KALA BIO to Build On-Prem AI for Biotech

This strategic pivot into AI infrastructure marks a significant shift for KALA BIO, a clinical-stage company previously focused on developing therapies for rare eye diseases using its mesenchymal stem cell secretome (MSC-S) platform. The company's stock has struggled, trading down nearly 95% over the past year, prompting this move into the high-growth AI sector. The initiative is underpinned by an exclusive worldwide licensing agreement with a Canadian company, 2624465 Ontario Inc., operating as Younet AI. This gives KALA BIO the rights to Younet's proprietary AI research platform, internally named "Researgency," specifically for the biotechnology field. The deal includes an initial 12-month term with options for KALA to renew annually. As part of the agreement, KALA BIO will make initial cash payments of up to $530,000 and issue 5 million shares of common stock to Younet AI. The deal also grants KALA an irrevocable option to acquire Younet's equity or assets for $55 million. This structure provides KALA with a pathway to full ownership of the AI technology. KALA will first deploy the Researgency platform internally, applying it to its own MSC-S datasets and its KPI-012 clinical program. This initial phase serves as a validation of the technology, with preliminary findings expected within the first 12 months. Following this internal use case, the company plans to license the platform to other biotech and pharmaceutical companies on a recurring subscription basis. This on-premise model directly addresses data security and sovereignty concerns, which are significant barriers for biotech companies considering cloud-based AI platforms. CEO Avi Minkowitz emphasized this differentiation, stating, "We are not building another centralized AI platform that asks biotechs to hand over their crown jewels... We want to be the company that shows up at the biotech company's door, deploys institutional-grade AI on the biotech company's servers... and never takes [the data] from the biotech company." The Researgency platform utilizes retrieval-augmented generation (RAG) pipelines and specialized AI agents to analyze complex biomedical data. Its capabilities include modeling protein interactions, reviewing drug safety literature, and simulating clinical trial outcomes, aiming to accelerate R&D and optimize trial design for its future clients. This strategic shift comes after a challenging period for KALA BIO, which recently settled a $10.6 million debt and completed a $10 million registered direct offering to shore up its finances. The company's market capitalization stands at a modest $9.91 million, highlighting the high-stakes nature of this pivot into the competitive AI in biotech space, which is projected to become a multi-billion dollar market.