UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
OR
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of registrant’s principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
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. ☒
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). ☒
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.
☒ |
| 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).
The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of May 11, 2023 was:
CARA THERAPEUTICS, INC.
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023
PART I –FINANCIAL INFORMATION
PART I
FINANCIAL INFORMATION
Item 1.Financial Statements.
CARA THERAPEUTICS, INC.
CONDENSED BALANCE SHEETS
(amounts in thousands, excluding share and per share data)
(unaudited)
| March 31, 2023 |
| December 31, 2022 | |||
Assets |
|
|
| |||
Current assets: |
|
|
|
| ||
Cash and cash equivalents | $ | | $ | | ||
Marketable securities |
| |
| | ||
Accounts receivable, net - related party | | | ||||
Inventory, net | | | ||||
Income tax receivable |
| |
| | ||
Other receivables |
| |
| | ||
Prepaid expenses |
| |
| | ||
Restricted cash |
| |
| | ||
Total current assets |
| |
| | ||
Operating lease right-of-use assets | | | ||||
Marketable securities, non-current |
| |
| | ||
Property and equipment, net |
| |
| | ||
Total assets | $ | | $ | | ||
Liabilities and stockholders’ equity |
|
|
| |||
Current liabilities: |
|
|
|
| ||
Accounts payable and accrued expenses | $ | | $ | | ||
Operating lease liabilities, current |
| |
| | ||
Total current liabilities |
| |
| | ||
Commitments and contingencies (Note 16) |
|
| ||||
Stockholders’ equity: |
|
|
|
| ||
Preferred stock; $ |
|
| ||||
Common stock; $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Accumulated other comprehensive loss |
| ( |
| ( | ||
Total stockholders’ equity |
| |
| | ||
Total liabilities and stockholders’ equity | $ | | $ | |
See Notes to Condensed Financial Statements.
1
CARA THERAPEUTICS, INC.
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(amounts in thousands, excluding share and per share data)
(unaudited)
Three Months Ended | |||||||
| March 31, 2023 |
| March 31, 2022 |
| |||
Revenue: | |||||||
Collaborative revenue | $ | | $ | — | |||
Commercial supply revenue | | | |||||
Royalty revenue | | — | |||||
Clinical compound revenue |
| |
| — | |||
Total revenue |
| |
| | |||
Operating expenses: |
|
|
| ||||
Cost of goods sold | | | |||||
Research and development |
| |
| | |||
General and administrative |
| |
| | |||
Total operating expenses |
| |
| | |||
Operating loss |
| ( |
| ( | |||
Other income, net |
| |
| | |||
Net loss | $ | ( | $ | ( | |||
Net loss per share: |
|
|
|
| |||
Basic and Diluted | ( | ( | |||||
Weighted average shares: |
|
|
| ||||
Basic and Diluted |
| |
| | |||
Other comprehensive income (loss), net of tax of $ |
|
|
|
| |||
Change in unrealized gains (losses) on available-for-sale marketable securities |
| |
| ( | |||
Total comprehensive loss | $ | ( | $ | ( |
See Notes to Condensed Financial Statements.
2
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) Income |
| Equity | ||||||
Balance at December 31, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Shares issued upon exercise of stock options | | | | — | — | | |||||||||||
Shares issued upon vesting of restricted stock units | | — | | — | — | | |||||||||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Other comprehensive income |
| — |
| — |
| — |
| — |
| |
| | |||||
Balance at March 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | |
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock | Paid-In | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Loss |
| Equity | ||||||
Balance at December 31, 2021 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Shares issued upon exercise of stock options |
| |
| — |
| |
| — |
| — |
| | |||||
Shares issued upon vesting of restricted stock units | | — | | — | — | | |||||||||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Balance at March 31, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | |
See Notes to Condensed Financial Statements.
3
CARA THERAPEUTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Three Months Ended | |||||||
| March 31, 2023 |
| March 31, 2022 |
| |||
Operating activities |
|
|
|
| |||
Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
| |||
Stock-based compensation expense |
| |
| | |||
Depreciation and amortization |
| |
| | |||
Amortization expense component of lease expense |
| |
| | |||
(Accretion)/amortization of available-for-sale marketable securities, net | ( | | |||||
Changes in operating assets and liabilities: |
|
| |||||
Accounts receivable, net - related party | ( | ( | |||||
Inventory, net | ( | | |||||
Other receivables |
| |
| | |||
Prepaid expenses |
| ( |
| ( | |||
Accounts payable and accrued expenses |
| ( |
| | |||
Operating lease liabilities | ( | ( | |||||
Net cash used in operating activities |
| ( |
| ( | |||
Investing activities |
|
|
|
| |||
Proceeds from maturities of available-for-sale marketable securities |
| |
| | |||
Proceeds from redemptions of available-for-sale marketable securities, at par | | — | |||||
Purchases of available-for-sale marketable securities |
| ( |
| ( | |||
Purchases of property and equipment | — | ( | |||||
Net cash provided by investing activities |
| |
| | |||
Financing activities |
|
|
| ||||
Proceeds from the exercise of stock options |
| |
| | |||
Net cash provided by financing activities |
| |
| | |||
Net (decrease) increase in cash, cash equivalents and restricted cash |
| ( |
| | |||
Cash, cash equivalents and restricted cash at beginning of period |
| |
| | |||
Cash, cash equivalents and restricted cash at end of period | $ | | $ | | |||
See Notes to Condensed Financial Statements.
4
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
In August 2021, the Company received U.S. Food and Drug Administration, or FDA, approval for KORSUVA® (difelikefalin) injection, or KORSUVA injection, for the treatment of moderate-to-severe pruritus associated with chronic kidney disease in adults undergoing hemodialysis. Commercial launch of KORSUVA injection began in the United States in April 2022 and the Company began recording the associated profit-sharing revenues in the second quarter of 2022.
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 approved Kapruvia for use in all member states of the European Union, or EU, as well as Iceland, Liechtenstein, and Norway. Kapruvia was also approved in the United Kingdom in April 2022. Commercial launches in Austria, Germany, Sweden, France, the Netherlands, and Finland have commenced. In August 2022, as part of the Access Consortium, difelikefalin injection was approved in Switzerland under the brand name Kapruvia, as well as Singapore and Canada under the brand name KORSUVA. Commercial launch in Switzerland has also commenced. In November 2022, difelikefalin injection was approved in the last Access Consortium country, Australia, under the brand name KORSUVA. The Company expects additional commercial launches to commence over the next 12-18 months.
In 2018, the Company entered into a license and collaboration agreement with a joint venture between Vifor Pharma Group and Fresenius Medical Care Renal Pharmaceutical Ltd., or Vifor Fresenius Medical Care Renal Pharma Ltd., that provides full commercialization rights of Kapruvia, and where applicable KORSUVA, to Vifor Fresenius Medical Care Renal Pharma Ltd. worldwide (excluding the United States, Japan and South Korea). In markets outside of the United States, the Company is eligible to receive tiered double-digit royalty payments based on annual net sales, as defined in the agreement with Vifor Fresenius Medical Care Renal Pharma Ltd., of difelikefalin injection in the licensed territories. In the U.S. market, the agreement with Vifor Fresenius Medical Care Renal Pharma Ltd. provides that Vifor Fresenius Medical Care Renal Pharma Ltd. 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
In 2020, the Company entered into a second licensing and collaboration agreement, along with stock purchase agreements, with Vifor (International) Ltd., or Vifor International, that provides full commercialization rights of KORSUVA injection to Vifor International in dialysis clinics in the United States under a profit-sharing arrangement, whereby total net sales of KORSUVA injection in the United States, 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
5
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
In May 2022, Vifor International assigned its rights and obligations under the license agreement and a supply agreement, as permitted under the agreements, to Vifor Fresenius Medical Care Renal Pharma Ltd. The Company’s rights and obligations under these agreements were unaffected by this assignment and the assignment did not affect the Company’s economic rights under the agreements with Vifor International.
In August 2022, Vifor Pharma Group (which includes Vifor International) was acquired by CSL Limited and subsequently renamed CSL Vifor as part of the acquisition. The acquisition of Vifor Pharma Group did not affect any of the Company’s rights and obligations pursuant to these agreements.
The Company also has a license agreement with Maruishi Pharmaceutical Co. Ltd., or Maruishi, under which the Company granted Maruishi an exclusive license to develop, manufacture, and commercialize drug products containing difelikefalin for acute pain and/or uremic pruritus in Japan. In September 2022, Maruishi submitted a New Drug Application in Japan for approval of difelikefalin injection for the treatment of pruritus in hemodialysis patients (see Note 11, Collaboration and Licensing Agreements).
As of March 31, 2023, the Company had raised aggregate net proceeds of approximately $
As of March 31, 2023, the Company had unrestricted cash and cash equivalents and marketable securities of $
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, Kapruvia 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
6
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
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, 2022 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, 2022.
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, the amount and periods over which certain revenues will be recognized, including licensing and collaborative revenue recognized from non-refundable up-front and milestone payments, related party accounts receivable reserve, as applicable, inventory valuation and related reserves, research and development, or R&D, clinical costs and accrued research projects included in prepaid expenses and accounts payable and accrued expenses, 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 impact from global economic conditions and potential and continuing disruptions to and volatility in the credit and equity markets in the United States and worldwide are highly uncertain and cannot be predicted, including impacts from the COVID-19 pandemic or future public health crises, geopolitical tensions, such as the ongoing military conflict between Russia and Ukraine and related sanctions against Russia, decades-high inflation, rising interest rates, uncertainty and liquidity concerns in the broader financial services industry, such as those caused by certain recent banking failures, and a potential recession in the United States. 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, 2022.
3. Available-for-Sale Marketable Securities
As of March 31, 2023 and December 31, 2022, the Company’s available-for-sale marketable securities consisted of debt securities issued by U.S. government-sponsored entities and investment grade institutions as well as municipal bonds.
7
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
The following tables summarize the Company’s available-for-sale marketable securities by major type of security as of March 31, 2023 and December 31, 2022:
As of March 31, 2023
Gross Unrealized | Estimated Fair | |||||||||||
Type of Security |
| Amortized Cost |
| Gains |
| Losses |
| Value | ||||
U.S. government agency obligations | $ | | $ | — | $ | ( | $ | | ||||
Corporate bonds |
| |
| — |
| ( |
| | ||||
Commercial paper | | | ( | | ||||||||
Municipal bonds |
| |
| — |
| ( |
| | ||||
Total available-for-sale marketable securities | $ | | $ | | $ | ( | $ | |
As of December 31, 2022
Gross Unrealized | Estimated Fair | |||||||||||
Type of Security |
| Amortized Cost |
| Gains |
| Losses |
| Value | ||||
U.S. government agency obligations | $ | | $ | — | $ | ( | $ | | ||||
Corporate bonds |
| |
| — |
| ( |
| | ||||
Commercial paper |
| |
| |
| ( |
| | ||||
Municipal bonds | | — | ( | | ||||||||
Total available-for-sale marketable securities | $ | | $ | | $ | ( | $ | |
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 March 31, 2023 and December 31, 2022:
As of March 31, 2023
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. government agency obligations | $ | — | $ | — | $ | | $ | ( | $ | | $ | ( | ||||||
Corporate bonds | | ( | | ( | | ( | ||||||||||||
Commercial paper | | ( | — | — | | ( | ||||||||||||
Municipal bonds |
| — |
| — |
| |
| ( |
| |
| ( | ||||||
Total | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( |
8
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
As of December 31, 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. government agency obligations | $ | — | $ | — | $ | | $ | ( | $ | | $ | ( | ||||||
Corporate bonds |
| |
| ( |
| |
| ( |
| |
| ( | ||||||
Commercial paper |
| |
| ( |
| — |
| — |
| |
| ( | ||||||
Municipal bonds |
| |
| ( |
| |
| ( |
| |
| ( | ||||||
Total | $ | | $ | ( | $ | | $ | ( | $ | | $ | ( |
As of March 31, 2023 and December 31, 2022,
As of March 31, 2023 and December 31, 2022, the Company held a total of
U.S. government agency obligations. The unrealized losses on the Company’s investments in direct obligations of government agencies were due to changes in interest rates and non-credit related factors. The credit ratings of these investments in the Company’s portfolio have not been downgraded below investment grade status. The contractual terms of these investments do not permit the issuer to repay principal at a price less than the amortized cost bases of the investments, which is equivalent to the par value on the maturity date. The Company expects to recover the entire amortized cost bases of these securities on the maturity date. The Company does not intend to sell these investments, and it is not “more likely than not” that the Company will be required to sell these investments before recovery of their amortized cost bases. The Company held
Corporate bonds, commercial paper, and municipal bonds. The unrealized losses on the Company’s investments in corporate bonds, commercial paper and municipal bonds were due to changes in interest rates and non-credit related factors. The credit ratings of these investments in the Company’s portfolio have not been downgraded below investment grade status. The contractual terms of these investments do not permit the issuer to repay principal at a price less than the amortized cost bases of the investments, which is equivalent to the par value on the maturity date. The Company expects to recover the entire amortized cost bases of these securities on the maturity date. The Company does not intend to sell these investments, and it is not “more likely than not” that the Company will be required to sell these investments before recovery of their amortized cost bases. The Company held
9
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
The Company classifies its marketable debt securities based on their contractual maturity dates. As of March 31, 2023, the Company’s marketable debt securities mature at various dates through November 2024. The amortized cost and fair values of marketable debt securities by contractual maturity were as follows:
As of March 31, 2023 | As of December 31, 2022 | |||||||||||
Contractual maturity |
| Amortized Cost |
| Fair Value |
| Amortized Cost |
| Fair Value | ||||
Less than one year | $ | | $ | | $ | | $ | | ||||
One year to two years |
| |
| |
| |
| | ||||
Total | $ | | $ | | $ | | $ | |
All available-for-sale marketable securities are classified as marketable securities, current or marketable securities, non-current depending on the contractual maturity date of the individual available-for-sale security. Other income, net includes interest and dividends, accretion/amortization of discounts/premiums, realized gains and losses on sales of securities and credit loss expense due to declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method.
There were
As of March 31, 2023 and December 31, 2022, accrued interest receivables on the Company’s available-for-sale debt securities were $
4. Accumulated Other Comprehensive Loss
The following table summarizes the changes in accumulated other comprehensive loss, net of tax, from unrealized gains (losses) on available-for-sale marketable securities, the Company’s only component of accumulated other comprehensive loss, for the three months ended March 31, 2023 and 2022, respectively.
| Total Accumulated | ||
Other Comprehensive | |||
Loss | |||
Balance, December 31, 2022 | $ | ( | |
Other comprehensive income before reclassifications |
| | |
Amount reclassified from accumulated other comprehensive loss |
| — | |
Net current period other comprehensive income |
| | |
Balance, March 31, 2023 | $ | ( | |
Balance, December 31, 2021 | $ | ( | |
Other comprehensive loss before reclassifications |
| ( | |
Amount reclassified from accumulated other comprehensive loss |
| — | |
Net current period other comprehensive loss |
| ( | |
Balance, March 31, 2022 | $ | ( |
Amounts reclassified out of accumulated other comprehensive loss into net loss are determined by specific identification. There were
10
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
5. Fair Value Measurements
As of March 31, 2023 and December 31, 2022, the Company’s financial instruments consisted of cash, cash equivalents, available-for-sale marketable securities, accounts receivable, net – related party, prepaid expenses, restricted cash, accounts payable and accrued liabilities. The fair values of cash, cash equivalents, accounts receivable, net – related party, prepaid expenses, restricted cash, accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these financial instruments. Available-for-sale marketable securities are reported at their fair values, based upon pricing of securities with the same or similar investment characteristics as provided by third-party pricing services.
The Company validates the prices provided by its third-party pricing services by reviewing their pricing methods, obtaining market values from other pricing sources, and comparing them to the share prices presented by the third-party pricing services. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by its third-party pricing services as of March 31, 2023 or December 31, 2022.
The following tables summarize the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022.
Fair value measurement as of March 31, 2023:
Quoted prices in | Significant other | Significant | ||||||||||
Financial assets | active markets for | observable | unobservable | |||||||||
identical assets | inputs | inputs | ||||||||||
Type of Instrument |
| Total |
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
| ||||
Money market funds and checking accounts | $ | | $ | | $ | — | $ | — | ||||
Available-for-sale marketable securities: |
|
|
|
|
| |||||||
U.S. government agency obligations |
| |
| — |
| |
| — | ||||
Corporate bonds |
| |
| — |
| |
| — | ||||
Commercial paper |
| |
| — |
| |
| — | ||||
Municipal bonds |
| |
| — |
| |
| — | ||||
Restricted cash: |
|
|
|
|
| |||||||
Commercial money market account |
| |
| |
| — |
| — | ||||
Total financial assets | $ | | $ | | $ | | $ | — |
11
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
Fair value measurement as of December 31, 2022:
Quoted prices in | Significant other | Significant | ||||||||||
Financial assets | active markets for | observable | unobservable | |||||||||
identical assets | inputs | inputs | ||||||||||
Type of Instrument |
| Total |
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
| ||||
Money market funds and checking accounts | $ | | $ | | $ | — | $ | — | ||||
Available-for-sale marketable securities: |
|
|
|
|
|
|
|
| ||||
U.S. government agency obligations |
| |
| — |
| |
| — | ||||
Corporate bonds |
| |
| — |
| |
| — | ||||
Commercial paper |
| |
| — |
| |
| — | ||||
Municipal bonds | | — | | — | ||||||||
Restricted cash: |
|
|
|
|
|
|
|
| ||||
Commercial money market account |
| |
| |
| — |
| — | ||||
Total financial assets | $ | | $ | | $ | | $ | — |
There were
6. Restricted Cash
The Company is required to maintain a stand-by letter of credit as a security deposit under its leases for its office space in Stamford, Connecticut (refer to Note 16, Commitments and Contingencies: Leases). The fair value of the letter of credit approximates its contract value. The Company’s bank requires the Company to maintain a restricted cash balance to serve as collateral for the letter of credit issued to the landlord by the bank. As of March 31, 2023, the restricted cash balance for the Stamford Lease was invested in a commercial money market account.
As of March 31, 2023 and December 31, 2022, the Company had $
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Balance Sheets that sum to the total of the same such amounts shown in the Condensed Statements of Cash Flows.
| March 31, 2023 |
| December 31, 2022 | |||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash, current assets |
| |
| | ||
Total cash, cash equivalents, and restricted cash shown in the Condensed Statements of Cash Flows | $ | | $ | |
12
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
7. Inventory, net
Inventory, net consists of the following:
| March 31, 2023 |
| December 31, 2022 | |||
Raw materials | $ | | $ | | ||
Work-in-process |
| |
| | ||
Finished goods |
| |
| — | ||
| | |||||
Less Inventory Reserve for Obsolescence |
| — |
| ( | ||
Total | $ | | $ | |
As of March 31, 2023 and December 31, 2022, inventory balances include inventory costs subsequent to regulatory approval of KORSUVA injection on August 23, 2021. There were
8. Prepaid expenses
As of March 31, 2023, prepaid expenses were $
9. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
| March 31, 2023 |
| December 31, 2022 | |||
Accounts payable | $ | | $ | | ||
Accrued research projects |
| |
| | ||
Accrued compensation and benefits |
| |
| | ||
Accrued professional fees and other |
| |
| | ||
Total | $ | | $ | |
10. Stockholders’ Equity
In March 2023, as a result of the completion of the second year of the
In February 2023, as a result of the completion of the first year of the
Also in February 2023, as a result of the completion of the third year of the
13
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
In January 2023, as a result of satisfaction of the quarterly vesting period for restricted stock units granted in October 2021, an aggregate
In March 2022, as a result of the achievement of certain performance targets, an aggregate of
In March 2022, as a result of the completion of the first year of the
In March 2022, the Company filed a universal shelf registration statement, or the Shelf Registration Statement, which provides for aggregate offerings of up to $
Also in March 2022, the Company entered into an open market sales agreement, or the Sales Agreement, with Jefferies LLC, as sales agent, pursuant to which it may, from time to time, issue and sell common stock with an aggregate value of up to $
The Company may offer additional securities under its Shelf Registration Statement from time to time in response to market conditions or other circumstances if it believes such a plan of financing is in the best interests of its stockholders.
In February 2022, as a result of the completion of the second year of the
11. Collaboration and Licensing Agreements
Vifor (International) Ltd. (Vifor International)
In October 2020, the Company entered into a license agreement with Vifor International, or Vifor Agreement No. 1, under which the Company granted Vifor International an exclusive license solely in the United States to use, distribute, offer for sale, promote, sell and otherwise commercialize difelikefalin injection for all therapeutic uses relating to the inhibition, prevention or treatment of itch associated with pruritus in hemodialysis and peritoneal dialysis patients in the United States. Under Vifor Agreement No. 1, the Company retains all rights with respect to the clinical development of, and activities to gain regulatory approvals of, difelikefalin injection in the United States.
After the assignment of rights of Vifor Agreement No. 1 from Vifor International to Vifor Fresenius Medical Care Renal Pharma Ltd. in May 2022, Vifor Agreement No. 1 provides full commercialization rights in dialysis clinics to
14
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
CSL Vifor in the United States under a profit-sharing arrangement. Pursuant to the profit-sharing arrangement, the Company is generally entitled to