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

Good afternoon, and welcome to Cara Therapeutics 2022 Virtual R&D Day. Before we begin, let me remind you that today's presentation will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see Slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to update or revise the information provided on this webinar as a result of new information or future results or developments. Participating from Cara today will be Chris Posner, Cara's President and Chief Executive Officer; and Dr. Joana Goncalves, Cara's Chief Medical Officer. We're delighted to also be joined by 2 highly accomplished key opinion leaders, Dr. Brian Kim; and Dr. Jonathan Silverberg. Dr. Kim is the Vice Chair of Research at the Icahn School of Medicine at Mount Sinai in New York; Site Chair at Mount Sinai West and Morningside and Director of the Dr. Mark Lebwohl Center for Neuroinflammation and Sensation. Dr. Silverberg is an Associate Professor of Dermatology at the George Washington University School of Medicine and Health Sciences in Washington, D.C. and the Director of Clinical Research and Patch Testing. Today's event is expected to run until approximately 2:00 p.m., Eastern Standard Time. At the end of the presentation, Jo will moderate a Q&A session. If you would like to submit a question, you may do so at any time during the webinar by typing your question into the Ask the Question field. A replay of the webinar will be available on the Investors section of the Cara Therapeutics website later today. With that, I will turn it over to Chris for his introductory remarks.

Thanks, Iris, and good afternoon, everyone, and thank you for joining us for our virtual R&D event. Since I took on the CEO job last November, I have really looked forward to this day when we can detail moving our late-stage pipeline forward. I see this as a step toward enhancing the trust and excitement around our broader long-term strategy and mission in which our oral KORSUVA platform is a key value driver. Our mission is to be the leader in chronic pruritus. To achieve that, we are commercializing and developing novel, first-in-class treatments that change the way this underdiagnosed and underserved symptom is treated across a variety of diseases. We believe a sizable market opportunity, more than 16 million patients in the U.S. alone, is waiting for the right new treatment option. 10 days ago, you heard how we were executing our first strategic priority to maximize the commercial potential of KORSUVA injection, the first and only FDA-approved product for pruritus in chronic kidney disease patients on hemodialysis. Together with our commercial partner, Vifor Pharma, we are prepared and ready for the impending KORSUVA injection launch in the U.S. Today, we will focus exclusively on how we are executing our second priority, initiating pivotal Phase III programs to advance oral KORSUVA for chronic pruritus in advanced kidney disease and atopic dermatitis. In a moment, Dr. Jo Goncalves, our Chief Medical Officer, will detail our Phase III clinical programs and the background that gives us confidence in our approach and execution. Current treatment algorithms are not satisfying the significant unmet need in pruritus. They are leaving pruritus patients behind. Chronic pruritus in any form can lead to impaired quality of life, including insomnia and depression. 30% of approximately 1.2 million stage 4 to 5 chronic kidney disease patients in the U.S. have moderate to severe pruritus. And in AD, roughly 12 million U.S. patients suffer from pruritus. We believe we have a rare and unique opportunity to significantly alter the treatment algorithm for pruritus in these diseases. Right now, there are no FDA-approved therapies specifically for pruritus in either one. And currently use therapies have long been insufficient. Moreover, in AD, modern standard of care treatments and their mechanism of action do not specifically target pruritus, a central manifestation of the disease. Our oral KORSUVA program aims to change this. You will hear more from the 2 experts in the field on the scientific rationale underlying our programs, the mechanism of action of oral KORSUVA and how it might play a role in the clinical practice for AD. We have a well-defined scientific rationale and anchor approval and a clear clinical and regulatory path forward for oral programs in advanced kidney disease and in AD. This is a formidable point from which to start our pivotal trials. Today's event is a significant step towards accelerating momentum and reinvigorating the excitement around our Phase III programs as well as our strategy overall. By focused execution on our oral KORSUVA platform, we are building the next key growth driver for Cara. I'd like to turn it over to Jo to present the details of our Phase III programs.

Thanks, Chris, and good afternoon. It's an exciting time at Cara as we initiate 2 pivotal Phase III programs for oral difelikefalin. I'll start off by reviewing the advanced chronic kidney disease Phase III program. We are confident in the success of this program due to our development of work with KORSUVA injection and our study of the oral formulation in chronic kidney disease. Data from our Phase III KALM program with KORSUVA injection led to its approval last year in hemodialysis patients. That experience, along with the data from our Phase II CKD study with oral difelikefalin supports the use of difelikefalin as an antipruritic treatment for patients with advanced CKD-associated pruritus. As a reminder, our Phase II study with oral difelikefalin was conducted in patients with CKD stages 3 to 5 as well as patients undergoing hemodialysis. The primary endpoint was met with a 1 milligram once daily dose versus placebo at 12 weeks. And the safety and tolerability was consistent with the new safety profile from the IV formulation in the CKD patient population. We presented this data to the dermatology division of the FDA, and we're pleased with the positive discussion and alignment on the Phase III program in patients with advanced CKD with moderate to severe pruritus who are not on dialysis. The Phase III program will comprise of 2 identical 12-week double-blind placebo-controlled studies, KICK 1 & KICK 2. Each study will enroll approximately 400 patients who will be randomized 1:1 to either oral difelikefalin 1 milligram once daily or mature placebo. The study population will include adult patients with advanced CKD stages 4 or 5 who are not on dialysis. We are excluding Stage 3 CKD patients who are largely responsible for the high placebo response rates in our Phase II study. We also know based on data from a recent National Kidney Foundation survey that the itch characteristics in patients with CKD stage 4 and 5 are very similar to the itch characteristics in hemodialysis patients. Thus, we believe that the patient population in the KICK studies should behave more like those in the Phase III KALM program. Let me elaborate further on the inclusion criteria. Patients must have pruritus for at least 6 months prior to entering the study. In addition, there will be a 7-day run-in period by which patients will be required to have an itch score of greater than or equal to 5 on the worst itch NRS before being randomized. Together, these requirements will help to reduce the variability in itch and further assist in controlling the placebo response rate. Patients will be allowed to continue using itch treatments, including antihistamines and gabapentinoids, as long as they remain on a stable dose throughout the study. KICK 1 will be conducted in the U.S. and KICK 1 will be a global study with facts both in the U.S. as well as outside of the U.S. The primary endpoint is the proportion of patients with a greater than equal to 4-point improvement at week 12 from baseline in the worst itch NRS. Additional endpoints include quality of life assessment such as sleep as well as safety assessments. The 12-week study period will form the foundation for the NDA filing of difelikefalin in nondialysis advanced CKD stage 4 to 5 patients. We estimate to have top line results in the second half of 2024. Now let me review the safety extension period. After the initial 12-week treatment period, patients are allowed to enter the safety extension. At that time, they will be rerandomized to even difelikefalin or matching placebo for up to 52 weeks. A placebo-controlled arm during the extension period will allow for a more robust and accurate interpretation of the long-term safety data compared to using historical controls. This brings me to the aim of the CKD program. Now moving on to atopic dermatitis and the KIND Phase III program. Based on the efficacy and safety profile from the Phase II case study, we are advancing oral difelikefalin into 2 pivotal Phase III studies. As a reminder, the Phase II case study demonstrated an improvement in itch with oral difelikefalin at week 1, which was sustained to week 12, with the treatment effect more pronounced in patients with mild to moderate AD that is patients with a body surface area of less than 10%. Difelikefalin was well tolerated across all doses with the most favorable benefit risk profile seen in the lower 2 doses of 0.25 and 0.5 milligrams twice daily. Both clinical and preclinical data support that the mechanism of action of difelikefalin AD is predominantly neuromodulatory. Since current therapies for AD are mostly anti-inflammatory, they may improve the rash, but they may not always fully address the itch. As such, we see difelikefalin playing an important role in this patient population and is a complement to current treatment options. Dr. Kim will elaborate further on this point in his presentation. At the end of Phase II meeting with the dermatology division of the FDA, we discussed our KICK Phase II data and agreed on a path forward for a Phase III AD program for difelikefalin as an adjunctive therapy to topical corticosteroids. Using difelikefalin as a junctive therapy will mimic real-world clinical practice and the way it would be likely used by dermatologists. The pivotal Phase III program for difelikefalin and AD will comprise of 2 studies, KIND 1 and KIND 2. The KIND 1 study will be composed of 2 parts: Part A and Part B. KIND 1 and KIND 2 will be double-blind, controlled, 12-week study with patients allowed to roll over into open-label 52-week extension. The studies will include adult patients with pruritus who have not been adequately controlled by topical therapy alone. Patients have to have chronic AD-related pruritus for at least 6 weeks prior to screening, and the pruritus must be rated as moderate to severe with a greater than or equal to 5 on the itch NRS. Patients must have an IGA of greater than or equal to 2 and the body surface area, less than or equal to 20%. Patients will be washed out of any medication that may impact itch and any medication that may impact the AD prior to screening. We will stratify patients to a body surface area of less than 10% or greater than or equal to 10% with the aim to enroll 85% of patients with a body surface area of less than 10%. As I mentioned, KIND 1 will be composed of 2 parts, Part A and Part B. Let me review Part A first. Part A will include 280 patients who will be randomized equally to 4 arms. Difelikefalin, 0.25 milligram twice daily plus topical corticosteroids, difelikefalin 0.5 milligrams twice daily has topical corticosteroids, oral placebo twice daily plus topical corticosteroids, oral placebo twice daily plus vehicle. The dose selection for Part A was based on the benefit risk profile of difelikefalin in the key study. Part A will be conducted in sites in North America. At the end of the 12-week treatment period in Part A, we will have an internal data readout, which will provide key information, specifically the dose and the sample size to initiate Part B and KIND 2. Our decision to determine the dose and the sample size will be based on a 4-point responder analysis and safety assessments. To set expectations, Part A is not powered to show statistical significance between treatment groups and Part A patients will not go over into Part B. We will not release detailed results from this readout. However, we will disclose the initiation of Part B and KIND 2 the selected dose and the sample size. We estimate to have the readout for Part A in the second half of 2023. Part B and KIND 2 will be identical in design. There will be double-blind controlled 12-week studies with patients randomized 1:1 to either difelikefalin or matching placebo as adjunct to topical corticosteroids. The difelikefalin dose will be based on the results from Part A of kind 1. The primary endpoint will be the proportion of patients with a 4 or greater than 4-point improvement at week 12 from baseline in the itch NRS. As a reminder, a 4-point improvement is considered to be a clinically meaningful response and the accepted primary endpoint by the dermatology division of the FDA. Additional endpoints include quality of life assessments such as sleep as well as safety assessments. The patient population in Part B and in KIND 2 will be the same as Part A. KIND 1 both Part A and Part B will be conducted in North American stacks only. Kind 2 will be conducted in sites in North America as well as states outside of North America. All patients who complete the 12-week treatment period will be eligible to roll over into an open-label extension phase for up to 52 weeks. As you can see, our Phase III programs in both advanced CKD and atopic dermatitis are designed to accomplish 3 things: address the unmet need, which is not sufficiently addressed with current treatment options, focus on the most appropriate patient populations for oral difelikefalin considering current clinical practice and execute on the most appropriate study designs with the greatest likelihood of success. Let me conclude by saying we are thrilled to be initiating these programs and our clinical teams are working hard on getting the study started this month. Now let me hand over to Dr. Brian Kim, who will elaborate on the proposed mechanism of action of difelikefalin in atopic dermatitis.

Thank you, Jo. I'll be talking today about difelikefalin and its potential mechanism of action in atopic dermatitis. Atopic dermatitis is a classic chronic itch disorder. It has a very high incidence. It's very costly and itch is a central symptom. Although there is clearly a rash that's chronic and relapsing, itch within this condition is the thing that bothers patients the most and has a tremendously negative impact on quality of life. Therapeutic options have traditionally been very limited in targeting itch or pruritus in atopic dermatitis. Additionally, an increasing number of patients treated for their rash are left with residual itch. The conventional paradigm of atopic dermatitis pathogenesis is as follows. There are immune cells either in the skin or even circulating that come into the skin that then respond to a variety of inflammatory factors referred to as cytokines. These cytokines can activate the immune cells. And in turn, the immune cells or lymphocytes can actually directly produce what we refer to as effective cytokines. These include cytokines like IL-4 and 13 that can directly damage the skin and cause a lot of inflammation. In recent years, work from our laboratories actually identified how these inflammatory factors not only damage the skin, but actually directly communicate with the sensory nervous system to promote itch. So in other words, there's a direct link between the immune system and the nervous system in a way that these inflammatory factors act as neurotransmitters to promote itch directly and these signals work their way all the way up to the brain. So we know that blocking inflammatory factors or cytokines represents an anti-inflammatory therapeutic paradigm, not just in atopic dermatitis, but a variety of inflammatory disorders. But what we've been proposing in recent years is that we have to actually think of how the sensor and nervous system or the nervous system, in general, represents a direct target of therapeutics as well to block these kinds of signals in inflammatory disorders like atopic dermatitis. So we're talking about the nervous system, we have to actually think about different kinds of signaling pathways such as neurotransmitters. And what I'm going to be talking about today here is neurotransmitters such as kappa opioids as well as mu opioids. And it's really a careful balance between these 2 very distinct opioid pathways that results in a healthy non-itchy, normal skin. What do we know about these opioids. We'll start with mu opioids, which are quite distinct. This includes opiates that actually stimulates its pathways such as morphine. We know that patients who actually get morphine, there's a high incidence actually of patients developing itch. And this is in part because these opioids, the mu opioids actually directly stimulate the itch sensory nervous system. But that there -- is this other counterbalancing pathway of the kappa opioid system, which actually can balance this resulting in normal skin and is actually antipruritic or anti-itch. So it's really having less mu-opioid signaling and more kappa opioid and this is a manner in which we can actually restore what we think is non-itchy healthy skin. So how does this work if we actually now look at the nervous system. We know that signals that stimulate itch, start in the skin. These activate itch sensory neurons that work their way into what we refer to as the dorsal ganglion near the spinal cord. The electrical signals from these sensory neurons relay into a spinal cord and on to the brain, and that's how we ultimately perceive itch. As I mentioned already, mu opiates can actually directly stimulate this itch access shown in red. But what we also know from a variety of different published work is that kappa opioids can actually directly stimulate other parallel sensory neurons to suppress it. There's some -- it's much broader than this because we know that kappa opioids can also activate these itch neurons as well as well as neuros within the spinal cord to suppress it. So what the operative mechanism is still remains a bit controversial. But what I'm going to focus on is this particular parallel circuit pathway of the Kappa-opioids on these other blue neurons here shown here. So we've actually done some studies in preclinical mouse models of atopic dermatitis. I'm going to show you some of this data and how this plays into some of the biology that I'm talking about. We have a mouse model in which we treat mice with an irritant called MC903 and these mice very reliably develop atopic dermatitis or AD-like disease clinically with itchy red scaly skin histopathologically under the microscope as inflammation that's very distinct. And as well as immunologically, if we actually do techniques such as flow cytometry, we can actually look at the inflammatory environment and find that these mice exhibit features very consistent with what's observed in human skin. If we now look at what the genes within the skin actually express by way of RNA sequencing, we find that key cytokines and different inflammatory factors are altered in a way that's very consistent with what has been reported in human atopic dermatitis skin. But importantly for us, because we're talking about itch, we have to look at whether its mice are actually scratching and the fact they are. If we look at scratching mouse over time on the Y-axis as well as over time in days on the x-axis, what we find is that these mice that develop 80 like disease are exhibiting chronic spontaneous itch very robustly as shown in the closed circles. The controlled vehicle-treated mice do not exhibit much in the way of chronic spontaneous that's, again, shown in the open circles here. And so what we did was we actually treated mice that developed AD-like disease and [indiscernible] with difelikefalin or DFK twice a day systemically, by systemic, we mean intraperitoneally to get the drug everywhere into the mouse. And what we found is that if we actually do perform immunologic analysis in the skin, we don't find any difference in terms of the inflammatory infiltrate based on broad immune cells, CD45 positive immune cells, key pathogenic cells such as ILC2s, or CD4 T cells, we find no difference in the mice that were treated with DFK or vehicle control. Furthermore, if we actually measure skin thickness over time as a serve measurement of the rash, what we find is that the percent change is no different. So no more thicker or less thick in DFK-treated mice compared to controlled vehicle treated mice. However, in stark contrast, if we look at the itch or scratching bouts in these mice, on the Y axis over time on the X axis, what we find is that in contrast to the vehicle-treated mice, there is a very dramatic and significant reduction in terms of the itch at every time point. And what was rather striking was that we saw this right away even at day 0 to 1, indicating that the effect is actually quite rapid and does not really require much time to see the effect despite the fact that the disease is manifesting very robustly. So if we go back into the nervous system, there's been great studies, and this is -- we've just curated the data that's already out there of single-cell RNA sequencing studies in which we look at each individual neuron within the sensory nervous system, and we can then classify these neurons into different buckets, and that's what these columns are. And what we find interestingly in this data is that Oprk1 gene, which is the gene for the kappa opioid receptor, which is a target of DFK, we find that this gene is highly expressed, untouched neurons shown here on the left. We don't find that much expression on the itch neurons or what we refer to as the C-fibers shown on the right. But in contrast, if you look at OPRM1, which is the receptor for the mu opioid receptor, we actually find that consistent with what I said before, how these mu-opioid stimulate itch fibers. We see the receptors for these actually expressed on the itch fibers. So we see, again, the kappa opioid gene highly expressed on these touch neurons. And I'll come back to that point in a second. But if we actually now take these sensor neuros, put them in a future edition, stimulate them with DFK, we use a technique called calcium imaging to see if these neurons actually do respond functionally to the drug, and they do. We see these spikes in calcium. That's what we're seeing these little inflections here. And in fact, the neurons do about which neurons respond to DFK. And if we actually compare the compositions of the neurons, we see that it starts to look different. Traditional itch inducing factors or pruritogens such as chloroquine, CQ and black or histamine, which we're all familiar with, in white, tend to activate these small diameter neurons, so does DFK to some degree. But what we also find is that medium diameter neurons are highly enriched for DFK shown here in the red indicating consistent with the sequencing data I showed you that this DFK seems to activate these larger diameter touch neurons, which we refer to as Abeta neurons as well. And if we now go back to looking at pictures of these mice, they have red, scaly rash, no difference, whether they're treated with DFK or control. And if you look at the microscope, we see no difference as well. So despite this very dramatic reduction in terms of the scratching or itch in these mice, again, we don't really see any clinical features that are different based on DFK in the mouse model. And so what are we getting at? What we think is actually happening is that there are a variety of different itch stimuli that trigger itch in the skin by activating itch neurons shown here in red. And this is how you get itch in the mouse or in a human being for that matter. But what we're modeling, we think, is that DFK or difelikefalin actually activates another neuron, which is actually a touch response of neuron, which then is able to suppress itch within the spinal cord by blocking a broad array of itch inducing stimuli from the skin. This is a very distinct mechanism of action because instead of simply blocking the itch neuron, what we're doing is we're actually activating touch neuron, the ones that actually respond to scratching the manner in which we try to alleviate it to actually block out these itch signals. So what -- the picture I painted for you is that there is an inflammatory paradigm of itch where inflammation leads to itch, but we also know there are many ways in which you can get itch independently of inflammation or referred to as primary neurogenic edge. But diseases fall somewhere in the middle, and we know that conditions like atopic dermatitis are highly inflammatory and there are a variety of anti-inflammatory agents that are currently available, but many that are emerging to actually treat atopic dermatitis. But traditionally, what we're familiar with is corticosteroids as being an anti-inflammatory mechanism of action. But what I'm also proposing is that there are ways in which you can actually block using neuromodulatory agents, the itch within atopic dermatitis, and there are different mechanisms of actions that are distinct, but also what we're proposing is could be synergistic, perhaps even in combination because there's an added benefit to using neuromodulatory agents, particularly when we're talking about atopic dermatitis itch. Thank you very much for listening, and I'll hand it over to Jonathan.

Thank you very much, Brian, and good afternoon, everyone. I'll be discussing the more clinical aspects of atopic dermatitis and some of the heterogeneity and novel phenotypes of the disease. So to get started, I think it's important to recognize that atopic dermatitis is a very complex and heterogeneous disorder. And I think we often hear this kind of discussion with other diseases, but it is particularly true for atopic dermatitis. Here, we see 7 different images of atopic dermatitis, and they all look really different and yet they're all part of the same disease. And there's a lot of variability in terms of the clinical signs, even the most commonly looked for clinical sign, which is the flexural involvement, the involvement of the creases, the elbows, back of the knees is something that's not universal. In fact, none of the signs are particularly universal. What is universal is the itch. Itch is the most common symptom. It's also the most burdensome symptom that happens. But it turns out that the symptoms of atopic dermatitis go even beyond the itch. There's skin pain is a newly recognized symptom. A lot of skin pain, though is secondary to scratch and so it's indirectly related to itch. But there may be a component of skin pain that's independent of itch, sleep disturbance, such an important downstream sequela of itch. And particularly for nocturnal itch and scratch, and such a debilitating issue for patients, anxiety and depression. Major problems that happen with chronic itch, major drivers of health utility decrements and quality of life impact and become a source of comorbidity in of themselves but often or almost always related to the itch. And there's other symptoms as well that can impact patients within this disease. Now when we think about the severity or the prevalence of these different symptoms or how active the disease is, I think it's important for us to recognize that atopic dermatitis is a very variable course, a heterogeneous longitudinal course as well. So sometimes we hear these regulatory definitions, mild disease, moderate disease. And the truth is they kind of don't fully capture what the story is. Patients will bounce around all the time. So these are some data from a real-world study that my group conducted, looking at the longitudinal course of worst itch and average itch over a 2-year period. And there's a lot of different ways to measure it, but we use the sort of standard numeric rating scale for average itch or worst itch in the previous week. And what we found was that there's a large subset of patients who have -- if they started with moderate or severe itch, that's a large subset of those will continue to have moderate to severe itch and at least one follow-up visit indicating that there are clearly some unmet needs in the real world. When we look at patients who have follow-up out for the 2-year period, what we found was substantial fluctuation in terms of both the frequency and the intensity of itch as shown here in these colorful Sankey charts. And what you see in these squiggly less opaque lines is that really no matter what their baseline severity is, there's just bouncing around and fluctuation of severity that's happening all the time with standard of care therapy, indicating that patients really have a lot of unmet needs with respect to itch. And some patients may not need anti-itch therapies, 24/7, 365 days a year, but it also suggests that all patients really require some anti-itch therapy, at least at some point over that 24-month period of observation. I think when you look at the numbers, it's quite impressive. 65% had persisted itch severity categories over a 2-year haul and 28% have fluctuating severity, only 6% had sustained improvements in terms of average itch and very similar results when you look at the worst itch scores as well with actually even higher rate of persistent worst itch over a period of time. So what we're seeing is that for those patients who are following up in the system, a big part of why they're followed up and a big part of their unmet needs is that persistent uncontrolled itch. These are just some schematics that I drew up in terms of -- from my own clinical experience of the different longitudinal courses of itch and really not just itch, but atopic dermatitis severity. And you could argue that there's many more different combinations or permutations to come up with, but these are just a few. On the far left, you have an example of a patient who's got overall good control. You see a little background noise there, but by and large, it's the patient that can be managed with some topical steroids here or there and is probably going to be fine. On the far right, we've got a patient who -- there's also that noise happening, but the reality is this patient has 365 days of your bad disease. And then there's everything in between with bouncing up and down of severity groups and some patients like the second one from the left, where they get towards mild between flares, but then they're having multiple moderate flares and you've got patients who are even when their flare gets better, they're still at a moderate point in time. And what this says is that for a lot of these patients, they're not only going to require therapies that can control their disease and control their itch during those flares, but also options that they can use to really manage flares even in sort of those baseline stages where they may have more moderate disease that's still quite active and itchy. What about different phenotypes of atopic dermatitis? And this is an area, I think, that's really growing now in terms of its interest. For background, I'm not the biggest fan of some of these expensive biomarker assays, the transcriptomics and other things. I think they provide important information, but they're expensive. They're invasive. They're hard to commercialize and it's very hard to prescribe a drug based on them at this point. We don't have anything that's really a valid clinical biomarker or theranostic. But I'm a big fan of as clinicians, what can we look at that's cheap and simple and feasible from a clinical phenotyping exercise. And so we did what I think is a very simple and logical exercise here to say, what if we just looked at the severity of itch and the severity of lesions. And we looked at the combinations of them. And so we looked at mild-to-moderate itch versus severe itch, compare that with mild-to-moderate lesions versus severe lesions. So you got, of course, 4 combinations. And we call these MI/ML, MI/SL, SI/ML and SI/SL. But I want to draw your attention to the third one, severe itch and mild to moderate lesions or SI/ML. What we also affectionately referred to as itch dominant atopic dermatitis in the discussion of the manuscript. This is an important subset because it's something that really was not recognized well until this study. So most patients, perhaps not surprisingly had MI/ML, the mild to moderate itch and multi-to-moderate lesions. But look at this, the second most common subset is the SI/ML, the itch dominant, which -- it depends on how you define the lesional severity whether it's an easy score, a score at, but it's anywhere between 21% to 30% of patients who have this itch dominant disease. So this is not an uncommon subset. It's a very common subset that's happening in the real world. And then fortunately, those with severe lesions are far less common. Now the SI/ML or itch-dominant atopic derm was more common in females. It was also more common in black patients. But there are very important characteristics with respect to burden, I think that we have to think about here. So patients who had either severe lesions or severe itch, the itch dominant atopic derm, described their atopic dermatitis as being more severe, worse quality of life. They weren't quite as bad as those who had both severe itch and severe lesions, but they still had markedly worse impact than those who had mild itch and mild-to-moderate lesions. And the patients with itch-dominant atopic dermatitis also had more severe physician global assessment scores, but they often were missed. And the ones who had severe lesions were far more likely to be rated with severe physicians' global assessment scores. Now the patients with -- who had the severe itch and severe lesions versus just the SI/ML, the itch-dominant atopic derm, the added similar frequency of flares, similar rates in terms of clearance/remission. They also have similar rates in itch triggers and a similar longitudinal course over time. So what we're seeing is that this itch-dominant atopic derm behaves more aggressively in a sense than the mild to moderate itch, mild to moderate lesions. And many of these patients eventually needed to go on to a systemic or biologic therapy due to the poor control that was afforded to them by the current sort of topical therapies that are out there. So I can show you the data, but you might say, well, but is it real? And here, I show you 2 examples of patients that have itch-dominant atopic dermatitis. And on the left, we have a patient who -- originally, the resident walked out of the room saying to me, "I think this patient just needs some moisturizers." And I came out of the room saying, "I think this patient needs a systemic therapy because their itch was so severe." And when you look at the lesions, they don't stand out as being so impressive. They're fairly mild looking. They're quite extensive, but they're fairly mild. But this is a patient who's got a 9 to 10 out of 10 itch. And on the right, you have a similar story. The lesions don't look very impressive. They're mild, or scattered throughout, but it's a patient who's got a 9 to 10 out of 10 itch. And so these are patients that -- it's debatable. How should we even manage these? What are you even treating topically with? You can barely even see much in the way of lesions is that patients who clearly though need therapy for their itch. So why should we care? Well, itch-dominant atopic derm is a previously unrecognized subset of the disease. It's a subset that would almost entirely be missed by physical examination alone. We have to ask patients about itch severity and/or make sure that we're not missing them. And then there may even be differences in terms of race and ethnicity and certainly a lot of things you have to think about in the real world with respect to measurement. But it hasn't been studied well in clinical trials. The regulatory definitions are just starting to catch up to recognize this, which is important. But I think most important is that patients experience a high burden of the disease, and there's a lot of unmet needs. And we still have a lot of unanswered questions. Should we be using topicals? Debatable. Because what are you treating? You don't have so many obvious lesions. Should we be using systemic anti-itch? Likely, possibly systemic anti-inflammatory. But again, you're not seeing profound lesions -- so does it make sense to be treating information? Or should we be treating itch? And I think these are some unanswered questions that we're going to learn the answers to over time. Very briefly, I'll just highlight here some of the data from the difelikefalin study, just showing this itch dominant subset or something equivalent, which is those who have less extensive body surface area but who have that moderate to severe itch. And what we see is that for those patients, they're able to achieve significant reductions or significant higher response with respect to that moderate, clinically important difference in itch, or a 4-point reduction in itch at week 12. And so not only did I show you that there's a clinical subset that's been recently identified in the real-world research, but that now we have therapies that are able to address that. So where would difelikefalin fit in the management? And here, I show you a schematic that's taken from the atopic dermatitis yardstick, which uses the conventional step-up approach to therapy. And there's how do we treat flares? How do we treat the maintenance part of things? And we stratify by mild, moderate, severe disease. And the truth is difelikefalin could be used anywhere in reality. For some patients, they might be -- certainly the milder lesions. And they're optimizing their basic management and topical therapies, but they still need something for their itch, and that could be treatment for the moderate patients who may be using higher potency topical therapies, or even sometimes those are on systemic therapies who still need some additional boost for their itch. Some patients may require, as I mentioned, 365 days a year, they need to treat that baseline itch. For some patients, they may need it more for during their flares and a little bit more of that intermittent use. So I think there's a lot of opportunities, a lot of unmet needs that could potentially be filled with an effective anti-itch therapy. And with that, I thank you for your attention, and I turn it over to the Cara team.

Thank you, Jonathan. We are now ready for Q&A. So Alex, please provide the phone instructions for questions.

[Operator Instructions]

Thank you, Alex. And while we're queuing up on participants, let's start with some questions that came in on the platform. It looks like the first one goes to Jo and Brian. You didn't study DFK in combination with TCS in the Phase II study. How confident are you in the success with this combination in Phase III?

Thanks so much, Iris. So difelikefalin was used as monotherapy in the Phase 2 case study. It was important for us to have a good understanding of the efficacy of the drug as monotherapy. We then took this data to help us design the Phase III program, whereby difelikefalin will be used as adjunct to topical corticosteroids. This is likely the way that the drug will be used by dermatologists in clinical practice. And so the study really will mimic real-world use. So we're confident about the design of the study and the potential outcome. But let me hand over to Brian, and he can maybe speak a little bit more to the mechanistic aspect of the combined use of the drugs.

Yes, absolutely. Thanks, Jo. Yes, I think that the clinical data, the fact that there were prespecified endpoints of stratifying milder disease and seeing these effects on itch, coupled with the fact that we see in mechanistic preclinical studies that there is a very, very potent and dramatic anti-itch effect that strongly suggests a significant neuromodulatory effect of the drug, indicates that there's a different mechanism of action or an additional mechanism of action well beyond the anti-inflammatory properties and therefore, increases our confidence that in -- on top of any anti-inflammatory agent, including topical corticosteroids that we would anticipate seeing an effect on itch.

Right. Let's take one more question from the online platform before we go to the phone lines. So will the long-term data from the long-term extension KICK studies be required for registration? Jo, this is another one for you.

Yes. So as you know, when we're developing a drug for chronic use, we do have to study safety as long-term use with the drug. So we will be collecting long-term safety data. That's the objective of the extension study. As per ICH and FDA guidance, you require a certain number of patients with long-term safety data to help to understand the characteristics and the profile of the drug. That will be part of the registration package. But just to highlight, as I presented earlier, that the primary endpoint will be after 12-week period, so the efficacy of the drug will be [indiscernible]. I don't know if you heard that. So the 12-week treatment period is what will be used to understand the efficacy of the drug, and the safety will be assessed and long-term safety will be assessed at long-term use as we have done even in the KALM program.

Thanks, Jo. So let's take some questions from the phone line.

Your first question is from Daniel Wolle from JPMorgan.

Two questions, maybe one for the company first. In the CKD trial, what are some of the considerations besides CKD stage or excluding Stage 3 patients? You have taken empowering the study to reduce the risk of significant placebo effect we saw. And related to that, in your view, is there any scientific rationale to believe that concomitant treatment to address the underlying CKD could contribute to treatment and therefore, potentially be reflected as a high placebo response? And then I have a follow-up for the doctors.

Okay. Thanks, Daniel. So the first part was the placebo response. So indeed, the -- excluding the Stage 3 CKD patients is the biggest factor that will help to contribute to reduce the placebo response, knowing that there were largely the group that added to the higher placebo response in the Phase II study. But in addition to that, we want to ensure that the patients enrolling will have a more stable itch. So when patients are -- come into the study, they will be required to have a chronic itch of at least 6 months. They also will need to come into a run-in period, whereby we try to ensure that the itch is stable and that they have a moderate to severe pruritus. In addition, recall that our Phase II study had a 3:1 randomization. This is a 1:1. So that will also help to mitigate the placebo response. And then lastly, we have operational factors that we will be implementing to help mitigate the placebo as well. So we feel quite confident with all these measures that we should see a lower placebo response. And importantly, I just want to bring back to the patient population that this advanced CKD patient population with Stage 4 and 5, we know that the itch is much more aligned to the itch of patients undergoing hemodialysis. So they should behave more like the patients that we saw on the KALM program. So that was your first question. The second question was regarding background medication and whether they're contributing to the placebo response. For sure, we know that patients who are on background meds, they come into the study. And we know from our KALM program that about 40% of patients had used these meds. But do keep in mind that they're coming in with an already score of moderate to severe pruritus. So we know that these meds are not really working that well. What is important is that these meds are -- remain that the patients use these in a stable manner. So they need to have used them prior to enrolling into the study for a certain period of time, and they're not allowed to adjust it, so to try and prevent any influence or impact on that response rate, the placebo response.

Great. Okay. And then for Dr. Kim and Dr. Silverberg. On the primary endpoint of the proportion of subjects with greater than or equal to 4-point improvement in worst itch NRS and the KIND 1 Part B and KIND 2, what are your expectations, I guess, for a new therapy like oral to be considered clinically meaningful? And then will there be a difference based on the severity of the itch?

Brian, do you want to take that first or...

I was waiting for you, but -- yes. Well, a couple of thoughts. So the 4-point reduction on the itch being considered clinically meaningful, I think that's currently kind of the industry standard, but I don't necessarily know that that will hold up as the clinically meaningful bar in perpetuity as we start to think of itch more dynamically and also as we start to think of different populations of patients with itch, whether in atopic dermatitis or others. So for example, if we're looking at populations that generally have milder itch, it's really hard to consider 4 point as being dogmatically the most clinically meaningful improvement. So I think that's the kind of main point that I generally make lately with regard to how we think about itch. How it's going to play out in terms of the trials, I think it's an endpoint that you want to see right now, given what I've said. And I think that even in -- if I'm remembering your question correctly, I think that there's still an opportunity for that kind of improvement in effect in adjunctive settings if their itches actually still remaining significant in the patient.

Yes, that's all excellent points. I think just for context, the 4-point reduction in itch is actually not a minimal clinically important difference. That's the way the FDA refers to it because -- just some technical numbers reasons. It's really a moderate, clinically important difference. And you can't achieve -- and this is what Brian was alluding to, you can't achieve a 4-point response if you start with an itch score of 2. So it's something that is really relevant for those who have more on the moderate to severe itch at baseline. So it's an important regulatory end point right now. But certainly, I agree with Brian. There's a lot that's evolving in our understanding of itch and the endpoints of itch.

Next question is from the line of Annabel Samimy from Stifel.

I guess this is a question directed at Jo. I just want to understand the dosing that you've chosen for the AD trial. So I think in the KARE studies, when you did an analysis of the mild to moderate patient in Part B, I think it was only the 1 milligram dose that showed statistically significant change. And then as far as the 4-point improvement, it was all doses. And I'm a little bit curious to know why it seems like you're still doing some dose finding at the lower doses, 0.25 and 0.5 in Part A of the KIND studies? And then maybe you can explain the rationale for having the Part A and the Part B, I guess, as part of the dose finding as well. So just if you could help us understand that a little bit better, that would be great.

Sure, Annabel. So our KARE Phase II study, the doses that showed the most favorable benefit risk profile, and when we looked at the benefit specifically, the 4-point responder was the 0.5 milligram, but also the 0.25 milligram twice daily. And so those are the doses that we are taking forward into Part A. Now we know that those are the most favorable doses when used in monotherapy. Now adding to topical corticosteroids, we want to assess which of those 2 doses would have the most favorable benefit risk profile to take into Part B and to take into KIND 2. The reason why we're doing Part A and Part B is indeed to generate data to be able to inform us on Part B and KIND 2 on the dose as well as the sample size. And we've designed the studies this way as a Part A and Part B. They do fall under 1 Phase III protocol. That's important to note. And we designed it this way really to maximize the success of the study, and that is to reduce clinical risk and to enhance our operational efficiency to be able to get the outcome of the data that we're looking for.

Okay. And then I guess the second part of my question is, I think your inclusion criteria is now BSA of less than 20%. But I think in the prespecified analysis on the mild to moderate patient was a BSA of less than 10%. So does that start to capture some of the patients who are turning into the moderate severe or have more inflammatory component than they did before? So I just want to, I guess, maybe explain how that might have an impact on the placebo response for patients who are focused more on inflammatory aspect, the itch aspect.

Great question, Annabel. So indeed, we are conducting the studies across the severity of atopic dermatitis. We still aim to enroll the majority of patients that is at least 85% of patients who have a body surface area of less than 10%. As you rightly pointed out, this is where we saw the most pronounced effect of difelikefalin in the KARE study and where we believe the drug has the most appropriate use, based in the most appropriate patient population. So the majority of the patients will still have a BSA of less than 10%. But now as the Phase III program, difelikefalin will be added on to topical corticosteroids as adjunct therapy. We believe that difelikefalin will be able to address the itch across the spectrum of disease from mild to severe. And so we think that it will be able to complement very nicely the effect of topical corticosteroid as Brian expands the different mechanism of action. So we feel confident about allowing these patients to be included as well.

Okay. Great. And if I could have a couple of follow-ups for the physicians on the call. So as far as -- I mean, one of the things that's a little bit more comforting for atopic dermatitis is that it seems like it is a consistent or a persistent characteristic of disease for AD. And the placebo responses have been relatively low across the studies we've seen in the -- I guess, the new modulators or anti-inflammatory drugs. But as you look in a mild to moderate population and as you've characterized that soon these patients can be flaring as opposed to persistent, how do you think about what kind of placebo response this particular population might have? I think it's best to answer this question, but -- yes.

Well, we've actually been studying kind of flares and itch flares recently, particularly in the moderate to severe population. And it's really just kind of a feature of the disease. It's something that's kind of baked into these trials. So I don't necessarily know as long as I think you're properly powered. I don't think that that's necessarily going to be more of a problem necessarily in this setting. But I think your point about the itch in atopic dermatitis being a little bit more homogeneous is well taken. I think I worry a lot more about placebo effect in -- if the kind of population that you're looking at ends up having a very heterogeneous origin of itch. And as also Jo alluded to before as well, is if the entry criteria for the trial is too liberal about how long you had to have the itch. So generally, you're looking at durability. You want to know that the kind of itch is actually falling within a certain kind of category. And I think that does clean it up a bit that you know that these patients started with atopic dermatitis that may have gotten better, but they still have residual itch. I agree that, that's probably a cleaner itch population.

Yes. I would agree with all those points. I think in addition, keeping in mind that when you limit to a patient population with a little bit more moderate to severe itch at baseline, you're going to be less vulnerable to the placebo responses, one, because the more severe the itch, generally speaking, the more persistent itch and the more stable it is. And 2 is a separate point that the vulnerability to placebo response is usually greatest when you're looking at just least squares mean change because you may have a patient who has, as a placebo response, a 1- to 2-point reduction. Generally speaking, as you go to the more rigorous binary endpoints like a 4-point reduction in itch, you're going to see less of that placebo response come up as a general rule.

Right. Thank you, both. Let's take another question from the phone.

Next question is from the line of David Amsellem from Piper Sandler.