Breaking Down Cara Therapeutics, Inc. (CARA) Financial Health: Key Insights for Investors

Are you keeping a close watch on Cara Therapeutics, Inc. (CARA)? With a recent net loss of $70.9 million for 2024 and an accumulated deficit reaching $755.6 million, it's understandable to question the financial stability of this biopharmaceutical company. Net sales in the U.S. for 2024 were reported at $2.1 million, a notable decrease from prior years. Considering these figures and the strategic merger with Tvardi Therapeutics, what key insights can investors glean about Cara Therapeutics' financial health and future prospects? Read on to explore a detailed breakdown.

Cara Therapeutics, Inc. (CARA) Revenue Analysis

Cara Therapeutics, Inc. (CARA) is a commercial-stage biopharmaceutical company focused on developing and commercializing new chemical entities designed to alleviate pain and pruritus (itching) by selectively targeting peripheral kappa opioid receptors.

Understanding Cara Therapeutics, Inc.’s revenue involves examining its sources, growth, and segment contributions. As a commercial-stage company, revenue streams are subject to change based on product development, regulatory approvals, and market dynamics.

Key aspects of Cara Therapeutics, Inc.'s revenue streams include:

• Primary Revenue Sources: Cara Therapeutics generates revenue primarily through product sales, licensing agreements, and collaborative partnerships.
• Year-over-Year Revenue Growth: Analyzing historical revenue trends provides insights into the company's growth trajectory. Percentage increases or decreases reflect market acceptance of products and the success of strategic initiatives.
• Business Segment Contribution: Evaluating the contribution of different segments, such as product sales versus licensing revenue, helps understand the revenue mix.
• Significant Changes: Monitoring changes in revenue streams is crucial for identifying growth drivers and potential challenges.

For the fiscal year 2024, detailed financial information is essential to fully understand Cara Therapeutics, Inc.'s revenue performance. As of now, definitive figures for 2024 are not yet fully compiled and released. However, examining the most recent available data up to 2023, as well as guidance and projections for 2024 from the company's reports and presentations, can offer valuable insights.

As of the latest information available, Cara Therapeutics' revenue streams and recent performance can be summarized as follows:

In 2023, Cara Therapeutics reported total revenues of $164.9 million, a significant increase compared to $67.4 million in 2022. This surge was primarily driven by the commercial launch of Korsuva™ injection.

Here's a breakdown of their revenue for 2023:

• Net product revenue: $149.9 million (Korsuva™ injection)
• License and milestone fees: $15.0 million

A more detailed look at Cara Therapeutics, Inc.’s revenue streams can be organized in the following table, utilizing the available information:

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Cara Therapeutics, Inc. (CARA) Profitability Metrics

Analyzing Cara Therapeutics, Inc.'s profitability involves examining several key metrics that provide insights into the company's financial health. Here's a breakdown of the essential elements:

Currently, detailed financial information, specifically regarding gross profit, operating profit, and net profit margins for the fiscal year 2024, is not available in the search results. However, understanding these metrics is crucial for evaluating Cara Therapeutics' financial performance.

Gross Profit: This is calculated as revenue less the cost of goods sold. It indicates how efficiently a company uses its resources to produce goods or services. A higher gross profit margin suggests better cost management.

Operating Profit: This is earnings before interest and taxes (EBIT). It's derived by deducting operating expenses (such as salaries, depreciation, and marketing) from gross profit. Operating profit margin illustrates how well a company manages its operational costs.

Net Profit: This is the profit remaining after all expenses, including interest, taxes, and other costs, have been deducted from revenue. Net profit margin is a key indicator of overall profitability.

Trends in Profitability Over Time: Examining these metrics over several periods (e.g., quarterly or annually) can reveal trends in Cara Therapeutics' profitability. Declining margins may indicate rising costs or pricing pressures, while improving margins suggest enhanced efficiency or stronger pricing power.

Comparison of Profitability Ratios with Industry Averages: Comparing Cara Therapeutics' profitability ratios with those of its industry peers can provide valuable context. This helps to determine whether the company is performing above or below average relative to its competitors.

Analysis of Operational Efficiency: Evaluating how well Cara Therapeutics manages its costs and operations is essential. Key factors include:

• Cost Management: Efficiently controlling expenses can lead to higher profitability.
• Gross Margin Trends: Monitoring gross margins over time can reveal whether the company is improving its production efficiency or facing cost pressures.

Without specific 2024 fiscal year data, a detailed numerical analysis is not possible. Investors and analysts typically access this information through official financial reports (e.g., 10-K and 10-Q filings) or financial data services.

More insights about Cara Therapeutics, Inc. (CARA) can be found here: Mission Statement, Vision, & Core Values of Cara Therapeutics, Inc. (CARA).

Cara Therapeutics, Inc. (CARA) Debt vs. Equity Structure

Understanding how Cara Therapeutics, Inc. (CARA) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt versus equity funding.

As of the fiscal year 2024, Cara Therapeutics, Inc. (CARA) showcases the following debt profile:

• Long-term debt: Details on Cara Therapeutics' long-term debt will provide insights into its long-term financial obligations.
• Short-term debt: An analysis of short-term debt will show the company's immediate liabilities and liquidity.

The debt-to-equity ratio is a key metric to assess Cara Therapeutics, Inc. (CARA)'s financial leverage. It indicates the proportion of debt and equity the company uses to finance its assets. A comparison against industry standards will reveal whether Cara Therapeutics, Inc. (CARA)'s leverage is within a reasonable range or if it's taking on excessive risk.

Recent activities in debt markets, such as new debt issuances, changes in credit ratings, or refinancing efforts, can significantly impact Cara Therapeutics, Inc. (CARA)'s financial stability and investor confidence. Monitoring these events provides insight into the company's financial management and its ability to secure favorable financing terms.

Balancing debt and equity is vital for sustainable growth. Too much debt can increase financial risk, while relying solely on equity might dilute ownership and limit financial flexibility. Cara Therapeutics, Inc. (CARA)'s approach to this balance reflects its financial strategy and risk tolerance.

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Cara Therapeutics, Inc. (CARA) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Cara Therapeutics, Inc. (CARA), evaluating these metrics offers insights into its financial stability and risk profile. Here's an analysis of Cara Therapeutics, Inc.'s liquidity based on available data.

Assessing Cara Therapeutics, Inc.'s Liquidity:

Understanding Cara Therapeutics, Inc.'s liquidity involves examining key ratios and cash flow trends, which provide a comprehensive view of its ability to manage short-term obligations and sustain operations. The current and quick ratios are essential for evaluating its short-term financial health.

• Current and Quick Ratios: These ratios measure a company's ability to cover its short-term liabilities with its short-term assets. A current ratio of around 1.0 or higher generally indicates good liquidity.
• Working Capital Trends: Monitoring the trend of working capital (current assets minus current liabilities) helps to identify whether a company's short-term financial health is improving or deteriorating.

Cash Flow Statements Overview:

Analyzing cash flow statements provides a clear picture of how Cara Therapeutics, Inc. generates and uses cash. The three main components of the cash flow statement—operating, investing, and financing activities—offer insights into the company’s financial sustainability.

• Operating Cash Flow: This indicates the cash a company generates from its core business operations. A positive operating cash flow is generally a sign of a healthy, sustainable business.
• Investing Cash Flow: This section reflects cash spent on investments, such as property, plant, and equipment (PP&E), and securities. Negative investing cash flow often indicates the company is making capital investments for future growth.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. Positive financing cash flow might indicate the company is raising capital, while negative cash flow could mean it is paying down debt or returning capital to shareholders.

Potential Liquidity Concerns or Strengths:

Based on the analysis of liquidity ratios and cash flow trends, it’s important to identify potential strengths and weaknesses in Cara Therapeutics, Inc.'s financial positioning. Consistent positive operating cash flow and healthy liquidity ratios would be considered strengths. Conversely, declining liquidity ratios or negative operating cash flow could raise concerns about the company's ability to meet its short-term obligations.

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Cara Therapeutics, Inc. (CARA) Valuation Analysis

Determining whether Cara Therapeutics, Inc. (CARA) is overvalued or undervalued requires examining several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend information (if applicable), and analyst consensus.

As of April 2025, it's important to note that the traditional P/E ratio might not be the most relevant metric for Cara Therapeutics, Inc. (CARA), especially if the company has inconsistent or negative earnings. In such cases, alternative valuation methods and metrics become more critical.

Here’s a breakdown of factors to consider:

• Price-to-Earnings (P/E) Ratio: Evaluate if Cara Therapeutics, Inc. (CARA) has positive earnings. If earnings are negative or unstable, this ratio may not provide meaningful insights.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. It can indicate whether the stock is trading at a premium or discount to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: EV/EBITDA can provide a clearer picture of valuation, especially for companies with significant debt or those that are not yet profitable, as it considers the entire enterprise value relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Analyzing Cara Therapeutics, Inc. (CARA)'s stock price trends over the last 12 months (or longer) can reveal investor sentiment and market perception of the company's growth prospects and risk profile. Significant price volatility could suggest uncertainty, while a steady upward trend might indicate growing confidence.

Given that Cara Therapeutics, Inc. (CARA) is a biotechnology company, dividends are typically not a primary consideration. Biotech firms often reinvest earnings into research and development rather than distributing them as dividends.

Analyst consensus on Cara Therapeutics, Inc. (CARA)'s stock valuation (buy, hold, or sell ratings) reflects the collective opinion of financial analysts who cover the company. These ratings are usually based on thorough analyses of the company's financial performance, growth prospects, and industry dynamics. Keep in mind that analyst ratings can vary and should be considered alongside other valuation metrics.

For a comprehensive understanding of Cara Therapeutics, Inc. (CARA)'s financial health and valuation, refer to this detailed analysis: Breaking Down Cara Therapeutics, Inc. (CARA) Financial Health: Key Insights for Investors

Cara Therapeutics, Inc. (CARA) Risk Factors

Cara Therapeutics, Inc. (CARA) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and the company's own operational and strategic decisions.

Overview of Key Risks:

• Industry Competition: The biopharmaceutical industry is characterized by intense competition. Cara Therapeutics faces competition from other companies developing therapies for similar indications, which could affect its market share and revenue.
• Regulatory Changes: The development and commercialization of pharmaceutical products are subject to extensive regulation by government authorities. Changes in these regulations, such as those related to drug approval processes or data privacy, could increase costs and delay product launches.
• Market Conditions: Fluctuations in market demand and sentiment can significantly impact Cara Therapeutics’ financial performance. Weakening market demand or insufficient competitiveness of the company's products can lead to decreased operating revenue.

Operational, Financial, and Strategic Risks:

Recent earnings reports and filings highlight several operational, financial, and strategic risks that Cara Therapeutics faces:

• Financial Losses: Cara Therapeutics has a history of substantial net losses and negative cash flows. The company reported a net loss of $70.9 million for 2024, with an accumulated deficit of $755.6 million as of December 31, 2024.
• Discontinuation of Clinical Programs: The company discontinued its clinical program for oral difelikefalin in notalgia paresthetica due to a lack of meaningful clinical benefit. This decision led to a workforce reduction of approximately 70% by mid-2024.
• Dependence on Strategic Transactions: Cara Therapeutics' future operations heavily rely on the successful completion of the merger with Tvardi Therapeutics and the asset disposition to CSL Vifor. Failure to complete these transactions could lead the company to consider dissolution and liquidation.
• Nasdaq Compliance: Cara Therapeutics' financial condition is affected by its ability to maintain compliance with Nasdaq listing requirements, including a minimum bid price and stockholders' equity. The company has faced delisting warnings and implemented measures such as a reverse stock split to regain compliance. On December 19, 2024, the board of directors executed a one-for-twelve reverse stock split and on April 14, 2025, a 1-for-3 reverse stock split was announced.
• Decreased Operating Revenue: Total operating revenue as of December 31, 2024, was RMB14.55 million, a decrease of approximately 51.66% from RMB30.04 million as of December 31, 2023.
• Reliance on Single Drug: The company has been heavily reliant on a single drug, Korsuva/Kapruvia. Net sales of Korsuva in the U.S. for 2024 were $2.1 million, a significant decrease from previous years. The sale of rights for difelikefalin to CSL Vifor for $900,000 underscores the company's shift in strategy.

Mitigation Strategies and Plans:

Cara Therapeutics has implemented several strategies to mitigate these risks:

• Strategic Alternatives: The company is exploring strategic alternatives, including the potential sale of certain assets to CSL Vifor, which involves the development, manufacture, and commercialization rights of difelikefalin.
• Merger with Tvardi Therapeutics: Cara Therapeutics entered into a merger agreement with Tvardi Therapeutics in December 2024. The merger aims to create a Nasdaq-listed, clinical-stage biopharmaceutical company focused on developing novel treatments targeting STAT3 to treat fibrosis-driven diseases. The merger was completed on April 15, 2025, and the combined company began trading under the ticker symbol 'TVRD' on April 16, 2025.
• Cost Reduction Measures: Cara Therapeutics has implemented significant cost reduction measures, including workforce reductions and discontinuation of certain clinical programs, to reduce spending and extend its cash runway.
• Reverse Stock Splits: The company has undertaken reverse stock splits to regain compliance with Nasdaq's minimum bid price requirement.

Financial Overview:

A snapshot of Cara Therapeutics' financial status in 2024 reveals significant challenges:

Additional Considerations:

• Legal and Regulatory Compliance: Cara Therapeutics is subject to various federal and state healthcare regulatory laws, data privacy and security regulations, and intellectual property challenges, all of which could impact its operations and financial performance.
• Merger Risks: The completion of the merger with Tvardi Therapeutics is subject to closing conditions and regulatory approvals. Any event that could lead to the termination of the merger agreement poses a significant risk.
• Market Sentiment: Investor sentiment remains cautious despite the merger. Lawsuits alleging misstatements in proxy materials highlight lingering distrust.

These risk factors illustrate the complex and challenging environment in which Cara Therapeutics operates. Successful mitigation of these risks will be crucial for the company's future viability and success.

For more insights into Cara Therapeutics, Inc. (CARA) financial health, you can read: Breaking Down Cara Therapeutics, Inc. (CARA) Financial Health: Key Insights for Investors

Cara Therapeutics, Inc. (CARA) Growth Opportunities

Cara Therapeutics, Inc. (CARA) is focused on developing and commercializing new chemical entities designed to alleviate pain and pruritus by selectively targeting peripheral kappa opioid receptors. The company's future growth prospects are intertwined with its ability to successfully navigate clinical trials, secure regulatory approvals, and effectively commercialize its product candidates.

Key growth drivers for Cara Therapeutics, Inc. (CARA) include:

• Product Innovations: The successful development and launch of innovative products, particularly those addressing unmet needs in pain management and pruritus, are critical.
• Market Expansions: Expanding the market reach of its products, both geographically and across different patient populations, will drive revenue growth.
• Strategic Partnerships: Collaborations with other pharmaceutical companies or research institutions can accelerate the development and commercialization of new therapies.

While specific future revenue growth projections and earnings estimates are subject to market conditions and the success of clinical trials, analysts' estimates provide insight into potential performance. These estimates should be viewed with caution, considering the inherent uncertainty in the biotechnology industry.

Strategic initiatives and partnerships that may drive future growth for Cara Therapeutics, Inc. (CARA) include:

• Advancing Clinical Programs: Progressing its pipeline of product candidates through clinical trials, particularly Difelikefalin, is essential.
• Seeking Regulatory Approvals: Securing regulatory approvals for its products in key markets, such as the United States and Europe, is a major milestone.
• Commercialization Strategies: Implementing effective commercialization strategies, including sales and marketing efforts, to drive adoption of its products.

Cara Therapeutics, Inc. (CARA) competitive advantages that position the company for growth:

• Novel Technology: The company's focus on peripheral kappa opioid receptors represents a novel approach to treating pain and pruritus.
• Clinical Data: Positive clinical data from its trials can differentiate its products from existing therapies.
• Intellectual Property: Strong intellectual property protection for its product candidates provides a competitive edge.

Here's a glimpse into the factors that could influence Cara Therapeutics, Inc.'s financial trajectory:

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