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Cara Therapeutics: Major Upside Potential


Today we do a deep dive on Cara Therapeutics, a rare small-cap that is part of both the Biotech Forum and Insiders Forum portfolios.

The company has many positive traits, including upcoming milestones, insider buying, a solid balance sheet, downside technical support and an attractive risk/reward profile.

The stock could double just by getting to half some of the analyst price targets proferred on the stock recently.

In today's deep analysis, we look at a rare small-cap name that I hold both within my Biotech Forum and Insiders Forum portfolio, as this small biopharma focusing on pain management has a very attractive risk/reward profile at its current trading levels as well as heavy insider buying in 2016. It also has myriad traits I look for before adding a small stake in a developmental concern, including a solid drug candidate(s), upcoming milestones, good balance, strong analyst support, and the stock appears significantly undervalued with a positive risk/reward profile. If the stock can get to just halfway to recent analyst price targets, substantial gains lie ahead.

Company Overview

Cara Therapeutics (NASDAQ:CARA) is a Connecticut-based emerging biotechnology company with just over a $150 million market capitalization. The company came public two and a half years ago and is currently priced just below $6 a share. Shares have sold for north of $20.00 within the past year. They have also developed a hard downside technical support around $5, making this an asymmetrical upside play.

Cara is focused on developing novel therapeutics to treat human diseases associated with pain, inflammation and pruritus. The company possesses near-term clinical development opportunities combined with proprietary approaches to developing first-in-class novel therapeutics.

Cara's most advanced compound, CR845, is currently undergoing clinical testing for acute pain and pruritus. This patented compound possesses analgesic, anti-inflammatory and anti-pruritic activities appropriate for multiple therapeutic applications. In addition, the company aims to develop a future pipeline of first-in-class molecules at novel analgesic and anti-inflammatory targets using its proprietary drug screening technology.


As stated above, Cara's primary drug candidate is CR845, which is in mid- to late-stage trials for treatments in three distinct areas. Numerous milestones should be hit in 2016, which will be discussed in a section below. CR845's primary benefit is that unlike currently marketed opioids, this new compound does not...