Exploring Cara Therapeutics, Inc. (CARA) Investor Profile: Who’s Buying and Why?

You're looking at Cara Therapeutics, Inc. (CARA) to understand who is still holding the bag-or, more accurately, who bought into the new vision-and why they made that bet, especially after the critical merger with Tvardi Therapeutics, Inc. in April 2025. This isn't a typical biotech stock; it's a high-stakes pivot, where pre-merger Cara stockholders now own roughly 17.0% of the combined, Nasdaq-listed entity, Tvardi Therapeutics, Inc., which trades under the new TVRD ticker. The investor profile shifted from a company with a trailing twelve-month revenue of only $7.14 million and a net loss of -$70.87 million to a clinical-stage firm focused on STAT3 inhibition.

The institutional conviction was already high, with institutions owning about 98.30% of the outstanding shares before the merger. So, what are these major funds-like Farallon Capital Management Llc and the Vanguard index funds-really buying now? They are buying a cash runway, with Cara contributing approximately $24 million in cash at closing, expected to fund operations into the second half of 2026. The real near-term opportunity, and the reason for the new investor base, centers on Tvardi's anticipated topline data readouts from two Phase 2 clinical programs in the second half of 2025. Are the new investors chasing a potential blockbuster drug, or simply managing a complex biotech restructuring? Let's defintely look at the new ownership structure and the catalyst-driven timeline to see if the risk is worth the reward.

Who Invests in Cara Therapeutics, Inc. (CARA) and Why?

The investor profile for Cara Therapeutics, Inc. (CARA) in 2025 is a story of transition, dominated by institutional players betting on a strategic pivot. The direct takeaway is that your investment thesis must now center on the combined entity, Tvardi Therapeutics Inc., following the April 2025 merger, as the old CARA is fundamentally a different company.

You're not just buying a biotech stock; you're buying into a complex special situation. The investment base is overwhelmingly professional, which means less retail noise but higher sensitivity to clinical trial data and merger execution risks. Honesty, the high institutional concentration is the single most important factor here.

The Institutional Dominance: A Breakdown of Investor Types

Cara Therapeutics, Inc. (CARA) has long been a stock for the professional investor, not the casual retail trader. As of the most recent data near the merger in early 2025, an astonishing 98.30% of the outstanding shares were owned by institutions. This figure is a clear signal: the stock's movements are driven by large funds, not individual investors.

The institutional base is diverse, including major mutual fund families and specialized hedge funds. For example, large index and extended market funds like Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) and Vanguard Extended Market Index Fund Investor Shares (VEXMX) hold passive positions. However, the presence of active managers like Farallon Capital Management Llc suggests a more calculated, active strategy at play. Insider ownership is comparatively small, sitting at just 3.62%. This high institutional float means you need to watch 13F filings closely, because a few large sales can defintely move the price quickly.

Investment Motivations: From Difelikefalin to Tvardi's Pipeline

The primary motivation for holding Cara Therapeutics, Inc. (CARA) stock shifted dramatically in 2025. Historically, investors were drawn to the commercial potential of its flagship drug, difelikefalin (KORSUVA/Kapruvia), for pruritus (chronic itch). However, with the company exploring strategic alternatives due to financial struggles, the focus pivoted to the merger with Tvardi Therapeutics Inc., which closed in April 2025.

The new investment thesis is a bet on Tvardi's pipeline, specifically their lead asset, TTI-109, a novel STAT3 inhibitor for various cancers. The merger was essentially a lifeline for the original CARA shareholders, who were expected to own only about 17.0% of the combined company, while Tvardi investors took the majority 83.0% stake. This was a clear move to preserve capital, as Cara Therapeutics had net cash at closing estimated between $22.875 million and $23.125 million. You are now investing in the new company's growth prospects, not the old one's. You can see the new direction in the Mission Statement, Vision, & Core Values of Cara Therapeutics, Inc. (CARA).

• Bet on Tvardi's clinical pipeline, particularly TTI-109.
• Capital preservation via the cash balance from the old CARA entity.
• No dividend income, so the motivation is purely capital appreciation.

Investment Strategies: Special Situations and Long-Term Biotech Bets

Given the 2025 corporate action, two main investment strategies dominate the shareholder base:

Special Situations/Merger Arbitrage: The high institutional ownership prior to the merger suggests many were playing a special situations strategy (a form of hedge fund strategy) where they bought CARA shares specifically to capture the value of the merger with Tvardi. This strategy focuses on the technical aspects of the deal-the ratio of shares received and the cash balance of the acquired entity-rather than the long-term fundamentals of the former CARA drug pipeline. This is a short-to-medium-term play.

Long-Term Biotech Growth: For those holding post-merger, the strategy is a classic, high-risk, high-reward biotech bet. The combined company's future hinges on the success of Tvardi's clinical programs. The Q1 2025 revenue of $2.57 million and the net loss of -$4.91 million just before the merger closing show this is not a cash-flow play. Here's the quick math: with a negative Return on Equity (ROE) of -270.01%, the investment is a pure speculation on a future blockbuster drug, not current profitability. What this estimate hides is that the new company's value is entirely tied to the success of its new drug candidates, which is a binary risk for your capital.

Institutional Ownership and Major Shareholders of Cara Therapeutics, Inc. (CARA)

You're looking for who was buying Cara Therapeutics, Inc. (CARA) and why, but the most crucial piece of information is that the company you knew as CARA essentially transformed in the first half of 2025. This change of control, driven by a reverse merger, fundamentally rewired the investor base and corporate strategy.

Before the merger, Cara Therapeutics, Inc. was a small-cap biotech with a modest institutional footprint. As of April 15, 2025, the company reported having 19 institutional owners who had filed 13D/G or 13F forms with the SEC. These institutions collectively held 152,823 shares (excluding 13D/G filings), with a total institutional value (Long) of approximately $1.52 million, based on the stock price at that time. That's a small pool of capital for a public company, indicating a high-risk, high-reward profile that only a few specialized funds were willing to take on.

Top Institutional Investors and Shareholdings (Pre-Merger)

The institutional investor profile for Cara Therapeutics, Inc. (CARA) before the corporate action was primarily composed of index funds and specialized asset managers. These are often passive holders, but their presence still offers a baseline of liquidity and validation.

• Farallon Capital Management Llc: A large, multi-strategy hedge fund, often taking activist or event-driven positions.
• VTSMX - Vanguard Total Stock Market Index Fund Investor Shares: A broad-market index fund, holding the stock as part of its mandate to track the entire U.S. stock market.
• VEXMX - Vanguard Extended Market Index Fund Investor Shares: A fund focused on smaller-cap companies, where Cara Therapeutics, Inc. resided.

These investors were holding a company that, despite its development-stage status, had a market capitalization of $37.8 million as of November 17, 2025, though this figure is complicated by the subsequent merger. You can read more about the company's background and mission here: Cara Therapeutics, Inc. (CARA): History, Ownership, Mission, How It Works & Makes Money.

Recent Shifts: The Ownership Reset of 2025

The institutional ownership landscape for Cara Therapeutics, Inc. experienced a massive, deliberate contraction. This wasn't just routine portfolio rebalancing; it was a corporate restructuring that fundamentally changed the stock.

The institutional shares (Long) saw a sharp decrease of -46.59% in the most recent quarter leading up to April 2025, equating to a reduction of about 0.13 million shares. This selling pressure was a direct response to the impending merger with Tvardi Therapeutics, Inc.

Here's the quick math on the corporate action:

• Reverse Split: A 1-for-3 reverse stock split was completed on April 15, 2025, reducing the number of outstanding shares.
• Merger: Cara Therapeutics, Inc. merged with privately-held Tvardi Therapeutics, Inc. in an all-stock transaction.
• Name/Ticker Change: The combined entity was renamed Tvardi Therapeutics, Inc. and began trading under the new symbol TVRD on April 16, 2025.

The old CARA stock is gone. The new institutional investor profile is now dominated by the pre-merger Tvardi investors.

Impact of Institutional Investors: A New Company Strategy

Institutional investors in this scenario played two distinct roles: first, as passive holders of a troubled asset, and second, as the new majority owners dictating the future strategy. The key impact is a complete overhaul of the company's focus and ownership structure.

The pre-merger Cara Therapeutics, Inc. stockholders were expected to own only about 17% of the combined company, while the pre-merger Tvardi investors were expected to own about 83%. This massive shift means the strategic direction, drug pipeline, and operational focus are now overwhelmingly controlled by the institutional investors who backed Tvardi Therapeutics, Inc. The old Cara Therapeutics, Inc. strategy is largely obsolete.

What this estimate hides is the change in the company's core business. The new institutional base is investing in Tvardi's pipeline, not the legacy assets of Cara Therapeutics, Inc. The original institutional holders who stayed through the merger are now minority shareholders in a completely different company, Tvardi Therapeutics, Inc. The new majority owners are defintely focused on maximizing returns from the Tvardi pipeline, which is the whole point of a reverse merger like this.

If you were an investor in Cara Therapeutics, Inc. (CARA), your investment decision is now tied to the success of Tvardi Therapeutics, Inc. (TVRD) and its new institutional backing. Your next step should be to analyze the top institutional holders of Tvardi Therapeutics, Inc. (TVRD) and their conviction in the new therapeutic programs.

Key Investors and Their Impact on Cara Therapeutics, Inc. (CARA)

The investor profile for Cara Therapeutics, Inc. (CARA) underwent a seismic shift in 2025, so the key takeaway is this: the old CARA shareholder base essentially became a minority partner in a new entity, Tvardi Therapeutics, Inc., which now trades under the ticker TVRD. The institutional ownership structure, which was already dominant, drove this pivot toward a reverse merger to secure a new pipeline and extend the cash runway.

As of early 2025, institutional investors held an overwhelming stake, accounting for approximately 98.30% of the outstanding shares before the reverse merger. This level of concentration means a few major funds effectively dictate the company's strategic direction. Key institutional holders included Farallon Capital Management Llc, alongside passive giants like VTSMX - Vanguard Total Stock Market Index Fund Investor Shares and VEXMX - Vanguard Extended Market Index Fund Investor Shares. Their collective influence was less about activist demands and more about approving the strategic move necessary to survive a tough biotech market.

Recent Moves: The 2025 Merger and Stock Restructuring

The most significant investor-related event in 2025 was the closing of the all-stock merger with Tvardi Therapeutics, Inc. on April 15, 2025. This wasn't just a simple acquisition; it was a fundamental corporate restructuring. Here's the quick math on the new ownership structure:

• Pre-Merger Cara Therapeutics, Inc. (CARA) stockholders own approximately 17.0% of the combined company.
• Pre-Merger Tvardi Therapeutics investors own approximately 83.0%.

This massive dilution for original Cara Therapeutics, Inc. (CARA) shareholders reflects the new company's focus on Tvardi's pipeline. The merger was also preceded by a 1-for-3 reverse stock split, effective April 15, 2025, which reduced the outstanding shares from roughly 4.6 million to about 1.5 million. This move was defintely necessary to meet Nasdaq listing requirements and facilitate the transaction.

Investor Influence: The Activism of Dissent

While the large funds approved the merger, not all shareholders were silent. The transaction faced pushback from individual investors, which is a great example of how even small shareholders can create friction. In March 2025, shareholders Joseph Clark and Michael Kent filed separate lawsuits to block the merger, alleging that the prospectus filed with the SEC was materially incomplete and misleading, specifically regarding the financial projections for Tvardi Therapeutics. That's a clear sign of investor activism forcing disclosure.

The company, to avoid litigation and disruption, provided supplemental disclosures, showing the power of even a small group of shareholders when they raise valid concerns. The final structure of the combined company's board was set to reflect the new ownership, with six directors designated by Tvardi Therapeutics and only one from Cara Therapeutics, Inc. (CARA), solidifying the shift in control. For a deeper dive into the new entity's direction, you should check out the Mission Statement, Vision, & Core Values of Cara Therapeutics, Inc. (CARA).

The Financial Context of the Investor Shift

Investors backed this merger because Cara Therapeutics, Inc. (CARA) was facing significant revenue challenges; its TTM revenue was around $7.13 million, a sharp drop from the prior year. The merger provided a lifeline, extending the combined company's cash runway into the second half of 2026. The cash infusion was critical:

This combined capital of over $50 million was the real prize for the institutional investors, giving the new company the necessary resources to advance Tvardi's clinical programs. The market capitalization of the new entity, as of November 2025, sits around $37.8 million, which shows the market is still valuing the combined company based on its early-stage clinical pipeline potential, not its historical revenue.

Market Impact and Investor Sentiment

If you were a shareholder of Cara Therapeutics, Inc. (CARA) before the reverse merger in April 2025, your investment profile fundamentally changed overnight. The company effectively became Tvardi Therapeutics, Inc. (TVRD), shifting the focus from Cara's oral difelikefalin program-which had a disappointing Phase 2/3 clinical trial update in June 2024-to Tvardi's clinical-stage pipeline targeting STAT3. This corporate action, coupled with a recent clinical setback, has created a highly volatile, two-sided investor sentiment.

The initial sentiment for former Cara shareholders was mixed, leaning toward skepticism, especially since pre-merger Cara stockholders were expected to own only approximately 17.0% of the combined entity. This dilution of ownership, which was a key part of the deal, led to shareholder lawsuits seeking more transparency on the private Tvardi's financial projections before the vote. The stock market's reaction has been sharp, reflecting the high-risk, high-reward nature of the new biotech focus.

Recent Market Reactions and Ownership Shifts

The most significant market reaction in 2025 came in October when the combined company, Tvardi Therapeutics, Inc., announced that preliminary data from its Phase 2 REVERT trial for TTI-101 in Idiopathic Pulmonary Fibrosis (IPF) did not meet its goals. This news caused a significant drop in the stock price, as it directly impacted the lead program that was the primary justification for the merger.

Despite this clinical setback, the investor base remains anchored by a few large institutional and insider holders. As of September 2025, institutional ownership sits around 20.56% to 20.85% of the outstanding shares, which is a respectable foundation for a clinical-stage biotech. The largest individual shareholder is Vifor International Ltd. (now part of CSL Ltd.), which holds a massive 7.40 million shares, representing 78.85% of the company, classifying them as an insider and demonstrating a deep, long-term commitment to the new entity's success.

Here's the quick math on the major institutional players who are betting on the new pipeline:

• Slate Path Capital LP: Held 704.12K shares as of August 2025.
• Vanguard Group Inc.: Held 398.41K shares as of August 2025.
• BlackRock: Held 267.88K shares as of August 2025.

Analyst Perspectives on the Combined Entity

Analyst perspectives on Tvardi Therapeutics, Inc. (TVRD) are currently split between long-term optimism on the core technology and near-term caution following the failed IPF trial data. The consensus rating from analysts is a Buy, but this masks the recent downgrade activity. For instance, Raymond James downgraded the stock from Buy to Hold in October 2025 immediately following the TTI-101 IPF trial update. Still, the overall sentiment remains positive on the potential of the STAT3 inhibitor platform in other indications, like hepatocellular carcinoma (HCC).

The average 12-month price target is highly dispersed, reflecting the binary nature of biotech investing after a major clinical event. The targets range from a low of $4.00 to a high of $78.00. The average price target is around $14.33, which suggests a potential upside of over +248.74% from recent trading levels, but that's a heavily risk-adjusted number. The market is defintely trying to figure out the new baseline value.

What this estimate hides is the high-stakes timeline. The company's cash, cash equivalents, and short-term investments totaled $36.5 million as of September 30, 2025, which is projected to fund operations into the fourth quarter of 2026. This gives the new management team approximately a year to deliver positive data from its other programs, like the HCC trial, before needing to raise more capital.

If you want to understand the new company's long-term vision, you should review the Mission Statement, Vision, & Core Values of Cara Therapeutics, Inc. (CARA).

Next Step: Portfolio Managers should model a 12-month probability-weighted valuation (DCF) for Tvardi's pipeline, assigning a 70% probability of failure to the IPF indication and re-weighting the HCC program based on the new cash runway.