CARA - Bull Thesis
Posted 7/7/2022
BULL THESIS
CARA overall corporate and summary
Low burn rate, with cash through mid-2024
Vifor-Fresenius owns a stake in CARA and with approved lead drug and co-marketing is a logical potential acquirer
Value opportunity
Recently approved drug (IV Korsuva) launched in April 2022 in significant market (IV CKD) to treat major unmet need (itching), with ample cash thru Q2 2022,, yet Enterprise Value is only ~500M
Catalyst in 2022
Early revenue/adoption/pricing after April could be impactful For Q2 and esp. Q3 report outs
Readouts in 2022
Q2 Ph2 Notalgia Paresthetica (NP) - positive top end with 19% discontinuation rate
Q4 Ph2 Pimary Biliary Cholangitis (PBC)
Korsuva (IV and oral) is possible pipeline in a product for treating severe itch
Oral phase 3 trials in CKD and AP appear to be patient populations and doses that should set them up for success by balancing efficacy and safety based on Phase 2 data
Oral proof of concept data establishes that oral Korsuva (DFK) has efficacy across many different types of pruritic conditions
BULL THESIS (Detailed)
IV Korsuva
Recently approved to treat pruritus in diabetic patients on dialysis
Market is substantial (over ~200K in U.S.)
Launched in April 2022 and approved by EC as Kapruvia expect EU decision in H2 2022
Triggered $15M milestone payment
Expect KORSUVA to be reimbursed favorably for a therapeutic in the dialysis setting
Outside ESRD bundle for 2 yrs under TDAPA and optimistic will be funded in bundle post-TDAPA
1st product of this type (Amgen - Parsabiv) had $1.4B revenue in 1st 3 yrs
Approved in August 2021, only approved treatment for CKD-associated pruritus in adults undergoing hemodialysis
Addresses a significant unmet medical need
Hemodialysis is a highly consolidated market - rapid uptake is a realistic possibility
Partnered with Vifor under favorable financial terms
Established commercial organization in dialysis
Included substantial equity investment in CARA
CARA will receive 60% of profits from sales in U.S.
Established Ex-US commercial partners in EU, Japan, and South Korea
Oral Korsuva
Much larger market than IV
CARA retains all rights to oral Korsuva currently
Proof of concept data obtained in Notalga Paresthetica (NP), chronic kidney disease (CKD) and atopic derm
Ph2 trial to treat pruritus in CKD met primary endpoint in the intent to treat population (p=0.018)
Ph2 trial to treat pruritus in atopic dermatitis met primary endpoint in mild-to-moderate patient subgroup
Ph2 trial in NP met primary and key secondary endpoints (p<.01)
Initiated multiple Phase 3 trials in CKD and AD
Smart dosing and patient population choices balancing safety and efficacy from Phase 2 data position the trials well for success
Phase 2 trials in PBC are expecting data near end 2022, and market should not be negatively surprised by data
Consistent and acceptable safety profile with treatment AEs that manifiest early
FS/MV 6/30/2022
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