Cara Therapeutics, Inc. (NASDAQ:CARA) Q1 2020 Earnings Conference Call May 11, 2020 4:30 PM ET Company Participants Jack Hildick-Smith - Stern Investor Relations Derek Chalmers - President & Chief Executive Officer Rick Makara - Vice President & Head of Accounting Conference Call Participants Jason Gerberry - Bank of America David Amsellem - Piper Sandler Chris Howerton - Jefferies Alan Carr - Needham & Company Esther Hong - Janney Operator Good afternoon and welcome to Cara Therapeutics First Quarter 2020 ...

```markdown [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements for the quarter ended March 31, 2020, including balance sheets, comprehensive loss, stockholders' equity, and cash flows, with accompanying notes [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) The balance sheet shows a decrease in total assets from **$233.0 million** at the end of 2019 to **$196.2 million** as of March 31, 2020, primarily driven by a reduction in cash, cash equivalents, and marketable securities, with total stockholders' equity also decreasing from **$186.7 million** to **$160.5 million** over the same period, reflecting the net loss incurred during the quarter Condensed Balance Sheet Data (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $132,669 | $165,656 | | **Total assets** | $196,173 | $232,959 | | **Total current liabilities** | $18,362 | $22,917 | | **Total liabilities** | $35,699 | $46,246 | | **Total stockholders' equity** | $160,474 | $186,713 | | **Accumulated deficit** | ($429,649) | ($400,727) | [Condensed Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Statements%20of%20Comprehensive%20Loss) For the first quarter of 2020, the company reported a significant increase in revenue to **$8.1 million**, up from **$4.4 million** in the prior-year period, driven by license and milestone fees, with operating expenses also rising substantially, and R&D expenses increasing to **$33.5 million**, resulting in a higher net loss of **$28.9 million**, or **($0.62) per share**, compared to a net loss of **$22.0 million**, or **($0.56) per share**, in Q1 2019 Statement of Comprehensive Loss (in thousands, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Total revenue** | $8,093 | $4,382 | | License and milestone fees | $8,021 | $4,242 | | **Research and development** | $33,536 | $23,608 | | **General and administrative** | $4,558 | $3,908 | | **Operating loss** | ($30,001) | ($23,134) | | **Net loss** | ($28,922) | ($21,960) | | **Net loss per share (Basic and Diluted)** | ($0.62) | ($0.56) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) The company used **$38.3 million** in cash for operating activities during the first quarter of 2020, a significant increase from the **$27.5 million** used in the same period of 2019, primarily due to a higher net loss and changes in operating assets and liabilities, while investing activities provided **$37.0 million** in cash, mainly from maturities of marketable securities, and financing activities provided a minor cash inflow from stock option exercises Cash Flow Summary (in thousands) | Activity | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Net cash used in operating activities** | ($38,303) | ($27,526) | | **Net cash provided by investing activities** | $36,959 | $26,399 | | **Net cash provided by financing activities** | $75 | $234 | | **Net decrease in cash, cash equivalents and restricted cash** | ($1,269) | ($893) | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes provide crucial context to the financial statements, detailing the company's business focus on developing pruritus treatments, its history of net losses and negative cash flows, and its reliance on equity financing and license agreements for funding, along with significant accounting policies, collaboration agreements, revenue recognition, stock-based compensation, and commitments - The company is a clinical-stage biopharmaceutical firm focused on developing and commercializing new chemical entities to alleviate pruritus by selectively targeting peripheral kappa opioid receptors[21](index=21&type=chunk) - As of March 31, 2020, the company had an accumulated deficit of **$429.6 million** and has incurred substantial net losses and negative cash flows from operations since inception, a trend expected to continue[23](index=23&type=chunk) - Revenue from the VFMCRP Agreement is recognized proportionately as R&D services are conducted, with **$8.021 million** recognized as license and milestone fees revenue for Q1 2020[110](index=110&type=chunk) - The company entered into a license agreement with Enteris Biopharma in August 2019 for its Peptelligence® technology to develop an oral formulation of its product candidate, paying an upfront fee of **$8.0 million**[168](index=168&type=chunk)[169](index=169&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial condition, operational results, and future outlook, covering KORSUVA development, Q1 2020 performance, and liquidity, with funds expected to last into the second half of 2021 [Product Candidate Pipeline](index=57&type=section&id=Our%20Product%20Candidate%20Pipeline) The company's pipeline centers on KORSUVA (CR845/difelikefalin), a first-in-class KOR agonist, with the injectable form in late-stage development for CKD-aP in hemodialysis patients, an NDA submission expected in the second half of 2020, and the oral form being evaluated in Phase 2 trials for CKD-aP (non-dialysis), CLD-aP, and Atopic Dermatitis (AD) - The company expects to submit a New Drug Application (NDA) to the FDA for KORSUVA injection for CKD-aP in the second half of 2020, following positive top-line results from its pivotal KALM-2 Phase 3 trial[212](index=212&type=chunk)[213](index=213&type=chunk) - The Phase 2 trial of Oral KORSUVA for pruritus in stage III-V CKD patients met its primary endpoint for the **1.0 mg** dose, and the company plans an End-of-Phase 2 meeting with the FDA in the second half of 2020[223](index=223&type=chunk)[226](index=226&type=chunk) - A Phase 2 trial of Oral KORSUVA for pruritus in patients with Atopic Dermatitis (AD) was expanded to approximately **320 patients**, with an interim analysis expected in Q2 2020 and top-line results in 2020, subject to COVID-19 related delays[233](index=233&type=chunk) [Results of Operations](index=74&type=section&id=Results%20of%20Operations) Comparing Q1 2020 to Q1 2019, total revenue increased **85%** to **$8.1 million**, driven by license fee revenue from the VFMCRP Agreement, while R&D expenses rose **42%** to **$33.5 million** due to increased activity in the KORSUVA clinical programs, and G&A expenses increased to **$4.6 million** from **$3.9 million**, reflecting higher professional fees and stock-based compensation Comparison of Operating Results (in thousands) | Item | Q1 2020 | Q1 2019 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $8,093 | $4,382 | 85% | | **R&D Expense** | $33,536 | $23,608 | 42% | | **G&A Expense** | $4,558 | $3,908 | 17% | - The increase in R&D expenses was primarily driven by costs for the KALM-2 Phase 3 trial, the Phase 3 safety trial of KORSUVA injection, and the Phase 2 trial for pruritus associated with Atopic Dermatitis (AD)[276](index=276&type=chunk) [Liquidity and Capital Resources](index=76&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2020, the company had **$179.8 million** in unrestricted cash, cash equivalents, and marketable securities, which management believes are sufficient to support operations into the second half of 2021, though the company has a history of losses and expects to continue incurring significant expenses, necessitating additional capital to fund its development and potential commercialization activities - The company believes its existing cash and marketable securities of **$179.8 million** as of March 31, 2020, will be sufficient to fund operations into the second half of 2021[286](index=286&type=chunk)[304](index=304&type=chunk) - The company has an effective Shelf Registration Statement allowing it to offer up to **$300.0 million** in securities, of which approximately **$145.5 million** has been sold to date, providing flexibility for future capital raises[285](index=285&type=chunk) - Future expenses are expected to increase with the continued development of KORSUVA, seeking regulatory approvals, and establishing a commercial infrastructure[295](index=295&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=84&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure is primarily related to interest rate fluctuations affecting its portfolio of cash equivalents and available-for-sale marketable securities, which consists of high-grade debt instruments with relatively short durations, mitigating interest rate risk, and the company does not use derivative instruments to manage this exposure - The company's primary market risk is interest rate risk, where a hypothetical **1%** increase in interest rates would result in an immaterial decrease in the fair value of its portfolio due to the conservative nature and short duration of its investments[320](index=320&type=chunk)[321](index=321&type=chunk) - Credit quality risk is managed through an investment policy that specifies minimum credit quality, and limits exposure to any single issuer or investment type[322](index=322&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and Principal Financial Officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2020, with a change in internal control over financial reporting made to adopt a new accounting standard for credit losses, which did not have a material effect - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[323](index=323&type=chunk) - A change was made to internal controls to implement ASU 2016-13 (Credit Losses), which did not have a material impact on the company's financial statements[324](index=324&type=chunk) [PART II – OTHER INFORMATION](index=88&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=88&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not currently involved in any legal proceedings that would have a material adverse effect on its business, operating results, or financial condition - As of the report date, the company is not a party to any material legal proceedings[329](index=329&type=chunk) [Risk Factors](index=88&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks related to its financial viability, product development and commercialization, regulatory approvals, third-party reliance, and the impact of the COVID-19 pandemic - The company has incurred significant losses since inception, with an accumulated deficit of **$429.6 million** as of March 31, 2020, and anticipates continued losses[332](index=332&type=chunk) - The business is substantially dependent on the success of KORSUVA (CR845/difelikefalin) injection, which may not successfully complete trials, receive regulatory approval, or be commercialized[346](index=346&type=chunk) - The COVID-19 pandemic poses a risk to business operations and clinical development, having already affected patient enrollment in a Phase 2 trial and reduced capacity at a third-party manufacturer[357](index=357&type=chunk) - The company relies on third parties for manufacturing and clinical trials, and any failure by these parties to perform satisfactorily could delay product development and commercialization[447](index=447&type=chunk)[454](index=454&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=170&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the reporting period - There were no unregistered sales of equity securities in the quarter ended March 31, 2020[596](index=596&type=chunk) [Other Information](index=170&type=section&id=Item%205.%20Other%20Information) The company reported no other information required to be disclosed under this item - There was no other information to report for the period[602](index=602&type=chunk) [Exhibits](index=172&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's amended and restated certificate of incorporation and bylaws, and certifications by the CEO and Principal Financial Officer as required by the Sarbanes-Oxley Act - The report includes a list of filed exhibits, such as corporate governance documents and required CEO/CFO certifications[606](index=606&type=chunk) ```

Financial Data and Key Metrics Changes - For the year ended December 31, 2019, the company reported a net loss of $106.4 million or $2.49 per share, compared to a net loss of $74 million or $2.06 per share for 2018 [35] - For Q4 2019, the net loss was $28.6 million or $0.61 per share, compared to a net loss of $20.7 million or $0.52 per share for the same quarter in 2018 [36] - Revenues for the year were $19.9 million, up from $13.5 million in 2018, primarily related to a license agreement with Vifor Fresenius [36][37] - Cash, cash equivalents, and marketable securities totaled $218.2 million as of December 31, 2019, compared to $182.8 million at the end of 2018 [42] Business Line Data and Key Metrics Changes - The company advanced the late-stage clinical development of KORSUVA, with positive topline results from the KALM-1 Phase 3 trial in hemodialysis patients [7][8] - The oral KORSUVA program expanded into two new pruritic indications: atopic dermatitis and chronic liver disease associated pruritus, with Phase 2 trials initiated in 2019 [9][10] - The KALM-2 trial was fully enrolled to a target of 430 patients, a 20% increase from the original target, with topline data expected in Q2 2020 [18] Market Data and Key Metrics Changes - There are over 500,000 dialysis patients in the U.S., with 60% reporting some level of pruritus, indicating a significant unmet need in this market [20] - The company has established commercial license agreements in major markets including Japan, South Korea, and the European Union, enhancing its market reach [21] Company Strategy and Development Direction - The company plans to commercialize KORSUVA injection in the U.S. and has established a co-promotion and profit-sharing agreement with Vifor Fresenius [21][22] - The strategy includes advancing KORSUVA to an NDA filing in the second half of 2020, pending positive KALM-2 results, while also initiating pre-commercial activities [22][33] - The company aims to leverage its clinical data to support a broader label for KORSUVA across various pruritic conditions [70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about multiple major clinical data readouts and regulatory advancements expected in 2020 [11] - The company anticipates that its current cash position will fund operations into the second half of 2021, allowing for continued clinical development [43] - Management acknowledged the challenges of placebo responses in clinical trials and outlined strategies to mitigate these in future studies [54][90] Other Important Information - The company reported a significant increase in R&D expenses, totaling $113.8 million for the year, primarily due to clinical trial costs and stock compensation [38] - General and administrative expenses were $17.7 million for the year, reflecting increases in various operational costs [40] Q&A Session Summary Question: What alignment does the company hope to achieve with the FDA regarding the CKD oral program? - The company aims to propose a 3-point responder analysis as the primary endpoint for the CKD oral study, based on previous consultations with the FDA [50][51] Question: How does the company plan to control the placebo response in future trials? - The company plans to use de novo sites without prior experience with the drug and may incorporate a longer run-in period to identify consistent patient responses [58][59] Question: What is the rationale for increasing the sample size in the atopic dermatitis trial? - The increase was based on maintaining high statistical power to detect a treatment effect, informed by historical placebo rates and treatment effects observed in previous trials [61][76] Question: How will the company approach commercialization for atopic dermatitis and liver disease? - The company is capable of running late-stage trials independently but may consider partnerships for commercialization in these areas [68][70] Question: What are the expected milestones from the collaboration with Vifor Fresenius? - The company anticipates $30 million in regulatory milestones and $430 million in commercial milestones, with further guidance to be provided as timelines for launch and approval become clearer [101]

Part I [Item 1. Business](index=8&type=section&id=Item%201.%20Business.) Cara Therapeutics is a clinical-stage biopharmaceutical company developing KORSUVA (CR845/difelikefalin) for pruritus, focusing on regulatory approval, U.S. commercialization, and expanding oral formulations [Overview](index=8&type=section&id=Overview) Cara Therapeutics is a clinical-stage biopharmaceutical company developing KORSUVA for pruritus, which has shown efficacy in CKD-aP trials, and is financed through equity and license agreements with no products currently for sale - The company's primary focus is on developing and commercializing treatments for pruritus by targeting peripheral kappa opioid receptors (KORs)[14](index=14&type=chunk) - The lead product candidate is **KORSUVA (CR845/difelikefalin)**, a first-in-class KOR agonist[14](index=14&type=chunk) - KORSUVA injection has demonstrated statistically significant reductions in itch intensity in Phase 3 and Phase 2 trials for hemodialysis patients with moderate-to-severe CKD-aP[15](index=15&type=chunk) - The company has partnered with Vifor Fresenius Medical Care Renal Pharma (VFMCRP) to commercialize KORSUVA injection in dialysis patients worldwide, excluding the U.S., Japan, and South Korea; Cara retains U.S. rights and will co-promote with VFMCRP in U.S. Fresenius Medical Care clinics[15](index=15&type=chunk) - The company has no products currently available for sale and has financed its operations primarily through equity/debt sales and payments from license agreements[18](index=18&type=chunk) [Recent Developments](index=8&type=section&id=Recent%20Developments) In late 2019, the company saw a CFO/CSO resignation, adopted a new inducement plan, and secured a license for oral KORSUVA technology, following a **$136.5 million** public offering and a manufacturing agreement - Dr. Mani Mohindru, former CFO and Chief Strategy Officer, resigned effective December 20, 2019[19](index=19&type=chunk) - Entered into a non-exclusive license agreement with Enteris Biopharma on August 20, 2019, for its Peptelligence® technology to develop, manufacture, and commercialize oral products[23](index=23&type=chunk) - Completed a follow-on public offering on July 29, 2019, raising net proceeds of **$136.5 million** from the sale of 6,325,000 shares at **$23.00** per share[25](index=25&type=chunk) - Entered into a Master Manufacturing Services Agreement with Patheon UK Limited on July 8, 2019, for non-exclusive manufacturing services for drug products[27](index=27&type=chunk) [The Market Opportunity](index=10&type=section&id=The%20Market%20Opportunity) The company targets significant market opportunities in pruritus (CKD-aP, AD, CLD-aP) and post-operative nausea and vomiting (PONV), where millions are affected with limited or no approved treatments - Chronic Kidney Disease-Associated Pruritus (CKD-aP) affects a significant portion of the **37 million** people with CKD in the U.S.; approximately **40%** of the **3.2 million** global dialysis patients experience moderate to severe pruritus, with no approved treatments in the U.S. or Europe[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - Pruritus associated with Atopic Dermatitis (AD) is a defining feature of the condition, which affects up to **25%** of children and **2-5%** of adults, negatively impacting quality of life[36](index=36&type=chunk) - Chronic Liver Disease-Associated Pruritus (CLD-aP) is a common symptom for millions of Americans with CLD; in 2013, approximately **2.5 million** patients with CLD received a prescription for an anti-pruritic, yet there are no approved therapies for CLD-aP in the U.S.[39](index=39&type=chunk)[40](index=40&type=chunk) - Post-Operative Nausea and Vomiting (PONV) is a significant factor in hospital length of stay, with estimated annual costs in the U.S. around **$1 billion**; over **700 million** units of PONV drugs were sold in the U.S. in 2017[42](index=42&type=chunk) [Our Strategy](index=13&type=section&id=Our%20Strategy) The company's strategy focuses on advancing KORSUVA injection for CKD-aP towards approval, building a U.S. sales force, expanding Oral KORSUVA into other pruritic conditions, and seeking partnerships for I.V. CR845 for acute pain/PONV - Advance KORSUVA injection for moderate-to-severe CKD-aP in hemodialysis patients, with top-line data from the global KALM-2 Phase 3 study expected in **Q2 2020**[44](index=44&type=chunk)[46](index=46&type=chunk) - Build a specialty sales and marketing organization to commercialize KORSUVA injection for CKD-aP in U.S. dialysis centers, if approved[47](index=47&type=chunk) - Expand the use of Oral KORSUVA into other pruritic indications, including non-dialysis stage III-V CKD-aP, CLD-aP, and Atopic Dermatitis (AD), with top-line data from Phase 2 trials in CLD-aP and AD expected in **2020**[48](index=48&type=chunk) - Seek partnerships for further development and commercialization of I.V. CR845/difelikefalin for acute post-operative pain and/or PONV, following positive top-line data from a Phase 2/3 trial[49](index=49&type=chunk) [Our Product Candidates](index=17&type=section&id=Our%20Product%20Candidates) The company's pipeline centers on CR845/difelikefalin in injectable (KORSUVA) and oral forms, with KORSUVA injection in Phase 3 for CKD-aP (Breakthrough Therapy Designation) and oral forms in Phase 2 for other pruritic conditions | Program | Product Candidate | Primary Indication | Status | | :--- | :--- | :--- | :--- | | Pruritus | KORSUVA (CR845/ difelikefalin) Injection | Pruritus CKD – Hemodialysis | KALM-2 (Global) Phase 3 ongoing; KALM-1 completed; Phase 3 safety trials ongoing; Breakthrough Therapy Designation granted | | | Oral KORSUVA (CR845/difelikefalin) | Pruritus CKD (Stage III - V) | Phase 2 trial completed; topline data reported | | | Oral KORSUVA (CR845/difelikefalin) | Pruritus CLD – PBC | Phase 2 efficacy trial ongoing | | | Oral KORSUVA (CR845/difelikefalin) | Pruritus AD | Phase 2 efficacy trial ongoing | | Post-Op Setting | CR845/difelikefalin Injection | Acute Post-Operative Pain/PONV | Adaptive Phase 2/3 trial completed; top-line data reported | - KORSUVA injection for CKD-aP: The KALM-1 pivotal Phase 3 trial met its primary and all secondary endpoints; the global KALM-2 trial is fully enrolled, with top-line data expected in **Q2 2020**; an NDA filing is anticipated in the second half of **2020**[56](index=56&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - Oral KORSUVA for non-dialysis CKD-aP: A Phase 2 trial met its primary endpoint at the **1.0 mg** dose, showing a statistically significant reduction in itch scores versus placebo; the company plans an End of Phase 2 meeting with the FDA to initiate a Phase 3 program in **H2 2020**[70](index=70&type=chunk)[71](index=71&type=chunk) - Oral KORSUVA for CLD-aP and AD: Phase 2 trials are ongoing for pruritus in patients with Primary Biliary Cholangitis (PBC) and Atopic Dermatitis (AD), with top-line data for both expected in **2020**[74](index=74&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - I.V. CR845 for Post-Operative Pain/PONV: A Phase 2/3 trial showed statistically significant pain relief at the **1.0 mcg/kg** dose and significant reductions in PONV at both **0.5** and **1.0 mcg/kg** doses[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Collaboration and License Agreements](index=26&type=section&id=Collaboration%20and%20License%20Agreements) The company has key partnerships, notably with VFMCRP for KORSUVA injection in dialysis patients globally (ex-U.S., Japan, South Korea), and agreements with Maruishi and CKDP for specific territories - **VFMCRP Agreement:** Granted VFMCRP a license to commercialize KORSUVA injection for pruritus in dialysis patients worldwide (ex-U.S., Japan, South Korea); Cara received a **$50M** upfront payment and Vifor purchased **$20M** of common stock; Cara is eligible for up to **$470M** in regulatory and commercial milestones, plus tiered double-digit royalties; in the U.S., the companies will co-promote in FMCNA clinics under a profit-sharing arrangement[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - **Maruishi Agreement:** Granted Maruishi an exclusive license for CR845/difelikefalin in Japan for acute pain and uremic pruritus; Cara received a **$15.0M** upfront fee and is eligible for up to **$10.5M** in milestones, plus tiered royalties[97](index=97&type=chunk)[98](index=98&type=chunk) - **CKDP Agreement:** Granted CKDP an exclusive license for CR845/difelikefalin in South Korea; Cara received a **$0.6M** upfront payment and is eligible for up to **$3.8M** in milestones, plus tiered royalties[99](index=99&type=chunk)[100](index=100&type=chunk) [Manufacturing and License Agreements](index=30&type=section&id=Manufacturing%20and%20License%20Agreements) The company has secured agreements with Enteris Biopharma for oral formulation technology and Patheon UK Limited for non-exclusive commercial manufacturing of KORSUVA injection - **Enteris Biopharma:** Entered a non-exclusive license for Enteris's Peptelligence® technology for oral drug delivery; Cara paid an **$8.0 million** upfront fee (**$4.0M** cash, **$4.0M** stock) and is obligated to pay future milestones and low-single digit royalties[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) - **Patheon UK Limited:** Established a Master Manufacturing Services Agreement (MSA) for non-exclusive manufacturing of drug products; related agreements govern the commercial supply of CR845/difelikefalin injection at Patheon's Monza, Italy and Greenville, North Carolina sites[113](index=113&type=chunk)[117](index=117&type=chunk) [Sales and Marketing](index=32&type=section&id=Sales%20and%20Marketing) Cara Therapeutics plans to establish its own U.S. commercial organization for KORSUVA injection in dialysis, while out-licensing ex-U.S. rights, with market research indicating strong physician interest due to efficacy and safety - The company plans to build its own commercial organization and distribution capability in the U.S. for KORSUVA injection in the dialysis setting[119](index=119&type=chunk) - For Oral KORSUVA, the company plans to develop and commercialize on its own in the U.S. while exploring partnerships for ex-U.S. territories[119](index=119&type=chunk) - Market research indicates a clear unmet need for managing CKD-aP among dialysis patients, with physicians impressed by CR845/difelikefalin's efficacy and safety profile[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - Market research for PONV suggests anesthesiologists view CR845's novel mechanism and efficacy favorably, particularly for high-risk patients and as a potential new rescue therapy option[126](index=126&type=chunk) [Intellectual Property](index=34&type=section&id=Intellectual%20Property) The company's IP strategy focuses on wholly-owned patent protection for CR845/difelikefalin, with U.S. patents expiring no earlier than **2027** (potential extension) and new oral formulation patents potentially extending to **2039** - The company wholly owns its patent portfolio for its synthetic peptide amide kappa opioid agonists[136](index=136&type=chunk) - The portfolio includes fifteen issued U.S. patents covering CR845/difelikefalin composition and methods of use; the earliest U.S. patent is expected to expire no earlier than **2027**, with potential for a **5-year** extension under the Hatch-Waxman Act[136](index=136&type=chunk) - Patent applications have been filed internationally for novel oral formulations of CR845/difelikefalin, which if granted, would expire no earlier than **2039**[127](index=127&type=chunk) - Patents for CR845/difelikefalin have been granted in **31** European countries and other key markets including Australia, Canada, China, and Japan, expiring no earlier than **November 12, 2027**[136](index=136&type=chunk) [Competition](index=38&type=section&id=Competition) Cara Therapeutics faces intense competition from large pharmaceutical and biotech companies, with no approved CKD-aP products in the U.S., and a fragmented market for chronic pruritus and PONV - The company faces competition from large pharmaceutical and biotech companies with greater financial and technical resources[144](index=144&type=chunk) - For CKD-aP, there are no approved products in the U.S., but competitors include Sanwa Kagaku Kenkyusho and Toray Industries (nalfurafine, approved in Japan)[148](index=148&type=chunk)[149](index=149&type=chunk) - For chronic pruritus, competitors with product candidates include Menlo Therapeutics (serlopitant), Trevi (nalbuphine ER), and Vanda (tradipitant)[150](index=150&type=chunk) - The PONV market is highly fragmented with numerous generic products; I.V. CR845/difelikefalin would likely be used as an add-on therapy for high-risk patients[151](index=151&type=chunk) [Manufacturing](index=40&type=section&id=Manufacturing) The company relies entirely on third-party contract manufacturers for all product supplies, with a non-exclusive commercial manufacturing agreement in place with Patheon for KORSUVA (CR845/difelikefalin) injection - The company has no manufacturing facilities and relies on third parties for all manufacturing needs[152](index=152&type=chunk) - A non-exclusive commercial manufacturing agreement is in place with Patheon for KORSUVA (CR845/difelikefalin) injection[152](index=152&type=chunk) - Product candidates are manufactured using reliable synthetic processes from readily available starting materials, amenable to scale-up without special equipment[153](index=153&type=chunk) [Government Regulation and Product Approval](index=42&type=section&id=Government%20Regulation%20and%20Product%20Approval) The company's operations are subject to extensive U.S. and international regulations, including a lengthy drug approval process, with KORSUVA injection having FDA Breakthrough Therapy Designation, and ongoing post-approval compliance requirements - The drug approval process in the U.S. requires extensive preclinical and clinical testing (Phase 1, 2, 3) to establish safety and efficacy before an NDA can be submitted to the FDA[158](index=158&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk) - The FDA granted Breakthrough Therapy Designation to KORSUVA injection for CKD-aP in hemodialysis patients, which is intended to expedite the development and review process[174](index=174&type=chunk)[175](index=175&type=chunk) - If approved, product candidates may be regulated as a "controlled substance" by the DEA, which imposes strict registration, security, and recordkeeping requirements[182](index=182&type=chunk)[183](index=183&type=chunk) - The company is subject to federal and state healthcare laws, including the Anti-Kickback Statute, False Claims Act, and data privacy laws like HIPAA, which restrict business practices[189](index=189&type=chunk)[190](index=190&type=chunk)[192](index=192&type=chunk) - Commercial success depends on securing coverage and adequate reimbursement from government payers (Medicare, Medicaid) and private insurers, who are increasingly focused on cost-containment[201](index=201&type=chunk)[202](index=202&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks including significant financial losses, dependency on KORSUVA injection's success, clinical and regulatory uncertainties, intense competition, reliance on third parties, intellectual property challenges, and evolving healthcare laws - **Financial Risks:** The company has a history of significant net losses (**$106.4M** in 2019) and an accumulated deficit of **$400.7M** as of Dec 31, 2019; it anticipates continued losses and will require additional funding to complete development and commercialization efforts[220](index=220&type=chunk)[228](index=228&type=chunk) - **Product Dependency:** The business is substantially dependent on the success of its lead candidate, KORSUVA (CR845/difelikefalin) injection; failure to complete Phase 3 trials, receive regulatory approval, or successfully commercialize this product would have a material adverse impact[234](index=234&type=chunk)[235](index=235&type=chunk) - **Clinical & Regulatory Risks:** The regulatory approval process is lengthy and unpredictable; clinical trials may be delayed or fail, and undesirable side effects could halt development or lead to a restrictive label; Breakthrough Therapy Designation does not guarantee a faster review or approval[250](index=250&type=chunk)[254](index=254&type=chunk)[262](index=262&type=chunk)[266](index=266&type=chunk) - **Commercialization Risks:** The company faces significant competition, has no commercial infrastructure, and must achieve market acceptance and adequate reimbursement from payers, which is uncertain[300](index=300&type=chunk)[305](index=305&type=chunk)[311](index=311&type=chunk) - **Third-Party Reliance:** The company relies on third-party CROs for clinical trials and contract manufacturers for product supply; failure of these parties to perform satisfactorily could delay development and commercialization[323](index=323&type=chunk)[330](index=330&type=chunk) - **Intellectual Property Risks:** The ability to protect proprietary rights is difficult and costly; patents may be challenged, circumvented, or may expire before product commercialization, and the company may face infringement lawsuits from third parties[392](index=392&type=chunk)[408](index=408&type=chunk)[413](index=413&type=chunk) [Item 1B. Unresolved Staff Comments](index=135&type=section&id=Item%201B.%20Unresolved%20Staf%20Comments.) The company reports that it has no unresolved staff comments from the SEC - None[471](index=471&type=chunk) [Item 2. Properties](index=135&type=section&id=Item%202.%20Properties.) The company's principal offices are located in Stamford, Connecticut, occupying approximately **24,000 square feet** of leased office space, with the lease expiring in November 2023 - The company's principal offices are in a leased space of approximately **24,000 square feet** in Stamford, Connecticut[472](index=472&type=chunk) - The current office lease expires in **November 2023**[472](index=472&type=chunk) [Item 3. Legal Proceedings](index=135&type=section&id=Item%203.%20Legal%20Proceedings.) The company is not currently a party to any legal proceedings that would have a material adverse effect on its business, operating results, or financial condition - The company is not currently a party to any material legal proceedings[473](index=473&type=chunk) [Item 4. Mine Safety Disclosures](index=135&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable[475](index=475&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=135&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Cara Therapeutics' common stock trades on The Nasdaq Global Market under "CARA", with no cash dividends ever paid or anticipated, and a stock performance graph comparing its return to relevant indices - The company's common stock is traded on The Nasdaq Global Market under the symbol "**CARA**"[478](index=478&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[481](index=481&type=chunk) | | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | 12/31/2019 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cara Therapeutics, Inc. | 100.00 | 169.11 | 93.18 | 122.77 | 130.39 | 161.58 | | Nasdaq Biotechnology | 100.00 | 111.42 | 87.26 | 105.64 | 95.79 | 119.17 | | Nasdaq Composite | 100.00 | 105.73 | 113.66 | 145.76 | 140.10 | 189.45 | [Item 6. Selected Financial Data](index=137&type=section&id=Item%206.%20Selected%20Financial%20Data.) This section presents selected financial data for the five years ended December 31, 2019, showing increased revenue to **$19.9 million** in 2019, a widened net loss to **$106.4 million**, and growth in total assets and stockholders' equity | (in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $19,886 | $13,469 | $911 | $86 | $3,803 | | **Research and development** | $113,820 | $75,531 | $48,524 | $49,253 | $21,221 | | **General and administrative** | $17,745 | $15,320 | $11,872 | $9,233 | $7,770 | | **Net loss** | $(106,373) | $(74,013) | $(58,125) | $(57,280) | $(24,690) | | **Net loss per share** | $(2.49) | $(2.06) | $(1.86) | $(2.10) | $(1.00) | | (in thousands) | As of Dec 31, 2019 | As of Dec 31, 2018 | | :--- | :--- | :--- | | **Cash, cash equivalents and marketable securities** | $218,165 | $182,779 | | **Total assets** | $232,959 | $190,823 | | **Total liabilities** | $46,246 | $57,193 | | **Total stockholders' equity** | $186,713 | $133,630 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=140&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) In 2019, revenue increased to **$19.9 million**, while net loss widened to **$106.4 million** due to higher R&D and G&A expenses, with the company ending 2019 with **$218.2 million** in cash, sufficient into H2 2021 | (in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $19,886 | $13,469 | $911 | | **R&D Expense** | $113,820 | $75,531 | $48,524 | | **G&A Expense** | $17,745 | $15,320 | $11,872 | | **Net Loss** | $(106,373) | $(74,013) | $(58,125) | - The increase in R&D expense in 2019 was primarily due to costs for Phase 3 trials of KORSUVA injection, Phase 2 trials of Oral KORSUVA, and an **$8.0 million** upfront payment for the Enteris License Agreement[543](index=543&type=chunk) - The company ended 2019 with **$218.2 million** in cash, cash equivalents, and marketable securities; management expects these funds to be sufficient to finance operations into the second half of **2021**[561](index=561&type=chunk)[575](index=575&type=chunk) - Net cash used in operating activities was **$109.2 million** in 2019, compared to **$22.3 million** in 2018; the increase was primarily due to higher net loss and changes in deferred revenue[581](index=581&type=chunk)[582](index=582&type=chunk) - Net cash provided by financing activities was **$142.6 million** in 2019, mainly from a public offering that raised net proceeds of **$136.5 million**[590](index=590&type=chunk)[558](index=558&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=165&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company's primary market risk is interest rate fluctuations on its investment portfolio, which is conservatively managed with **$199.9 million** in marketable securities as of December 31, 2019, mitigating significant impact from rate changes - The company's main market risk is interest rate risk on its portfolio of cash and marketable securities[618](index=618&type=chunk) - As of December 31, 2019, the company had **$199.9 million** invested in marketable securities, including corporate bonds, commercial paper, and U.S. government obligations with maturities through December 2021[617](index=617&type=chunk) - Due to the conservative nature and short duration of its investments, a hypothetical **1% increase** in interest rates would result in an immaterial decrease in the fair value of the investment portfolio[620](index=620&type=chunk) - Credit quality risk is managed through an investment policy that specifies credit standards and limits exposure to any single issuer or investment type[621](index=621&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=167&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section contains the company's audited financial statements for FY2019, including Balance Sheets, Statements of Comprehensive Loss, Stockholders' Equity, and Cash Flows, along with the independent auditor's unqualified opinion - Includes the Report of Independent Registered Public Accounting Firm (Ernst & Young LLP), which provides an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting[628](index=628&type=chunk)[629](index=629&type=chunk)[640](index=640&type=chunk) - The critical audit matter identified was Revenue Recognition, specifically the complexity and judgment involved in estimating the total research and development costs to complete obligations under a license agreement, which impacts the timing of revenue recognition[633](index=633&type=chunk) - Presents the audited Balance Sheets, Statements of Comprehensive Loss, Statements of Stockholders' Equity, and Statements of Cash Flows[625](index=625&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=242&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company reports that there have been no changes in or disagreements with its accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure - None[928](index=928&type=chunk) [Item 9A. Controls and Procedures](index=242&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, a conclusion affirmed by the independent auditor, with no material changes reported - Management concluded that disclosure controls and procedures were effective as of **December 31, 2019**[929](index=929&type=chunk) - Management concluded that internal control over financial reporting was effective as of **December 31, 2019**, based on the COSO framework[931](index=931&type=chunk) - Ernst & Young LLP, the independent auditor, has audited and confirmed the effectiveness of the company's internal control over financial reporting[932](index=932&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of **2019**[933](index=933&type=chunk) [Item 9B. Other Information](index=242&type=section&id=Item%209B.%20Other%20Information.) The company reports that there is no other information to disclose for this item - None[936](index=936&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=244&type=section&id=Item%2010.%20Directors,%20Executive%20Of%20icers%20and%20Corporate%20Governance.) Information concerning directors, executive officers, and corporate governance is incorporated by reference from the company's 2020 Annual Meeting Proxy Statement - Information is incorporated by reference from the **2020** Annual Meeting Proxy Statement[939](index=939&type=chunk) [Item 11. Executive Compensation](index=244&type=section&id=Item%2011.%20Executive%20Compensation.) Information concerning executive compensation is incorporated by reference from the company's 2020 Annual Meeting Proxy Statement - Information is incorporated by reference from the **2020** Annual Meeting Proxy Statement[940](index=940&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=244&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) Information concerning security ownership and equity compensation plans is incorporated by reference from the company's 2020 Annual Meeting Proxy Statement - Information is incorporated by reference from the **2020** Annual Meeting Proxy Statement[941](index=941&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=244&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence.) Information concerning related party transactions and director independence is incorporated by reference from the company's 2020 Annual Meeting Proxy Statement - Information is incorporated by reference from the **2020** Annual Meeting Proxy Statement[942](index=942&type=chunk) [Item 14. Principal Accountant Fees and Services](index=244&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services.) Information concerning principal accountant fees and services is incorporated by reference from the company's 2020 Annual Meeting Proxy Statement - Information is incorporated by reference from the **2020** Annual Meeting Proxy Statement[943](index=943&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=244&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules.) This section lists the documents filed as part of the Annual Report on Form 10-K, including financial statements, schedules, and a detailed list of exhibits such as corporate governance documents and material contracts - Lists the Financial Statements of Cara Therapeutics, Inc. included in the filing[945](index=945&type=chunk) - States that all other financial statement schedules are omitted because they are not applicable or the required information is already included in the financial statements or notes[949](index=949&type=chunk) - Provides a detailed list of exhibits filed with the report, including the Amended and Restated Certificate of Incorporation, material license and manufacturing agreements, and executive officer certifications[950](index=950&type=chunk)[952](index=952&type=chunk)[953](index=953&type=chunk)

Targeting Pruritus with Novel Peripherally-Restricted Kappa Agonist Therapeutics November 2019 Forward Looking Statements 2 This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by the words "anticipate," "believe," "continue," "estimate," "expect," "objective," "ongoing," "plan," "propose," "potential," "projected", or "up-coming" and/or the negative of these terms, ...

Cara Therapeutics, Inc. (NASDAQ:CARA) Q3 2019 Results Earnings Conference Call November 5, 2019 4:30 PM ET Company Participants Jane Urheim - Stern Investor Relations Derek Chalmers - President & Chief Executive Officer Mani Mohindru - Chief Financial Officer & Chief Strategy Officer Conference Call Participants Chris Howerton - Jefferies David Amsellem - Piper Jaffray Annabel Samimy - Stifel Pete Stavropoulos - Cantor Fitzgerald Esther Hong - Janney Chris Howerton - Jefferies Operator Good afternoon, and w ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 001-36279 CARA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 75-3175693 (State or other jurisdiction of incorporation ...

Cara Therapeutics, Inc. (NASDAQ:CARA) Q2 2019 Earnings Conference Call August 7, 2019 4:30 PM ET Company Participants Jane Urheim - Stern Investor Relations Derek Chalmers - President & Chief Executive Officer Mani Mohindru - Chief Financial Officer & Chief Strategy Officer Conference Call Participants Jason Gerberry - Bank of America David Amsellem - Piper Jaffray Nick Rubino - Stifel Charles Duncan - Cantor Fitzgerald Alan Carr - Needham & Company Esther Hong - Janney Operator Good afternoon and welcome t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 001-36279 CARA THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 75-3175693 (State or other jurisdiction of incorporation or organization) (I.R.S ...

KORSUVA™ Development Programs - KORSUVA™ Injection is in Phase 3 development for CKD-associated pruritus (CKD-aP) in hemodialysis patients, with positive topline data from the KALM-1 trial reported in May 2019 and topline data from the KALM-2 trial expected in 2H19[3] - Oral KORSUVA™ has multiple programs including a Phase 2 trial ongoing for CKD-aP in non-dialysis patients with data expected in 2H19, a Phase 2 trial expected to initiate in 2Q19 for chronic liver disease-associated pruritus, and a Phase 2 trial expected to initiate around mid-year 2019 for atopic dermatitis[3] - The FDA has conditionally accepted KORSUVA™ as the trade name for CR845 / difelikefalin for pruritic indications[8] Market Opportunity - Chronic kidney disease-associated pruritus (CKD-aP) affects approximately 40% to 50% of patients with renal failure[5] - Approximately 20% to 30% of patients with cholestatic liver disease experience pruritus[5] - In the U S, approximately 50% of the 20 million atopic dermatitis (AD) patients seek treatment for pruritus[6] - In the U S, approximately 50% of the 8 million psoriasis patients seek treatment for pruritus[7] - Approximately 60% to 70% of hemodialysis (HD) patients report pruritus[10] - Approximately 30% to 40% of hemodialysis patients with CKD-aP have moderate to severe itch intensity[10] - There are approximately 468,000 patients on dialysis in the US[11] KALM-1 Trial Results - In the KALM-1 Phase 3 trial, 51% of KORSUVA™-treated subjects achieved ≥3 point improvement in weekly mean of daily worst itching intensity NRS (WI-NRS) compared to 28% in the placebo group (p = 000019)[21] - In the KALM-1 Phase 3 trial, 39% of KORSUVA™-treated subjects achieved ≥4 point improvement in weekly mean of daily WI-NRS compared to 18% in the placebo group (p = 000032)[22] Financial Status - As of March 31, 2019, the company had $1561 million in cash and marketable securities[38]