Good day, everyone. Thank you for joining the 23rd annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next presenting company, Cara Therapeutics. Joining us today from Cara is President and CEO Chris Posner and CFO Ryan Maynard. For those of you joining on the webcast, if you want to ask a question, please do so at any time. You can submit a question using the chat box at the bottom of your screen. With that, we'll get started. Chris, Ryan, thank you for joining us today. Thanks, Joey. Good to see you. Thanks for having us. We'll kind of jump right into the questions here. You announced a corporate restructuring earlier this year. Can you just recap what this entailed and how you think that sets you up for 2024 and beyond? Yeah, you're right, Joey. At the end of 2023, we decided to sharpen our strategy and focus, and we announced in January of this year that we prioritized a program with really the highest likelihood of both clinical and commercial success, and that's oral difelikefalin for notalgia paresthetica. And I know we'll talk a lot about NP in a little while. But part of the restructuring, we focused all our resources on NP. We extended our cash runway to give us two years of operating capital, which gets us into early 2026. And this really allows us to reach some key data milestones for NP. I'll tell you very honestly, I mean, these are difficult decisions to streamline our operations, but we aligned our resources with the program that we believe has the greatest long-term value, and it's the best for the company and shareholders. So we'll get into NP, as you mentioned, Chris. You recently held an investor event, very informative there. But for those who may not be familiar in the audience, can you describe what notalgia paresthetica is and the unmet need? Yeah, no, absolutely. And we're doing a lot of awareness building. You're starting to see more and more excitement around notalgia paresthetica. But let me just step back and talk about NP for a minute to give you a sense and give the audience a sense. NP, notalgia paresthetica, is very challenging for people to cope with, and this is a neuropathic itch. And although the itch may seem innocuous to many people, itch in general seems kind of innocuous. It's not your mosquito bite, really. These are people that are unable to find relief from chronic, severe itch, and this could significantly affect a person's quality of life. And literature, which is really quite interesting, I mean, literature suggests that chronic pruritus is often as onerous as chronic pain in terms of the impact on the quality of life of patients. You heard that in our NP Day with a patient, right, Joey? I mean, she said that she'd rather she could live with chronic pain. She can't live with chronic pruritus. Chronic pain and neuropathic pain really has been targeted and studied extensively. Chronic neuropathic pruritus and notalgia paresthetica is not. And so NP is this unexplored neuropathy. It's characterized by chronic pruritus. It's actually relatively common. And we estimate an addressable market of over 650,000 patients. And these are patients that are currently being treated by dermatologists. And so that's important. Even though notalgia paresthetica is a neuropathy, right, it's actually treated by dermatologists. Digging a little bit more to the addressable patients here, you mentioned the greater than 650 that are currently being treated by derms. What does your market research tell you about diagnosis rates and, say, from a prevalence number? And then kind of as a follow-up to that, what percentage of patients are not adequately controlled with, say, off-label therapies? And maybe lastly, where are these patients getting diagnosed? Is it primarily at a dermatologist, or are there other specialists that are involved here? Yeah, I mean, so let's talk about the treatment journey and the patient journey and the treatment algorithm. And really, the punchline here is that there was a significant unmet need that really led us to sharpen our strategy in the beginning of this year. So neuropathic pruritus and notalgia paresthetica really has gone under the radar, like I said. I mean, if you look across the United States, there's roughly 34 million, 13% of the population suffers from chronic pruritus. And roughly out of those, about 3 million, 2.7-3 million patients suffer from neuropathic pruritus, and NP is one of those subsets of them. And we've estimated roughly 650,000 of these patients are currently being treated by a dermatologist. So diagnosis, it's in the dermatology office. So when patients come in, they're suffering from moderate-severe pruritus. It's a subjective classification in terms of moderate, severe, and mild. But if you're going to a derm, you have moderate-severe pruritus, right, or you wouldn't be going to a derm. So that's what that 650,000 represents. In terms of the current treatment and kind of lack of treatment is probably a better word. There are no FDA-approved therapies for notalgia paresthetica. There are none. What is typically used is a potpourri of either topicals like topical steroids or capsaicin, which are relatively ineffective. They're also hard to apply, right? I mean, you got to put them 3-4 times. This is a chronic itch in the middle of your back, essentially. So it's very hard to do. A lot of dermatologists do have to resort to the gabapentins of the world, and they're beset with some side effects, clearly. But that's kind of what is currently being used. We've done a lot of market research, and our market research suggests upwards of 90% of these patients, Joey, say that their therapies are either totally not effective or have very limited effectiveness. Coupled with that, over 75% of these patients are currently on nothing, really owing to the fact that really nothing works. And I suppose it depends a lot on the data, and we'll see what that looks like and how that plays out. But in terms you touched on a little bit in your previous there, what do you consider the addressable patient population in NP, and how would you plan to position the drug in this indication? Would it be used after topicals fail or concurrently? What are your thoughts there? Yeah, so let's talk about the addressable population. We're using a conservative estimate of about 650,000 patients in the U.S. And again, I want to stress, these are patients currently being treated by dermatologists. So they're already in the office, right? They're already being treated. But as we said, again, last week, you heard some of the physicians. We think, obviously, the population is much broader. We know roughly 2.7-3 million suffer from neuropathic pruritus in general. So there's just a lot of lack of awareness. And it's amazing when science starts to catch up, and it raises the awareness. So we think that number is on the conservative side, the addressable. Yeah. And in terms of kind of positioning, the label that we're going for, Joey, is a first-line label. Obviously, we're looking at all patients with moderate-to-severe pruritus that have notalgia paresthetica. So we think this will be the gold standard, given that there are no approved therapies. And what's currently being used, as I just mentioned from the market research and hearing from physicians, is really inadequate. Got it. No, that's a very helpful overview of NP. You've got a phase 2/3 NP program ongoing. Walk us through the design of that. Yeah. So as you know, last year we reported out, or in late 2022, we reported out our first phase 2 proof-of-concept study called KOMFORT. That had the 2 mg BID dose versus placebo, and we saw really, really good results. And that was published, obviously, in the New England Journal. That gave us a heck of a lot of confidence to move forward with a phase 2/3 program called KOURAGE 1 and KOURAGE 2. So KOURAGE 1 is composed of two parts. Part A, which is the dose-finding portion, and Part B will be the second pivotal study. And then we'll have KOURAGE 1, which will mimic that. So Part A is kind of what's right on the horizon, right? We expect to have the Part A results, the top-line results, in the third quarter of this year. That includes 214 patients that were equally randomized to four arms. We have three active doses. We're looking at 0.25 BID, one milligram BID, and the two milligram BID versus placebo. For Part A, we'll get into the details of the design and the patients here. How representative are the patients in Part A compared to what you had described in the real-world setting? Yeah, the patient population that we enrolled in KOMFORT as our proof of concept, as well as Part A, very aligned to the real-world setting. And obviously, we expect the same moving forward for the pivotal studies. You also mentioned the COMFORT phase 2 results, which were very strong in terms of the treatment effect. Just curious, the obvious question is, how well do you think that can translate into your Part A readout here? Digging into that a little bit more, how similar are the inclusion/exclusion criteria for the COURAGE Part A relative to the COMFORT, the phase 2A criteria? Is there any significant differences in the trial designs? Yeah, I think let me take the last one first. So there's no really significant differences between COMFORT and COURAGE, the proof of concept, to the COURAGE pivotal trials that we're undergoing now, especially Part A. So that leads to my answer of, yeah, we would expect some similar results that we saw in COMFORT. Now, I think there are some differences in terms of, obviously, we're looking COMFORT, our proof of concept study, was one active arm versus placebo. This has three active arms. So 75% of the patients are going to receive active treatment. That may cause some variability. We obviously have more sites in this as well. So there may some variability, but net-net, we would expect similar results. And remember, the objective of Part A is to select a dose. We know the 2 mg BID has already been highly effective, and we showed that in COMFORT. We have that same dose in this study as well, but we wanted to bracket that and look at the lowest dose that we believe should be 0.25 mg BID as well as 1 mg BID. So our goal is to select a dose. It'll also determine what that sample size should really look like as we move into the pivotals this year. Got it. Any trial site overlap between the phase 2 COURAGE Part A relative and the phase 2 COMFORT trial? And then second question is, what% are U.S. sites? And do you think there's any differences there in terms of how those sites are run? Yeah. Well, the first part of your question, yes, there are significant overlap. Most of the sites in the COMFORT trial are participating in COURAGE. And importantly, most of the Part A sites are also intended to participate in Part B into the pivotals. So that's A. COMFORT was solely based in North America. COURAGE has a couple of sites in the EU, and they both will be Part B, as well as COURAGE 2 will both be global studies in general. And there are no differences in the EU. Very similar construct. There are no approved therapies for notalgia paresthetica. We've seen a lot of interest already in Europe in terms of sites. They want to be included in this. And in Europe, I've always found in my career, they're very interested in patient-reported outcomes. They're very heightened sensitivity around patients. So I'm actually really encouraged already what we're hearing from Europe. Yeah. And so you don't think there's any significant difference in how maybe just broadly, how NP is treated, diagnosed in the U.S. relative to, say, Europe? No, no. I mean, listen, again, there's some really top pruritic experts in Europe that we're currently working with. There are no approved medications in the U.S. or ex-U.S., for that matter. And again, I think what we're hearing in terms of site selection already as we're preparing for the pivotals, very robust response, very robust response. So we're pretty excited about all that. Great. So you've got data coming from Part A. When do you plan to announce that data? What data do you plan to announce in that top-line readout? Timing, we've said publicly, we've completed enrollment. We said that in our March Q4 earnings call, if you remember. We would expect, and we've said publicly that we expect Q3 of this year to release the top-line data. We'll release top-line efficacy and safety data, and that's our intent. The four-point responder, one of the endpoints, is in and of itself considered a clinically meaningful change on the Worst-Itch NRS. But just curious, based on your discussion with KOLs and treating physicians, what would you consider a meaningful placebo-adjusted response rate? Well, I mean, you heard a little of this at our MP Day last week, right? So let me tackle first. A four-point responder, and you said it perfectly, that's a clinically meaningful endpoint in and of itself. That's a regulatory endpoint. That will be our primary endpoint. That's A. That's been established with the FDA, right? Now, the KOLs, I would say, in our recent event 2 weeks ago, they mentioned even less than a four-point response represents a meaningful improvement in patients' lives. I mean, a lot of these folks are coming in moderate-severe. Joey, I mean, in our COMFORT study, the average itch score coming in was like 7.6 or 7.8. This is a really significant impact on the quality of life. Even some responses could. I would say in the real world, what we've heard from KOLs is that no one really talks about placebo-adjusted results. They look at absolute or real response above all else, especially in—you got to remember—notalgia paresthetica or neuropathic pruritus, there are no available treatment options. I mean, again, go back to what they're using. They're using capsaicin, topical, a cream. They're using steroids, which obviously is a chronic condition you don't want to use long-term, and it's very inconvenient. Or they have to resort to gabapentins of the world, which dermatologists, first and foremost, are an incredibly conservative specialty. Safety is really important. So that's kind of how we see and what we've heard from KOLs around a meaningful improvement in itch in neuropathic pruritus. Yeah. Maybe just as a follow-up to that, you mentioned, and I don't have the data in front of me. I can't remember for COMFORT, the complete responders' data was quite impressive there, not just the four-point responder. Now, for the Phase 2 COMFORT, you had a placebo response rate at, I believe it was week 8, around 18%. A common question for itch trials: what are expectations on the placebo response rate for Part A? Would you expect it to be somewhere similar around that 18%-20% range? And what steps have you taken to make sure you keep the placebo response rate down? Yeah. I mean, that's always dealing with a subjective endpoint, not unlike pain, right? I mean, pruritus is a subjective endpoint. With notalgia paresthetica and neuropathic pruritus, there are no good analogs to kind of guide us. Now, we've done COMFORT, which was 120+ patients, and we saw a placebo rate around 18%. That's kind of what a priori was, our expectation around there, just from our work with KOLs and what we think. I would say Part A, we should see in that range. Again, I would really stress, though, this is a little different, right? I mean, the COMFORT was one arm active and one placebo arm. This has three active arms, a dose-response study. So you may see a bit more variability and we have more sites. Placebo may not be a point estimate at 18%-19%, but it should be in a range acceptable. Got it. In terms of, is there a minimum placebo-adjusted treatment difference on the primary endpoint, the responder rate, that you have in mind internally that you can say, "Yes, that is sufficient to select, let's say, a dose, a single dose, and then proceed to Part B and subsequently COURAGE 2"? Right. I mean, well, COMFORT, we were really happy with what we saw. I mean, we were statistically significant with a very, I'd say, 120 patients, right, and two arms. So we really encouraging what we saw. Again, you got to remember there's a huge unmet need. There are no approved treatments. I would also say with Part A, our expectation is we should see kind of similar results, maybe some variability. I'd also say that Part A, we got to be very transparent here. It's not powered to show statistical significance between the groups. Our goal, Joey, is to see a separation from placebo and to move a dose into the pivotal trials. That's what our goal is with this study. And again, we'll see what the data shows. I would say now we believe there's a high probability of success for these trials, given what we saw in Comfort. Got it. Great. Well, a lot of people, investors, looking forward to the readout later this year from Part A. It'll be a big one for you guys. We'll finish up with a couple of financial questions. Chris, Ryan, just given the restructuring, what's your thinking on OpEx for 2024? And if you do get a positive signal in Part A later this year, you start up a phase three NP program, how much would that cost to get that up and fully enrolled? Yeah. Thanks, Joey. So the really tough decisions we made at the beginning of the year, as Chris mentioned, not only to reduce our staff by almost 50%, but to shut down a phase 3 program in CKD with oral difelikefalin, really allowed us to pay for the NP trials and not just pay for the phase 2 Part A that we're going to release in Q3, but to allocate money for the phase 3s. So that's the important part here. So it's a runway that is fully loaded with the potential costs that we believe right now, based on just our assumption coming out of the original COMFORT trial on what it would look like. That gets us into 2026. So we've said publicly that we expect the first readout in the pivotal phase 3s. So that would be COMFORT 1, Part B, to be in the latter part of 2025, and then the second part in early 2026. So the important part for us was to be able to pay for those trials without raising any more money. And we've accomplished that. So obviously, our OpEx is going to go down dramatically in 2024 compared to 2023. That's key. We haven't yet put out what the phase 3 is going to cost because we're waiting, as Chris mentioned, part of the output from the Part A is the sample size for the phase 3. So once we get those, we'll make sure to inform the street on our burn. But we feel pretty confident in what we've loaded into the costs going forward. Got it. And lastly, touched on a little bit of cash runway, but just can you remind us your current cash position, current runway expectations, and some of the assumptions that are built into that? Sure. Yeah. I kind of touched, danced around that, and touched on a little bit. So we ended 2023 with about $100 million in cash. We've guided that that's enough to get us into 2026. But the important part and the point I want to hammer on is that it's not just a runway to kind of keep the company going. It's a runway to pay for those phase 3s. So we've loaded costs in there. So the key assumption is our current infrastructure of roughly we've got roughly 53 employees currently and the ability to execute on these 2 phase 3s, which is COMFORT Part B sorry, COURAGE Part B and COURAGE 2. Got it. Well, thank you so much, Chris and Ryan, for participating. It was a great discussion. Thanks, Joey. Thank you, Joey. See you. Thanks for watching. Appreciate it. Thanks, everyone, for joining us on the webcast. Have a good day and a good rest of your conference. Cheers. Take care, everyone.