Cara Therapeutics Q3 2023 Earnings Call Transcript

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November 13, 2023

There are 11 speakers on the call.

Operator

Good afternoon. My name is Latif, and I will be your conference facilitator. I would like to welcome everyone to the Cara Therapeutics' Third Quarter Financial Results and Update Conference Call. All lines have been placed on mute to avoid any background noise. After the speaker remarks, there will be a question and answer session.

Operator

And the numbers 11 on your telephone keypad. Please be advised that this call is being recorded. I would now like to introduce Matt Murphy, Cara's Manager of Investor Relations. Mr. Murphy, you may begin your call.

Speaker 1

Thank you, operator, and good afternoon. After market close today, Cara issued a news release announcing the company's financial and operating results for the Q3 of 2023. Copies of this news release and the associated SEC filing can be found in the Investors section of our website at www.caratherapeutics.com. Before we begin, let me remind you that during the course of this conference call, we will be making certain forward looking statements about Cara and our programs based on management's current plans and expectations. These statements are being made under the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties.

Speaker 1

Actual results may differ materially due to various factors, and Cara undertakes no obligation to update or revise these statements publicly as a result of new information or future results or developments. Investors should read the risk factors set forth in Cara's 10 ks for the year ended December 31, 2022, and any subsequent reports filed with the SEC, including its Form 10 Q for the quarter segment, September 30, 2023. That said, I'd like to turn the call over to Chris Posner, Cara's Chief Executive Officer. Chris?

Speaker 2

Thanks, Matt. Good afternoon, everyone, and thank you for joining our call. With me today are Ryan Maynard, our Chief Financial Officer Doctor. Joanna Consalves, our Chief Medical Officer and Scott Cerulean, our General Counsel and Head of Government Affairs. Our strategy at Cara Therapeutics is to change the treatment of chronic pruritus with our innovative and differentiated asset diphalaKeflin.

Speaker 2

Our highest priority is to execute on our 3 unique late stage programs in dermatology and nephrology, which drive the greatest potential long term value for our company. And we are excited to have fully funded value inflection milestones within these programs over the next 12 months. Today, I will provide an update on the funding of our wholly owned oral diphala keflin pipeline. Next, I will Discuss the progress in our 3 late stage programs, including expectations for Part A of our KIND-one atopic dermatitis study, which is scheduled to read out in December of this year. Finally, I will address the performance of KORSUVA Injection in the U.

Speaker 2

S. And discuss the recently released 2024 ESRD rule. After that, Ryan will provide a financial update and we will subsequently open up the call to Q and A. With that, let me start with our recent announcement regarding the monetization of our Tisqor KORSUVA Injection and KORSUVA. On November 1, we entered into a royalty interest purchase and sale agreement with healthcare royalty.

Speaker 2

Under the terms of the agreement, Cara received an initial payment of $17,500,000 less certain expenses. We will receive an additional payment of $20,000,000 upon COPUVIA receiving a certain minimum price in Germany, which is expected to occur this quarter. In addition, Cara will receive a $2,500,000 milestone payment based upon achieving certain 2024 performance levels of KORSUVA in Japan. In exchange, Healthcare royalty will receive all royalties due to Cara from KORSUVA Injection and COPUVIA ex U. S.

Speaker 2

License agreements with CSLV4 and Mary Wieshi. The aggregate royalty payments to Healthcare Royalty are capped at 2x the payment to Cara if received before the end of 2029. Otherwise, the payments are capped at 2.8x, after which Cara will resume receiving all royalties from both CSLV4 and Maruhishi. The arrangement with healthcare royalty specifically Non dilutive financing is an important part of our strategy to drive the continued development of our very promising pipeline, which has always been key to building sustainable long term value for Cara. Closing this non dilutive transaction extends our cash runway into 2025.

Speaker 2

This helps us reach critical catalysts and milestones that we believe will display the potential of our diphila catholin pipeline and start to display the underappreciated value in Cara. Next, Let me discuss the progress of our multiple late stage pipeline programs. First, our Phase 3 KIND1 trial in pruritus associated with atopic dermatitis is approaching a key near term milestone. We now plan to release top line efficacy and safety data for Part A, the dose finding portion of this trial in mid December in order to increase the visibility into this trial. Recall chronic pruritus is the most common and most burdensome symptom of atopic dermatitis affecting almost 100% of the approximately 12,000,000 adult patients in the U.

Speaker 2

S. In recent years, there has been significant investments and Innovation in the treatment of moderate to severe AD resulting in the development and approval of new biologics and JAK inhibitors. Despite these developments, a large segment of the AD market remains underserved. We are targeting roughly 1 quarter of the total AD market. These are mild to moderate AD patients with moderate to severe itch, also referred to as itch dominant AD.

Speaker 2

Numerically, that's about 3,000,000 addressable itch dominant patients in the U. S. Who are primarily managed with topical corticosteroids. While TCS may treat skin lesions, they often fail to effectively address the burdensome chronic itch that severely impacts these patients' quality of life. So there is a significant void in the treatment continuum and a need for an oral therapy with a favorable safety and tolerability profile to effectively treat the debilitating itch in these patients.

Speaker 2

Our KIND program is tailored to specifically address this unmet need for a targeted oral antiperedic treatment for mild to moderate AD patients who are very itchy. No company to date has focused on this market segment and enriched its trials with this patient phenotype. Today, we can confirm that 80% of the patients enrolled in Part A of KIND-one have a baseline body surface area of less than 10% and a mean itch score of greater than 7, meaning most patients in the trial have mild to moderate skin lesions with severe itch. As you will recall, this is also the subgroup of patients that showed the best clinical benefit with oral diphala keflin in our Caraere Phase II monotherapy trial. In contrast to our Phase II trial, our Phase III KIND program is designed to mimic likely future real world utilization in patients.

Speaker 2

Difelacatholin is used on top of mid potent TCS and compared to TCS alone, an active comparator. With this higher clinical hurdle and 4 treatment arms, Part A of KIND-one is not powered for statistical significance. We've enrolled 287 patients with the intent to select the most favorable dosage strength and determine the sample size for the confirmatory part of the Phase 3 program. The KIND-one Part A readout is a significant catalyst and mirrors the future of this program. We believe that Part A will be a good proxy for the likely outcomes of the confirmatory KIND-one, Part B and KIND-two studies.

Speaker 2

The patient enrollment criteria, study conduct and endpoints in the confirmatory studies are expected to be the same as for KIND-one Part A. In addition, the study sites from Part A will participate in Part B along with some new added sites. We are excited to share the results of KIND-one Part A with you in the near future. Now turning to our other 2 late stage programs that also target sizable patient populations with a lack of treatment options. Enrollment in our Phase 3 KIKI and II trials in pruritus associated with advanced chronic kidney disease It's progressing well and we continue to expect top line results in the second half of twenty twenty four.

Speaker 2

The approval of KORSUVA Injection validated this mechanism, laying the foundation for our nephrology franchise. We see a natural extension of diphalaKeflin into earlier stage patients with the oral formulation. There are roughly 300,000 pre dialysis advanced stage CKD patients who suffer from moderate to severe pruritus in the U. S. Alone.

Speaker 2

Importantly, these patients do not fall under the capitated reimbursement system that covers dialysis patients. Hence, we see a significant commercial opportunity in this underserved patient population. Our Phase twothree COURAGE 1 trial in NOTALSA Parasthetica is tracking to its first data readout of Part A in the second half of twenty twenty four. With no approved therapies and an addressable population of at least 650,000 patients in the U. S.

Speaker 2

Who are under the care of a provider, most often the dermatologists, we believe oral diphila, Keflin has the potential to unlock a sizable new market in dermatology. Now let me turn to the performance of KORSUVA Injection in the U. S. For the Q3 of 2023, net sales for KORSUVA were $4,400,000 translating into $1,900,000 of profit recorded as revenue to Cara. Wholesaler shipments to dialysis clinics totaled 91,000 vials, a 36% increase from the prior quarter.

Speaker 2

68% of these vials were shipped to Fresenius Clinics and the remainder split between DaVita and the other dialysis organizations. At Fresenius, Orders grew by more than 37% quarter to quarter, reaching 62,000 vials. By the end of the third quarter, Over 1,000 Fresenius clinics or 37% have placed reorders, that's up from 27% at the end of the second quarter. Additionally, 1478 clinics or 55% had dosed at least one patient at the end of the 3rd quarter. Importantly, following the ESRD prospective payment system rule, Fresenius decided to reallocate remaining inventory that was shipped in the Q3 of 2022 within its network of clinics.

Speaker 2

As a result, we expect shipments from CSLV4 to wholesalers to be small in the Q4 of this year and the Q1 of 2024, translating into minimal revenues accrued to Cara in these quarters. At DaVita, we continue to observe steady growth in demand. Orders grew by 20% quarter to quarter to 13,000 vials. Over 500 clinics or 19% had ordered KORSUVA at the end of the third quarter, that's up from 15% at the end of the second quarter. Reorder rates remain strong with 76% of clinics placing repeat orders.

Speaker 2

As a reminder, Since there is minimal inventory held at DaVita Clinics, we believe the growth in clinic orders represents a good proxy for the growth in patient demand. At midsize and independent dialysis organizations, KORSUVA utilization continued its momentum. Orders grew by 47% quarter to quarter to over 16,000 vials. At the end of the third quarter, 18% of clinics in this market segment had placed orders. That's up from 17% at the end of the second quarter.

Speaker 2

In addition, 77% of these clinics placed repeat orders, up from 68% at the end of the second quarter. U. S. Renal Care remains the largest buyer of KORSUVA in the MDO, IDO segments. Approximately 80% of USRC clinics had ordered KORSUVA by the end of the Q3 and 83% of these clinics had placed repeat orders.

Speaker 2

Overall, our expectations for KORSUVA Injection are now greatly reduced, But we remain confident in the mechanism of action and benefit of KORSUVA. The provider and patient feedback for KORSUVA remains highly positive and its good clinical performance has continued to fuel growth in vial demand, But its use will not likely reflect the existing clinical need. The significant challenges in the uptake of KORSUVA Even with its TDAPA designation stem from the unique capitated dialysis reimbursement system in the U. S, which really does not foster innovation. On October 27, CMS published the end stage renal disease prospective payment system final rule for the calendar year 2024.

Speaker 2

We are disappointed The CMS rejected our request to extend the TDAPA period for KORSUVA. Furthermore, CMS maintained the proposed methodology for calculating the add on adjustment, which in our view is flawed and results in a significant shortfall in funding for KORSUVA and other innovative drugs with TDAPA designation in the future. As a result, we now believe that KORSUVA's commercial potential will be meaningfully lower than we previously expected. However, Cara fundamentally is a development company and our greatest source of value is our wholly owned oral diphilaqueflin pipeline. We remain laser focused on maintaining a strong balance sheet and driving progress in our 3 late stage programs to deliver value catalysts ahead.

Speaker 2

I would now like to turn it over to Ryan for additional details on our Q3 financial results. Over to you, Ryan.

Speaker 3

Thank you, Chris. I would like to first take a moment to reinforce what we have stated about our very important financing transaction with Healthcare Royalty. We were able to bring forward the value of our ex U. S. And Japan royalties and add to our balance sheet in a meaningful way.

Speaker 3

This allowed us to extend our cash runway in the non dilutive manner that we have been socializing with the investment community over these last few quarters. As Chris mentioned, we have received the initial payment of $17,500,000 and we fully expect to receive the 1st milestone of $20,000,000 by the end of this quarter. Now on to the Q3 results. Total revenue was $4,900,000 for the 3 months ended September 30, 2023 compared to $10,800,000 for the same period in 2022. Revenue this quarter consisted of $1,900,000 of collaborative revenue related to our profit from CSLV4's net sales of KORSUVA Injection to 3rd parties, dollars 1,400,000 from the milestone payment earned from Maruyushi for marketing and approval of KORSUVA Injection in Japan, $1,300,000 of commercial supply revenue and finally $167,000 of royalty revenue representing our royalties from the net sales of COPUVIA in Europe.

Speaker 3

Remember that revenue in the same period last year included the large stocking order from FMC. Cost of goods sold was $1,600,000 for the 3 months ended September 30, 2023 compared to $3,100,000 for the same period in 2020 2. As a reminder, cost of goods sold relates to our shipments of KORSUVA Injection to CSLV4. Research and development expenses were $25,500,000 for the 3 months ended September 30, 2023, compared to $24,700,000 in the same period of 2022. The slight increase in R and D expenses is primarily due to the increased clinical trial spend related to our 3 late stage clinical programs, offset by a decrease in stock based compensation expense.

Speaker 3

Also, R and D expenses for the 3 months ended September 30, 2022 included $5,000,000 related to a milestone paid to Antares Biopharma Inc. General and administrative expenses were essentially flat at $6,800,000 for the 3 months ended September 30, 2023 compared to 6.9 in the same period of 2022. Cash, cash equivalents and marketable securities at September 30, 2023 totaled 83 point $3,000,000 compared to $101,700,000 at June 30, 2023. The decrease of $18,400,000 this quarter was due to cash used in operating activities. Finally, We expect that our current unrestricted cash, cash equivalents and available for sales marketable securities, including the proceeds from our recently announced royalty financing and the collaborative revenue from our share of profit from KORSUVA will be sufficient to fund our currently anticipated operating plan into 2025.

Speaker 3

Now back to you, Chris.

Speaker 2

Thanks, Ryan. So in summary, I want to highlight the tremendous opportunity we see within our company. Cara's oral diphala Capulin franchise has significant potential and we know that the innovation in this product delivers value when used. We have 3 late stage programs in sizable indications, which in our view are not recognized by the market today. Our improved cash runway allows us to reach multiple value inflection points, which will start to display the potential of our pipeline.

Speaker 2

We believe that our KIND-one Part A readout in December represents the first milestone and we look forward to sharing the data. Now with that, Ryan, Joe, Scott and I will be happy to take your questions. So Latif, you could open up the line to Q and A.

Operator

Thank you. Our first question comes from the line of Joseph Stringer of Needham and Company.

Speaker 4

Hi. Thanks for taking my questions. Just on KIK1 and KIK2, can you provide any more detail on Some of the enrollment metrics, you mentioned that enrollment is tracking well and you're on scheduled for top line readout second half next year. But just curious on screen failure rates, are those in line with expectations? And What are some of the most common reasons for say a screening failure?

Speaker 4

And then, any plans to open additional target sites for either of those?

Speaker 2

Yes. Hey, Joey. Thanks for the question. Let me give that to Jo and she could address some of that.

Speaker 5

Yes, Joey. Yes. So as Chris I had mentioned earlier. So we are on track as per our anticipation of how the study should be running. We don't typically give any details Regarding the metrics.

Speaker 5

So at this stage, I won't comment on that, but I'm very pleased with it and on track with the readout next year.

Speaker 4

Okay, great. Thanks for taking our question.

Speaker 2

Thanks, Joey.

Operator

Thank you. Our next question comes from the line of Dennis Ding of Jefferies.

Speaker 6

Hi, this is Anthea on for Dennis. Thanks for taking our questions. 2 from us. First, What is your commercial strategy post TDAPA? And what is the best way to maximize KRYSTUVA value for shareholders in your view post CMS decision.

Speaker 6

And then secondly, What are any additional ways to extend cash runway beyond the royalty deal recently announced that you're looking at? Thank you.

Speaker 2

Thanks, Cynthia. Yes, let me tackle the first one. So here's our expectation. First of all, let me just say, We have a really great partner in CSL Vifor in the U. S.

Speaker 2

And what we expect given obviously The diminished sales potential due to the lack of funding that CMS put in place with the final rule, Yes, we think nothing will change in the promotional outlook for this year. But next year, we would expect More limited promotion from CSLV4 quite frankly, and that will be really tied to the diminished sales potential. So that's how we see kind of the promotional activities moving forward. And I think your

Speaker 7

So we

Speaker 3

are very pleased that the financing that we accomplished allows us to get through 3 very meaningful value inflection milestones for the company. And as you know, those are the Part A data in atopic dermatitis. That's the KIND the KIK-one and KIK-two readouts next year as well as Part A for The, Intatology Peristhetica. So we are in a position with our runway to get through those. So we're happy where we are at that point.

Speaker 3

So No comment on future financing needs.

Speaker 5

Okay. Thank you very much.

Speaker 2

Thanks Cynthia.

Operator

Thank you. Our next question comes from the line of Sumant Kalkani of Canaccord Genuity.

Speaker 8

Good afternoon. Thanks for taking our questions. I have 2. So the first is on your oral dessilekaphalin program for advanced CKD. Clearly reimbursement dynamics are very different for this market versus for the dialysis market on IV KORSUVA.

Speaker 8

But how confident are you in the commercial potential for treating itch in non dialysis CKD given this dynamic and how are you internally prioritizing your dollars for this indication versus ADNP because of what happened with the dialysis market here.

Speaker 2

Yes. Well, I think your first question, Sumant, is around the different ecosystem that both play in. I mean, KORSUVA Injection obviously plays in the most unique of reimbursement systems. And We talked about that in some of my prepared remarks and that's in a bundled system and that will not play that's not the system that oral diphala, Eflin Advanced CKD will launch into. It's more of a what we're used to more of a traditional retail pharmaceutical market.

Speaker 2

We're really very bullish on advanced CKD. Again, we estimate the addressable relation of around 300,000. There's roughly 1,200,000 Stage 4 and 5 and around 30% of them Are identified to have moderate or severe itch. I think the other thing we've learned, even marketing to nephrologists or CSL has done is that There is a significant unmet need and these patients with this debilitating severe itch have significant implications on their quality of life. So listen, end of the day, if funding were available for KORSUV injection, we think that product would have Very long runway.

Speaker 2

With oral diphila Kapalene, we're really pleased. I think your other question that you asked around AD and how we prioritize AD, Nautilus prosthetic and CKD. I mean, if you're asking me what my favorite child is, I won't say that. I think all three are incredibly valuable programs. They all have very sizable addressable patient populations And they all have one thing in common, there's no available treatments.

Speaker 2

We would be the 1st FDA approved treatments across these three indications. It's a really differentiated positioning to be in. That's why we're so excited about and we've always been excited about the oral pipeline.

Speaker 8

And then as you go into Part A of KIND-one, what exactly do you expect to report externally? Given Part A is not powered for statistical significance. I think you used the term that it would be a good proxy for Part B. So what would be a good outcome on Part A and what might not be a good outcome?

Speaker 2

Sure. Let me turn that to Jo.

Speaker 5

Yes. Thanks, Sumant. So, for Part A, designed really as to gather additional information for our pivotal program. So it's not been powered to show statistical significance, But importantly, it has the appropriate number of patients for us to be able to assess what the sample size needs to be and to be able to select a favorable dose for moving forward to the pivotal program. So that's exactly what we intend to use that data for.

Speaker 5

So we're comfortable with the patient numbers and what we can glean from that.

Speaker 8

Thank you.

Speaker 2

Thanks, Sumant.

Operator

Thank you. Our next question comes from the line of David Amsellem of Piper Sandler.

Speaker 7

Hey, thanks. This is Tim on for David. Just two from us. First, could you provide some color on the inventory burn that we should expect toward the end of the year? I know you had previously guided to depleting that built up inventory towards the back half of the year, but given the lumpiness this quarter, we just want to get your thoughts there.

Speaker 7

And then second and relatedly, how does this tie into your thinking around your cash flow runway? I know this will ask the 4th, I guess I'll ask more directly, is monetizing oral DfK in some way on the table. Thanks.

Speaker 2

Super. So let me address the first one around the inventory. I mean, Listen, I mentioned on the call given the rule, we've already seen some of the implications. I mean one thing that happened is Fresenius Is now reallocating their remaining inventory in the roughly 1,000 clinics that have not started a patient on yet and are actually reallocating that to the clinics that are. So net net, what that's going to mean is, I mentioned the next two quarters, you're going to see Further disconnection in terms of demand and sales, especially at the Fresenius side.

Speaker 2

But I think The bigger picture there, Tim, is longer term given the lack of funding from CMS that we're incredibly disappointed in And I think we'll have broader implications on any innovation going forward. But given the lack of funding, that's going to have significant downward pressure in both demand and sales moving forward. I think that's the big takeaway. And on the cash runway, let me tell you.

Speaker 3

Yes. So, I think To kind of answer the second part of your cash wondering question first, we've always been very explicit that we are not going to stand up ex U. S. Sales force for oral diphala Kathleen. So yes, we are looking to continue that effort to find a partner for ex U.

Speaker 3

S. For ole diphila cafflin. So that is a part of our plans. Obviously, it's not included in my cash runway that I gave you.

Operator

Our next question comes from the line of Annabel Samimy of Stifel. Please go ahead Annabel.

Speaker 9

Hi, thanks for taking my question. I just wanted to get a little bit more granular on, what you might report out The thresholds that you were looking at to have made, a go no good decision on whatever dose it is or the sample size that you're looking at. Is it the standard WNRS scores on an absolute basis or on a response rate basis, are we going to see any of that kind of data? Or is it just dose and trial size or statistical powering and that's it? And then, the second question I have is, I guess, Yes, you mentioned that 80% of your enrolled patients have a biosurface area of less than 10%.

Speaker 9

So that means It's Dominic. Do you have any expectation that the patients with a greater than 10% body surface area might Do you think in any strange way or do you feel like you've hired enough to sort of offset some of that? Thanks.

Speaker 2

No, absolutely Annabel. Great questions. Let me turn it to Joe.

Speaker 5

Thank you Annabel. So first on what we report out, we intend to report out the top line efficacy and safety data. So more than what we had originally stated of just the dose and the sample size. So sort of the typical top line data that we have provided. So that includes the 4 point response analysis.

Speaker 5

Then to address your second question, Indeed, we've always targeted this mild to moderate patient population who are very itchy. It is the dominant phenotype, as that is what we saw the greatest signal in and we're very happy and pleased by enriching the study that we have landed with 80% of the patient population having a body surface area of less than 10%. Notably, this study is different to our care program in the sense that we are now adding diphala kephalin to topical corticosteroids. So the patients have a greater than 10% body surface area now have a topical corticosteroid to address the skin lesions And as such, bring the atopic dermatitis down to a milder form and really represent a dominant AD. So we feel comfortable with that.

Speaker 5

And in addition, just the mechanism of action of Daphyla Kefelin being differentiated from the topical corticosteroid as predominantly neuromodulatory in AD, we believe that it could have an additive benefit to these patients. So quite comfortable with that additional patient population who may have greater than 10% body surface area.

Speaker 9

Okay, great. That's very helpful. And if I

Speaker 5

could just

Speaker 9

clarify for KORSUVA Injection, should we just assume that post April, the dialysis providers just won't be incentivized to use it regardless of whether their patients Are responding to treatment or asking for the treatment. Is it just not something that they'll be willing to purchase because they're not getting the right reimbursement.

Speaker 2

Well, Annabel, I think end of the day, policy Funding will drive prescribing behavior, I mean, quite simply. And what we would anticipate happening It is kind of what we saw in the Parsabiv world a couple of years ago, where you saw significant Policy decisions being made at the DO level, I. E. Restricting or even stopping access to this drug. I mean, Vifor will continue to make this drug available, that's for sure.

Speaker 2

But we think policy will dictate The future of this product and given the lack of funding, I think there'll be protocols and policies put in place at the DO level To severely limit access, which is incredibly unfortunate given the reports we've heard with the patients on this drug, Incredibly disappointed.

Speaker 9

Yes. Okay, great. Thank you.

Speaker 3

Yes.

Operator

Thank you. Our next question comes from the line of Orin Libnick of H. C. Wainwright.

Speaker 10

Thanks for taking my question. I want to focus on the upcoming TIME-one Part A data. Just to build on, I guess Annabel's question and others before. Can you help us now with any sort of theoretical expectations around what a clinically meaningful improvement in pruritus would even look like And this population interview or based on your conversations with KOLs, I'm thinking we've all seen data in labels for older or more recent biologics or maybe JAKs. And I'm trying to understand if the difference in this population, The characteristics and perhaps being on top of steroids, which most, if not all, haven't been for those other ones.

Speaker 10

What Do you think we should be looking for because I know you're not powered for stats, but I'm just trying to figure out what even just magnitude of pruritus reduction From baseline is even expected this kind of population.

Speaker 2

Absolutely. Let me give that to Joe, Oren.

Speaker 5

Thanks, Oren. It's a great question. So First of all, I think just to highlight that our study is unique and that the patient population that we have included in Kind one part A has not been investigated before in clinical studies. This is mild to moderate patients who are very itchy. It's an itch dominant patient population.

Speaker 5

So we cannot use prior history from biological JAK studies. Those are only approved for moderate to severe. So having said that, we are conducting the study to have a better understanding of what the data would look like, Right, so that it can inform us for our pivotal program. Of course, our primary endpoint is looking at the 4 point responder analysis, which is key, But we have not powered the study to show statistical significance. We do have internal threshold that we will use to guide us in making an assessment.

Speaker 5

And those have been vetted by dermatologists, but key opinion leaders as well as community derms. But those are internal thresholds, which will guide us. So this data is really unique data, which we need to learn from to apply to our pivotal program.

Speaker 10

So clearly this is a go, no go based on your own and your KOLs input on what's clinically meaningful. I guess when we think about projecting forward, Is this more of a commercial hurdle? What is in fact clinically meaningful? Or do you think it's regulatory such that If you could power this up enough to get stat sig on a small improvement on Relative Improvement of Pruritus versus TCS. Is that still likely an approvable product in your mind?

Speaker 10

And it's just a question of How the commercial uptake would be? Or do you think there is in fact an FDA hurdle?

Speaker 2

I'll let Joe tackle the first on the regulatory side and then I'll tackle the commercial side.

Speaker 5

Yes. So from a regulatory perspective, we know what we need to do in our pivotal program And that's a 4 point response. We need to demonstrate that that is statistically significant from our comparator. The regulators have assessed the 4 point as what is clinically meaningful. So that's from a regulatory perspective and that's what our pivotal program will demonstrate.

Speaker 5

Our first part of the program is really to provide us with the information to be able to ensure that the pivotal program is designed accordingly and powered accordingly so that we can achieve that and Achieve Regulatory Success.

Speaker 2

Yes. I'd say, Lauren, on the commercial side, where we're very excited is the position that It's both our clinical and commercial position quite frankly and that's in the mild to moderate space with these patients being incredibly itchy. And in fact, Chronic pruritus is the most dominant feature in the mild to moderate space. Lesions aren't they're necessarily their biggest concern is severe itch and it's chronic. What's currently being used are topicals, namely topical steroids.

Speaker 2

As Joe mentioned, they have their own limitations. Even some of the newer topical therapies, You have limitations on chronicity of use. So we would be the 1st and only oral systemic antipyretic agent in this space. So we think we've carved out a really significant space. That's how our clinical programs design And that's the feedback we hear on the unmet need in this space.

Speaker 2

And it's a sizable market opportunity and we estimated over 3,000,000 patients. So that's from a commercial side.

Speaker 10

All right. Thank you. I look forward to the data.

Speaker 7

You got it.

Operator

Thank you. I would now like to turn the conference back to Chris Posner for closing remarks. Sir?

Speaker 2

Yes. I'd like to wish everybody a great evening and hopefully a great upcoming holiday.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Cara Therapeutics Q3 2023
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