Cara Therapeutics (NASDAQ: CARA) was one of the more promising biotech companies on the market, offering a compelling treatment for a significant issue many patients were having.
However, as is often the case with hyped up biotech companies, if clinical results aren’t as positive as the market would have initially expected, shares can quickly plummet due to the disappointment. That’s exactly what happened to Cara Therapeutics, announcing only decent, but not excellent, results for its upcoming Korsuva drug which failed to meet a secondary endpoint in a study.
Korsuva is a drug candidate being developed to treat patients with pruritis, a type of skin itching that comes from patients that have moderate or severe kidney disease. With pruritis being a rather common occurrence for kidney disease patients, the potential market size is quite large, and investors had been optimistic about Korsuva’s upcoming results.
Unfortunately, they weren’t as optimistic as investors would have liked. While Korsuva met its primary endpoints, it ended up falling short on its secondary endpoints for the study. While this isn’t terrible for the company, it’s a mild setback that has resulted in a major selloff in the stock. While the company’s management remained optimistic in the press release, investors didn’t feel the same way.
“CKD-associated pruritus remains a significant unmet need for approximately one-third of diagnosed CKD patients in the U.S.,” said Derek Chalmers, CEO and President of Cara Therapeutics in a press release. “We are pleased that this Phase 2 study has successfully identified an appropriate tablet strength of Oral KORSUVA to carry forward into a pivotal Phase 3 registration program which we expect to initiate next year.”
Shares of Cara Therapeutics fell by 34.5% over the course of the day in response to this piece of news, eradicating any gains the stock has seen previously over the course of the year. While this is definitely an adverse development, it’s possible that another study in the near term will end up vindicating that now, slightly tarnished Korsuva. The fact that the study in question met its primary endpoint is still good news, and the fact that it failed to meet a secondary endpoint likely won’t be enough to doom the drug altogether.
Cara is a pretty small company, however, with a market cap of around $790 million following this downturn. At present, Korsuva remains the company’s main drug candidate with any real blockbuster potential. Time will tell whether Cara’s hope in Korsuva ends up being justified, but investors should keep an eye out for further announcements from the company in the future.
Cara Therapeutics Company Profile
Cara Therapeutics Inc is an emerging biotechnology company involved in the development of novel therapeutics to treat human diseases associated with inflammation, pain, and pruritus. Cara’s most advanced compound, CR845, aims to treat acute pain and pruritus.
This patented compound has analgesic, anti-inflammatory, and antipruritic properties that can be used for multiple therapeutic applications. Additionally, Cara’s objective is to use its proprietary drug-screening technology to develop a future pipeline of first-in-class molecules with analgesic and anti-inflammatory features. – Warrior Trading News