You've probably heard the expression "no pain, no gain." In Cara Therapeutics' (NASDAQ:CARA) case, it's more like "no pain, big gain."

The biotech's lead candidate, CR845, is in a late-stage study for relief of post-operative pain. CR845 is also in another late-stage study for treatment of chronic kidney disease-associated pruritus (CKD-aP), a chronic itching experienced by many patients on dialysis. Good news from those studies should send Cara stock through the roof.

But could Cara Therapeutics really be a millionaire-maker stock? Let's take a look.

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The opportunities

Several months ago, I wrote about two possibilities for where Cara Therapeutics could be in five years. In the dream scenario, the biotech would report stellar results from its phase 3 post-operative pain study in the first half of this year. That would lead to a regulatory filing for the intravenous version of CR845 in treating post-op pain.

The potential in this indication is significant. Currently, post-operative pain is frequently addressed using mu-opioid receptor agonists such as morphine. The problem with these drugs is that they come with serious side effects, including a high potential for addiction, nausea and vomiting, and respiratory depression.   

CR845 is a kappa opioid receptor agonist. Like mu-opioids, CR845 is effective at alleviating pain. The big difference, however, is that CR845 doesn't easily penetrate the blood-brain barrier. As a result, patients experience little to none of the side effects associated with mu-opioids. Even better, CR845 has exhibited anti-inflammatory properties. The drug's potential to reduce inflammation is a big plus for patients coming out of surgery.  

Another property of CR845 is that it can reduce itching. Cara is therefore testing the drug in treating itching in chronic kidney disease patients on dialysis. Around 456,000 patients in the U.S. are on dialysis, with up to 70% of them experiencing itching. And there are currently no FDA-approved drugs for the condition.

As mentioned earlier, Cara has a late-stage safety study under way for IV CR845 in treating CKD-aP patients on dialysis. The biotech is also moving forward with a pivotal late-state efficacy study targeting this indication. 

An even greater opportunity exists for an oral version of CR845. Over 12 million patients in the U.S. have chronic kidney disease but aren't on dialysis, with nearly one-third of them treated for itching. Other indications are also associated with itching, including atopic dermatitis, chronic liver disease, and psoriasis. Cara expects to initiate two phase 2 studies of oral CR845 in treating CKD-aP in the first half of 2018.

The odds

What are Cara's chances of success with CR845? It's best to separate the IV form of the drug from the oral version.

So far, every clinical study conducted for the IV version has been positive. A phase 2 study of IV CR845 in treating CKD-aP in patients on dialysis met its primary endpoint of reducing itching intensity as well as multiple secondary and exploratory endpoints. The drug also demonstrated a favorable safety profile.

In another phase 2 study, IV CR845 met its primary endpoint of significantly reducing post-operative pain. It also meaningfully reduced nausea and vomiting for post-op patients.

Around half of drugs in phase 3 studies ultimately win FDA approval, according to industry group Biotechnology Innovation Organization. My hunch is that IV CR845 could have better odds that that of obtaining approval for its targeted indications.

It's a different story for oral CR845, though. The drug failed to meet meet the primary endpoint in a phase 2 study for treatment of pain associated with osteoarthritis. Cara did see some potential for the drug in treating hip pain, however, and could move forward with a late-stage study. What about the two phase 2 studies of oral CR845 that should start soon? The average probability of winning approval for drugs in phase 2 is only 15%, according to BIO.  

Making a million

There's an old joke that the easiest way to end up with $1 million is to start with $2 million. I don't think that path will be necessary with Cara Therapeutics. On the other hand, for Cara to be a millionaire-maker stock requires a lot to go right.

I think it's entirely possible that a lot of things do go right for Cara. And I think with a sizable enough up-front investment and patience to hold on to the stock for years, Cara could be a millionaire-maker stock. Just remember the risks -- and there are plenty of them. That old saying of "no pain, no gain" didn't catch on and stay around for nothing. It's usually true.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.