All right. Good morning, everyone, and welcome to the Cara Therapeutics presentation. Well, presentation, fireside chat rather. Happy to have the team here, the most important, we'll say, Jo Goncalves. I never say your name correctly, but- Goncalves. Goncalves, I apologize. No worries. CMO, and of course, Chris Posner, CEO, and I know that Ryan is hiding in the back over there, CFO. And, Cara, as you know, has been developing kappa-opioid receptor agonist, and oral difelikefalin for the treatment of pruritus across a number of pruritic conditions. And, we're coming into a period where you're gonna start reporting out some important data, in first in AD, then following with CKD pre-dialysis, as well as notalgia paresthetica. I apologize, NP for short. So, that's exciting. The mechanism is validated. It's already approved in the hemodialysis population, which is a whole other stor. But we're gonna probably focus more on the oral part because that's probably gonna be the biggest value driver for shares. So, I will ask you about Korsuva injection, but I'll save that for the very end when we run out of time, because that's not the most exciting part of the story. You got it. So maybe we can just start with AD. Well, I don't know. I gave you your quick overview, so do you want to add anything more to that? I could take the mic off and just leave now. Okay, so. I mean, that was a heck of an overview. I think it's important, you know, I always kind of start these as our mission has been unwavering, right? We want to be the world leader in chronic pruritus, and that's what drives us and drives our company. And we have three really exciting late-stage programs, and we'll talk about that today. I would also say, you know, the recent financing has now extended our runway, allowing us, as we like to say, turn over each of these data cards well into next year and into 2024, early 2025. So you're really kind of excited where we are with three late-stage programs that all address sizable populations. Mm-hmm. And then, you know, we could start with AD. Yeah. It's the most near-term readout this December for top-line efficacy and safety. Yeah. So let's, let's talk about that. So part one of, Part A of KIND 1, rather, which is the oral DFK in atopic dermatitis, that is, gonna be... You're exploring it on top of standard topical steroids, because that's what the standard of care is right now. And you're exploring it in a... I guess before I go into exactly the trial design, maybe you can just first tell us the population that you're exploring it for and how this trial specifically is different than the last trial? Mm-hmm... that you conducted, where we started seeing evidence that there's activity in AD. Yeah. So thanks, Annabel. So the phase II study that we had conducted was really to provide us with key information for this program, and we needed to understand if the drug is effective and in which patient population it's most effective, and we got that. We saw that the best efficacy was in patients who had an itch-dominant atopic dermatitis. And what do we mean by that? It's patients who have a body surface area of less than 10%, but who are very itchy. And so taking those learnings from that study, we developed this program, the phase III program, and this first part of the program is really to provide us with information so that we can run the pivotal program. Mm-hmm. The pivotal studies, should I say. So we are focusing on that itch-dominant patient population where we saw the most efficacy, so we enriched for that in the study. We've landed up with 80% of patients who have a BSA of less than 10%, and who have a NRS of greater than seven, so exactly what we were looking for. Mm-hmm. In this study, we are using it on top of topical corticosteroids, because that's, as you mentioned, is how it will be used in the real world. We are providing patients with a topical corticosteroid. It's a mid-potent steroid, and it is there to be used on the skin lesions. Mm-hmm. Once the skin lesions are controlled, then they stop it. This is, as I said, it's the way it's intended to be used in real world, and our phase II study was monotherapy, so that's another difference as well. Mm-hmm. Okay, so just to get to this topical aspect of it, is it established that topical steroids do not have an impact on itch? Yeah. It's just strictly for the inflammatory lesions? Well, so topical corticosteroids, the mechanism of action, that they are anti-inflammatory agents, and so the strongest effect is really on the skin lesions. They may address some of the itch for sure, but they may not address it effectively and comprehensively. And especially in these patients as well, who have very little skin lesions, but they're itching everywhere. Like, where do you actually apply that topical now, right? And so it remains the gold standard. That is why we are using that. Mm-hmm. And we really see, and we know that there's an unmet need in this patient population for something additional to address the itch, because our antihistamines get used abundantly in these patients, and they don't work because it's not a histamine-driven itch in AD. So we know that there's a need for something else to be added to it, and that is why we designed the study the way we have, and it will be added on top of it when they're not getting that itch relief just from the topical corticosteroids. Okay. And how is the you mentioned that 80% of the population has less than 10% body surface area in the lesions, but 20% have greater than 10%? Yeah. Do you feel that the greater than 10% population might skew it in any way, where they become, I guess, more lesion dominant rather than itch dominant? Yeah. I mean, how might that affect the trial? Well, we feel confident about allowing those patients in the study, because this study now has the topical corticosteroids, so they should be addressing those skin lesions, and really bringing down the, AD into a milder patient population. So ultimately, really representing the itch dominant. So we feel comfortable because we have the steroid now to address it. We also feel confident that these mechanism of actions are different, right? Mm-hmm. So the steroid and difelikefalin. So difelikefalin could potentially have an additive effect, bringing in more of a neuromodulatory action. Mm-hmm. And so address that, you know, the pruritus on top of the anti-inflammatory agent. Okay. So we feel good about that. All right, so I just want to go back to the other phase II for a minute. Please. I will move on to this phase, this part coming up. But, I guess the one thing that, you know, has gotten Wall Street hung up on the prior phase II, is that it wasn't, technically fully successful. Because you had a much more moderate to severe, lesion-driven population in there. And, you know, presumably, they would have had a response to itch, but not exactly the response that you would have expected from the mild population. So just help people get comfortable with the different populations you looked at, and why that mild population is going to have the response that you want, versus the moderate population, where maybe they were focused more on the lesions. I don't know. Yeah. So maybe just help people understand and why it actually wasn't a failed trial the way people just assume it to be. Yeah. We certainly didn't see it as a failed study. We saw it providing us with exactly what we needed. That's why we do these phase II studies, to learn and to understand which patient population to focus on. And so what that study showed us was that in the patients who had a body surface area of less than 10%, that's where the drug was most effective. Mm-hmm. It was used only as monotherapy in that study. So, that's important to note the difference that we're now using in this. You know, how difelikefalin is being used in this study. So we enriched for the patient population. Here, 80% of them have a body surface area less than 10%. We allowed a small proportion of patients to come in greater than 10% because we have topical corticosteroids now there, so we feel comfortable. So that study did exactly what it needed to do. Mm-hmm. It provided us the information for us, which, on which patient population we need to focus on now. Okay. So coming into this, Part A data release, the Part A is designed as, you know, to, for you to identify the right dose on top of the topical steroids, as well as to identify the sizing. Right. For the next stage. But you're going to be releasing more data. So can you just go through what we're going to see? Yeah. You know, that's what you're going to present public-facing for us to understand what kind of success you'll have in the next stage. Yeah. So we're going to be releasing top line data, just typically as one would present, our primary endpoint, the 4-point responder analysis, and safety endpoints as well. And, and then, of course, inform on which dose we will select moving forward, as well as the sample size. So that, you know, we believe then, that the investment community can then, you know, see the data and it will help contextualize why we're moving forward into the pivotal program. Importantly, as well, I mean, we've designed this program like this, so to be able to give us information for the pivotal studies, right? This is a very unique study. There are no other studies that have looked at this patient population, and so that's why we're doing it, really to de-risk the pivotal studies. Yeah. We need to generate that data so we understand what that sample size is and design the study accordingly. So that's really important. But it's not designed with sufficient powering for statistical significance. Exactly. So how will you know exactly whether it works or not? Absolutely. That's a good point. So it's not been designed to show statistical significance. We have the appropriate number of patients to give us that information. Yeah. We need to know which dose to move forward with, and we need to assess what that treatment effect is like. You don't need to power a study in order to give you that information. Mm-hmm. We have the appropriate number of patients to assess that, and then to be able to power the pivotal studies accordingly. And that, you know, that just allows us to do things efficiently and fast. Mm-hmm. Otherwise, you know, if you're powering to get this information, it would have taken a much longer time. Yeah. Okay, got it. And so just can you remind us what you assume will be the placebo response in this? If it's not powered accordingly what do you assume will be the placebo response? Yeah. Well, so importantly, we need to look at the topical corticosteroid. That's our comparator. And so what will the topical corticosteroid response be? We don't quite know for this patient population. That's why we're conducting the study. And the reason for that is that in patients with mild to moderate AD, whereby the topicals are approved in that space, they don't compare versus a topical corticosteroid. Mm-hmm. They compare versus vehicle, and the duration is quite different. They either have a 4-week study or an 8-week study. So we can't really extrapolate what a topical corticosteroid effect is like, 'cause it's not there, and the study design is different. And then if you look at the moderate-to-severe space, well, that's not relevant because those patients all need to have a body surface area of at least 10% or greater to be part of those studies. So that leaves us with, well, we don't have anything to really extrapolate. We're doing the study to understand that steroid response, and based on that, we will then use that to determine our sample size. We're obviously gonna be prudent in assessing that. We're not gonna run a study of 3,000 people. We need to see separation from a steroid. That's gonna be... allow us to have an operational, viable study. Mm-hmm. So, you know, that will all be taken into account for sure, and we've got internal thresholds that we've vetted with the steering committee as well as with community dermatologists to help guide us in making that decision. Okay. All right. And are there any internal thresholds that are beyond just the 4-point responder? Well, it's predominantly the four-point responder because that's, you know, that's obviously our primary endpoint. But we have to take into account and look at the data comprehensively at the benefit-risk profile, because tolerability, of course, is really important especially for AD patients. Okay. The other question that we get a lot from investors, and everyone sees obviously a lot of development in the AD space, primarily biologics. Mm-hmm. Also, you get, you know, you have some other orals that are being developed, and they all have an impact on pruritus. So I guess, you know, the default idea is that it's a very crowded space. Mm-hmm. But is anyone actually developing anything in this mild to moderate population? Are those drugs that are being developed that have an impact on AD, that have an impact on pruritus, in the populations that you're looking at? Yeah. So, so great question, and just, and I think that's important because everyone thinks it's a very crowded space. But as you mentioned, all those orals and biologics, those are only for the moderate to severe patient population, which we are not addressing. And they're very effective, and they've really revolutionized the way AD is managed. If we look at the mild to moderate space, there are some drugs who are very effective. I mean, if you look at, you know, the JAK inhibitors, very effective for pruritus. However, it still remains to be a topical therapy. It's still not first-line therapy. Mm-hmm. There are other limitations, right? It's limitations of a topical, of compliance, of duration, of use, et cetera. So we still remain... Like, we're still very confident about the position, is that it's on top of topical corticosteroids. Topical corticosteroids is the gold standard and the first-line treatment for mild to moderate patients. So we're not displacing it. We're not displacing it. Mm-hmm. Well, they're not getting enough effect, you add oral difelikefalin on top of it. And it, to answer your question directly, there's no oral drug that is looking and targeting pruritus. We are the only ones, and we do provide a unique profile beyond the topicals in the space. Yeah, I'll just conclude, Annabel, we're the only oral systemic therapy being developed for mild to moderate AD. It's a segment, about 9 million patients, that is dominated by topicals. The JAKs, are they in that mild to moderate population, are they approved for a certain body surface area as well? The topical JAK? Yeah. Yeah. So it is, it's limited by body surface area. It's limited also by duration of use and actually amount of use. If you look at the label, there's, there's a lot of restriction. Okay. All right. So it's not just an easy thing to just apply to leave it on. It's topical JAK, yeah. Yeah. I mean, you know, Jo said, you cannot use it on a continuous basis. I think the thing that gets missed here, too, is we're talking about chronic pruritus. Mm-hmm. You know, you've gotta use... You know, this is persistent at least over six weeks. So I mean, using a topical JAK is challenged in that treatment for chronic pruritus. What's the time limitation on the JAK? I'm not sure offhand. Is it? Sorry, I think it's eight weeks. Eight weeks? Yeah. Yeah. I'd just have to look at that. Yeah. But there's a limited duration, for sure. Yep. Okay. Well, I mean, I guess we're all excited to see this date. It's gonna be December obviously before the end of the year. Yep. Hopefully not during the Christmas, New Year's period. Just suggesting. Okay, moving on to CKD-AP, the KICK Program, this is a little bit... There's two pivotal studies. There's not as many parts to this. This is just straight, you've identified the dose, you've identified, the population that you want to be in. And again, Wall Street has this impression that oral difelikefalin, oral DFK rather, was not successful in this trial. But what is it that you have done in this pivotal program that was not done in the phase II that gives you comfort that we're gonna have an active program here? Yeah. Again, you know, we found the phase II program to be successful because, again, it gave us what we needed. It helped us identify the patient population. Wall Street's got a lot of interesting views. I know. But you know, we conduct phase II studies for a reason, and that's to give us information to develop a phase III program. I mean, if you were going to develop them as huge studies, well, you would never finish a program. So it gave us the information, it gave us the understanding of the dose, it gave... and specifically the patient population. And we understood that the itch in patients who had Stage 3 is a lot more labile. It's not, the characteristics are not the same as patients who have Stage 4 and 5, who are much more aligned with the hemodialysis-... patient population and the itch characteristics. So we learned from that, and that's what we've taken forward into KICK 1 and 2. We've taken that advanced CKD patient population really focused on them. Other learnings, we needed to make sure that patients had chronic pruritus for a longer duration, making sure that, you know, it wasn't waxing and waning. Mm-hmm. So they need to have at least six months of chronic pruritus. They need to not have been responsive to topical therapy, because a systemic itch typically isn't. So, you know, making sure that there's a failed response there. So these were like key insights that we've now applied into the KICK Program. Mm-hmm. You know, to be able to control that placebo response, because that was one of the criticisms, that the placebo response was too high. Mm-hmm. And so we believe that by focusing on this patient population and controlling some of these entry criteria, we should be able to control it. Okay. And what kind of rescue are you allowing in this trial? In the KICK Program, no rescue per se, but patients are allowed to come into the study on background meds. Just as we've done with IV Korsuva, just as we did in the phase II study. As long as they come in on a consistent dose, that they're not altering that dose, and they maintain that throughout the program. That they're not fluctuating on what they're using. But they're allowed. They're allowed antihistamines, they're allowed gabapentin as long as it's a controlled dose that they're coming in and maintaining. These two trials are running in parallel with each other? Parallel. How is the enrollment for both of them? Yeah, I mean. Given that they're running in parallel? So KICK 2, as I think we mentioned right up front, operationally just started a little bit afterwards, just to stagger it for operational purposes, but they're running pretty much concurrently. KICK 1 is U.S. only, and KICK 2 is U.S. and ex-U.S., and enrolling well, according to what we have stated, which is top line data, second half of 2024. Mm-hmm. Okay. All right, and is there... I mean, given that it's in CKD and this is an oral, it's not given with the dialysis treatment, what kind of safety endpoints are you looking at, given that these patients have kidney compromise? Yeah. So, well, we always look comprehensively at safety. Mm-hmm. We look at serious adverse events, adverse events, and discontinuations, and we monitor that very carefully throughout the study program. There's a data safety monitoring board as well, who looks at the data. You know, and to date, we, you know, have been pleased with how the study is going and the safety profile of the drug. Have you stated the percent enrollment you have right now? We haven't. No, Kate. No? Okay. All right, but. On track Presumably, it's on track. Okay. And then I also want to talk about notalgia paresthetica, because this is an indication that is not as familiar to people, and it's surprisingly very large. Mm-hmm. The phase II data were the cleanes of the three phase IIIs that you or three phase IIs that you've already conducted. Yeah. So much so that it was published. Mm-hmm. Maybe you can tell us a little bit about this indication, what this trial is. Is it just a proof of concept? You've done the proof of concept. Mm-hmm. What is this next stage that you're conducting right now? Yeah. We were very excited about the data, and it was published in New England Journal, so it really got the attention. Mm-hmm. You know, they usually publish in New England Journal due to an unmet need and the credibility of the data, so we felt good about that. That was really just a proof of concept study. We took the highest dose because we only took one dose just to understand if there was efficacy. This study now is looking at a dose-finding portion of the program. So we've taken three doses, the lowest dose, 0.25 mg, 1 mg, and 2 mg, twice daily, and looking at patients' itch for eight weeks. Mm-hmm. Based on this data, we will be able to select the dose as well as assess the sample size moving forward into the pivotal program. This is used completely as monotherapy, no background use of any therapies, not on top of topical corticosteroids just as monotherapy. Remind us, the dose that you did in the proof of concept was 1 mg? Was 2 mg. It was 2 mg. Twice daily. You're comfortable going lower. Yeah. B ecause of the extent of the efficacy that you saw in? Not so much. More so, in the sense that in all our phase II studies, you may recall, even with the IV, we haven't really seen a dose effect with the doses that we've used, and that's really because this is an agonist, and you just need a little bit of drug to activate the receptor. So generally, we see quite a muted dose response as you may recall, when you look back at our studies, our phase II studies. So we believe that, you know, we could even have effect with a 0.25 here. Really, what alters the way we assess the dose selection is really, to date, been mostly on the tolerability. Mm-hmm. So although that the efficacy seems to be muted across the doses, there seems to be a little bit of a tolerability difference, and we want to bring the lowest, most favorable tolerability profile. What tolerability issues did you see at the 2-mg level? So what we saw, what we see consistently across, in AD and NP, was GI. So we saw abdominal pain and some nausea. Those were the two that were mostly higher in the 2 mg and the 1 mg when we looked at AD as well. Mm-hmm. It was GI effects. So we really want to try and control that and bring that lower as much as possible. Okay. All right, great. Okay, and then you're not... Okay, got it. All right. I'm gonna move over to. You're gonna move over to the IV course. Yeah, yeah, your favorite topic. Obviously, the outcome of the CMS final decision, did not go in your favor. I'm not gonna say despite all your negotiation, 'cause it's not a negotiation, it's probably lobbying as opposed to negotiation. Mm-hmm. You know, at this point, what should we think about the sales of Korsuva injection? Yeah. I mean, the product is valuable 'cause it validated that the product's efficacy. Right. You know, there's efficaciousness, there's efficacy. Mm-hmm. That's great for your oral programs. Mm-hmm. But what kind of value does this bring to you now at this point? Well, one thing I would say, Annabel, it's bad for all patients. Yeah. On dialysis, not just for Korsuva. Clearly, you know, it's gonna have a major impact on us, but it's gonna stifle innovation in that space, period. So as we're, you know, we're thinking about IV Korsuva moving forward, there's gonna be a dramatic decline in both demand and sales. We're looking at our company with that not being a strategic contributor from a cash standpoint. And remember, for Cara, that's what that was. I mean, you know, it obviously proved our molecule. We, you know, kinda navigated a new regulatory pathway, which was great, and that'll obviously help our oral platform. But, you know, listen, I mean, given the fact that we know the product works, we know it's safe, payers won't pay for it, i.e., CMS won't pay for it. And we already saw some of the repercussions from that. You know, the major customer, you know, for CSL is Fresenius. They've already reallocated some of the product they had bought last year to the clinics that are already ordering, essentially saying: Don't start new patients on this. Mm-hmm. You know, that's how we see this playing out. Do you know what's gonna happen to the patients who are on treatment now? Are they just gonna lose? We don't know. I mean, we anticipate they're gonna stay on. Mm-hmm. You know, there's a natural attrition. I'm sure that, you know, unfortunately, there's a, you know... In dialysis, these are very sick patients. But, yeah, the expectation is that, yeah, these patients hopefully stay on therapy. But bottom line is that policy will be changed at the dialysis level. We think protocols will change, making access, you know, incredibly restrictive. Mm-hmm. Well, I guess the unfortunate part about this as well is that you may not necessarily see the sales milestones that you might have expected from CSL before. Correct. And we recognize. They were sizable. They were sizable. Yeah. But we recognized some of this, you know, when we saw the proposed rule in June. And, you know, listen, I think the mark of a good company is you expect the unexpected. Mm-hmm. We saw this proposed rule, and, you know, that kind of led to, okay, we need to think about our company in order to fund our pipeline, and that was the work Ryan did, you know, over the last couple of months around the monetization of royalties. It also shows you, you know, kind of the belief in Korsuva when payers will pay for it. Right. Um, yeah. Why don't you just talk about how it's doing in Europe versus how it's done here, and, you know, why you're able to get such a, you know, nice monetization there? Yeah. Well, just I'll work backwards. I mean, we monetized our ex-U.S. royalties for Korsuva, as and Kapruvia, you know, Kapruvia in Europe and obviously Korsuva in Japan to $240 million. We'll collect roughly $37.5 million this quarter, actually, and then $2.5 million milestone, you know, next year, pending sales in Japan. So, you know, in Europe, it launched late last year. It's launched in roughly 15-17 countries around there. It's done really well. It's done better than internal expectations from CSL, and obviously, that led to a very fruitful discussion with our royalty partner on monetizing that. Japan, you know, Japan just recently got approved, right? You know, the launch probably will happen very soon, obviously. Mm-hmm. Well, you know, we were always excited about the Japan market. Well, Japan has already a drug available. Yeah. For pruritus. For pruritus, an oral drug called Remitch. Uh-huh. You're right. How large was that product? It peaked at $150 million a t one point. It's now gone generic, so it's gone down, but it peaked at $150 million. So I know, you know, our partners, Maruho, they're really excited about the potential for this product. Mm-hmm. Clearly, you know, from a royalty partner standpoint, they're excited as well. Yeah. So I mean, just to go back to this $40 million deal, it gets you to three data points: the AD data point, CKD data point, as well as an NP, Part A data point. Yep. Then after that, I guess you're gonna need to consider other sources of financing. That's right. F or the remainder of the program. So what are some of the options that you're looking at? Mm-hmm. Obviously, you've got three very large itch indication, this partnership in the works here. Yeah. You know, so you just said it right. I mean, we really wanted to make sure we could fund through really key data milestones and we have that. We have done that in each of our three programs. You know, one thing that's not contemplated, and I've said very publicly, is that we're looking at ex-U.S. partnerships. Mm-hmm. That's not contemplated in the runway. That's another potential source. And yeah, I mean, you know, we got these data events, and we'll see how they go, and obviously, you know, we want to fund these programs through fruition. Okay. Great. Well, hopefully, we can see a good data event, and we'll get some more non-dilutive interest, funding available. I think we're out of time unfortunately. Always happens to me. Thanks, Annabel. Thanks. Thank you. Appreciate it. Thanks for having us.