Stamford’s Cara Therapeutics continues financial struggles; 10-employee workforce down 91%
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Cara Therapeutics is based at 400 Atlantic St. in Stamford.
Cara Therapeutics, a Stamford-based biopharmaceutical company, saw its financial struggles continue in the third quarter despite its major restructuring efforts.
In a quarterly report filed with the U.S. Securities and Exchange Commission (SEC), the company reported a net loss of $12.5 million, or 23 cents per share, for the third quarter ended Sept. 30, down from a loss of $28 million, or 52 cents per share, for the same period last year.
Through the first nine months of 2024, the company reported a net loss of $63 million, or $1.15 per share, down from a loss of $86 million, or $1.59 per share, for the same period in 2023.
“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 financial report states.
As of Sept. 30, Cara Therapeutics said, it had unrestricted cash and cash equivalents and marketable securities of $42 million and an accumulated deficit of $748 million.
The report follows its second quarter report, which stated that the company’s leadership is considering at least the possibility of liquidating and dissolving the company. In June, its board of directors approved a streamlined operating plan “exploring strategic alternatives focused on maximizing shareholder value.”
The board granted that approval after it decided to “discontinue the clinical program in notalgia paresthetica, or NP,” a chronic neurological disorder that can cause episodic itching or pain on a small patch of the skin on the mid-back area, especially in older women.
Cara Therapeutics, which is a portfolio company of the state’s quasi-public venture arm Connecticut Innovations, had said previously it was prioritizing development of oral difelikefalin as a treatment for NP. The decision to discontinue that program came after a clinical study determined the drug “did not demonstrate a meaningful clinical benefit at any dose” when compared to placebo.
In July, the company announced it had hired Greenwich-based investment bank Piper Sandler & Co. to act as a financial adviser “for the process of exploring and reviewing strategic alternatives.”
The restructuring of the company has included slashing its workforce. It announced a first round of layoffs in January, when it cut its workforce in half, and a second round that was to be “substantially completed” by June 30. In its latest filing, Cara Therapeutics states it now has just 10 employees, down from 106 as of March 1, 2023, a 90.5% reduction.
The company said its restructuring expenses totaled $5.7 million for the nine months ended Sept. 30, primarily related to “our strategic prioritization of NP in January 2024 and the resulting discontinuation of our NP program in June 2024, our exploration of strategic alternatives to maximize shareholder value, and the associated workforce reductions.”
The company noted that, due to the restructuring, it expects “that our current unrestricted cash and cash equivalents and available-for-sale marketable securities will be sufficient to fund our currently anticipated operating plan for at least the next 12 months.”
It added, however, that “it is possible that the assumptions upon which we have based this estimate may prove to be wrong, and we could use our capital resources sooner than we presently expect.”
The company also remains at risk of having its stock delisted from the Nasdaq Stock Market. It was notified on Feb. 1 that the closing bid price on its stock, which trades under the symbol CARA, was below $1 per share for the previous 30 consecutive days and would be delisted if the bid price did not improve above that level for 10 consecutive business days..
The company was provided an initial 180-day period to regain compliance with the bid price rule, and on July 31, Nasdaq granted it an additional 180 days, or until Jan. 27, 2025, to regain compliance. On Aug. 1, Cara Therapeutics’ stock was also transferred from the Nasdaq Global Market to the Nasdaq Capital Market.
The stock was trading at 32 cents per share Friday morning, down 2.6% but above its 52-week low of 24 cents per share.
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