Tuesday, June 13, 2017

Cara Therapeutics

Cara Therapeutics [CARA]

Cara is trying to do big things to combat the opioid epidemic that has been a problem in the United States for quite some time. Opiates are considered an analgesic drug - or one that relieves pain. The most common are in the forms of morphines and heroin. Then there are the synthetic and semi-synthetic opiate drugs being Percocet, Vicodin, OxyContin, and fentanyl. From the Wikipedia page Opioid epidemic, there were 52,000 drug overdose related deaths in the United States. Of those overdose related deaths, 33,000 were from opioids. Clearly there is an opioid problem.


So what is Cara Therapeutics doing to combat this? They are creating a drug that targets the kappa opioid receptor instead of the mu receptor. These types of pain relievers can target three different receptors: kappa, mu, and delta. Morphine, the most common form of analgesic, activates the mu the most and while it works well in pain relief, activating said mu receptor has not-so-great side effects. Most commonly seen are "nausea/vomiting, sedation, respiratory depression, and abuse liability." The mu receptor is activated primarily in the Central Nervous System which is why it works so well in pain relief BUT has the negative side effects that morphine does. The kappa receptors are not directly connected to the central nervous system and therefor won't produce the negative side effects while still providing the user with pain relief.


Cara's current drug in their pipeline has been dubbed CR854 and is, "The First Potential Kappa Opioid Receptor Agonist."
"Cara Therapeutics is developing the first peripherally acting kappa opioid receptor agonist (KORA) called CR854. CR854 is a potent peripheral kappa opioid receptor agonist with high selectivity over the other opioid receptors in the body. The degree of kappa receptor selectivity displayed by CR854 ranks as the best-in-class compared to all other previously developed compounds for this therapeutic target. Moreover, CR854 displayed no significant affinity for any other non-opioid known receptors.
CR854 exhibits potent analgesic, ant-inflammatory and anti-pruritic (anti-itch) properties in both human and animals. Since CR854 is intrinsically poor at penetrating the blood-brain barrier, it has shown to produce little to no CNS-mediated side effects that one sees with traditional CNS-acting mu opioids like nausea/vomiting, sedation, respiratory depression, abuse, addiction or euphoria." -Pipeline & Technology on Cara Therapeutics website

Basically, Cara's up an coming drug works the same in pain and itch relief as morphine does, but it has shown to NOT give the same negative side effects. As it does not target the Central Nervous System [CNS] on the mu receptor it has not shown evidence of people developing an addiction or dependence to it.


In Cara's current pipeline they have an IV for post-op pain between phase III and commercialization and an oral version for chronic pain between phase II and phase III. If the IV form of CR854 passes phase III testing and begins to be commercialized it could be huge for Cara and the opioid epidemic.


This isn't the first non-opioid pain relief drug. Ibuprofen, Advil, and Tylenol are all examples. However, they don't provide enough pain relief for many patients. Cara is developing a drug that has the similar positive effects that morphine has, minus the negative repercussions of activating the mu receptors in the CNS.



Financially speaking they aren't a sure thing. They're a biotech company though, to be expected. The valuation and the financial side is not great on paper. The one thing that jumps out to me as good is the percent of shares owned by insiders. It shows the belief employees or management have in the company. However, the negative thing I see is that the short float percentage is almost up to 24%. Float is the number of shares available to trade. That means shares owned by insiders, and employees are subtracted from the total outstanding shares to get the float. So that isn't a welcome sight.

Cara's performance:
1 week: -3.57%
1 month: 9.76%
Quarter: 14.48%
6 months: 78.35%
1 year: 222.61%
YTD: 88.91%


Taking a look at their chart, I see that it has been tracking along the 50 day moving average pretty steadily. It was climbing with it and using it as support during the beginning of 2017 and thought it dipped below in May, it has since regained composure and began using the 50 day SMA as support. CARA has been following its 20 day moving average even more closely. And yes, that seems obvious. But at the beginning of this year it was outpacing the 20 day with ease. 



Personally, I am very excited for this company and in the investment possibility it presents. There is a lot of upside potential with their IV CR854 in phase III right now and the great results they have gotten from it thus far. Not only that, but what they are trying to do with the opioid epidemic in the United States is noteworthy as well and may create some additional positive press depending on the rest of their trials. 


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