbol KALA. For more information visit www.kalarx.com.