The day microcap biotech company Cara Therapeutics (NASDAQ:CARA) presented at the J.P. Morgan Healthcare Conference, the stock jumped 8%, even though there was no new information in the presentation. Perhaps investor awareness of the potential of the company's pain drug in phase 2 and 3 trials is simply growing. What evidence do investors have that Cara's approach will succeed? As it turns out, plenty.
Cara Therapeutics has a single drug in human testing, CR845, a novel treatment for acute and chronic pain, inflammation, and severe itching. Existing opioid drugs work by acting on the mu opioid pain receptors in the central nervous system. CR845 works on different receptors, the kappa opioid receptors in the periphery of the body, where pain signals originate. It does not readily cross the blood-brain barrier, unlike current pain drugs -- which turns out to be incredibly advantageous.
A better pain drug
What makes this drug potentially so important is that this difference in action eliminates many of the disadvantages of today's narcotic analgesics such as morphine and fentanyl. These opioids operate on the central nervous system, and part of the effect they have is euphoria, which is what leads to addiction. All currently approved opioid pain drugs suffer from this fundamental drawback, leading drug manufacturers to employ various strategies for abuse deterrence such as making the pills uncrushable, but the basic problem of exposing patients to an addictive substance remains. Cara's drug takes a completely different approach.
Since CR845 does not cross the blood-brain barrier, it cannot produce the pleasant sensations that lead to abuse. What some investors may not realize is that the non-addictive quality of CR845 has already been proven. Cara completed an FDA-mandated Human Abuse Liability study in which a number of recreational, non-dependent drug users were injected with 15 times the therapeutic dose of the drug and asked, "Do you like the drug effect you are feeling now?" Subject responses were neutral -- about the same as with a placebo. They were also asked their overall liking of the drug and whether they would want to take it again. For both questions, the responses were again not significantly different than with a placebo. Basically, taking the drug is no fun. Further testing using a physiological measurement (pupil size changes) also indicated that the drug was not producing pleasurable sensations.
Euphoria is not the only undesirable side effect of current opioid pain drugs. Other side effects include nausea and vomiting, respiratory depression, sedation, and constipation. These reactions are characteristic of drugs that work on the mu opioid receptors. But the fact that CR845 interacts with the kappa opioid receptors means these side effects are greatly reduced. In fact, in trials for using the drug in an IV formulation for post-operative pain, nausea and vomiting were significantly decreased in comparison to a placebo.
And lack of side effects is not the only advantage of the kappa receptor action. CR845 is an anti-inflammatory as well, something that is not true of mu opioids and is a market need for post-operative applications. It is also long-lasting. When administered in pill form for chronic pain, it need be taken only twice a day.
Data on effectiveness has been very positive so far in phase 2 trials. For post-operative patients, IV CR845 showed significant reductions in pain intensity scores and reduced postoperative morphine use by 44%. For osteoarthritis patients with chronic pain, CR845 has been more effective in reducing pain scores than controlled-release oxycodone.
The market is huge
CR845 is being tested for three indications to begin with: IV delivery for post-operative pain, pill form for chronic pain of arthritis, and both IV and pill form for pruritis, a severe itching condition common in patients with chronic kidney disease, something that is unresponsive to conventional itch medications. These markets add up to a big opportunity for Cara. There are about 60 million post-operative patients in the U.S. every year, 140 million prescriptions written annually for chronic pain, and over 3 million potential patients for the pruritis indication.
Market research has been encouraging. When presented with the drug's characteristics, 84% of physicians said they were "likely to very likely" to prescribe it for their patients with moderate to severe pain. The company has patent protection on the drug through 2027.
This year will be big for Cara Therapeutics, with significant data readouts from clinical trials.
Human drug trials are never a sure thing, and investors need to be aware that a single negative outcome could be disastrous for the stock price. But the information we have at this point has been very encouraging, and we should be getting more very soon. Lately, it seems that the market is taking notice of the potential whenever the company tells its story. Biotech investors with a tolerance for risk might want to consider this one.