CARA Therapeutics Has Good News

Cara Therapeutics (CARA) develops novel and proprietary class of product candidates, led by Korsuva (CR845/difelikefalin) injection. This product is a first-in-class peripheral kappa opioid receptor (KOR) agonist designed to alleviate pruritus (itching) and pain.  In Phase 2 trials, Korsuva injection demonstrated statistically significant reductions in itch intensity and concomitant improvement in the quality of life in hemodialysis patients with moderate-to-severe chronic kidney disease-associated pruritus (CKD-aP). Additionally, Korsuva has demonstrated statistically significant pain relief in Phase 2 clinical trials conducted in patients with moderate-to-severe pain, without inducing many of the undesirable side effects typically associated with currently available opioid pain therapeutics.

Currently, Korsuva is in Phase 3 trials in hemodialysis patients with CKD-aP.

THE NEWS

The good news came from Cara, which announced that it has licensed worldwide rights, except in the U.S., Japan, and South Korea, to commercialize Korsuva injection for the treatment of chronic kidney disease-associated pruritus (CKD-aP) in dialysis patients to Vifor Fresenius Medical Care Renal Pharma Ltd (VFMCRP), a joint company of Vifor Pharma Group (VIFN.VX) and Fresenius Medical Care (FMS) that specializes in treatments for CKD.

The U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation to Korsuva injection for this indication, for which there are currently no approved therapies in the U.S. or E.U.

The good news resides in the fact that the marketer VFMCRP is a global leader in providing treatment for chronic kidney disease patients. It is expected to do a great task bringing Cara product to patients on dialysis across Europe and the other licensed indicated countries.

Stefan Schulze, Vifor Pharma President of the Executive Committee and COO said, “CR845 injection is a first-in-class, innovative investigational medicine for treating a highly debilitating disease. It is a natural fit for our leading product portfolio in nephrology, and we look forward to making it available to patients who urgently need better therapy. Sixty to 70% of dialysis patients experience CKD-aP. Nearly 20% suffer from a very severe form, which is associated with much lower survival. Despite the clear unmet medical need, there is no approved treatment for CKD-aP in Europe or the U.S. Mr. Schulze added, “CR845 does not penetrate the brain and so bypasses unwanted side-effects like the opioid addiction. It has significant potential for setting new standards in providing relief, both from CKD- induced itching and post-operative pain.”

The License Agreement

Under the terms of the Agreement:

Cara is to receive an upfront payment in the amount of $50 million in cash and an equity investment of $20 million to acquire Cara common stock at a price of approximately $17/share. – Cara will be eligible to receive payments of up to $470 million, which includes $30 million in regulatory and up to $440 million in tiered commercial milestones that are all sales related.

– Cara is also eligible to receive tiered royalties based on net sales of Korsuva injection in the licensed territories.

– VFMCRP will have the exclusive rights to commercialize KORSUVA injection for the treatment of CKD-aP in dialysis patients ex-U.S. except in Japan and South Korea.

– Cara retains full development and commercialization rights for Korsuva injection for the treatment of CKD-aP in the U.S. except in the dialysis clinics of Fresenius Medical Care North America (FMCNA), where VFMCRP and Cara will promote Korsuva injection under a profit-sharing arrangement based on net FMCNA clinic sales recorded by Cara.

FMCNA is the largest kidney dialysis provider in the U.S. and treated approximately 38% of U.S. dialysis patients in 2017. Cara will solely promote Korsuva injection in all non-FMC clinics in the U.S. and retain all profits from those sales.

 Some Details on Korsuva Trials

Based on positive data from Phase 2 clinical trials and after completion of the End-of-Phase 2 meeting with the FDA, Cara initiated the first pivotal Phase 3 trial of Korsuva injection (KALM-1 trial) in hemodialysis patients suffering from moderate-to-severe CKD-aP in the United States.

Cara expects to initiate a global Phase 3 clinical trial of Korsuva injection for the treatment of CKD-aP in hemodialysis patients in multiple countries later this year.

Filings for regulatory approvals in the U.S. and other markets will be supported by the data from these studies.

Conference Call

Cara management hosted a conference call today at 8:30 a.m. EDT, which discussed the licensing agreement. A live webcast of the call can be accessed under “Events and Presentations” in News & Investors section of the Cara Therapeutics’ website at www.CaraTherapeutics.com.

 

Prohost Observations

What we observed in the news is a unique product with successful results demonstrating statistically significant reductions in itch intensity and concomitant improvement in the quality of life in hemodialysis patients with moderate-to-severe chronic kidney disease-associated pruritus (CKD-aP). Important to know that this pruritis is debilitating and has yet to find a treatment. All this is good news but the best news to hear from a small firm such as Cara is signing a licensing agreement with a world-renowned firm specialized in the kidney dialysis markets all over the world.  

That’s what the good news is all about.

The signing of licensing agreement with a specialized highly regarded firm highlights Cara’s product and its technological and management’s capabilities. The approval of Korsuva injection will be huge news for Cara and its shareholders.

The Stock 

The Symbol:               CARA

Stock Price:                $15.13 UP $3.53 in today’s morning trading

Market Cap:                $495.40 million

52-Week Average:      $11,11 – 28.50

We are optimistic. The approval of Korsuva could triple this firm’s market cap.

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