Cara Therapeutics(US:CARA)2025-08-14 20:10Financial Performance - Tvardi reported a net income of $4.2 million for the three months ended June 30, 2025, compared to a net loss of $7.0 million for the same period in 2024[128]. - Net income for the three months ended June 30, 2025, was $4.2 million, a substantial improvement from a net loss of $7.0 million in the same period of 2024, reflecting a 159.7% change[175]. - Other income for the three months ended June 30, 2025, was $12.7 million, primarily due to a $12.8 million remeasurement gain on Legacy Tvardi's Convertible Notes[187]. - Interest income rose to $0.4 million for the three months ended June 30, 2025, compared to $0.2 million in 2024, indicating an 83.0% increase[185]. - Total operating expenses for the six months ended June 30, 2025, were $13.2 million, up from $11.6 million in 2024, reflecting a 13.7% increase[175]. - General and administrative expenses increased significantly to $3.1 million for the three months ended June 30, 2025, compared to $0.7 million in 2024, marking a 371.2% increase[182]. - General and administrative expenses for the six months ended June 30, 2025, totaled $4.3 million, up from $1.4 million in 2024, a 212.7% increase[183]. - The company has not generated any revenue from product sales and does not expect to do so for several years[189]. - As of June 30, 2025, Tvardi has an accumulated deficit of $97.6 million and incurred a net loss of $5.4 million for the six months ended June 30, 2025[192][199]. Cash and Investments - As of June 30, 2025, Tvardi had $20.6 million in cash and cash equivalents and $20.3 million in short-term investments[128]. - Tvardi had $20.6 million in cash and cash equivalents and $20.3 million in short-term investments as of June 30, 2025, down from $31.6 million in cash and cash equivalents as of December 31, 2024[236]. - Net cash used in operating activities was $13.6 million for the six months ended June 30, 2025, compared to $6.8 million for the same period in 2024[198][200]. - Tvardi's net cash used in investing activities was $20.4 million for the six months ended June 30, 2025, primarily due to purchases of short-term investments[201]. Clinical Development - Tvardi's lead product candidate, TTI-101, is in Phase 2 clinical development, with unblinded data expected in Q4 2025[126]. - The company expects to report preliminary topline data from its Phase 1b/2 HCC clinical trial in the first half of 2026[126]. - The company anticipates substantial increases in research and development expenses as it continues to invest in TTI-101 and TTI-109, with higher costs expected for clinical development compared to preclinical[163]. - Tvardi expects to incur approximately $400,000 in oncology-related costs and $300,000 in non-oncology-related costs for the initiation of Phase 3 clinical trials[146]. - The company reported a $1.9 million increase in costs related to the IPF trial due to patient enrollment timing, with the trial fully enrolled as of June 30, 2025[180]. Expenses and Future Funding - The company anticipates significant increases in expenses and capital requirements as it advances its clinical development activities[130]. - Tvardi may need substantial additional capital in the future to support ongoing development efforts and cannot predict when material net cash inflows will commence from product sales or licensing[164]. - Future funding requirements will depend on various factors, including the costs and results of clinical trials and regulatory requirements[195][196]. - The company plans to seek additional funding through equity offerings or debt financings following its merger, which provided approximately $23.9 million in net assets[192][204]. - Tvardi anticipates significant and increasing expenses as it advances its product candidates and expands its corporate infrastructure[193]. Agreements and Liabilities - Following the merger with Cara Therapeutics, Legacy Tvardi's equity holders owned approximately 84.5% of the outstanding common stock of Tvardi on a fully diluted basis[136]. - The merger resulted in Tvardi acquiring approximately $23.9 million in net assets[138]. - Tvardi issued convertible promissory notes totaling approximately $28.3 million in December 2024, which converted into 1,265,757 shares of common stock upon the merger[141][142]. - The BCM First Agreement requires Legacy Tvardi to pay annual maintenance fees ranging from $30,000 to $50,000, with royalties based on a low-single-digit percentage of net sales of licensed products[145]. - Tvardi is required to pay one-time milestone payments of up to $2,200,000 for the first BCM1 Licensed Product upon achieving specified development and regulatory milestones[145]. - The company has future operating lease liabilities of $0.3 million as of June 30, 2025, related to its corporate office space lease[205]. Stock and Valuation - The fair value of the Convertible Notes at conversion was $23.1 million, based on 1,265,757 shares of common stock at the closing market price on April 16, 2025[224]. - A change in fair value of $12.8 million was recorded, comparing the $23.1 million at conversion to the $35.9 million recorded value prior to conversion, impacting other income for the three months ended June 30, 2025[224]. - As of June 30, 2025, there were no Convertible Notes outstanding following their conversion into common stock[225]. - The estimated fair value of Legacy Tvardi's common stock was $0.92 and $0.82 as of June 30, 2023, and June 30, 2022, respectively[233]. - Tvardi's stock-based compensation expense is measured based on the fair value of stock options at the date of grant, using the Black-Scholes option-pricing model[226]. - Expected volatility for stock options was estimated using historical volatility of peer companies due to the lack of trading history for Legacy Tvardi's common stock prior to the Merger[232]. - Tvardi does not anticipate declaring dividends, estimating the dividend yield to be zero[232]. Miscellaneous - As of June 30, 2025, there was no current or deferred income tax expense or benefit due to the company's losses and full valuation allowance[171]. - No payments were made or incurred under the BCM Second Agreement during the three and six months ended June 30, 2025 and 2024, and no royalty fees have been incurred to date[156]. - The company does not believe inflation has materially affected its results of operations during the reported periods[238]. - Tvardi is not exposed to foreign currency exchange risks as all operations and expenses are denominated in U.S. dollars[239].