Cara Therapeutics (CARA) Gains as VF Comes to Rescue

Cara Therapeutics’ (NASDAQ:CARA) long-suffering bulls finally have reason to celebrate: The biotech firm announced this morning a license and co-promotion agreement with Vifor Fresenius Medical Care Renal Pharma (VF). The agreement relates to KORSUVA (CR845) in the renal dialysis setting. VF is gaining commercial rights for the treatment of pruritus in hemodialysis worldwide, excluding U.S., Japan, and S Korea. In the U.S., VF and Cara will co-promote the drug in Fresenius dialysis clinics. Cara retains rights to the IV formulation in all indications in the U.S. outside of Fresenius facilities as well as all WW rights to the oral formulation.

Under the terms of the Agreement, Cara will receive an upfront payment in the amount of $50 million in cash and an equity investment of $20 million to acquire Cara common stock at a price of approximately $17/share. Cara will also be eligible to receive additional payments of up to $470 million, which includes $30 million in regulatory and up to $440 million in tiered commercial milestones that are all sales related. Cara is also eligible to receive tiered royalties based on net sales of KORSUVA injection in the licensed territories.

Cara shares reacted to the news, skyrocketing nearly 30% to $15.10, after flirting with their 52-week low yesterday.

“As a global leader in providing treatment for chronic kidney disease patients, VFMCRP is an ideal partner to bring KORSUVA injection to dialysis patients across Europe and other licensed territories,” said Derek Chalmers, Ph.D., D.Sc., President and Chief Executive Officer of Cara Therapeutics. “Additionally, we believe the ability to leverage VFMCRP’s nephrology-focused commercial expertise in our co-promotion partnership for U.S. Fresenius Medical Care dialysis facilities will provide significant momentum for adoption of KORSUVA injection, if approved in the U.S. Importantly, we continue to retain all rights to KORSUVA/CR845 in other indications.”

“CR845 injection is a first-in-class, innovative investigational medicine for treating a highly debilitating disease. It is a natural fit to our leading product portfolio in nephrology, and we look forward to making it available to patients who urgently need better therapy,” said Stefan Schulze, Vifor Pharma President of the Executive Committee and COO. “Sixty to 70% of dialysis patients experience CKD-aP. Nearly 20% suffer from a very severe form, which is associated with much lower survival. And despite this clear unmet medical need, there is no approved treatment for CKD-aP in Europe or the U.S. CR845 does not penetrate the brain and so bypasses unwanted side-effects like opioid addiction. It has significant potential for setting new standards in providing relief, both from CKD- induced itching and post-operative pain.”

Analyst Ratings

Cara Therapeutics has one of the best ratings by the Street. TipRanks reveals that Cara has a Strong Buy analyst consensus rating with 8 back-to-back buy ratings in the last 12 months. Meanwhile the average analyst price target of $24.63 suggests the stock still has upside potential of just over 60% from the current share price for the next 12 months.

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