A raging opioid epidemic has healthcare providers clamoring for pain management tools they can use with a clear conscience. Cara Therapeutics (NASDAQ:CARA) stock recently surged after the company took a big step toward providing one.

Cara's lead candidate could also become an important option for a growing population of dialysis patients with nerve damage that leads to chronic itching. Does this stock look like a buy now that it's a bit closer to becoming a commercial-stage company? Let's start with the latest results to find out.

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A win on two fronts

Unlike traditional opioids used to manage post abdominal surgery pain, Cara's candidate CR845 isn't active in the brain and therefore doesn't cause the same euphoric sensations that make its cousins so addictive. Pain measurements are terribly subjective and I'm of the opinion that any drug that doesn't make patients feel "high" is at an inherent disadvantage over one that does. Despite the drawback, those given CR845 reported significantly less pain during the hours following surgery than those given a placebo.

Patients might not enjoy CR845 due to its nonaddictive properties, but staying out of the brain could make it very popular among healthcare providers. Nobody's quite sure why traditional opioids cause around a third of patients to vomit in recovery rooms, but it looks like Cara's candidate can make it happen far less often. Those in the group treated with a 1 mcg dose of CR845 were 73% less likely to vomit within 24 hours following surgery.

Postoperative nausea and vomiting (PONV) aren't particularly dangerous, but it can lengthen recovery periods which drives up a hospital's costs per procedure. Traditional opioids that cross the blood-brain barrier can also cause patients to stop breathing right in their hospital beds, but that probably won't be an issue for CR845. Add it up, and there's a lot for hospital purchasing managers to like about Cara's candidate. 

Results we're itching to see

In addition to postoperative pain, Cara's developing an injectable version of CR845, called Korsuva, for the treatment of chronic itching that hounds a large percentage of people with chronic kidney disease. We're not talking about mosquito-level discomfort here. The condition can get bad enough that it keeps patients from sleeping and around 20% of all dialysis patients suffer a very severe form associated with much lower survival rates.

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During mid-stage clinical trials, the average patient rated their itching intensity 48% lower after treatment with Korsuva. Earlier this year, the company started a larger pivotal study that will measure itch intensity reductions against a placebo at 12 weeks. We're not sure when the study will finish dosing around 350 patients expected to enroll, but with an expected 60 sites up and running by the end of June, top-line data before the end of the year seems reasonable.

If Korsuva's trial succeeds, and it earns an approval, it ought to enjoy an unusually smooth commercial launch. Last month, Cara Therapeutics inked a deal with a dialysis provider that treated 38% of America's dialysis patients last year, Fresenius Medical Care.

A buy now?

If eventually approved, Korsuva would be the first available treatment for a chronic condition that severely affects perhaps 100,000 people in the U.S. alone, and you can be sure that at least a third will be offered Korsuva at their local Fresenius dialysis clinic. Kidney disease is just one source of the type of nerve damage that leads to chronic itching, and there's a chance the drug could expand its addressable population. For now, though, it seems reasonable to expect around $300 million in peak annual sales from the large kidney disease population.

After an oral version of CR845 failed to produce a significant pain reduction for arthritis patients, many had written off its chances of succeeding in the post-operative setting. After hitting its main goal, and showing a surprising ability to reduce PONV, I think intravenous CR845 can generate $100 million in peak annual sales for Cara from this indication.

Despite the recent run-up, Cara Therapeutics' market cap is still just $712 million. The company hasn't earned its first approval yet, which means there's still a lot that can go wrong. That said, I think the recently inflated price undervalues the company's pipeline. It's still a cautious buy at recent prices.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.