STAMFORD, Conn. - Cara Therapeutics, Inc. (NASDAQ: NASDAQ:CARA), a biopharmaceutical company, announced today that it has engaged Piper Sandler & Co. as its financial advisor to explore and review strategic alternatives aimed at maximizing shareholder value.
The company's President and CEO, Christopher Posner, emphasized the Board of Directors' commitment to a range of strategic options, along with an approved operating plan emphasizing cost-containment and cash conservation.
The exploration of strategic alternatives by Cara Therapeutics may involve potential agreements or transactions, although there is no certainty as to the outcome or timing of any such developments. The company stated it will not provide updates or disclose further developments unless the Board of Directors approves a specific action or deems disclosure appropriate or legally required.
As of March 31, 2024, Cara Therapeutics reported having approximately $70 million in cash, cash equivalents, and marketable securities. The company has made strides in the treatment of pruritus, particularly with its IV formulation of difelikefalin, which is approved for the treatment of moderate-to-severe pruritus in adults undergoing hemodialysis due to advanced chronic kidney disease in the United States, EU, and several other countries.
The company is known for its focus on developing new treatments for pruritus and has out-licensed its IV formulation of difelikefalin globally.
This news is based on a press release statement from Cara Therapeutics.
In other recent news, Cara Therapeutics has faced significant setbacks due to disappointing trial results and financial challenges. The company announced the discontinuation of its clinical program for oral-difelikefalin after it failed to show clinically meaningful benefits in its KOURAGE-1 Part A study. The study was focused on treating moderate-severe pruritus associated with notalgia paresthetica, a chronic skin condition.
Following these developments, investment firms Stifel and Canaccord Genuity downgraded Cara Therapeutics' stock from Buy to Hold, and drastically reduced their price targets. These revisions reflect the challenges Cara Therapeutics faces in advancing its treatment portfolio for pruritus-related conditions.
Further, Cara Therapeutics is in a precarious financial position, with only $70 million in cash remaining. This situation has been compounded by a disappointing decision by the Centers for Medicare & Medicaid Services regarding the reimbursement of Cara's approved intravenous drug Korsuva.
In light of these setbacks, the company is currently exploring strategic alternatives.
InvestingPro Insights
In light of Cara Therapeutics' announcement to explore strategic alternatives, a closer look at the company's financial health through InvestingPro data provides a clearer picture for investors. With a market capitalization of just $15.64 million, the company appears to be navigating a challenging financial landscape. Notably, the revenue for the last twelve months as of Q1 2024 has seen a sharp decline of 60.83%, reflecting difficulties in maintaining growth. This is further compounded by a gross profit margin of -546.42%, indicating that the company is not only generating less revenue but also struggling to convert sales into profit efficiently.
Despite these financial headwinds, Cara Therapeutics does hold more cash than debt on its balance sheet, which aligns with the CEO's emphasis on cash conservation. This is an essential factor for investors considering the company's future prospects, as it suggests a degree of financial flexibility despite the significant challenges faced. Additionally, the company's liquid assets exceed its short-term obligations, providing some reassurance of its ability to meet immediate financial commitments.
Investors looking to delve deeper into Cara Therapeutics' financial situation will find additional insights with InvestingPro. There are 12 more InvestingPro Tips available that analyze the company's performance and potential, which could be pivotal in making an informed investment decision. For those interested in a comprehensive analysis, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/CARA.
As Cara Therapeutics explores its strategic options, these financial metrics and additional InvestingPro Tips may help investors understand the risks and opportunities involved in the company's future.
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