Cara Therapeutics, Inc. (CARA) Q4 2023 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call revealed a decline in revenue and cash reserves, with increased R&D expenses. Despite some positive aspects, such as reduced cost of goods sold, the lack of clear guidance and the management's evasive responses in the Q&A raise concerns. The absence of a strong catalyst or partnership announcement, combined with financial pressures, suggests a negative outlook for the stock price.
Key Financial Performance
Revenue $3 million for Q4 2023, down from $3.3 million in Q4 2022, a decrease of 9%. The decline was attributed to the majority of wholesaler shipments being inventory reallocated within the Fresenius network, which did not translate into incremental revenue.
KORSUVA Injection Net Sales $5 million in Q4 2023, reflecting a 22% quarter-to-quarter demand growth. However, unfavorable reimbursement changes are expected to restrict access to KORSUVA, impacting future revenue.
Cost of Goods Sold $0.6 million for Q4 2023, down from $2.1 million in Q4 2022, a decrease of 71%. The reduction was mainly due to inventory adjustment charges rather than actual vials shipped.
Research and Development Expenses $28.4 million for Q4 2023, up from $26 million in Q4 2022, an increase of 9%. The rise was primarily due to increased clinical trial costs related to late-stage development programs, partially offset by a decrease in stock-based compensation.
General and Administrative Expenses $6.6 million for Q4 2023, essentially flat compared to $6.4 million in Q4 2022.
Cash, Cash Equivalents and Marketable Securities $100.8 million at December 31, 2023, down from $156.7 million at the same time in 2022, a decrease of 36%. The decline was primarily due to $92.1 million used in operating activities, offset by $36.5 million of net proceeds from the HCR agreement.
Operating Highlights
Oral Difelikefalin for Notalgia Paresthetica: Prioritized program with the highest likelihood of clinical and commercial success, aiming to become the first oral therapy for NP.
KORSUVA Injection: Generated net sales of $5 million in Q4 2023, with a 22% quarter-to-quarter demand growth.
Market Potential for Notalgia Paresthetica: Estimated 34 million US patients suffer from chronic pruritus, with 650,000 diagnosed NP patients, indicating a significant unmet need.
Cash Runway Extension: Extended cash runway into 2026 by prioritizing NP program and completing financing with HealthCare Royalty.
Enrollment in COURAGE I Study: Completed enrollment in the dose-finding portion ahead of schedule, with plans for additional sites in the pivotal program.
Strategic Focus Shift: Evolved strategy to focus on notalgia paresthetica, aiming for clinical and commercial success.
Risk or Challenges
Regulatory Issues: Unfavorable reimbursement changes following the end of the TDAPA period on March 31, 2024, are expected to significantly restrict access to KORSUVA, impacting revenue contributions.
Supply Chain Challenges: The company anticipates modifications in treatment protocols by dialysis organizations due to reimbursement changes, which may affect the distribution and accessibility of KORSUVA.
Competitive Pressures: The market for notalgia paresthetica is currently underserved, but the lack of approved therapies means that competition could arise if other companies develop effective treatments.
Economic Factors: The overall economic environment and changes in healthcare policies could impact funding and operational costs, affecting the company's financial stability.
Clinical Development Risks: The success of the oral difelikefalin program is contingent on the outcomes of ongoing clinical trials, which carry inherent risks of failure or delays.
Guidance & Outlook
Strategic Focus: Cara has prioritized the oral difelikefalin program for notalgia paresthetica (NP), extending cash runway into 2026 to reach value inflection milestones.
Clinical Development: Enrollment in the Phase 2/3 COURAGE I study for oral difelikefalin has been completed ahead of schedule, with top-line results expected in Q3 2024.
Market Opportunity: Notalgia paresthetica is a highly underserved condition with an estimated 650,000 patients under care, presenting a significant market opportunity.
KORSUVA Injection: Despite a 22% growth in demand for KORSUVA injection, unfavorable reimbursement changes are expected to restrict access and limit future revenue.
Revenue Expectations: KORSUVA injection generated net sales of $5 million in Q4 2023, but future contributions are not expected due to reimbursement changes.
Cash Runway: Current cash, cash equivalents, and marketable securities are projected to fund operations into 2026.
R&D Expenses: R&D expenses for Q4 2023 were $28.4 million, reflecting increased clinical trial costs.
Future Plans: The operating plan includes costs related to the pivotal program for notalgia paresthetica.
Shareholder Return Plan
Cash Position: Cash, cash equivalents and marketable securities at December 31, 2023, totaled $100.8 million.
Cash Used in Operating Activities: $92.1 million of cash used in operating activities.
Net Proceeds from HCR Agreement: $36.5 million of net proceeds received from HCR.
Cash Runway: Current unrestricted cash is expected to fund operations into 2026.
Key Q&A
Earnings Word Cloud
CARA Transcript
The earnings call revealed a decline in revenue and cash reserves, with increased R&D expenses. Despite some positive aspects, such as reduced cost of goods sold, the lack of clear guidance and the management's evasive responses in the Q&A raise concerns. The absence of a strong catalyst or partnership announcement, combined with financial pressures, suggests a negative outlook for the stock price.
CARA Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
