Shares of Cara Therapeutics Inc CARA are surging to a three-month high in reaction to a licensing agreement the biotech company announced with Vifor Fresenius Medical Care Renal Pharma.
What Happened
Cara said it has licensed worldwide rights — except in the U.S., Japan and South Korea — to commercialize Korsuva injection with VFMCRP, a joint venture between Vifor Pharma and Fresenius Medical Care AG & Co. (ADR) FMS.
Korsuva, chemically difelikefalin, is being evaluated for treating chronic kidney disease-associated pruritis in dialysis patients. It was given breakthrough designation status by the FDA; there are no approved therapies for the condition in the U.S. or European Union.
Cara retains all rights to Korsuva for all other indications.
Why It's Important
The deal provides for a $50-million upfront cash payment to Cara and an equity investment of $20 million via share sales at $17 apiece. Cara also stands to receive additional payments of up to $470 million, including $30 million in regulatory and up to $440 million in tiered commercial milestones.
The deal provides significant momentum for adoption of Korsuva injections if the drug is approved in the U.S., as it can leverage VFMCRP's nephrology-focused commercial expertise in its co-promotion partnership for U.S. Fresenius Medical Care dialysis facilities.
What's Next
Cara has initiated the first pivotal Phase 3 trial of Korsuva in hemodialysis patients suffering from moderate-to-severe pruritis in the U.S. The company expects to initiate a global Phase 3 clinical trial in multiple countries later this year.
Data from these studies would support regulatory filings in the U.S. and other markets, the company said.
Cara shares were rallying 30 percent to $15.08 at the time of publication Wednesday.
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