Cara Therapeutics, Inc. (CARA) Earnings Call Transcript & Summary

Good afternoon. My name is Daniel Wolle. I'm one of the associates on the biotech team. We're continuing the 2020 Healthcare -- the JPM Healthcare with Cara Therapeutics. After their presentation, the breakout sessions will be held in the Olympic Room. Before that though, I present Derek Chalmers, CEO of Cara Therapeutics.

Great. Thank you, Daniel. Good afternoon, everybody. Thanks for staying late this afternoon. So what I'm going to do this morning -- I'm sorry, this afternoon, is run through our basic therapeutic focus very briefly, then update you on our various clinical programs and our advancement there through last year and what we expect this year and then finish with the major milestones for the year. Of course, there will be some forward-looking statements. So Cara today is a company focused on developing a novel therapeutic approach for the treatment of chronic systemic pruritus. And I think most people are familiar with pruritus as a major symptom associated with dermatological conditions, atopic dermatitis often described as the itch that rashes. But there's also a high prevalence of pruritus across a range of disease areas, including end-organ diseases, chronic inflammatory diseases, certain neuropathic conditions. And when we look at empirical script data here in the U.S., across all these disease areas, we see in the order of 20 million scripts per year annually in the U.S. to treat pruritus. Today, the vast majority of those scripts are generic corticosteroids or centrally acting antihistamines. So certainly an unmet need and significant unmet need, and we've been focused on defining a novel therapeutic approach for this clinical problem. So how have we done that? Over the last number of years, we've been developing a series of highly selective kappa receptor agonist therapeutics, which show very robust antipruritic activity, both preclinically and as you'll see clinically. These molecules are highly selective for the human kappa receptor. Our lead molecule here is CR845, exemplified in Slide #4, where we see peak or more activity at the human kappa receptor and essentially no activity at any other opioid receptor, including the classical new opioid receptor. So this compound acts to activate kappa receptors in the absence of classical opioid side effects, including a lack of abusability. Structurally, it's not a classical opioid, small organic structure. This is a D-amino acid peptide, metabolically stable. These compounds have a very high polar surface area, which prevents crossing the blood-brain barrier. So essentially, these compounds act peripherally with a lack of CNS activity. And Cara is the only company with issued compositional matter on this class of compound, essentially worldwide to 2027. So how do these work to produce their antipruritic effect? So pruritus essentially initiates in the epidermis and the dermal-epidermal junction, and it's relayed by a subset of sensory C-fibers, as illustrated here on Slide #5. And these C-fibers are sensitive to an array of pruritogens released from immune cells. And the profile of those released immune cells differs in terms of the pathophysiology of the disorder. And these immune cells sensitize the nerve endings and produce the pruritus response. KORSUVA acts on kappa receptors downstream from these pruritogens to essentially inhibit C-fiber neuronal activity directly. And then with the second mechanism, we know kappa receptors on activated immune cells prevent exocytosis from those immune cells. So it has a dual mechanism which we believe has the potential to underscore the broad applicability for KORSUVA across pathophysiologies to treat pruritus. And we've designed our pipeline accordingly. We have 2 major formulations of KORSUVA in development: an intravenous formulation, KORSUVA Injection, which is currently completing a Phase III program for the treatment of chronic kidney disease-associated pruritus, specifically within hemodialysis patients; and then we have an oral formulation of KORSUVA in development to treat pruritus across a range of clinical populations, CKD pre-dialysis patients, stage III-V patients, chronic liver disease patients as well as atopic dermatitis patients. So let me walk you through each of these programs and provide you with somewhat update as to where we are in our development progress. So starting with KORSUVA Injection to treat pruritus in dialysis patients. CKD-associated pruritus in hemodialysis patients is a serious intractable disorder frequently occurring. It's associated with a range of comorbidities, including increased local infections, increased systemic infections. It's highly correlated with diminished quality of life in these patients. And in the most severe cases, it's actually correlated with increased mortality risk. To date, there is nothing approved in the U.S. or Europe for this disorder. The opportunity for KORSUVA Injection in this patient population is significant. Of the 500,000 or so dialysis patients in the U.S., 60% of these patients exhibit some form of pruritus, with 40% to 50% of these patients exhibiting moderate to severe pruritus. To date, using generic available medications, there has been very little robust positive efficacy data in this patient population. Based on our Phase II data, with KORSUVA injection in this patient population, we were awarded breakthrough designation in 2017. So we've been advancing our Phase III program for the last 2 years, and we've made significant progress. In Q2 of last year, we reported data from our first pivotal Phase III trial in this patient population, the KALM-1 trial, where we met all primary and secondary end points. We announced in December of last quarter that we had truly enrolled our second pivotal Phase III trial, KALM-2 trial. That will report top line data in Q2 of this year. And we're in a good position in terms of satisfying our safety database. Per ICH guidelines, we've already surpassed the required 1,500 total exposures and surpassed requirements for both 6-month and 1-year exposures. So we are in a strong position to meet our first goal for this year, which is file our NDA for KORSUVA Injection in the second half of this year. So let me take you through some of the data from that first Phase III trial, the KALM-1 trial. This was designed as a standard 1:1 randomization of KORSUVA at a dose of 0.5 micrograms per kilo versus placebo. Patients qualified for randomization by exhibiting moderate to severe pruritus in a run-in period. They then received KORSUVA as an injection bolused post-dialysis 3x per week. And this is a highly convenient dosing regimen for the hemodialysis patients, who, as you are aware, are heavily pill-burdened due to the array of comorbidities that these patients exhibit. Primary end point in this trial was a proportion of subjects exhibiting at least a 3-point reduction from baseline in the worst itch mean NRS scores. And that's a threshold level we had previously determined empirically to be clinically meaningful for this patient population. And then the secondary end point is look at the 4-point responder rate as well as quality-of-life measurements using validated self-assessment skills, the 5-D itch and the Skindex-10. Starting with our primary end point. Patients treated with KORSUVA exhibited a 51% frequency rate and producing a 3-point reduction from baseline versus 28% and placebo, very robust achievement of that primary end point. If we look at the odds ratio, that's telling us that patients treated with KORSUVA had greater than a 2.5x likelihood of showing a clinically meaningful reduction in the worst itch NRS score over the treatment period. Similarly, for a 4-point reduction, 39% of KORSUVA-treated patients exhibiting that threshold level of reduction versus 18% and placebo, again, odds ratio indicating KORSUVA-treated patients have a threefold increase in likelihood of a response at this level. If we look at the time course of effect and reduction of mean NRS in these patients, we see a separation from placebo at week 1 statistically, and that is sustained and indeed develops through the 12-week treatment period, sustaining statistical separation from placebo. And by the end of the treatment period, the average KORSUVA-treated patient has moved from moderate to severe, to mild pruritus. So I said, how has this changed in NRS score perceived by the patients? If we look at quality of life measurements, both multi-dimensional quality of life scores exhibited statistically significant improvements, 35% for the 5-D itch and 43% for the Skindex-10, and these were improvements across all dimensions within these self-assessment skills. So reductions in NRS are perceived as improvement in quality of life for these patients. In terms of tolerability, KORSUVA was generally very well-tolerated. The most frequent adverse events at the 5% level were essentially GI with diarrhea and some vomiting and some transient dizziness. And all of these were in the mild-to-moderate scale and self-realizing, not requiring intervention. So this is a very well-tolerated drug, an attractive profile in treating pruritus in hemodialysis patients. And it's Cara's intention to commercialize this drug within the U.S. Ex U.S., we've established commercial license agreements in Japan, in South Korea and also within the European Union. There, we've established a relationship with Vifor Fresenius, a joint venture between these 2 companies. We think this is an ideal partnership for this drug. We can leverage the broad reach of Fresenius to dialysis patients really across Europe and across the world in that sense. Per this agreement, we're eligible to receive up to $470 million in regulatory and commercial milestones as well as double-digit royalties tiered by sales. So a standard license agreement for ex U.S. sales here. Another interesting aspect of this agreement is we established a co-promotion and profit share agreement with Vifor Fresenius, specifically within Fresenius clinics in the U.S., and we believe this will allow us to leverage the nephrology-focused commercial expertise of these companies and will add momentum to the adoption of KORSUVA upon launch. And we think that's an important aspect of this arrangement. So that's where we are in terms of KORSUVA Injection development, moving to the other half of our pipeline focused on Oral KORSUVA. Here, we believe this formulation is applicable to a broad array of clinical populations. In Q4 of last year, we reported positive top line data from our Phase II trial looking at CKD pre-dialysis stage III-V patients, and I'll run through some of those highlights in a second. And we also have ongoing trials, both in atopic dermatitis and in chronic liver disease, we're looking at primary biliary cholangitis patients. So let me start with CKD stage III-V patients in terms of the data. So if we look at the opportunity here again, per our National Kidney Foundation numbers, there are some 30 million CKD patients in the U.S. If we look at diagnosed CKD patients and the incidence of pruritus scripts within those diagnosed patients, almost 1/3, just over 1/3 of those patients are receiving generic scripts, again, predominantly corticosteroids to treat their pruritus. As with hemodialysis patients, there's nothing yet approved here in the U.S. or EU for this patient population. Our Phase II trial in this patient population was a 3:1 randomization trial designed in a similar fashion in terms of treatment period to our IV Phase III trial with KORSUVA Injection. We dosed KORSUVA QD in these patients once a day and over a 12-week treatment period. Primary end point in this trial was changed from baseline in the weekly mean of the daily worst itch NRS scores. And then secondary end points were, again, quality of life scores and responder analysis at the 3-point level as well as at the complete responder level and Patient Global Impression of Change. So looking at the primary end point, we see a dose-dependent response here in mean NRS change at 12 weeks. We achieved statistical significance with the 1-milligram dose. Again, if we look at the time line for this treatment effect, it looks very similar to that achieved with KORSUVA Injection in hemodialysis patients, separation from placebo between week 1 and week 2 and a sustained drug benefit through the 12-week treatment period. Looking at the secondary end point of 3-point responder analysis, we saw a significant difference through the majority of time points for the 12-week treatment period. At the 12-week time point, 72% of KORSUVA-treated patients exhibited a 3-point reduction in the worst itch NRS score, which just failed to achieve statistical significance due to the higher-than-normal placebo rate at this particular time point. But if we increase the threshold for responder rate and look at complete responder rate, so this is the proportion of patients who exhibit NRS scores of 0 or 1 in their final week of treatment through the treatment period. We can see activity in all 3 tablet strengths of KORSUVA, with patients treated with the 1-milligram tablet strength achieving 40% complete responder rate versus 14% in placebo. Looking at PGIC responses, we see a similar response mirroring the complete response rate, with 75% of the 1-milligram treated patients categorizing the response as much improved or very much improved at the 12-week time point. So certainly a robust efficacy response here from this Phase II trial. We met our goal of identifying the tablet strength to take the Phase III, which will be the 1-milligram dose strength. Oral KORSUVA was generally very well-tolerated, with a very similar profile to that seen with KORSUVA Injection in hemodialysis patients. And our goal for this program is to complete our end of Phase II program in the second half of this year and initiate pivotal Phase III trials. Just to finish here in the last few minutes, where we are in our additional oral programs. We have an ongoing trial of KORSUVA tablets in pruritus associated with atopic dermatitis. Here, we're looking at 320 adult patients exhibiting moderate to severe pruritus. Primary end point here, again, analogous to that and designed with CKD oral and the CKD patients, change in baseline in the weekly mean of the worst itch NRS scores. Secondary end points, proportion of patients achieving a 4-point response as well as quality-of-life changes with Skindex-10 and 5-D itch. We've also introduced an interim statistical analysis for this Phase II trial, where we're going to look at 50% of the patients completing the treatment period, and we project completing that interim analysis in Q2 of this year. And finally, we're also looking at proof-of-concept trial in primary biliary cholangitis patients. This is a 16-week trial, 1:1 randomization against our highest dose of KORSUVA, 1-milligram tablet strength used BID. So to finish here and look at the expected milestones through the rest of this year, we certainly have a busy year, an exciting year in terms of output. Starting with KORSUVA Injection, we expect a nice top line data for our second pivotal Phase III trial in Q2 of this year, the KALM-2 trial, and that's going to get our NDA submission in the second half of 2020. Aligning with these regulatory time lines, we have also initiated key pre-commercial activities at the company, essentially across functional groups, including establishment of commercially viable drug product manufacturing capability in anticipation of a 2021 launch for KORSUVA Injection. For Oral KORSUVA, we do expect to announce results of our interim assessment in our ongoing Phase II trial in atopic dermatitis in Q2 also of this year. And we do expect top line data from both our atopic trial and our primary biliary cholangitis trial in the second half of this year. And finally, we're on track to complete our end of Phase II meeting with the FDA, initiate our Phase III trial in CKD-aP pre-dialysis patients before the end of this year. In terms of our cash position and runway, we finished Q3 with approximately $249 million, and we've guided the sufficient cash to take us through the NDA submission, the results of all of our ongoing Phase II trials and into the second half of 2021. So I'll stop there. Thank you for foregoing happy hour for at least a few minutes. Happy to answer your questions in the breakout session. Thank you very much.