Good day ladies, gentlemen welcome to the Cara Therapeutics Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder this conference call is being recorded. I now introduce your host for today's conference Jesse Baumgartner of Stern Investor Relations, please go ahead sir.

Good afternoon. This is Jesse Baumgartner with Stern Investor Relations. And welcome to Cara Therapeutics second quarter 2015 earnings conference call. The news release with our second quarter financial results and corporate update became available at 4 o'clock PM today, and can be found on our Web site at www.caratherapeutics.com. You may also listen to a live webcast and replay of today's call on the Investors section of the Web site. 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 includes statements concerning the expected timing for the company's clinical trials and the reporting of clinical trial results, the potential results of planned clinical trials and future regulatory and development milestones for the company's product candidates, and the potential regulatory development pathway for CR845 in uremic pruritus. 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, 2014, its quarterly report on Form 10-Q for the quarter ended June 30th, 2015 and its other documents subsequently filed with or furnished to the SEC. All forward-looking statements made on 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. Now, let me turn the call over to Cara's President and CEO, Dr. Derek Chalmers.

Thanks, Jesse. Good afternoon everybody and thanks for being with us on the call. I'm joined today by our Chief Financial Officer, Joe Schoell; and our Chief Medical Officer, Dr. Joseph Stauffer. So the past few months have certainly been a very busy and productive time for us here at Cara with significant clinical progress in our lead development candidate CR845 across multiple clinical indications. Our recent Phase 2 [rida] and uremic pruritus clearly broadens the potential of CR845 to address an additional indication of significant unmet need beyond our core program in acute pain and we still remain on track to initiate the first of our pivotal trials for IV CR845 in acute pains during this quarter along with our Phase 2 study for oral CR845 in osteoarthritis patients and we're going to add some color and detail to both those programs in just a moment. Very importantly we also recently completed a very successful follow on offering which raised more than 75 million in net proceeds for the company which significantly strengths our balance sheet to provide the projected financial resources required to execute on our clinical plans for both IV and oral CR845. So I'm going to start with a run through of our recent uremic pruritus data and the next steps there and then I'll let Joe Stauffer take you through the progress and the IV CR845 acute pain program and our upcoming Phase 2 trial for oral CR845 program and then Joe Schoell will walk you through the numbers before we turn the call over for Q&A. So starting with uremic pruritus, just a couple of weeks ago we were very pleased to report positive top line results from our double blind randomized placebo controlled Phase 2 trial of IV CR845 and moderate-to-severe uremic pruritus…

Thank you, Derek. As we've discussed was our intention during our last earnings call in May, following our end of Phase 2 meeting with the FDA. We've now submitted the protocol for the first adopted pivotal trial in our Phase 3 program for IV CR845 in acute pain and after FDA input are set to initiate this trial this quarter. As a reminder, this will be randomized, double blind placebo controlled adoptive design trial and approximately 400 to 600 male and female patients undergoing abdominal laparoscopic surgery, including laparoscopic hysterectomy and other procedures associated with moderate-to-severe postoperative pain. CR845 will be administered both pre and post-operatively with patients assigned to receive one of three dosage of IV CR845 or placebo. And the primary efficacy endpoint will be reduction in pain intensity over 24 hours, with secondary endpoints including reductions in post-operative nausea and vomiting as well as standard measurements of rescue medication use and total pain relief over the drug treatment period. The trial was designed to accommodate an interim assessment of efficacy and safety across doses by an independent monitoring committee with an adaptation to optimum doses at this time point and subsequent progression to complete enrollment and read out in 2016. We have already received our first IRB approval for this protocol and say recruitment is progressing well. Our planned announcement of trial initiation will include more details on the final protocol design. Turning to Oral CR845 program, we also still expect to initiate a Phase 2 a trial in osteoarthritis patients during this quarter with top line data projected by end of year. This Phase 2 is designed at the PK, safety and effective trial, assessing multiple ascending doses of Oral CR845 dose [BID] over two week treatment period in patients reporting moderate-to-severe pain associated with OA. Trial end points include, change from baseline and joint pain using the numeric rating scale NRS, change from baseline in the Western Ontario and McMaster Osteoarthritis Index WOMAC as well as other exploratory measurements of changes in inflammatory biomarkers. This protocol has also received its first IRB approval and we expect to dose our first patient in the near-term. Now let me turn the call over to our Chief Financial Officer, Joe Schoell.

Thanks, Joe. Let's start with our net loss for the quarter was $5.7 million or $0.25 per basic and diluted share for the second quarter of 2015 compared to a net loss of $3.6 million or $0.16 per basic and diluted share for the same period of 2014. License and milestone fees revenue was zero for the second quarter of 2015 compared to 302,000 for the same period of 2014 which related to the license agreement with Maruishi Pharmaceutical Company. Collaborative revenue was 874,000 for the second quarter of 2014 compared to 526,000 for the same period of 2014, comprising revenue that had been deferred upon entry into the Maruishi license agreement. Clinical compound revenue was zero for the second quarter of 2015 compared to a 132,000 for the same period of 2014 from the sale of clinical compounds to Maruishi. R&D expenses were 4.7 million in the second quarter of 2015 compared to 3.2 million for the same period 2014. The higher R&D expenses in the second quarter of 2015 were principally due to a net increase in direct preclinical studies and clinical trial costs and consulting services in support of preclinical studies and clinical trials, and an increase in payroll and related costs including stock option expense associated with R&D personnel. G&A expenses were 1.9 million in the second quarter of 2015 compared to 1.5 million in the same period of 2014. The increase in the second quarter of 2015 was primarily due to increases in professional fees, public investor relation costs and increases in payroll and related costs including stock option expense, mostly due to increases in headcount. At June 30, 2015 cash and cash equivalents were 43.2 million compared to 47.4 million at the end of March 2015. The decrease was principally related to cash and cash equivalents used in operating activities during the second quarter of 2015. This total does not include our recent public offering of common stock which raised approximately 75.1 million in net proceeds after deducting underwriting discounts and commissions and estimated offering expenses and provides Cara with a projected run rate through of 2017. Now we'll turn back over to the operator for Q&A.

Thank you. [Operator Instructions] Our first question comes from Charles Duncan of Piper Jaffray. Your line is open.

So Derek on IV 845, I had a question about that in terms of laparoscopic surgery. You are including males and females in this study and I'm just wondering if you are going to stratify that study for gender or type of surgery or even severity of baseline pain or do you feel like that's not necessary?

I'm going to let Joe get into the details on that. The basic answer to that is we're going to stratify it for surgery type but not for gender. Joe do you want to comment on that more specifically.

Sure I'll take that. I think you had a three parts there Charles. So no on stratification for gender, yes on stratification for type for surgery and no on stratification for baseline pain. Everybody I think it was the three elements you mentioned. As long as everybody gets at least a four out of 10 or 40 out of 100 on a visual analog scale then they're allowed to be in the trial. And the purpose here is to look at their pain change over time and indeed the way we're doing it this time because we're dosing pre-op actually you don't even need pain scores as part of the randomization, right. You just randomized a dose and you dose pre-op and we follow your pain score all the way through. So our expectation is that they'll have four out of 10 but it's not required and the FDA has blessed this protocol so this is something we're quite comfortable with. The biggest ratification that we have to look at that we want to look is hiatal hernia, that is not a laparoscopic procedure that is an open procedure and we will stratify there.

So that addresses, and the old idea that cappers may work better just in females than in males.

Right, I mean, that's still a raging debate, I don't know if that's been ever settled and clearly it’s something that we don't see and at least in the IV pain story and so it clearly wasn't the case in our Phase 2 work, although was mostly female. So a fair criticism on the Phase 2 program is that we didn't have males in there, so -- but pain is pain and we fully expect that we'll have a good analogy response here in at least one of the doses.

Perhaps I could ask you a quick question on uremic pruritus for the Phase 3 and I know that you haven't met with the FDA, but I'm wondering if you believe that you'll end up evaluating multiple different dose levels, are do you feel that you've optimized the doses versus response?

You want to go ahead and start on that one Derek.

We know that we've got a very nice dose with one microgram per kilogram given to these patients three times a week. I could easily see the FDA asking us to optimize and by that I mean go lower and that's a reasonable thing to ask us for but we'll explore that with them once we have our meeting. But I would not see that being an unreasonable thing to do for them to ask or even us to what to do?

Okay.

Charles you know from our Phase 2 data, we were squeaky clean at that dose and there is no reason we couldn't go higher other than pharmacologically looking at the exposure levels we have in those patients, we're most likely at the top of the curve on that and the affect size in that study was very good in terms of drug effect, but there is no reason we couldn't take that up to the next higher dose if that's something the agency wants to see, I think it's probably more likely they don't want to see a minimum effect of dose and again that should be no issue.

Then actually addresses that question. My final question is regarding the cash, I think it was stated that cash is good through 2017. In your view does that fully fund development of IV 845 at least in a pain indication if not uremic pruritus?

Yes, with our projections and obviously we have some pretty detailed data on price per patient for both indications, this is going to fund us all the way through to NDA for both acute pain and uremic pruritus with IV and importantly a larger Phase 2b trial for the Oral CR845 program.

Thank you. Our next question is come from Annabel Samimy of Stifel. Your line is now open.

This is Esther Hong in for Annabel Samimy. I just have a quick question on uremic pruritus, regarding the Late-Breaker abstract at ASN in late November, what additional type of data can we expect to see?

So, we will submit the Late-Breaker obviously, it's all going to be mostly top line stuff and because it's a Late-Breaker and it's going to be our first kind of that meaning, so we have to basically just give them the top line stuff and hopefully that will be accepted. Obviously the secondary endpoints will be in there too the sweet scale on the Skindex-10 but I wouldn't necessarily expect to see much more from that, we're also planning on submitting something for a world pitch congress as well in Japan. And we have to make sure that these two abstracts complement each other.

And then just it might be a little bit early to ask but if you're looking at patients, CKD patients who are not on dialysis, is there any issue with the fact that the drug is renal excreted?

I don't think so, not at all, in fact, so you're asking about patients who are out patients with CKD not on dialysis do we think there is any issues with their kidneys, not working as well?

Correct.

Absolutely not, this drug is very, very clean. As you know, it's not metabolized at all, it's excreted whole through the kidney and so based on the safety profile that we saw in the end stage renal disease patients, we certainly would expect it to be with a similar profile in all patients.

Esther you're asking about appropriate dose adjustment for renally impaired patients, we actually already have that data on stage 2, stage 4 and renally impaired patient is part of our IV programs. So we're all aware of dose adjustment ratios in that type of patient.

Thank you. Our next question comes from Alan Carr of Needham and Company. Your line is now open.

I wonder, if you could talk a bit more about the Phase 3 and acute pain, you mentioned the timelines for getting the first one going but I wonder if you could tell us a bit more about your thoughts of the timing for the interim and then also whether or not there will be two Phase 3s after that or maybe one Phase 3 after that at what point do you make that decision?

I am going to let Joe answer that again Alan but the basic idea he has once to optimize the doses at the interim point, we're going to start our second Phase 3 trial in '16 but I'll let Joe get into that in a little more detail.

Right. So, we'll do an interim assessment in the first half of 2016 and based on that assessment we'll pick one dose maybe two pick that into the next trial, so we're not going to wait for this first trial to complete necessarily. And that next trial right now is planning on going into a bony model as we have previously discussed and whether or not, I think your next question was are going to need three trials or two, that’s TBD, we certainly left a window open as we talked about even early last year when I first joined the company, it's a three shots on goal approach but we may not need three. And it will really depend upon the strength of the data coming out of this first trial and what we're still going for those is the broadest way where we can get soft tissue and hard tissue, if we have a marginal response we'll consider a third trial. The nice part about doing three trials is at that point we're going to be a lot smarter about which doses are best, which doses are optimal, we’ll have a lot better sense of what the effect size would be now that we've done a broader trial. And very likely we'll not have to power up a trial as big as the one we're doing now. And it will all happen within -- it's still projected to happen within the timeframes that we've previously put out there with a submission to complete by the end of 2017.

So you make a decision based on the strength of the interim analysis rather to run two or, one or two extra trials after that, have I got that right?

That's correct, and just to be clear, we're not calling in an interim analysis because it's not a formal interim analysis. We call it interim assessment. Two different things, just clarifying there. We're simply looking for conditional power at this first half of 2016 to make sure that we've got enough strength in the sample size and the doses that we have, so that'll carry the day at the end. And if we have enough strength based on the conditional power we'll pick one or two of those doses for the next trial. And based on that power that’s when we'll have to make a clinical and regulatory judgment as to whether or not we should really gee up two trials at the same time as opposed to just one.

On a separate matter. When you have your discussions with the FDA about uremic pruritus do you plan to, do you plan to discuss possibility of what would be needed to look at the oral formulation in uremic and other issue indications or will you just be sticking with IV and uremic pruritus any dialysis patient.

Sure, we're still developing our strategy there, I think for the moment we're staying focused on the IV drug for uremic pruritus. However that's something that is always open for discussion but right now our focus is breakthrough designation orphan and what is the overall structure to look like for the IV version of this drug for then say renal disease these patients.

Thank you, our next question comes from Chiara Russo, Janney. Your line is open.

I just wanted to just touch quickly on pain, would you sort of remind us what type of screening criteria you're going to be looking at for the Phase 2A on osteoarthritis.

Sure, so these are patients who have away of the hip or knee and they have to have pain that is significant enough to warrant them coming into a trial like this, in this case it's kind of classic old school moderate to severe pain at a minimum, that being 4 out of 10 or greater on a numeric rating scale.

Are you doing any radiological assessments?

No, we're not.

No, okay.

We don't need to do that kind of stuff in this kind of trial. I know those are some of the assessments that are done for nerve growth factor, that type of thing, we don't seem to have, we don’t think that we have the type of issues potentially that their growth factors had. I'm not so sure that they had an issues but that's not necessary for this trial, it won't be necessary for a 2B trial or even a Phase 3 pivotal.

And for the process going forward with the oral NOA, you'd only require I believe one Phase 3 if the Phase 2B reads are positive. Do I have that correct?

That's a good question. I think it's a new chemical entity so technically you do need two Phase 3 pivotals replicate evidence.

Right.

This first trial is just a little two week PK trial.

Sure, yes.

The second trial we talked about, that'll be a, certainly a broader trial. Yet to be determined, it'll be placebo controlled against very likely two doses. Whether or not we have to do one or two trials after that, that's a further discussion with the FDA at the end of these two meetings. So you should always plan for at least two but it is NCE.

Sure. And my last question is, with the uremic pruritus, obviously you guys have some competition in the UP space and I was wondering if you think any of your competitors' data potentially jeopardizes you guy getting breakthrough this designation any indication?

So, my view is no, we have something that's quite unique and dosed in a unique way as an NCE and I think the competitors that are out there, I'm not so sure there are new chemical entity and with the data that we've got in terms of its signal strength and in terms of its very clean safety profile, while there is no guarantees what the agencies going to give us or someone else, I like our odds, but again breakthrough designations or an individual discussion with that division and we haven't even been here yet, so I don't want to speculate until we go. Once we come out of that meeting I'll have a better sense of where we were at -- I don't know, if Derek wants to add any further color to that.

Yes Chiara, just to add that as you know, we're really the only company develop in the select of kappa agonist for this indication and moreover the only company developing peripheral like the kappa agonist, so it really is a novel mechanism for an unmet need and clearly we have no CNF issues with this medication. And so that gives us an advantage to think over any competition, I said there really isn't any pharmacologically they're anywhere close in selectivity of peripheral action to see how it fulfill.

Thank you. [Operator Instructions] Our next question comes from Jim Molloy of Laidlaw Capital Market. Your line is now open.

Frank on for Jim. Just wondering if you can obviously right now, you guys are going to focus more on the IV CR845 for pruritus, I was wondering in terms of market size, how should we be looking at the Oral version for general pruritus compared to uremic pruritus?

Let me start there and then maybe Joe want to add some. The most obvious place to move with our pruritus program if you like done the [lot] in terms of renal failure and we're very much interested in the chronic kidney disease population, much larger population about 9 million patients in the U.S. high incidence and pruritus again refractory to traditional treatments, so about 30% incidents in that population. So, we can -- been our homework on that population in terms of what would be appropriate formulations for treatment there and how often these people see their physicians and began to think a little bit more about how we'd like to approach that population, in terms of formulation and dosaging. But that is something clearly we think as like an obvious place to move, we clearly have a very anti psoriatic effect certainly in this renal disease patient population and I think we cover that's when we talk specifically about the UP data the mechanism of action here, as I said in peripheral if you like at the end stage of the pruritus cascade actually on the C fibers and dermis and the epidermis and those immune cells in the dermis really to our mind speaks to a broad applicability for this mechanism across multiple indications associated with pruritus and that's clearly somewhere we could ultimately move with this medication but our first start to rolling back to chronic kidney disease and we're looking at the possibilities of which formulations are appropriate, they're oral, subcutaneous may be some other deeper type preparations might be a possibility and that something we'll certainly inform our investors on as we move forward there.

Thank you. I'm not showing any further questions in queue. I'd like to turn the call back over to management for any further remarks.

I'd just like to thank you everybody for joining us on the call today and we look forward to updating you very, very soon on our clinical progress. Thank you very much.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a wonderful day.