Shares of Cara Therapeutics Inc. (NASDAQ:CARA), a clinical-stage biotech, continued a slide that began last month with a 10.5% loss Monday. A clinical trial failure in the chronic pain indication announced at the end of June continues to pressure the stock.
The use of opioids to manage chronic pain often leads to addiction and abuse, and until late last month, it looked like Cara's lead treatment candidate, CR845, might have been just what the medical community has been clamoring for. Unlike most opioids, which act in the brain and cause an addictive state of euphoria, CR845 is aimed at receptors in the peripheral nervous system where pain signals originate.
Unfortunately, results from a mid-stage clinical trial released last month suggest the pill form of CR845 won't be displacing standard opioids in the chronic pain management space. Patients with moderate-to-severe knee and hip pain failed to show a significant benefit when given two of three dosage strengths of CR845 orally. Patients with osteoarthritis who received the highest of the three tested doses just squeaked out a win, statistically speaking. Overall, however, the results were poor enough to lead most analysts to conclude the candidate doesn't have a chance in the enormous chronic pain management arena.
Now that the company's market cap has slid to about $359 million, I think this stock has legs for long-term investors. CR845 may not have led arthritis sufferers to report relief, but it sailed through a uremic pruritis trial with highly significant figures earlier this year. Patients with chronic itching caused by kidney related disorders reported 68% drop in the worst itching scores, and a big quality of life improvement. There aren't any drugs specifically approved for this indication, and it looks like Cara Therapeutics has a shot at making CR845 the first. The uremic pruritis market isn't nearly as large as the chronic pain space, but if approved the drug could go on to generate more than $300 million in annual sales at its peak with this indication alone.
The company also has a version of CR845 delivered as an intravenous infusion in a late-stage study designed to support an application for acute management of post-operative pain. This is a space much larger than uremic pruritus, and independent data monitors recommended the study continue after performing an interim analysis last month.
Cara's development pipeline also boasts a cannabinoid receptor agonist in clinical-stage development. While the market's initial reaction to CR845's clinical trial failure in the chronic knee and hip pain setting was justified, it looks like the beating has been too severe.