Shares of Cara Therapeutics (CARA -2.20%), a clinical-stage biotech, dropped by as much as 28.1% in after-hours trading Thursday, and remain more than 25% lower in pre-market trading Friday morning. The stock's double-digit nosedive was sparked by disappointing top-line results from a phase 2b trial of the company's oral formulation of selective kappa opioid agonist CR845 in patients with osteoarthritis (OA) of the knee or hip.
Cara reported that CR845 failed to produce lower pain scores compared to placebo across any dose (1.0 mg, 2.5 mg, and 5.0 mg) tested -- that is, when all patients in the trial were considered in the analysis. In fact, the only really encouraging result from the study came from a subset of patients with OA of the hip maintained on the highest dose of CR845 for eight weeks. Unfortunately, even this result was only marginally significant, with a p-value equal to 0.043.
Cara was hoping that CR845 would transform into a disruptive new pain medicine capable of displacing problematic opioids such as morphine or hydrocodone. These weak midstage results, however, suggest that this possibility is now off the table.
The good news is that CR845's IV formulation for post-operative pain and its chronic kidney disease-associated pruritis (itching) treatment remain very much in play at this point. So while the drug's most lucrative indication appears to be a dead end based on these midstage results, Cara's lead product candidate could still haul in some respectable sales if everything else goes as planned.
However Cara's management hasn't given up on the drug's potential as an oral chronic pain medication just yet. Despite the lack of a clear-cut efficacy signal, the biotech's brass announced that they are going to request a meeting with the U.S. Food and Drug Administration to discuss a potential pathway forward. Investors, though, should probably consider this high-value indication a long shot at this stage, and instead focus their attention on the company's remaining pipeline efforts.