Cara Therapeutics, Inc.

Good afternoon and welcome to the CARA Therapeutics Second Quarter 2021 Financial Results Conference Call. All participants are now 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 the CARA team. Please proceed.

Good afternoon. This is Cole Herlitz-Ferguson with Stern Investor Relations, and welcome to Kara Therapeutics' second quarter 2021 financial results and update conference call. The news release became available just after 4 p.m. today and can be found on our website at www.karatherapeutics.com. You may also listen to a live webcast and replay of today's call on the investor section of the website. 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 include statements concerning the expected timing of the data readouts from the company's planned and ongoing clinical trials, the potential results of ongoing clinical trials, timing of future regulatory and development milestones for the company's product candidates, including the company's projected timeline for FDA review and potential approval and commercial launch of Corsiva injection for dialysis-dependent CKD-AP, the expected timeline for conducting meetings with the FDA concerning the company's product candidates, including oral Corsuva for NDD CKD-AP and AD-AP, the potential for the company's product candidates to be alternatives in the therapeutic areas investigated, the potential impact of COVID-19 on the company's clinical development and regulatory timelines and plans, 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. Risks are described more fully in caratherapeutics filings with the Securities and Exchange Commission, including the risk factor sections of the company's most recent annual report on Form 10-K and its other documents subsequently filed or furnished to the Securities and Exchange Commission. All forward-looking statements made in today's call speak only as of the date in which they were made. Kera Therapeutics undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Participating on today's call are Dr. Derek Chalmers, Kera's President and CEO, and Mr. Thomas Riley, Kera's Chief Financial Officer. I'll now turn the call over to Dr. Chalmers.

Okay, thank you, Cole, and good afternoon, everybody, and thanks for joining us today on the call. We have continued to make significant progress across our Cursiva development pipeline in the second quarter of this year with our MDA for our lead product candidate Cursiva injection for the treatment of moderate to severe pruritus in hemodialysis patients. Under priority review, our interactions with the FDA have progressed efficiently and on schedule. And through the completion of our late cycle review, we remain on track for an expected PDUFA target action date of August 23rd of this year. In addition, we continue to make important progress across our oral Cursuva pipeline programs. To that end, in Q2 of this year, we reported top-line results from our Phase II care dose-ranging clinical trial of oral Cursuva for the treatment of moderate to severe pruritus in atopic dermatitis patients. Based on pre-specified analysis of that data set, we've identified the appropriate patient population and dose strength to move forward, and pending the outcome of discussions with the FDA later this quarter, aim to initiate a phase three registration program in mild to moderate atopic dermatitis patients by year end. We also plan to meet with the agency in the coming months to discuss the appropriate predialysis CKD patient population to move forward to phase three in that program. And we continue to enroll patients in our ongoing trials in both PBC and Natalja Parasetica with the aim of establishing Cursiva's efficacy across a range of patient pathologies where treatment of chronic pruritus remains a significant unmet need. So the remainder of 2021 is shaping up to be truly transformative for the company with the potential approval and commercial launch of the first therapy for the treatment of pruritus in hemodialysis patients and potential advancement of oral Kursuva into registration trials. So with that, now let me provide you with some additional details across our main pipeline programs. beginning with our most advanced program, Kursuva injection. Following the FDA's acceptance of our NDA filing with priority review in the first quarter of this year, our dialogue with the agency has progressed well and without any review delays. Based on the outcome of our late cycle review last quarter, we currently do not anticipate any manufacturing inspection delays. and we expect the agency to meet their Pertuva target action date of August 23rd of this year. With that in mind, we remain focused, along with our U.S. commercialization partner, V4 Pharma, for the commercial launch of Krasuva injection in the second half of this year. As a reminder, based on V4's established U.S. nephrology sales force and their deep-rooted relationships with both large and small companies, U.S. dialysis organizations. CARA executed a strategic license agreement with V4 Pharma in the fourth quarter of last year for the commercialization of Kursuva injection in U.S. dialysis clinics under a CARA 60% V4 40% profit share arrangement. And we firmly believe this will support increased launch momentum and adoption of Kursuva in the U.S. market if approved. The financial considerations of the V4 agreement contribute significantly to the current strength of our balance sheet. Based on the terms of the license, the company will be eligible to receive an additional $50 million common stock investment upon U.S. regulatory approval of Kursuva injection, and post-launch, be eligible to receive payments of up to $240 million in U.S. sales-based commercial milestones. On Cursiva injection reimbursement activity, our ongoing interactions with CMS have been productive, and we plan to file both our Tdapa and HCPCS applications later in Q3, again assuming Cursiva injection approval. Turning to ex-U.S. commercialization planning, we were also very pleased to announce earlier this year that the European Medicines Agency accepted the MEA for diphalecephaline injection for the treatment of pruritus associated with chronic kidney disease in hemodialysis patients. The EMA will review the application under the centralized marketing authorization procedure. And under our 2018 license agreement, V4 for Xenius will be responsible for the commercialization of Cursiva injection across European territories. with CARA eligible to receive tiered double-digit royalty payments based on annual net sales and up to $440 million in tiered commercial milestones, all of which are sales-related. The EMA is expected to render their decision in the second quarter of 2022. Turning now to progress on our ORO Cursiva pipeline, We recently announced top-line results from the CARE Phase II dose-ranging trial of oral Krasuva for the treatment of moderate to severe paralysis in atopic dermatitis patients. This trial, you'll recall, was a randomized double-blind placebo-controlled study designed to evaluate the efficacy and safety of oral Krasuva in 401 adult subjects with atopic dermatitis. Patients were stratified across treatment groups by disease severity. with 64% approximately of patients characterized by mild to moderate atopic dermatitis, and approximately 36% of patients characterized by moderate to severe atopic dermatitis. Patients were randomized to three tablet strengths of oral Cursiva, 0.25, 0.5, and one milligram, taking BID versus placebo for 12 weeks, followed by four weeks of active extension. In this pre-specified analysis, A statistically significant change in the primary efficacy endpoint was observed in the mild to moderate, that is BSA less than 10%, patient population, which was evident at week one and sustained through the treatment period. In addition, a statistically significant improvement was also observed in the registration endpoint of four-point responder analysis in the mild to moderate patient population, with 32% of Cursiva-treated patients achieving a greater than four point reduction in NRS at week 12 versus 19% in the placebo group. So these care results have provided key information related to the defined patient group, that is mild to moderate, an active dose range, and an effect size on the registration four point responder endpoint from which to design appropriately powered phase three trials. So with this data in hand, And pending the outcome of our scheduled end of Phase II meeting with the FDA, we aim to initiate our first oral Cursiva Phase III program in mild to moderate atopic dermatitis patients by year-end 2021. We also plan to present additional data and additional analysis from the CARE trial at upcoming medical meetings later this year. So to step back and think a little in terms of ultimate potential positioning of oral Krasuva in the atopic dermatitis treatment landscape, it's clear that while pruritus is recognized as the definitive and indeed the most burdensome symptom of atopic dermatitis, therapeutic development to date in this area has focused on pro-inflammatory pathways rather than pruritogenic pathways. And there is a particular treatment gap amongst mild to moderate atopic dermatitis patients, which is approximately 80% of the AD population, where topical therapies do not adequately address chronic pruritus and systemic immunomodulatory agents are not available. So based on its observed profile from our care data set, we believe that oral Kursuva may provide clinical benefit for these patients and provide a systemic antipyretic therapeutic option where none presently exists. So moving on to our program in predialysis CKD patients with moderate severe pruritus. We recently conducted an end-of-phase two meeting with the FDA with the goal of defining a phase three program in predialysis CKD patients, which would allow us to leverage the substantial clinical efficacy and safety data set we've compiled with Cursiva injection in hemodialysis patients. The FDA has indicated the viability of stage five predialysis CKD patients as a population for a phase three program, and also indicated the potential to use the data from our previous trials of Cursiva injection in dialysis patients to support an approval based on a single phase three clinical trial. We are currently gathering more data related to pruritus incidence and severity in predialysis CKD patients and aim to meet with the agency in the fourth quarter of this year to further define a viable patient population for inclusion in a phase three program. Finally, to our ongoing phase two trials in primary biliary cholangitis and Natalgia parasitica. Before I get to that, I'd like to remind everyone that due to the ongoing COVID-19 pandemic and in accordance with the FDA's updated guidance for conducting clinical trials, we've implemented numerous clinical and operational measures to prioritize the health and most importantly, the safety of patients our employees, and study investigators, and minimize potential disruptions to our ongoing clinical studies. Paritis is a common symptom of cholestatic liver diseases. Twenty to 30 percent of these patients overall experience paritis, with that number rising to approximately 70 percent of patients with primary biliary cholangitis. Our 16-week phase 2 trial is designed to assess the safety and efficacy of a 1-milligram tablet strength of oral Krasuva taken twice daily versus placebo and PPC patients with moderate to severe pruritus. The primary endpoint is the change from baseline in the weekly mean of the daily 24-hour worst HNRS score at week 16. We now expect to report top-line data from this study in the first half of 2022 due to delays in site initiations and patient enrollment resulting from the ongoing COVID-19 pandemic. Finally, with the goal of further establishing the broad antipyretic applicability of Kursuva across patient populations with underlying pathologies, earlier this year, we initiated a phase two proof of concept trial of oral Kursuva for the treatment of moderate to severe pruritus in patients suffering from Natalgia Parasitica, a neuropathic disorder characterized by chronic pruritus in the upper to middle back. The phase two multi-center randomized double-blind placebo-controlled eight-week study is designed to evaluate the efficacy and safety of oral Krasuva in approximately 120 subjects with Natalgia Parasitica, randomized to receive oral Krasuva two megs twice daily versus placebo for eight weeks, followed by a four-week active extension period. Primary efficacy endpoint is a change from baseline, the weekly mean of the daily 24-hour worst-itch NRS score at week eight of the treatment period. And I'm pleased to note today that this trial has now passed the 50% enrollment mark, and based on our current recruitment rates, we expect full enrollment in this trial by the end of this year. So overall, our progress through Q2 and recent months has laid the foundation for a very significant second half of 21. We very much look forward to the expected PDUFA target action date later this month for Kursuva injection as potentially the first FDA-approved therapeutic for the treatment of pruritus in hemodialysis patients. And we're well-prepared, along with our partner, V4 Pharma, for commercial launch of Krasuva injection in the second half of this year. With a strong balance sheet, we're well-positioned to support our goal of initiating our first phase three program with oral Krasuva in mild to moderate AD patients by year end, as well as continue to progress our ongoing oral programs in CKD, in PBC, and Natalgia Parasitica patients. and we'll be updating you in all of the progress across these programs in the coming weeks and months. So, with that, I'll now turn it over to Tom to detail the financial results for this quarter.