Good afternoon. My name is Andrew, and I will be your conference facilitator. I would like to welcome everyone to the Cara Therapeutics Fourth Quarter 2021 Financial Results and Update Conference Call. All lines have been placed on mute to avoid any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Please be advised that this call is being recorded. I would now like to introduce Iris Francesconi, Interim Head of Investor Relations from Cara Therapeutics. Ms. Framcesconi, you may begin your call.

Thank you, Andrew, and good afternoon. Just after market closed today, we issued a press release detailing our corporate progress and financial results for the fourth quarter and full year 2021. The press release can be found on our website at www.caratherapeutics.com. You may also listen to a live webcast and replay of today's call on the Investors section of the website. Participating in today's call are Chris Posner, Cara's President and Chief Executive Officer; Tom Reilly, Cara's Chief Financial Officer; and Joana Goncalves, Cara's Chief Medical Officer. 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 company's ability to successfully commercialize KORSUVA injection, including the timing of the product launch, planned future regulatory submissions, and potential future regulatory approvals, the company's ability to maintain coverage, and adequate reimbursement of KORSUVA injection, the performance of our commercial partners including Vifor Pharma, expected timing of the initiation, enrollment and 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 products candidates, the potential for the company's products candidates to be alternatives in therapeutic areas investigated, the company's expected cash reach and the potential impact of COVID-19 on the company's commercial launch, clinical development and regulatory timelines and plans. 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 in more fully in Cara Therapeutics' filings with the Securities and Exchange Commission, including the risk factors section of the company's most recent annual report on Form 10-K and its other documents subsequently filed with or furnished to the Securities and Exchange Commission. All forward-looking statements contained in today's call speak only as of the date on which they were made. Cara Therapeutics undertakes no obligation to update such statements to recent events that occur or circumstances that exist after the date on which they were made. With this, I will turn it over to -- turn the call over to Chris.

Thanks, Iris, and good afternoon, everyone. With me today are Tom Reilly, our Chief Financial Officer; and Dr. Joe Gonsalves, our Chief Medical Officer. Today, I will give you a quick review of our tremendous progress delivering against our milestones, commitments, and plans. Then I will provide some updates on our preparations for the launch of our first product, KORSUVA Injection. Tom will follow with a financial update. And then after that, we will be available to take your questions. I am very excited to join you today to lead my first quarterly earnings conference call as CEO of Cara Therapeutics. In my first 120 days in this role, I have listened and learned to make sure we are doing the necessary things to build trust in our ability to deliver on our goals and continue growing. I am confident that we have the ingredients to build a long-term growth platform here at Cara, and it starts now. We have the right strategy in place, and our work ahead is very focused on executing against our strategy. We are building the category-defining leader in pruritus. This guiding mission drives our strategy and our actions. Chronic pruritus is often a severe, intractable problem for patients in a wide range of diseases, and it is underserved by currently used treatments. In light of this lack of treatment options, chronic pruritus remains underreported, even though it can have a significant negative impact on the quality of life of millions of patients. We are committed to enhancing the awareness of this disease and improving the treatment protocols for patient care so that our novel science benefits the most patients possible. Over the past year, we made excellent progress executing on 3 strategic priorities. Our first priority is to optimize the commercial potential of KORSUVA…

Thank you, Chris. As a reminder, the full financial results for the fourth quarter and full year 2021 can be found in our press release issued today after the market closed. For the fourth quarter of 2021, net loss was $33.4 million or $0.63 per basic and diluted share compared to a net income of $78.9 million or $1.60 per basic and $1.59 per diluted share for the same period in 2020. In the fourth quarter of 2021, we reported $0.8 million of revenue compared to $112.1 million during the same period of 2020. In Q4 2021, we recognized $0.7 million of commercial supply revenue related to our sales of KORSUVA injection to Vifor. Q4 2020, we recognized $111.6 million related to the license agreement with Vifor and $0.5 million related to the license agreement with VFMCRP. Research and development expenses were $22.8 million in the fourth quarter of 2021 compared to $27.1 million in the same period of 2020. The lower R&D expenses in 2021 were principally due to a decrease in costs associated with clinical trials and decreases in payroll costs, partially offset by $5 million in milestones earned by Enteris during the 3 months ended December 31, 2021 compared to $2.5 million during the same period of 2020. General and administrative expenses were $11.5 million in the fourth quarter of 2021 compared to $6.7 million in the same period of 2020. The higher G&A expenses in 2021 were principally due to increases in stock-based compensation expense, which includes $5.1 million of incremental expense related to the modification of our former CEO equity awards in November of 2021. In addition, an increase in payroll costs, legal fees, and insurance costs, partially offset by a decrease in consulting costs and commercial expenses. Other income was $0.1 million in the…

Thanks, Tom. In summary, we believe we are executing preparations that will drive significant immediate growth and help drive growth in the years to come. We have 3 core elements fueling our growth engine, KORSUVA Injection. We are focused on executing the U.S. launch of our first product in April. We and our partner, Vifor, are prepared. KORSUVA injection is a first of its kind product for the treatment of pruritus in chronic kidney disease patients on hemodialysis, and we are ready to maximize its potential in the U.S. and eventually in the EU and other countries. Second, our R&D pipeline. We continue to take disciplined steps to advance our oral KORSUVA pipeline, which we think has the potential to be a pipeline and a product platform across a spectrum of pruritus. We are focused on turning this potential into reality, including 2 Phase III programs starting this month. And we have the strong financial foundation to drive this exciting pipeline to deliver on our growth strategy. That strategy is to be the leader in bringing new treatments to the underserved patient population with pruritus, an underrealized market opportunity of millions of patients. The launch of our anchor product, KORSUVA injection and the profitable economics of our Vifor commercial partnership will make our foundation even stronger to help us get there. Now with that, Tom, Joe, and I will be happy to take your questions. So Andrew, you can now open up the call for questions.

[Operator Instructions]. Our first question comes from the line of Joseph Stringer with Needham & Company.

Chris, I'd be curious to get your thoughts just from a higher level on launch expectations given your experience. And what are some of -- some comps that we could think about. One in particular that somewhat of a comp would be Amgen's Parsabiv certainly some similarities there, but key differences. I was wondering if you could sort of compare and contrast how you think KORSUVA launch could go relative to that drug or any other types of comps that come to mind?

Thanks, Joe. Great to hear from you. So let me first talk about how I think about the upcoming launch. And I'll preface that by saying it's incredibly exciting to launch a first and only product -- and I think about this launch in a couple of different ways. First, it's a significant, significant condition. And as I mentioned in my prepared remarks, the total addressable population is about 200,000 patients. It's very much underreported by patients and overlooked by physicians. And we see a lack of significant treatments. Again, the standards of care are typically the Benadryl Word of the world. So as I think about kind of the overall launch dynamics, it's incredibly conducive to a strong launch. One could think about, first, the overall market dynamics of reimbursement. We have reimbursement, as I mentioned, with TDAPA and now we have a J Word code, and we'll be ready to roll in April. It's a very concentrated physician audience of about 4,000 nephrologists. It's a very concentrated audience in terms of dialysis organizations where you have Fresenius and DaVita accounting for roughly 80% of all the dialysis patients. And lastly, and most important goes down to execution, and we have the right partner, Vifor, which is the leading nephrology company, and they have an established sales force with strong infrastructure. So if you think about those, Joe, in terms of the drivers for success, they point to a very strong adoption. The second part of your question was around comps and you mentioned the Amgen product Parsabiv. And we look at that as probably a good analog during the TDAPA period, but probably not a great analog after the TDAPA period. So during the TDAPA period, what we saw with Parsabiv is very strong uptake. It had, I believe, $300 million in the first year in 2018, $550, the second year and close to that, the third year. So cumulative total of about $1.3 billion in net sales. And we feel, again, that was the only product that ever went through TDAPA will be the second one. Post-TDAPA, obviously, there's a lot of differences. That had competition, that had a generic oral equivalent called Sensipar as well as a brand at Sensipar. We'll go into the period after TDAPA Joe with no competition. So again, net-net, the fundamentals of our value proposition remains incredibly strong. So I would conclude by saying the market dynamics support a very, very strong launch and a very strong trajectory, but also sustained launch success given the fact that the value proposition will be maintained with the lack of competition and the remaining unmet needs in the space.

And our next question comes from the line of Chris Howerton with Jefferies.

This is Kambiz on for Chris. Team, what does the performance metrics for IV KORSUVA launch look like? Are you expecting any pent-up demand for the launch? And how do you anticipate COVD-19 impacting the launch? And then maybe as a second question, is there any reason there was a lag between December and -- the decision in the TDAPA implementation in April?

Chris, let me take the last one. So the last one first in terms of the -- what you said, the lag. So when we receive TDAPA in December, it's a 90-day implementation period. So the CMS has the implementation at April 1. So that was via the CMS that was fully expected. So that's the last part of your question. The first part around metrics for success, I believe you asked a pent-up demand. The great thing getting an approval last August and what we've seen with Vifor and what we agree to them for this preparation period is around strong market shaping. So Vifor has been out really for the last 6, 7 months doing the proper disease education awareness, talking to the 4,000 nephrologists that they target as well as focused on the nurses as well as dialysis organization. So again, with all -- with the proper disease awareness, the market shaping and product shaping that's been underway really for the last 8 months. We feel it's going to be, again, a very strong launch beginning in April.

Your next question comes from the line of Annabel Samimy with Stifel.

This is Nick Rubino on for Annabel. If you commercial and then maybe just a follow-up, if I could. So just to drill down on the post-TDAPA period, should we expect the bundle reimbursement paradigm to cause kind of volume inflections likely with some level of lower pricing? And then shifting to the EU, congrats on the positive CHMP opinion. But what should the kind of Kapruvia launch look like? Obviously, before Fresenius is still leading the charge, which is definitely a big benefit, but there's more reimbursement blocking and tackling. Kind of when should we expect contribution to come through there?

Thanks, Nick. Thanks for the question. So the first question is post TDAPA. So this is how we think about post TDAPA. I mean, we think it will be in the bundle, but we think very strongly that it will be properly funded post TADAP. Again, the value proposition of KORSUVA injection will remain very strong because if you look at the competition, there is no competition coming. So we will be the first and only and that will really strengthen as we go through as more patients get on therapy. So again, we think -- well, we're very optimistic that post TADAP funding will be secured. The second question in terms of the EU, we think there's obviously a very large opportunity in the EU. If we think about the patient size, there's roughly 300,000 patients on hemodialysis in the EU and roughly about the same about -- in the U.S., about 40% of patients experience moderate to severe pruritus depending on the country. And additionally, I think it's really important, again, we talk about value proposition a lot. There are no approved products to treat CKD pruritus in hemodialysis patients in the EU. So there may be some pricing differences clearly between the EU and the U.S., but it's still a very significant opportunity.

And then just switching to oral KORSUVA real quick. Congrats on the Stage 4, 5 expansion. Just wondering if you can kind of give us how you're thinking about powering assumptions for the placebo arm now that it's you know that it's going to be Stage 4 and 5 inclusion. Are you looking more at the IV KORSUVA study to help you think about that or more of the Phase II study you did before with Stages 3 to 5?

Yes. Nick, let me turn that over to Joe.

As you know, we're going to be conducting our R&D Day next week, and we'll be sharing a lot more about the Phase III designs and can give more details at that stage.

Your next question comes from the line of Sumant Kulkarni with Canaccord.

I have a couple. On the price that you've set, can we assume very modest discounting of the 21,000 list, if any? And what might be a real-world addressable peak share or utilization rate in the TDAPA period? And then I have a follow-up.

Hey, Sumant, great to hear from you. So on the price, I mean, in terms of contract, there is some contracting in the buy and bill space, but it's certainly not as significant as you would typically see in Part D. So there will be some contracting. But it's very early to kind of assess what that would look like. And your second question, Sumant, if you -- so your second question was around peak share. Yes, I think, again, we're not -- at this point, we're not guiding to sales forecast. But what I can tell you is that we're excited about the early adoption of this product. And what we're hearing anecdotally from physicians and dialysis organizations is a real keen interest in this product. I just always reinforce the value proposition, the significant burden of this disease and really the lack of treatment. There are no approved treatments for pruritus. So that's how we're kind of thinking about a very strong adoption curve for KORSUVA Injection. And I believe, Sumant, you had a second follow-up.

Yes, it's more a pipeline based thing. Is it fair to assume that notalgia paresthetica remains one of the more relatively challenging itch base indication to target? And given that dynamic, how should we expect or read through anything you might learn from the upcoming oral KORSUVA data set in MP to your own KORSUVA pivoted programs in pruritus in atopic dermatitis, for example?

Yes. Let me turn that to Joe.

So indeed, notalgia paresthetica is quite a challenging itch and because of 22 treatment options and very difficult to manage. There are no currently approved treatments. So we are excited about our study, and I look forward to our data readout in the second quarter of this year

Our next question comes from the line of Jason Gerberry with Bank of America.

Hey, Jason, I think you're coming in and out, I don't know, of your connection.

This is Chi for Jason. Can you hear me now?

I can hear you perfectly. Yes, go ahead.

So I guess first question I have is on the upcoming Phase II data readout. Can you talk about how [indiscernible] expectation for the readout? I know you had said expecting looking for separation from placebo at respective disease. So I'm curious, is this a signal-seeking exercise where you're looking for a numeric separation? Or are you looking for the results for the respective Phase II studies? And I guess when I look at the primary endpoint for each study, they are looking at change from baseline and score. So I'm curious, can we expect any responder analysis from the top line risk similar to sort of prior reuse Word in CKD? And I guess on that point, would you expect ultimately the registrational endpoint for these indications to be either on responder rates based on either 3 point or 4 improvement score similar to like in the CKD and similar to the dialysis setting? And I guess also only if it has changed from baseline, how should investors interpret the data as the extrapolate into sort of like what could be a potential registrational endpoint?

Sure, sure. Let me -- Chi, let me turn that to Joe and she could address those questions one by one.

Sure. So let me first address your first question regarding our expectation. Indeed, these are proof-of-concept studies as a reminder. So we are looking for numerical separation from placebo. Additionally, you -- we have other additional endpoints, and we'll be looking at the data in its entirety when assessing the outcome of the study. As far as regulatory endpoints, as you know, notalgia paresthetica, there is no precedent. So this will be a discussion with the agency. And that goes through the term division. The PBC goes through the GI division. And again, that will be a discussion with the GI division on what the regulatory end points would be.

I guess my second question is on IV KORSUVA. I think Company had commented on this before. But is there -- do you have any -- what's your latest thought process on providing guidance for 2022 for IV KORSUVA, at least the revenue contribution to Cara. And if you don't think you will provide any guidance in 2020 for the year, curious how comfortable is management on sort of consensus estimates right now. I think when I look at it, it's around $70 million, but it's a little bit hard to piece out sort of like what's revenue contribution and what is product sales and whatnot. So I'll stop it there and see how we [Technical Difficulty].

No, no, it's a good question. Yes, yes. No, it's a good question. Let me turf that to Tom, our CFO, to talk about guidance, et cetera.

So right now, we're not in a position to provide any sales guidance. As Chris mentioned before, we are confident given the product profile, the concentrated market and with our strong partner in Vifor. So we believe KORSUVA Inject will have a rapid uptake. We'll continue to work with Vifor over the upcoming quarters. And at the appropriate time based on those discussions, we will give guidance at the appropriate time.

And I guess just one more question for me. Just a follow-up sort of your commentary on sort of management thought process post-TDAPA. Certainly, I appreciate the color that you provided, how there's similarly and contrast compared to Parsabiv, especially in the post-TDAPA setting with Parsabiv as a generic counterpart, so that consideration with the bundle adjustment. But I'm curious if KORSUVA were to be bundled after the TDAPA up period, I would imagine it would be classified in each category. And there's already an existing each category where there's antihistamines such as Benadryl already been like to go into the bundle rate. So antihistamine is relatively low cost and it's been around a while. So I'm just curious how should -- what's the management thinking process about the bundle rate? Are you thinking about the differences and how it classifying into each category with existing low-cost alternative, how that might factor into the bundle rate adjustment?

So the post-TDAPA, as I mentioned before, I mean, we're incredibly optimistic that additional funding will be given to cover KORSUVA injection after TDAPA expires over the next 2 to 3 years. So Jason, we -- again, we're very confident that it will be -- there'll be funding available. Now the question is why, why are we confident, why are we optimistic? You mentioned that in the pruritus category in the functional category, there's antihistamines. Well, there's no FDA-approved therapies for pruritus with hemodialysis patients. There are no FDA approved therapies. So we don't believe that the antihistamines will be included as they look at additional funding for KORSUVA injection. I think that's really important. Again, it goes down to the value proposition. And we also know antihistamines have very limited efficacy in this patient population. It's really the only thing there for them, but it certainly has significant limitations. So net-net, post-TDAPA, I mean, we'll work with CMS. They've signaled the willingness to continue to talk to us, which is great. and we'll continue to talk with them. But again, I think the importance for us and Vifor is during the TDAPA period is to make sure this drug is accessible and used by as many appropriate patients as possible.

And our next question comes from the line of Daniel Wolle with JPMorgan.

You mentioned underreporting of pruritus by hemodialysis patients as one of the factors, including overlooking by physicians. So I'm trying to see if there's any plans to get to those patients so that they're aware of treatment options possibly through some sort of DTC campaigns?

Daniel, absolutely. Having an informed and activated patient base is a critical, critical lever in the commercialization plan for Vifor and Cara, 100%. As I mentioned before, pruritus in hemodialysis patients, we've done a lot of work with Vifor. I mean it's underreported among patients and it's undertreated why because there's no treatments. So the marketing lever that we will pull very heavily with Vifor is really activating the patient base.

Okay. And then, will you be responsible financially for that type of marketing? Or will it be Vifor solely?

No, we don't stand up any commercial organization here at Cara. So Vifor will be responsible for the commercialization and the subsequent costs.

And then just to get a little bit color on the opportunity for notalgia paresthetica. You've outlined in prior presentations, the patient opportunity to be around 1 million patients. Of those patients, how many have those have moderate to severe pruritus? And are this potentially addressable by a treatment such as KORSUVA?

Yes. So let me tackle first and then maybe I'll turn it to Joe for a little color commentary. So we think there's about 1 million patients that are receiving antipruritic medicines for pruritus. In terms of how many would be addressable by us, that's work that we're still doing to be quite frank. I would -- it is the primary concern among these patients. And what we hear is, Daniel, I think you and I spoke before, we call it the itch, you can't scratch. And what you see is the use of back scratches are actually a main treatment that folks use. So we think it's a very, very significant population that would be addressable from an oral KORSUVA. Again, we got to see how the data looks in the next quarter, but we're excited about the unmet need there. And again, I think Joe always says there's no approved therapies in this space. and it's a significant burden of disease on these patients. I don't know, Joe, do you want to say...

Just to add to that, I think, in last year's publication that reported that these patients have about 6 [indiscernible] so it gives you an indication that these patients have moderate to severe itch. And again, waiting to look at our data, but potentially a patient population who could serve -- who would do well without drug possibly.

Our next question comes from the line of David Amsellem with Piper Sandler.

So, just have a couple. First, on the commercial landscape for IV KORSUVA, can you just talk about the extent to which patients will be getting, say, gabapentin or other agents, not antihistamine, I should say, but other systemics, ahead of IV KORSUVA. How should we think about that? And then secondly, the CKD study for oral -- in terms of the mix between Stage 4 and Stage 5 CKD, can you just -- this is a question for Joe, just talk through the breakdown between the 2 buckets, how that's going to be, how it's going to play out in the study? And then lastly, just go through whether it's a 3 point or 4 point worst itch NRS endpoint. And if you can't talk about it and want to wait till the R&D day, that's fine, but I figure I asked the question.

So I'll tackle the first one in terms of the treatment algorithm among patients in hemodialysis that have moderate to severe pruritus, you mentioned gabapentin. I mean the primary treatment, as you know, is antihistamines predominantly maybe some topical steroids, but it's predominantly antihistamine, a very small percentage of patients get gabapentin. And you typically have to push the dose there, and that comes with some baggage around side effects. So even in our studies, 1 and 2, we saw very few patients come in on gabapentin and very few. So we think we're going to slot in very nicely as the standard of care for these patients. That's how we view it. In terms of your second question around CKD, I'll turn that to Joe.

But we will wait for those to give further details next week if that's the case. So we ask you to be a little bit patient, and we'll describe the Phase III studies in more detail.

I'm showing no further questions. So with that, I'll turn the call back over to President and CEO, Chris Posner, for any further remarks.

Well, thanks a lot, Andrew, and thanks to everyone for joining us today to hear about our great progress heading into this year for Cara. 2022 is going to be a year of what I say focused execution. With our partner, Vifor, really leading the commercialization, we are ready for an efficient, successful launch of KORSUVA injection. And we are taking our pipeline to the next level. We hope you joined us on March 11 for our virtual R&D event when we will take a deep dive on the details of our Phase III programs with Joe and some leading KOLs. I'd like to say the future starts now for Cara. So with that, I'll conclude the call and thank everyone.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.