There was a lot of good economic news to report on Thursday. In addition, great Q1 results from tech stocks are helping push the markets up to record-highs once again. However, amidst all of this, a lot of investors might have missed out on this one ticker that made waves. Small-cap biotech company Cara Therapeutics (NASDAQ: CARA) is plunging after the company reported a complete flop for its phase 2 drug trial.
Cara is working on a drug called Korsuva, which targets patients with a skin itching condition known as atopic dermatitis. In a double-blind, randomized, placebo-controlled study, Korsuva ended up failing to meet its primary endpoints, the last thing that any biotech company wants to hear.
Not only did the phase 2 trial fail to meet its endpoints in general, but not even a single dose group managed to meet its endpoints. Even worse, no group even managed to meet one of the secondary endpoints either. In other words, this phase 2 trial was a complete and irredeemable flop for Korsuva and Cara therapeutics, at least from a statistical perspective. However, to be fair, it should be noted that Korsuva still did see an improvement in patient symptoms; it just wasn’t enough to reach the main goals of the trial.
“The KARE Phase 2 trial demonstrates the unique anti-itch effects of KORSUVA in atopic dermatitis, a highly inflammatory skin disease,” said Dr. Brian Kim, “This is novel and promising for a future in which we can treat the central symptom of AD, especially for patients with mild-to-moderate AD who experience severe itch.”
Despite this setback, that doesn’t necessarily mean that Korsuva itself is finished. There are sometimes flaws within clinical studies that can be addressed. Additionally, there are rare cases of phase 2 trials failing but phase 3 trials working out. Since later-stage trials use a larger population size, it’s possible that this trial simply was a statistical anomaly and got unlucky with patients who didn’t react well to the drug.
Shares of Cara Therapeutics are down 45.5% on Thursday, thanks to the news. While Cara might not be the hottest biotech stock on the market, a lot of investors were watching it closely in recent weeks. However, Korsuva isn’t Cara’s primary drug candidate right now. If anything, it’s a secondary product being developed in its pipeline.
Some investors argue that this pullback is an overexaggerated response from the markets and that the news isn’t as bad as the headlines would make it out to be. However, a complete trial flop like this is obviously going to send shares tanking.
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