- Cara Therapeutics struck a licensing deal with Vifor Pharma that may be worth as much as $440 million as the biotech prepares to seek approval of its anti-itch medicine for dialysis patients with chronic kidney disease-associated pruritus (CKD-aP).
- The agreement expands on a 2018 deal in which the joint venture Vifor Fresenius Medical Care Renal Pharma got rights to the treatment, IV Korsuva, in most countries around the world and in dialysis clinics run by Fresenius in the U.S.
- Under the new pact, Vifor will pay Cara $100 million up front, make a $50 million equity investment and provide as much as $290 million more in milestone payments and investments. In return, Vifor gets commercial rights to the therapy in non-Fresenius clinics in the U.S. and will receive 40% of the profits.
The deal provides a fresh cash infusion for Cara, as the company works to develop an oral version of Korsuva for patients suffering from atopic dermatitis, pre-dialysis CKD and other pruritic conditions. At the end of June, Cara had $153 million in cash, cash equivalents and marketable securities, enough to carry the company into the second half of 2021.
Cara doesn’t yet have to spend money developing a sales force, and now should have enough cash to fund operations into 2023, Stifel analyst Annabel Samimy wrote in a note to investors. That will allow the company to "double down" on its oral version, which is undervalued by investors, according to Samimy.
"Overall, we view the terms as highly favorable,” the analyst wrote. Cara shares jumped 9% to a little over $15 in early trading Tuesday, though they fell back down to around $14.20 shortly after. Stifel holds a $33 price target for Cara stock.
Analysts expect IV-Korsuva to win approval in 2021, after a filing in the fourth quarter of this year. Because the treatment could help address an unmet need among patients, the Food and Drug Administration has agreed to give it a speedy review. Cara in April reported positive Phase 3 results for the therapy.
CKD-aP affects about 40% of patients on dialysis, according to Cara. The itching associated with the condition can become chronic and affect quality of life, potentially impairing sleep or prompting depression.