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What: Shares of Cara Therapeutics (NASDAQ:CARA) gained nearly 70% last month, after the company reported strong midstage results for its lead kappa opioid agonist, CR845, as a potential treatment of moderate to severe uremic pruritus, an itch associated with kidney failure, usually in patients on dialysis, that currently lacks any form of approved treatment in the United States. 

Digging into the top-line data, CR845 significantly reduced the average worst itch by 54% during the second week of treatment, compared with patients receiving a placebo.  

So what:: According to Cara, there are approximately 400,000 kidney dialysis patients in the U.S., with half of them needing treatment for uremic pruritus. While it's basically impossible to estimate the peak sales for an experimental product with no comparable entity on the market, investors are probably excited at the prospects that CR845 would essentially have the market all to itself if approved. 

Now what: Cara plans on launching a pivotal late-stage study in 2016 for CR845's uremic pruritus indication. But the bigger issue to keep an eye out for is the start of the drug's late-stage trial for its acute pain indication. This trial is set to begin enrolling patients later this year.

Acute pain is a multibillion-dollar market, and there is a significant unmet medical need for drugs that can provide long-lasting relief in the post-op setting. So if CR845 can prove effective in the acute-pain space in a registry study, this stock could really begin to take off. That's why investors may want to add this speculative biopharma stock to their watchlist. 

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.