My name is Dennis Ding, biotech analyst here at Jefferies. Welcome to the 2023 London Healthcare Conference, and I'm very pleased to have Cara Therapeutics and Chief Strategy Officer Iris Francesconi here to talk a little bit about you know all that has been going on at Cara- Mm-hmm. -this year. You guys just reported third quarters- Yeah. you know, last week or this week, actually. Mm-hmm. So maybe talk about, you know, what's been going on with KORSUVA, with the pipeline, and just sort of your outlook for the next 12 months. Sure. Thank you. Well, first of all, thank you, Dennis. It's a pleasure to be here in London again, beautiful London, rainy London, and thanks for the invitation. Really appreciate it. So, you know, for those of you who don't know Cara, we are a small biotech company headquartered in Stamford, Connecticut, so just outside New York City. We have a very, very unique asset. It's called difelikefalin, so it's a tongue breaker. And this asset is a very selective kappa opioid receptor agonist. We, as an organization, are really a development company, so we are focused on the development of the oral formulation. We currently have three late-stage programs. Very exciting, of course. They're all targeted at pruritus. One is pruritus associated with atopic dermatitis. One is pruritus associated with notalgia paresthetica. That's a neuropathic itch treated by dermatologists, and one is pruritus associated with advanced kidney disease. We also have the IV formulation approved already in the U.S., Europe, Japan, the Access countries, and in fact a number of other countries around the world. But it's outlicensed. So we have a partner, CSL Vifor, who has the rights, commercial rights for the IV formulation outside the U.S., everywhere, except for Japan, where we have a partner with Maruishi and Kissei, and we recently got approval in Japan. So Kissei is in the process of commercializing as we speak. So it's a very exciting time for us because we have a number of milestones coming up. I'm sure we'll talk about it in a minute. Particularly near term, mid-December, we have our first readout of a portion of our pivotal program in AD. Right, and it's very interesting because your oral DFK program is actually in pretty late-stage development- Mm-hmm. Right? Like phase II, phase III. Yeah. So in terms of the atopic derm update. Mm-hmm. at the end of the year, maybe talk a little bit about, the trial design, you know- Sure. -remind investors what, what's going on- Yeah ... what you're trying to measure, et cetera. Absolutely. So the Phase 3 program actually has... It's called KIND is the name of the program. KIND 1 is a North America program. It has two portions. It has a Part A and a Part B. The Part A is designed to be a dose-finding portion of the program, and that's the part that reads out in December. It's very important to understand that we changed a little bit the design between the Phase 2, which was a monotherapy trial, to the Phase 3, which is adding difelikefalin on top of topical steroids. And the reason for that is that TCS is really the gold standard for mild to moderate AD patients. Topical corticosteroids. Topical corticosteroids, yes. And pretty much every patient gets it. TCS treats lesions relatively well, so it treats the inflammatory component well, but a lot of patients have severe itch still. And so what we have focused on in our program is, one, you know, the very likely real-world utilization of difelikefalin, once it gets approved. So it's added to topical steroids. But two, we also focused on the mild to moderate patients, and that's a key distinguishing factor for our program from any of the other, you know, recently reported programs. If you look at the JAK inhibitors, if you look at the biologics, they're all targeting the moderate to severe AD patients, which is about 20% of the market, and we focused on the other 80% of the market, so the mild to moderate. And that the design of the program is as such, very, very different, and it's a little hard to anticipate what the hurdles would be in terms of showing separation from control. So we currently have, in the Part A, a four-arm study, where we study two different dosage strength, with 0.25 and 0.5 milligram, against two controlled arms. One, and the most relevant one being the topical steroid arm, that we essentially measure against. For the readout of Part A in December, what we're looking for is essentially a meaningful separation from this control arm. We haven't really disclosed the threshold, but it's important to know that it's not powered for statistical significance. It's really a portion of the program that informs us in terms of the sample selection, sample size selection, as well as the strength that we are moving forward with. Once we have the Part A data, we will move into confirmatory portion of the trial, which will be Part B for KIND 1, and then there is a global trial as well that will be a replica. So we're gonna be studying essentially one strength against the control arm with TCS. Right, and let me try and summarize that really quickly. So this will be in mild to moderate atopic derm. Mm-hmm. Very different market from all the biologics- Mm-hmm ... and systemic therapies out there. It would be on top of steroids for phase III. The prior phase II data that you guys had was monotherapy- Right ... but it did not make sense to do a monotherapy trial in Phase 3 because standard of care is topical steroids, and you're not really trying to displace steroids. Right. You're trying to be used in conjunction with them. So then, you know, when we head into the December update- Mm-hmm ... you're gonna disclose some information. Mm-hmm. Some, hopefully some separation of the curves on itch. Mm-hmm. You're not really looking for like EASI-75- Correct or things like that, you're focusing on itch. Correct. Can you contextualize, you know, the efficacy for us? You guys are measuring itch scores? Correct. Right, yes. Yeah, so the primary endpoint in our trial, in both in the Part A, as well as in the subsequent confirmatory portion of the trial, is the number of patients that have a four-point or more improvement on the I-NRS, that's the itch scale. So we, you know, our product is really an antipruritic. We're looking for a pruritus indication, so we're not looking to treat lesions, we're looking to treat the itch. And so you're right, the endpoint is measured at 12 weeks. Again, that's the same thing for Part A as it will be for the confirmatory portions- Mm-hmm ... of the trial. And you know, the one thing that's really great about the itch scale and about this endpoint, we've actually you know, proven effectively that in with our IV formulation, that this is a recognized endpoint by the FDA and regulatory authorities around the world. Mm-hmm. And so we feel very comfortable with that endpoint. But you're correct, it is a pruritus endpoint. So what we will be releasing is the efficacy on that endpoint- Mm-hmm ... on the four-point responder rate, as well as, of course, safety and tolerability. So your very typical, top-line readout. It's important to note that Part A, so this readout is not an interim analysis, but it's actually a full, data lockdown, so it's a full analysis. And patients do not roll over into Part B- Mm-hmm ... but rather they have the option to roll over into an open label, extension phase. Right. Part A and Part B are completely separate- Separate ... closed. Mm-hmm. Separate trial, and you need the data from Part A to inform whatever dose you guys will be moving forward in Part B? Correct. Okay. So, you know, in the atopic derm space, I think for any, you know, I& I category- Mm-hmm ... placebo is always, you know, something that people are concerned with. Sure. Especially in the mild to moderate stage- Mm-hmm ... where you're using steroids, which are, you know, like you said, quite effective. Mm-hmm. How should we expect, you know, not placebo, but like steroids? Mm-hmm ... to perform on itch and other measures that you guys are looking at? Sure. So an important reason for us to conduct this Part A of the pivotal program is, in fact, to figure that out. You know, historically, again, you know, the trials that have been conducted have been either moderate to severe patients, when, you know, when steroids were used as a background therapy. So that doesn't really apply, it's not a good reference point or analog for us. Or when you look at the mild to moderate space, you do have, of course, some new therapies that are topical products, but they didn't, you know, have- Mm-hmm ... steroids as background therapy or as comparators. Mm-hmm. So it's really a sort of an open space and an open question. Of course, we do have some expectations, and it's also important to understand that these patients are not TCS-naive patients. These patients have, you know, TCS experience. They have effectively failed a topical steroid, but they are now instructed to try again. And steroids generally, you know, they treat lesions, right? They are anti-inflammatory treatments, so they treat the lesions, but they oftentimes do not really help with the itch. The reason why we know that is there is a tremendous amount of use of antihistamines actually, which is also interesting. So if, you know, one tells us there's a medical, significant unmet medical need, because, you know, at the same time, antihistamines don't actually work either. Mm-hmm. They put you to sleep for the most part- Right ... but they don't work because it's not an histamine-mediated, mediated itch. So our goal, in fact, of Part A, is look for that meaningful separation. We do have a threshold, of course, that we have vetted with, KOLs and with, community doctors, via market research. So, so we certainly have a certain amount of expectation in terms of the, the delta we are looking for. But, you know, that's the key reason why we're gonna be disclosing the top-line results to allow everybody, particularly the investment community, to really contextualize the results. So when you speak with these KOLs, what do they consider as a meaningful reduction in itch on top of steroids? Mm-hmm. Yeah, again, Dennis, that's a great question. We have not, you know, disclosed what that is, and certainly there's a little bit of a spectrum. Because, you know, some of the physicians are so desperate to have an antipruritic therapy that they say any separation is a good separation. Obviously, we have, you know, a meaningful threshold in that regard. Needless to say, obviously, it also needs to be meaningful in the sense that it needs to be approvable from a regulatory perspective, right? So we need to be comfortable enough to be able to power the confirmatory portion in a way that we can achieve statistical significance in that part. Right. And the Part A is not designed, it's not powered- Part A is not designed. ... to show stat sig. Exactly. Oh- We're just looking for that separation to inform Part B. Right. Right. Hopefully, there's a numerical difference- Correct ... numerical trend that could help you inform the size, the sample size- Mm-hmm ... in the Part B. Okay, great. And, you know, on the primary endpoint for the Part A, it's a reduction in itch, but, which is also over 12 weeks- Correct ... or at 12 weeks. So, so how does that work? Is it, you know, because atopic derm, there are flares, there are no-- you know, it, it comes and goes. Mm-hmm. Are you guys measuring itch at 12 weeks? Yeah. Or is it over time, or is it- Yeah ... maximum reduction? Right. Like, how do we think about that? Yeah. No, so we have, again, the four-point responder rate- Mm-hmm ... as the primary endpoint at week 12. So it's a single time point. Of course, we'll be looking at curves over time as well. Needless to say, because obviously we wanna see, you know, what the onset of action looks like, et cetera. But the primary endpoint is measured at week 12. FDA has previously stated that, you know, a four-point reduction is a clinically meaningful response. If you think about the scale, the scale goes from 0- 10. So, you know, four points, you're really shifting patients, you know, across the scale pretty meaningfully. So, you know, we know that this, again, is an approvable endpoint with regard to FDA, and now again, we're looking then for the number of patients, the percent of patients that do achieve that clinically meaningful shift. Given that atopic derm can come and go- Mm-hmm. —like, I feel like that's sort of tricky to think about if... especially if there are some imbalances— Yes. Mm-hmm -you know, in, you know, flares or itch- Right at that specific time point Mm-hmm at week 12. So how do we get comfortable with that? You know, are there anything in the trial protocol that kind of enriches patients for people who are more likely to flare or more- Sure likely to have active disease? Yeah. So it's important to understand, and this is actually quite interesting from a scientific perspective, that lesions and itch do not necessarily correlate. So actually, one of the reasons why we do allow. We put, you know, topical steroids into the program is to treat the inflammatory component, to treat the lesions, right? So we actually want the lesions to be treated. And the instructions for patients are, you know, use the topical steroids, which we provide, by the way, which is an important factor to consider as well. Use it once a day until your lesions are actually resolved. What we do from a pruritus perspective is making sure that these patients truly have chronic pruritus, so they have to have at least six months of chronic pruritus. There's also a run-in period of seven days, where we wanna make sure that the pruritus, the itch severity, that these patients report on five, at least five out of seven days, needs to be five or above, so it's moderate to severe pruritus. Mm-hmm. So, you know, your point is well taken, but that's exactly why we have a run-in period, why we, you know, look at, you know, six months back, in terms of the medical history, to make sure that these patients do truly have chronic pruritus. One limitation with steroids is that you can't use them chronically. Correct. Right? Because of skin thinning and- Right ... you know, et cetera. So is 12—like, what is a typical course for, you know, a steroid? Remind us which specific steroid you guys are using. Mm-hmm. Would patients be using that steroid over the entire 12 weeks? Mm-hmm ... or would they go on steroid- Mm-hmm ... come off- Mm-hmm ... go back on again? Like- Sure, yeah How do we think about that? So we're using betamethasone valerate. It's a mid-potency steroid. Again, it's provided by us to make sure that every patient gets the same product, so, you know, we have some control over that. Mm-hmm. And the patients are instructed to use it once daily on their lesions until the lesions resolve, and then use it as needed. So they are not... You know, some patients will use it for a longer period of time, some patients will use it for a shorter period of time. Mm-hmm. But they are really, you know, using it as needed, which would, you know, which would be essentially, again, mimicking sort of their real-world experience. Remind us what, what oral DFK showed, in Phase 2. Mm-hmm. Like, I appreciate that as monotherapy- Mm-hmm, right ... is a little bit different. Sure. But, one would assume that in combo, the responder rate would be higher than what you guys sh- Mm-hmm ... had shown in the phase II for mono. Mm-hmm. So, maybe remind us what that data was. Sure, sure. So in the phase II, it was called the CARE study. Like you pointed out, it was a monotherapy study. We had four arms. We had three active arms with 0.25, 0.5, and 1 milligram, dosed twice a day versus placebo control. So the, you know, patients were, to your point, were not on background therapy. We showed, you know, for the 0.25 and 0.5 milligram, which were, you know, the- Mm-hmm ... the more effective treatments or strength, we showed about 33%-34% in terms of the responder rate- Okay ... versus 19% for the placebo control arm. The 1 milligram was slightly lower, but that was due to discontinuations. Okay. And the reason actually why we moved forward with the 0.25 and 0.5 is that they showed a relatively steady efficacy, so we don't see a significant dose response from an efficacy perspective. Mm-hmm. But we do see side effects increasing a bit with higher strength. So we then selected the 0.25 and the 0.5 to proceed to the Phase 3 program. Okay. So, 0.25 and 0.5, between 30%-40%? 30%, 33%, 34%. Yeah, 32- 33. Yep. Okay, 33, 34. Versus 19%. Let's call it 30-35. Mm-hmm. Placebo did- Nineteen ... about 20%. Yeah, twenty. You had about a 15%- Mm-hmm ... delta. The steroids, I feel like will get you probably... You know, it's obviously gonna be a wide range, I feel like. Mm-hmm. Right? Yeah. 20%-40%. Hopefully, with oral DFK, you guys achieve even more than that. Let's call it, you know, if we've seen the same delta that you guys saw in phase II, maybe, you know, 40%-50% or 60%. Hopefully, there's a good separation- Mm-hmm ... to inform the Part B. Mm-hmm. Right? Once we have that data, which is coming December- Mm-hmm ... how quickly can you move into the Part B? Mm-hmm. Yeah, absolutely. I mean, one of the reasons why, you know, this dose-finding portion is under the Phase 3 umbrella, so it's truly one protocol, is that operationally, we wanna move as fast as we possibly can. We will be using the same sites, so we really, really only just update the protocol with regard to sample size as well as the dosage strength, and then effectively immediately move into the confirmatory portion. So we already have the sites up and running. We will add a few more sites for the confirmatory part- Mm-hmm ... 'cause it's likely gonna be, of course, larger. But you know that, you know, having that setup where we effectively, you know, have sites on standby is making it very, very fast from a transition perspective. Okay, and then when can we expect data from Part B? Yeah. The data from Part B, we, you know, based on our current assumptions with regard to Part A readout, we're expecting them for the first half of 2025. First half of 2025. Okay, got it. And, you know, we pretty much spent 20 minutes on oral DFK. Sure. But remind, you know, atopic derm is just one of the multiple indications that you guys are- Yeah -moving into or- Yeah You know, with oral DFK. Remind us, the other indications you mentioned- Sure NP and others. So- Yeah. Remind us about those and your status. Sure. In a nutshell, notalgia paresthetica, again, it's a neuropathic itch. It's in the middle of your back, so there's actually some expectation that the backscratcher was invented for it. It's a fairly prominent indication. In the U.S., we estimate about 650,000 patients are under the physician care right now, predominantly a dermatologist. But it's likely a vast underestimation of the actual prevalence of this disease because it's so underdiagnosed and not treated, 'cause there's really nothing that patients can use currently. We are in a Phase 2 program. It's actually the setup is very similar to our AD program, where we have a Part A portion, where we're evaluating three different strengths against placebo in this case, so there's no background therapy. versus, so the three different strengths versus placebo. The program is in that Part A portion right now. We expect the readout from that, in the second half of 2024, so in about a year from now. The reason why we're doing a dose-finding portion in that trial is because we only studied 2 milligram BID in the phase II. And of course, FDA always wants you to assess or to define the lowest efficacious dose- Right. So they're always looking for dose-finding elements in your program. So that's nutshell pruritic. We are very excited about it 'cause it's a really nice complement to our AD program, and also it had fantastic data. In fact, the phase II program was actually our trial was actually published in the New England Journal of Medicine earlier this year. And then I- Maybe if I can ask a question on that. Sure. So, you said the Phase II uses the 2 milligram dose? Mm-hmm. But for atopic derm, you guys use 0.25, 0.5, and 1. Mm-hmm. 1 milligram had, I think you mentioned, some higher discontinuation rates. Mm-hmm. Mm-hmm. What led to the decision to go even higher to 2 milligrams? Yeah. So, you know, nobody has ever studied notalgia paresthetica. We are literally a pioneer in this indication, and the team decided we'd go, you know, relatively high on the dosing in order to not miss a signal, to put it simply. Okay. Okay. We very much expect that the lower doses that we're now studying are gonna be very efficacious as well, in part because we have an agonist, right? So if you activate the receptor, you don't necessarily get substantially more efficacy if you just, you know, load more, more drug into the body. Right. and so we very much expect the lower dose to be efficacious in this, you know, Part A of the phase II, III program. And then just, you know, quickly on the CKD front, we have the IV formulation approved. It was sort of our foot in the door- Mm-hmm -and then also very much a proof of concept with regard to having an efficacious product. The phase III program is ongoing right now. We have two studies. You know, they are the same in terms of design. It's studying 1 milligram QD, so once daily dosing against placebo. We have one study in the U.S., 1 is a global study, and the data readout from that program is in the second half of 2024. The goal here is to really move into the pre-dialysis space. It's a fairly sizable patient population- Mm-hmm. Particularly, you know, we're focused on stage four and five, so these are advanced stage CKD patients that have, of course, again, you know, chronic pruritus. But it really opens up the market substantially. Okay. So, you know, Cara obviously has a pretty broad pipeline- Yeah With a lot of catalyst over the next few years. Mm-hmm. You know, I do wanna ask a little bit on the other part of the business. Mm-hmm. Which is KORSUVA, you know, in the couple of minutes that we have left. You know, you guys reported third quarter. Mm-hmm. Talk a little bit about what's going on there on KORSUVA- Sure And the outlook. Sure. So I'll start with the exciting part for us, which is, we recently monetized the ex-US royalties- Right ... with HealthCare Royalty. We received or will receive about $40 million, or up to $40 million. That's really exciting for us because it certainly extends our runway from a cash perspective- Mm-hmm -into 2025 and allows us actually to reach those milestones you were just referring to. We do have the IV formulation in the U.S., of course, as well. It's been a little bit of a rocky road over the you know since the launch. The reason really is the reimbursement system in the U.S., which is very unique, and it's solely for dialysis patients. Mm-hmm. It's a capitated system. You know, difelikefalin was only the second product that achieved TDAPA designation, so that means for a period of two years, it was being reimbursed outside the bundle. But CMS recently, in their final rule, confirmed that going forward, after the TDAPA period expires, which is at the end of March of next year- Mm-hmm It will effectively be part of the bundle, and they will add $0.25 to the bundle. Right now, you know, the WAC price is $150. It's one, you know, one vial per treatment, per patient, so there's a huge disconnect, right? Yeah. In fact, what really transpired is that there has been a concern from physicians, from dialysis organizations, about the post-TDAPA reimbursement, which has really hampered the uptake of the product. Mm-hmm. The good thing is, we've heard fantastic feedback from both physicians and patients who have used the product. So in that sense, you know, it's again, very, you know, reaffirming in terms of, you know, having an efficacious product. Right. And, and the focus right now for the company, given some of the reimbursement, you know, dynamics in the U.S.- Mm-hmm ... it's kind of like the company's more focused at this point on spending resources on the pipeline, getting to the key catalysts- Mm-hmm -right at the end of the year, as well as, you know, in the next few years. Remind us, your current cash balance- Mm-hmm The $40 million from HealthCare Royalty. When does that hit the balance sheet? Mm-hmm. Is it structured a certain way, where it- Yeah Gets, you know, you get the money over time? Right. But yeah, just remind us on your balance sheet. Yeah. You mentioned we reported earnings earlier this week. Mm-hmm. We reported that we had $83 million at the end of the third quarter. We got, you know, of the $40 million that we will be getting from HealthCare Royalty, we already banked $17.5 million of that, and $20 million are tied to the finalization of the price of Kapruvia, which is the name in Europe for KORSUVA in Germany. We very much expect that to be in short order, certainly this quarter. Mm-hmm. So we very much expect to essentially have $37.5 million of the $40 million this year. With regard to the remaining $2.5 million, that's tied to a milestone in Japan, which we expect to achieve in 2024. Okay, and the runway is? The runway is getting us into, you know, 2025. Into 2025. Yeah. So we really, you know, will be passing those value inflection milestones, which is important for us. Got it. Okay, very helpful. Well, I think that's all the time that we have today, Iris, but it's great to see you. Thank you. Hope you have a great conference. Thank you so much. Thanks for being here.