Cara Therapeutics (NASDAQ:CARA) enjoyed a really good year in 2017, with the stock jumping 32%. But the clinical-stage biotech is having a great year so far in 2018. Shares are up around 50% -- and that reflects a significant pullback. Cara stock had skyrocketed more than 90% as of the end of September.

This big gain is definitely fantastic news for Cara shareholders. But why the biotech stock has generated the strong returns this year makes for even better news. Here are the three top reasons behind Cara's impressive performance.

Ascending wooden blocks with a line pointing upwards drawn above them and 2018 written below them

Image source: Getty Images.

1. Landing a big partner

One of the biggest catalysts for Cara this year was its announcement in May of a deal with Vifor Fresenius Medical Care Renal Pharma Ltd. (VFMCRP). VFMCRP is a joint venture between Swiss drugmaker Vifor Pharma Group and large dialysis provider Fresenius Medical Care (NYSE:FMS).

This deal allows VFMCRP to market Cara's Korsuva injection as a treatment for chronic kidney disease-associated pruritus (CKD-aP) in dialysis patients worldwide except for the U.S., Japan, and South Korea. In exchange, Cara received an up-front cash payment of $50 million, a $20 million equity investment, tiered royalties on all sales, and is eligible for milestone payments of up to $470 million.

Cara will retain commercialization rights in the U.S. However, Fresenius will promote Korsuva in its U.S. dialysis clinics and share profits with Cara. That should be great for the biotech considering that Fresenius is the largest dialysis provider in the U.S. with 38% of the market last year. 

2. Strong post-op results

There's no question that Cara's primary focus is on advancing Korsuva as a treatment for CKD-aP. But the company also reported encouraging results for an intravenous (IV) form of CR845 (which is a primary ingredient of Korsuva) in June.

Cara's results from a phase 2 clinical study of IV CR845 showed that the drug performed well in alleviating post-operative pain for patients who underwent abdominal surgeries. The study met its primary endpoint of statistically significant improvement in pain relief compared to placebo. There also were statistically significant reductions in nausea and vomiting for patients who took IV CR845. 

It's possible, and perhaps even probable, that Cara will try to find a partner for IV CR845. The company has a lot on its plate with Korsuva. However, good news in the post-op setting made investors quite happy and boosted optimism about the prospects for Korsuva in CKD-aP.

3. Overall pipeline progress

Although Cara didn't report any other results from clinical studies this year, the biotech definitely achieved progress with its pipeline. Most importantly, in January, Cara initiated its U.S. phase 3 study of Korsuva injection in CKD-aP for patients on dialysis.  

Cara followed up in August with the first dosing of patients in its global phase 3 study of Korsuva injection in CKD-aP for patients on dialysis. The biotech also began dosing patients in July in a phase 2 study of oral Korsuva in treating pruritus in patients with moderate to severe CKD who aren't on dialysis.

In addition, Cara made headway in evaluating Korsuva in another indication. In February, the company dosed the first patient in a phase 1 study of an oral version of the drug in treating patients with chronic liver disease-associated pruritus (CLD-aP).

Looking ahead

Investors have a lot to look forward to with Cara over the next year. The biotech expects to announce preliminary results from its phase 1 study of oral Korsuva in treating CLD-aP within the next few weeks. If those results are positive, the company should begin a phase 2 study by early 2019.

Cara also anticipates reporting results from both phase 3 studies of Korsuva injection in treating CKD-aP in dialysis patients in 2019. CEO Derek Chalmers said that the company should also initiate its clinical development program of oral Korsuva in treating dermatological conditions.

The consensus one-year price target among Wall Street analysts now reflects a 45% premium over Cara's current share price. With some good news from clinical studies, it wouldn't be surprising if Cara hits that mark in 2019.

Keith Speights 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.