Mar 10, 2016
Executives
Jesse Baumgartner - Stern IR Dr. Derek Chalmers - President and CEO Joe Stauffer - CMO Josef Schoell - CFO
Analysts
Annabel Samimy - Stifel Nicolaus Sarah Weber - Piper Jaffray Alan Carr - Needham & Company Ken Trbovich - Janney Montgomery Chiara Russo - Cantor Fitzgerald
Operator
Good afternoon, and welcome to the Cara Therapeutics Fourth Quarter and Full Year 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode.
There will be a question-and-answer session at the end. Please be advised that this call is being recorded at Cara's request.
I would now like to turn the call over to Cara's team, please proceed.
Jesse Baumgartner
Good afternoon. This is Jesse Baumgartner with Stern Investor Relations.
And welcome to Cara Therapeutics fourth quarter and full year 2015 earnings conference call. The news release with our fourth quarter and full year financial results and corporate update became available at 4:01 PM today, and can be found on our Web site at www.caratherapeutics.com.
You may also listen to a live webcast and replay of today's call on the Investors section of our Web site. Before we begin, let me remind you that statements made on today's call regarding matters that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Examples of these forward-looking statements includes statements concerning a expected timing of the Company's meeting with the FDA to discuss the clinical hold for I.V. CR845 in post-operative pain, the potential resolution of the clinical hold and resumption of the CLIN3001 trial, timing for the Company’s other planned clinical trials and the reporting of clinical trial results, the potential results of ongoing and planned clinical trials and future regulatory development milestones for the Company’s product candidates, and the Company’s expected cash reach.
Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. The risks are described more fully in Cara Therapeutics’ filings with the Securities and Exchange Commission, including the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and its other documents subsequently filed with or furnished to the Securities and Exchange Commission.
All forward-looking statements made on today's call speak only as of the date on which they are made. Cara Therapeutics undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made except as required by law.
Now, let me turn the call over to Cara's President and CEO, Dr. Derek Chalmers.
Dr. Derek Chalmers
Okay. Thank you, Jesse.
Good afternoon everybody. Thanks for being with us on the call.
I'm joined today by our Chief Medical Officer, Joe Stauffer; and our Chief Financial Officer, Joe Schoell. So the agenda for today's call is as follows, I'll provide a brief overview of our 2015 highlights and also recent developments.
Then Joe Stauffer will walk through the status of our pivotal trial of CR845 in acute post-operative pain, as well as an ongoing development plans for our CR845 programs in uremic pruritus and also in chronic pain. And then Joe Schoell will walk through financials for the fourth quarter before we open up to Q&A.
So 2015 was certainly a very productive year for us at Cara. We continue to execute on our clinical development plan and build out a broader set of indications for CR845.
Starting with our lead indication for I.V. CR845 in acute post-op pain, we initiated our first adaptive pivotal trial CLIN3001 in September of last year.
Examining repeat doses of CR845 administered both prior to and following abdominal surgeries. As we discussed with you a couple of weeks ago, we recently announced that the trial has been placed on a clinical hold, following a limited number of patients reaching a pre-specified stopping rule related to increases in serum sodium concentrations to the mild to moderate hyponatremia level that is greater than or equal to 150 Millimoles Per Litre and I’ll remind you the normal range is 135 Millimoles Per Litre to 145 Millimoles Per Litre.
Again to remind you that there were no severe adverse events observed in these patients and all sodium levels will result to normal levels within 24 hours through standard fluid management protocol. Nevertheless, we’re working through a review of safety data by both us and the trial’s independent data monitoring committee and we’ll be discussing this with the FDA shortly with the aim of reinitiating this trial in Q2 of this year.
So while we look forward to continuing with that study, the past year was also significant because of positive data for CR845 and additional clinical indications. This included the results from our oral CR845 Phase 2a study in osteoarthritis patients that we announced in December of last year showing that CR845 exhibited a dose related reduction in main baseline pain score to the end of the two week treatment period with up to an approximate 34% reduction for the highest dose group.
We also observed a statistically significant reduction in mean rescue medication for the highest dose group as well as a very clean safety profile in those patients. So I’ll let Josef Schoell walk through the next steps for this indication in just a moment.
But obviously the expansion to chronic pain with an oral formulation of CR845 that’s already exhibited very low abuse potential from our completed Human Abuse Liability Trial R&D to any other side effects typically associated with chronic pain mediation we believe opens up a significant opportunity for us within the chronic pain space. We plan to initiate a multiple dose Phase 2b study in OA patients in the second half of this year and Joe will provide a little color around that protocol in just a moment.
And then finally, turning to our program focused on CR845 in the treatment of moderate to severe uraemic pruritus and dialysis patients. In Q3 last year we’re very pleased to announce data from our Phase 2 trial where CR845 treatment resulted in statistically significant reductions in both the primary endpoint worse itching or pruritus and secondary endpoints assessing quality of life measurements in these patients.
We believe this data shows the clear potential for CR845 to address what is currently a significant unmet clinical need with no approved therapies for UP in the U.S. or EU and following the results we have the guidance meeting with the FDA in December of last year to inform our registration program moving forward.
And again I’ll let Joe describe shortly the path forward in detail surrounding that program. Before I turn the call over for clinical review and discussion, I just want to highlight the capital efficient approach that was taken in our CR845 development programs.
With the capital raised from our follow-on offering this past summer, we ended 2015 with approximately 106 million in cash and marketable securities, which puts us in a very strong financial position to execute on each of our three CR845 clinical development programs in the coming two years and indeed beyond. So with that, I’d like to turn the call over to Josef Joe Stauffer to walk through the plans in each of our clinical programs.
Joe Stauffer
Thank you, Derek. I will be starting with our first adaptive pivotal trial in acute post-op pain CLIN3001, and just as a reminder of the structure of this study.
This is a multi-center randomized double-blind placebo-controlled parallel group adaptive design trial with repeated doses of I.V. CR845 or placebo administered both prior to and following abdominal surgery in male and female patients at approximately 30 sites in the U.S.
The trial is designed to enroll up to 600 patients undergoing various abdominal surgeries. As we discussed previously, the study accommodates interim assessment for safety and conditional power across the doses with an adaptation to optimum doses and subsequent progression to complete enrollment.
As Derek noted, following a protocol specified trial safety review after 90 patients have completed dosing, we identified that the pre-specified stopping rule related to the number of patients exhibiting increases in serum sodium concentration to the mild moderate hyponatremia level to find as greater than or equal to 150 Millimoles Per Litre have been reached. The review of the unblinded safety data show that the four patients were confined to the highest CR845 dose group, that’s the 5 microgram per kilogram group.
They’re asymptomatic and as with our previous experiences, sodium levels resolved to normal level which is less than 146 millimole per litre with standard fluid management, no patients in the other two groups, which is the 2 microgram group and the 1 microgram group exhibited serum sodium levels greater than 150. Importantly, the review also showed that there were no CR845-associated serious adverse events thus far in the trial and the safety profile overall has been well in line with what we saw in our earlier Phase 2 pain studies with I.V.
CR845. Right now, we're focused on completing the protocol safety data review process with our IDMC, that's the Independent Data Monitoring Committee and following our anticipated FDA meeting with subject to agreement with the FDA on path forward and we hope to reinitiate the CLIN3001 protocol in Q2 of this year.
Turning to our oral CR845 program in chronic pain, Derek touched on the highlights on our December announcement of the top-line Phase 2a data in patients with osteoarthritis of the hip or knee, this was a single-blind randomized, multiple ascending dose trial designed to evaluate the safety, pharmacokinetics and effectiveness of oral CR845 tablets dosed over a two-week period in OA patients experiencing moderate-to-severe pain. We were extremely pleased with the activities in this trial including the following highlights, the mean joint pain score, NRS numeric rating score exhibited a dose-related reduction from baseline to the end of the two-week treatment period, ranging from 25% percent at the lowest tablet strength which was a 0.25 milligram up to 34% for the highest of 5 milligram tablet strength.
50% of the patients in the 5 milligram dose group reported at least a 30% reduction in their pain score at the end of the treatment period. The reduction in pain score in the 5 milligram dose group was accompanied by a statistically significant reduction in mean rescue medication of approximately 80% with an ANOVA of p=0.02 for the 5 milligram versus the lower dose groups.
PK analysis indicated dose proportional exposure of CR845 after oral administration, with the 5 milligram dose group exhibiting an approximately five-fold increased mean AUC value compared to the 1 milligram dose group. And very importantly, tablet strengths were generally well tolerated with no drug-related SAEs.
Looking forward, our next planned trial here is a larger Phase 2b study, this will be designed as a double-blind, multiple dose Phase 2b with repeat doses of CR845 administered over an eight week treatment period in patients with moderate-to-severe pain which is greater than or equal to 5 on a 10-point scale associated with osteoarthritis. Four treatment arms oral twice a day dosage, placebo and three CR845 tablet strengths.
This will be an approximately 330 patient trial run at about 15 sites in the United States. Finally, as Derek highlighted earlier, we also held a guidance meeting with the FDA in December around our uremic pruritus program following our positive Phase 2 readout in July 2015.
As you may recall, that trial was designed to evaluate the efficacy of I.V. CR845 compared to placebo in reducing intensity of itch in dialysis patients over a two week dosing period.
Highlights from that data shows that I.V. CR845 achieved statistically significant results on the primary endpoint of reducing worst itch intensity.
Trial also demonstrated statistically significant results on the secondary endpoint of quality of life measurements with an additional positive trend on itch-related sleep disturbances. And again I.V.
CR845 was also observed to be well tolerated during this study with no CR845 related serious adverse events or AEs reported. This recent meeting, near the end of 2015, with the FDA was designed to inform our registration path for I.V.
CR845 and coming out of that interaction we've been planning our first larger trial in this indication. The trial will be a two part Phase 2/3 adaptive design in haemodialysis patients exhibiting moderate-to-severe uremic pruritus.
Part a will be randomized, double-blind, placebo controlled study of three doses of I.V. CR845 administered three times a week after dialysis over a period treatment of up to eight weeks.
Part b will be randomized, double-blind, placebo controlled study of one optimized dose of I.V. CR845 administered TIW, that's three times a week, over a 12 week treatment period.
The primary endpoint will be reduction in worst itching scores from baseline values, measured on a standard NRS alongside secondary quantitative quality of life endpoints. We expect to initiate this trial in the first half of this year at multiple sites in the U.S.
concurrently, with this I.V. CR845 trial, we'll also be initiating a PK safety trial of multiple doses of oral CR845 to haemodialysis patients in order to define bioequivalent tablet strengths that will afford our ability to develop an oral tablet formulation for this clinical indication.
In summary, we are very encouraged by the rapid clinical development progress made during 2015 in each of our clinical indications and although it is unfortunate that we're facing the clinical hold on the postoperative pain trial, we're optimistic that following the completion of our safety review and FDA meeting, we'll be able to resume the trial properly. We look forward to reporting on our clinical progress as we execute our plans throughout the coming year.
And with that I'll turn it over to Joe Schoell for the financials.
Josef Schoell
Thanks, Joe. And as a reminder the full financial results for both the fourth quarter and the full year 2015 can be found in our press release issued today after the market closes, the following is a summary of the fourth quarter results.
We reported a net loss of 9.5 million or $0.35 per basic and diluted share for the fourth quarter of 2015, compared to a net loss of 4.2 million or $0.18 per basic and fully diluted share for the same period of 2014. We did not recognize any revenue during the fourth quarter of 2015.
For the fourth quarter of 2014, we had collaborative revenue of $399,000, comprising of revenue that had been deferred upon entry into a license agreement with Maruishi Pharmaceutical Company and clinical compound revenue was $515,000 from the sale of the clinical compound to Maruishi. R&D expenses were 7.6 million in the fourth quarter of 2015, compared to 3.5 million in the same period of 2014.
The higher R&D expenses in the fourth quarter of 2015 were principally due to an increase in direct preclinical and clinical trial costs, consultant services in support of the preclinical studies and clinical trial cost, and an increase in payroll and related costs for R&D personnel. General and administrative expenses were 2.2 million in the fourth quarter of 2015 compared to 1.8 million in the same period of 2014.
The increase in the fourth quarter of 2015 was primarily due to increases in payroll and related costs and stock option expense. Those increases in costs were partially offset by decreases in professional and consulting fees.
At December 31, 2015, cash and cash equivalents and marketable securities totalled $106.7 million compared to 52.7 million at December 31, 2014. The increase in the balance of cash, cash equivalents and marketable securities resulted from a receipt of the net proceeds of 75.2 million from the follow-on offering of common stock which closed in August of 2015, also cash received from exercise of stock options of 300,000 and partially offset by 21.5 million of cash used in operations.
Turning to our financial guidance, based up on timing expectations and projected costs for current clinical development plans, we expect that our existing cash, cash equivalents and marketable securities as of December 31, 2015 will be sufficient for the Company to fund its operating expenses and capital expenditure requirements through the end of the first quarter of 2018, without giving effect to any potential milestone payments under existing collaborations. Now, we'll open it up to Q&A, operator?
Thank you.
Operator
[Operator Instructions] Our first question comes from Annabel Samimy of Stifel. Your line is open.
Annabel Samimy
I just had a couple of additional questions on clinical hold, so I understand that the timing of the clinical hold is really contingent on the IV NB review completion and then further submissions to the FDA, with some of the recommendations that we've talked about in the past, I guess one of the things I was curious about is, is it if you hadn’t had the protocol violations in the trial, it doesn’t seem like we'd be here today with the clinical hold, so is there a possibility that dropping the dose is too brave step or adjustment in this trial, and if that is the case can you explain how dropping the dose won't compromise the efficacy? Thank you.
Dr. Derek Chalmers
Sure, so dropping the dose is certainly a reasonable thing to do I mean obviously that higher dose, and in terms of the other two remaining doses, don’t forget that the 1 microgram per kilogram arm was also efficacious in our itch program that's also consistent with efficacy that we have from pre-clinical evidence. And the other thing that we have working in our favour here is that we also have a pre-planned look at the data as part of the original protocol and they will be part of the follow-on protocol to take the interim assessment look for conditional power.
So that's how we protect our flank and downside so to speak for efficacy failure once we get to about 50-60 patients randomized per arm.
Annabel Samimy
And then on the uraemic pruritus trial, you gave us the study designed to may be two parts with Q3, but these two parts are you going to have any additional clinical trial requirements after that?
Dr. Derek Chalmers
Well since [indiscernible] we will very likely have to do another pivotal trial as well. And following the same type of requirements that we would expect from any NCE you can expect that we’ll have to have a similar type of data base as well, 1,500 total exposures as part of the entire program.
So, to sum that up, it would be this trial plus another pivotal trial Phase 3.
Annabel Samimy
And so if that’s the case and can you sort of give us an idea of when we might be looking at this in terms of potential filing?
Dr. Derek Chalmers
Yes Joe answer it.
Joe Stauffer
So in terms of filing the NDA?
Dr. Derek Chalmers
Yes, I think it's too early to say on it until we get this initiated and actually look at the equipment rates for the number of sites we’re going to have involved here that is -- we’ll give guidance on that as we get underway we know how quickly we can recruit patients into these trials.
Operator
Our next question comes from Charles Duncan of Piper Jaffray. Your line is open.
Sarah Weber
This is Sarah on for Charles. So, in terms of the clinical hold besides from the cases of hyponatremia, were you otherwise encouraged by the interim look of safety of CR845?
Dr. Derek Chalmers
Very much though. I mean none of these patients, none of any of the patients have serious adverse events related to serum sodium, so very encouraging that is similar to what we’ve seen before in previously trials.
Sarah Weber
And then what do you believe that agency is working on or looking for in advance of a meeting with your next quarter?
Dr. Derek Chalmers
Right so, what they’ll look for is our proposal based on the IDMC recommended guidance and our agreement to that guidance that we will likely come up with a dosing scheme that make sense that keep patients less than the 150 target.
Operator
Our next question comes from Alan Carr of Needham & Company. Your line is open.
Alan Carr
What about -- with these Phase 3 trials in uraemic pruritus be running in serial or could you do them, would they just be staggered? And then with your hope to reinitiate the Phase 2/3 in post-operative pain in second quarter what are your thoughts on timelines to the interim assessment and the final results from that trial?
Dr. Derek Chalmers
Sure. So the first part of your question was related to UP and we would run the staggered because we want to optimize the dose.
The second part of your question was related to the I.V. pain trial, is that correct.
And you’re looking for timing there. We’ll have a better sense of what that timing looks like once we meet with the FDA, finalize the protocol going forward, get a handle on sample size and get up and running.
So we’ll be able to comment with more clarity once we have that meeting.
Alan Carr
I mean is it appropriate to assume that you started this one back in September, and should we just -- and you I think have been guiding for finishing it in 3Q. Should we just shift everything out six months, or what sort of factors might influence that?
Dr. Derek Chalmers
I don’t know if it's necessary to assume that at this point. We have to see what the size of the trial looks like.
I would anticipate the trial size gets smaller, which is good and smarter, which is also good. But, as I said, I’ll have a better sense of what that looks like once we got agreement with the agency what the full scope of trial looks like.
Alan Carr
And then last one in terms of revenues for 2016, are there any milestones that you all expect from Maruishi or CKD this year or maybe you can give us an update on where they stand with clinical development over there?
Dr. Derek Chalmers
As far as milestones for Maruishi Alan we don’t expect any in 2016. There will be in 2017 though.
Operator
Our next question comes from Ken Trbovich of Janney. Your line is open.
Ken Trbovich
Just wanted to follow-up on the discussion for uraemic pruritus, I think part of the curiosity that I have is that the design or the intention to go forward with an oral formulation study before you’ve even figured out what the optimal dose is on the I.V. side.
Can you kind of help us understand how you’re trying to bracket that?
Dr. Derek Chalmers
Yes, I’ll let Joe talk about clinically Ken but to start there for us in a market sense and for reimbursement of that product ultimately as you’re well aware an intravenous product in the U.S. is essentially automatically within the bundle payment.
And as you’re also aware an oral medication is automatically outweigh the bundle payment and falls into Medicare Part D, so this is part of a stat program we’re trying to initiate to essentially validate the oral in these patients so that not only we could think about transferring from I.V. to oral for uraemic pruritus and then it makes it much-much easier to walk that back to chronic kidney disease obviously.
But also ultimately to possibly expand beyond dialysis associated pruritus into those other conditions that you’re well aware of associated with liver disease and endocrine disorders and so on where there is a very-very significant unmet need in terms of general pruritus, so that's our initial step in validating our formulation with an ability to move to that formulation for UP and possibly other conditions.
Ken Trbovich
Sure. No I understand with regard to the intention from the reimbursement standpoint and even outside of UP potentially but obviously this PK study in hyponatremia was outside of UP I guess, what I'm really trying to get at is it is the first study tested three doses and had the same Part a, Part b design and the Part b design was highly affected at a 1 microgram dose and so I'm -- I guess, I'm a little puzzled around, first the FDA’s request that you guys do a three dose study and then secondly, what's the -- when we talk about the PK study or just looking at it purely from a oral proof of concepts in that patient population or is this really trying to refine a specific dose because it's not clear to me, that you'd be able to target specific dose until this first trial is completed.
Dr. Derek Chalmers
Right, now on the first part of that question, Joe can chip in on this standard protocol for the FDA to look for dose responsiveness and establishment of minimal effect of dose and that's why we're going to look at a dose range in the first, two, three trial and the second part is the simplest way to look at it, as we quantified the tablet strength that can narrow a much AUCs, we know our effect of from our intravenous studies. And that’s something we can run with a PK trial in these patients we haven’t done it before in these patients and simply to establish that we can get bioequivalence if you like in terms exposure and then to find the tablet strength or strengths that we would predict would active in this group, that's the main reason to run that trial.
Ken Trbovich
Okay. And then the three doses over the same three doses that we saw in the earlier spend?
Dr. Derek Chalmers
The three doses in terms of the intravenous trial while they're going to be anchored during the 1 microgram per kilo and I think as we have said before, it is highly likely we’d like to look at a dose lower than that to sign floor and it's also highly likely we’d look at a dose higher than that.
Ken Trbovich
Right and then I guess, the reason I'm asking is that the earlier study was 0.5 and 2.5, so I'm just trying to confirm whether or not we're talking about the same doses or you're looking at different doses outside of those two that were already tested?
Dr. Derek Chalmers
Yes, that's undecided at that point Ken, but we will certainly go to that when we know final dosages.
Ken Trbovich
Okay and then last question, I know the question with regard to timeline on the program overall was considered too long in the distance too sort of refined but could you give us an expectation on your perspective in terms of how quickly this particular study could be completed because I know you and a competitor both had fairly rapid enrolments in earlier studies, so I just didn't know what you thought the timeline for completion of this study would be on the I.V. side?
Dr. Derek Chalmers
As with the I.V. post-op Ken I think we like to get to that once we're up and running and we know how quickly sites are recruiting then we'll make a guidance on that but we aim to get the study up and running first half of this year.
So, you are not too far away from more refined guidance once we get the study underway.
Ken Trbovich
Sounds good. Okay, appreciate your time.
Operator
Our next question comes from Chiara Russo of Cantor Fitzgerald. Your line is open.
Chiara Russo
Just probably back tracking and I apologize if this has already been addressed. I jumped on the call late, but I was wondering if you could just walk us through sort of the dose equivalent math if you will around the 2 microgram and the 5 microgram, why sort of efficacy here is looked at for areas under the curve versus CMAX?
And why you feel comfortable sort of translating that 1 microgram dose that you saw in pruritus over to the pain trial? Thank you.
Dr. Derek Chalmers
Sure, so I'll start with the back end of your question first, pain and itch travel along the same receptors on the A-delta and C-fibers on ascending pathway, whether it's coming from your skin or whether it's coming from a surgical insult, and we know that the 1 microgram per kilogram is quite efficacious even with only and I think 30 patients per treatment arm in that I.V. UP study and then like fashion, so extrapolate that then out to what we knew in the [indiscernible] trial of [indiscernible] inflammatory painful model, in that situation we had 5 micrograms per kilogram at two 8 dosing, and we saw nice efficacy there as well.
But we needed to go lower, we wanted to go lower because we thought we could even optimize the doses lower, in other words deliver ALG's efficacy at a lower dose, it's a very potent drug, and not have to deal with side effects going forward. Clearly we have one of those side effects at the [indiscernible] but it doesn't scare me or bother me at all actually at this point yet about the 1 and 2, because what I just said on IVH and we'll be able to take a look at that dose again in the assessment once we get a healthier complement of patients for treatment on to see that conditional power, if indeed we have conditional powers it makes us feel comfortable going forward then we continue that study, if we don't we readjust depending upon what we see.
Operator
There are no further questions. I would like to turn the call over Derek Chalmers for any closing remarks.
Dr. Derek Chalmers
Okay well thank you everybody for participating in today's call and we look forward to updating you again very-very soon, so thank you very much.
Operator
Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect.
Everyone have a great day.