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Kala Pharmaceuticals Announces FDA Approval of INVELTYS™ for the Treatment of Post-Operative Inflammation and Pain Following Ocular Surgery

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– First Twice-Daily Ocular Corticosteroid Indicated for the Treatment
of Post-Operative Inflammation and Pain Following Ocular Surgery –

– Kala to Host Conference Call Today at 5:00pm (ET) –

Kala Pharmaceuticals, Inc. (NASDAQ:KALA), a biopharmaceutical company
focused on the development and commercialization of therapeutics using
its proprietary mucus-penetrating particle (MPP) technology, today
announced that the U.S. Food and Drug Administration (FDA) has approved
INVELTYSTM (loteprednol etabonate ophthalmic suspension) 1%
for the treatment of post-operative inflammation and pain following
ocular surgery. INVELTYS is the first twice-daily (BID) ocular
corticosteroid approved for this indication.

"The FDA approval of INVELTYS is a tremendous milestone for Kala," said
Kim Brazzell, Ph.D., Chief Medical Officer of Kala Pharmaceuticals.
"Approximately 8 million patients undergo ocular surgeries each year.
The approval of INVELTYS offers patients and their eye care
professionals the first and only BID ocular corticosteroid therapy that
has been shown in clinical trials to be clinically effective while
maintaining a proven safety profile, which may improve compliance and
prove less burdensome for patients. We believe INVELTYS will be an
important addition to eye care professionals' treatment armamentarium."

All other ocular steroids are only approved for four-times-a-day dosing.
This more frequent dosing requirement can lead to issues for both
doctors and patients. Corticosteroids are the foundation of therapy for
post-ocular surgery care, with the key goal of controlling inflammation
and pain which is caused by surgical trauma to the eye. The use of
ocular steroids post-surgery is to achieve a rapid reduction of
inflammation and to promote healing of the eye. Therefore, ensuring
close adherence to the steroid regimen is a critical factor for
physicians in the post-surgery care of the patient and eventual overall
success of the procedure.

"Today's approval of INVELTYS is welcome news for the eye care community
as it provides a clear advancement in the treatment for inflammation and
pain following ocular surgery. Having access to a BID corticosteroid in
a novel nanoparticle formulation with proven safety and efficacy will
make a positive impact on the management of my post-operative patients,"
said Terry Kim, M.D., Professor of Ophthalmology and Chief, Cornea and
External Disease Division, Duke University Eye Center.

"On behalf of the Kala team, I want to thank the many patients and
clinicians who participated in our clinical trials. With this approval,
our ongoing commercialization preparations now advance to the next phase
where we plan to hire a specialty sales force that will focus on eye
care professionals in the United States. We expect to launch INVELTYS in
the beginning of 2019," said Mark Iwicki, Chairman, President and Chief
Executive Officer of Kala Pharmaceuticals.

Kala also continues to advance KPI-121 0.25% for dry eye disease. Kala
has initiated a third Phase 3 clinical trial, STRIDE 3 (STRIDE - Short
Term Relief In Dry Eye), evaluating KPI-121 0.25% for the temporary
relief of the signs and symptoms of dry eye disease. Kala believes that
the changes made to the design of STRIDE 3 will improve its probability
of success. The Company expects to report top-line results for STRIDE 3
in the fourth quarter of 2019. Kala also plans to submit a New Drug
Application (NDA) for KPI-121 0.25% during the second half of 2018. The
NDA will include data from three clinical trials studying approximately
2,000 patients, including one Phase 2 trial and two Phase 3 efficacy and
safety trials (STRIDE 1 and STRIDE 2).

INVELTYSTM Important Safety Information

INVELTYS, as with other ophthalmic corticosteroids, is contraindicated
in most viral diseases of the cornea and conjunctiva including
epithelial herpes simplex keratitis (dendritic keratitis), vaccinia, and
varicella, and also in mycobacterial infection of the eye and fungal
diseases of ocular structures.

A prolonged use of corticosteroids may result in glaucoma with damage to
the optic nerve, defects in visual acuity and fields of vision. If this
product is used for 10 days or longer, IOP should be monitored.

Use of corticosteroids may result in posterior subcapsular cataract
formation.

Use of steroids after cataract surgery may delay healing and increase
the incidence of bleb formation. In those diseases causing thinning of
the cornea or sclera, perforations have been known to occur with the use
of topical steroids. The initial prescription and renewal of the
medication order should be made by a physician only after examination of
the patient with the aid of magnification such as slit lamp
biomicroscopy and, where appropriate, fluorescein staining.

Prolonged use of corticosteroids may suppress the host response and thus
increase the hazard of secondary ocular infections. In acute purulent
conditions, steroids may mask infection or enhance existing infection.

Use of a corticosteroid medication in the treatment of patients with a
history of herpes simplex requires great caution. Use of ocular steroids
may prolong the course and may exacerbate the severity of many viral
infections of the eye (including herpes simplex).

Fungal infections of the cornea are particularly prone to develop
coincidentally with long-term local steroid application. Fungus invasion
must be considered in any persistent corneal ulceration where a steroid
has been used or is in use.

In clinical trials, the most common adverse drug reactions were eye pain
(1%) and posterior capsular opacification (1%). These reactions may have
been the consequence of the surgical procedure.

Please see the full prescribing information available at: www.inveltys.com

Conference Call Information

Kala will hold a conference call today at 5:00pm (ET) to discuss the
approval of INVELTYS. The dial-in numbers are (866) 300-4091 for
domestic callers and (703) 736-7433 for international callers. The
conference ID is 4072478. For an archived recording of the call and
question and answer session, please visit the "Investors & Media"
section on the Kala website at http://kalarx.com/

About Post-Operative Inflammation and Pain

Ocular inflammation and pain are common complications following ocular
surgery. According to Marketscope, in 2017 there were approximately 8
million ocular surgeries in the U.S., which is projected to grow to up
to approximately 10 million in 2022. More than half of the ocular
surgeries performed in the U.S. are cataract surgeries. Tissue damage
caused by ocular surgery leads to the production of prostaglandins,
lipids that aid in recovery at the site of an injury, and an increase in
blood flow to the affected area, both of which contribute to
inflammation. The standard of care for post-operative inflammation and
pain includes anti-inflammatory drugs such as corticosteroids, which
improve patient comfort and accelerate recovery through disruption of
the inflammatory cascade. The current four-times-a-day dosing regimen
for corticosteroid treatment can be burdensome for patients as they are
taking multiple eye drop products following surgery and is believed to
reduce patient compliance. There are no other twice-daily ocular
corticosteroid products currently approved in the U.S. for the treatment
of post-operative inflammation and pain.

About INVELTYS™

INVELTYS (loteprednol etabonate ophthalmic suspension) 1% is a
twice-a-day corticosteroid for the treatment of inflammation and pain
following ocular surgery. INVELTYS utilizes Kala's proprietary
Mucus-Penetrating Particle (MPP) technology to enhance penetration into
target tissues of the eye. In preclinical studies, MPP technology
increased delivery of LE into ocular tissues compared to current LE
products. INVELTYS successfully completed two Phase 3 clinical trials
and achieved statistical significance for both primary efficacy
endpoints in both trials. In each of these trials, INVELTYS was well
tolerated with no treatment-related serious adverse events observed.
INVELTYS was approved by the FDA on August 22, 2018. Kala believes
INVELTYS has a favorable profile for the treatment of inflammation and
pain following ocular surgery, due to its twice-a-day dosing regimen. A
link to the full product label can be found at: www.inveltys.com

About KPI-121 0.25%

Kala is developing KPI-121 0.25% for the temporary relief of the signs
and symptoms of dry eye disease utilizing a two-week course of therapy
administered four times a day. Dry eye disease is a chronic, episodic,
multifactorial disease affecting the tears and ocular surface and can
involve tear film instability, inflammation, discomfort, visual
disturbance and ocular surface damage. KPI-121 0.25% utilizes Kala's MPP
technology to enhance penetration of LE into target tissue of the eye.
Kala has completed one Phase 2 and two Phase 3 clinical trials of
KPI-121 0.25%. Kala has initiated a third Phase 3 trial, STRIDE 3, for
which topline results are expected in the fourth quarter of 2019. Kala
believes that, if approved, KPI-121 0.25%'s broad mechanism of action,
rapid onset of relief of both signs and symptoms, favorable tolerability
and safety profile and the potential to complement existing therapies,
could result in a favorable profile for the management of dry eye flares
and other dry eye associated conditions.

About Kala Pharmaceuticals

Kala is a biopharmaceutical company focused on the development and
commercialization of therapeutics using its proprietary Mucus
Penetrating Particle (MPP) technology, with an initial focus on the
treatment of eye diseases. Kala has applied the MPP technology to a
corticosteroid, LE, designed for ocular applications, resulting in the
recent approval of INVELTYS for the treatment of inflammation and pain
following ocular surgery. Kala plans to submit a New Drug Application
for KPI-121 0.25%, for the temporary relief of the signs and symptoms of
dry eye disease in the second half of 2018.

Forward Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, that
involve substantial risks and uncertainties, including statements
regarding INVELTYS for the treatment of inflammation and pain following
ocular surgery and the Company's lead product candidate KPI-121 0.25%
for the temporary relief of the signs and symptoms of dry eye disease,
INVELTYS being an important addition to eye care professionals'
treatment armamentarium, the Company's expectation to hire a specialty
sales force that will cover the majority of Eye Care professionals and
plans to launch INVELTYS in the beginning of 2019, ocular surgeries in
the U.S. growing to up to 9.4 million in 2021, the anticipated reporting
of STRIDE 3 topline results in the fourth quarter of 2019, and the
Company's plans to file an NDA for KPI-121 0.25% with the FDA during the
second half of 2018. All statements, other than statements of historical
facts, contained in this press release, including statements regarding
the Company's strategy, future operations, future financial position,
future revenue, projected costs, prospects, plans and objectives of
management, are forward-looking statements. The words "anticipate,"
"believe," "estimate," "expect," "intend," "may," "plan," "predict,"
"project," "target," "potential," "will," "would," "could," "should,"
"continue" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements
contain these identifying words. The Company may not actually achieve
the plans, intentions or expectations disclosed in its forward-looking
statements, and you should not place undue reliance on such
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in the
forward-looking statements as a result of various risks and
uncertainties including, but not limited to: whether the Company will be
able to successfully implement its commercialization plans for INVELTYS;
whether the market opportunity for INVELTYS is consistent with the
Company's expectations and market research; data from the Company's
Phase 3 clinical trials of KPI-121 0.25% will warrant submission and
filing of an NDA on the timeline expected, or at all; whether any
additional clinical trials will be initiated or required for KPI-121
0.25% prior to submission or filing of an NDA, or at all, and whether
any such NDA will be accepted for filing and/or approved; the Company's
ability to initiate and complete clinical trials on the timeline
expected, or at all; whether the results of clinical trials will be
positive and/or replicate the results from earlier clinical development
and/or preclinical studies; that post-hoc analyses are normally given
less weight by regulatory authorities than pre-specified analyses;
uncertainties inherent in the availability and timing of data from
ongoing clinical trials; uncertainties related to the Company's ability
to obtain regulatory approvals to conduct trials or to market products;
the Company's ability to build a specialty sales force and prepare for
commercial launch of INVELTYS on the timeline expected, or at all;
whether the Company's cash resources will be sufficient to fund the
Company's foreseeable and unforeseeable operating expenses and capital
expenditure requirements for the Company's expected timeline; other
matters that could affect the availability or commercial potential of
INVELTYS and the Company's product candidates; and other important
factors, any of which could cause the Company's actual results to differ
from those contained in the forward-looking statements, discussed in the
"Risk Factors" section of the Company's most recently filed Quarterly
Report on Form 10-Q and other filings the Company makes with the
Securities and Exchange Commission. These forward-looking statements
represent the Company's views as of the date of this release and should
not be relied upon as representing the Company's views as of any date
subsequent to the date hereof. The Company does not assume any
obligation to update any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by
law.

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