Why Cara Therapeutics Stock Is Crashing Today

What happened

Shares of Cara Therapeutics (NASDAQ:CARA) were crashing 43.9% lower as of 11:17 a.m. EDT on Thursday. The big drop came after the company announced results from its phase 2 study evaluating oral Korsuva in treating moderate-to-severe pruritis in patients with atopic dermatitis. 

So what

With the biotech stock falling so heavily today, you’d think that all the results from the phase 2 trial were really bad. That wasn’t entirely the case, though.

Man wearing a suit looking at a red line with arrow crashing through the floor

Image source: Getty Images.

The company did report that oral Korsuva didn’t meet the primary endpoint of the study — a statistically significant change from baseline in the weekly mean of the daily 24-hour itch numerical rating scale (NRS) score at week 12 of the treatment period. It also announced that the drug failed to meet the key secondary endpoint of the study — an improvement from baseline of at least four points in the weekly mean of the daily 24-hour itch NRS score at week 12.

However, Cara said that oral Korsuva did achieve statistically significant improvement in the primary endpoint of the study as early as the first week after dosing. This improvement was sustained through 75% of the treatment period. The company also stated that both primary and key secondary endpoints were met in prespecified analyses in study participants with mild-to-moderate atopic dermatitis.

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Now what

Despite the bad news, Cara Therapeutics doesn’t think it’s the end of the road for oral Korsuva in treating atopic dermatitis. Chief Medical Officer Joana Goncalves said, “We now have a defined patient group and active dose range for Oral KORUSVA in which to design a registration program that we expect to discuss with the FDA in the coming months.” 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

View more information: https://www.fool.com/investing/2021/04/29/why-cara-therapeutics-stock-is-crashing-today/

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