UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
OR
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of registrant’s principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
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☒ |
| Smaller reporting company | |||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of August 9, 2024 was:
CARA THERAPEUTICS, INC.
INDEX TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024
PART I –FINANCIAL INFORMATION
PART I
FINANCIAL INFORMATION
Item 1.Financial Statements.
CARA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, excluding share and per share data)
(unaudited)
| June 30, 2024 |
| December 31, 2023 | |||
Assets |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Marketable securities |
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Accounts receivable, net - related party | | | ||||
Inventory, net | | | ||||
Income tax receivable |
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Other receivables |
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Prepaid expenses |
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Restricted cash |
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Total current assets |
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Operating lease right-of-use assets | | | ||||
Property and equipment, net |
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Restricted cash, non-current |
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Total assets | $ | | $ | | ||
Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable and accrued expenses | $ | | $ | | ||
Operating lease liability, current |
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Total current liabilities |
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Liability related to sales of future royalties and milestones, net | | | ||||
Operating lease liability, non-current | | | ||||
Total liabilities |
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Commitments and contingencies (Note 17) |
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Stockholders’ equity: |
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Preferred stock; $ |
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Common stock; $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | | ||
See Notes to Condensed Consolidated Financial Statements.
1
CARA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(amounts in thousands, excluding share and per share data)
(unaudited)
Three Months Ended | Six Months Ended | ||||||||||||
| June 30, 2024 |
| June 30, 2023 |
| June 30, 2024 |
| June 30, 2023 |
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Revenue: | |||||||||||||
Collaborative revenue | $ | — | $ | | $ | | $ | | |||||
Commercial supply revenue | — | | | | |||||||||
Royalty revenue | — | | — | | |||||||||
Clinical compound revenue |
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Other revenue | | — | | — | |||||||||
Total revenue |
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Operating expenses: |
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Cost of goods sold | — | | | | |||||||||
Research and development |
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General and administrative |
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Restructuring | | — | | — | |||||||||
Total operating expenses |
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Operating loss |
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Other income, net |
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Loss on inventory write-down | ( | — | ( | — | |||||||||
Non-cash interest expense on liability related to | ( | — | ( | — | |||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Net loss per share: |
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Basic and Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Weighted average shares: |
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Basic and Diluted |
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Other comprehensive income, net of tax of $ |
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Change in unrealized gains on available-for-sale marketable securities |
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Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
See Notes to Condensed Consolidated Financial Statements.
2
CARA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(amounts in thousands except share and per share data)
(unaudited)
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock | Paid-In | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Loss |
| Equity | ||||||
Balance at December 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation expense | — | — | | — | — | | |||||||||||
Shares issued upon vesting of restricted stock units | | — | | — | — | | |||||||||||
Net loss |
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| ( |
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Other comprehensive income |
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Balance at March 31, 2024 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation expense | — |
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Shares issued upon vesting of restricted stock units | |
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Net loss | — |
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Other comprehensive income | — |
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Balance at June 30, 2024 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Accumulated | |||||||||||||||||
Additional | Other | Total | |||||||||||||||
Common Stock | Paid-In | Accumulated | Comprehensive | Stockholders’ | |||||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Loss |
| Equity | ||||||
Balance at December 31, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation expense |
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Shares issued upon exercise of stock options |
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Shares issued upon vesting of restricted stock units | | — | | — | — | | |||||||||||
Net loss |
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Other comprehensive income |
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Balance at March 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Stock-based compensation expense | — |
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Shares issued upon vesting of restricted stock units | | — | | — | — | | |||||||||||
Net loss | — |
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Other comprehensive income | — |
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Balance at June 30, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
See Notes to Condensed Consolidated Financial Statements.
3
CARA THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
Six Months Ended, | |||||||
| June 30, 2024 |
| June 30, 2023 |
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Operating activities |
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Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation expense |
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Non-cash interest expense on liability related to sales of future royalties and milestones, net of issuance costs accretion | | — | |||||
Loss on inventory write-down | | — | |||||
Depreciation and amortization |
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Noncash lease expense |
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Accretion of available-for-sale marketable securities, net | ( | ( | |||||
Changes in operating assets and liabilities: |
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Accounts receivable, net - related party | | ( | |||||
Inventory | ( | ( | |||||
Other receivables |
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Prepaid expenses |
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Accounts payable and accrued expenses |
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Operating lease liability | — | ( | |||||
Reimbursement of lease incentive | | — | |||||
Net cash used in operating activities |
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Investing activities |
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Proceeds from maturities of available-for-sale marketable securities |
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Proceeds from redemptions of available-for-sale marketable securities, at par | — | | |||||
Purchases of available-for-sale marketable securities |
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Purchases of property and equipment | ( | — | |||||
Net cash provided by investing activities |
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Financing activities |
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Payments to royalty purchase and sale agreement | ( | — | |||||
Proceeds from the exercise of stock options |
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Net cash (used in) provided by financing activities |
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Net decrease in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period | $ | | $ | | |||
Noncash investing and financing activities | |||||||
Accrual for leasehold improvements | $ | | $ | — | |||
See Notes to Condensed Consolidated Financial Statements.
4
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
1. Business
Cara Therapeutics, Inc., or the Company, is a biopharmaceutical corporation formed on
On June 14, 2024, the Board of Directors of the Company approved a streamlined operating plan exploring strategic alternatives focused on maximizing shareholder value after the Company announced its decision to discontinue the clinical program in notalgia paresthetica, or NP, on June 12, 2024. The Company’s decision to discontinue the clinical program in NP followed the outcome from the dose-finding Part A of the KOURAGE-1 study evaluating the efficacy and safety of oral difelikefalin for moderate-to-severe pruritus in adult patients with NP in which oral difelikefalin did not demonstrate a meaningful clinical benefit at any dose compared to placebo. The Company’s decision was not related to any safety or medical issues, or negative regulatory feedback related to the Company’s NP program. In connection with the streamlined operating plan, the Board of Directors also approved a second reduction in the Company’s workforce by approximately
In August 2021, the Company received U.S. Food and Drug Administration, or FDA, approval for KORSUVA® (difelikefalin) injection, or KORSUVA injection, for the treatment of moderate-to-severe pruritus associated with chronic kidney disease in adults undergoing hemodialysis. Commercial launch of KORSUVA injection began in the United States in April 2022 and the Company began recording the associated profit-sharing revenues in the second quarter of 2022.
In April 2022, the European Commission granted marketing authorization to difelikefalin injection under the brand name Kapruvia® (difelikefalin), or Kapruvia, for the treatment of moderate-to-severe pruritus associated with chronic kidney disease in adult hemodialysis patients. The marketing authorization approved Kapruvia for use in all member states of the European Union, or EU, as well as Iceland, Liechtenstein, and Norway. Kapruvia was also approved in the United Kingdom in April 2022. Commercial launches in Austria, Germany, Sweden, France, the Netherlands, Finland, and Norway have commenced. In August 2022, as part of the Access Consortium, difelikefalin injection was approved in Switzerland under the brand name Kapruvia, as well as Singapore and Canada under the brand name KORSUVA. Commercial launch in Switzerland has also commenced. In November 2022, difelikefalin injection was approved in the last Access Consortium country, Australia, under the brand name KORSUVA. Difelikefalin injection was also approved in the United Arab Emirates, Kuwait, Israel, Japan, and Saudi Arabia under the brand name KORSUVA in January 2023, May 2023, June 2023, September 2023, and January 2024, respectively. The Company expects additional approvals and commercial launches over the next -
In 2018, the Company entered into a license and collaboration agreement with a joint venture between Vifor Pharma Group and Fresenius Medical Care Renal Pharmaceutical Ltd., or Vifor Fresenius Medical Care Renal Pharma Ltd., that provides full commercialization rights of Kapruvia, and where applicable KORSUVA, to Vifor Fresenius Medical Care Renal Pharma Ltd. worldwide (excluding the United States, Japan and South Korea). In 2020, the Company entered into a second licensing and collaboration agreement, along with stock purchase agreements, with Vifor (International) Ltd., or Vifor International, that provides full commercialization rights of KORSUVA injection to Vifor International in
5
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
dialysis clinics in the United States under a profit-sharing arrangement (see Note 12, Collaboration and Licensing Agreements).
In May 2022, Vifor International assigned its rights and obligations under the license agreement and a supply agreement, as permitted under the agreements, to Vifor Fresenius Medical Care Renal Pharma Ltd. The Company’s rights and obligations under these agreements were unaffected by this assignment and the assignment did not affect the Company’s economic rights under the agreements with Vifor International.
In August 2022, Vifor Pharma Group (which includes Vifor International) was acquired by CSL Limited and subsequently renamed CSL Vifor as part of the acquisition. The acquisition of Vifor Pharma Group did not affect any of the Company’s rights and obligations pursuant to these agreements.
The Company also has a license agreement with Maruishi Pharmaceutical Co. Ltd., or Maruishi, under which the Company granted Maruishi an exclusive license to develop, manufacture, and commercialize drug products containing difelikefalin for acute pain and/or uremic pruritus in Japan. In September 2023, Maruishi received manufacturing and marketing approval from Japan’s Ministry of Health, Labour and Welfare for KORSUVA IV Injection Syringe for the treatment of pruritus in hemodialysis patients (see Note 12, Collaboration and Licensing Agreements). In the fourth quarter of 2023, the Company entered into the HCR Agreement pursuant to which HCR will receive current and future royalty and milestone payments for KORSUVA (Japan) up to certain capped amounts in exchange for certain payments to the Company (see Note 10, Royalty Purchase and Sale Agreement).
As of June 30, 2024, the Company has raised aggregate net proceeds of approximately $
As of June 30, 2024, the Company had unrestricted cash and cash equivalents and marketable securities of $
The Company is subject to risks and uncertainties including, should it resume development of its product candidate or future product candidates, risks and uncertainties common to other life science companies including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing, and compliance with FDA and other government regulations. Should the Company resume development of its product candidate or any future product
6
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
candidate, even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company would generate additional recurring product revenue or achieve profitability.
2. Basis of Presentation
The Company’s condensed consolidated financial statements include the results of the financial operations of Cara Therapeutics, Inc. and its wholly-owned subsidiary, Cara Royalty Sub, LLC, or Cara Royalty Sub, a Delaware limited liability company which was formed in November 2023 for the purpose of the transactions contemplated by the HCR Agreement described in Note 10, Royalty Purchase and Sale Agreement. All intercompany balances and transactions have been eliminated.
The unaudited interim condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the United States of America, or GAAP. In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of results for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by SEC rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated balance sheet data as of December 31, 2023 were derived from audited financial statements, but do not include all disclosures required by GAAP. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. The more significant estimates include the fair value of marketable securities that are classified as Level 2 of the fair value hierarchy, the amount and periods over which certain revenues will be recognized, including licensing and collaborative revenue recognized from non-refundable up-front and milestone payments and future ex-U.S. royalties and milestones projected in relation to the HCR Agreement, related party accounts receivable reserve, as applicable, inventory valuation and related reserves, research and development, or R&D, clinical costs and accrued research projects included in prepaid expenses and accounts payable and accrued expenses, the amount of non-cash compensation costs related to share-based payments to employees and non-employees, restructuring costs, the amount of lease incentives, as applicable, and the incremental borrowing rate used in lease calculations, and the likelihood of realization of deferred tax assets.
The impact from global economic conditions and potential and continuing disruptions to and volatility in the credit and equity markets in the United States and worldwide are highly uncertain and cannot be predicted, including impacts from global health crises, geopolitical tensions, such as the ongoing conflicts between Russia and Ukraine, conflict in the Middle East, and increasing tensions between China and Taiwan, and government actions implemented as a result of the foregoing, fluctuations in inflation, rising interest rates, uncertainty and liquidity concerns in the broader financial services industry, and a potential recession in the United States. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of
7
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
these condensed consolidated financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the reported amounts of assets and liabilities or the disclosure of contingent assets and liabilities. These estimates, however, may change as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known.
Actual results could differ materially from the Company’s estimates and assumptions.
Significant Accounting Policies
There have been no material changes to the significant accounting policies previously disclosed in Note 2 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Accounting Pronouncements Recently Adopted
In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU 2023-07, which expanded the disclosures for reportable segments made by public entities. These amendments within ASU 2023-07 retained the existing disclosure requirements in ASC 280 and expanded upon them to require public entities to disclose significant expenses for reportable segments in both interim and annual reporting periods, as well as items that were previously disclosed only annually on an interim basis, including disclosures related to a reportable segment’s profit or loss and assets. In addition, entities with a single reportable segment must provide all segment disclosures required in ASC 280, including the new disclosures for reportable segments under the amendments in ASU 2023-07. The amendments did not change the existing guidance on how a public entity identified and determined its reportable segments. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in ASU 2023-07 are effective for annual periods for all public entities in fiscal years beginning after December 15, 2023, and in interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 on January 1, 2024, and expects to comply with any new applicable disclosures in its Annual Report on Form 10-K for the year ended December 31, 2024. The Company does not expect the adoption to have a material effect on its results of operations, financial position, and cash flows.
Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, or ASU 2023-09, which applies to all entities subject to income taxes. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is intended to provide more detailed income tax disclosures. For public business entities (PBEs), the new requirements will be effective for annual periods beginning after December 15, 2024. ASU 2023-09 will be applied on a prospective basis with the option to apply the standard retrospectively. The Company expects to adopt ASU 2023-09 on January 1, 2025, and it does not expect the adoption to have a material effect on its results of operations, financial position, and cash flows.
8
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
3. Available-for-Sale Marketable Securities
As of June 30, 2024, the Company’s available-for-sale marketable securities consisted of debt securities issued by U.S. government-sponsored entities. As of December 31, 2023, the Company’s available-for-sale marketable securities consisted of debt securities issued by the U.S. Treasury, U.S. government-sponsored entities and investment grade institutions (corporate bonds).
The following tables summarize the Company’s available-for-sale marketable securities by major type of security as of June 30, 2024 and December 31, 2023:
As of June 30, 2024
Gross Unrealized | Estimated Fair | |||||||||||
Type of Security |
| Amortized Cost |
| Gains |
| Losses |
| Value | ||||
U.S. government agency obligations | $ | | $ | — | $ | ( | $ | | ||||
Total available-for-sale marketable securities | $ | | $ | — | $ | ( | $ | | ||||
As of December 31, 2023
Gross Unrealized | Estimated Fair | |||||||||||
Type of Security |
| Amortized Cost |
| Gains |
| Losses |
| Value | ||||
U.S. Treasury securities | $ | | $ | | $ | — | $ | | ||||
U.S. government agency obligations |
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Corporate bonds |
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Total available-for-sale marketable securities | $ | | $ | | $ | ( | $ | | ||||
The following tables summarize the fair value and gross unrealized losses of the Company’s available-for-sale marketable securities by investment category and disaggregated by the length of time that individual debt securities have been in a continuous unrealized loss position as of June 30, 2024 and December 31, 2023:
As of June 30, 2024
Less than 12 Months | 12 Months or Greater | Total | ||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||
| Value |
| Losses |
| Value |
| Losses |
| Value |
| Losses | |||||||
U.S. government agency obligations | $ | — | $ | — | $ | | $ | ( | $ | | $ | ( | ||||||
Total | $ | — | $ | — | $ | | $ | ( | $ | | $ | ( | ||||||
As of December 31, 2023
Less than 12 Months | 12 Months or Greater | Total | ||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||
| Value |
| Losses |
| Value |
| Losses |
| Value |
| Losses | |||||||
U.S. government agency obligations | $ | — | $ | — | $ | | $ | ( | $ | | $ | ( | ||||||
Corporate bonds |
| — |
| — |
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| ( |
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| ( | ||||||
Total | $ | — | $ | — | $ | | $ | ( | $ | | $ | ( | ||||||
9
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
As of June 30, 2024 and December 31, 2023,
As of June 30, 2024 and December 31, 2023, the Company held a total of
U.S. government agency obligations. The unrealized losses on the Company’s investments in direct obligations of U.S. government agencies were due to changes in interest rates and non-credit related factors. The credit ratings of these investments in the Company’s portfolio have not been downgraded below investment grade status. The contractual terms of these investments do not permit the issuer to repay principal at a price less than the amortized cost bases of the investments, which is equivalent to the par value on the maturity date. The Company expects to recover the entire amortized cost bases of these securities on the maturity date. The Company does not intend to sell these investments, and it is not “more likely than not” that the Company will be required to sell these investments before recovery of their amortized cost bases. The Company held
The Company classifies its marketable debt securities based on their contractual maturity dates. As of June 30, 2024, the Company’s marketable debt securities mature at various dates through November 2024. The amortized cost and fair values of marketable debt securities by contractual maturity were as follows:
As of June 30, 2024 | As of December 31, 2023 | |||||||||||
Contractual maturity |
| Amortized Cost |
| Fair Value |
| Amortized Cost |
| Fair Value | ||||
Less than one year | $ | | $ | | $ | | $ | | ||||
More than one year |
| — |
| — |
| — |
| — | ||||
Total | $ | | $ | | $ | | $ | | ||||
All available-for-sale marketable securities are classified as marketable securities, current or marketable securities, non-current depending on the contractual maturity date of the individual available-for-sale security. Other income, net includes interest and dividends, accretion/amortization of discounts/premiums, realized gains and losses on sales of securities and credit loss expense due to declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method.
There were
As of June 30, 2024 and December 31, 2023, accrued interest receivables on the Company’s available-for-sale debt securities were $
10
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
4. Accumulated Other Comprehensive Loss
The following table summarizes the changes in accumulated other comprehensive loss, net of tax, from unrealized gains on available-for-sale marketable securities, the Company’s only component of accumulated other comprehensive loss, for the six months ended June 30, 2024 and 2023, respectively.
| Total Accumulated | ||
Other Comprehensive | |||
Loss | |||
Balance, December 31, 2023 | $ | ( | |
Other comprehensive income before reclassifications |
| | |
Amount reclassified from accumulated other comprehensive loss |
| — | |
Net current period other comprehensive income |
| | |
Balance, June 30, 2024 | $ | ( | |
Balance, December 31, 2022 | $ | ( | |
Other comprehensive income before reclassifications |
| | |
Amount reclassified from accumulated other comprehensive loss |
| — | |
Net current period other comprehensive income |
| | |
Balance, June 30, 2023 | $ | ( | |
Amounts reclassified out of accumulated other comprehensive loss into net loss are determined by specific identification. There were
5. Fair Value Measurements
As of June 30, 2024 and December 31, 2023, the Company’s financial instruments consisted of cash, cash equivalents, available-for-sale marketable securities, accounts receivable, net – related party, prepaid expenses, restricted cash, accounts payable and accrued liabilities, and liability related to the sales of future royalties and milestones. The fair values of cash, cash equivalents, accounts receivable, net – related party, prepaid expenses, restricted cash, accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these financial instruments. The fair value of the liability related to the sales of future royalties and milestones also approximates the carrying value. Available-for-sale marketable securities are reported at their fair values, based upon pricing of securities with the same or similar investment characteristics as provided by third-party pricing services.
The Company validates the prices provided by its third-party pricing services by reviewing their pricing methods, obtaining market values from other pricing sources, and comparing them to the share prices presented by the third-party pricing services. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by its third-party pricing services as of June 30, 2024 or December 31, 2023.
The following tables summarize the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023.
11
CARA THERAPEUTICS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(amounts in thousands, except share and per share data)
(unaudited)
Fair value measurement as of June 30, 2024:
Quoted prices in | Significant other | Significant | ||||||||||
Financial assets | active markets for | observable | unobservable | |||||||||
identical assets | inputs | inputs | ||||||||||
Type of Instrument |
| Total |
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
| ||||
Money market funds and checking accounts | $ | | $ | | $ | — | $ | — | ||||
Available-for-sale marketable securities: |
|
|
|
|
| |||||||
U.S. government agency obligations |
| |
| — |
| |
| — | ||||
Restricted cash: |
|
|
|
|
| |||||||
Commercial money market account |
| |
| |
| — |
| — | ||||
Total financial assets | $ | | $ | | $ | | $ | — | ||||
Fair value measurement as of December 31, 2023:
Quoted prices in | Significant other | Significant | ||||||||||
Financial assets | active markets for | observable | unobservable | |||||||||
identical assets | inputs | inputs | ||||||||||
Type of Instrument |
| Total |
| (Level 1) |
| (Level 2) |
| (Level 3) | ||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
| ||||
Money market funds and checking accounts | $ | | $ | | $ | — | $ | — | ||||
Available-for-sale marketable securities: |
|
|
|
|
|
|
|
| ||||
U.S. Treasury securities |
| |
| — |
| |
| — | ||||
U.S. government agency obligations |
| |
| — |
| |
| — | ||||
Corporate bonds |
| |
| — |
| |
| — | ||||
Restricted cash: |
|
|
|
|
|
|
|
| ||||
Commercial money market account |
| |
| |
| — |
| — | ||||
Total financial assets | $ | | $ | | $ | | $ | |||||