Cara Therapeutics, Inc. (NASDAQ:CARA) This fall 2022 Earnings Name Transcript March 6, 2023
Operator: Good afternoon. My identify is Josh, and I shall be your convention facilitator. I want to welcome everybody to the Cara Therapeutics Fourth Quarter and Full 12 months 2022 Monetary Outcomes and Replace Convention Name. I might now prefer to introduce Matt Murphy, Cara’s Supervisor of Investor Relations. Mr. Murphy, you could start your name.
Matt Murphy: Thanks, operator, and good afternoon. Simply after market shut in the present day, Cara issued a information launch saying the Firm’s outcomes for the fourth quarter and full 12 months of 2022. Copies of this information launch and the related SEC submitting could be discovered within the Traders part of our web site at www.caratherapeutics.com. Earlier than we start, let me remind you that throughout the course of this convention name, we shall be ensuring forward-looking statements about Cara and our applications based mostly on administration’s present plans and expectations. These statements are being made below the Personal Securities Litigation Reform Act of 1995, and are topic to numerous dangers and uncertainties. Precise outcomes might differ materially because of varied components, and Cara undertakes no obligation to replace or revise these statements publicly because of new data or future outcomes or developments.
Traders ought to learn the chance components set forth in Cara’s 10-Okay for the 12 months ended December 31, 2022, and any subsequent experiences filed with the SEC. With that stated, I would like to show the decision over to Chris Posner, Cara’s Chief Govt Officer. Chris?
Chris Posner: Thanks, Matt, and good afternoon, everybody. With me in the present day are Ryan Maynard, our Chief Monetary; and Dr. Joana Goncalves, our Chief Medical Officer. First, I wish to give a fast overview of 2022 and our important progress executing our technique to turn into the world chief within the therapy of continual pruritus. Then, I’ll share the newest insights into the KORSUVA injection launch and the progress in our growth progress for oral difelikefalin. Ryan will observe with a monetary replace. After that we’ll be obtainable to take your questions. The U.S. launch of KORSUVA injection within the second quarter of 2022 rang in a brand new period for the therapy of continual pruritus and propelled care ahead in our journey to be the class defining chief on this situation.
Persistent pruritus is commonly a extreme, intractable drawback for sufferers in a variety of ailments, and it’s underserved by at present used remedies. In mild of this lack of therapy choices, continual pruritus stays underreported, though it may possibly have a major unfavourable affect on the standard of lifetime of hundreds of thousands of sufferers. We’re dedicated to enhancing the notice of this illness and bettering the therapy protocols for affected person care in order that our novel science advantages essentially the most sufferers attainable. Over the previous 12 months, we made nice strides in translating our mission into motion and firmly establishing our two core franchises in nephrology and dermatology. The launch of KORSUVA injection created the inspiration for our nephrology franchise.
Along with our industrial accomplice CSL Vifor, we’re laser targeted on driving the trial and adoption within the U.S. and in international locations world wide. Furthermore, we’re increasing this differentiated and promising nephrology franchise with oral difelikefalin and the late stage program in non-dialysis dependent CKD sufferers. Enrollment is progressing nicely, and we proceed to focus on the highest line information launch for the second half of 2024. Switching to our dermatology franchise, enrollment in our late stage atopic dermatitis program is progressing nicely. And we proceed to trace to our inside readout within the second half of 2023. The constructive Part 2 outcomes of oral difelikefalin in notalgia paresthetica not solely confirmed our speculation, that difelikefalin can goal pruritus unbiased of the origin of itch but additionally created a definite alternative to enrich our program in AD.
This provides us a novel one-two punch to construct a really considered one of a form dermatology franchise. We’re excited in regards to the launch of our Part 2/3 program in NP and the popularity from the New England Journal of Medication which lately printed our Part 2 outcomes. Now, let me present some extra particulars on the quarter and the progress inside the strategic priorities of our two franchises. First, on the launch of KORSUVA injection, we’re making significant progress within the U.S. For the fourth quarter of 2022, internet gross sales for KORSUVA injection had been $2.3 million, translating into $1.1 million of revenue recorded as income to us, and wholesaler shipments to dialysis clinics totaled roughly 21,000 vials. This quarterly efficiency is reflective of the distinctive launch dynamics on this ecosystem and represents a transition from the stocking and trial part to the adoption and demand based mostly efficiency part.
After the preliminary stock constructing at each the wholesaler and sure clinics within the second and third quarter, we now have began to see stock being drawn down and orders accelerating. We’re happy to see this momentum persevering with by means of the primary two months of 2023. Equally as essential, suggestions on KORSUVA from suppliers and sufferers has been extremely constructive. And we proceed to listen to that KORSUVA is delivering on the promise it demonstrated within the medical research and performing as we anticipated. Let me escape the completely different dynamics on the varied DOs. Beginning with Fresenius, we’re happy with the dedication from FMC to the long-term success of KORSUVA as mirrored by each the addition of the FMC subject pressure within the promotion of KORSUVA and the push for its fast adoption.
Within the third quarter with affected person care as their primary precedence, Fresenius took a non-traditional method and inventory product in most of its clinics to facilitate trial throughout its community. Whereas this technique demonstrates FMC’s perception within the unmet medical want in CKD-associated pruritus and confidence in KORSUVA’s worth proposition, it created an atypical stock dynamic. Within the fourth quarter, we noticed a gradual progress within the variety of FMC clinics using their preliminary stock and inserting reorders, a transparent reflection of their transfer from trial to adoption. Merely put, and what’s very encouraging, when clinics begin utilizing KORSUVA, there’s a robust purchase in and these clinics turn into repeat prospects. This constructive pattern has accelerated in 2023.
Encouragingly throughout the first eight weeks of this 12 months, clinic reorders from the wholesalers have already exceeded your entire FMC order quantity within the fourth quarter of 2022. Wanting forward, we anticipate to see continued progress within the variety of FMC clinics using their stock and reordering. And as trial shifts to adoption throughout the FMC community, we anticipate a lot of the stock on the clinic degree shall be utilized by mid-2023. At DaVita, we see regular progress within the variety of clinics order in KORSUVA. For these clinics which have bought KORSUVA we proceed to see a excessive reorder fee, which clearly suggests a constructive expertise with this product. We proceed to work with CSL Vifor on high down and backside up initiatives to speed up the adoption of KORSUVA at DaVita clinics.
On the MDO and IDO entrance, uptake continues to be robust, each when it comes to the variety of clinics ordering in addition to the reorder charges. Whereas this section of the market represents lower than 20%, we really feel that the progress at these organizations underscores the constructive expertise of sufferers and suppliers with KORSUVA. To summarize, given the launch and stock dynamics throughout the first few quarters, we anticipate a extra regular uptake curve for KORSUVA to emerge mid-2023. Extra particularly, we anticipate that the longer term gross sales and vial shipped to dialysis clinics won’t be associated to any important stocking on the wholesaler or clinic degree. Nonetheless, till the remaining stock on the clinic degree is depleted, you will need to emphasize that it’s the mixture of stock draw-downs on the clinics and new wholesaler shipments to clinics that collectively signify true affected person demand.
General, we’re inspired by the progress within the U.S. launch and we stay assured within the long-term potential of KORSUVA. On the worldwide entrance, the rollout of Kapruvia in Europe continues to achieve momentum. Launches within the first 4 international locations Austria, Germany, Sweden and Denmark are progressing nicely and we anticipate a lot of the different international locations in Europe to come back on-line in 2023. The preliminary suggestions may be very encouraging and in keeping with the supplier and affected person testimonials we now have obtained within the U.S. Moreover, all 4 of the entry consortium international locations, Canada, Australia, Singapore and Switzerland accredited the product in 2022, and we anticipate launches in these international locations to begin as soon as reimbursement is secured within the subsequent 12 to 18 months.
Based mostly on the regulatory submission within the second half of 2022 and constructive interactions with the PMDA, we proceed to anticipate a regulatory resolution in Japan within the second half of 2023. As a reminder, if the product is accredited in Japan, we are going to obtain a milestone cost from our accomplice Maruishi. The JV of CSL Vifor and FMC additionally lately introduced signing a long-term unique licensing settlement for the co-development and commercialization of KORSUVA with Winhealth in China. We’re very excited by this constructive growth and we stay up for work beginning within the near-term. Lastly, let me briefly contact on TDAPA. Within the second quarter of 2022, as a part of the proposed rule for the calendar 12 months 2023, CMS issued an RFI relating to an acceptable cost mechanism for medicine with TDAPA designation publish the TDAPA interval.
We usually imagine that the completely different cost mechanisms outlined within the RFI would supply sufficient reimbursement for KORSUVA publish the expiration of its TDAPA interval. We additional assist the idea of linking drug cost to drug utilization in acceptable sufferers. We proceed to work carefully with different stakeholders to assist CMS in its decision-making course of. And whereas we do not need clear visibility as to the precise timing of a last resolution relating to the publish TDAPA reimbursement mechanism, we proceed to hope for a substantive and constructive replace from CMS throughout this 12 months’s rulemaking cycle. Shifting on to our pipeline. We’re constructing two therapeutic franchises by means of our work to broaden the utility of difelikefalin. Final 12 months, we launched our Part 3 applications of oral difelikefalin in each pruritus related to non-dialysis dependent superior CKD in addition to atopic dermatitis.
Enrollment in each applications is progressing nicely and we anticipate high line outcomes for the CKD program within the second half of 2024 and for the AD program within the first half of 2025. We proceed to trace to the second half of 2023 for the inner readout of half A of the Part 3 KIND 1 research. Moreover, final 12 months, we reported constructive information from our Part 2 trial of oral difelikefalin in notalgia paresthetica. Within the fourth quarter of 2022, we had a constructive interplay with the FDA, which cleared the trail to initiating our Part 2/3 program in NP. Like our AD program, we designed the NP program with the objective to boost our operational effectivity to advance the research as quickly as attainable and to maximise the potential for fulfillment. We anticipate the inner readout of the dose discovering portion of the KOURAGE 1 research within the second half of 2024, with last top-line outcomes for this system within the first half of 2026.
In conclusion, we imagine 2022 was a pivotal 12 months for Cara. Our progress laid the inspiration for sustained progress and value-creation for our stakeholders and the promising way forward for our firm. On the KORSUVA injection launch, we anticipated variability and a fluctuating dynamic over the primary 12 months of launch. We’re seeing constructive developments in product uptake and stay assured within the long-term potential of KORSUVA injection. Now we have three late-stage applications underway, demonstrating important progress towards establishing our two therapeutic franchises and maximizing the potential of difelikefalin. I might now like to show it over to Ryan for added particulars on our fourth quarter and full 12 months outcomes. Over to you Ryan.
Iakov Filimonov/Shutterstock.com
Ryan Maynard: Thanks, Chris. Nicely, I will be focusing my commentary primarily across the fourth quarter. The complete 12 months outcomes for 2022 could be present in our press launch issued in the present day after the market closed. Complete income was $3.3 million for the three months ended December 31, 2022, in contrast $0.8 million for a similar interval in 2021. Income this quarter consisted of $1.1 million of collaborative income associated to our revenue from CSL Vifor’s internet gross sales of KORSUVA injection to 3rd events, and $2.1 million of economic provide income. We additionally acknowledged $72,000 of royalty income this quarter, representing our royalties from the web gross sales of Kapruvia in Europe within the fourth quarter of 2022. I additionally wish to spotlight that for the 12 months, we now have now acknowledged a complete of $16.6 million of collaborative income associated to our share of the revenue of KORSUVA injection gross sales.
Value of products bought throughout the three months ended December 31, 2022 was $2.1 million and pertains to our industrial provide shipments of KORSUVA injection to CSL Vifor. Analysis and growth bills had been $26 million for the three months ended December 31, 2022, in comparison with $22.8 million in the identical interval of 2021. The rise in R&D bills is as a result of elevated medical trial spend associated to our two Part 3 medical applications that had been initiated in 2022. Basic and administrative bills had been $6.4 million for the three months ended December 31, 2022, in comparison with $11.5 million in the identical interval of 2021. The discount in G&A expense was because of a lower in stock-based compensation within the fourth quarter of 2022 as in comparison with the identical interval in 2021.
Inventory-based compensation in 2021 included prices pertains to the modification of sure fairness awards to our former CEO. Money, money equivalents and marketable securities at December 31, 2022 totaled $156.7 million, in comparison with $236.8 million at December 31, 2021. The lower within the steadiness primarily resulted from money utilized in our working actions. Now, we anticipate that our present unrestricted money and money equivalents and obtainable on the market marketable securities are enough to fund our at present anticipated working plan into at the very least the primary half of 2024. This steering assumes all of the spend associated to our three late-stage medical growth applications and KORSUVA income revenue share contribution. I’ll now flip the decision again over to Chris.
Chris Posner: Thanks, Ryan. I wish to once more emphasize how assured we’re within the 12 months forward giving the momentum of the KORSUVA launch and the numerous progress in our pipeline. We imagine that Cara is nicely on its strategy to turning into the world chief within the therapy of continual pruritus and we stay up for offering you extra updates within the near-term. With that Ryan, Jo, and I will be completely happy to take your questions. So, I may flip it again over to Josh and we will open up the decision for questions.
See additionally Worth Investor Joel Greenblatt’s Dividend Shares and 12 Most Promising EV Shares In line with Analysts .
To proceed studying the Q&A session, please click on right here.
.gif)
