Cara Therapeutics Inc. (NASDAQ: CARA) Q1 2020 Earnings Call Transcript

Cara Therapeutics Inc. (CARA) Q1 2020 earnings call dated May 11, 2020

Corporate Participants:

Jack Hildick-Smith — Investor Relations

Derek Chalmers — Chief Executive Officer, President, and Director

Richard Makara — Vice President, Head of Accounting and Controller

Analysts:

Jason Gerberry — Bank of America — Analyst

David Amsellem — Piper Sandler & Co. — Analyst

Christopher Howerton — Jefferies LLC — Analyst

Avatar Jones — Stifel Financial Corp. — Analyst

Alan Carr — Needham & Company — Analyst

Esther Hong — Janney Montgomery Scott — Analyst

Presentation:

Operator

Good afternoon and welcome to Cara Therapeutics First Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please be advised that this call is being recorded at Cara’s request.

I would now like to turn the call over to the Cara team. Please proceed.

Jack Hildick-Smith — Investor Relations

Good afternoon. This is Jack Hildick-Smith with Stern Investor Relations and welcome to Cara Therapeutics’ first quarter 2020 financial results and update conference call. The news release became available just after 4:00 p.m. today and can be found on our website at www.caratherapeutics.com. You may also listen to a live webcast and replay of today’s call on the Investors section of the website.

Before we begin, let me remind you that statements made on today’s call regarding matters that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of these forward-looking statements, include statements concerning the expected timing of the data readouts from the Company’s ongoing clinical trials, the potential results of ongoing clinical trials, timing of future regulatory and development milestones for the Company’s product candidates, including the Company’s projected timeline for the submission of its first NDA, the potential for the Company’s product candidates to be alternatives in the therapeutic areas investigated, and the Company’s expected cash reach. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Risks are described more fully in Cara Therapeutics’ filings with the Securities and Exchange Commission, including the Risk Factors section of the Company’s annual report on Form 10-K for the year ended December 31, 2019 and its other documents subsequently filed with or furnished to the Securities and Exchange Commission. All forward-looking statements made in today’s call speak only as of the date on which they were made. Cara Therapeutics undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Participating on today’s call are Dr. Derek Chalmers, Cara’s President and CEO; and Mr. Rick Makara, VP and Head of Accounting.

I’ll now turn the call over to Dr. Chalmers.

Derek Chalmers — Chief Executive Officer, President, and Director

Thank you, Jack. Good afternoon, everybody, and thanks for joining us today. So, our first quarter and recent progress in many ways culminated in positive top line data from our KALM-2 to global Phase 3 trial of KORSUVA Injection in hemodialysis patients, which we announced a few weeks ago. We were and continue to be very pleased to observe a robust sustained antipruritic effect of KORSUVA Injection in these patients that was consistent with what we observed in our first US Phase 3 trial or KALM-1 trial. With positive results from both our Phase 3 efficacy trials in hand and a large safety database ready to go, we’re now focused on preparing our NDA and we indeed remain on track to submit that in the second half of this year.

Before we go on, I’d like to commend the entire Cara team for delivering this dataset on time during such a challenging period. As the COVID-19 pandemic has evolved, our team has continued to demonstrate great flexibility and dedication in order to advance our clinical development programs and our commercial preparations in keeping with our original timelines. As a result of the pandemic, we have implemented several clinical and operational measures to prioritize, the health and safety of patients, our employees and study investigators and to minimize potential disruptions to our ongoing studies. These include such measures as adopting SOPs for remote monitoring visits, and remote source document verification for our clinical trials.

I will note that, like many other companies, the rate of enrollment in our ongoing clinical studies has been affected somewhat in response to the pandemic. However, almost all of our study sites remain open and are enrolling patients. And we are fortunate, our projected clinical timelines remain on track. And, of course, we will continue to update you should there be any changes to these expected milestones.

Lastly, we do have sufficient clinical supply of both KORSUVA Injection and Oral KORSUVA. We are in close contact with our clinical and commercial manufacturing partners. And we believe that future supply will continue with minimal or no disruption. On the overall operation side, the Cara team is working very efficiently in a virtual setting. We’re continuing to monitor the progression of the pandemic and guidelines from state and federal government, so we can quickly adapt to our business operations should that be appropriate.

So, on today’s call, I’ll provide an update on each of our programs and our expectations for the rest of this year. But first I wanted to provide a quick reminder on KORSUVA’s broad antipruritic mechanism of action, which is in contrast to other modalities that focus on blocking one specific pruritogen. So the action of KORSUVA on dermal and epidermal immune cells blocks the release of a range of nerve-sensitizing molecules or pruritogens, and KORSUVA directly diminishes the stimulation of dermal sensory fibers or C fibers, all of the stand stream from the action of pruritogens. And if this dual, neuronal and anti-inflammatory effect, that is what we believe provides for antipruritic activity, regardless of the initiating pathophysiology, whether that’s chronic kidney disease or chronic liver disease, or some dermatological condition.

So, let’s begin with our lead program for KORSUVA Injection in hemodialysis patients with CKD-associated pruritus. This is a patient population where approximately 40% to 50% of patients suffer from moderate-to-severe pruritus. So, a clear significant unmet need with no therapies currently approved in the US or in Europe. Our pivotal program is presently concluding. And that includes four Phase 3 studies: a KALM-1 US efficacy trial, which readout positive top line data last year; KALM-2, our global efficacy trial, which readout positive top line data last month; and two open-label safety trials. Both KALM-1 and KALM-2 were designed to investigate the efficacy of KORSUVA Injection at a dose of 0.5 micrograms per kilo versus placebo, administered three times per week. So that’s after scheduled dialysis sessions over a 12-week treatment period. And each efficacy trial included a 52-week open-label extension phase for safety.

In April, as I’ve already mentioned, we were very pleased to report positive KALM-2 top line results. Analysis of the primary endpoint, demonstrated that KORSUVA Injection significantly reduced itch intensity with 54% of subjects achieving, at least a three-point improvement in worst itch intensity, compared to 42% of subjects in the placebo group. As for the key secondary endpoint, 41% of subjects treated with KORSUVA achieved at least a four-point improvement and more such itch intensity, compared to 29% in the placebo group. And, although, we didn’t achieve statistical significance on our two quality of life endpoints as measured by the Skindex-10 and the 5-D itch self-assessment scale, additional analysis of these results did indicate that itching intensity-related domains in both scales were significantly reduced. So that’s consistent with the improvement we reported in both the primary and key secondary endpoints. KORSUVA Injection was generally well-tolerated with a safety profile that was consistent with KALM-1 and with our prior clinical trials in this program.

Moving on to our safety studies in the program. We currently have a safety database in line or indeed exceeding ICH guidelines for an NDA submission with over 1,500 total patient exposures, including more than 600 patients having completed six months of treatment and over 300 patients completed one year of treatment as a therapeutic dose. So, we are confident we have sufficient safety exposures to support our NDA submission. We believe we’re well positioned to cement a strong NDA package to the FDA in the second half of the year. As you may recall, we have breakthrough designation for KORSUVA Injection for this indication, so we’ll also be applying for priority review.

As you know, we plan to commercialize KORSUVA Injection in the US and we’ve already established commercial license agreements and other major commercial markets, including Japan, South Korea, and the European Union. In the EU, we have a collaboration with Vifor Fresenius, which allows us to leverage the broad reach of Fresenius to dialysis patients across that continent. Working with our partners at Vifor Fresenius, we plan to submit for marketing authorization approval, the EMA shortly after we complete the NDA submission. In the US, we’ve established a co-promotion and profit-sharing agreement with Vifor Fresenius, specifically within Fresenius clinics, which allows us to leverage the neurology-focused expertise of both Fresenius and Vifor, and which we hope will build momentum for the adoption of KORSUVA Injection upon launch.

In terms of our commercial preparations, we’ve established and continue to execute on our cross-functional launch plan. We already established a national MSL Group at Cara and they’ve been working hard to increase awareness of the CKD-associated pruritus through disease education. Beyond that, we’ve begun to prepare all of the necessary steps to potentially launch KORSUVA Injection in 2021 and that includes establishing commercial manufacturing agreements and planning for senior sales, marketing, market access hires, as well as laying the groundwork for our sales force activation post-NDA approval. So, again, we are very pleased with the NDA-enabling KALM-2 results and Cara team is working extremely hard on finalizing our NDA package for submission later this year, and we’ll continue to update you on the timing for that and our commercial preparation in the coming quarters.

So, let’s move on to our pipeline program focused on Oral KORSUVA and start with our lead program in pre-dialysis CKD patients with moderate-to-severe pruritus. In December last year, we reported positive top line results from our 12-week Phase 2 trial evaluating the safety and efficacy of three tablet strengths of Oral KORSUVA, 0.25, 0.5 and 1 mg taken once daily. Based on that data, we identified the 1 mg tablet strength as the dose level to take forward into Phase 3.

And as with the hemodialysis population, pruritus reflects a significant proportion of pre-dialysis CKD patients. Based on pruritus-related drug prescription data of the approximately 7 million people diagnosed with CKD here in the US, about one-third are currently receiving some sort of treatment for pruritus. And these treatments are typically generic antihistamines or corticosteroids, neither of which effectively alleviate the pruritus burden certainly not in the long-term. So, as a significant opportunity for Oral KORSUVA as a novel therapeutic approach in that population and we’re keen to move to our registration program here as soon as possible. With that in mind, we do plan to hold an end of Phase 2 meeting with the FDA in the second half of this year to enable initiation of that pivotal Phase 3 program.

As many of you know, we’re also currently evaluating Oral KORSUVA in ongoing Phase 2 trials for atopic dermatitis and Primary Biliary Cholangitis, or PBC. Atopic dermatitis is, of course, one of the most common chronic inflammatory diseases with prevalence rates of 5% in the adults and approximately 25% in children. Pruritus is the defining symptom of atopic dermatitis with a point prevalence estimated at essentially 100%. And then a similar fashion to CKD-associated pruritus, drug treatments across the AD patient spectrum, particularly the mild-to-moderate disease area fall short consisting of topical corticosteroids, hypos antihistamines and antidepressants.

So, our ongoing Phase 2 trial is designed to randomize atopic dermatitis patients across three tablet strengths of Oral KORSUVA, again, 0.25, 0.5 and 1 mg taken twice daily versus placebo. In January of this year, we made two adjustments to this trial. We expanded the enrollment size from 240 adult patients with moderate-to-severe pruritus to approximately 320 patients. And we incorporated an interim conditional power assessment and the design to be conducted after approximately 50% of the targeted patient number complete that designated 12-week treatment period. And I’m happy to report that we’re on track to complete this interim statistical analysis in the next number of weeks before the end of the second quarter.

We also continue with our Phase 2 trial of Oral KORSUVA in PBC patients with moderate-to-severe pruritus. Pruritus is a common symptom of cholestatic liver diseases with 20% to 30% of patients experiencing pruritus, but with a prevalence of up to 70% in patients with PBC. So, as a reminder, this is a 16-week trial designed to evaluate the safety and efficacy of 1 mg tablet strength of Oral KORSUVA taken twice daily versus placebo in approximately 60 patients.

I’d like to add that nearly all of our study sites for these two Phase 2 trials remain open and we continue to enroll patients, although the rate of enrollment has slowed somewhat due to the pandemic. We’re also expanding clinical sites as we’re able with the aim to report data from both trials before year-end.

So, to wrap up, 2020 is off to a very good start with compelling, consistent pivotal data from our KALM-2 trial. We’re on track to submit our first NDA for KORSUVA Injection later this year. In addition, we expect major progress with our oral modality of KORSUVA, as we work to finalize the Phase 3 program for pre-dialysis CKD patients and readout data and the Phase 2 trials in both atopic dermatitis and PBC.

So with that, I’ll turn it over to Rick to cover the financial results for the quarter. Rick?

Richard Makara — Vice President, Head of Accounting and Controller

Thanks, Derek. As a reminder, the full financial results for the first quarter 2020 can be found in our press release issued today at the market closed. For the first quarter of 2020, we reported a net loss of $28.9 million, or $0.62 per basic and diluted share, compared to a net loss of $22 million, or $0.56 per basic and diluted share for the same quarter of 2019. In the first quarter of 2020, we recognized revenue of $8 million related to the Vifor collaboration agreement, compared to $4.2 million during the same quarter in 2019. Revenue from the sale of clinical compound was approximately $100,000 in the first quarter of both 2020 and 2019.

For the first quarter of 2020, we reported R&D expenses of $33.5 million, compared to $23.6 million in the same period of 2019. The higher R&D expenses in 2020 were primarily due to a net increase in clinical trial costs, increases in stock compensation expense, payroll and related costs, conferences and travel and related costs.

G&A expenses were $4.6 million during the first quarter of 2020, compared to $3.9 million in the same period of 2019. The increase in 2020 was primarily due to increases in legal and accounting fees, stock compensation expense, insurance costs, franchise taxes and payroll and related costs. Those increases were partially offset by a decrease in travel and related costs.

Other income was $1 million in the first quarter of 2020, compared to $1.1 million in the same period of 2019.

As of March 31, 2020, our cash, cash equivalents and marketable securities totaled $179.8 million, compared to $218.2 million as of December 31, 2019. The decrease in the balance of cash and cash equivalents and marketable securities primarily resulted from $38.3 million of cash used in operations, partially offset by $100,000 received from the exercise of stock options.

Turning to our financial guidance. Based on projected costs for our clinical development plans and timing expectations, we expect that our current cash, cash equivalents and marketable securities as of March 31, 2020 will be sufficient to fund our operations into the second half of 2020, 2021, not accounting for any potential milestone payments under the existing collaborations.

I’ll now turn the call back over to the operator for Q&A.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Jason Gerberry of Bank of America. Your line is open.

Jason Gerberry — Bank of America — Analyst

Hey, guys. Good evening and thank you for taking my questions. First question for me just given the COVID dynamics and where you are with your atopic derm and your PBC studies, is either study from a top line perspective at greater risk of getting pushed into 2021? Just any color you can provide and that would be helpful.

And then, second question is pertains to IV KORSUVA, and I’m ultimately wondering, how you model and think about patient adherence to therapy with this treatment. And as you think about the RCT and the open-label extension studies, how you think about the proportion of patients who will be lifetime chronic therapy those that will potentially drop off or get shorter duration therapy? Ultimately how do you get at average days of therapy per patient? Just curious, how you think about that variable in the model. Thanks.

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. Thanks, Jason. On the first of those, on the COVID effect, so as I said, we have noticed a slowing in enrollment and post the AD trial and the PBC trial. And in both trials, we are actively moving to enable novel clinical sites that can help make up for some of that. So, so far in terms of timelines, we’re not going to alter those. As I said, the interim comes when we’re 50% through on the AD, 50% through the entire targeted patient population there, and we’re going to have that interim in the next, I don’t know, what six weeks to the end of this quarter. So, we’re on track for that. And based on that interim, as you know, that’s an interim that’s somewhat more adaptive than we’ve used in the past, and that we will have the ability to increase sample size on a targeted dose there specifically. So, with the new sites coming on board there, and where we are in enrollment, which is it’s slowed, but it’s not certainly not zero here in our current sites that we think we can still see top line data later in the year. But clearly, we’ll adjust to that. PBC is the same way. We’re trying to add novel sites there. That’s been hindered a little due to the present environment. But states are opening up and that should help, that should help to get these sites up and running. So at the minute, we’re still on track to see that data this year.

And then on the IV KORSUVA for patient adherence, I think we’ve discussed this before in terms of how the patients view this symptom. There has been numerous studies on this with very large patient samples. And consistently they rate pruritus as their worst symptom associated with hemodialysis and CKD, which is remarkable on itself. But at that level where it is moderate-to-severe and severe effects on quality of life perhaps understandable. So, really we’re going to see patients on this therapy long-term. This is a GPCR-related mechanism when we stop supplying agonist to that target you’re going to see a diminished response biochemically. So, they’re going to be on that therapy long-term to treat that pruritus. And it’s — we think it’s an advantage and the feedback we hear from patients and investigators, it’s an advantage that we administer this at the point of care. So they don’t have to think about another medication. As you know, they’re heavily still burden. So, we think, without getting that 3 times a week, really as a bolus as they’re leaving [Phonetic], they finished their dialysis session, their bolus KORSUVA. They go home, they get protected from pruritus, to get a decent nice sleep. They stop scratching. They have some sort of social life. I think they’re highly motivated to keep that up.

And so, I think it’s going to be a longer-term therapy. And I think the penetration rates into this population would be and will be significantly higher than you’d expect in a normal PBC-type environment, even related to a serious symptom. As you know, these patients really have to come to the dialysis clinic, and they’re highly motivated to treat that condition. So, I think there’ll be a high penetration into that patient population.

Jason Gerberry — Bank of America — Analyst

And Derek, just as a follow-up, because in the Phase 3, we’ve seen more shorter-term exposure. But is it your sense that the open-label extension should mere maybe the discontinuation we’ve seen in the shorter-term RCT trials and that maybe a bigger indicator for the proportion of patients who will go on and be adherent to a chronic therapy regimen?

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. I mean, that is a possible indicator. That’s true. We’ve certainly seen, there are large percentage of patients from the RCT portion have moved into the open-label. So there’s a motivation there to go on and take the medication, which is always a good sign that people would like to continue that. And the discontinuation rate, I do not have that in front of me in terms of the safety extensions, but I don’t recall that being significantly different than what we’ve seen in the RCT portion of that, which is also a good sign that patients want to maintain their medication for that treatment. So, very high percentage moved out of the RCT in to their open labels on both those safety extension. And I should say, we’re winding down all of those safety trials right now and concluding those. So those are wrapping up.

And again, getting back to the COVID influence, I think it was a combination of good planning from our clinical group kind of presciently putting in these SOPs to deal with closing down these databases. And a little bit of good fortune that we were wrapping up many of these trials, just as the pandemic was taking off. But we are in good shape for getting all of that data from all the safety trials.

Jason Gerberry — Bank of America — Analyst

Got it. Great. Thank you.

Derek Chalmers — Chief Executive Officer, President, and Director

Thanks, Jason.

Operator

Our next question comes from David Amsellem of Piper Sandler. Your line is open.

David Amsellem — Piper Sandler & Co. — Analyst

Thanks. So, I just had a couple of questions. So, I wanted to get your latest thoughts on how you’re thinking of — about pricing and particularly wanted to get your thoughts on pricing of Oral KORSUVA here. Just refresh us on how you’re thinking about it and what kind of analogs you’re using?

And then, this is somewhat related to price, but to the extent that you have a real signal in atopic dermatitis and you try to access that market. How do you think about how that influences your view on the price of the product? And how do you think about step-throughs in terms of what patients are going to go on first and what they could be forced through before they can access the agent? Thanks.

Derek Chalmers — Chief Executive Officer, President, and Director

Thanks, David. Yeah. So, on pricing, we’re still, obviously, a little early to be thinking about price points. There’s going to be a number of variables to consider there as we go out and develop the oral and these somewhat different markets, of course, I know you’re well aware of our KORSUVA Injection, we’re part of the ESRD bundling reimbursement. And, as you know, there we’re going to have our two years to TDAPA ASP. And then, we’re actively engaged, our Group is actively engaged with CMS to create some sort of path, some clarity regarding post-TDAPA reimbursement there. So that’s ongoing and we’re quite confident we have good engagement there and we think we’ll get some answer as to how that’s going to proceed.

On the oral, of course, the vast majority of pre-dialysis patients are commercial insurance and certainly in AD. Those are going to be commercial insurance. So that’s a slightly different piece there. And, as you know, this is the first-in-class. Hopefully, we’ll be the first label for treating moderate-to-severe pruritus with an oral medication here. So, I think a reasonable analog might be other long-term symptomatic treatment. And again, I think, a differentiated pain drug might be a reasonable analog to look at there. Although, there still is an argument, it’s a large unmet need would be a first-in-class and that usually demands a premium pricing, but highly differentiated, non-abusable or less-abusable pain drugs that are out there in the $8,000, $10,000, $12,000 per year on launch. There hasn’t been many recently, not maybe the bottom end of that bookmark. And then at the top end a highly differentiated oral dermatological medication might be a test and that’s getting you in the high-teens, plus $20,000 annually. So that’s the conversation. Just don’t have enough information yet to think about in great detail, but those might be the kind of bookends we’d be thinking of in terms of the AD market and I think you and I have discussed this a couple of times there, I mean, I think that’s sorely missing, an oral medication to treat the primary symptom.

And, as you know, an atopic derm the vast majority of that population is mild-to-moderate and those mild-to-moderate patients are really not candidates for biologics there, both from a patient perspective and from a payer perspective and paying for that. So, I think the only step through and it’s one way to look at it, but it may be a combination here is probably topical corticosteroids and the mild-to-moderate population there. And then, of course, that becomes a practicality to applying that twice daily and then there’s a long-term issue with that also. So, I’d imagine that may be the only thing we see ahead of this. And then this easily usable oral medication twice a day to really systemically reduce pruritus would be the next line therapy we’d imagine.

David Amsellem — Piper Sandler & Co. — Analyst

Okay. That’s helpful. And regarding AD just a quick follow-up. Do you intend to commercialize that yourself? Or is that something you look to find a partner for?

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. So, you’re really looking for kind of glass ball projections here David, right? We’re out a few years there. So, I think our thought is, we can easily handle — we can accommodate launching the IV product into the dialysis population. That’s something, as you know, that is manageable. And we think we’ve got a good partner in Vifor Fresenius that will help us with that launch and we think that’s something that we can accommodate. And we think it’s a very attractive product.

Of course, when we move to the larger pruritus market, and as you know, there were some 20 million or so scripts broadly in the US annually across all patient populations. That’s a bigger nut for the small squirrel the Cara as the crack right now. So, at that point, most likely, we’d look for a strategic partnership when we get there someone with an established sales force would be appealing and that’s some very attractive structures that have been employed and how those commercial relationships have been set up. So, I think it’s most likely when we get there we’d look for some sort of strategic arrangement. That really depends where we are in terms of revenues from our launched IV product and how we feel about that. But most likely we’ll look for some strategic alliance on the larger oral market.

David Amsellem — Piper Sandler & Co. — Analyst

All right. Thanks, Derek.

Derek Chalmers — Chief Executive Officer, President, and Director

Thank you, David.

Operator

Our next question comes from Chris Howerton of Jefferies. Your line is open.

Christopher Howerton — Jefferies LLC — Analyst

Great. Thank you. Hey, Derek. So I think for me it was just a really quick question. So, in the past you’ve described that aspirations certainly for Oral KORSUVA to just get a broad antipruritic label. So, just curious, again, if you could walk us through potential approvals in single indications and how does that translate to a broad just antipruritic label.

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. Thanks Chris. Yeah. Look as I said at the beginning here, we think we’ve got a mechanism with this drug where we’re not focused on one specific pruritogen and one specific site again that may be elevated in a specific clinical population. It’s been widely accepted for many decades that peripheral kappa receptors when activated can diminish C-fiber activity, sensory fiber activity very, very effectively. And so, as that’s the final conveyor of the signal from the epidermis and the dermis then we should have a mechanism that should be broadly applicable. Now, there’s some good evidence for that. Obviously, we think and the evidence bears that were highly effective in CKD-associated pruritus. There’s good evidence from the Japanese drug that’s on the market there. They can treat liver disease-associated pruritus. And obviously those have different profiles in terms of elevated cytokines within those patients. So that’s evidence that perhaps we’re thinking the right way.

And then we kind of looked at it the way that people in the past have looked at the pain medication regulatory approach. And not I should say there in specific guidance at this point for pruritus. But in pain, as you know, to get that broader label, you would satisfy the division that you have activity across these various subtypes of pain from inflammatory to neuropathic to visceral. And we thought about it the same way here and our clinical development group has done a great job and strategically thinking about this and which patient subgroups would be useful to add to that argument. And right now we have end organ disease pruritus with CKD and CLD. We’re clearly moving into dermatological if you like local inflammatory pruritus with atopic and we may look at some other subgroups that provide some information in these other areas that are quite prevalent and perhaps neuropathic pruritus. And so, the ultimate case to be made there is, with that data on hand that shows activity across all these various pathopysiology, then it would make sense to have the broader label.

Now, having said that, we think we’re in a great position with CKD, as you and I have discussed before. And if we — when we move that Phase 3 program forward here, we do have a large number of safety exposures already available from our intravenous KORSUVA Injection program, which would make sense to reference as part of that pivotal registration program. So, that’s certainly something we’d like to engage the FDA with and that would save us a great deal of time in terms of developing that number of exposures and perhaps as an avenue there to have a diminished requirement in terms of efficacy trials also. So, it does make sense to push that label quickly and it’s a large unmet need that could get us that label as fast as we can.

But clearly, if there’s a signal as we hope in atopic derm that’s obviously a very large unmet need there that we’d also like to push quite quickly when we get it there. So that’s the idea of developing these various patient populations. That’s the ultimate conversation. It’s probably not the primary conversation, but the ultimate conversation where the oral would be, get that broader label there for moderate-to-severe pruritus.

Christopher Howerton — Jefferies LLC — Analyst

Okay. And I apologize, I should know this, but I just wanted to — are you expecting an advisory committee for the IV formulation of KORSUVA?

Derek Chalmers — Chief Executive Officer, President, and Director

Well, that’s — I have no information that, at this point, that’s something that they’ll decide upon review. The module [Phonetic] is a novel chemical entity. There might be a higher likelihood for that. But we have no information at this point.

Christopher Howerton — Jefferies LLC — Analyst

Okay.

Derek Chalmers — Chief Executive Officer, President, and Director

Thanks, Chris.

Christopher Howerton — Jefferies LLC — Analyst

All right. Yeah. Thanks a lot. Appreciate you’re taking the questions.

Derek Chalmers — Chief Executive Officer, President, and Director

Appreciate it. Thank you.

Operator

Our next question comes from Annabel Samimy of Stifel. Your line is open.

Avatar Jones — Stifel Financial Corp. — Analyst

Hi. This is Avatar Jones on for Annabel tonight. Two questions regarding KALM-2. Firstly, have you had an opportunity to pull out any of the additional secondary endpoints such as the completer [Phonetic] response?

And secondly, have any of the KALM-2 patients rolled into the open-label or extension studies? And if so, what percent did you see there? Thank you.

Derek Chalmers — Chief Executive Officer, President, and Director

Thank you, Avatar. It’s Derek here. The answers here are pretty short. We haven’t actually done any additional analysis on that. And this is a course of dedicated but smaller force. We’ve moved on to close. And as I mentioned some of these safety databases, we really need to get done and are keen to get done for our NDA submission. So, we haven’t yet done extensive sub-analysis and all the other secondary endpoints other than and we mentioned that’s on the KALM-2 call, we did look in terms of the quality of life secondary — we did look at the individual domains in there and confirmed that we did indeed have statistically significant reductions in the pruritus-related domains on both those quality of life scales. So that’s reassuring and ties in with what we’ve seen on the primaries. But we haven’t had a great deal of time to get through all of that. We will be projecting — presenting that data later in the year, the nephrology meeting in the fall. So there will be additional sub-analysis that’s presented there.

And what was your second question, Avatar?

Avatar Jones — Stifel Financial Corp. — Analyst

The second was on KALM-2 patients rolling into an open-label, what percentage of patients there had rolled into open-label?

Derek Chalmers — Chief Executive Officer, President, and Director

Yes. No, it was high in both KALM-1 and KALM-2, it’s a high percentage of patients. I don’t have the precise number in front of me, but it was a high percentage that rolled forward into that open-label studies. And both of those studies are ramping up right now.

Avatar Jones — Stifel Financial Corp. — Analyst

Okay. And if I could squeeze one more in there. Just a little — could you provide a little color on your preparations for commercialization with IV KORSUVA in the dialysis population?

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. So, yeah, that’s something we’ve been working on for a while actually. So, as I said on the call, we’ve already established. We’re expanding actually our national MSL group here at Cara under the guidance of our CMO, Jo Goncalves. And we’re working to broaden our KOL universe, the increased awareness of CKD-associated pruritus. They’ve been working hard. They’re establishing regional and national advisory boards, their sponsoring strategic education opportunities and putting CME symposia. In fact, we had one recently at the NKF’s Spring Clinical Meeting in March. And we — as you know, we’re improving and increasing our KORSUVA publication footprint. We published KALM-1 in The New England Journal at the end of last year and you’ll see continuous publications throughout this year and preparation for launch.

Our MSL team has established going, that’s been active on the commercial preparation, say, broadly we’ve already initiated things like state licensing, processing and application. We have established manufacturing agreements with major CMOs. We’ve got commercial scale manufacturing enabled. We are currently screening and hiring senior commercial hires and sales, marketing, market access. So, all of this is underway and constantly developing in preparation for our 2021 launch.

Avatar Jones — Stifel Financial Corp. — Analyst

Excellent. Thanks, Derek.

Derek Chalmers — Chief Executive Officer, President, and Director

Thanks, Avatar.

Operator

Our next question comes from Alan Carr of Needham & Company. Your line is open.

Alan Carr — Needham & Company — Analyst

Hi. Thanks for taking my questions. I have couple of them. I’d like to get your latest thoughts on Phase 3 strategy for the oral formulation CKD number of trials and that sort of thing and maybe the size that’s changing you from your previous speculations?

And then also around your ex-US partnerships, as you’ve got one in Korea, and in Japan and then over in Europe. What is your expectations in terms of revenue stream from the milestone payments from them in the near-term? I think it’s — if I’m wrong, I think, it’s small single-digit from the two Asian ones, but you have some regulatory milestones for Vifor Fresenius. And one thing things those are tied to a submission or if they’re around approval? Thanks.

Derek Chalmers — Chief Executive Officer, President, and Director

Thanks, Alan. Yeah. So — well, let me take the second first as probably more — less speculative easier to deal with the factor. So, yeah, in terms of wrapping your stream from the various partnerships, first of all, all of them are designed. So, we see appropriate royalties, which are obviously tiered by sales, but they’re all double-digit — starting in the reasonable double digits. And all of them other than the Korean also has commercial milestones built into them.

You’re right, in terms of regulatory milestones and completion of the NDA, there are also a set of milestones. We’ve said publicly before — for Vifor Fresenius, that’s $30 million related to regulatory and there’s approximately another several million in milestones related to our agreement in Japan with Maruishi and with CKD in South Korea. So, that’s kind of the revenue stream that are in the near-term.

With Vifor Fresenius, we have approximately $440 million in commercial milestones on top of the royalty that are on ex-US sales. So, that’s also significant. And there is a commercial milestone associated with the Maruishi agreement also. So, those are all structured based on a…

Alan Carr — Needham & Company — Analyst

Is the regulatory milestone, the $30 million, is that one or is that multiple milestones? And is it just approval or is it [Speech Overlap] submission?

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. No, that’s really approval in the US and approval in Europe. That’s the $30 million on Vifor Fresenius.

And then on the Phase 3 oral, yeah, I mean, really the same answer as we had last time the great position we’re in with our Phase 3 data in hand is that, we now have a set of empirical data that we can model to make sure we size that Phase 3 oral trial appropriately. And we discussed this last time. The unusual aspect of the Phase 2 oral data was a higher placebo response. Certainly, higher than we’ve seen in the IV trials and hemodialysis patients. And our thoughts there were a couple and we think we can make amendments to the design that can address those couple of thoughts. One was the earlier stage patients, they may have more liver [Phonetic] pruritus. So we can have longer run out periods be more careful make sure their pruritus is consistent. We can certainly build out into a design — Phase 3 design. And we’re going to move from a 3:1 randomization to 3.1:1 so that alone should help in terms of placebo response.

And then we’re not going to use any site. And as you know, a reasonable number of those sites we use in the Phase 2 oral trial had previous experienced with KORSUVA either from the KALM-1 trial or the Phase 2 IV trial. And so, we think there might be some expectation by us built in there. So, using de novo site is an obvious solution. And there are a few other things we’re going to take into consideration to try and help with that placebo response. But nevertheless, taking that empirical data and modeling, if you like a worst-case scenario, which is the beautiful thing about running stage development programs as we have data — real data to model on. So, we can take that variability we saw there, and Phase 2 and simply model that out for our Phase 3 study and assume the worst-case scenario, but hope for the best.

And, as you know, we like to check our assumptions on these larger trials, very large trial we’ve ran for the last three years we’ve incorporated an interim assessment at 50% completion and that really is a terrific indicator of whether your assumptions are correct. In fact, in all three of the latest of those interim assessments, we have the primary endpoint. And so, we — that’s how we’re going to deal with it.

And size-wise, I think I’ve said that before, it really depends on conservative, we want to be on our prior assumptions, but at a reasonable conservatively, I mean, I don’t have the numbers right in front, but I do recall this is in the 200 million to 250 million, so a very reasonable sample size per group to get a very good powering on that trial. So, we’re in a great position to design that trial appropriately.

Alan Carr — Needham & Company — Analyst

Are you thinking one or two? I think before you thought there might be two Phase 3s. Is that…

Derek Chalmers — Chief Executive Officer, President, and Director

Well, I’m thinking one, but it really depends on what the FDA is thinking. So, I think there’s a case to be made for one here, but obviously that’s a decision we’d have to have in consultation with the FDA. As you know, we have many, many exposures in CKD patients. And so, there maybe a case, but that’s a conversation for the FDA and an FDA decision on that.

Alan Carr — Needham & Company — Analyst

Okay. Thanks for taking my questions.

Derek Chalmers — Chief Executive Officer, President, and Director

All right, Alan. Thank you.

Operator

Our next question comes from Esther Hong of Janney. Your line is open.

Esther Hong — Janney Montgomery Scott — Analyst

Hi. Thanks for taking my questions. So, with IV KORSUVA potentially launching 2021, followed later by other potential approvals for Oral KORSUVA. Can you talk about patent protection, other types of protection? Right now, it looks like current patent expiry is through 2027. And so, that gives between six to seven years of current patent protection. So, it sounds like applications have been filed. Can you speak about those — the status of those? Have any of those been granted? Are they close to being granted? Any update there? Thanks.

Derek Chalmers — Chief Executive Officer, President, and Director

Yeah. Thanks, Esther. Yeah. No, you’re correct, we have composition-of-matter patents that do run through 2027, but recall that’s without extension on those. So, with Hatch-Waxman on that, we go to 2032, which we’ll get us our full 10 years on the market, if you like, both with IV and I would suspect with oral for our first label there, which would probably be a year behind the IV. But you’re also correct, we have multiple other applications. So we’ve built several fences around this IP estate-related to usage. And there are also patents related to specific formulations, as part of that, they run into the 2030s, mid-to-late. And so, we’ve built as much protection around that as we can. But we will get the benefit of Hatch-Waxman. So, we’ll get our full 10 years on the IV and the oral.

Esther Hong — Janney Montgomery Scott — Analyst

Great. Thank you.

Derek Chalmers — Chief Executive Officer, President, and Director

Thank you, Esther.

Operator

There are no further questions. I like to turn the call back over to the Cara team.

Derek Chalmers — Chief Executive Officer, President, and Director

Great. Thank you, Michelle. So, thank you, everybody. Thanks for participating in today’s call. I also want to thank the whole Cara team, our study investigators, all of the patients who continue to participate in our clinical trials. And we certainly look forward to updating you again very, very soon. So be safe and healthy everybody. Thank you for calling in today. Take care.

Operator

[Operator Closing Remarks]