CARA - Bull Thesis

(Updated on 8/31/22 based on quarterly report)

BULL THESIS SUMMARY

• CARA overall corporate and summary

  • IV Korsuva

    • Recently approved therapeutic that is highly effective in lg patient population

    • 1st and only approved drug in this indication (severe itch)

  • Value opportunity and IV Korsuva revenue opp

    • $400M enterprise value is very attractive

      • Recently approved IV Korsuva alone value over $2B

        • CARA profit share conservatively $250M/yr

        • 10X PE = $2.5B

        • CARA recognized $8M revenue in 1st quarter for Korsuva

        • Profit share of Korsuva revenue is 47%!

    • Great chance to reach >20% of market within 1yr

      • Davita & Fesenius own 75% of market

      • Fesenius is a CARA partner and sales force is selling Korsuva

      • On both furmularies now

  • Low burn rate, with cash through mid-2024

  • CARA has executed very well on plan

    • 1st time FDA approval

    • TDAPA approval

    • Clinical trials progress and read out on time

    • Impressive early commercial numbers and formulary wins

  • CSL/Vifor-Fresenius partnership very positive for CARA

    • Sets up commercial success sinceFresenius clinics have lg share of market

    • CARA get 47% of revenue without commercial expense

    • Appears to be good acquisition candidate for IV business

      • Owns stake in CARA

      • Approved lead drug

      • Co-marketing partner

  • Oral Korsuva - possible pipeline in a product for treating severe itch

    • Oral phase 3 trials in CKD and AP appear to be patient populations & doses set up for success - balance safety & efficacy from Phase 2 data

    • Oral proof of concept data establishes that oral Korsuva (DFK) has efficacy across many different types of pruritic conditions

FS/MV 9/2/22

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