Cara Therapeutics Inc (NASDAQ: CARA) got some love from Wall Street on Tuesday, with one analyst projecting significant upside for the stock based the outlook for its leading drug candidate.
Bank of America Merrill Lynch analyst Jason Gerberry initiated coverage of Cara with a Neutral rating and set a $19 price target.
The $19 price target is based on a discounted cash flow analysis of Cara's leading asset IV Korsuva (CR845) in Phase 3 studies for pruritus associated with end-stage renal disease hemodialysis treatment, Gerberry said in the Tuesday initiation note.
Data readouts coming in 2019 make the stock a highly binary trade in the near-term, with large potential upside and downside, the analyst said.
The stock's key catalysts are Phase 3 topline results for IV Korsuva in ESRD-HD in the mid- and back-half of 2019 and Phase 2 topline data for oral Korsuva in CKD3-5, likely in the second half of the year, Gerberry said.
The stock is pricing in roughly a 65-percent probability of a favorable outcome for IV Korsuva, he said.
The drug has both positives and negatives ahead of Phase 3 data, the analyst said. Phase II efficacy and safety readouts were positive, and Gerberry said the drug should benefit from a commercial partnership with VIFOR.
Negatives include Phase 2 data variability across dose arms and unclear reimbursement mechanisms on the distribution front, he said.
BofA projects peak IV Korsuva sales of $530 million, which includes assumptions of acceptable reimbursement rates and 45-percent peak penetration rates in ESRD-HD patients with moderate-to-severe chronic itch, or about 40 percent of the patient population.
Cara Therapeutics shares were up 1.19 percent at $15.31 at the time of publication Tuesday.
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Latest Ratings for CARA
|Jan 2019||Bank of America||Initiates Coverage On||Neutral|
|Sep 2018||Cantor Fitzgerald||Initiates Coverage On||Overweight|
|Sep 2018||Jefferies||Initiates Coverage On||Buy|
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