Cara Therapeutics: Waiting for a better entry levels on an excellent company

Cara Therapeutics shares have more than 100% profit in one year and over 30% in the last month. The company provides attractive opportunities for long-term investments at low levels. If the action does not adjust in the coming weeks, be prepared to shoot up because of strong catalysts in the second half of the year.

Introduction

Cara Therapeutics is a biotechnology company specializing in the treatment of acute and chronic pain. In addition, the company focuses on the treatment of people with itching, a side effect of many diseases such as chronic kidney disease, which causes people to develop painful itching.

20 million people with pruritus are being treated with prescription medications every year. Fortunately for these people, Cara works to market a number of medicines to treat their condition. The main medicinal product of Cara KORSUVA is currently in Phase II and III for oral and intravenous use. In this way, the company is oriented towards introducing the drug to the market to show the effectiveness of medicines in treating various diseases.

What makes Cara's treatment revolutionary

The present methods of treating opiate pain are successful in reducing the pain reported by the patient but create their negative side effects, reducing their overall effectiveness. Cara stressed that there was little innovation in the treatment of pain indicating that the date of creation of morphine and acetaminophen was well before the 21st century.

Cara's healing breakthrough stems from his decision to target a cappic opioid receptor located in the peripheral nervous system. Drugs such as morphine are directed to the central nervous system (CNS), which leads them to influence the brain activity of the individual. As Cara's KARSUVA acts on the periphery rather than on the brain, the negative side effects of opioids are mitigated while reducing the pain of the individual.

Foundation

The company has a current market capitalization of $ 965 million. The shares are in an excellent series since the markets collapsed in December 2018, jumping with over 100% of the bottoms then.

Shares are heavily linked to the overall market, as investors study in detail the company's lack of profit in times of economic uncertainty. Looking at the Beta index of the company for the past three years, it is clear that it is trading close to the market, often even higher at reversal levels, which gives it a higher degree of volatility. For this reason, while I'm sure about the company in the long run, I would not recommend it in the short term.

The company announced it expects to have enough funds available to support its operations by the end of 2020. She reported $ 156.1 M of liquidity at the end of the first quarter. In addition, CARA spent 27.2M of these funds for the same period. Using the cash / spend ratio, the company will need 190.8M in 2020 to maintain its business if the current cost-of-cost levels persist. Simple arithmetic shows that the monetary position of the company will not satisfy its needs without a little help. For that, the forecast depends on whether KORSUVA starts selling well and provides $ 34.7 M to suck the business.

In the past, management has begun to offer additional audiences to raise funds. If Cara has a stumbling block in the third phase of the Korsuva injection tests, expect the board of directors to turn to public markets to raise additional funds.

Conclusion

Monetary policy makes us cautious when offering this company in the short run for investors. I will feel more secure if the share did not rise so much in the last 12 months, which makes me offer patience for a better entrance. Overall, markets have begun an aggressive rise, which makes them and the stock more vulnerable to a decline due to the trade war. If stock prices fall, investors will quickly enter the market and buy this profitable company at good levels. I would wait for an entrance at the end of August if prices did not adjust from their current levels.

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