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

Good morning. My name is Liz, and I will be your conference facilitator. I'd like to welcome everyone to Cara Therapeutics call to discuss the top line results of the KOMFORT Phase II proof-of-concept study in NP. [Operator Instructions] Please be advised that this call is being recorded. I would now like to introduce Iris Francesconi, Chief Strategy Officer and Head of Investor Relations from Cara Therapeutics. Ms. Francesconi, you may begin the call.

Thank you, Liz, and good morning, everyone. Earlier today, we issued a press release detailing our top line results for the proof-of-concept study, KOMFORT, in notalgia paresthetica. The press release can be found on our website at www.caratherapeutics.com. You may also listen to a live webcast and replay of today's call on the Investors section of the website. Participating in today's call are Chris Posner, Cara's President and Chief Executive Officer; and Dr. Joana Goncalves, Cara's Chief Medical Officer. Before we begin, let me remind you that statements made on today's call regarding matters that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of these forward-looking statements include statements concerning the timing of the company's planned clinical trials, potential results of ongoing and planned clinical trials, the company's planned future regulatory submissions and potential future regulatory approvals, timing of future regulatory and development milestones for the company's product candidates, the potential for the company's product candidates to be alternative for notalgia paresthetica, the size and growth of the potential markets for notalgia paresthetica, the potential for oral difelikefalin to address additional pruritic indications and the potential impact of COVID-19 on the company's clinical development and regulatory time lines and plans. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Risks are described more fully in Cara Therapeutics' filings with the Securities and Exchange Commission, including the Risk Factors section of the company's annual report on Form 10-K for the year ending December 31, 2021, and its other documents subsequently filed with or furnished to the Securities and Exchange Commission. All forward-looking statements contained in this presentation speak only of the date on which they were made. Cara Therapeutics undertakes no obligation to update such statements to reflect any events that occur or circumstances that exist after the date on which they were made, except as required by law. With this, I will now turn it over to Chris.

Well, thank you, Iris, and good morning, everyone. Cara Therapeutics' mission, our north star is to be the world leader in chronic pruritus. Chronic pruritus is often a severe intractable underserved problem for patients in a wide range of diseases. With limited therapeutic options for this condition, we have set out to develop a treatment, oral difelikefalin, that may provide a clinical benefit independent of the underlying cause of pruritus. Now due to its novel mechanism of action, oral difelikefalin or in short DFK has the potential to treat pruritus across a spectrum of disease categories: systemic, dermatologic and neurologic. And our clinical programs are targeted to actively exploring DFK in diseases in all 3. Now today's positive data helps to establish DFK's broad applicability with the potential in pruritus of neurological origin, specifically notalgia paresthetica. This affirms that our core strategy is on target and on track. Now let me spend a moment on discussing the market opportunity in NP. The patient population is sizable. We estimate about 2.7 million adults have neuropathic itch, including NP. The disease is significantly underdiagnosed. We believe only 1/4 of NP patients are under the care of a provider. And lastly, there are no FDA-approved therapies. Moreover, off-label treatments that are currently used have little or no efficacy or safety and tolerability concerns. So there is a void. There is a void to fill from a medical perspective and an opportunity to capture from a commercial viewpoint, and we believe we have a product candidate that may address both. Now for a review of the KOMFORT top line study results, I'd like to turn it over to Jo Goncalves, our Chief Medical Officer.

Thank you, Chris. Welcome, everyone. I'm pleased to be able to share the exciting results of our NP KOMFORT study with you today. Before I present the data, I wanted to remind everyone of some of the salient features of notalgia paresthetica. Notalgia paresthetica, or NP, is a sensory neuropathy. And in fact, it is one of the most common form of neuropathic itch. It is characterized by a localized chronic pruritus in the middle of the back between and below the shoulder blades. The itch is often associated with a well-demarcated hyperpigmented patch, as you can see in these 2 photos. And there's often thickening of the skin. Both the pigmentation and the thickening are due to the intense scratching. The itch is burdensome and can have a significant effect on the patient's quality of life. The treatment of NP is challenging since conventional treatment for pruritus in inflammatory dermatosis such as antihistamines and topical steroids are largely ineffective. And treatments like capsaicin cream or gabapentin are limited by compliance and tolerability issues. There are no treatment guidelines and there are no approved therapies for NP. While the exact etiology of NP is unclear, hypothesis have centered around a mechanical irritation along the spinal cord, either from localized muscle impingement or from spinal pathology, which then causes disruption of the cutaneous sensory nerves, which supply the upper back. KOMFORT is the first robust randomized placebo-controlled study in patients with NP. This Phase II proof-of-concept study of safety -- efficacy and safety of oral difelikefalin on reducing itch severity compared to placebo in patients with NP. Patients were randomized to receive either oral DFK at a dose of 2 milligrams or placebo twice daily for 8 weeks. After the 8-week placebo-controlled period, patients could enter a 4-week active extension phase, whereby placebo patients were randomized to active drug. The active extension period of the study is still ongoing. So I will only be presenting data from the placebo-controlled period today. Patients needed to have chronic pruritus with a baseline Worst Itch NRS score of greater than or equal to 5. Once randomized, patients continue to report their daily Worst Itch intensity until the end of the study. Patients were washed out of all anti-itch medication prior to entering the study and were only allowed to take this study drug for their pruritus. The primary end point was the change from baseline in the weekly mean of the daily 24-hour Worst Itch NRS score at week 8. Other end points included the proportion of patients achieving at least a 4-point improvement from baseline in the Worst Itch NRS score at week 8, safety assessment and quality of life assessments, including sleep. I will not be presenting the quality of life assessments on the call today as it was not part of the top line data. Looking at patient disposition. A total of 126 patients were randomized across the 2 groups. One patient randomized to DFK withdrew consent prior to taking study drug and is not included in the analysis for safety or efficacy. The discontinuation rate was higher in the DFK arm compared to placebo, but the most common reason for discontinuation was due to adverse events. And I will provide more details on the AEs leading to discontinuation when I review the safety data later on in the presentation. Based on patient demographics is in line with what we would expect based on the NP epidemiology data. The study enrolled a higher proportion of female patients with a mean age of 60 and the majority were white. Patients were overweight with a mean BMI of approximately 28 across the groups. Patients had NP for a mean duration of 8 to 9 years. In the mean Worst Itch NRS at baseline was 7.6, very similar to what we have seen across all our previous studies. The study met its primary end point. There was a statistical significant improvement in itch observed as oral DFK versus placebo in the mean change from baseline in the Worst-Itch NRS at week 8. Patients treated with DFK had a mean change of minus 4 versus minus 2.4 in the placebo arm at week 8. The onset of action started at week 1 and was sustained through week 8. There was a statically significant reduction in itch compared to placebo at all time points throughout the study. This pattern of efficacy with early separation from placebo and maintenance of effect is very similar to what has been seen in our other studies with DFK. Similarly, a significantly greater proportion of patients on DFK achieved a 4-point improvement in the NRS score compared to placebo. As you know, this is the end point that regulators will be looking at in pivotal trials. 41% of patients on DFK achieved a 4-point response at week 8 compared to 18% on placebo. Statistical separation from placebo was seen as early as week 2 and sustained through week 8. Moving on to the safety data. There were a similar number of patients reporting at least one treatment-emergent adverse event on DFK and placebo. Treatment-emergent adverse events were mild-to-moderate in severity, except for one patient randomized to placebo, who had a severe event. There were no serious adverse events reported in the study. 12 patients on DFK and 4 patients on placebo discontinued due to an adverse event. The most common reason for discontinuation from the DFK arm were dizziness and nausea. Here, 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 the group. Nausea was the most commonly reported adverse event in the DFK group with a similar incidence in the placebo group. Abdominal pain was also reported at a similar incidence across the groups. Headache, dizziness, constipation and increased urine output were reported more frequently in the DFK group compared to placebo. These events are consistent with what has been reported across all studies with oral DFK. To conclude, oral difelikefalin demonstrated as a strong anti-pruritic effect in patients with notalgia paresthetica. This Phase II proof-of-concept study met the primary end point with strong statistical significance. The onset of action was rapid and sustained through week 8. There was a significantly greater proportion of patients on DFK who achieved at least a 4-point improvement in the Worst Itch NRS. Historically, the regulatory end point for registrational studies. DFK was well tolerated with a consistent safety profile and with no signals detected with a 2-milligram twice-daily dose. We are thrilled with the positive results in this NP patient population who have no approved treatment options. The data confirms the potential for DFK to work broadly as an anti-pruritic agent across disease areas regardless of the underlying etiology of chronic itch. In addition, it supports our understanding of the mode of action of DFK that the anti-pruritic effect may be strongly driven by a neuromodulatory mechanism. The efficacy and safety data support further development of DFK in NP. We plan to finalize the data analysis and to discuss the path forward with the FDA. Thanks for your attention. Let me turn it over to Liz to open the line for Q&A.

[Operator Instructions] Our first question comes from David Amsellem with Piper Sandler.

So just have a couple. First, I guess with the data in hand, is this something where you may explore other pruritic settings where there's a neuropathic origin. And I guess, more broadly, how do you think about that now knowing what we know? It seems that there's a much stronger signal here for oral DFK than what you had in the AD setting. So do you now pivot in terms of how you think about DFK going forward? And I guess as a corollary to that question, does this data and the strength of this data make you in any way rethink how you're thinking about the AD program?

Thanks, David. So let me first address your first question about other areas. So we are focused on our key areas in AD, CKD and, of course, now with NP. We'll review this data in totality and discuss further development path. Regarding other programs, I mean, we remain very confident about our programs, our Phase III program in CKD as well as in atopic dermatitis. They've demonstrated anti-pruritic efficacy in the Phase II studies, and we are confident about the design of this program. Keep in mind that although we demonstrated that difelikefalin has strong neuromodulatory properties, it has other anti-pruritic properties too and other disease areas have mixed components: neuromodulatory, anti-inflammatory, et cetera. So we're confident in the mechanism of action across all the other disease areas as well.

Okay. That's helpful. If I may sneak in a follow-up. Can you just talk about other pruritic settings where there's a neuropathic etiology? Maybe just provide specifics on one other population might be appropriate. And I realize that might be putting the cart before the horse here, but I just thought it might be helpful to articulate the broader populations.

Sure. Thanks, David. So there are numerous other neuropathic itch. And the one that's quite similar to notalgia paresthetica, which is also a compression-like syndrome, which is brachioradialis. Of course, then you get the peripheral neuropathies like the diabetic peripheral neuropathy, postherpetic pruritus, postherpetic episode, you get that as well. You get a scope pruritus as well. There are also pruritic conditions, it's called anogenital pruritus, which is also a neurogenic. So there is a large group of neuropathic itch, and notalgia paresthetica remains the largest of the neuropathic itch conditions.

Our next question comes from Annabel Samimy with Stifel.

Congratulations on the data. So now that we have the data for 2 milligrams in neuropathic pain. I mean, we're seeing clear and early activity. I know you just kind of tried to answer that but I want to drill down a little bit more. Is there any thought to the doses that you've chosen? And specifically maybe for AD since there's, I guess, by general standards, they're a healthier population, and you have 2 parts to the study. Is it possible that you might consider a higher dose? And then can you remind us how the drug discontinuations compared to the prior studies? These higher doses, obviously, may be something that's causing that. Is there anything you can do to manage the nausea, for example, like a titration schedule? And then, I guess, to the last question again, and you tried to touch on this, I suppose, and I'm not sure that you're going to have an answer to this, but I know that it's been tossed around for some time. Could you be pursuing a formal pivotal program for NP or just leveraging this to get a broader label for all forms of itch?

Okay. Thanks, Annabel. So first, let me tackle the 2-milligram dose. So as a reminder, we selected the 2-milligram dose for notalgia paresthetica based on preclinical data in pain models, and it demonstrated that a neuropathic pain required higher doses of difelikefalin. We need to be careful of extrapolating some of these results to the other disease areas. We remain confident about the doses that we have selected in AD and CKD and would not change the doses. So those are the correct doses we believe. As far as the discontinuation rate, the discontinuation rate seen here, in fact, is very much aligned what we saw in the atopic dermatitis study. So we were anticipating discontinuation rate here in the KOMFORT study. We will, of course, likely need to do some dose-finding moving forward, but we are not considering titration as part of -- at this stage as part of the way we administer difelikefalin. And then regarding clinical studies moving forward, we will review the data in its entirety and we'll be having a discussion with the FDA and we'll decide on the most appropriate clinical path forward for difelikefalin in neuropathic itch.

Our next question comes from Daniel Wolle with JPMorgan.

Congratulation on the data. A couple of questions here. One is, do you consider the duration of NP between the 2 arms as balanced, especially considering the standard deviation. And is that of a contributing factor to the outcome? Two, what explains the increased urine output and frequent urination observed in the treatment arm? Is it because of an underlying disease, I don't believe we've seen that before. Or is it because of an increased oral -- increased dose? And last, but not least, ahead, given what we know about REMITCH working in this -- in PBC with the same -- similar mechanism of action and today's positive results, what does this for mean what we should expect as a potential outcome when that data reached out in the second half?

Thanks, Daniel. So let me start with your first question. The study was randomized, and we believe that the 2 groups were equally balanced for a proof-of-concept study. So we remain confident in the data. The thing was very strong. So I don't think that there's any implications of maybe some small imbalances possibly of baseline characteristics. Regarding the urine output, this is patient-reported outcomes, the patients noticed that they were likely urinating more frequently. This is expected of a kappa-opioid receptor agonist. The class of drug has a known aquaretic effect, which is a free water loss in patients with functioning kidney. This is usually found as we've seen some of these events were mild and patients just need to drink water and hydrate orally. We haven't seen it reported in the other studies specifically AD, as the numbers didn't quite meet a 5% threshold. There were a couple of patients, but very few patients. And then your last question regarding PBC. Like I said, we always need to be cautious about extrapolating data from one study to another, and we'll wait eagerly to assess that data at the end of the year.

Our next question comes from Joseph Stringer with Needham & Company.

Our -- just 1 question from us on the placebo response rates. How do these compare -- these and NP compare relative to the Phase II AD and CKD trial, specifically on -- just the change in NRS looks like 2.4 improvement and then also the 4-point responder analysis, 18% placebo here in NP trial. How do those compare to the Phase II AD and CKD, if you could remind us? And was -- the placebo response for NP in this trial, was it in line with your expectations?

Thanks, Joe. So the placebo response rate that we've seen here, I'll start with the last question. We really didn't have great insight into what to expect in the notalgia paresthetica. This is the first robust placebo-controlled study. So this was indeed a true learning for Cara. We were very pleased with the response rate. And in fact, when you look across chronic pruritus conditions, very much in keeping with a placebo response. Regarding our other study, the -- again, very consistent with the pattern of efficacy that we have seen. The range may differ a little bit, but within the ballpark. This is probably our strongest data, but the others are within the same range of about a 1 point difference to placebo in the mean change. In the atopic dermatitis, I think you mentioned specifically for the 4-point responder analysis, specifically in the mild-to-moderate patient population, where we see the greatest impact of difelikefalin in those patients, the placebo response was about the same. It was about 19 -- it was 19%. So very much in keeping with this. So we are very pleased with the outcome and consistency.

Our next question comes from Sumant Kulkarni with Canaccord.

I have a few here. So how would 1 expect headache, dizziness, constipation and increased urine output to change over time with the chronic usage of Oral KORSUVA? And asked another way, I guess, is how it need be managed in potential real-world usage of this product? And how would doctors and patients think about the benefits of the product competing underlying NPH versus these risks?

So first, I'd like to say we're very pleased with the safety and tolerability profile of the drug. A, very consistent to what we've seen before. And for the 2-milligram BID dose, the benefit group profile was very good. And in fact, this profile is very favorable for -- dermatologist specifically would be treating these patients. These events tend to occur early on. And they were mostly mild-to-moderate and well tolerated by patients. So we think, with the right expectations by dermatologists to their patients that this profile should be very acceptable to both physicians and patients.

Got it. It's still quite early, but how long do you think a Phase III trial in NP could take in? Could you potentially get those results prior to obtaining Phase III results in atopic dermatitis?

So we'll be reviewing the data in totality and looking at the clinical path discussing with the FDA. So a little early to comment on that at the moment, Sumant.

And then my final question is a 2 parter. So in the event that the company decides to prioritize NP, for example, would you have enough of a safety database to file in that indication alone because you have programs running in NDD, CKD, AD and PBC as well. And the second part, specifically, what implications does the increased urine output adverse event in the KOMFORT trial mean for patients with nondialysis-dependent chronic kidney disease.

So let me touch upon the safety database. So we will always have to meet the required ICH guidance for safety requirements regardless of which product goes -- which [indiscernible] goes first. Regarding non-CKD, the acrylic effect is predominantly an effect that is seen in patients with functioning kidneys. This is not seen in patients with hemodialysis and as patient's kidneys are less functioning and as the non-CKD patient population with advanced CKD, it should be less of an impact on those patients.