Following a stock offering that diluted investors and ahead of first-quarter financial results, shares in Cara Therapeutics (NASDAQ:CARA) lost 13.6% of their value in April, according to S&P Global Market Intelligence.
On April 5, the company closed on an offering of 5,117,500 shares at a price of $18 per share, diluting existing investors, but generating an estimated $86.5 million for Cara Therapeutics' balance sheet, after fees.
The company will use that extra money to advance its clinical-stage pipeline, including CR845, a potential treatment for pain that works differently than opioids. CR845 relieves pain by targeting peripheral nerve receptors called kappa-opioid receptors that are closer to the source of pain, and recently reported study results in controlling uremic pruritus (chronic itch) in dialysis patients were encouraging.
In part A of a phase 2/3 study, CR845 patients had a 68% reduction in pain versus a placebo, based on a 0-to-10 rating scale after eight weeks of treatment. CR845 also delivered a 100% greater reduction versus a placebo in the Skindex-10 score, a quality-of-life scale.
The company is also evaluating CR845 in acute pain due to surgery, and in pain caused by osteoarthritis.
Earlier this week, Cara Therapeutics updated investors on its first-quarter progress. In the quarter, the company reported that its research and development expenses were $20.8 million, up from $8.5 million one year ago, and that general and administrative expenses were $2.4 million, in line with last year.
Later this quarter the company expects to complete an interim look at its phase 3 data in postoperative pain and to report data from a phase 2b trial in chronic osteoarthritis pain, and it hopes to sit down soon with the U.S. Food and Drug Administration to discuss the uremic pruritus part A results so that it can design part B of its study.
Because there's a huge need for pain drugs that are effective, but that don't pose the same high risk of abuse as opioids, the market for CR845 could ultimately be big. However, there's still work to do before this drug can be considered for approval by the FDA, so over the short term investors will have to focus on Cara's upcoming data, rather than an FDA green light.