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

Welcome to the Cara KARE Phase II Top Line Data Call. My name is John, and I'll be your operator for today's call. [Operator Instructions] And I will now turn the call over to Jack Hildick-Smith.

Good morning. This is Jack Hildick-Smith with Stern Investor Relations, and welcome to Cara Therapeutics KARE Top Line Data Conference Call. [Operator Instructions] Please be advised that this call is being recorded at Cara's request. The news release describing the top line data became available at 7:00 a.m. today and can be found on our website at www.caratherapeutics.com. with further details available in a current report on Form 8-K filed with the U.S. Securities and Exchange Commission this morning. A PowerPoint slide deck describing the details of the top line data is posted on the Investors section of the website, and you may listen to a live webcast and replay of today's call on the same section. Before we begin the call, I would like to remind you that today's conference call contains certain forward-looking statements, including statements concerning plans, strategies and expectations for the future, including statements regarding the expected timing of planned clinical trials and regulatory submissions, the potential results of ongoing and planned clinical trials, future regulatory and development milestones for the company's product candidates, the size of the potential markets that are potentially addressable for the company's product candidates and the plans for meeting with the FDA regarding the potential registrational program for oral. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from any future results expressed or implied by any forward-looking statements include the risks described in the Risk Factors section of Cara's annual report on Form 10-K for the year ended December 31, 2020, as well as those set forth from time in its other SEC filings. Any forward-looking statements speak only as of the date of this presentation. The company undertakes no obligation to publicly update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Participating on today's call are Dr. Derek Chalmers, Cara's President and CEO; Dr. Jo Goncalves, Cara's CMO; and Mr. Tom Reilly, Cara's CFO. I'll now turn the call over to Dr. Chalmers.

Thanks, Jack, and good morning, everybody, and thanks for joining us for our KARE Top Line Data Call. So before Jo takes you through the details of the trial and the top line end points, I wanted to briefly remind you of the overall status of our KORSUVA pipeline. Of course, we know that pruritus is a serious and highly prevalent condition across a range of clinical populations with varying pathologies. And we believe that based on its mechanism of action, KORSUVA has the potential to be an effect of antipruritic regardless of the initiating pathophysiology. And we've designed our pipeline accordingly, as you see in Slide 3. To date, we've established positive results with KORSUVA in chronic kidney disease-associated pruritus, both in end-stage hemodialysis patients, where we have our NDA under review presently, and in predialysis patients. So confirmation of activity and treating pruritus associated with end-organ disease. We believe the KARE data we'll discuss today is an important confirmation of KORSUVA's activity in patients with a different initiating pathology, that of a highly inflammatory skin disease, atopic dermatitis. And consequently, this is an important step in beginning to establish the potential for Oral KORSUVA to act as a broad antipruritic. So with that, I'm going to turn it over to Jo to take you through the details of the trial. Jo?

Thank you, Derek. Good morning, everyone. Before I present the study data, it's important to have a good understanding of the atopic dermatitis patient population. AD is a common highly inflammatory skin disease, whereby pruritus is the predominant and most bothersome symptom for patients, with the disease often referred to as the itch that rashes. However, not all patients have the same extent of rash, that is the inflammatory lesions on the skin. And it is the extent and the degree of skin lesions which define the population into mild, moderate or severe disease. The majority of patients, that is about 80% of patients, have mild to moderate skin lesions and 20% have severe lesions. But what is common to all is that they all have pruritus. In fact, moderate to severe pruritus occurs even in patients with mild to moderate disease. And this group has been referred to as an itch-dominant AD group, highlighting that itch severity does not correlate well with lesional severity. The majority of activity in drug development has concentrated on addressing moderate to severe disease. Dupilumab, for example, is indicated for this patient segment. For patients with mild to moderate lesions, topical steroids and topical immunomodulators are available, but they don't always fully address itch. In our Phase II study, also known as KARE, we enrolled the whole spectrum of AD, mild to severe disease with moderate to severe pruritus. The study was prespecified to evaluate itch in subjects with mild to moderate AD and in subjects with moderate to severe AD. Next slide. KARE was a Phase II dose-ranging study to assess the efficacy and safety of 3 dose levels of oral difelikefalin on reducing itch severity compared to placebo in subjects with atopic dermatitis. Subjects were randomized to receive oral difelikefalin at a dose of 0.25, 0.5, 1 milligram or placebo twice daily for 12 weeks. After the 12-week placebo-controlled period, subjects could enter a 4-week active extension phase, whereby placebo subjects were randomized to active drug. The active extension phase of the study is still ongoing so I'll be presenting data only from the placebo-controlled period. Subjects needed to have a baseline itch NRS score of 5 or greater defined as the average of all nonmissing scores reported during the 7-day running period. Subjects were washed out of all anti-itch and atopic dermatitis medication prior to entering the study. Subjects had to apply emollients to their skin daily throughout the study. Rescue medication were to be used only to control unacceptable symptoms. Once randomized, the subjects continue to report their daily worst itching intensity until the end of the study. The primary end point was the change from baseline in the weekly mean of the daily 24-hour itch NRS score at week 12. The key secondary end point was the proportion of subjects achieving at least a 4-point improvement from baseline in the weekly mean of the daily 24-hour itch NRS score at the end of week 12. We had an interim assessment for sample size re-estimation after 50% of the planned sample size reached week 12 that was 160 subjects, whereby our Independent Data Monitoring Committee recommended a sample size increase for the most promising dose and placebo. On Slide 6, I'll discuss the patient disposition. A total of 401 subjects were randomized across the 4 groups. As you can see here, the 0.5 milligram dose was selected to be increased together with placebo. The discontinuation rate was fairly similar across the treatment groups of placebo and the 1-milligram group having greater percentage of subjects discontinued that is 21% and compared to the 0.25 and 5-milligram groups where 18% of subjects discontinued the study. The most common reason for discontinuations in the 1-milligram dose group were due to adverse events. There was very little use of rescue medication throughout the study. You can see here that 4 subjects used rescue medication on the 0.25 milligram dose, 2 subjects on placebo and 1 subject each on the 0.5 and the 1-milligram dose. Baseline patient demographics were similar to other clinical studies which have evaluated itch in atopic dermatitis, that is there was a higher proportion of female subjects and black subjects. Subjects were in the early 40s, mostly female, and the majority were white. Subjects were obese with a mean BMI of 50 across the groups. Looking at baseline disease characteristics on Slide 8. Subjects across the groups had atopic dermatitis for a mean duration of approximately 20 years with a baseline mean body surface area of 8%. Based on body surface area, we enrolled approximately 65 patients with mild to moderate AD, that is a BSA of less than 10% subject to the mean EASI ranging from 5.9 to 6.9. And over 50% of subjects had a baseline IGA of 3, which is moderate. And approximately 45% an IGA of 2, being mild. The baseline mean itch NRS score ranged from 7.7 to 7.9. So looking at the primary end point. In the ITT population, significant differences were observed with 1-milligram oral difelikefalin versus placebo starting at week 1 and continuing through week 12 in the majority of time points, that is 9 of the 12 weeks. However, the difference was not statistically significant at week 12 with a p-value of 0.073. Subjects treated with the 1-milligram dose had a mean change of minus 3.6 versus minus 2.8 in the placebo arm. The pattern of separation from placebo is similar to what has been seen in all our other studies with difelikefalin in the CKD patient population. The key secondary end point. In the ITT population, while subjects treated with oral difelikefalin exhibited numerical improvement of greater than 4 points in the NRS at week 12, none of the doses were statistically significant. As a reminder, the KARE study enrolled the full spectrum of disease lesion severity, with 64% of subjects having mild to moderate AD and 36% with moderate to severe disease based on body surface area. And we had prespecified these groups to assess efficacy in these 2 subgroups. In the next few slides, I'll focus on the efficacy data for the mild to moderate group. When we look at the mild to moderate atopic derm patient population, the antipruritic effect of difelikefalin doses combined becomes much more apparent. Statistical significance versus placebo was achieved beginning week 1 and sustained through week 12 and including week 12 in the mean NRS reduction. At week 12, the effect size in the difelikefalin or doses combined group was 0.75, with a p-value of 0.036. Slide 13 shows again the mean change in NRS in the mild to moderate subjects. But this slide now demonstrates how the individual doses behave in the mild to moderate AD group, where the separation from placebo is more apparent across all doses. We see numerical separation from placebo across all doses, with the 1-milligram dose exhibiting a statistically significant separation in 11 of the 12 time points up to week 12. Slide 14. With regards to the regulatory required in end point itch, that is a 4-point responder analysis, we see a statistically significant greater proportion of patients achieving this end point compared to placebo at week 12, with 32% of subjects on the difelikefalin doses combined versus 19% in placebo in this mild to moderate AD group. Slide 15. I'm showing the 4-point responder analysis again, but now showing the individual doses. We see similar numerical improvement over placebo in all doses with a 0.5 milligram sample size. Slide 16, adverse effect data. Overall subjects reporting at least one adverse event ranged from 39.5% on the 0.5 milligram dose to 54.5% of subjects under 1-milligram dose. There were 4 subjects with serious treatment-emergent adverse events, none of which were considered related to study drug. There was one event of costochondritis, one event of kidney stones in a subject with prior history of kidney stones. One subject had an alcoholic binge and experienced hypovolemia and acute kidney injury, and a subject with a preexisting hypertension on thiazide diuretic, which resulted in an episode of hyponatremia. Subject who discontinued due to a treatment-emergent adverse event ranged across doses, with the lowest in the 0.5 milligram group at 0.8% to 11.7% in the 1-milligram group. The most common reason for discontinuation across treatments was GI-related, with abdominal pain being the most common on the 1-milligram and nausea the most common for placebo. Slide 17. You see the most commonly reported treatment-emergent adverse events as defined by events that occurred at a frequency equal to or greater than 5% in a treatment group. Abdominal pain was the most commonly reported event in the 1-milligram and placebo groups at an incidence of 18.2% and 10.6%, respectively. These events were all mild or moderate in severity and were well tolerated. Nausea was more commonly reported in subjects receiving placebo compared to those on difelikefalin. Hypertension was reported in 5 subjects on the 1-milligram dose, and one subject in each of the other groups, including placebo. Of note, approximately 1/4 of subjects had a baseline medical history of hypertension, with more subjects in the difelikefalin group having a prior history compared to placebo. Of the 5 subjects with an adverse event of hypertension in the 1-milligram group, 4 had preexisting hypertension. And the one subject who developed hypertension was morbidly obese with a BMI of 48.7. Events of dizziness were reported across the difelikefalin doses and placebo. Dizziness tended to start in the first week and lasted a couple of days. Dry mouth and headache were the other treatment-emergent adverse events reported here. Slide 18 demonstrates the efficacy profiles in the different disease areas, and we compare here the efficacy profile of difelikefalin in mild to moderate atopic dermatitis and in CKD in the Phase III KALM-2 study, but we see a very similar antipruritic effect across these 2 very different disease areas. The onset of effect is early and sustained throughout the 12-week period with similar effect sizes. So to conclude, while KARE did not meet the primary end point, a positive antipruritic signal was observed with oral difelikefalin, especially in subjects with mild to moderate AD with moderate to severe itch. In the mild to moderate population, difelikefalin significantly improved itch as measured by both the mean change from baseline in itch NRS as well as the 4-point responder analysis at week 12. We are encouraged to have met the expected Phase III registration end point of a 4-point responder analysis in the mild to moderate AD group. We view this as a positive outcome in the defined population where difelikefalin potentially works best. This patient segment also happens to be a highly underserved phenotype of atopic dermatitis. The efficacy and safety data support further development in mild to moderate AD. We expect to discuss the clinical path with the FDA at the end of Phase II meeting. Thanks.

John, we'll now pass it back to you for Q&A.

[Operator Instructions] And our first question is from Chris Howerton from Jefferies.

I guess 2 from me. One would be the interim analysis was not as predictive as I think certainly I would have hoped in terms of determining the right dose to upsize and move forward. So I guess, how are you thinking about kind of the overall heterogeneity in this patient population? And also kind of any additional thoughts or color around your adaptive trial designs that you've been working on? So that's question one. And then question 2 would be it seems like there's obviously a little bit of a higher effect size in the higher doses. So what are you thinking about kind of the maximal dose here? Is it possible to go above 1 mg BID just noting that you have tried higher doses in the past?

Yes. Great. Let me just start generally, and then I'll let Jo comment on the details on this particular trial. But yes, you're correct. We do favor interim assessments on our larger trials. And in each case, we've used that methodology, including this case. We've seen significance in the more sensitive patient populations on the more important end point. So in this case, at the interim assessment time, it was clear to the IDMC that the 0.5 mg dose had a slightly better performance at that point. And of course, we're looking at 40 patients per group at that point. So variability has a bigger effect on mean performance, but had a slightly better effect. And because there was no safety issues there and the way that the charter is written to guide them to favor the dose with the more favorable effect, they decided that, that would make sense and they increased the power on the 0.5 mg. And at the end of the day, we did see significance in the individual dose in the 4-point responder analysis in the sensitive mild to moderate population. So in that sense, it was correct. But in essence, Chris, the way I view each of these tablet strengths, and it's similar to the data we've seen and the CKD oral trial from a pharmacological standpoint, looking at exposure levels and we published that data, all 3 of these should be pharmacologically active. They're pretty much equivalent. We may have a more efficient bioavailability with a higher tablet strength, but overall pharmacologically equivalence, and that's kind of what we see in the data here. All of these doses are equivalent. And I'll stop there and let Jo comment on these individual KARE parameters here.

Thanks, Derek, and thanks, Chris, for the question. So maybe just to focus on what you mentioned about the heterogenecity of AD and how we would control that going forward, I think what we've learned in the study is that difelikefalin is most effective in the mild to moderate patient population. So that's the patient population that seems to be well defined and that we will focus on going forward in further development. And to try to maximize the effect, the treatment we effect, we now know what the treatment effect likely is, and we will power the study accordingly in this patient population. Just to speak a little bit about to -- the dose. The 0.5 and the 1-milligram doses Derek mentioned likely have -- seem to have -- to be a little bit more effective. And so going forward, we just have to look at the totality of the data and look at these 2 doses. Indeed, we have gone higher in the notalgia paresthetica study to 2 milligrams. But like I said, we'd have to look at the totality of the data and assess based on benefit risk what would be the most appropriate dose.

Our next question is from David Amsellem from Piper Sandler.

I guess just along the lines of dosing, one question I had is does it make sense to go and run another Phase II multi-dose study in just the mild to moderate subgroups given that you had, what I guess I'd call, not a clear dose response and there's still, I guess, some questions on what is the right dose to take forward? I mean is that something that you think would make sense? And then you mentioned talking with the FDA having an end of Phase II meeting. I guess to the extent that you do move forward in a Phase III and don't do another Phase II, what is your sense based on what we know now on what dose you do take forward?

Jo, do you want to start on that one? And then maybe I'll make a comment also.

Right. So as Derek mentioned, all 3 doses appear to be effective. As we could see in the study, they're all numerically higher than placebo. We would have to just -- as I mentioned, we have to look at the totality of the data and assess which dose would be most appropriate in the next program. And we'll have to decide whether that's a IIb or a III with discussions with the FDA. But we have quite a lot of data here that we could understand which maybe is the most appropriate dose. I don't know, Derek, if you want to add anything to that.

Yes. Look, I would say we got everything we need here, David. And the most important piece of data is the registration end point data. And we clearly have very effective separation there and a very good effect size. And we can use that data to empirically power a registration trial with confidence and make sure we have correct power to have that end point. And to the comment I made to Chris, really, all 3 of these doses, particularly the 0.5 and the 1, are really pharmacologically equivalent. We're at the top of the curve from an exposure standpoint. So I don't think we gain anything by repeating this trial again with a higher power. We have that there. We can model with what we have, and we've had the registration end point. So I'll view that as we have what we need and let's move forward to design the registration trial.

Derek, if I may ask just a quick follow-up. How big would a Phase III be in terms of number of patients per arm? What do you think the ballpark would be?

Yes. So using the effect size we see here, it looks very similar to our KALM trials. 200 to 225 patients per group would give us really good power on this effect size.

Our next question is from Annabel Samimy from Stifel.

I had a few. So I guess, first, when you think about the population, can you explain to us what the baseline score was for the mild to moderate patients if technically all these patients have moderate to severe pruritus? I guess that would be helpful in knowing. And I guess related to that, it's curious that in both of your oral studies, you're not really seeing the plateauing of the placebo rate. And I was wondering if you could explain this and if it's something that you can address in future trials.

Thanks, Annabel. So the baseline score was actually the same -- it's very similar. It was 7 -- high 7, 7.8. I don't know exactly at the top of my head, but it was in the high 7s. Regarding the placebo rate, we do -- although it's -- I'm just looking at the curve now. Derek, I don't know if you want to bring that up. You do see a placebo response rate. It does seem to stabilize over the next -- towards the end of the study. The placebo rate is very variable in a patient-reported outcome end point, and this is seen across multiple studies and multiple disease areas. And if you look at other studies in atopic dermatitis, you typically see this. It's -- I don't think it's unusual to our studies only. So I can't explain that it is just patients may be sensitive to placebo when reporting on a patient-reported outcome.

Yes. And I would say that -- just to add to that, Annabel, the placebo rates we see here in the mild to moderate patient population, as Jo mentioned, are very similar to what has been reported in trials in the same patient population. The high teens to low 20s is where we expected to see this placebo rate, and that's where we ended up. And that's -- and we've talked about this before. It's probably due to the fact these patients have experienced their disease for a very long time, are very in tune with the main symptom, and that's a fairly low placebo rate for a patient-reported outcome.

Okay. And if I can just ask another, going back to the dosing question. What specifically do you need to see to decide on a dose moving forward? And is there a possibility that you should move with both the 0.5 and a 1-milligram dose in the Phase III trial just as an option for flexibility -- dosing flexibility? Does that ruin the powering going forward?

Yes. So as just said, we kind of view the 0.5 and the 1 as pretty much equivalent here, and we don't see any safety issues overall in both those cases. But as ever, that's really related to the discussion with the FDA, and we'll have that discussion as soon as we can. We still have a goal of moving this program into Phase III registration in the second half of this year. We've been preparing everything, including commercial-level drug product that we can use in those trials. So that will be part of the discussion with the FDA, Annabel. But you're somewhat correct that both those doses look quite equivalent here, although on the more sensitive end point, which is the continuous end point of mean NRS change from baseline. We do see a slightly improved benefit on the higher dose, on the 1 mg dose, if you look at the mean NRS response versus this iconomous 4-point response. So there might be a slight edge there, but that will be the main focus of discussion with the FDA on dose selection.

Just curious on that point, does it make sense to you that the .5 would -- on the more sensitive end point, the 0.5 looks to be stronger on the -- sorry, the 1 milligram is stronger on the actual change but the .5 is better on the responder analysis?

Yes. And we think that's simply a power issue on the responder. We adjusted upwards 60% increase in sample size in that dose after the interim and so it does look slightly better. And then the 1 mg -- and the 1 mg has actually the smallest sample size in that particular end point.

The next question is from Jason Gerberry from Bank of America.

This is Chi on for Jason. Just 2 from me. I'm curious if you have a sort of stance for your Phase III trial, whether you're going to enroll patients specifically -- if you're looking at younger age patients as well. Curious, the study, I think the mean age is somewhat around 40 to 43. Can you put it into context as it pertains to mild to moderate patients? Are they still the older patients or are these the younger patients below 18? Just trying to get a sense of the market size, how the Phase III population relates to the overall patient population and overall. I guess my second question is as you pivot the study to mild to moderate atopic dermatitis patients, how does that alter your pricing assumption? Maybe I'm looking way ahead right now. But as we look into mild to moderate, is that a concern, the market might see you as competing as an alternative versus some of the kind of over-the-counter or generic antihistamines?

So, Chi, thanks for those -- you were breaking up quite a bit there, but I think your first question was on the selection of patients for the Phase III and would we look at a younger demographic going into Phase III. So Jo, I'll let you comment on that.

Sure. So thanks, Chi. So our study was conducted in adult patients, 18 and older, and so we would do the same going forward into the next part of our development plan as well. We would look at 18-year-old adult patients. I think you referred to that the mean age was 40. This is very typical of all our -- all atopic dermatitis studies if you look across mild to moderate or moderate to severe in adults. That is the mean age. So I just wanted to comment on that. And then I think your second question was questioning use of over-the-counter drugs used -- being used in mild to moderate patients. Maybe I can just comment on just that, Derek, and then throw it over to you. I think there was a commercial question there as well. But mild to moderate patients are -- the only thing they can use, and what's been indicated for them, are topical agents, predominantly use topical corticosteroids or topical immunomodulators. And these -- both of these drugs don't address itch fully. And so there still is a great need for an oral antipruritic agent in this mild to moderate space. I think you mentioned antihistamines. We know that antihistamines don't work for atopic dermatitis itch. So those and over-the-counter are not effective at all.