SEC Filing | Cara Therapeutics

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-36279

CARA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	75-3175693
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4 Stamford Plaza 107 Elm Street, 9^th Floor Stamford, Connecticut	06902
(Address of registrant’s principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (203) 406-3700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	CARA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No.

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of August 4, 2022 was: 53,725,925.

Table of Contents

CARA THERAPEUTICS, INC.

INDEX TO FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

PART I –FINANCIAL INFORMATION

		PAGE NUMBER

Item 1.	Financial Statements (Unaudited):

	Condensed Balance Sheets as of June 30, 2022 and December 31, 2021	1

	Condensed Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021	2

	Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021	3

	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	4

	Notes to Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	59

Item 4.	Controls and Procedures	59

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	61

Item 1A.	Risk Factors	61

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63

Item 3.	Defaults Upon Senior Securities	63

Item 4.	Mine Safety Disclosures	63

Item 5.	Other Information	63

Item 6.	Exhibits	64

	SIGNATURES	66

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1.Financial Statements.

CARA THERAPEUTICS, INC.

CONDENSED BALANCE SHEETS

(amounts in thousands, excluding share and per share data)

(unaudited)



	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	46,718	$	13,453
Marketable securities		110,794		153,582
Accounts receivable, net - related party		8,003		—
Inventory, net		3,460		2,584
Income tax receivable		697		697
Other receivables		468		455
Prepaid expenses		6,026		2,519
Total current assets		176,166		173,290
Operating lease right-of-use assets		2,278		2,973
Marketable securities, non-current		47,171		69,754
Property and equipment, net		549		631
Restricted cash		408		408
Total assets	$	226,572	$	247,056
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	19,332	$	15,861
Operating lease liabilities, current		1,835		1,755
Total current liabilities		21,167		17,616

Operating lease liabilities, non-current		983		1,918
Commitments and contingencies (Note 16)		—		—
Stockholders’ equity:
Preferred stock; $0.001 par value; 5,000,000 shares authorized at June 30, 2022 and December 31, 2021, zero shares issued and outstanding at June 30, 2022 and December 31, 2021		—		—
Common stock; $0.001 par value; 100,000,000 shares authorized at June 30, 2022 and December 31, 2021, 53,710,300 shares and 53,480,812 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		53		53
Additional paid-in capital		719,129		708,585
Accumulated deficit		(512,713)		(480,758)
Accumulated other comprehensive loss		(2,047)		(358)
Total stockholders’ equity		204,422		227,522
Total liabilities and stockholders’ equity	$	226,572	$	247,056

See Notes to Condensed Financial Statements.

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CARA THERAPEUTICS, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE LOSS

(amounts in thousands, excluding share and per share data)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenue:
License and milestone fees	$	15,000	$	—	$	15,000	$	1,192
Collaborative revenue		8,003		—		8,003		706
Commercial supply revenue		—		—		4,790		—
Clinical compound revenue		—		—		—		37
Total revenue		23,003		—		27,793		1,935
Operating expenses:
Cost of goods sold		—		—		2,081		—
Research and development		19,905		25,225		41,178		44,356
General and administrative		7,570		5,651		16,917		12,016
Total operating expenses		27,475		30,876		60,176		56,372
Operating loss		(4,472)		(30,876)		(32,383)		(54,437)
Other income, net		266		131		428		391
Net loss	$	(4,206)	$	(30,745)	$	(31,955)	$	(54,046)
Net loss per share:
Basic and Diluted	$	(0.08)	$	(0.61)	$	(0.60)	$	(1.08)
Weighted average shares:
Basic and Diluted		53,614,668		50,059,984		53,561,161		49,989,379
Other comprehensive loss, net of tax of $0:
Change in unrealized losses on available-for-sale marketable securities		(324)		(17)		(1,689)		(78)
Total comprehensive loss	$	(4,530)	$	(30,762)	$	(33,644)	$	(54,124)

See Notes to Condensed Financial Statements.

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CARA THERAPEUTICS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(amounts in thousands except share and per share data)

(unaudited)


								Accumulated
				Additional				Other		Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Equity
Balance at December 31, 2021	53,480,812	$	53	$	708,585	$	(480,758)	$	(358)	$	227,522
Stock-based compensation expense	—		—		4,266		—		—		4,266
Shares issued upon exercise of stock options	470		—		3		—		—		3
Shares issued upon vesting of restricted stock units	109,943		—		1,438		—		—		1,438
Net loss	—		—		—		(27,749)		—		(27,749)
Other comprehensive loss	—		—		—		—		(1,365)		(1,365)
Balance at March 31, 2022	53,591,225	$	53	$	714,292	$	(508,507)	$	(1,723)	$	204,115
Stock-based compensation expense	—		—		4,232		—		—		4,232
Shares issued upon exercise of stock options	30,000		—		182		—		—		182
Shares issued upon vesting of restricted stock units	89,075		—		423		—		—		423
Net loss	—		—		—		(4,206)		—		(4,206)
Other comprehensive loss	—		—		—		—		(324)		(324)
Balance at June 30, 2022	53,710,300	$	53	$	719,129	$	(512,713)	$	(2,047)	$	204,422


								Accumulated
				Additional				Other		Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income (Loss)		Equity
Balance at December 31, 2020	49,872,213	$	50	$	641,195	$	(392,317)	$	73	$	249,001
Stock-based compensation expense	—		—		2,744		—		—		2,744
Shares issued upon exercise of stock options	45,035		—		688		—		—		688
Shares issued upon vesting of restricted stock units	109,419		—		1,388		—		—		1,388
Net loss	—		—		—		(23,301)		—		(23,301)
Other comprehensive loss	—		—		—		—		(61)		(61)
Balance at March 31, 2021	50,026,667	$	50	$	646,015	$	(415,618)	$	12	$	230,459
Stock-based compensation expense	—		—		3,376		—		—		3,376
Shares issued upon exercise of stock options	25,494		—		293		—		—		293
Shares issued upon vesting of restricted stock units	36,000		—		100		—		—		100
Net loss	—		—		—		(30,745)		—		(30,745)
Other comprehensive loss	—		—		—		—		(17)		(17)
Balance at June 30, 2021	50,088,161	$	50	$	649,784	$	(446,363)	$	(5)	$	203,466

See Notes to Condensed Financial Statements.

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CARA THERAPEUTICS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)


	Six Months Ended
	June 30, 2022		June 30, 2021
Operating activities
Net loss	$	(31,955)	$	(54,046)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		10,359		7,608
Depreciation and amortization		126		124
Amortization expense component of lease expense		695		638
Amortization of available-for-sale marketable securities, net		530		384
Realized gain on sale of available-for-sale marketable securities		—		(39)
Realized gain on sale of property and equipment		—		(70)
Changes in operating assets and liabilities:
Accounts receivable, net - related party		(8,003)		—
Inventory, net		(876)		—
Income tax receivable		—		810
Other receivables		(13)		252
Prepaid expenses		(3,507)		3,781
Accounts payable and accrued expenses		3,471		(3,388)
Operating lease liabilities		(855)		(780)
Net cash used in operating activities		(30,028)		(44,726)
Investing activities
Proceeds from maturities of available-for-sale marketable securities		94,250		80,470
Proceeds from redemptions of available-for-sale marketable securities, at par		—		8,600
Proceeds from sale of available-for-sale marketable securities		—		9,029
Purchases of available-for-sale marketable securities		(31,099)		(63,772)
Purchases of property and equipment		(43)		—
Proceeds from sale of property and equipment		—		70
Net cash provided by investing activities		63,108		34,397
Financing activities
Proceeds from the exercise of stock options		185		981
Net cash provided by financing activities		185		981
Net increase (decrease) in cash, cash equivalents and restricted cash		33,265		(9,348)
Cash, cash equivalents and restricted cash at beginning of period		13,861		32,091
Cash, cash equivalents and restricted cash at end of period	$	47,126	$	22,743

See Notes to Condensed Financial Statements.

Table of Contents

CARA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data)

(unaudited)

1. Business

Cara Therapeutics, Inc., or the Company, is a commercial-stage biopharmaceutical corporation formed on July 2, 2004. The Company is leading a new treatment paradigm to improve the lives of patients suffering from pruritus. The Company’s primary activities to date have been organizing and staffing the Company, developing its lead product and product candidates, including conducting preclinical and clinical trials of difelikefalin-based product candidates, and raising capital.

In August 2021, the Company received U.S. Food and Drug Administration, or FDA, approval for KORSUVA^TM(difelikefalin) injection, or KORSUVA injection, for the treatment of moderate-to-severe pruritus associated with chronic kidney disease in adults undergoing hemodialysis. The Company has a license agreement with Vifor (International) Ltd., or Vifor International, that provides full commercialization rights of KORSUVA injection to Vifor in dialysis clinics in the U.S. under a profit-sharing arrangement, whereby total net sales of KORSUVA injection in the U.S., as recorded by Vifor International, are reduced by Vifor International’s cost of goods sold, or COGS, as well as a marketing and distribution fee owed by the Company based on the level of annual net sales, and the resulting amount is shared according to a 60% (Company)/40% (Vifor International) profit split (excluding sales to Fresenius Medical Center dialysis clinics, compensation for which is governed by the agreement with Vifor Fresenius Medical Care Renal Pharma Ltd., or Vifor), subject to potential temporary adjustment in future years based on certain conditions (see Note 11, Collaboration and Licensing Agreements). Commercial launch of KORSUVA injection began in the U.S. in April 2022 and the Company began recording the associated profit-sharing revenues in the second quarter of 2022. In May 2022, as permitted by the agreements with Vifor International, Vifor International assigned its rights and obligations under the license agreement and a related supply agreement to Vifor. The Company’s rights and obligations under these agreements were unaffected by this assignment and the assignment does not affect the Company’s economic rights under the agreements. Throughout the Notes to Condensed Financial Statements, unless the context requires otherwise, references to Vifor’s commercialization of KORSUVA injection pursuant to this license agreement, and the Company’s provision of KORSUVA injection under this supply agreement, should be understood to refer to Vifor International prior to the assignment and to Vifor following the assignment, as applicable.

In April 2022, the European Commission granted marketing authorization to difelikefalin injection under the brand name Kapruvia® (difelikefalin), or Kapruvia, for the treatment of moderate-to-severe pruritus associated with chronic kidney disease in adult hemodialysis patients. The marketing authorization approves Kapruvia for use in all member states of the European Union, or EU, as well as Iceland, Liechtenstein and Norway. In 2018, the Company entered into a license agreement with Vifor that provides full commercialization rights of Kapruvia to Vifor worldwide (excluding the U.S., Japan and South Korea). In markets outside of the U.S., the Company is eligible to receive tiered double-digit royalty payments based on annual net sales, as defined in the agreement with Vifor, of difelikefalin injection in the licensed territories. In the U.S. market, the agreement with Vifor provides that Vifor will promote difelikefalin injection in the dialysis clinics of Fresenius Medical Care North America, or FMCNA, under a profit-sharing arrangement, whereby the Company is generally entitled to 50% of the annual net profits (as defined in the agreement with Vifor) based on net FMCNA clinic sales (as defined in the agreement with Vifor) and Vifor is entitled to 50% of such net profits, subject to potential adjustments in a calendar year based on certain conditions (see Note 11, Collaboration and Licensing Agreements). In April 2022, Kapruvia was also approved in the UK. The Company expects commercial launch of Kapruvia in certain EU markets in the second half of 2022.

As of June 30, 2022, the Company had raised aggregate net proceeds of approximately $519,600 from several rounds of equity financing, including its initial public offering, or IPO, which closed in February 2014 and four follow-on public offerings of common stock, which closed in July 2019, July 2018, April 2017 and August 2015, respectively, and the issuance of convertible preferred stock and debt prior to the IPO. Including profit share revenue, the Company had also earned approximately $252,700 under its license and supply agreements for difelikefalin, primarily with Vifor

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CARA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data)

(unaudited)

International, Vifor, Maruishi Pharmaceutical Co. Ltd., or Maruishi, and Chong Kun Dang Pharmaceutical Corp., or CKDP, and an earlier product candidate for which development efforts ceased in 2007. In October 2021, the Company received net proceeds of $44,969 from the issuance and sale of 3,282,391 shares of the Company’s common stock to Vifor International in connection with U.S. regulatory approval for KORSUVA injection in August 2021. Additionally, in October 2020, the Company received net proceeds of $38,449 from the issuance and sale of 2,939,552 shares of the Company’s common stock to Vifor International in connection with the Company’s license agreement with Vifor International. Furthermore, in May 2018, the Company received net proceeds of $14,556 from the issuance and sale of 1,174,827 shares of the Company’s common stock to Vifor International in connection with the Company’s license agreement with Vifor (see Note 11, Collaboration and Licensing Agreements).

As of June 30, 2022, the Company had unrestricted cash and cash equivalents and marketable securities of $204,683 and an accumulated deficit of $512,713. The Company has incurred substantial net losses and negative cash flows from operating activities in nearly every fiscal period since inception and expects this trend to continue for the foreseeable future. The Company recognized net losses of $4,206 and $30,745 for the three months ended June 30, 2022 and 2021, respectively, and $31,955 and $54,046 for the six months ended June 30, 2022 and 2021, respectively, and had net cash used in operating activities of $30,028 and $44,726 for the six months ended June 30, 2022 and 2021, respectively.

The Company is subject to risks common to other life science companies including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing, and compliance with FDA and other government regulations. If the Company does not successfully commercialize KORSUVA injection or any of its other product candidates, it will be unable to generate additional recurring product revenue or achieve profitability.

2. Basis of Presentation

The unaudited interim condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the United States of America, or GAAP. In the opinion of management, these unaudited interim financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of results for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by SEC rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The condensed balance sheet data as of December 31, 2021 were derived from audited financial statements, but do not include all disclosures required by GAAP. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. The more significant estimates include the fair value of marketable securities that are classified as level 2 of the fair value hierarchy, revenue recognition associated with profit-sharing arrangements, the amount and periods over which certain revenues will be recognized, including licensing and collaborative revenue recognized from non-

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CARA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data)

(unaudited)

refundable up-front and milestone payments, accounts receivable, net – related party, inventory valuation and related reserves, the determination of prepaid research and development, or R&D, clinical costs and accrued research projects, the amount of non-cash compensation costs related to share-based payments to employees and non-employees, the incremental borrowing rate used in lease calculations and the likelihood of realization of deferred tax assets.

The ongoing COVID-19 pandemic and geopolitical tensions, such as Russia’s incursion into Ukraine, resulted in a global slowdown of economic activity, decades-high inflation, rising interest rates, and a potential recession in the U.S. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these condensed financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the reported amounts of assets and liabilities or the disclosure of contingent assets and liabilities. These estimates, however, may change as new events occur and additional information is obtained, and are recognized in the condensed financial statements as soon as they become known.

Actual results could differ materially from the Company’s estimates and assumptions.

Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in Note 2 to the Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, except as disclosed below.

Accounts Receivable, Net – Related Party

Accounts receivable, net – related party consists of amounts due from sales of KORSUVA injection under the Company’s supply agreements with Vifor, as well as revenues earned from its profit-sharing agreement from sales of KORSUVA injection in the U.S. under the licensing agreements with Vifor. The Company does not obtain collateral for its accounts receivable.

The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for credit losses when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. The Company believes that credit risk associated with its licensing partner, Vifor, is not significant. The Company reviews the need for an allowance for credit losses for any receivable based on various factors including payment history and historical bad debt experience. The Company had an insignificant allowance for credit losses as of June 30, 2022.

Revenue Recognition – Profit-Sharing Arrangement

The Company receives its share of the net profits from Vifor’s sale of KORSUVA injection to third parties in the U.S. under its existing license agreements. The Company has adopted a policy to recognize revenue net of tax withholdings, as applicable.

The Company determined that Vifor is a customer under Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers (Topic 606), as amended by ASU 2016-08, 2016-10, 2016-12 and 2016-20, or ASC 606, in relation to its profit share arrangement with Vifor. The Company sells commercial product to Vifor, who ultimately sells the commercial product to third parties. The Company’s profit share arrangement revenues generated from sales of KORSUVA injection in the U.S. are considered akin to sales-based royalties. In accordance with the sales-based royalty exception, the Company recognizes its share of the pre-tax commercial net profit generated from the sales of

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CARA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data)

(unaudited)

KORSUVA injection in the U.S. in the period the product sales are earned, as reported by Vifor. The related COGS for Vifor associated with the net profit share arrangement as well as the marketing and distribution fee for the applicable period reduces the Company’s profit share revenue for the period. The net sales amounts are determined based on amounts provided by Vifor and involve the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and contractual rebates, wholesaler fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. The Company is dependent on Vifor for timely and accurate information regarding the net revenues from sales of KORSUVA injection in the U.S. in accordance with ASC 606 to accurately report its results of operations. If the Company does not receive timely and accurate information or incorrectly estimates activity levels associated with the profit share arrangement at a given point in time, the Company could be required to record adjustments in future periods.

In accordance with ASC 606-10-55, Principal Agent Considerations, the Company records revenue transactions as net product revenue if it is deemed the principal in the transaction, which includes being the primary obligor, retaining inventory risk, and control over pricing. Given that the Company is not the primary obligor and does not have the inventory risks in the license agreement with Vifor, it records its share of the net profits from the sales of KORSUVA injection in the U.S. on a net basis and presents the settlement payments from Vifor as Collaborative revenue. The Company and Vifor settle the profit sharing quarterly (see Note 11, Collaboration and Licensing Agreements).

3. Available-for-Sale Marketable Securities

As of June 30, 2022 and December 31, 2021, the Company’s available-for-sale marketable securities consisted of debt securities issued by the U.S. Treasury, U.S. government-sponsored entities and investment grade institutions as well as municipal bonds.

The following tables summarize the Company’s available-for-sale marketable securities by major type of security as of June 30, 2022 and December 31, 2021:

As of June 30, 2022


			Gross Unrealized				Estimated Fair
Type of Security	Amortized Cost		Gains		Losses		Value
U.S. Treasury securities	$	11,033	$	—	$	(32)	$	11,001
U.S. government agency obligations		9,500		—		(456)		9,044
Corporate bonds		59,053		—		(853)		58,200
Commercial paper		57,846		—		(150)		57,696
Municipal bonds		22,580		—		(556)		22,024
Total available-for-sale marketable securities	$	160,012	$	—	$	(2,047)	$	157,965

As of December 31, 2021


			Gross Unrealized				Estimated Fair
Type of Security	Amortized Cost		Gains		Losses		Value
U.S. Treasury securities	$	11,573	$	—	$	(3)	$	11,570
U.S. government agency obligations		17,020		—		(45)		16,975
Corporate bonds		66,495		—		(171)		66,324
Commercial paper		106,914		5		(31)		106,888
Municipal bonds		21,692		—		(113)		21,579
Total available-for-sale marketable securities	$	223,694	$	5	$	(363)	$	223,336

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CARA THERAPEUTICS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(amounts in thousands, except share and per share data)

(unaudited)

The following tables summarize the fair value and gross unrealized losses of the Company’s available-for-sale marketable securities by investment category and disaggregated by the length of time that individual debt securities have been in a continuous unrealized loss position as of June 30, 2022 and December 31, 2021:

As of June 30, 2022


	Less than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	11,001	$	(32)	$	—	$	—	$	11,001	$	(32)
U.S. government agency obligations		7,123		(377)		1,921		(79)		9,044		(456)
Corporate bonds		53,797		(749)		4,403		(104)		58,200		(853)
Commercial paper		57,696		(150)		—		—		57,696		(150)
Municipal bonds		18,019		(439)		4,005		(117)		22,024		(556)
Total	$	147,636	$	(1,747)	$	10,329	$	(300)	$	157,965	$	(2,047)

As of December 31, 2021


	Less than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	11,570	$	(3)	$	—	$	—	$	11,570	$	(3)
U.S. government agency obligations		9,456		(45)		—		—		9,456		(45)
Corporate bonds		62,704		(170)		2,020		(1)		64,724		(171)
Commercial paper		52,163		(31)		—		—		52,163		(31)
Municipal bonds		20,562		(105)		1,017		(8)		21,579		(113)
Total	$	156,455	$	(354)	$	3,037	$	(9)	$	159,492	$	(363)

As of June 30, 2022 and December 31, 2021, no allowance for credit losses were recognized on the Company’s available-for-sale debt securities as no portion of the unrealized losses associated with those securities were due to credit losses. The information that the Company considered in reaching the conclusion that an allowance for credit losses was not necessary is as follows:

As of June 30, 2022 and December 31, 2021, the Company held a total of <