Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cara Therapeutics (NASDAQ:CARA), a clinical-stage biopharmaceutical company focused on developing therapies to treat various types of pain, surged as much as 19% after it and development partner Enteris BioPharam announced they'd dosed their first subjects in a phase 1a/1b study of oral CR845 for the treatment of acute and chronic pain.

So what: According to the press release from both Cara and privately held Enteris, the prior phase 1 study involving CR845 "demonstrated a mean oral bioavailability of 16% across all groups under fasting conditions, with peak and total exposures proportional to each dose." The investigational pain med delivered peripheral kappa opioid receptor activation in all doses and appeared to be safe and well-tolerated. The two companies expect to report top-line pharmacokinetic, safety, and biomarker data by the fourth quarter and believe CR845 could address a large pain market where prescription abuse remains a large concern.

Now what: While moving forward with any compound is a positive for a clinical-stage biopharmaceutical company, we should also keep a number of things in context. First, the initial results from oral CR845 were extremely early stage. Even when we get additional data by the fourth-quarter it's going to be geared more toward biomarkers and safety than actual pain-reducing efficacy. In other words, it's probably not a good idea to get too excited about its potential just yet.

Also, investors should consider that Cara's pipeline isn't particularly deep. The company anticipates initiating a phase 3 registration trial for CR845 in IV form as a treatment for post-operative pain this year, just began dosing CR845 in tablet form for acute and chronic pain, and is testing CR701, a chronic pain compound in preclinical studies. That is the entire scope of Cara's current pipeline, yet the company is nearing a $400 million valuation. With the Food and Drug Administration so particular about pain med abuse potential I would much rather avoid a company like Cara until it has a product on pharmacy shelves and steady revenue streaming in.