Cara Therapeutics Inc (CARA) Q1 2019 Earnings Call Transcript

Before we provide the overview on each of our ongoing programs, I want to briefly remind you of KORSUVA's mechanism of action and why we believe it has the potential to be a first line therapy for pruritus across patient populations. KORSUVA's therapeutic action is mediated by kappa receptors on peripheral sensory afferents as well as on certain immune cells.

The action of KORSUVA on dermal and epidermal immune cells blocks the release of the range of nerve sensitizing molecules or pruritogens, diminishing the stimulation of dermal sensory fibers. We believe that dual neuronal and anti-inflammatory effect affords KORSUVA an effect of anti-pruritic action regardless of the initiating pathophysiology, whether that's chronic kidney disease, chronic liver disease or dermatological conditions or some other clinical situation.

So moving on to our clinical program, let's start with KORSUVA Injection for hemodialysis patients with CKD-aP. This is a patient population where moderate-to-severe pruritus occurs in approximately 40% of patients. It significantly diminishes quality of life and is associated with increased mobility and indeed mortality.

The FDA has granted KORSUVA Injection breakthrough therapy designation for this indication reflecting the significant unmet need with no therapeutics approved in the U.S. R&D to Europe at this point. The pivotal program for KORSUVA Injection in this population currently includes four ongoing Phase III studies KALM-1, a U.S. efficacy trial; KALM-2, a global efficacy trial; and two open-label safety studies, one U.S. and one global, and I'll cover each of these shortly.

Both KALM-1 and KALM-2 are designated -- are designed to investigate the efficacy of KORSUVA Injection at a dose of 0.5 micrograms per kilo versus placebo. The drugs administered three times per week after scheduled dialysis sessions over a 12-week treatment periods with a 52-week open-label extension phase for safety.

The primary efficacy endpoint is the proportion of patients achieving at least a three point improvement from baseline at week-12 with respect to the weekly mean of the daily worst itching intensity score measured on a standard Numeric Rating Scale.

Secondary endpoints in the trials measure aspects of itch-related quality of life, using validated self-assessment scales, namely the Skindex-10 and the 5-D itch, both of which we had also previously implied in our completed Phase IIb trial. Additional secondary endpoints include the proportion of patients achieving a greater than or equal to four point improvement from baseline and the weekly mean of the daily 24-hour worst itch NRS scores at week-12.

The third ongoing Phase III trial and our pivotal program is an open-label 52-week extension safety study, which we initiated in 2017. We recently expanded this trial to enroll up to 300 patients from 240 patients with currently about a 150 patients through 6 months of treatment and approximately 40% of these patients completed one-year of exposure.

To-date, the safety and tolerability has been consistent with data reported in Phase II trials of KORSUVA Injection in hemodialysis patients and based on completed Independent Data Safety Monitoring Board evaluations, the last of which was in Q1 of this year, no new safety signals have been observed to-date.

In addition with the aim of accelerating safety exposures to KORSUVA Injection, we've recently initiated a second open-label safety study utilizing both U.S. and European clinical phase.

And to clarify, this is not a trial required for any specific request from any regulatory agencies, but rather part of our regulatory strategy to utilize novel clinical sites and accelerate required safety exposures per ICH guidelines in an effort to further expedite our path to NDA filing. This trial is expected to enroll up to 400 patients with a maximum treatment period of 12 weeks.

So with top line data from both CAM-1 and CAM-2 expected this year and rapidly accumulating long-term and total patient safety exposures from the ongoing open label trials, we do remain on track toward our goal of developing KORSUVA Injection as a first-in-class therapeutic for hemodialysis patients suffering from pruritus as quickly as we possibly can.

We also remain focused on advancing Oral KORSUVA for pre-dialysis patients with moderate-to-severe CKD-aP. Based on generic pruritus-related script numbers, it is estimated there at least 2.5 million Stage III to V CKD patients suffering from pruritus in the U.S. with current standard of care being predominantly generic corticosteroids and antihistamines.

So we're currently evaluating Oral KORSUVA in an ongoing U.S. Phase II trial for pre-dialysis CKD-aP patients. These trials are multicenter randomized double-blind placebo-controlled 12-week trial designed to evaluate the safety and efficacy of three doses of Oral KORSUVA 0.25 mg, 0.5 mg and 1 mg tablet strengths administered once daily.

In this Oral KORSUVA Phase II trial, we're enrolling 240 patients with 60 per arm. There's an unblinded interim power assessment at 50% enrollment for those subjects who've completed 12 weeks of treatment that allows for expansion of the study up to 480 patients. That trial is currently on track for patient enrollment and we expect to complete the interim assessment in the next few months and ultimately providing top line data in the second half of this year.

Lastly, as we move forward with additional pruritic patient populations that may benefit from Oral KORSUVA, we plan to initiate two additional Phase II trials in the near-term. The first in chronic liver disease associated pruritus in Q2 and the second in pruritus associated with atopic dermatitis around midyear, and we will provide more detail around trial design and patient selection for both of these trials upon the initiation. So, overall, we're very pleased with our team's execution and all of the progress across our clinical programs so far this year, and we look forward to providing further updates as we advance KORSUVA through several significant clinical milestones in the coming months.

And with that, I'll now turn the call over to Mani to discuss our Q1 financial results, Mani.

Mani Mohindru -- Chief Financial Officer

Thank you, Derek. As a reminder, the full financial results of our first quarter of 2019 can be found in the press release that was issued earlier today after market closed. For the first quarter of 2019, we reported a net loss of 22 million or $0.56 per basic and diluted share compared to a net loss of 16.8 million or $0.51 per basic and diluted share for the same quarter of 2018.

For the first quarter of 2018, we recognized revenue of 4.4 million comprised of 4.2 million related to the Vifor Fresenius collaboration agreement and 140,000 related to the sale of clinical compound to a partner Maruishi in Japan. We did not recognize any revenues during the first quarter of 2018. For the first quarter of 2018 of this year, we reported R&D expense of $23.6 million as compared to $13.4 million for the same period of 2018, primarily due to an increase in clinical trial cost as well as increases in stock comp expense and payroll related cost.

G&A expenses were $3.9 during the first quarter of 2019, compared to $3.7 million in the same period of 2018. The slight increase in 2019 period was due to increased legal and consulting cost. Other income was $1.1 million for the first quarter of 2019 versus $311,000 for the same period in 2018. The increase in 2019 was due to higher interest income resulting from a higher balance of company's investment portfolio in the 2019 period.

As of March 31, 2019, our cash and marketable securities totaled $15.1 million compared to $182.8 million at the end of 2018. The decrease in the balanced cash and cash equivalents and marketable securities, the decrease in the cash equivalents and marketable securities was primarily related to cash used in operations of 27.5 million slightly offset by proceeds of $0.2 million from the exercise of stock option.

Turning to our financial guidance. Based on the projected costs of our clinical development plans and timing expectations, we believe that our current cash, cash equivalence and marketable securities as of March 31, 2018 will be sufficient to fund our operations into the fourth quarter of 2020 without taking into account any potential milestones payments under our existing collaborations.