Cara Therapeutics announced its third-quarter results after the market closed on Tuesday. And investors were itching to see what the biotech had to say. Here are the highlights of Cara's Q3 update.
By the numbers
Cara Therapeutics announced Q3 revenue of $5.8 million, a 14% increase from the $5.1 million reported in the same quarter of the previous year. This figure beat the average analysts' revenue estimate of $4.34 million.
The company reported a net loss in the third quarter of $32.8 million, or $0.74 per share, based on generally accepted accounting principles (GAAP). This reflected a move in the wrong direction compared to Cara's net loss of $19.4 million, or $0.51 per share, in the prior-year period. It also was worse than the consensus Wall Street estimate of an adjusted net loss of $0.58 per share.
Cara ended the third quarter with cash, cash equivalents, and short-term investments of $249.1 million. This was an increase from the $182.8 million on hand as of Dec. 31, 2018.
Behind the numbers
All of Cara's revenue came from its license agreement with Vifor Fresenius Medical Care Renal Pharma, a joint venture between Vifor Pharma and Fresenius Medical Care. This joint venture plans to market Cara's Korsuva outside the U.S., Japan, and South Korea pending regulatory approvals.
Cara's worsening bottom line stemmed nearly entirely from increased research and development costs. This higher R&D expense stemmed mainly from an $8 million upfront payment Cara gave to Enteris as part of a license agreement. Cara also incurred higher clinical trial costs and paid more in stock-based compensation and salaries.
The company's cash position improved considerably from the end of 2018 thanks to a public offering in July 2019. This public offering generated net proceeds of $136.5 million.
Since Cara remains a clinical-stage biotech, its pipeline progress is more important to investors than its financial results. The company announced in October that it had completed an interim statistical assessment of its late-stage KALM-2 study of Korsuva injection. This assessment led to Cara increasing the enrollment of the study from 350 patients to 430 patients. Cara also has three phase 2 clinical studies under way evaluating an oral version of Korsuva.
Cara thinks its current cash stockpile will fund operations into the second half of 2021 without any potential milestone payments. That's good news considering the company has a lot of potential milestones on the way.
The company expects to announce top-line data from its phase 2 study of oral Korsuva in treating chronic kidney disease-associated pruritis patients who aren't on hemodialysis by the end of 2019. Results are expected next year from the other two phase 2 studies of oral Korsuva in treating pruritis associated with atopic dermatitis and pruritis in patients with chronic liver disease-associated pruritis caused by primary biliary cholangitis.
Cara's pivotal study of Korsuva injection in treating chronic kidney disease-associated pruritis (CKD-aP) patients on hemodialysis should be fully enrolled within the next month or so. The company said it's still on schedule to file for U.S. approval of Korsuva injection in the CKD-aP hemodialysis indication in the second half of next year. If all goes well, Cara's big gains so far this year could pale in comparison with what the stock could deliver in 2020.