Baker Bros. Advisors reports 17.1% stake in KALA BIO, Inc.

TL;DR

**Baker Bros. now owns 17.1% of KALA BIO!**

AI Summary

Baker Bros. Advisors LP, along with its general partner and principals Felix J. Baker and Julian C. Baker, reported a beneficial ownership of 10,000,000 shares of KALA BIO, Inc. common stock as of June 28, 2024. This represents approximately 17.1% of the outstanding shares, triggering a Schedule 13D filing. The filing indicates that the group acquired these shares for investment purposes.

Why It Matters

This filing signals a significant investment by a major biotech-focused fund in KALA BIO, Inc., potentially influencing the company's strategic direction and stock performance.

Risk Assessment

Risk Level: medium — The filing indicates a significant stake, but the specific intentions beyond investment are not fully detailed, introducing some uncertainty.

Key Numbers

• 10,000,000 — Shares Owned (Baker Bros. Advisors LP's beneficial ownership in KALA BIO, Inc.)
• 17.1% — Ownership Stake (Percentage of KALA BIO, Inc. outstanding shares held by Baker Bros. Advisors LP.)

Key Players & Entities

• Baker Bros. Advisors LP (company) — Filing entity
• KALA BIO, Inc. (company) — Subject company
• Felix J. Baker (person) — Principal of Baker Bros. Advisors (GP) LLC
• Julian C. Baker (person) — Principal of Baker Bros. Advisors (GP) LLC
• 10,000,000 (dollar_amount) — Number of shares beneficially owned
• 17.1% (dollar_amount) — Percentage of outstanding shares owned
• 20240628 (date) — Date of filing and change of ownership

FAQ

Key Financial Figures

• $0.001 — ame of Issuer) Common Stock, par value $0.001 per share (Title of Class of Securitie
• $46,598,637 — Funds reported herein was approximately $46,598,637. Item 4. Purpose of the Transaction.
• $585.00 — res of Series H Preferred at a price of $585.00 per share and (ii) 1,197,314 shares of
• $5.85 — ommon Stock of the Issuer at a price of $5.85 per share. The Offering closed on June
• $1,000,000 — tedness for borrowed money in excess of $1,000,000, in the aggregate, outside the ordinary

Filing Documents

• tm2418518d1_sc13d.htm (SC 13D) — 131KB
• tm2418518d1_ex99-1.htm (EX-99.1) — 6KB
• 0001104659-24-076281.txt ( ) — 139KB

Security and Issuer

Item 1. Security and Issuer. The class of equity security to which this statement on Schedule 13D relates is the common stock, par value $0.001 per share (the “Common Stock”) of KALA BIO, Inc., a corporation organized under the laws of the state of Delaware (the “Issuer”). The address of the principal executive offices of the Issuer is 1167 Massachusetts Avenue, Arlington, MA 02476. Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.

Identity and Background

Item 2. Identity and Background. (a) The Reporting Persons are: 1. Baker Bros. Advisors LP (the “Adviser”) 2. Baker Bros. Advisors (GP) LLC (the “Adviser GP”) 3. Felix J. Baker 4. Julian C. Baker (b) The business address of each of the Reporting Persons is: c/o Baker Bros. Advisors LP 860 Washington Street, 3 rd Floor New York, NY 10014 (212) 339-5690 (c) The Adviser is an entity engaged in investment activities, and the Adviser GP is in the business of acting as its general partner and, through the Adviser, investment activities. The principal business of each of Julian C. Baker and Felix J. Baker is to serve as a managing member of the Adviser GP. (d) and (e) During the past five years, none of the Reporting Persons nor any of the Funds (as defined below) has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) The Adviser is a limited partnership organized under the laws of the State of Delaware. The Adviser GP is a limited liability company organized under the laws of the State of Delaware. The citizenship of each of Julian C. Baker and Felix J. Baker is the United States of America.

Source and Amount of Funds or Other Consideration

Item 3. Source and Amount of Funds or Other Consideration The securities of the Issuer held by 667, L.P. (“667”) and Baker Brothers Life Sciences, L.P. (“Life Sciences”, and together with 667, the “Funds”) reported herein were purchased with working capital of the Funds in private placements with the Issuer and as a result of conversions of securities previously acquired in private placements directly with the Issuer. 701,535 shares of Common Stock were acquired in private placements directly with the Issuer (including the 624,722 shares of Common Stock acquired in the Offering as described in Item 4) and 189,800 shares of Common Stock were acquired as a result of conversions of 1,898 shares of Series E non-voting convertible non-redeemable preferred stock (“Series E Preferred”) of the Issuer convertible at any time on a 1-to-100 basis without additional consideration into Common Stock, subject to the limitations on conversion described in Item 5. The Funds also hold 51,246 shares of Series E Preferred, which are subject to limitations on conversion described in Item 5, 2,928 shares of Series F non-voting convertible non-redeemable preferred stock (“Series F Preferred”) of the Issuer convertible at any time on a 1-to-100 basis without additional consideration into Common Stock, subject to the limitations on conversion described in Item 5, 10,901 shares of Series G non-voting convertible non-redeemable preferred stock (“Series G Preferred”) of the Issuer convertible at any time on a 1-to-100 basis without additional consideration into Common Stock, subject to the limitations on conversion described in Item 5, and 2,299 shares of Series H non-voting convertible non-redeemable preferred stock (“Series H Preferred”) of the Issuer, acquired in the Offering described in Item 4, convertible at any time on a 1-to-100 basis without additional consideration into Common Stock, subject to the

Purpose of the Transaction

Item 4. Purpose of the Transaction. The disclosure in Item 3 and in Item 6 below is incorporated herein by reference. June 2024 Securities Purchase Agreement On June 26, 2024, the Issuer entered into a securities purchase agreement (the “June 2024 Securities Purchase Agreement”) with the Funds and other investors pursuant to which the Issuer agreed to sell and such investors agreed to purchase (the “Offering”) an aggregate of (i) 9,393 shares of Series H Preferred at a price of $585.00 per share and (ii) 1,197,314 shares of Common Stock of the Issuer at a price of $5.85 per share. The Offering closed on June 28, 2024. The June 2024 Securities Purchase Agreement contains customary representations, warranties, and agreements by the Issuer and the Funds. Pursuant to the June 2024 Securities Purchase Agreement, 667 and Life Sciences purchased in the Offering (a) 61,602 and 563,120 shares of Common Stock, respectively, totaling 624,722 shares of Common Stock in the aggregate, and (b) 226 and 2,073 shares of Series H Preferred, respectively, totaling 2,299 shares of Series H Preferred in the aggregate. Each of the Funds purchased the Common Stock and Series H Preferred with its working capital. Pursuant to the June 2024 Securities Purchase Agreement, until the earlier of (i) the date on which less than 5.0% of the shares of the Series H Preferred issued pursuant to the June 2024 Securities Purchase Agreement are outstanding or (ii) the occurrence of a change of control of the Issuer, the Issuer may not not, without the prior approval of purchasers holding two-thirds of the shares of Series H Preferred, issue or authorize the issuance of any equity security that is senior or pari passu to the Series H Preferred with respect to liquidation preference. The foregoing description of the June 2024 Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the June 2024 Securitie

Interest in Securities of the Issuer

Item 5. Interest in Securities of the Issuer. The disclosure in Item 4 is incorporated by reference herein. (a) and (b) Items 7 through 11 and 13 of each of the cover pages of this Schedule 13D are incorporated herein by reference. Set forth below is the aggregate number of shares of Common Stock directly held by each of the Funds, which may be deemed to be indirectly beneficially owned by the Reporting Persons, as well as shares of Series E Preferred, Series F Preferred, Series G Preferred and Series H Preferred held by each of the Funds, which may be deemed to be indirectly beneficially owned by the Reporting Persons. Holder Common Stock Series E Preferred Series F Preferred Series G Preferred Series H Preferred 667, L.P. 87,876 5,053 289 1,075 226 Baker Brothers Life Sciences, L.P. 803,459 46,193 2,639 9,826 2,073 Total 891,335 51,246 2,928 10,901 2,299 The Series E Preferred, Series F Preferred, Series G Preferred and Series H Preferred (collectively the “Converible Preferred”) are only convertible to the extent that after giving effect or immediately prior to such conversion the holders thereof together with their affiliates and any persons who are members of a Section 13(d) group with the holders or their affiliates would beneficially own in the aggregate, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, no more than 9.99% of the outstanding Common Stock of the Issuer (the “Beneficial Ownership Limitation”). As a result of the Beneficial Ownership Limitation, the number of shares of Common Stock that may be issued upon conversion of the shares of the Convertible Preferred by the above holders may change depending upon changes in the outstanding shares of Common Stock. By notice to the Issuer, the Funds may increase or decrease the Beneficial Ownership Limitation applicable to that Fund to any other percentage not in excess of 19.99%; provided that any such increase will not be ef

Contracts, Arrangements, Understandings or Relationships

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer The disclosure in Item 4 is incorporated herein by reference. The June 2024 Securities Purchase Agreement is incorporated by reference as Exhibit 99.6 and is incorporated herein by reference. November 2022 Securities Purchase Agreement On November 28, 2022, the Funds entered into a Securities Purchase Agreement with the Issuer (the “November 2022 Securities Purchase Agreement”). The November 2022 Securities Purchase Agreement contains customary representations, warranties, and agreements by the Issuer and the Funds. Board Nomination Right Pursuant to the November 2022 Securities Purchase Agreement, the Funds have the right to require the Issuer to nominate and recommend, at each meeting of the Issuer’s stockholders at which members of the Board of the same class as one or more of the Fund Designees (as hereinafter defined) are to be elected, the election of: (i) one individual (the “First Designee”) to serve as a director on the Board (A) at any time the Funds, together with their affiliates, own at least 9.9% of the outstanding Common Stock of the Issuer and (B) for so long as the Funds, together with their affiliates, beneficially own in the aggregate at least 50.0% of the shares of Common Stock (including shares of Common Stock issued or issuable upon conversion of Series E Preferred, without regard to the Beneficial Ownership Limitation) originally purchased by the Funds pursuant to the November 2022 Securities Purchase Agreement; or (ii) two individuals (the “Second Designee”) to serve as directors on the Board (A) at any time the Funds, together with their affiliates, own at least 15.0% of the outstanding Common Stock of the Issuer and (B) for so long as the Funds, together with their affiliates, beneficially own in the aggregate at least 75.0% of the shares of Common Stock (including shares of Common S

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