It's been a very good week for Cara Therapeutics, Inc. (NASDAQ: CARA). The biotech stock soared after Cara reported positive results from a phase 2/3 clinical study of intravenous (IV) CR845 in alleviating post-operative pain.
Success for CR845 in post-operative pain no doubt has investors more eager than ever to see how the drug performs in treating chronic kidney disease-associated pruritis (CKD-aP), a severe itching that occurs in patients with kidney disease. Is now the time to buy Cara Therapeutics stock?
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A closer look at the good news
Cara Therapeutics evaluated two doses of IV CR845 in patients who underwent abdominal surgery, a 1.0 mcg/kg dose and a 0.5 mcg/kg dose. Pretty much everything looked great for the 1.0 mcg/kg dose. The company reported that this higher dose achieved the study's primary endpoint of reducing pain by a statistically significant amount when compared to placebo over 24 hours after surgery.
Actually, this dose of IV CR845 reduced pain throughout all the periods evaluated for the patients who completed abdominal surgery. Cara stated that statistically significant pain reduction was seen during the first six hours and the first 18 hours following surgery for patients receiving the higher dose IV CR845 compared to patients on placebo.
Pain is, of course, one of the most common issues for patients following abdominal surgery. Another is nausea and vomiting. IV CR845 appeared to be effective in addressing both problems.
Cara reported that the higher dose of IV CR845 reduced the incidence of patient-reported vomiting by 73% versus the level for patients on placebo. Significant improvement was also observed in post-operative nausea and vomiting (PONV) impact scores for patients receiving the 1.0 mcg/kg dose of IV CR845.
The results weren't as great for the lower dose of IV CR845. Although some pain improvement was seen in patients, it wasn't enough to be statistically significant. That's not a major concern, however, since the higher dose of the drug appeared to be well-tolerated by patients.
There was also one disappointment for the 1.0 mcg/kg dose. Both higher and lower doses of IV CR845 failed to meet a secondary endpoint of statistically significant reduction in the use of rescue pain meds.
Current opioid drugs are effective in alleviating post-op pain. However, a potential side effect of these drugs is nausea and vomiting. In addition, these opioid drugs can be highly addictive. But these drugs are mu opioid receptor agonists (MORAs), while IV CR845 is a kappa opioid receptor agonist (KORA). The key differences between these two types of opioids are that KORAs don't penetrate the brain-blood barrier and don't have the negative side effects that MORAs do.
What's next for Cara
Cara Therapeutics' CEO Derek Chalmers mentioned in the company's Q1 earnings call that the company could seek a partner to advance IV CR845 through the regulatory approval process and commercialize the drug if approved. I think that's exactly what the biotech will do now. And I expect Cara shouldn't have any problems finding a partner.
The bigger story for Cara, though, is in the use of CR845 to treat pruritis. Cara has already lined up a partner to market CR845 (now branded as Korsuva) outside of the U.S., Japan, and South Korea. In May, the biotech signed a deal with Vifor Fresenius Medical Care Renal Pharma, a joint venture between Swiss drugmaker Vifor Pharma Group and dialysis services provider Fresenius Medical Care.
Cara began a pivotal phase 3 clinical study of its Korsuva injection in treating CKD-aP in patients on hemodialysis earlier this year. Initial results from that study should be available in 2019. The company also has a phase 1 study of an oral version of Korsuva in treating CKD-aP in patients who aren't on hemodialysis. Results from this study should be available any day now.
In addition, Cara is evaluating oral Korsuva in treating chronic liver disease-associated pruritis (CLD-aP) in a phase 1 clinical study. This study is expected to be completed in the third quarter of 2018.
Is the stock a buy?
Cara Therapeutics sports a market cap of around $630 million after the positive results for IV CR845 in post-op pain relief. I think the stock has plenty of room to run.
There are still risks, though. It's possible that upcoming clinical study results could be disappointing. Cara is also likely to issue more shares by early 2019 to raise cash, which would dilute the value of existing shares and probably cause the stock price to fall.
But for investors with a long-term perspective who are willing to take on these risks, my view is that Cara's risk-reward proposition makes it one of the better clinical-stage biotech stocks on the market.
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