Q3 2020 Cara Therapeutics Inc Earnings Call
Report on form 10-q and it's other documents subsequently filed or with or furnished to the Securities and Exchange Commission. All forward-looking statements made in today's call speeds only as of the date on which they were 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 with participating on today's call our doctor Chalmers Cara president and CEO and Chief Financial Officer Thomas Riley. I'll now turn the call over to doctor Chalmers.
Great. Thank you. Jack. Good afternoon everybody and thanks for joining us today on on that day. That's very special day for our industry and for science in general. We've also been executing on some some excellent signs through the third quarter of this year. We've made significant advancements related to our clinical development programs from both receive an injection and for all across a range of indications and I'll summarize those programs shortly an additional Tober. We were very pleased to announce an important commercial license agreement with V for a former smoker server and Jackson for the treatment of CKD Associated Brightest Bulb specifically and US dialysis patients.
We see this as an important strategic deal for the company, which we believe will maximize the potential commercial success for pursuer and Jackson dog food and I'll cover the terms of this agreement a little later in the call.
Additionally in October we strengthened our management team by welcoming Thomas Riley on the call with me today as Chief Financial Officer Tom brings a wealth of experience and biopharma financial strategy from his work at both out again and Novartis in the past and we're very happy to welcome to the team.
Due to the ongoing COVID-19 front damage and in accordance with the fda's updated guidance for conducting clinical trials. We have implemented numerous clinical and operational measures to prioritize the health and safety of patients our employees and study investigators and to minimize potential disruptions to our ongoing studies during the entire acara teams continued dedication and hard work in this area. We remain on track to meet our main clinical and Regulatory goals for the year. And we continue to enroll patients across all of our ongoing trials. So now let me update you on each of our programs starting with our lead program for pursue the injection off and hemodialysis patients with CKD Associated providers as a reminder. This is the patient population where there is significant unmet need with no therapies current wage.
Proved in the US or Europe. So we believe Chris Silva injection has significant potential to change the treatment Paradigm for these patients. Our faith program for this indication is not complete in both pivotal phase three trials the camp one and count to trials to serve archieves statistical significance and both primary and secondary endpoints and in both studies pursuit of an injection was generally well-tolerated with a safety profile consistent with our prior to trial all safety databases for our face reprogram have been closed with Total Safety exposures in excessive i c h guidelines to support the NDA submission with more than 1,500 total patient exposures achieved including more than seven hundred patients completing at least six months of treatment and greater than 400 patients completed.
one year of treatment
I'm preparing r n d a package and we remain on track for submission to the FDA little later. That's quarter at which point we'll also be applying for six months priority review status. Ask receive an injection has breakthrough therapy designation for this indication Escalante priority review a potential 2012 Grand US commercial launch injection as achievable with respect to our us commercialization strategy for pursuing injection. We bought a number of key advantages from our recently announced license agreement with before, most importantly it allows us to employ Keefer's already established dedicated Nephrology focused commercial organization, including an experience sales force of some two hundred ftes with existing relationships across large medium and then depending.
Dialysis organization it also enables us to work with the V4 Market access team to enhance our reimbursement efforts and to leverage the existing wholesale and supply chain agreement agreements already in place to our economic advantage. In addition with no need to build a Cairn apology Focus Salesforce. We expect significant savings and projected future commercial infrastructure costs, which consequently extend our estimated cash one way and we'll get to that a little later on the call with those advantages in mind the financial terms of the agreement also significantly strengthen our balance sheet going forward that's includes an upfront payment of $150 million one hundred billion of that in cash and fifty million in equity purchase a u s approval Milestone consisting of a further wage.
Fifty million dollars in equity purchase and potential us commercial sales Milestones of up to $200 and forty million dollars V4 will have the exclusive or the commercialized receive an injection and non Fresenius Medical Care in North America clinics in the US under Atara 60% V for forty percent profit sharing Arrangement based on non Medical Care Clinic sales recall from a regional office B4. Fazzini's like the agreement which we executed in 2018. We have an established 50/50 profit split Arrangement already in place representing us medical care clinics in the US.
So over we see that there's an ideal agreement to provide both significant momentum for lunch and Adoption of pursue the injection and the US and 4-car importantly to retain commercial upside from our profit sharing Arrangement. So moving from might be onto pipeline programs focused on or off and let's start with our lead program and pre-dialysis CKD patients with moderate-to-severe provided. We previously reported positive top-line results from our home. Well, we create to trial evaluating the safety and efficacy of three tablets strands of oil crossover point two five Megs point five Meg and one Meg once-daily Based on data, we identified the one Meg tablet strength as The Doors level to take forward into phase three to that end. We plan to launch the safety portion of the phase three program.
Do this the third quarter we've been focused.
N c k d a p in the fourth quarter of this year prior to a plant and the fees to meeting with the FDA and the first quarter of 2021.
Which one able to projected pivotal phase 3 trial initiation into two twenty Twenty-One moving on to a topic dermatitis off. I'm going to hear these two doors ranging trial is designed to randomize patients across again, 3 tablets strengths of oral preserver like to 5.5 and 1 am taking twice-daily versus placebo into two of that here. We completed a planned entrance conditional power assessment conducted after approximately fifty percent of the originally targeted patient number completed the designated 12-week treatment. Based on the independent data monitoring committee's recommendation to maintain conservatives testicle power for both primary and state can be secondary endpoint of approximately eighty percent. We increase the target trial size by again approximately 28%
I'm happy to announce that based on current patient screening rates. We expect us trial to be fully enrolled at approximately four hundred patients a little later than water lately within the calendar month of November.
We're also enrolling patients in our ongoing proof-of-concept, please to trial and PBC patients primary biliary cholangitis with moderate-to-severe plaque psoriasis is a common symptom of static liver diseases with 20 to 30% of those patients experiencing colitis. What were the prevalence of up to 70% off in patients with PVC R16 week trial is designed to evaluate the safety and efficacy of a one Meg table of oral taken twice daily wage versus placebo and approximately 60 patients primary endpoint of the change from Baseline and the weekly meeting of the daily 24-hour worst Edge and our escort that we sixteen. Trial and we do have to report top-line data from this study and the first half of 2021.
Finally in relationship with a goal of Father establishing the broad antipyretic applicability of across patient populations. Am currently planning to initiate a Force Base to a trial of Oracle server and an additional patient population with chronic bronchitis remains a significant unmet need off and will provide more details on this study and the targeted patient population a little later that's border. So overall we're pleased with the progress made across all of our development programs in the third quarter and we're looking forward to achieving significant Regulatory and clinical Milestones through the end of this year and into twenty Twenty-One. So what's the unlock turn the call over to Tom to cover the financial results for the quarter tonne?
Okay. Thank you.
Before I begin the financial review, I'd like to say I'm very excited to have joined the team. I'm really looking forward to contributing to the financial strategy of the company as we continue to serve our Pipeline and focus on several key upcoming Milestones that will enhance our long-term value.
Now to the financial review as a reminder the full Financial results for the third quarter twenty-twenty can be found in our press release issued today after the market closed for the third quarter of 2020. We reported a net loss of 16.5 million or 35 cents per basic and diluted share wage compared to a net loss of 32.8 million or $0.74 per basic and diluted share. So the same quarter of 2019.
And the third quarter of 2020 we recognize revenue of 9.3 million related to the V4 Fresenius collaboration agreement compared to five or eight million during the same quarter in 2019.
For the third quarter of 2020. We reported R&D expense of $21 million compared to $36 million in the same period of 2019.
The lower R&D expenses in the third quarter 2020 were primarily due to a decrease in clinical trial cost.
A 2019 eight million upfront payment upon entering the licensing license agreement with interest biopharma Inc. And partially offset by a 2.5 million Milestone earned by interest in 2020.
G&A expenses were five point two million during the third quarter of 2020 compared to 4.2 million in the same period of 2019. The increase in wage 2020 was primarily due to Insurance costs franchise taxes payroll related costs and Commercial costs partially offset by decreases and Consultants costs.
Other income was approximately 0.4 million in the third quarter of 2020 compared to approximately 1.3 million in the same period of 2019. The decrease is due to the lower interest income on our investments and marketable securities.
As of September 30th, 2020 our cash cash equivalents and marketable securities total 131.4 million month compared to 218.2 million as of December 31st, 2019.
the decrease the
Balance of cash and cash equivalents and marketable securities Securities primarily resulted from cash used in operations.
Turning to our financial guidance.
Based on projected cost for clinical development plans and timing expectations. We expect that our current Cash Cash equivalents and marketable securities as a September 30th 2020 with the additional funding of $150 million from the V4 Forma license agreement in October 2020 will be sufficient to fund our operations into 2023 not accounting for any potential Milestone payments under existing collaborations.
With that, I'll turn the call back over to the operator for Q&A.
Thank you. As a reminder to ask a question. You will need to press * then 1 on your touchtone telephone you withdraw your question from the queue, please press the pound key. Please stand by while we compiled the Q&A roster off.
Our first question comes from David Hansen with Piper Sandler Caroline is now open.
Big thanks. This is Zack. For David. Thank you for taking my questions. Just a couple of for me. I know you've asked this in a couple of different ways before but could you maybe just give us a sense of your updated thoughts on pricing for the ice form and you'll be helpless into your thought process regarding what competitors might make sense to either and then quickly on the coral Forum. Could you provide any thoughts on this side, but for still first that you might plan to be building out and what kind of spend particularly direct-to-consumer activities you envisioned. We're just trying to get a better set of the cost structure log. Thank you. Yeah. Yeah. Hi Zach. Thank you. You know, I think a lot of questions were a little too far away from that in terms of projecting what we're going to be spending on a commercial for us there. I would just concentrating on getting that program into the pastry next year and your question on receiver injection was related to pricing or possible pricing and messed up. Yep dead.
Yeah, that's on pricing. Yeah, we just a little early on that. You know, we as we said on this call, you know consistently we're in constant communication with CMS. We believe we have a very good relationship with that group, but we are still a ways away from the label. So it's just a little early to get into detailed discussion on Page in terms of of pricing. There are progressive NJ.
Okay, that makes sense. Thank you. Thanks.
Thank you question comes from Annabel. Samimy with people your line is no open.
Good afternoon, everyone. This is Nick Rubino on for Annabelle. Thanks for taking our questions to from us. Now that you have the V4 deal in hand and a company Capital flexibility. Is there anything that you're doing to accelerate the oil program perhaps opening more sites, and then secondly, you mentioned this new trial in chronic brightest. I know you're giving details but given the population heterogeneity. I guess challenges you saw with pre-dialysis population. What's your general thinking in approaching this broad chronic off right at population and are there similar protocols? You might be considering? Thank you. Yeah. No. Thanks Nick on the lot of question. Let me take that first. I didn't want to leave the impression. We were looking at Broad non-specific providers of non-specific origin. So that's not what we're going to be looking at and in the next phase to it's going to be a very defined patient population.
With a very defined pathology associated with arthritis. So so and the rationale there in terms of which patient groups were looking at as we've discussed before ultimately. I believe that our mechanism of action here is going to be broadly applicable. You know, we're not dependent on blocking any one particular site that came or other provider Jen that pops up associated with one specific wage pathology here. So we'd like to be able to ascertain that we're we have efficacy and these various pathologies where we see pruritus has been up real quick appointment need and so we kind of satisfied the end organ if you like and organ disease-associated provide us with CKD, as you know, we're looking at down to logical Associated provider of the topic and there are some other categories there that we'd like to look at specifically so that the end of the day when we have that discussion down the road with the FDA we've satisfied.
And each of these pathologies which are varied for all have in common a chronic moderate-to-severe parentis, which is not treatable with current medications that we satisfied that we have had the across these various groups. So I'm going to be non-specific providers group to look at it. So it's going to be at the same pathology for this novel is to trial been looking out for some time with that strategy in mind and in terms of our overall capabilities now, you're correct that the people deal has a certainly dramatically strep our balance sheet. Then we have capability and I have to press forward with larger trials. I think you're going to see the benefit of that and the phase three trials. We plan to initiate and twenty twenty one month. And so there were open to push both CKD pre-dialysis and assuming positive results the topic dermatitis interface three. So the advantage we see now, is that those wage
As you rightly indicate can be powered in such a way that we can get through those and then accelerated fashion. So whatever is required in terms of quantity.
Thanks, we can imply and push those several trials, you know as quickly as possible once we get into those. So that's where I see the advantage of the the increase Capital power that we've achieved post the the V4 deal.
All right understood. Thank you for the inside. Thanks, Nick.
Thank you. And our next question comes from Jason gerberry with Bank of America. Airline is now open.
Oh, hi. Good afternoon. Good evening. This is Tianna bro Jason. Thanks for taking my question. Just went from me on the ongoing atopic dermatitis exercise curious. If if you suck monitor activity monitoring interruptions in Cyprus has all those Interruption while the child is ongoing and blinded and if so, do you have any sense whether you observe what the data monitor wage jobs are any interruption in Cypress it for those Interruption. Thank you.
Yeah. Hi Keane. No, that's a good that's a good question. We actually are using electronic data capture was that particular trial? So we have very detailed information on dosage and and when dosage occurs and so far we haven't seen any significant Interruption issues that aren't facts as we've talked about before, um in Q2 post the forward Bloc then we see we've seen a pretty healthy rebound and an enrollment rates in that trial month and you know, we did expect that trial as I said earlier to be fully enrolled very soon that's border. So no, we haven't seen any significant dose Interruption issues with those patients.
Okay, awesome. Thank you. Thanks G.
Thank you. And our next question comes from Alan Carr with Needham & Company your line is now open. All right, thanks for taking my questions one Derek. Can you give us off the scale of the this open-label safety phase three trial that you're going to be starting? What sort of database are you going to need for the oral formulation in total for that and then took a picture question. Obviously, you've made it clear that he planned to look for more indications for oral course UVA, but in one thousand in the in the long-term, where do you expect it to to see Kara? Where do you plan to take it you plan to bring in other drugs or maybe look within your existing early-stage a library of compounds. Thanks. Yeah. Thanks.
On the on the open-label trial that we will when we start that trial will be releasing details on the size of that trial and and that's that's when you're going to see everything you've asked in relation to open-label, but as we've discussed before the strategy with CKD pre-dialysis patience for oil change is that we feel as though we should have the ability to reference the already-established database with I be pursued over and CKD patients and Stage a stage five dialysis patients. So can give you an absolute answer to that right now cuz that's going to come obviously poster interface to meeting but there would like to see a reduced over of safety database requirement by virtue of the ability to reference are already established if you like I did receive a safety database so so that's that's dead.
You know our strategy there and again definitively we'll have some answers to that put the end of his meeting, which we're targeting.
For the first quarter of 2021 and then you know your general, you know, thirty thousand foot will be gone with us. As you know, our first name is obviously some in India for preserver injection for dialysis patients. Second major goal moving or four silver forward with our chosen patient population and to registration trials. I'm getting a course labeled there and then expanding upon the in terms of you know, the oil application and then beyond that if we move that into commercial then yeah me make sense down the road that we look to augment that you know particular plane flying related to feel like dermatologically focused or across and not be involved. Both other formulations of of pure silver that we might pursue that would be useful for that patient population and it may also involved.
You know possible in licensing of again Therapeutics make sense to partner with an aura want to be ready. But that's a little further down the road and you know, not something I could discuss with any sort of certainty right now. It's not something we haven't thought about but that comes after we we push oil forward get it increased free and make sure we can get that to a label first of all.
Thanks for taking my questions. Thanks Allen.
Thank you. And our next question comes from our Linda Lee with canaccord your line is now open.
Good afternoon, and thanks for taking my question congrats on the progress Derek.
I just had a quick question on the forthcoming trial design that you might be contemplating for this new undisclosed indication. It sounds like your prior trials in Upper Deck indications provided sort of a template. Can you give us a size of an indication of what patient population might be and you know, well the trials be similar in scope to what you've done before and will they have similar features for example, like pre-specified interim assessment wage?
Yeah, yeah. Thanks for that question. So so I think the advantage we have now as as you've indicated we we we've established an affect those range for Oracle server. We do understand the computer with that and and the patience we've looked at and so, you know for the new patient population. It's it's a pretty accurate estimate of where we need to be in terms of exposure level to to hopefully see, you know a signal with a not population. So the design is is going to be more on a proof-of-concept page design here to make sure we can get a signal they're based on if you like the doors range and data. We've already established both in CKD and and we're going to see data from from a topic. So so that's going to be the general design again talk about more details when we initiate the trial and and talk about that in a little more detail, but the most important thing there is wage.
It's going all out to establish. Ethicacy Within.
Yes. Ology associated with chronic bronchitis, which ultimately I think is going to be useful ammunition if you like and have discussions with the FDA off and eventually getting that brought label. So so the design is going to you know use information. We've already gleaned from our prior oral trials in terms of those range. We're going to employ off and have we told there and it's going to be more in line with with seeking signal there since we already established if you like her or are appropriate doors for the whole Priscilla. Okay, great. I apologize. I forgot to mention. This is Ben calling in for our Linda. I did realize it was off like to focus on the question here my last question and I I apologize the system asked before but with Ivy course at what time?
They process will you get an idea of where this may or may not be scheduled?
Yes, so obviously it's part of our NDA submission. We will be submitting a specific document that's going to address that all the aspects required by the FDA their home. So after we submit our document when we get acceptance of that document document those a review. They're of a couple of months where the FDA are going to look at that wage aside, whether ultimately they're going to recommend a drug for scheduling and then the end of that review. If they do recommend a scheduling their own as you know, we have very much data, but this is a group that shouldn't be scheduled and we've talked about that on these calls before, you know, it doesn't have a standard or. Chemistry and it doesn't release dopamine in preclinical studies all the preclinical models indicators. Not a highly abusable drug. We've run the human abuse liability trial or css guidelines we run that again, sir.
Ford and look like it's scheduled for so we'll be we'll be presenting all that strong evidence that there should be a non-scheduled compound but f as in the the FDA decides and it should be scheduled and the likelihood they are going to recommend that would be a schedule five. Then after that review process. They'd be another review process of three months of the DEA office infirm that schedule so that would come at the end of the of the priority review process. Okay. That's very helpful again congrats on the progress and the best of luck to you. Great. Thanks, Ben.
Thank you, and I'm showing no further questions in the queue at this time. I'd like to turn the call back to their trailers for any closing remarks. Great. Thank you Jimmy. And thank you everybody for participating in today's call. I'd also like to thank the carotene our study investigators and all the patients to continue to participate in our clinical trials, and we look forward to updating you again very very soon. So thank you very much everybody for dialing and today and have a good night.
Ladies and gentlemen, thank you for your participation on today's conference. This does include your program and you may not disconnect.
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